EXHIBIT 10.28
EXECUTION COPY
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
dated as of December 9, 2002
among
▇▇▇▇▇▇, INC.,
as initial Servicer
and
▇▇▇▇▇▇, INC. AND CERTAIN SUBSIDIARIES OF
▇▇▇▇▇▇, INC.,
as Sellers
and
▇▇▇▇▇▇ RECEIVABLES, LLC,
as Buyer
TABLE OF CONTENTS
PAGE
ARTICLE I AGREEMENT TO PURCHASE AND SELL........................................................1
SECTION 1.1 Agreement to Purchase and Sell....................................................1
SECTION 1.2 Timing of Purchases...............................................................2
SECTION 1.3 Consideration for Purchases.......................................................3
SECTION 1.4 No Recourse.......................................................................3
SECTION 1.5 No Assumption of Obligations Relating to Receivables, Related Assets or
Contracts.........................................................................3
SECTION 1.6 True Sales........................................................................3
SECTION 1.7 Addition of Sellers...............................................................4
SECTION 1.8 Termination of Status as a Seller.................................................4
ARTICLE II CALCULATION OF PURCHASE PRICE.........................................................5
SECTION 2.1 Calculation of Purchase Price.....................................................5
SECTION 2.2 Definitions and Calculations Related to Purchase Price Percentage.................6
ARTICLE III PAYMENT OF PURCHASE PRICE; SERVICING, ETC.............................................7
SECTION 3.1 Purchase Price Payments...........................................................7
SECTION 3.2 The Buyer Notes...................................................................9
SECTION 3.3 Application of Collections and Other Funds.......................................10
SECTION 3.4 Servicing of Receivables and Related Asset.......................................10
SECTION 3.5 Adjustments for Noncomplying Receivables, Dilution and Cash Discounts............11
SECTION 3.6 Payments and Computations, Etc...................................................11
ARTICLE IV CONDITIONS TO PURCHASES..............................................................12
SECTION 4.1 Conditions Precedent to Continued Purchases......................................12
SECTION 4.2 Certification as to Representations and Warranties...............................13
SECTION 4.3 Effect of Payment of Purchase Price..............................................13
ARTICLE V REPRESENTATIONS AND WARRANTIES.......................................................13
SECTION 5.1 Representations and Warranties of the Sellers....................................13
SECTION 5.2 Representations and Warranties of Buyer..........................................18
SECTION 5.3 Representations and Warranties of Servicer.......................................18
ARTICLE VI GENERAL COVENANTS OF THE SELLERS.....................................................18
SECTION 6.1 Affirmative Covenants............................................................18
SECTION 6.2 Reporting Requirements...........................................................21
i
PAGE
SECTION 6.3 Negative Covenants...............................................................22
ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE SPECIFIED ASSETS.................25
SECTION 7.1 Rights of Buyer..................................................................25
SECTION 7.2 Responsibilities of the Sellers..................................................25
SECTION 7.3 Further Action Evidencing Purchases..............................................26
SECTION 7.4 Collection of Receivables; Rights of Buyer and Its Assignees.....................27
ARTICLE VIII TERMINATION..........................................................................28
SECTION 8.1 Termination by the Sellers.......................................................28
SECTION 8.2 Automatic Termination............................................................28
ARTICLE IX INDEMNIFICATION......................................................................28
SECTION 9.1 Indemnities by the Sellers.......................................................28
ARTICLE X MISCELLANEOUS........................................................................30
SECTION 10.1 Amendments; Waivers, Etc.........................................................30
SECTION 10.2 Notices, Etc.....................................................................31
SECTION 10.3 Cumulative Remedies..............................................................31
SECTION 10.4 Binding Effect; Assignability; Survival of Provisions............................31
SECTION 10.5 Governing Law....................................................................31
SECTION 10.6 Costs, Expenses and Taxes........................................................32
SECTION 10.7 Submission to Jurisdiction.......................................................32
SECTION 10.8 Waiver of Jury Trial.............................................................32
SECTION 10.9 Integration......................................................................33
SECTION 10.10 Counterparts.....................................................................33
SECTION 10.11 Acknowledgment and Consent.......................................................33
SECTION 10.12 No Partnership or Joint Venture..................................................33
SECTION 10.13 No Proceedings...................................................................34
SECTION 10.14 Severability of Provisions.......................................................34
SECTION 10.15 Recourse to Buyer................................................................34
ii
EXHIBITS
EXHIBIT A Form of Buyer Note
EXHIBIT B Form of Seller Assignment Certificate
SCHEDULES
SCHEDULE 1 Litigation and Other Proceedings
SCHEDULE 2 Chief Executive Office and Principal Place of Business
SCHEDULE 3 Legal Names, Trade Names and Names Under Which the
Sellers Do Business
SCHEDULE 4 Addresses
APPENDIX
APPENDIX A Definitions
i
THIS AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT, dated as of
December 9, 2002 (as further amended, supplemented and otherwise modified from
time to time, and including the Original Purchase Agreement for the period that
it was in effect, this "AGREEMENT"), is made among ▇▇▇▇▇▇, INC., a Delaware
corporation (formerly known as Big Flower Press Holdings, Inc.), as initial
Servicer ("▇▇▇▇▇▇" or "SERVICER"), ▇▇▇▇▇▇, INC. and certain direct or indirect
domestic subsidiaries of ▇▇▇▇▇▇ that are listed on the signature pages hereto or
that become party hereto in accordance with the terms hereof (the "SELLERS"),
and ▇▇▇▇▇▇ RECEIVABLES, LLC, a Delaware limited liability company (formerly BFP
Receivables Corporation) ("BUYER"). Except as otherwise defined herein,
capitalized terms have the meanings that APPENDIX A assigns to them, and this
Agreement shall be interpreted in accordance with the conventions set forth in
PART B of APPENDIX A.
WHEREAS, pursuant to the Indenture, Buyer intends to grant a security
interest in the Receivables sold pursuant hereto, together with Receivables
contributed to Buyer by ▇▇▇▇▇▇ from time to time, to the Trustee in order to,
among other things, finance its purchases hereunder;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 AGREEMENT TO PURCHASE AND SELL. Each Seller hereby sells,
transfers, assigns, sets over and otherwise conveys to Buyer and Buyer agrees to
purchase from each Seller, at the times set forth in SECTION 1.2, all of such
Seller's right, title and interest in, to and under:
(a) all Receivables (other than Contributed Receivables) (i)
existing on (A) the Initial Cut-Off Date (as defined in the Original
Purchase Agreement) (1) in the case of ▇▇▇▇▇▇, as successor to Treasure
Chest Advertising, Inc. ("TREASURE CHEST") and as successor to Laser Tech
Color, Inc. ("LASER TECH"), (2) in the case of Webcraft, LLC, as successor
to Webcraft, Inc., and (3) in the case of Webcraft Chemicals, as successor
to Webcraft Chemicals, Inc., (B) the effective date of the First
Supplemental
Receivables Purchase Agreement dated as of December 29, 2000
(the "SUPPLEMENTAL CUT-OFF DATE"), in the case of ▇▇▇▇▇▇ other than as
successor to Treasure Chest and Laser Tech, and (C) the business Day
immediately preceding the Issuance Date (the "ENTERON CUT-OFF DATE"), in
the case of Enteron Group, LLC ("ENTERON") or (ii) thereafter created by
such Seller that arise during the period from and including the closing of
such Seller's business on the Initial Cut-Off Date, the Supplemental
Cut-Off Date, or the Enteron Cut-Off Date, as the case may be, to but
excluding the Purchase Termination Date,
(b) all Related Security with respect to such Receivables of such
Seller,
(c) all proceeds of the foregoing, including all funds received by
any Person in payment of any amounts owed (including invoice prices,
finance charges, interest and all other charges, if any) in respect of any
Receivable described above or Related
Security with respect to any such Receivable, or otherwise applied to repay
or discharge any such Receivable (including insurance payments that a
Seller or Servicer applies in the ordinary course of its business to
amounts owed in respect of any such Receivable and net proceeds of any sale
or other disposition of repossessed goods that were the subject of any such
Receivable) or other collateral or property of any Obligor or any other
party directly or indirectly liable for payment of such Receivables,
(d) all checks, wire transfers, monies and other items of any type
whatsoever deposited into the Bank Accounts, whether or not such items
constitute proceeds of Receivables and whether such items are now existing
or hereafter arising or acquired, and
(e) all Records relating to any of the foregoing.
As used herein, "PURCHASED RECEIVABLES" means the items listed above in
CLAUSE (A), "RELATED PURCHASED ASSETS" means the items listed above in CLAUSES
(B), (C) and (D).
Pursuant to SECTION 1.09 of the Original Purchase Agreement, Treasure Chest
transferred certain Contributed Receivables to Buyer. Pursuant to SECTION 3.1 of
the Original Purchase Agreement certain other Contributed Receivables may have
been transferred by ▇▇▇▇▇▇ to Seller. ▇▇▇▇▇▇ may in the future contribute
additional Contributed Receivables hereunder. ▇▇▇▇▇▇, in its capacity as a
Seller, hereby transfers to Buyer, as a contribution to the capital of Buyer,
all of its right, title and interest in, to and under:
(a) all Contributed Receivables created by Treasure Chest now
existing that arose during the period from the Initial Cut-Off Date to but
excluding the Purchase Termination Date, and all Contributed Receivables
created by ▇▇▇▇▇▇ now existing or that arise during the period from the
Supplemental Cut-Off Date to but excluding the Purchase Termination Date,
(b) all Related Security with respect to such Contributed
Receivables of such Seller,
(c) all proceeds of the foregoing, including all funds received by
any Person in payment of any amounts owed (including invoice prices,
finance charges, interest and all other charges, if any) in respect of any
Contributed Receivable described above or Related Security with respect to
any such Contributed Receivable, or otherwise applied to repay or discharge
any such Contributed Receivable (including insurance payments that a Seller
or Servicer applies in the ordinary course of its business to amounts owed
in respect of any such Contributed Receivable and net proceeds of any sale
or other disposition of repossessed goods that were the subject of any such
Contributed Receivable) or other collateral or property of any Obligor or
any other party directly or indirectly liable for payment of such
Contributed Receivables,
(d) all checks, wire transfers, monies and other items of any type
whatsoever deposited into the Bank Accounts, whether or not such items
constitute proceeds of Contributed Receivables and whether such items are
now existing or hereafter arising or acquired, and
2
(e) all Records relating to any of the foregoing (the items listed
above in clauses (B), (C) and (D) being referred to herein as the "RELATED
CONTRIBUTED ASSETS".
As used herein, "RELATED ASSETS" means the Related Purchased Assets and the
Related Contributed Assets, "PURCHASED ASSETS" means the Purchased Receivables
and the Related Purchased Assets, and "SPECIFIED ASSETS" means the Purchased
Receivables, the Contributed Receivables and the Related Assets.
SECTION 1.2 Timing of Purchases.
(a) INITIAL PURCHASES. All of the Purchased Assets of each Seller that was
a party to the Original Purchase Agreement on the First Issuance Date that
existed at the closing of such Seller's business on the Initial Cut-Off Date (as
defined in the Original Purchase Agreement) were sold automatically to Buyer on
the First Issuance Date (as defined in the Original Purchase Agreement).
(b) REGULAR PURCHASES. Except to the extent otherwise provided in SECTION
8.2 or (with respect to any Seller) SECTION 1.8, after the closing of a Seller's
business on the Initial Cut-Off Date (as defined in the Original Purchase
Agreement) until the closing of such Seller's business on the Business Day
immediately preceding the Purchase Termination Date, all Receivables and the
Related Assets of each Seller shall be sold (or in the case of ▇▇▇▇▇▇, at
▇▇▇▇▇▇' option as provided herein, contributed) automatically to Buyer pursuant
hereto immediately (and without further action by any Person) upon the creation
of the Receivable.
SECTION 1.3 CONSIDERATION FOR PURCHASES. On the terms and subject to the
conditions set forth in this Agreement, Buyer agrees to make Purchase Price
payments to the Sellers in accordance with ARTICLE III.
SECTION 1.4 NO RECOURSE. Except as specifically provided in this Agreement,
the sale and purchase of Purchased Assets under this Agreement shall be without
recourse to the Sellers; IT BEING UNDERSTOOD that (i) each Seller shall be
liable to Buyer for all representations, warranties, covenants and indemnities
made by such Seller pursuant to the terms of this Agreement, all of which
obligations are limited so as not to constitute recourse to such Seller for the
credit risk of the Obligors, and (ii) ▇▇▇▇▇▇ shall be liable to Buyer to the
extent specified in the Seller Guaranty.
SECTION 1.5 NO ASSUMPTION OF OBLIGATIONS RELATING TO RECEIVABLES, RELATED
ASSETS OR CONTRACTS. None of Buyer, the Servicer nor the Trustee shall have any
obligation or liability to any Obligor or other customer or client of a Seller
(including any obligation to perform any of the obligations of such Seller under
any Receivable, related Contracts or any other related purchase orders or other
agreements). No such obligation or liability is intended to be assumed by Buyer,
the Servicer or the Trustee hereunder, and any assumption is expressly
disclaimed.
SECTION 1.6 TRUE SALES. The Sellers and Buyer intend the transfers of
Receivables hereunder to be true sales by the Sellers to Buyer that are absolute
and irrevocable and that provide Buyer with the full benefits of ownership of
the Receivables, and none of the Sellers nor Buyer intends the transactions
contemplated hereunder to be, or for any purpose to be characterized as, loans
from Buyer to any Seller.
3
It is, further, not the intention of Buyer or any Seller that the
conveyance of the Specified Assets by such Seller be deemed a grant of a
security interest in the Specified Assets by such Seller to Buyer to secure a
debt or other obligation of such Seller. However, in the event that,
notwithstanding the intent of the parties, any Specified Assets are property of
any Seller's estate, then (i) this Agreement also shall be deemed to be and
hereby is a security agreement within the meaning of the UCC, and (ii) the
conveyance by such Seller provided for in this Agreement shall be deemed to be a
grant by such Seller to Buyer of, and such Seller hereby grants to Buyer, a
security interest in and to all of such Seller's right, title and interest in,
to and under the Specified Assets to secure (1) the rights of Buyer hereunder
and (2) a loan by Buyer to such Seller in the amount of the related Purchase
Price of the Purchased Assets sold by it or the Unpaid Balance of any
Contributed Receivables and the Related Contributed Assets, as the case may be.
Each Seller and Buyer shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the Specified Assets, such security interest
would be deemed to be a perfected security interest of first priority (subject
to Permitted Adverse Claims) in favor of Buyer under applicable law and will be
maintained as such throughout the term of this Agreement.
SECTION 1.7 ADDITION OF SELLERS. Any Domestic Subsidiary of ▇▇▇▇▇▇ may
become a Seller hereunder and sell its accounts receivable and property of the
types that constitute Related Assets hereunder to Buyer if (x) the last sentence
of this Section applies or (y) the Modification Condition is satisfied with
respect to such addition. ▇▇▇▇▇▇ and such Domestic Subsidiary of ▇▇▇▇▇▇ that is
proposed to be added as a Seller shall give to Buyer, the Trustee and the Rating
Agencies not less than 30 days' (or such shorter number of days as is acceptable
to Trustee) prior written notice of the effective date of the addition of such
Domestic Subsidiary as a Seller. Once the notice has been given, any addition of
a Domestic Subsidiary of ▇▇▇▇▇▇ as a Seller pursuant to this Section shall
become effective on the first Business Day following the expiration of the
notice period (or such later date as may be specified in the notice) on which
(i) the Modification Condition has been satisfied, (ii) the Servicer shall have
delivered to the Trustee a supplement to the Monthly Report then in effect as
described in Section 3.5(e) of the Indenture and shall have confirmed in writing
to the Trustee that the Seller Guaranty covers Obligations of such Seller, and
(iii) such Domestic Subsidiary and the parties hereto shall have executed and
delivered the agreements, instruments and other documents and the amendments or
other modifications to the Transaction Documents, in form and substance
reasonably satisfactory to Buyer and the Trustee, that Buyer or the Trustee
reasonably determines are necessary or appropriate to effect the addition. The
Modification Condition need not be satisfied as to any new Seller if (x) the new
Seller is in the same line of business as one or more existing Sellers or a
related line of business, (y) the aggregate Unpaid Balance of the new Seller's
outstanding Receivables on the last Cut-Off Date prior to the day that it
becomes a Seller is less than 5% of the aggregate Unpaid Balance of all
Receivables on such Cut-Off Date and (z) no more than two other Persons have
become Sellers during the preceding twelve months without satisfaction of the
Modification Condition (or, if no outstanding Notes are rated, written approval
of the Trustee). To the extent that Enteron may be considered a new Seller, the
Modification Condition is deemed satisfied as to Enteron.
SECTION 1.8 TERMINATION OF STATUS AS A SELLER. (a) At any time when more
than one Person is a Seller, a Seller may terminate its obligation to sell its
Receivables and Related Assets to Buyer if:
4
(i) the Seller (a "TERMINATING SELLER") shall have given Buyer not
less than 30 days' prior written notice of its intention to terminate the
obligations, which notice shall be given by Buyer to the Trustee and the
Rating Agencies (the date on which such notice is given being the
"TERMINATING SELLER NOTICE DATE"),
(ii) an Authorized Officer of the Terminating Seller shall have
certified that the termination by the Terminating Seller of its status as a
Seller will not have a Material Adverse Effect,
(iii) both immediately before and after giving effect to the
termination by the Terminating Seller, no Event of Default or Unmatured
Event of Default shall have occurred and be continuing or shall reasonably
be expected to occur; and
(iv) either the Terminating Seller will cease to be a Domestic
Subsidiary of ▇▇▇▇▇▇ concurrently with the effectiveness of such
termination, or such Terminating Seller is a Permitted Terminating Seller;
provided that this SUBCLAUSE (IV) may be waived by Noteholders that
evidence more than 50% of the outstanding principal amount of the Notes if
the Modification Condition is satisfied.
"PERMITTED TERMINATING SELLER" means a Terminating Seller that satisfies
the following requirements:
(x) the aggregate Unpaid Balance of such Terminating Seller's
Receivables on the Cut-Off Date immediately preceding the Terminating
Seller Notice Date would not exceed 20% of the aggregate Unpaid Balance of
all Receivables, calculated as of such Cut-Off Date, and (y) the aggregate
Unpaid Balance of such Terminating Seller's Receivables on such Cut-Off
Date, together with the Previously Terminated Seller Amount, would not
exceed 25% of the sum of the Previously Terminated Seller Amount and the
aggregate Unpaid Balance of all Receivables (calculated as of such Cut-Off
Date).
"PREVIOUSLY TERMINATED SELLER AMOUNT" means, on any day, the aggregate
Unpaid Balance of Receivables originated by all Sellers previously terminated
pursuant to this SUBSECTION 1.8(A), calculated with respect to any Seller as of
the Cut-Off Date immediately preceding its Terminating Seller Notice Date.
(b) Any termination by a Seller shall become effective on the first
Business Day that follows the day on which the requirements of CLAUSE (A) shall
have been satisfied (or such later date specified in the notice or certificate
referred to in the clauses). Any termination by a Seller shall terminate its
rights and obligations to sell Receivables and Related Assets hereunder to Buyer
and Buyer's agreement, with respect to the Terminating Seller, to purchase the
Receivables and Related Assets; PROVIDED, HOWEVER, that the termination shall
not relieve the Terminating Seller of any of its other Obligations, to the
extent the Obligations relate to Receivables (and Related Assets with respect
thereto) originated by the Terminating Seller prior to the effective date of the
termination.
(c) Notwithstanding the foregoing, a Seller's rights and obligations to
sell its Receivables and Related Assets to Buyer shall terminate immediately if
such Seller ceases to be
5
a Domestic Subsidiary of ▇▇▇▇▇▇; PROVIDED, HOWEVER, that the termination shall
not relieve such Seller of any of its other Obligations, to the extent the
Obligations relate to Receivables (and Related Assets with respect thereto)
originated by such Seller prior to the effective date of the termination.
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 CALCULATION OF PURCHASE PRICE. (a) On each Business Day, the
Servicer shall deliver to Buyer, the Trustee and ▇▇▇▇▇▇ a Daily Report with
respect to Buyer's purchases of Receivables from the Sellers that were made on
the immediately preceding Business Day.
(b) On each day when Receivables are purchased by Buyer from a Seller
pursuant to ARTICLE I, the "PURCHASE PRICE" to be paid to such Seller on such
day for the Purchased Receivables and Related Purchased Assets that are to be
sold by such Seller on such day shall be determined in accordance with the
following formula:
PP = AUB X PPP
WHERE:
PP = the aggregate Purchase Price for the Purchased Receivables and
Related Purchased Assets to be purchased from such Seller on
such day.
AUB = the "Aggregate Unpaid Balance" of the Purchased Receivables
that are to be purchased from such Seller on such day. For
purposes of this calculation, "AGGREGATE UNPAID BALANCE" shall
mean the sum of the Unpaid Balance of each Receivable to be
purchased from such Seller on such day, calculated at the time
of the Receivables sale to Buyer.
PPP = the Purchase Price Percentage applicable to the Receivables to
be purchased on such day, as determined pursuant to SECTION 2.2.
SECTION 2.2 DEFINITIONS AND CALCULATIONS RELATED TO PURCHASE PRICE
PERCENTAGE.
(a) "PURCHASE PRICE PERCENTAGE" for the Receivables to be sold by a Seller
on any day during a Payment Period shall mean the percentage determined in
accordance with the following formula:
PPP = 100% - (LD + PDRR)
WHERE:
PPP = the Purchase Price Percentage in effect during such Payment
Period.
LD = the Loss Discount (expressed as a percentage) in effect during
such Payment Period, as determined pursuant to SUBSECTION (b)
below.
6
PDRR = the Purchase Discount Reserve Ratio (expressed as a percentage)
in effect during such Payment Period as determined on such day
pursuant to SUBSECTION (c) below.
The Purchase Price Percentage, the Loss Discount and the Purchase Discount
Reserve Ratio shall be recomputed by the Servicer on each Report Date, in each
case as of the then most recent Cut-Off Date, and shall become effective on the
next Payment Date.
(b) "LOSS DISCOUNT" in effect during such Payment Period means a
percentage equal to the Loss to Liquidation Ratio as in effect during such
Payment Period (expressed as a percentage) as in effect on such day (it being
understood that the allocation of certain miscellaneous items will be required
to be estimated for this purpose).
(c) "PURCHASE DISCOUNT RESERVE RATIO" for the Receivables to be sold on
any day shall mean a percentage determined in accordance with the following
formula:
PDRR = (TD/360 X DR) + PD
WHERE:
PDRR = the Purchase Discount Reserve Ratio in effect during such
Payment Period.
TD = the Turnover Days during the Calculation Period preceding the
first day of such Payment Period.
DR = the Discount Rate (expressed as a percentage) in effect during
such Payment Period as determined pursuant to SUBSECTION (d)
below.
PD = a profit discount equal to .20%.
(d) "DISCOUNT RATE" for the Receivables to be sold on any day during a
Payment Period shall mean a fraction (expressed as a percentage) having (i) a
numerator equal to 12, MULTIPLIED BY an amount equal to the accrued Carrying
Costs for the Calculation Period preceding the first day of such Payment Period,
and (ii) a denominator equal to the aggregate Unpaid Balance of the Receivables
as of the last day of the Calculation Period preceding the first day of such
Payment Period.
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.
SECTION 3.1 PURCHASE PRICE PAYMENTS. (a) On the Business Day following each
day on which any Receivables and Related Assets are purchased by Buyer pursuant
to ARTICLE I, on the terms and subject to the conditions of this Agreement,
Buyer shall pay to the Sellers the Purchase Price for the Receivables and
Related Assets purchased on such day by Buyer by (i) making a cash payment to
Servicer (for the account of the Sellers) to the extent that Buyer has cash
available to make the payment pursuant to SECTION 3.3 and (ii) if the Purchase
Price to be paid for the Receivables and Related Assets of any Seller exceeds
the amount of any cash
7
payment for the account of such Seller on such day pursuant to CLAUSE (i), by
(x) automatically increasing the principal amount outstanding under the relevant
Buyer Notes by the amount of the excess, provided that such increase shall not
cause the Issuer Net Worth to be less than $26,000,000, or (y) at the option of
▇▇▇▇▇▇ (as evidenced by notice to Servicer), only in the case of ▇▇▇▇▇▇ as
Seller, such excess shall be considered to have been contributed to Buyer by
▇▇▇▇▇▇ as a capital contribution.
The obligation of Buyer to pay the Purchase Price for Receivables that has
been deferred pursuant to the preceding paragraph shall be evidenced by Buyer
Notes. Each Seller agrees that, prior to the Seller Maturity Date, Buyer shall
be required to make payments in respect of the payment obligations evidenced by
the Buyer Notes only to the extent that it has cash available under SECTION 3.3.
(b) On each Business Day, the "NONCOMPLYING RECEIVABLES AND DILUTION
ADJUSTMENT" shall be equal to the difference (whether the difference is positive
or negative) between (i) the sum of (A) the aggregate Seller Dilution
Adjustments in respect of all Sellers, if any, for the immediately preceding
Business Day, as shown in the Daily Report for such day, PLUS (B) the aggregate
Seller Noncomplying Receivables Adjustments in respect of all Sellers, if any,
for the immediately preceding Business Day, as shown in the Daily Report for
such day, in the case of each of CLAUSES (A) and (B), as the amounts are
determined pursuant to SECTION 3.5, MINUS (ii) the amount of the payments (if
any) that Buyer shall have received on the immediately preceding Business Day on
account of any Seller Noncomplying Receivables that had been the subject of an
earlier Seller Noncomplying Receivables Adjustment. If the Noncomplying
Receivables and Dilution Adjustment is positive on any day, Buyer shall reduce
the Purchase Price payable on such day pursuant to SUBSECTION (a) above by the
amount of the Noncomplying Receivables and Dilution Adjustment. If instead the
Noncomplying Receivables and Dilution Adjustment is negative on any day, Buyer
shall increase the Purchase Price payable pursuant to SUBSECTION (a) above on
such day by the amount of the Noncomplying Receivables and Dilution Adjustment.
(c) If on any day the sum of the Seller Dilution Adjustments and the
Seller Noncomplying Receivables Adjustments in respect of any Seller (as
determined pursuant to SECTION 3.5), less any amounts in CLAUSE (b)(ii)
allocated to such Seller, exceeds the Purchase Price payable by Buyer to such
Seller pursuant to SUBSECTION (a) above on such day, or if such day falls on or
after the Purchase Termination Date, then the principal amount of such Seller's
Buyer Note shall be reduced automatically by the amount of such excess.
(d) If, on any day prior to the Purchase Termination Date, the principal
amount of a Seller's Buyer Note is zero and such Seller is not a Terminating
Seller, then the amount of the excess of the sum of the Seller Dilution
Adjustments and the Seller Noncomplying Receivables Adjustments in respect of
such Seller (as determined pursuant to SECTION 3.5), less any amounts in CLAUSE
(b)(ii) allocated to such Seller, on such day over the Purchase Price payable by
Buyer to Servicer (for the account of such Seller) on such day pursuant to
SUBSECTION (a) above (the "PURCHASE PRICE CREDIT") shall be credited against the
Purchase Price payable by Buyer for subsequent Purchases of Receivables and
Related Assets of such Seller by Buyer. If any such Purchase Price Credit has
not been fully applied on or prior to the fifth Business Day (or a mutually
agreed upon earlier day) after the creation of such Purchase Price Credit, then,
on the
8
Business Day that follows the end of the five Business Day (or shorter) period,
such Seller shall pay to Buyer in cash the remaining unapplied amount of the
Purchase Price Credit.
(e) If, on any day on or after the Purchase Termination Date, or, with
respect to any Seller, the date such Seller becomes a Terminating Seller, the
principal amount of any Seller's Buyer Note has been reduced to zero, an amount
equal to the sum of any Seller Dilution Adjustments and the Seller Noncomplying
Receivables Adjustments, if any, in respect of such Seller (as determined
pursuant to SECTION 3.5), less any amounts in CLAUSE (b)(ii) allocated to such
Seller, shall be paid by such Seller to Buyer in cash on the next succeeding
Business Day.
(f) If, on any day, the amounts, if any, allocated to any Seller pursuant
to CLAUSE (b)(ii) above exceed the sum of any Seller Dilution Adjustments and
the Seller Noncomplying Receivables Adjustments, if any, in respect of such
Seller (as determined pursuant to SECTION 3.5) for such day, then Buyer shall
either (i) pay Servicer (for the account of such Seller) in cash the amount of
such excess, or (ii) if Buyer does not have sufficient cash to pay such amount
in full, increase the principal amount of such Seller's Buyer Note by the amount
of such excess that is not paid in cash to Servicer.
(g) Amounts received by Servicer pursuant to this Section shall be
allocated among the Sellers in accordance with SECTION 3.3, and the Seller
Dilution Adjustments and the Seller Noncomplying Receivables Adjustments in
respect of each such Seller (as determined pursuant to SECTION 3.5). Servicer
shall maintain a bookkeeping account (the "SELLER ACCOUNT") for purposes of
tracking:
(i) the Purchase Price payable to each Seller in respect of
Receivables sold by it to Buyer (including the extent to which cash and
non-cash payments made by Buyer should be allocated to each Seller),
(ii) the extent to which such Purchase Price should be reduced on
account of such Seller's Seller Dilution Adjustments and Seller
Noncomplying Receivables Adjustments (including any allocation of a
Purchase Price Credit),
(iii) if a Seller makes cash payments in respect of the Noncomplying
Receivables and Dilution Adjustment (including any payment in respect of a
Purchase Price Credit), the obligation of each other Seller to reimburse
such Seller for its proportionate share thereof,
(iv) if Purchase Price payments attributable to a Seller's
Receivables have been reduced on account of another Seller's Seller
Dilution Adjustment or the Seller Noncomplying Receivables Adjustment, the
obligation of such other Seller to reimburse the Seller subject to such
reduction,
(v) the extent to which payments (whether cash or non-cash) by
Buyer in respect of a negative Noncomplying Receivables and Dilution
Adjustment should be allocated to each Seller, and
(vi) cash payments made to and by each Seller in respect of the
items described above.
9
Servicer shall maintain sufficient records with respect to the Seller
Account such that, on any day, it would be able to calculate each of the items
set forth above. Intercompany accounts among Sellers resulting from the items
described above will be settled in accordance with the intercompany cash
management system customarily employed by ▇▇▇▇▇▇ and its Subsidiaries.
SECTION 3.2 THE BUYER NOTES. (a) On the First Issuance Date, Buyer will
deliver to each Seller a promissory note, substantially in the form of EXHIBIT
A, payable to the order of such Seller (each such promissory note, as the same
may be amended, supplemented, endorsed or otherwise modified from time to time,
together with any promissory note issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, being
herein called a "BUYER NOTE"), that is subordinated to all Senior Liabilities
now or hereafter arising under or in connection with the Indenture; such
promissory notes shall replace in their entirety the "Buyer Notes" issued by
Buyer under the Original Purchase Agreement. Each Buyer Note is payable in full
on the date that is one year and one day after the date on which all Notes have
been repaid in full and the Revolving Periods for all Notes have terminated (the
"SELLER MATURITY DATE"). Each Buyer Note bears interest at a rate per annum
equal to the rate publicly announced by the Trustee from time to time as its
"reference" rate, determined as of each Cut-Off Date. Buyer may prepay all or
part of the outstanding balance of any Buyer Note from time to time without any
premium or penalty, unless the prepayment would result in a default in Buyer's
payment of any other amount required to be paid by it under any Transaction
Document.
(b) ▇▇▇▇▇▇ (or its designee) shall hold all Buyer Notes for the benefit of
the Sellers and shall make all appropriate recordkeeping entries with respect to
the Buyer Notes or otherwise to reflect the payments on and adjustment of the
Buyer Notes. ▇▇▇▇▇▇ and the other Sellers shall be entitled to pledge the Buyer
Notes as collateral for the benefit of Vertis's senior lenders. Vertis's books
and records shall constitute rebuttable presumptive evidence of the principal
amount of and accrued interest on each Buyer Note at any time. Each Seller
hereby irrevocably authorizes ▇▇▇▇▇▇ to ▇▇▇▇ its Buyer Note "CANCELLED" and
return it to Buyer upon the final payment thereof.
SECTION 3.3 APPLICATION OF COLLECTIONS AND OTHER FUNDS. If, on any day,
Buyer receives funds pursuant to the Indenture, Buyer shall apply the funds as
follows:
(a) FIRST, to pay its existing expenses and to set aside funds for
the payment of expenses that are then accrued (in each case to the extent
such expenses are permitted to exist under Section 7.2(l) of the
Indenture).
(b) SECOND, to pay the Purchase Price pursuant to SECTION 3.1 for
Receivables and Related Assets purchased by Buyer from the Sellers on the
next preceding Business Day, and
(c) THIRD, in such order as Buyer may elect, (A) to repay amounts
owed by Buyer to the Sellers under the Buyer Notes, (B) to pay amounts owed
pursuant to SECTION 3.1(F), or (C) to declare and pay dividends to ▇▇▇▇▇▇
to the extent permitted by law.
SECTION 3.4 SERVICING OF RECEIVABLES AND RELATED ASSETS. Consistent with
Buyer's ownership of the Receivables and the Related Assets, as between the
parties to this Agreement,
10
Buyer shall have the sole right to service, administer and collect the
Receivables, to assign the right and to delegate the right to others. Without
limiting the generality of SECTION 10.11, each Seller hereby acknowledges and
agrees that Buyer shall assign to the Trustee for the benefit of the Noteholders
a security interest in the rights and interests of Buyer hereunder and agrees to
cooperate fully with the Servicer and the Trustee in the exercise of the rights.
As more fully described in Section 7.4(b) and in the Indenture, the Trustee may
exercise the rights in the place of Buyer (as assignee or otherwise) only after
the designation of a Servicer other than ▇▇▇▇▇▇ pursuant to Section 10.2 of the
Indenture.
At Trustee's request, each Seller will (A) assemble all of the Records that
are necessary or appropriate to collect the Receivables and Related Transferred
Assets, and shall make the same available to Trustee at one or more places
selected by Trustee or its designee, (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections in a
manner acceptable to Trustee and shall, promptly upon receipt (and in no event
later than the second Business Day following receipt), remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments of
transfer, to a Bank Account or the Master Collection Account and (C) permit,
upon not less than two Business Days' prior written notice, any Successor
Servicer and its agents, employees and assignees access to their respective
facilities and their respective Records.
SECTION 3.5 ADJUSTMENTS FOR NONCOMPLYING RECEIVABLES, DILUTION AND CASH
DISCOUNTS. (a) If at any time any of Buyer, Servicer, the Trustee or a Seller
shall determine that (i) any Receivable identified by Servicer as an Eligible
Receivable on the date of Purchase thereof by Buyer or the contribution thereof
to Buyer was in fact a Seller Noncomplying Receivable on such date, (ii) any of
the representations and warranties made by the related Seller in SECTION 5.1(k)
with respect to such Receivable was not true on such date, or (iii) the
representation and warranty made by the related Seller, in its capacity as
Sub-Servicer, in SECTION 5.3(b) with respect to such Receivable was not true on
such date, such Seller shall be deemed to have received on the date of such
determination a Collection of the Receivable in an amount equal to the Unpaid
Balance of the Receivable (the sum of all such amounts for such Seller on any
day being called the "SELLER NONCOMPLYING RECEIVABLES ADJUSTMENT" for such
Seller for such day), and such Seller Noncomplying Receivables Adjustment shall
be settled in the manner provided for in SECTION 3.1.
(b) If on any day the aggregate Unpaid Balance of the Receivables sold or
contributed to Buyer on or before such date by a Seller is reduced in any manner
described in the definition of "Dilution" (the total of the reductions being
called the "SELLER DILUTION ADJUSTMENT" for the Seller for such day), then such
Seller shall be deemed to have received on such day a Collection of Receivables
in the amount of the Seller Dilution Adjustment and such Seller Dilution
Adjustment shall be settled in the manner provided in SECTION 3.1.
SECTION 3.6 PAYMENTS AND COMPUTATIONS, ETC. (a) All amounts to be paid by a
Seller to Buyer hereunder shall be paid in accordance with the terms hereof no
later than 1:00 p.m.,
New York City time, on the day when due in Dollars in
immediately available funds to an account that Buyer shall from time to time
specify in writing. Payments received by Buyer after such time shall be deemed
to have been received on the next Business Day. In the event that any payment
becomes due on a day that is not a Business Day, then the payment shall be made
on the
11
next Business Day. Each Seller shall, to the extent permitted by law, pay to
Buyer, on demand, interest on all amounts not paid when due hereunder at 2% per
annum above the interest rate on the applicable Buyer Note in effect on the date
the payment was due; PROVIDED, HOWEVER, that the interest rate shall not at any
time exceed the maximum rate permitted by applicable law. All computations of
interest payable hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first but excluding the last day)
elapsed.
(b) All amounts to be paid by Buyer to a Seller hereunder shall be paid to
Servicer (for the account of the applicable Seller) no later than 4:00 p.m.,
New
York City time, on the day when due in Dollars in immediately available funds to
an account that ▇▇▇▇▇▇ shall from time to time specify in writing. Payments
received by Servicer after such time shall be deemed to have been received on
the next Business Day. Servicer shall promptly remit payments received by it in
immediately available funds to such account as the applicable Seller shall from
time to time specify in writing. In the event that any payment becomes due on a
day that is not a Business Day, then such payment shall be made on the next
Business Day in accordance with the terms of the applicable Buyer Note.
ARTICLE IV
CONDITIONS TO PURCHASES
SECTION 4.1 CONDITIONS PRECEDENT TO CONTINUED PURCHASES. The obligation of
Buyer to continue to purchase the Purchased Assets hereunder is subject to the
conditions precedent that (i) each of the conditions precedent to the execution,
delivery and effectiveness of each other Transaction Document (other than a
condition precedent in any other Transaction Document relating to the
effectiveness of this Agreement) shall have been fulfilled to the satisfaction
of Buyer, and (ii) Buyer shall have received (or in the case of SUBSECTION (f)
below, shall have delivered) each of the following, on or before the Issuance
Date, each (unless otherwise indicated) dated the date hereof or the Issuance
Date and each in form and substance satisfactory to Buyer:
(a) SELLER ASSIGNMENT CERTIFICATES. A Seller Assignment Certificate
from each Seller in the form of EXHIBIT B, duly completed, executed and
delivered by such Seller,
(b) RESOLUTIONS. A copy of the resolutions of the Board of
Directors (or sole member in the case of a Seller that is a limited
liability company) of each Seller approving this Agreement and the other
Transaction Documents to be delivered by it hereunder and the transactions
contemplated hereby and thereby and addressing such other matters as may be
required by Buyer, certified by its Secretary or Assistant Secretary, each
as of a recent date acceptable to Buyer,
(c) GOOD STANDING CERTIFICATE OF EACH SELLER; CERTIFICATES AS TO
FOREIGN QUALIFICATION OF EACH SELLER. A good standing certificate for each
Seller, issued as of a recent date by the Secretary of State of the
jurisdiction of its incorporation (or formation) and of each state in which
such Seller transacts business, is required to be in good standing and
where the failure to be in good standing has, or would have a substantial
likelihood of having, a Material Adverse Effect,
12
(d) INCUMBENCY CERTIFICATE. A certificate of the Secretary or
Assistant Secretary of each Seller certifying, as of a recent date
reasonably acceptable to Buyer, the names and true signatures of the
officers authorized on such Seller's behalf to sign the Transaction
Documents to be delivered by such Seller (on which certificate Buyer, the
Trustee and the Servicer may conclusively rely until such time as Buyer
shall receive from such Seller (with a copy to the Trustee and the
Servicer), a revised certificate meeting the requirements of this
subsection),
(e) OTHER TRANSACTION DOCUMENTS. Original copies, executed by each
of the parties thereto in such reasonable number as shall be specified by
Buyer, of each of the other Transaction Documents to be executed and
delivered in connection herewith, and
(f) BUYER NOTES. The Buyer Notes, executed by Buyer.
SECTION 4.2 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES. Each
Seller, by accepting the Purchase Price paid for each Purchase, shall be deemed
to have certified, with respect to the Receivables and Related Assets to be sold
by it on such day, that its representations and warranties contained in ARTICLE
V (excluding, with respect to any day after the Issuance Date, SECTION 5.1(i))
are true and correct on and as of such day, with the same effect as though made
on and as of such day.
SECTION 4.3 EFFECT OF PAYMENT OF PURCHASE PRICE. Upon the payment of the
Purchase Price (whether in cash or by an increase in a Buyer Note or, in the
case of ▇▇▇▇▇▇ as a Seller, by a capital contribution, in each case pursuant to
SECTION 3.1) for any Purchase, title to the Receivables and the Related Assets
included in the Purchase shall vest in Buyer, whether or not the conditions
precedent to the Purchase were in fact satisfied; PROVIDED, HOWEVER, that Buyer
shall not be deemed to have waived any claim it may have under this Agreement
for the failure by a Seller in fact to satisfy any such condition precedent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. In order to
induce Buyer to enter into this Agreement and to make purchases hereunder, each
Seller hereby makes the representations and warranties set forth in this Section
with respect to itself at the times and to the extent set forth in SECTION 4.2
(it being understood that only ▇▇▇▇▇▇ makes the representations and warranties
set forth below with respect to any Contributed Receivables and Related Assets
with respect thereto).
(a) ORGANIZATION AND GOOD STANDING. Such Seller is a corporation or
limited liability company duly organized and validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation and has full power and authority to own its properties and to
conduct its business as the properties presently are owned and the business
presently is conducted. Such Seller had at all relevant times, and now has,
all necessary power, authority, and legal right to own, sell and (if
applicable) contribute its Receivables and the Related Assets.
13
(b) DUE QUALIFICATION. Such Seller is duly qualified to do business
and is in good standing as a foreign corporation or limited liability
company (or is exempt from such requirements), and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires
qualification, licenses or approvals and where the failure so to qualify,
to obtain the licenses and approvals or to preserve and maintain the
qualification, licenses or approvals has, or would have a substantial
likelihood of having, a Material Adverse Effect.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. Such Seller has (i) all
necessary power and authority to (A) execute and deliver this Agreement and
the other Transaction Documents to which it is a party, (B) perform its
obligations under this Agreement and the other Transaction Documents to
which it is a party, and (C) sell, assign and (if applicable) contribute
the Receivables and the Related Assets on the terms and subject to the
conditions herein and therein provided and (ii) duly authorized by all
necessary action such sale, assignment and (if applicable) contribution and
the execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party and the consummation of the
transactions provided for in this Agreement and the other Transaction
Documents to which it is a party.
(d) VALID SALE; BINDING OBLIGATIONS. Each sale of Receivables and
Related Assets made by such Seller pursuant to this Agreement, and each
contribution of Receivables and Related Assets made to Buyer, shall
constitute a valid sale (or, in the case of Contributed Receivables and
Related Assets with respect to such Contributed Receivables, a valid
contribution), transfer, and assignment of all of such Seller's right,
title and interest in, to and under such Receivables and the Related Assets
of such Seller to Buyer that is perfected under the UCC, enforceable
against creditors of, and purchasers from, such Seller and free and clear
of any Adverse Claim (other than any Permitted Adverse Claim or any Adverse
Claim arising solely as a result of any action taken by Buyer hereunder or
by the Trustee under the Indenture); and this Agreement constitutes, and
each other Transaction Document to which such Seller is a party when duly
executed and delivered will constitute, a legal, valid and binding
obligation of such Seller, enforceable against it in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless
of whether enforceability is considered in a proceeding in equity or at
law.
(e) NO CONFLICT OR VIOLATION. The execution, delivery and
performance of, and the consummation of the transactions contemplated by,
this Agreement and the other Transaction Documents to be signed by such
Seller and the fulfillment of the terms hereof and thereof will not (i)
conflict with, violate, 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, (A) its Certificate of Incorporation or Bylaws or
limited liability company agreement or other organizational document or (B)
any indenture, loan agreement, mortgage, deed of trust or other material
agreement or instrument to which such Seller is a party or by which it or
any of its properties is bound, (ii) result in the creation or imposition
of any Adverse Claim upon any of the Receivables or Related Assets other
14
than pursuant to this Agreement and the other Transaction Documents, or
(iii) conflict with or violate any federal, state, local or foreign law or
any decision, decree, order, rule or regulation applicable to it or any of
its properties of any court or of any federal, state, local or foreign
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its properties, which
conflict, violation, breach, default or Adverse Claim individually or in
the aggregate, has, or would have a substantial likelihood of having, a
Material Adverse Effect.
(f) LITIGATION AND OTHER PROCEEDINGS. Except as described in
SCHEDULE 1, (i) there is no action, suit, proceeding or investigation
pending or, to the best knowledge of such Seller, threatened against it
before any court, regulatory body, arbitrator, administrative agency or
other tribunal or governmental instrumentality and (ii) it is not subject
to any order, judgment, decree, injunction, stipulation or consent order of
or with any court or other government authority that, in the case of each
of CLAUSES (i) and (ii), (A) asserts the invalidity of this Agreement or
any other Transaction Document, (B) seeks to prevent the sale, assignment
or contribution of any Receivables or Related Assets by such Seller to
Buyer, the issuance of the applicable Seller Assignment Certificate or the
consummation of any of the transactions contemplated by this Agreement or
any other Transaction Document, (C) seeks any determination or ruling that
would materially and adversely affect the performance by such Seller of its
obligations under this Agreement or any other Transaction Document or the
validity or enforceability of this Agreement or any other Transaction
Document, (D) seeks to affect adversely the income tax attributes of the
purchases hereunder or the applicable Seller Assignment Certificate, in the
case of each of the foregoing whether under the United States Federal
income tax system or any state income tax system, or (E) individually or in
the aggregate for all such actions, suits, proceedings and investigations
has, or would have a substantial likelihood of having, a Material Adverse
Effect.
(g) GOVERNMENT APPROVALS. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by such Seller, and all notices to and filings
(except, in respect of enforceability against a federal Governmental
Authority, any filings under the Assignment of Claims Act and any consents
required by states with respect to any Receivables arising from state and
local Governmental Authorities), with any Governmental Authority that are
required to be made by it, in the case of each of the foregoing in
connection with the conveyance of Receivables and Related Assets or the due
execution, delivery and performance by such Seller of this Agreement, such
Seller's Seller Assignment Certificate or any other Transaction Document to
which it is a party and the consummation of the transactions contemplated
by this Agreement, have been obtained or made and are in full force and
effect, except where the failure to obtain or make any such authorization,
consent, order, approval, notice or filing, individually or in the
aggregate for all such failures, does not, and would not reasonably be
expected to have, a Material Adverse Effect.
(h) BULK SALES ACT. No transaction contemplated by this Agreement
or any other Transaction Document requires compliance with, or will be
subject to avoidance under, any bulk sales act or similar law.
15
(i) FINANCIAL CONDITION. (x)(i) The audited consolidated financial
statements of and financial condition of ▇▇▇▇▇▇ and its Subsidiaries at
December 31, 2001 and the related consolidated statements of income and
cash flow and changes in shareholder equity of ▇▇▇▇▇▇ and its Subsidiaries
for the fiscal year ending December 31, 2001 and (ii) the unaudited
consolidated balance sheet of ▇▇▇▇▇▇, Inc. and its Subsidiaries as of the
end of the fiscal quarter ended June 30, 2002, and the related consolidated
statements of earnings, shareholder's equity and cash flows of ▇▇▇▇▇▇ and
its Subsidiaries for such quarterly period, in each case present fairly in
all material respects the financial condition of ▇▇▇▇▇▇ and its
Subsidiaries at the date of such statements of financial condition and the
results of operations of ▇▇▇▇▇▇ and its Subsidiaries for the periods
covered thereby, subject, in the case of unaudited financial statements, to
normal year end adjustments. (y) Since December 31, 2001, there has been no
material adverse change in the business, operations, property, assets,
liabilities, conditions (financial or otherwise) or prospects of ▇▇▇▇▇▇ and
its Subsidiaries taken as a whole.
(j) MARGIN REGULATIONS. No use of any funds obtained by such Seller
under this Agreement will conflict with or contravene any of Regulations T,
U and X promulgated by the Federal Reserve Board from time to time.
(k) QUALITY OF TITLE.
(i) Immediately before each purchase to be made by Buyer
hereunder and (in the case of ▇▇▇▇▇▇) each contribution to be made
hereunder to Buyer, each Receivable and Related Asset of such Seller
that is then to be transferred to Buyer thereunder, and the related
Contracts, shall be owned by such Seller free and clear of any Adverse
Claim (other than any Permitted Adverse Claim or any Adverse Claim
arising solely as the result of any action taken by Buyer hereunder or
by the Trustee under the Indenture); and such Seller shall have made
all filings and shall have taken all other action under applicable law
in each relevant jurisdiction in order to protect and perfect the
ownership interest of Buyer and its successors in the Receivables and
Related Assets against all creditors of, and purchasers from, such
Seller.
(ii) Whenever Buyer makes a purchase hereunder from such
Seller or (in the case of ▇▇▇▇▇▇) accepts a contribution hereunder
from such Seller, it shall have acquired a valid and perfected
ownership interest in each Transferred Asset, free and clear of any
Adverse Claim (other than any Permitted Adverse Claim, any Adverse
Claim arising solely as the result of any action taken by Buyer
hereunder or by the Trustee under the Indenture).
(iii) No effective financing statement or other instrument
similar in effect that covers all or part of any Receivable originated
by such Seller, any interest therein or any Related Asset with respect
thereto is on file in any recording office except such as may be filed
(A) in favor of such Seller in accordance with the Contracts, (B) in
favor of Buyer pursuant to this Agreement and (C) in favor of the
Trustee, for the benefit of the Noteholders, in accordance with the
Indenture. No effective financing statement or instrument similar in
16
effect relating to perfection that covers any inventory of such Seller
that might give rise to Receivables is on file in any recording office
except for (so long as an Intercreditor Agreement is in effect)
financing statements or instruments in favor of creditors of such
Seller bound by such Intercreditor Agreement.
(iv) No Purchase by Buyer from such Seller (and, in the case
of ▇▇▇▇▇▇, no capital contribution to Buyer whether or not made in
connection with a Purchase) constitutes a fraudulent transfer or
fraudulent conveyance under the United States Bankruptcy Code or
applicable state bankruptcy or insolvency laws or is otherwise void or
voidable or subject to subordination under similar laws or principles
or for any other reason.
(v) Each Purchase by Buyer from such Seller constitutes a
true and valid sale of the Receivables and Related Assets under
applicable state law and true and valid assignments and transfers for
consideration (and not merely a pledge of the Receivables and Related
Assets for security purposes), enforceable against the creditors of,
and other purchasers from, such Seller, and no Receivables or Related
Assets transferred to Buyer hereunder shall constitute property of
such Seller.
(l) ELIGIBLE RECEIVABLES. On the date of each purchase of
Receivables hereunder from such Seller (or, in the case of ▇▇▇▇▇▇)
contribution from such Seller, each such Receivable, unless otherwise
identified to Buyer and the Trustee by the Servicer in the Daily Report for
such date, is an Eligible Receivable.
(m) ACCURACY OF INFORMATION. All written information furnished by
or on behalf of such Seller to Buyer, Servicer or the Trustee pursuant to
or in connection with any Transaction Document or any transaction
contemplated herein or therein shall not contain any untrue statement of a
material fact or omit to state material facts necessary to make the
statements made not misleading, in each case on the date the statement was
made and in light of the circumstances under which the statements were made
or the information was furnished.
(n) OFFICES. The principal place of business and chief executive
office of such Seller is located at the address set forth on SCHEDULE 4,
and any other location which has been such Seller's principal place of
business or chief executive office since February 28, 2001 is specified in
SCHEDULE 2 (or at such other locations, notified to the Servicer and the
Trustee in accordance with SECTION 6.1(f), in jurisdictions where all
action required pursuant to SECTION 7.3 has been taken and completed).
(o) ACCOUNT BANKS AND PAYMENT INSTRUCTIONS. The names and addresses
of all the banks, together with the account numbers of the accounts at the
banks, into which Collections are paid as of the Issuance Date have been
accurately identified to Buyer in a letter from such Seller to Buyer dated
the Issuance Date or have been specified in the notices as shall have been
delivered thereafter pursuant to SECTION 6.3(c). Each Account Bank has
executed and delivered an Account Agreement to Buyer and the Trustee. Such
Seller has instructed all Obligors to submit all payments on the
Receivables and Related
17
Assets directly to one of the Lockbox Accounts. Any payments not made
directly to the Account Banks will be forwarded to the Account Banks within
two Business Days.
(p) COMPLIANCE WITH APPLICABLE LAWS. Such Seller is in compliance
with the requirements of all applicable laws, rules, regulations and orders
of all Governmental Authorities (federal, state, local or foreign, and
including environmental laws), a violation of any of which, individually or
in the aggregate for all such violations, has, or would have a substantial
likelihood of having a Material Adverse Effect.
(q) LEGAL NAMES. Except as set forth in SCHEDULE 3, since January
1, 1997 such Seller has not been (i) known by any legal name other than its
corporate or company name as of the date hereof, except to the extent
permitted otherwise pursuant to SECTION 6.3(e), (ii) the subject of any
merger or other corporate reorganization that resulted in a change of name,
identity, jurisdiction of organization or corporate structure. Such Seller
uses no trade names other than its actual corporate or company name and the
trade names set forth in SCHEDULE 3.
(r) INVESTMENT COMPANY ACT. Such Seller is not, and is not
controlled by, an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended.
(s) TAXES. Such Seller has filed or caused to be filed all tax
returns and reports required by law to have been filed by it and has paid
all taxes, assessments and governmental charges thereby shown to be owing,
except any such taxes, assessments or charges (i) that are being diligently
contested in good faith by appropriate proceedings, (ii) for which adequate
reserves in accordance with GAAP shall have been set aside on its books and
(iii) with respect to which no Adverse Claim, except Permitted Adverse
Claims, has been imposed upon any Receivables or Related Assets.
SECTION 5.2 REPRESENTATIONS AND WARRANTIES OF BUYER. From the date hereof
until the Purchase Termination Date, Buyer hereby represents and warrants that
(a)(i) this Agreement has been duly authorized, executed and delivered by Buyer
and (ii) constitutes the legal, valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law, and (b) the execution, delivery and performance
of this Agreement do not violate any applicable law or any agreement to which
Buyer is a party or by which its properties are bound.
SECTION 5.3 REPRESENTATIONS AND WARRANTIES OF SERVICER. In order to induce
Buyer to enter into this Agreement and to make purchases hereunder:
(a) Servicer and each Seller, in its capacity as a Sub-Servicer,
hereby represents and warrants as to itself that all information furnished
by or on behalf of such Person to Buyer, Servicer or the Trustee pursuant
to or in connection with any Transaction Document or any transaction
contemplated herein or therein shall not contain any untrue statement of a
material fact or omit to state material facts necessary to make
18
the statements made not misleading, in each case on the date the statement
was made and in light of the circumstances under which the statements were
made or the information was furnished; and
(b) without limiting the foregoing, each Seller, in its capacity as
a Sub-Servicer, hereby represents and warrants as to itself that on the
date of each Daily Report or Monthly Report that identifies a Receivable
originated by such Seller as an Eligible Receivable, such Receivable is an
Eligible Receivable.
ARTICLE VI
GENERAL COVENANTS OF THE SELLERS
SECTION 6.1 AFFIRMATIVE COVENANTS. From the First Issuance Date until the
first day following the Purchase Termination Date on which all Obligations of
the Sellers shall have been finally and fully paid and performed and the
Principal Amount of the Notes shall have been reduced to zero, unless Buyer
shall otherwise give its prior written consent, each Seller hereby agrees that
it will perform the covenants and agreements set forth in this Section.
(a) COMPLIANCE WITH LAWS, ETC. Such Seller will comply in all
material respects with all applicable laws, rules, regulations, judgments,
decrees and orders (including those relating to the Receivables, the
Related Assets, the related Contracts of such Seller and any other
agreements related thereto), in each case to the extent the failure to
comply, individually or in the aggregate for all such failures, has, or
would have a substantial likelihood of having, a Material Adverse Effect.
(b) PRESERVATION OF EXISTENCE. Such Seller will preserve and
maintain its corporate or limited liability company existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in good standing as a foreign corporation or
limited liability company in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualifications has, or would have a substantial likelihood of having, a
Material Adverse Effect.
(c) RECEIVABLES REVIEWS. Such Seller shall, during regular business
hours, permit Buyer and its agents or representatives, at the expense of
such Seller, (i) to examine and make copies of and abstracts from, and to
conduct accounting reviews of, all Records in the possession or under the
control of such Seller relating to the Receivables or Related Assets
generated by such Seller, and (ii) to visit the offices and properties of
such Seller for the purpose of examining the materials described in CLAUSE
(i) above, and to discuss matters relating to any Receivables or any
Related Assets of such Seller or such Seller's performance hereunder with
any of the Authorized Officers of such Seller or, with the prior consent of
an Authorized Officer of such Seller, with employees of such Seller having
knowledge of such matters (the examinations set forth in the foregoing
CLAUSES (i) and (ii) being herein called a "SELLER RECEIVABLES REVIEW").
Buyer and its agents or representatives shall be entitled to conduct Seller
Receivables Reviews whenever Buyer, in its reasonable judgment, deems it
appropriate; PROVIDED, that prior to the occurrence and continuance of an
Event of Default, Buyer (or its agent or representative) shall give such
Seller at least five Business Days' prior notice of any
19
Seller Receivables Review, and Buyer shall have the right to request a
Seller Receivables Review not more than once in any calendar year.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Such Seller shall
maintain and implement administrative and operating procedures (including
an ability to recreate records evidencing its Receivables and Related
Assets in the event of the destruction of the originals thereof), and shall
keep and maintain all documents, books, records and other information that,
in the reasonable determination of Buyer and the Trustee, are necessary or
advisable in accordance with prudent industry practice and custom for
transactions of this type for the collection of all Receivables and the
Related Assets. Upon the reasonable request of Buyer to Seller (with a copy
to the Trustee) made at any time after the occurrence and continuance of a
Servicer Default, such Seller will deliver copies of all books and records
maintained pursuant to this subsection to the Trustee. Such Seller shall
maintain at all times accurate and complete books, records and accounts
relating to the Receivables, Related Assets and Contracts and all
Collections thereon in which timely entries shall be made. Such books and
records shall be marked to indicate the sales of all Receivables and
Related Assets hereunder and shall include (i) all payments received and
all credits and extensions granted with respect to the Receivables and (ii)
the return, rejection, repossession, or stoppage in transit of any
merchandise, the sale of which has given rise to a Receivable that has been
purchased by or contributed to Buyer.
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. Such
Seller will, at its expense, timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it
under the Contracts of such Seller related to the Receivables and Related
Assets, in each case to the extent failure to perform or comply has, or
would have a substantial likelihood of having, a Material Adverse Effect.
(f) LOCATION OF RECORDS AND OFFICES. Such Seller will keep its
principal place of business and chief executive office at the addresses
referred to in SCHEDULE 2 or, upon not less than 30 days' prior written
notice given by such Seller to Buyer, the Trustee, the Agents and the
Rating Agencies, 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. Such Seller will comply in all
material respects with its Credit and Collection Policy in regard to each
Receivable of such Seller and the Related Assets and the Contracts related
to each such Receivable, where the failure so to comply, individually or in
the aggregate for all such failures, has, or would have a substantial
likelihood of having, a Material Adverse Effect.
(h) SEPARATE CORPORATE EXISTENCE OF BUYER. Such Seller hereby
acknowledges that the Trustee, on behalf of the Noteholders and the
Indemnified Parties, is entering into the transactions contemplated by the
Transaction Documents in reliance upon Buyer's identity as a legal entity
separate from such Seller and the other ▇▇▇▇▇▇ Persons. Therefore, from and
after the date hereof until the first day following the Purchase
Termination Date on which all Obligations shall have been fully paid and
performed and
20
the Principal Amount of the Notes shall have been reduced to zero, such
Seller will, and will cause each other ▇▇▇▇▇▇ Person to, take all
reasonable steps to continue their respective identities as separate legal
entities and to make it apparent to third Persons that each is an entity
with assets and liabilities distinct from those of Buyer and that Buyer is
not a division of the Servicer, such Seller, ▇▇▇▇▇▇ or any other Person.
Without limiting the foregoing, ▇▇▇▇▇▇ and each other Seller will, and will
cause each other ▇▇▇▇▇▇ Person to, operate, conduct their respective
businesses and otherwise act in a manner which is consistent with the
factual assumptions in each of the opinions of ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP dated the
date hereof regarding certain substantive consolidation and true sale
issues.
(i) PAYMENT INSTRUCTIONS TO OBLIGORS. Such Seller will instruct all
Obligors to submit all payments either (i) to one of the lockboxes
maintained at the Lockbox Banks for deposit in a Lockbox Account or to a
Concentration Account or (ii) directly to one of the Lockbox Accounts.
(j) SEGREGATION OF COLLECTIONS. Such Seller shall use reasonable
efforts to minimize the deposit of any funds other than Collections into
any of the Lockbox Accounts and, to the extent that any such funds
nevertheless are deposited into any of the Lockbox Accounts, shall promptly
identify any such funds, or shall cause the funds to be so identified, to
Buyer, the Servicer and the Trustee (following which notice, Buyer shall
cause the Servicer to return all the funds to such Seller).
(k) IDENTIFICATION OF ELIGIBLE RECEIVABLES. Such Seller will (i)
establish and maintain such procedures as are necessary for determining no
less frequently than each Business Day whether each Receivable qualifies as
an Eligible Receivable, and for identifying, on any Business Day, all
Receivables to be sold on that date that are not Eligible Receivables, and
(ii) except as permitted in Section 3.5(c) of the Indenture, notify Buyer
prior to the occurrence of a Purchase if a Receivable to be sold hereunder
will, to such Seller's knowledge, not be an Eligible Receivable as of the
date of Purchase.
(l) ACCURACY OF INFORMATION. All written information furnished on
and after the Issuance Date by or on behalf of such Seller to Buyer, the
Servicer or the Trustee pursuant to or in connection with any Transaction
Document or any transaction contemplated herein or therein shall not
contain any untrue statement of a material fact or omit to state material
facts necessary to make the statements made not misleading, in each case on
the date the statement was made and in light of the circumstances under
which the statements were made or the information was furnished.
(m) TAXES. File or cause to be filed, and cause each Person with
whom it shares consolidated tax liability to file, all Federal, state and
local tax returns that are required to be filed by it (except where the
failure to file such returns does not have a substantial likelihood of
having, a Material Adverse Effect) and pay or cause to be paid all taxes
shown to be due and payable on such tax returns (except only such taxes or
assessments the validity of which are being contested in good faith by
appropriate proceedings and with respect to which such Seller shall have
set aside adequate reserves on its books in accordance with GAAP and which
proceedings do not have a substantial likelihood of having, a Material
Adverse Effect).
21
(n) SOFTWARE LICENSES. Upon the renewal of or entry into any new
software license or similar agreement used by the Sellers or Servicer in
the origination or servicing of Receivables such Seller or the Servicer, as
applicable, shall use its commercially reasonable best efforts to expressly
permit use by any substitute Servicer of the materials subject to such
licenses or agreements.
SECTION 6.2 REPORTING REQUIREMENTS. From the Issuance Date until the first
day following the Purchase Termination Date on which all Obligations of the
Sellers shall have been finally and fully paid and performed and the Principal
Amount of the Notes shall have been reduced to zero, such Seller agrees that it
will, unless Buyer and the Trustee shall otherwise give prior written consent,
and (with respect to the notices described below in SUBSECTIONS (c) and (d),
unless the Modification Condition has been satisfied), furnish to Buyer, the
Agents, the Trustee and each Noteholder (and in the case of the notices
described below in SUBSECTIONS (c), (d) and (f), to the Rating Agencies):
(a) QUARTERLY FINANCIAL STATEMENTS. Within 50 days after the end of
each of the first three fiscal quarters of each fiscal year of ▇▇▇▇▇▇,
copies of the unaudited consolidated balance sheets of ▇▇▇▇▇▇ and its
consolidated Subsidiaries as at the end of the fiscal quarter and the
related unaudited statements of earnings and cash flows, in each case for
the fiscal quarter and for the period from the beginning of the fiscal year
through the end of such fiscal quarter, prepared in accordance with GAAP
consistently applied throughout the periods reflected therein and certified
(subject to year end adjustments and the omission of footnotes) by the
chief financial officer or chief accounting officer of ▇▇▇▇▇▇,
(b) ANNUAL FINANCIAL STATEMENTS. As soon as possible and in any
event within 95 days after the end of each fiscal year of ▇▇▇▇▇▇, a copy of
the audited consolidated balance sheet of ▇▇▇▇▇▇ and its consolidated
Subsidiaries as at the end of the fiscal year and the related statements of
earnings, stockholders' equity and cash flows of ▇▇▇▇▇▇ and its
consolidated Subsidiaries for the fiscal year, setting forth in each case
in comparative form the corresponding figures for the preceding fiscal year
and prepared in accordance with GAAP consistently applied throughout the
periods reflected therein, certified, without Impermissible Qualification,
by Deloitte & Touche (or such other independent certified public
accountants of a nationally recognized standing in the United States of
America as shall be selected by ▇▇▇▇▇▇),
(c) EVENT OF DEFAULTS. As soon as possible, and in any event within
five Business Days after an Authorized Officer of such Seller has obtained
knowledge of the occurrence of any Event of Default or any Unmatured Event
of Default, a written statement of an Authorized Officer of such Seller
describing the event and the action that such Seller proposes to take with
respect thereto, in each case in reasonable detail,
(d) MATERIAL ADVERSE EFFECT. As soon as possible and in any event
within five Business Days after an Authorized Officer of such Seller has
knowledge thereof, written notice that describes in reasonable detail any
event or occurrence that, individually or in the aggregate for all such
events or occurrences, has, or that would have a substantial likelihood of
having, a Material Adverse Effect,
22
(e) PROCEEDINGS. As soon as possible and in any event within five
Business Days after an Authorized Officer of such Seller has knowledge
thereof, written notice of (i) any litigation, investigation or proceeding
of the type described in SECTION 5.1(f) not previously disclosed to Buyer
and (ii) any judgment, settlement or other final disposition with respect
to any such previously disclosed litigation, investigation or proceeding,
and
(f) OTHER. Promptly, from time to time, (i) such other information,
documents, records or reports respecting the Receivables or the Related
Assets or (ii) such other information respecting the condition or
operations, financial or otherwise, of such Seller, in each case as Buyer
may from time to time reasonably request in order to protect the interests
of Buyer, the Trustee or the Noteholders under or as contemplated by this
Agreement.
SECTION 6.3 NEGATIVE COVENANTS. From the Issuance Date until the first day
following the Purchase Termination Date on which all Obligations of the Sellers
shall have been finally and fully paid and performed and the Principal Amount of
the Notes shall have been reduced to zero, unless Buyer shall otherwise give its
prior written consent, each Seller hereby agrees that it will perform the
covenants and agreements set forth in this Section.
(a) SALES, LIENS, ETC. Except as otherwise provided herein or in
the Indenture, such Seller will not (i)(A) sell, assign (by operation of
law or otherwise) or otherwise transfer to any Person, (B) pledge any
interest in, (C) grant, create, incur, assume or permit to exist any
Adverse Claim (other than Permitted Adverse Claims) to or in favor of any
Person upon or with respect to, or (D) cause to be filed any financing
statement or equivalent document relating to perfection with respect to any
Transferred Asset or any Contract related to any Receivable, or upon or
with respect to any lockbox or account to which any Collections of any such
Receivable or any Related Assets are sent or any interest therein, or (ii)
assign to any Person any right to receive income from or in respect of any
of the foregoing.
In the event that such Seller fails to keep any Specified Assets free
and clear of any Adverse Claim (other than a Permitted Adverse Claim, any
Adverse Claims arising hereunder, and other Adverse Claims permitted by any
other Transaction Document), Buyer may (without limiting its other rights
with respect to such Seller's breach of its obligations hereunder) make
reasonable expenditures necessary to release the Adverse Claim. Buyer shall
be entitled to indemnification for any such expenditures pursuant to the
indemnification provisions of ARTICLE IX. Alternatively, Buyer may deduct
such expenditures as an offset to the Purchase Price owed to such Seller
hereunder.
Such Seller will not pledge or grant any security interest in its
inventory, the Buyer Note or the capital stock of Buyer unless prior to any
pledge or grant such Seller and the Person for whose benefits the pledge or
grant is being made have entered into an Intercreditor Agreement; PROVIDED,
HOWEVER, that any Buyer Note and/or the capital stock or membership
interests of Buyer may be pledged pursuant to the ▇▇▇▇▇▇ Credit Agreement.
23
(b) EXTENSION OR AMENDMENT OF RECEIVABLES; CHANGE IN CREDIT AND
COLLECTION POLICY OR CONTRACTS. Such Seller will not, (i) without the prior
written consent of Buyer and the Trustee, which consent will not be
unreasonably withheld, extend, amend or otherwise modify the terms of any
Receivable or Contract in a manner that would have a substantial likelihood
of having a Material Adverse Effect or (ii) change the terms and provisions
of the Credit and Collection Policy in any material respect unless (x) with
respect to collection policies, the change is made with the prior written
approval of the Trustee and Buyer and the Modification Condition is
satisfied with respect thereto, (y) with respect to collection procedures,
the change is made with prior written notice to the Trustee and Buyer and
no Material Adverse Effect would result and (z) with respect to accounting
policies relating to Receivables that have become Write-Offs, the change is
made in accordance with GAAP.
(c) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Such Seller will
not (i) add or terminate any bank as an Account Bank from those listed in
the letter referred to in SECTION 5.1(o) unless, prior to any such addition
or termination, Buyer, the Trustee, the Agents and the Rating Agencies
shall have received not less than ten Business Days' prior written notice
of the addition or termination and, not less than ten Business Days prior
to the effective date of any such proposed addition or termination, Buyer
and the Trustee shall have received (A) counterparts of the applicable type
of Account Agreement with each new Account Bank, duly executed by such new
Account Bank and all other parties thereto and (B) copies of all other
agreements and documents signed by the Account Bank and such other parties
with respect to any new Bank Account, all of which agreements and documents
shall be reasonably satisfactory in form and substance to Buyer and the
Trustee, or (ii) make any change in its instructions to Obligors, given in
accordance with SECTION 5.1(o), regarding payments to be made to such
Seller or payments to be made to any Account Bank, other than changes in
the instructions that direct Obligors to make payments to another Bank
Account at such Account Bank or another Account Bank or to the Master
Collection Account.
(d) MERGERS, ACQUISITIONS, SALES, ETC. Except for (i) mergers or
consolidations in which such Seller is the surviving Person, (ii) mergers
or consolidations of a Subsidiary of ▇▇▇▇▇▇ into such Seller or (iii)
mergers or consolidations in which the surviving Person expressly assumes
the performance of this Agreement and the Modification Condition shall have
been satisfied with respect to the consolidation or merger, the Seller will
not be a constituent corporation to any merger or consolidation. Such
Seller will give the Rating Agencies, the Agents and the Trustee notice of
any such permitted merger or consolidation promptly following completion
thereof. Unless the Modification Condition is satisfied, such Seller will
not, directly or indirectly, transfer, assign, convey or lease, whether in
one transaction or in a series of transactions, all or substantially all of
its assets or sell or assign, with or without recourse, any Receivables or
Related Assets, in each case other than pursuant to this Agreement.
(e) CHANGE IN NAME. Such Seller will not change (A) (i) its
legal name or (ii) the name under or by which it does business, in either
case, in any manner that would or may make any financing statement filed by
such Seller in accordance herewith seriously misleading within the meaning
of Section 9-507(c) of an applicable enactment of the
24
UCC or (B) its jurisdiction of organization or legal structure, in each
case unless such Seller shall have given Buyer, the Servicer, the Trustee
and the Rating Agencies 30 days' prior written notice thereof and unless,
prior to any change in name, such Seller shall have taken and completed all
action required by SECTION 7.3.
(f) OPERATING AGREEMENT. Such Seller will not cause Buyer to amend
Section 1.2, 1.4, 1.6, 2.1, 2.2, 2.3, 2.6, 3.1B, 4.1.A, 4.3, 5.1, 6.1, 8.4,
and 8.6 nor any of the provisions of Article IX of its limited liability
company operating agreement without the Trustee's prior written consent,
which consent will not be unreasonably withheld or delayed.
(g) AMENDMENTS TO TRANSACTION DOCUMENTS. Such Seller will not amend
or otherwise modify or supplement any Transaction Document to which it is a
party unless (i) Buyer shall have given its prior written consent to each
amendment, modification or supplement and (ii) the Modification Condition
shall have been satisfied.
(h) ACCOUNTING FOR PURCHASES. Such Seller shall prepare its
financial statements in accordance with GAAP, and any financial statements
that are made publicly available and which are consolidated to include
Buyer will contain footnotes stating that such Seller has sold or
contributed its Receivables to Buyer and that the assets of Buyer will not
be available to ▇▇▇▇▇▇ and its Subsidiaries unless Buyer's liabilities have
been paid in full. Such Seller shall not prepare any financial statements
that account for the transactions contemplated in this Agreement in any
manner other than as a sale of the Purchased Assets by such Seller to
Buyer, or in any other respect account for or treat the transactions
contemplated in this Agreement (including but not limited to accounting
and, where taxes are not consolidated, for tax reporting purposes) in any
manner other than as a sale of the Purchased Assets by such Seller to
Buyer.
(i) AMENDMENTS TO INTERCREDITOR PROVISIONS. Such Seller will not
amend, waive, modify or breach the Intercreditor Provisions in a manner
that has, or would have a substantial likelihood of having, a Material
Adverse Effect.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE SPECIFIED ASSETS
SECTION 7.1 RIGHTS OF BUYER. (a) Subject to SECTION 7.4(b), each Seller
hereby authorizes Buyer, the Servicer and/or their respective designees to take
any and all steps in such Seller's name and on behalf of such Seller that Buyer,
the Servicer and/or their respective designees determine are reasonably
necessary or appropriate to collect all amounts due under any and all Specified
Assets, including endorsing the name of such Seller on checks and other
instruments representing Collections and enforcing such Seller's rights under
such Specified Assets.
(b) Except as set forth in SECTION 3.1 with respect to Seller Noncomplying
Receivables, Buyer shall have no obligation to account for any Specified Asset
to any Seller. Buyer shall have no obligation to account for, or to return
Collections, or any interest or other
25
finance charge collected pursuant thereto, to any Seller, irrespective of
whether such Collections and charges are in excess of the Purchase Price for the
Purchased Assets.
(c) Buyer shall have the unrestricted right to further assign, transfer,
deliver, hypothecate, subdivide or otherwise deal with the Specified Assets, and
all of Buyer's right, title and interest in, to and under this Agreement, on
whatever terms Buyer shall determine, pursuant to the Indenture or otherwise.
(d) Buyer shall have the sole right to retain any gains or profits created
by buying, selling or holding the Specified Assets and shall have the sole risk
of and responsibility for losses or damages created by such buying, selling or
holding.
SECTION 7.2 RESPONSIBILITIES OF THE SELLERS. Anything herein to the
contrary notwithstanding, each Seller hereby agrees:
(a) to deliver directly to the Servicer (for Buyer's account),
within two Business Days after receipt thereof, any Collections that it
receives, in the form so received, and agrees that all such Collections
shall be deemed to be received in trust for Buyer and shall be maintained
and segregated separate and apart from all other funds and moneys of such
Seller until delivery of such Collections to the Servicer; PROVIDED,
HOWEVER, that until the obligations of the Issuer under the Indenture are
terminated pursuant to Section 12.1 thereof, Buyer hereby directs each
Seller and each Seller hereby agrees, to make any delivery of Collections
pursuant to this SECTION 7.2(a) directly to the Trustee by deposit to one
of the Bank Accounts or the Master Collection Account,
(b) to perform all of its obligations hereunder and under the
Contracts related to the Receivables and Related Assets to the same extent
as if the Receivables had not been sold hereunder, and the exercise by
Buyer or its designee or assignee of Buyer's rights hereunder or in
connection herewith shall not relieve such Seller from any of its
obligations under the Contracts or Related Assets related to the
Receivables,
(c) that it hereby grants to Buyer an irrevocable power of
attorney, with full power of substitution, coupled with an interest, to
take in the name of such Seller all steps necessary or advisable to
endorse, negotiate or otherwise realize on any writing or other right of
any kind held or transmitted by such Seller or transmitted or received by
Buyer (whether or not from such Seller) in connection with any Transferred
Asset, and
(d) upon the occurrence of a Servicer Default, to the extent that
such Seller does not own the computer software that such Seller uses to
account for Receivables, such Seller shall use its commercially reasonable
best efforts to provide any substitute Servicer and the Trustee with such
licenses, sublicenses and/or assignments of contracts as any substitute
Servicer or the Trustee shall require with regard to all services and
computer hardware or software used by such Seller that relate to the
servicing of the Specified Assets.
SECTION 7.3 FURTHER ACTION EVIDENCING PURCHASES. Each Seller agrees that
from time to time, at its expense, it will promptly, upon reasonable request by
Buyer, Servicer or Trustee, execute and deliver all further instruments and
documents, and take all further action, in order to
26
perfect, protect or more fully evidence the purchase by Buyer or contribution to
Buyer of the Receivables and the Related Assets under this Agreement, or to
enable Buyer to exercise or enforce any of its rights under any Transaction
Document. Each Seller further agrees that from time to time, at its expense, it
will promptly, upon request, take all action that Buyer, the Servicer or the
Trustee may reasonably request in order to perfect, protect or more fully
evidence the purchase or contribution of the Receivables and the Related Assets
or to enable Buyer or the Trustee (as the assignee of Buyer) to exercise or
enforce any of its rights hereunder or under any other Transaction Document.
Without limiting the generality of the foregoing, on or prior to the Issuance
Date, and with respect to any Person who becomes a Seller pursuant to SECTION
1.7, on or prior to the effective date of such Person becoming a Seller, each
Seller will:
(a) execute (to the extent required by applicable law) and file
such financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as Buyer or the
Trustee may reasonably determine to be necessary or appropriate, and
(b) ▇▇▇▇ the master data processing records evidencing Receivables
with the following legend:
THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO ▇▇▇▇▇▇ RECEIVABLES,
LLC ("VR") PURSUANT TO AN AMENDED AND RESTATED
RECEIVABLES PURCHASE
AGREEMENT, DATED AS OF DECEMBER 9, 2002, AMONG ▇▇▇▇▇▇, INC.
("▇▇▇▇▇▇"), CERTAIN SUBSIDIARIES OF ▇▇▇▇▇▇ AS ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, AS
SERVICER, AND VR, AS BUYER; AND A SECURITY INTEREST IN SUCH
RECEIVABLES HAS BEEN GRANTED TO THE TRUSTEE PURSUANT TO AN AMENDED AND
RESTATED INDENTURE AND SERVICING AGREEMENT, DATED AS OF DECEMBER 9,
2002, AMONG VR, AS ISSUER, ▇▇▇▇▇▇, AS SERVICER, AND MANUFACTURERS AND
TRADERS TRUST COMPANY, AS TRUSTEE."
Each Seller hereby authorizes Buyer 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 Related Assets of such
Seller, in each case whether now existing or hereafter generated by such Seller,
without the signature of such Seller. Except for material performance
obligations of such Seller to any Obligor hereunder or under any of the
Contracts, if (i) such Seller fails to perform any of its agreements or
obligations under this Agreement and does not remedy the failure within the
applicable cure period, if any, and (ii) Buyer in good faith reasonably believes
that the performance of such agreements and obligations is necessary or
appropriate to protect its interests under this Agreement, then Buyer or its
designee may (but shall not be required to) perform, or cause performance of,
such agreement or obligation and the reasonable expenses of Buyer or its
designee or assignee incurred in connection with such performance shall be
payable by such Seller as provided in SECTION 9.1.
SECTION 7.4 COLLECTION OF RECEIVABLES; RIGHTS OF BUYER AND ITS ASSIGNEES.
(a) Each Seller hereby transfers to the Trustee (as transferee of Buyer's
interest in the Specified Assets)
27
the ownership of, and the exclusive dominion and control over, each of the Bank
Accounts and all related lockboxes owned by such Seller, and such Seller hereby
agrees to take any further action that Buyer or the Trustee may reasonably
request in order to effect or complete the transfer. Each Seller further agrees
to use reasonable efforts to prevent funds other than proceeds of the Specified
Assets from being deposited in any Bank Account.
(b) Buyer may, at any time after an Event of Default or Servicer Default,
direct the Obligors of Receivables, or any of them, to pay all amounts payable
under any Transferred Asset directly to the Trustee or its designees.
Furthermore, each Seller shall, at the request of Buyer and at such Seller's
expense, promptly give notice of the Trustee's security interest in the
Receivables of the Obligor and the Related Assets to each such Obligor and
direct that payments be made directly to the Trustee or its designee, which
notice shall be acceptable in form and substance to Buyer. In addition, each
Seller hereby authorizes Buyer to take any and all steps in such Seller's name
and on its behalf that are necessary or desirable, in the reasonable
determination of Buyer, to collect all amounts due under any and all Specified
Assets, including endorsing such Seller's name on checks and other instruments
representing Collections and enforcing the Specified Assets and the Contracts
related to the Receivables. The Trustee may exercise any of the foregoing rights
in the place of Buyer (as assignee or otherwise) at any time following the
designation of a Servicer other than ▇▇▇▇▇▇ pursuant to Section 10.2 of the
Indenture.
(c) At any time when (i) an Event of Default shall have occurred and
remain continuing or (ii) a Servicer other than ▇▇▇▇▇▇ has been designated
pursuant to Section 10.2 of the Indenture, each Seller shall, at Buyer's
request, assemble all of the Records that evidence the Receivables and Related
Assets originated by such Seller and the Contracts related to the Receivables,
or that are otherwise necessary or desirable to collect the Receivables or
Related Assets, and make the same available to Buyer or the Trustee at a place
selected by the Trustee or its designee.
ARTICLE VIII
TERMINATION
SECTION 8.1 TERMINATION BY THE SELLERS. Prior to the commencement of an
Amortization Period, if Buyer is unable to pay the Purchase Price for the
Receivables in accordance with SECTION 3.1, the Sellers may terminate all of
their agreements to sell Receivables hereunder to Buyer by giving Buyer and the
Trustee not less than thirty days' prior written notice of their election not to
continue to sell Receivables to Buyer; PROVIDED that such notice must be given
as to all Sellers and PROVIDED FURTHER, that such notice shall specify the
effective date of termination. The Trustee shall notify the Noteholders within
five Business Days of receiving any such termination notice.
SECTION 8.2 AUTOMATIC TERMINATION. (a) The agreement of each Seller to sell
Receivables hereunder, and the agreement of Buyer to purchase Receivables from
such Seller hereunder, shall terminate automatically upon the first date on
which an Amortization Period occurs; PROVIDED, HOWEVER, that if, at any time
prior to such date, an event specified in the definition of Bankruptcy Event
occurs (without regard to the 60 day grace period specified in paragraph (a) of
that definition) as a result of a bankruptcy proceeding being filed against a
28
Seller, then on and after the date on which such bankruptcy proceeding is filed
until the dismissal of the proceeding Buyer shall not purchase Receivables and
Related Assets from such Seller.
(b) If the Internal Revenue Service or the PBGC files one or more Tax or
ERISA Liens against the assets (including Receivables) of the Issuer or any
Seller, then in each case, Buyer shall not purchase any Receivables or Related
Assets from such Seller (or from any Seller if such Lien is filed against
Issuer).
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 INDEMNITIES BY THE SELLERS. Without limiting any other rights
that any RPA Indemnified Party (as defined below) may have hereunder or under
applicable law, each Seller agrees to indemnify Buyer, each of its successors,
permitted transferees and assigns, and all officers, directors, shareholders,
controlling Persons, employees and agents of any of the foregoing (each of the
foregoing Persons being individually called a "RPA INDEMNIFIED PARTY"),
forthwith on demand from and against any and all damages, losses, claims
(whether on account of settlements or otherwise), judgments, liabilities and
related reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) awarded against or incurred by any of them arising out of or as a
result of any of the following (all of the foregoing being collectively called
"RPA INDEMNIFIED LOSSES"):
(a) any representation or warranty made in writing by such Seller
(or any of its Authorized Officers) under any of the Transaction Documents,
any Monthly Report, any Daily Report or any other information or report
delivered by or on behalf of such Seller or the Servicer with respect to
such Seller or the Receivables or Related Assets originated by such Seller
(including without limitation any representation, warranty, information or
report relied upon by Buyer in connection with the offering or sale of any
Note), that contained any untrue statement of a material fact or omitted to
state material facts necessary to make the statements not misleading when
made,
(b) the failure by such Seller to comply with any applicable law,
rule or regulation with respect to any Receivable or any Related Asset or
to comply with any Contract related thereto, or the nonconformity of any
Receivable, the related Contract or any Related Assets with any such
applicable law, rule or regulation,
(c) the failure to vest and maintain vested in Buyer a perfected
ownership interest in the Receivables originated by such Seller, the
Related Assets, the related Collections and the proceeds of each of the
foregoing, free and clear of any Adverse Claim (other than an Adverse Claim
created in favor of Buyer pursuant to this Agreement or in favor of the
Trustee pursuant to the Indenture or the Original Agreement), whether
existing at the time of the sale of such Receivable or at any time
thereafter and without regard to whether such Adverse Claim was a Permitted
Adverse Claim,
(d) any failure of such Seller to perform its duties or obligations
in accordance with the provisions of the Transaction Documents,
29
(e) any products liability claim, personal injury or property
damage suit, environmental liability claim or any other claim or action by
a party other than Buyer of whatever sort, whether sounding in tort,
contract or any other legal theory, arising out of or in connection with
the goods or services that are the subject of any Specified Assets with
respect thereto or Collections thereof,
(f) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Specified Assets or Collections, whether at the time of any sale or at any
subsequent time,
(g) any dispute, claim, offset or defense (other than the discharge
in bankruptcy) of an Obligor to the payment of any Receivable originated by
such Seller or Related Asset, or purported Receivable or Related Asset,
including a defense based on such Receivables or the related Contract's not
being a legal, valid and binding obligation of the Obligor enforceable
against it in accordance with its terms, and
(h) any tax or governmental fee or charge (other than franchise taxes
and taxes on or measured by the net income of Buyer or any of its
assignees), all interest and penalties thereon or with respect thereto, and
all reasonable out-of-pocket costs and expenses, including the reasonable
fees and expenses of counsel in defending against the same, that may arise
by reason of the purchase or ownership of the Receivables originated by
such Seller or any Related Asset connected with any such Receivables.
Notwithstanding the foregoing (and with respect to CLAUSE (ii) below, without
prejudice to the rights that Buyer may have pursuant to the other provisions of
this Agreement or the provisions of any of the other Transaction Documents), in
no event shall any RPA Indemnified Party be indemnified for any RPA Indemnified
Losses (i) resulting from gross negligence or willful misconduct on the part of
the RPA Indemnified Party, (ii) to the extent the same includes losses in
respect of Receivables and reimbursement therefor that would constitute credit
recourse to such Seller for the amount of any Receivable or Related Asset not
paid by the related Obligor, (iii) resulting from the action or omission of the
Servicer (unless the Servicer is a ▇▇▇▇▇▇ Person), (iv) to the extent the same
are or result from lost profits, (v) to the extent the same are or result from
taxes on or measured by the net income of the RPA Indemnified Party and (vi) to
the extent the same constitute consequential, special or punitive damages.
If for any reason the indemnification provided above in this Section is
unavailable to a RPA Indemnified Party or is insufficient to hold a RPA
Indemnified Party harmless, then such Seller shall contribute to the maximum
amount payable or paid to the RPA Indemnified Party as a result of the loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the RPA Indemnified Party on the one hand
and such Seller on the other hand, but also the relative fault of the RPA
Indemnified Party (if any) and such Seller and any other relevant equitable
considerations.
ARTICLE X
MISCELLANEOUS
30
SECTION 10.1 AMENDMENTS; WAIVERS, 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 signed by Buyer and each Seller (with
respect to an amendment) or by Buyer (with respect to a waiver or consent by it)
and, in the case of any amendment, modification or waiver, to the extent
provided in Section 7.2(j) of the Indenture, by the Trustee, and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. If any outstanding Notes have been rated, this
Agreement shall not be amended unless Buyer shall have delivered the proposed
amendment to the Rating Agencies (or if no Outstanding Notes are rated, the
Noteholders) at least ten Business Days (or such shorter period as shall be
acceptable to each of them) prior to the execution and delivery thereof and the
Modification Condition has been satisfied with respect to such amendment.
(b) No failure or delay on the part of Buyer, any RPA Indemnified Party,
or the Trustee or any other third party beneficiary referred to in SECTION
10.11(a) 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 any Seller in any case shall entitle
it to any notice or demand in similar or other circumstances. No waiver or
approval by Buyer or the Trustee under this Agreement shall, except as may
otherwise be stated in the 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.
SECTION 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 certified
mail, postage prepaid, by facsimile or by overnight courier, to the intended
party at the address or facsimile number of such party set forth on SCHEDULE 4
or at such other address or facsimile number as shall be designated by the party
in a written notice to the other parties hereto given in accordance with this
Section. Copies of all notices and other communications provided for hereunder
shall be delivered to the Trustee and the Rating Agencies at their respective
addresses for notices set forth in the Indenture. Any notice that is required to
be delivered to any Noteholder hereunder shall be delivered to such Noteholder
at the address specified by such Noteholder to the Trustee in accordance with
SECTION 6.6 of the Indenture. All notices and communications provided for
hereunder shall be effective, (a) if personally delivered, when received, (b) if
sent by certified mail, four Business Days after having been deposited in the
mail, postage prepaid and properly addressed, (c) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic mean if sent during
business hours on a Business Day (or on the next Business Day in all other
cases) and (d) if sent by overnight courier, two Business Days after having been
given to the courier unless sooner received by the addressee.
SECTION 10.3 CUMULATIVE REMEDIES. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Without limiting
the foregoing, each Seller hereby authorizes Buyer, at any time and from time to
time, to the fullest extent permitted by law, to set-off, against any
Obligations of any Seller to Buyer that are then due and payable or that are not
then due and payable from a Seller to Buyer but have then accrued, any and all
indebtedness or other obligations at any time owing to any Seller by Buyer to or
for the credit or
31
the account of any Seller or that are not then due and payable from Buyer to a
Seller but have then accrued.
SECTION 10.4 BINDING EFFECT; ASSIGNABILITY; SURVIVAL OF PROVISIONS. This
Agreement shall be binding upon and inure to the benefit of Buyer and the
Sellers and their respective successors and permitted assigns. No Seller may
assign any of its rights hereunder or any interest herein without (i) the prior
written consent of Buyer and the Trustee and (ii) the satisfaction of the
Modification Condition. 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 first date following the
Purchase Termination Date, but not later than the date on which the obligations
of the Issuer under the Indenture are terminated pursuant to Section 12.1
thereof, on which all Obligations shall have been finally and fully paid and
performed or such other time as the parties hereto shall agree and as to which
the Trustee (at the direction of the Majority Investors) shall have given its
prior written consent. The rights and remedies with respect to any breach of any
representation and warranty made by a Seller pursuant to ARTICLE V and the
indemnification and payment provisions of ARTICLE IX and SECTION 10.6 shall be
continuing and shall survive any termination of this Agreement.
SECTION 10.5 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF
NEW YORK, INCLUDING SECTION 5-1401(1) OF THE
GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER CONFLICT OF LAWS
PRINCIPLE, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF BUYER IN
THE RECEIVABLES AND THE RELATED ASSETS ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
SECTION 10.6 COSTS, EXPENSES AND TAXES. In addition to the obligations of
the Sellers under ARTICLE IX, the Sellers agree jointly and severally to pay on
demand:
(a) all reasonable out-of-pocket and other costs and expenses in
connection with the enforcement of this Agreement, the Seller Assignment
Certificates or the other Transaction Documents by Buyer or any successor
in interest to Buyer, and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution and delivery, and the filing and
recording, of this Agreement or the other Transaction Documents, and agrees
to indemnify each RPA Indemnified Party against any liabilities with
respect to or resulting from any delay in paying or omission to pay the
taxes and fees.
SECTION 10.7 SUBMISSION TO JURISDICTION. Each party hereto hereby
irrevocably submits to the non-exclusive jurisdiction of any
New York State or
Federal Court sitting in the Borough of Manhattan in the City of
New York,
New
York over any action or proceeding arising out of or relating to the Transaction
Documents, and hereby (A) irrevocably agrees that all claims in respect of the
action or proceeding may be heard and determined in the State or Federal Court,
(B) irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of the action or proceeding,
and (C) irrevocably appoints The Corporation Trust Company (the "PROCESS
AGENT"), with an office on the date hereof at 1209
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as its agent to receive on behalf of
it and its property service of copies of the summons and complaint and any other
process that may be served in any action or proceeding. The service may be made
by mailing or delivering a copy of the process to Buyer or the applicable Seller
in care of the Process Agent at the Process Agent's above address, and Buyer and
each Seller hereby irrevocably authorizes and directs the Process Agent to
accept the service on its behalf.
AS AN ALTERNATIVE METHOD OF SERVICE, EACH OF BUYER AND THE SELLERS ALSO
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF THE PROCESS TO BUYER OR A SELLER (AS
APPLICABLE) AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN THIS SECTION SHALL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY HERETO TO BRING ANY ACTION OR
PROCEEDING AGAINST THE OTHER PARTY OR ANY OF ITS PROPERTIES IN THE COURTS OF ANY
OTHER JURISDICTION.
SECTION 10.8 WAIVER OF JURY TRIAL. Each party hereto waives any right to a
trial by jury in any action or proceeding to enforce or defend any rights under
or relating to the Transaction Documents or any amendment, instrument, document
or agreement delivered or that may in the future be delivered in connection
therewith or arising from any course of conduct, course of dealing, statements
(whether verbal or written), actions of either of the parties hereto or any
other relationship existing in connection with the Transaction Documents, and
agrees that any such action or proceeding shall be tried before a court and not
before a jury.
SECTION 10.9 INTEGRATION. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
SECTION 10.10 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
together shall constitute one and the same agreement.
SECTION 10.11 ACKNOWLEDGMENT AND CONSENT. (a) The Sellers acknowledge that,
contemporaneously herewith, Buyer is granting a security interest to the Trustee
in all of Buyer's right, title and interest in, to and under the Specified
Assets, this Agreement and all of the other Transaction Documents pursuant to
Sections 2.1 and 2.4 of the Indenture. The Sellers hereby consent to the grant
of a security interest to the Trustee by Buyer of all right, title and interest
of Buyer in, to and under the Specified Assets, this Agreement and the other
Transaction Documents, and all of Buyer's rights, remedies, powers and
privileges, and all claims of Buyer against the Sellers, under or with respect
to this Agreement and the other Transaction Documents (whether arising pursuant
to the terms of this Agreement or otherwise available at law or in equity),
including (i) the right of Buyer, at any time, to enforce this Agreement against
the Sellers and the obligations of the Sellers hereunder, (ii) the right to
consent to or direct the appointment of a successor to the Servicer at the times
and upon the conditions set forth in the Indenture, and (iii) the right, at any
time, to give or withhold any and all consents, requests,
33
notices, directions, approvals, demands, extensions or waivers under or with
respect to this Agreement, any other Transaction Document or the obligations in
respect of the Sellers thereunder to the same extent as Buyer may do. Each of
the parties hereto acknowledges and agrees that the Trustee is a third party
beneficiary of the rights of Buyer arising hereunder and under the other
Transaction Documents to which any Seller is a party. Each Seller hereby
acknowledges and agrees that it has no claim to or interest in any of the Bank
Accounts or the Transaction Accounts.
(b) The Sellers hereby agree to execute all agreements, instruments and
documents, and to take all other action, that Buyer or the Trustee reasonably
determines is necessary or appropriate to evidence its consent described in
SUBSECTION (A) above. To the extent that Buyer, individually or through the
Servicer, has granted or grants powers of attorney to the Trustee under the
Indenture, the Sellers hereby grant a corresponding power of attorney on the
same terms to Buyer. The Sellers hereby acknowledge and agree that Buyer, in all
of its capacities, shall assign to the Trustee for the benefit of the
Noteholders the powers of attorney and other rights and interests granted by the
Sellers to Buyer hereunder and agrees to cooperate fully with the Trustee in the
exercise of the rights.
SECTION 10.12 NO PARTNERSHIP OR JOINT VENTURE. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.
SECTION 10.13 NO PROCEEDINGS. Notwithstanding any prior termination of this
Agreement, each Seller hereby agrees that it will not institute against Buyer,
or join any other Person in instituting against Buyer, any insolvency proceeding
(namely, any proceeding of the type referred to in the definition of Event of
Bankruptcy) so long as any Notes shall be outstanding or there shall not have
elapsed one year plus one day since the last day on which any such Notes shall
have been outstanding. The foregoing shall not limit the right of a Seller to
file any claim in or otherwise take any action with respect to any insolvency
proceeding that was instituted against Buyer by any Person other than a Seller
or any other ▇▇▇▇▇▇ Person (provided that no such action may be taken by a
Seller until such proceeding has continued undismissed, unstayed and in effect
for a period of 10 days). The provisions of this Section shall survive the
termination of this Agreement.
SECTION 10.14 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then the
unenforceable covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement or the other Transaction Documents (as applicable) and shall in no way
affect the validity or enforceability of the other provisions of this Agreement
or any of the other Transaction Documents.
SECTION 10.15 RECOURSE TO BUYER. Except to the extent expressly provided
otherwise in the Transaction Documents, the obligations of Buyer under the
Transaction Documents to which it is a party are solely the obligations of
Buyer. No recourse shall be had for payment of any fee payable by or other
obligation of or claim against Buyer that arises out of any
34
Transaction Document to which Buyer is a party against any director, officer or
employee of Buyer. The provisions of this Section shall survive the termination
of this Agreement.
[Remainder of page intentionally left blank.]
35
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.
▇▇▇▇▇▇, INC., as a Seller
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------------
Title: Senior Vice President
---------------------
WEBCRAFT, LLC., as a Seller
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------------
Title: Senior Vice President
---------------------
WEBCRAFT CHEMICALS, LLC, as a Seller
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------------
Title: Senior Vice President
---------------------
ENTERON GROUP, LLC
as a Seller
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------------
Title: Senior Vice President
---------------------
▇▇▇▇▇▇ RECEIVABLES, LLC,
as the Buyer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
▇▇▇▇▇▇, INC.
as initial Servicer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
S-1
EXHIBIT A
FORM OF BUYER NOTE
____________, 2002
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇ RECEIVABLES, LLC, a Delaware
limited liability company ("BUYER"), promises to pay to __________________, a
____________ (the "SELLER" and together with its successors and assigns, the
"HOLDER"), on the terms and subject to the conditions set forth in this
promissory note (this "NOTE") and in the Amended and Restated
Receivables
Purchase Agreement of even date herewith (as further amended, supplemented or
otherwise modified from time to time, the "AGREEMENT") among Buyer, ▇▇▇▇▇▇, INC.
("▇▇▇▇▇▇"), as Servicer and ▇▇▇▇▇▇ and certain Subsidiaries of ▇▇▇▇▇▇, as
Sellers, an amount equal to the aggregate deferred Purchase Price owed by Buyer
to the Seller pursuant to ARTICLE III of the Agreement. Such amount, as shown in
the records of the Servicer, will be rebuttable presumptive evidence of the
principal amount and interest owing under this Note.
1. PURCHASE AGREEMENT. This Note is a Buyer Note described in, and is
subject to the terms and conditions set forth in, the Agreement. Reference is
hereby made to the Agreement for a statement of certain other rights and
obligations of Buyer and the Seller.
2. RULES OF CONSTRUCTION; DEFINITIONS. Certain rules of construction
governing the interpretation of this Note are set forth in Appendix A to the
Agreement and, except as otherwise specifically provided herein, capitalized
terms used but not defined herein have the meanings ascribed to them in Appendix
A to the Agreement. In addition, as used herein, the following terms have the
following meanings:
"BANKRUPTCY PROCEEDINGS" means any dissolution, winding up,
liquidation, readjustment, reorganization or other similar event relating
to Buyer, whether voluntary or involuntary, partial or complete, and
whether in bankruptcy, insolvency, receivership or other similar
proceedings, or upon an assignment for the benefit of creditors, or any
other marshalling of the assets and liabilities of Buyer or any sale of all
or substantially all of the assets of Buyer; PROVIDED, HOWEVER, that none
of the following shall constitute a "Bankruptcy Proceeding" so long as no
bankruptcy, insolvency, receivership or other similar proceedings shall
have been commenced by or against Buyer and is continuing: (i) the
commencement of an Amortization Period, (ii) the allocation and
distribution of Collections and other amounts during an amortization
period, accumulation period or early amortization period in accordance with
the terms of the Indenture and (iii) the liquidation, dissolution and
winding up of Buyer during an amortization period, accumulation period or
early amortization period in accordance with the Indenture after the
obligations of the Issuer under the Indenture are terminated in accordance
with Section 12.1 thereof.
"FINAL MATURITY DATE" means the date occurring one year and one day
after the Final Scheduled Payment Date of the latest maturing Note from
time to time outstanding.
Exhibit A-1
"HIGHEST LAWFUL RATE" has the meaning set forth in PARAGRAPH 9.
"JUNIOR LIABILITIES" means all obligations of Buyer to the Holder
under this Note.
"REFERENCE RATE" means, with respect to any day occurring in a
Calculation Period, the rate of interest publicly announced from time to
time by the Manufacturers and Traders Trust Company as its "reference rate"
and in effect on the first day of such Calculation Period, as determined by
the Servicer.
"SENIOR LIABILITIES" means all obligations of Buyer to the Trustee or
the Noteholders under or in connection with the Transaction Documents,
whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, including without limitation interest or
other amounts due or to become due after an Event of Bankruptcy.
"SUBORDINATION PROVISIONS" means, collectively, the provisions of
PARAGRAPH 7.
3. INTEREST. Subject to the Subordination Provisions, Buyer promises to pay
interest on the aggregate unpaid principal amount of this Note outstanding on
each day at an adjustable rate per annum equal to the Reference Rate in effect
on such day.
4. INTEREST PAYMENT DATES. (a) Subject to the Subordination Provisions,
Buyer shall pay accrued interest on this Note on each Payment Date and on the
Final Maturity Date. Buyer also shall pay accrued interest on the principal
amount of each prepayment hereof on the date of such prepayment.
(b) Notwithstanding the provisions of PARAGRAPH 4(a), in the event that on
the date an interest payment is due hereunder the amount of funds available
therefor pursuant to SECTION 3.3 of the Agreement is insufficient to pay any
amount due pursuant to PARAGRAPH 4(a), then interest shall be payable only to
the extent that funds are available therefor in accordance with SECTION 3.3 of
the Agreement, and any amount not paid because funds are not available in
accordance with said SECTION 3.3 shall not constitute a claim (as defined in
Section 101 of the Bankruptcy Code) against or corporate obligation of Buyer for
any such insufficiency. All interest on this Note that is not paid when due
pursuant to this paragraph shall be payable on the next date on which an
interest payment on this Note is due and on which funds are available therefor
pursuant to SECTION 3.3 of the Agreement, and all such unpaid interest shall
accrue interest at the Reference Rate until paid in full.
5. BASIS OF COMPUTATION. Interest accrued hereunder shall be computed for
the actual number of days elapsed on the basis of a 360-day year.
6. PRINCIPAL PAYMENT DATES. Subject to the Subordination Provisions, any
unpaid principal of this Note shall only become due and payable on the Final
Maturity Date. Subject to the Subordination Provisions, the principal amount of
and accrued interest on this Note may be prepaid on any Business Day without
premium or penalty but only to the extent that amounts are available therefore
in accordance with SECTION 3.3 of the Agreement; PROVIDED, that no prepayment
shall be made by Buyer to the extent that such prepayment would result in a
default
Exhibit A-2
in the payment of any other amount required to be paid by Buyer under any
Transaction Document.
7. SUBORDINATION PROVISIONS. Buyer covenants and agrees, and the Holder, by
its acceptance of this Note, likewise covenants and agrees, that the payment of
all Junior Liabilities is hereby expressly subordinated in right of payment to
the payment and performance of the Senior Liabilities to the extent and in the
manner set forth in this paragraph:
(a) In the event of any Bankruptcy Proceeding, the Senior Liabilities
shall first be paid and performed in full and in cash before the Holder
shall be entitled to receive and to retain any payment or distribution in
respect of the Junior Liabilities. In order to implement the foregoing: (i)
all payments and distributions of any kind or character in respect of the
Junior Liabilities to which the Holder would be entitled except for this
CLAUSE (a) shall be made directly to the Trustee (for the benefit of itself
and the Noteholders), and (ii) if a Bankruptcy Proceeding has been
commenced, the Holder shall promptly file a claim or claims, in the form
required in any Bankruptcy Proceedings, for the full outstanding amount of
the Junior Liabilities, and shall use commercially reasonable efforts to
cause said claim or claims to be approved and all payments and other
distributions in respect thereof to be made directly to the Trustee (for
the benefit of itself and the Noteholders) until the Senior Liabilities
shall have been paid and performed in full and in cash.
(b) In the event that the Holder receives any payment or other
distribution of any kind or character from Buyer or from any other source
whatsoever, in payment of the Junior Liabilities, after the commencement of
any Bankruptcy Proceeding, such payment or other distribution shall be
received in trust for the Trustee and the Noteholders and shall be turned
over by the Holder to the Trustee forthwith.
(c) Upon the final indefeasible payment in full and in cash of all
Senior Liabilities, the Holder shall be subrogated to the rights of the
Trustee and the Noteholders to receive payments or distributions from Buyer
that are applicable to the Senior Liabilities until the Junior Liabilities
are paid in full.
(d) These Subordination Provisions are intended solely for the purpose
of defining the relative rights of the Holder, on the one hand, and the
Trustee and the Noteholders on the other hand. Nothing contained in these
Subordination Provisions or elsewhere in this Note is intended to or shall
impair, as between Buyer, its creditors (other than the Trustee and the
Noteholders) and the Holder, Buyer's obligation, which is unconditional and
absolute, to pay the Junior Liabilities as and when the same shall become
due and payable in accordance with the terms hereof and of the Agreement or
to affect the relative rights of the Holder and creditors of Buyer (other
than the Trustee and the Noteholders).
(e) The Holder shall not, until the Senior Liabilities have been
finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or collect, or
subordinate to any obligation of Buyer (other than to the Senior
Liabilities), howsoever created, arising or evidenced, whether direct or
Exhibit A-3
indirect, absolute or contingent, or now or hereafter existing, or due or
to become due, the Junior Liabilities or any rights in respect hereof or
(ii) convert the Junior Liabilities into an equity interest in Buyer,
unless, in the case of each of CLAUSES (i) and (ii), the Holder shall have
received the prior written consent of the Trustee in each case; provided,
however, if the Holder is ▇▇▇▇▇▇, Inc., then the Holder may convert the
Junior Liabilities into an equity interest in Buyer without the Trustee's
consent.
(f) The Holder shall not, without the advance written consent of the
Trustee, commence, or join with any other Person in commencing, any
Bankruptcy Proceedings with respect to Buyer until at least one year and
one day shall have passed after the Senior Liabilities shall have been
finally paid and performed in full and in cash; PROVIDED, HOWEVER, that the
Holder shall at all times have the right to file any claim in or otherwise
take any action with respect to any insolvency proceeding instituted
against Buyer by any Person other than the Holder or any other ▇▇▇▇▇▇
Person (provided that no such action may be taken by the Holder until such
proceeding has continued undismissed, unstayed and in effect for a period
of 10 days).
(g) If, at any time, any payment (in whole or in part) made with
respect to any Senior Interest is rescinded or must be restored or returned
by a Noteholder (whether in connection with any Bankruptcy Proceedings or
otherwise), these Subordination Provisions shall continue to be effective
or shall be reinstated, as the case may be, as though such payment had not
been made.
(h) Each of the Trustee and the Noteholders may, from time to time, in
its sole discretion, without notice to the Holder, and without waiving any
of its rights under these Subordination Provisions, take any or all of the
following actions: (i) retain or obtain an interest in any property to
secure any of the Senior Liabilities, (ii) retain or obtain the primary or
secondary obligations of any other obligor or obligors with respect to any
of the Senior Liabilities, (iii) extend or renew for one or more periods
(whether or not longer than the original period), alter, increase or
exchange any of the Senior Liabilities, or release or compromise any
obligation of any nature with respect to any of the Senior Liabilities,
(iv) amend, supplement, amend and restate, or otherwise modify any
Transaction Document to which it is a party, and (v) release its security
interest in, or surrender, release or permit any substitution or exchange
for all or any part of any rights or property securing any of the Senior
Liabilities, or extend or renew for one or more periods (whether or not
longer than the original period), or release, compromise, alter or exchange
any obligations of any nature of any obligor with respect to any such
rights or property.
(i) The Holder hereby waives: (i) notice of acceptance of these
Subordination Provisions by the Trustee or any of the Noteholders, (ii)
notice of the existence, creation, non-payment or non-performance of all or
any of the Senior Liabilities, and (iii) all diligence in enforcement,
collection or protection of, or realization upon, the Senior Liabilities,
or any thereof, or any security therefor.
(j) These Subordination Provisions constitute a continuing offer from
Buyer to all Persons who become the holders of, or who continue to hold,
Senior Liabilities, and these
Exhibit A-4
Subordination Provisions are made for the benefit of the Trustee and the
Noteholders, and the Trustee may proceed to enforce such provisions on
behalf of each of such Persons.
8. GENERAL. No failure or delay on the part of the Holder 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 amendment,
modification or waiver of, or consent with respect to, any provision of this
Note shall in any event be effective unless (a) the same shall be in writing and
signed and delivered by Buyer and the Seller, and (b) all consents required for
such actions under the Transaction Documents shall have been received by the
appropriate Persons.
9. LIMITATION ON INTEREST. Notwithstanding anything in this Note to the
contrary, Buyer shall never be required to pay unearned interest on any amount
outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder, at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law (such maximum rate being herein called the
"HIGHEST LAWFUL RATE"). If the effective rate of interest that would otherwise
be payable under this Note would exceed the Highest Lawful Rate, or the Holder
shall receive any unearned interest or shall receive monies that are deemed to
constitute interest that would increase the effective rate of interest payable
by Buyer under this Note to a rate in excess of the Highest Lawful Rate, then
(a) the amount of interest that would otherwise be payable by Buyer under this
Note shall be reduced to the amount allowed by applicable law, and (b) any
unearned interest paid by Buyer or any interest paid by Buyer in excess of the
Highest Lawful Rate shall be refunded to Buyer. Without limitation of the
foregoing, all calculations of the rate of interest contracted for, charged or
received by the Holder under this Note that are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate shall be made, to
the extent permitted by applicable usury laws (now or hereafter enacted), by
amortizing, prorating and spreading in equal parts during the actual period
during which any amount has been outstanding hereunder all interest at any time
contracted for, charged or received by the Holder in connection herewith. If at
any time and from time to time (i) the amount of interest payable to the Holder
on any date shall be computed at the Highest Lawful Rate pursuant to the
provisions of the foregoing sentence, and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to the
Holder would be less than the amount of interest payable to the Holder computed
at the Highest Lawful Rate, then the amount of interest payable to the Holder in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate until the total amount of interest payable
to the Holder shall equal the total amount of interest that would have been
payable to the Holder if the total amount of interest had been computed without
giving effect to the provisions of the foregoing sentence. 10. NO NEGOTIATION.
This Note is not negotiable.
11. GOVERNING LAW. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK
INCLUDING SECTION 5-1401(1) OF THE GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD
TO ANY OTHER CONFLICT OF LAWS PRINCIPLE.
Exhibit A-5
12. SECURITY INTEREST. The Seller may grant a security interest in or
otherwise pledge this Note as security as collateral for the benefit of Vertis's
senior lenders, and any Person to whom such security interest is granted or to
whom this Note is pledged shall be bound by, and for all purposes takes this
Note subject to, the restrictions and other provisions (including the
Subordination Provisions) set forth herein.
13. CAPTIONS. Paragraph captions used in this Note are provided solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Note.
▇▇▇▇▇▇ RECEIVABLES, LLC
By:
---------------------------------------
Title:
-------------------------------------
Exhibit A-6
EXHIBIT B
FORM OF
SELLER ASSIGNMENT CERTIFICATE
Reference is made to the Amended and Restated
Receivables Purchase
Agreement, dated as of December 9, 2002 (as the same may be further amended,
supplemented, amended and restated or otherwise modified from time to time, the
"AGREEMENT") ▇▇▇▇▇▇ RECEIVABLES, LLC ("BUYER"), ▇▇▇▇▇▇, INC. ("▇▇▇▇▇▇"), as
Servicer, and ▇▇▇▇▇▇ and certain Subsidiaries of ▇▇▇▇▇▇, as Sellers. Unless
otherwise defined herein, capitalized terms used herein have the meanings
provided in Appendix A to the Agreement.
The undersigned (the "SELLER") hereby sells, transfers, assigns, sets over
and conveys unto Buyer and its successors and assigns all right, title and
interest of the Seller in, to and under:
(a) each Receivable created by the Seller (other than Contributed
Receivables) that arises during the period from and including the closing
of the Seller's business on the Initial Cut-Off Date (as defined in the
Original Purchase Agreement), the Supplemental Cut-Off Date (as defined in
the Agreement), or the Enteron Cut-Off Date (as defined in the Agreement),
as the case maybe, to but excluding the Purchase Termination Date,
(b) all Related Security with respect to all Receivables (other than
Contributed Receivables) of the Seller,
(c) all proceeds of the foregoing, including all funds received by any
Person in payment of any amounts owed (including invoice prices, finance
charges, interest and all other charges, if any) in respect of any
Receivable described above (other than a Contributed Receivable) or Related
Security with respect to any such Receivable, or otherwise applied to repay
or discharge any such Receivable (including insurance payments that the
Seller or the Servicer applies in the ordinary course of its business to
amounts owed in respect of any such Receivable (it being understood that
property insurance covering inventory is not so applied and is not included
in this grant) and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any such Receivable) or other
collateral or property of any Obligor or any other party directly or
indirectly liable for payment of such Receivables), and
(d) all Records relating to any of the foregoing.
This Seller Assignment Certificate is made without recourse but on the
terms and subject to the conditions set forth in the Transaction Documents to
which the Seller is a party. The Seller acknowledges and agrees that Buyer is
accepting this Seller Assignment Certificate in reliance on the representations,
warranties and covenants of the Seller contained in the Transaction Documents to
which the Seller is a party.
Exhibit B-1
THIS SELLER ASSIGNMENT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE AGREEMENT AND THE INTERNAL LAWS OF THE STATE OF
NEW YORK, INCLUDING SECTION
5-1401(1) OF THE GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER
CONFLICT OF LAWS PRINCIPLE.
IN WITNESS WHEREOF, the undersigned has caused this Seller Assignment
Certificate to be duly executed and delivered by its duly Authorized Officer
this _____ day of _______________, 2002.
[SELLER FULL NAME]
By:
----------------------------------
Title:
--------------------------------
Exhibit B-2
SCHEDULE 1
to Purchase Agreement
LITIGATION AND OTHER PROCEEDINGS
None
Exhibit B-1
SCHEDULE 2
to Purchase Agreement
CHIEF EXECUTIVE OFFICE AND
PRINCIPAL PLACE OF BUSINESS
CHIEF EXECUTIVE OFFICE AND
ENTITY NAME PRINCIPAL PLACE OF BUSINESS
----------- ---------------------------
▇▇▇▇▇▇, Inc. ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Webcraft, LLC ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Webcraft Chemicals, LLC ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Enteron Group, LLC ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE 3
to Purchase Agreement
LEGAL NAMES
▇▇▇▇▇▇, Inc.
Webcraft, LLC
Webcraft Chemicals, LLC
Enteron Group, LLC
TRADE NAMES
▇▇▇▇▇▇, Inc.: AdOut
LTC Group
▇▇▇▇▇▇ Logistics
▇▇▇▇▇▇ Retail & Newspaper Services
▇▇▇▇▇▇ Direct Marketing Services
▇▇▇▇▇▇ Logistics Services
Webcraft, LLC: ▇▇▇▇▇▇
▇▇▇▇▇▇ Direct Marketing Services
KSS Transportation
Webcraft Chemicals, LLC: ▇▇▇▇▇▇
▇▇▇▇▇ Adhesives & Coatings
▇▇▇▇▇▇ Webcraft Chemicals
Enteron Group, LLC: ▇▇▇▇▇▇
▇▇▇▇▇▇ Advertising Production Services
Master Vu
LTC Fusion
OTHER TRADE NAMES
ADNEXUS
BIG FLOWER
BIG FLOWER PRESS
DIGITANGO
IC2
INNERLOGIC
LIQUID STUDIOS
LTC
REACH AMERICA
TC ADVERTISING
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
TOTAL PAPER SUPPLY
PRIOR NAMES
▇▇▇▇▇▇, INC., a Delaware corporation, succeeded to the business of the following
entities on December 31, 2000:
BY MERGER:
1) TREASURE CHEST ADVERTISING COMPANY, INC., a Delaware corporation, which
succeeded to the business of the following entities by merger on December
31, 2000:
a) Treasure Chest Advertising Holding Company of Texas, a Delaware
corporation, which succeeded to the business of the following entities
by merger on December 31, 2000:
i) Treasure Chest Advertising Company of Texas, Inc., a Delaware
corporation
ii) Treasure Chest Advertising Company of Nevada, Inc., a Nevada
corporation
b) Treasure Chest Advertising Company of
New York, Inc., a New York
corporation
c) ▇▇ ▇▇▇▇▇ Incorporated, a California corporation
d) BF Aviation Corp., a Delaware corporation
e) Reach America, Inc., a Delaware corporation
2) LASER TECH COLOR, INC., a Delaware corporation, which succeeded to the
business of the following entities by merger on the dates indicated:
a) DCS, Incorporated, a Delaware corporation, on December 31, 2000
b) Gamma One, Inc., a Delaware corporation, on December 31, 2000
c) Imaging Consortium, Inc., a New York corporation, on December 31, 2000
d) Pacific Color Connection, Inc., a California corporation, on ▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇
▇) ▇▇▇▇▇▇▇ Graphics, Inc., a Minnesota corporation, on December 1, 2000.
By distribution of certain assets:
1) Colorstream Technologies, Inc., a Delaware corporation
ENTERON GROUP, LLC, a Delaware limited liability company, succeeded to the
business of the following entity by merger on December 31, 2001:
1) THE ENTERON GROUP, INC., an Illinois corporation, which succeeded to the
business of the following entities by merger on December 31, 2001:
a) Master Eagle Graphic Services, Inc., a New York corporation, which
succeeded to the business of the following entity by merger on
December 31, 2000:
i) Master Vu Incorporated, a New York corporation
b) Computer Color Graphics, Inc., an Illinois corporation
c) Revere Photo Platemakers Company, an Illinois corporation
WEBCRAFT, LLC, a Delaware limited liability company, succeeded to the business
of the following entity by merger on December 31, 2000:
1) WEBCRAFT, INC. (formerly known as Webcraft Technologies, Inc.), a Delaware
corporation, which succeeded to the business of the following entities by
merger on December 31, 2000:
a) Colorstream Technologies, Inc., a Delaware corporation, which
succeeded to the business of the following entity by merger on
December 31, 2000:
i) Webcraft Midwest, Inc., a Delaware corporation
b) KSS Transportation Corp., a New Jersey corporation
WEBCRAFT CHEMICALS, LLC, a Delaware limited liability company, succeeded to the
business of the following entity by merger on December 31, 2000:
1) WEBCRAFT CHEMICALS, INC., a New Jersey corporation
SCHEDULE 4
to Purchase Agreement
NOTICE ADDRESSES
ENTITY NAME ADDRESS FOR NOTICES
----------- -------------------
▇▇▇▇▇▇, Inc. ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Webcraft, LLC ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Webcraft Chemicals, LLC ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Enteron Group, LLC c/o ▇▇▇▇▇▇, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Receivables, LLC ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Schedule 3-1
APPENDIX A
[Same as Appendix A to Indenture]
Appendix A-1