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SALE AGREEMENT
dated as of March 31, 1997
between
EXIDE CORPORATION,
as Seller
and
EXIDE U.S. FUNDING CORPORATION,
as Buyer
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TABLE OF CONTENTS
Page
ARTICLE I
AGREEMENT TO PURCHASE AND SELL....................................1
SECTION 1.1 Contribution of Receivables.........................1
SECTION 1.2 Agreement to Purchase and Sell......................1
SECTION 1.3 Timing of Purchases.................................1
SECTION 1.4 Consideration for Purchases.........................2
SECTION 1.5 No Recourse.........................................2
SECTION 1.6 No Assumption of Obligations Relating to
Receivables or Contracts.....................2
SECTION 1.7 True Sales..........................................2
ARTICLE II
CALCULATION OF PURCHASE PRICE.....................................3
SECTION 2.1 Calculation of Purchase Price.......................3
SECTION 2.2 Definitions and Calculations Related to Purchase
Price Percentage.............................4
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.........................5
SECTION 3.1 Purchase Price Payments.............................5
SECTION 3.2 The Buyer Note......................................5
SECTION 3.3 Application of Collections and Other Funds..........6
SECTION 3.4 Servicing of Receivables............................6
SECTION 3.5 Monthly Calculations................................7
SECTION 3.6 Buyer Obligation under Purchase Agreement...........7
SECTION 3.7 Payments and Computations, Etc......................7
ARTICLE IV
CONDITIONS TO PURCHASES...........................................8
SECTION 4.1 Conditions Precedent to Initial Contribution........8
SECTION 4.2 Effective Date of Initial Contribution..............9
SECTION 4.3 Certification as to Representations and Warranties..9
SECTION 4.4 Effect of Payment of Purchase Price.................9
ARTICLE V
REPRESENTATIONS AND WARRANTIES....................................9
SECTION 5.1 Representations and Warranties of Seller............9
SECTION 5.2 Representations and Warranties of Buyer............12
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ARTICLE VI
GENERAL COVENANTS OF SELLER.......................................13
SECTION 6.1 Affirmative Covenants...............................13
SECTION 6.2 Reporting Requirements..............................18
SECTION 6.3 Negative Covenants..................................19
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE
RECEIVABLE........................................................21
SECTION 7.1 Rights of Buyer.....................................21
SECTION 7.2 Responsibilities of Seller..........................21
SECTION 7.3 Further Action Evidencing Purchases.................22
ARTICLE VIII
TERMINATION.......................................................23
SECTION 8.1 Termination by Seller...............................23
SECTION 8.2 Automatic Termination...............................23
ARTICLE IX
INDEMNIFICATION...................................................24
SECTION 9.1 Indemnities by Seller...............................24
ARTICLE X
MISCELLANEOUS.....................................................26
SECTION 10.1 Amendments; Waivers, Etc............................26
SECTION 10.2 Notices, Etc........................................26
SECTION 10.3 Cumulative Remedies.................................27
SECTION 10.4 Binding Effect; Assignability; Survival of
Provisions..........................................27
SECTION 10.5 Governing Law.......................................27
SECTION 10.6 Costs, Expenses and Taxes...........................27
SECTION 10.7 [Reserved]..........................................28
SECTION 10.8 Waiver of Jury Trial................................28
SECTION 10.9 Integration.........................................28
SECTION 10.10 Counterparts........................................28
SECTION 10.11 Acknowledgment and Consent..........................28
SECTION 10.12 No Partnership or Joint Venture.....................29
SECTION 10.13 No Proceedings......................................29
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SECTION 10.14 Severability of Provisions..........................29
SECTION 10.15 Recourse to Buyer...................................30
EXHIBITS
EXHIBIT A Form of Buyer Note
EXHIBIT B Form of Seller Assignment Certificate
SCHEDULES
SCHEDULE 1 Changes in Seller's Financial Condition
SCHEDULE 2 Information Regarding Affiliates and Trade Names
SCHEDULE 3 List of Permitted Lockbox Banks and Lockbox Accounts
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This SALE AGREEMENT, dated as of March 31, 1997 (this "Agreement"), is made
between EXIDE CORPORATION, a Delaware corporation ("Seller"), and EXIDE U.S.
FUNDING CORPORATION, a Delaware corporation ("Buyer").
Pursuant to the Receivables Purchase Agreement dated as of the date hereof
among Seller, Buyer and Three Rivers Funding Corporation, a Delaware corporation
("Second Step Purchaser") (as amended, supplemented or otherwise modified from
time to time, the "Purchase Agreement"), Buyer intends to transfer a
participation interest in the Receivables sold pursuant hereto, together with
Receivables contributed to Buyer by Seller from time to time, to the Second Step
Purchaser in order to, among other things, finance its purchases hereunder.
Except as otherwise defined herein or in Appendix A hereto, capitalized terms
have the meanings assigned to them in the Purchase Agreement.
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 Contribution of Receivables. Seller hereby transfers to Buyer
all Receivables in existence on the Initial Cut-Off Date as a contribution by
Seller to the capital of Buyer (the "Contributed Receivables"). Buyer shall
issue the Buyer Note to Seller, in the initial principal amount of $0.00.
SECTION 1.2 Agreement to Purchase and Sell. Seller hereby sells,
transfers, assigns, sets over and conveys to Buyer, and Buyer agrees to purchase
from Seller, at the times set forth in Section 1.3, all of Seller's right, title
and interest in, to and under:
(a) all Receivables created by Seller that arise during the period
from and including the closing of Seller's business on the Initial Cut-Off Date
to but excluding the Purchase Termination Date, and
(b) all proceeds of the Receivables (including all Collections with
respect thereto).
SECTION 1.3 Timing of Purchases. Except to the extent otherwise provided
in Section 8.2, after the closing of Seller's business on the Initial Cut-Off
Date until the closing of Seller's business on the Business Day immediately
preceding the Purchase Termination Date, all Receivables shall be sold
automatically to Buyer pursuant hereto immediately (and without further action
by any Person) upon the creation of the Receivable.
SECTION 1.4 Consideration for Purchases. On the terms and subject to the
conditions set forth in this Agreement, Buyer agrees to make the monthly
Purchase Price payments to Seller in accordance with Article III.
SECTION 1.5 No Recourse. Except as specifically provided in this
Agreement, the sale and purchase of Receivables under this Agreement shall be
without recourse to Seller; it being understood that Seller shall be liable to
Buyer for all representations, warranties, covenants and indemnities made by
Seller pursuant to the terms of this Agreement, all of which obligations have
been designed so as not to constitute recourse to Seller for the credit risk of
the Obligors.
SECTION 1.6 No Assumption of Obligations Relating to Receivables or
Contracts. Neither Buyer nor Second Step Purchaser shall have any obligation or
liability to any Obligor or other customer or client of Seller (including any
obligation to perform any of the obligations of 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 or Second Step
Purchaser hereunder, and any assumption thereof is expressly disclaimed.
SECTION 1.7 True Sales.
(a) Seller and Buyer intend the transfers of Receivables hereunder to
be true sales (or absolute conveyances, in the case of Contributed Receivables)
by Seller to Buyer that are absolute and irrevocable and that provide Buyer with
the full benefits of ownership of the Receivables, and neither Seller nor Buyer
intends the transactions contemplated hereunder to be, or for any purpose to be
characterized as, loans from Buyer to Seller.
(b) It is, further, not the intention of Buyer or Seller that the
conveyance of the Receivables by Seller be deemed a grant of a security interest
in the Receivables by Seller to Buyer to secure a debt or other obligation of
Seller. However, in the event that, notwithstanding the intent of the parties,
any Receivables are property of Seller's estate, then (i) this Agreement also
shall be deemed to be and hereby is a security agreement within the meaning of
the Uniform Commercial Code of any applicable jurisdiction, and (ii) the
conveyance by Seller provided for in this Agreement shall be deemed to be a
grant by Seller to Buyer of, and Seller hereby grants to Buyer, a security
interest in and to all of Seller's right, title and interest in, to and under
the Receivables to secure (1) the rights of Buyer hereunder and (2) a loan by
Buyer to Seller in the amount of the related Purchase Price of the Receivables
sold by it or the Unpaid Balance of any Contributed Receivables, as the case may
be. 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 Receivables, such security interest would
be deemed to be a perfected security interest of first priority (subject to
Liens created or permitted under the Purchase Agreement) in favor of Buyer under
applicable Law and will be maintained as such throughout the term of this
Agreement.
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ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 Calculation of Purchase Price.
(a) On each Settlement Date, the Servicer shall (i) deliver to Buyer
and Seller a Sale Report with respect to Buyer's purchases of Receivables from
Seller that was made during the immediately preceding Settlement Period and (ii)
record the net increase or decrease in the Buyer Note and compute the amount of
interest thereon which is then accrued and unpaid.
(b) On each day when Receivables are purchased by Buyer from Seller
pursuant to Article I, the "Purchase Price" to be paid to Seller on such day for
the Receivables that are to be sold by 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 Receivables to be
purchased from Seller on such day,
AUB = the "Aggregate Unpaid Balance" of the Receivables that are
to be purchased from Seller on such day. For purposes of
this calculation, "Aggregate Unpaid Balance" shall mean, for
purposes of calculating the Purchase Price on each Business
Day after the Contribution Date, the sum of the Unpaid
Balance of each Receivable to be purchased from Seller on
such day, calculated at the time of the Receivable's sale to
Buyer, and
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
Seller on any day during a Settlement Period shall mean the percentage
determined in accordance with the following formula:
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PPP = 100% - (LR + PDRR)
where:
PPP = the Purchase Price Percentage in effect during such
Settlement Period,
LR = the Loss Ratio (expressed as a percentage) determined on the
Settlement Date with respect to the immediately preceding
Accounting Period, and
PDRR = the Purchase Discount Reserve Ratio (expressed as a
percentage) in effect during such Settlement Period, as
determined on such day pursuant to subsection (b) below.
The Purchase Price Percentage, the Loss Ratio 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 Settlement Date.
(b) "Purchase Discount Reserve Ratio" for the Receivables to be sold
on any day during a Settlement Period shall mean a percentage determined in
accordance with the following formula:
PDRR = (DSO/360 x RR) + EDR + PD
where:
PDRR = the Purchase Discount Reserve Ratio in effect during such
Settlement Period,
DSO = the Days Sales Outstanding during the Accounting Period
preceding the first day of such Settlement Period,
RR = the Reference Rate in effect on such Report Date,
EDR = the Estimated Dilution Ratio (expressed as a percentage) in
effect during such Settlement Period as determined pursuant
to subsection (c) below, and
PD = a profit discount equal to 0.25 basis points.
(c) "Estimated Dilution Ratio" for the Receivables to be sold on any
day during a Settlement Period shall mean the Estimated Dilution Ratio obtained
from the most recently completed Dilution Study prepared by the Servicer. The
Servicer shall prepare a "Dilution Study"
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annually within four months following the end of each fiscal year of the Seller
and shall promptly thereafter deliver a copy of each such Dilution Study to each
of Buyer and Second Step Purchaser. In each such Dilution Study, the Servicer
shall use commercially reasonable efforts to determine the aggregate amount of
Dilution occurring during the Accounting Periods of April, May, October and
November and the aggregate dollar amount of invoices giving rise to Receivables
during the corresponding Settlement Periods. The "Estimated Dilution Ratio"
shall equal (i) (A) such aggregate amount of Dilution divided by (B) such
aggregate dollar amount of invoices giving rise to Receivables multiplied by
(ii) 1.02. Until the first Dilution Study is prepared by the Servicer, the
Estimated Dilution Ratio shall be 26.8%.
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.
SECTION 3.1 Purchase Price Payments. On the Business Day following each
day on which any Receivables are purchased by Buyer pursuant to Article I, on
the terms and subject to the conditions of this Agreement, Buyer shall pay to
Seller the Purchase Price for the Receivables purchased on such day by Buyer (i)
by making a cash payment to Seller 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 of Seller exceeds the amount of any cash actually paid
for the account of Seller on such day pursuant to clause (i), by automatically
increasing the principal amount outstanding under the Buyer Note by the amount
of the excess (unless, at the option of Seller (as evidenced by notice to the
Servicer), such excess shall be considered to have been contributed to Buyer by
Seller as a capital contribution).
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 Note only to the extent that it has cash available under Section 3.3.
SECTION 3.2 The Buyer Note.
(a) On the Contribution Date, Buyer will deliver to Seller a
promissory note, substantially in the form of Exhibit A, payable to the order of
Seller (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 Sale Documents, being herein called the "Buyer Note"). The
Buyer Note is payable in full on the date (the "Seller Maturity Date") that is
one year and one day after the date on which all the obligations owed by the
Buyer to the Second Step Purchaser under the Purchase Agreement have been repaid
in full. The Buyer Note shall bear interest at a rate per annum equal to the
rate publicly announced by the Agent from time to time as the Reference Rate,
determined as of each Cut-Off Date. Buyer may repay all or part of the
outstanding balance of the Buyer Note from time to time without any premium or
penalty in accordance with Section 3.3.
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(b) The Servicer (or its designee) shall hold all Buyer Notes for the
benefit of Seller 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. The Servicer's Records shall constitute
rebuttable presumptive evidence of the principal amount of and accrued interest
on each Buyer Note at any time. Seller hereby irrevocably authorizes the
Servicer to ▇▇▇▇ its Buyer Note "CANCELED" and return it to Buyer upon the final
payment thereof.
SECTION 3.3 Application of Collections and Other Funds. Buyer shall have
the right to receive all proceeds with respect to Collections and Reinvestments;
provided, however, that Buyer shall have no right to any amounts held in trust
by Servicer in accordance with the Purchase Agreement. If, on any day, Buyer
receives any amounts as set forth in the preceding sentence, 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 9.02 of the Purchase Agreement),
(b) second, to pay the Purchase Price as adjusted pursuant to Section
3.1 for Receivables purchased by Buyer from Seller on the next preceding
Business Day,
(c) third, to repay amounts owed by Buyer to Seller under the Buyer
Note,
(d) fourth, to loan amounts to Seller, and
(e) fifth, to declare and pay dividends to Seller to the extent
permitted by Law and the Sale Documents.
SECTION 3.4 Servicing of Receivables.
(a) Consistent with the Ownership Interest in the Receivables, as
between the parties to this Agreement, 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,
Seller hereby acknowledges and agrees that Buyer shall assign to the Second Step
Purchaser the rights and interests of Buyer hereunder and agrees to cooperate
fully with the Buyer and the Second Step Purchaser in the exercise of such
rights and interests.
(b) At the Second Step Purchaser's request, Seller will (A) assemble
all of the Records that are necessary or appropriate to collect the Receivables,
and shall make the same available to the Second Step Purchaser at one or more
places selected by the Second Step Purchaser or its designee, and (B) 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.
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SECTION 3.5 Monthly Calculations. For ease of computation, Buyer and
Seller agree that the daily payments and adjustments to the balance of the Buyer
Note shall occur automatically and without a requirement for immediate
computation, and Servicer shall only be required to reconcile the amounts of the
foregoing payments on a monthly basis on each Report Date.
SECTION 3.6 Buyer Obligation under Purchase Agreement. Seller agrees to
provide Buyer with all amounts necessary to enable Buyer to satisfy its
obligations under Section 5.03(c) of the Purchase Agreement, and Buyer and
Seller agree that either (i) the Purchase Price for Receivables purchased on the
date of such payment by Seller shall be reduced by the amount of such payment or
(ii) the principal amount outstanding under the Buyer Note on such date shall be
increased by such amount.
SECTION 3.7 Payments and Computations, Etc.
(a) All amounts to be paid by Seller to Buyer hereunder shall be
received 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 in 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 otherwise
is scheduled to become due on a day that is not a Business Day, then
payment shall become due on the next Business Day. 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
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 Seller hereunder shall be paid
to Seller no later than 2:00 p.m., New York City time, on the day when due
in Dollars in immediately available funds to an account that Seller shall
from time to time specify in writing. Payments received by Seller after
such time shall be deemed to have been received on the next Business Day.
In the event that any payment otherwise is scheduled to become due on a day
that is not a Business Day, then such payment shall become due on the next
Business Day.
ARTICLE IV
CONDITIONS TO PURCHASES
SECTION 4.1 Conditions Precedent to Initial Contribution. The initial
contribution of Receivables hereunder is subject to the conditions precedent
that (i) each of the conditions precedent to the execution, delivery and
effectiveness of the Purchase Agreement (other than a condition precedent in the
Purchase Agreement relating to the effectiveness of this Agreement)
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shall have been fulfilled to the satisfaction of Buyer, and (ii) Buyer shall
have received (or in the case of subsection (g) below, shall have delivered)
each of the following, on or before the Contribution Date, each (unless
otherwise indicated) dated the Contribution Date and each in form and substance
satisfactory to Buyer:
(a) Seller Assignment Certificates. A Seller Assignment Certificate
from Seller in the form of Exhibit B, duly completed, executed and delivered by
Seller.
(b) Resolutions. A copy of the resolutions of the Board of Directors
of Seller approving this Agreement and the other 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 Responsible
Officer, each as of a recent date acceptable to Buyer.
(c) Good Standing Certificate of Seller; Certificates as to Foreign
Qualification of Seller. A good standing certificate for Seller, issued as of a
recent date by the Secretary of State of: (i) the jurisdiction of its
incorporation, (ii) Pennsylvania, and (iii) Michigan.
(d) Incumbency Certificate. A certificate of a Responsible Officer
of Seller certifying, as of a recent date reasonably acceptable to Buyer, the
names and true signatures of the Responsible Officers authorized on Seller's
behalf to sign the Sale Documents to be delivered by Seller (on which
certificate Buyer, the Second Step Purchaser and the Servicer may conclusively
rely until such time as Buyer shall receive from Seller (with a copy to the
Second Step Purchaser and the Servicer), a revised certificate meeting the
requirements of this subsection).
(e) Financing Statement, etc. The Buyer shall have received evidence
satisfactory to it of the completion of all recordings, registrations and
filings as may be necessary or, in the opinion of the Buyer, desirable, to
evidence or perfect the Ownership Interest to be acquired by the Buyer
hereunder, including:
(i) acknowledgment copies of proper financing statements on Form
UCC-1 filed on or prior to the Initial Cut-off Date, naming the Seller
as debtor and/or assignor and the Buyer as secured party and/or
assignee, or such other similar instruments or documents as may be
necessary or, in the opinion of the Buyer, advisable, under the
Uniform Commercial Code or any comparable Law of all appropriate
jurisdictions to evidence or perfect the Ownership Interest; and
(ii) evidence of searches satisfactory to the Buyer listing all
effective financing statements which name the Seller as debtor and/or
assignor in the jurisdictions in which filings are made pursuant to
subsection (i) above, together with copies of such financing
statements, none of which shall cover any Receivables or the related
Contracts.
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(f) 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.
(g) Buyer Note. The Buyer Note, executed and delivered by Buyer.
(h) Creditors' Consent. The Second Step Purchaser shall have
received the written consent of the Banks party to the Credit Agreement dated as
of August 30, 1994, as amended, among Seller, the Banks and Agents party thereto
and Bankers Trust Company, as Administrative Agent (the "Seller Credit
Agreement"), to the execution and delivery of this Agreement and the Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby in form and substance satisfactory to the Second Step Purchaser.
SECTION 4.2 Effective Date of Initial Contribution. Notwithstanding the
date all conditions precedent set forth in Section 4.1 hereof are satisfied, the
initial contribution of Receivables hereunder shall be deemed to have taken
place as of March 31, 1997.
SECTION 4.3 Certification as to Representations and Warranties. Seller (by
accepting the Purchase Price paid for each Receivable and upon a contribution of
Receivables to the Buyer) shall be deemed to have certified with respect to such
Receivables to be sold or contributed on such day that its representations and
warranties contained in Article V (excluding, with respect to any day after the
date hereof, Section 5.1(k)) are true and correct on and as of such day, with
the same effect as though made on and as of such day.
SECTION 4.4 Effect of Payment of Purchase Price. Upon the payment of the
Purchase Price (whether in cash or by an increase in a Buyer Note pursuant to
Section 3.1) for any Receivable or upon a transfer of a Receivable as a capital
contribution, title to the Receivables included therein shall vest in Buyer,
whether or not the conditions precedent to such purchase or contribution 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 Seller in fact to
satisfy any such condition precedent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of Seller. In order to induce
Buyer to enter into this Agreement and to make purchases hereunder, Seller
hereby makes the representations and warranties set forth in this section at the
times and to the extent set forth in Section 4.3.
(a) Organization and Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation. Seller is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which the ownership
of its properties or the nature of its activities (including transactions giving
9
rise to Receivables), or both, requires it to be so qualified or, if not so
qualified, the failure to so qualify would not have a material adverse effect on
its business, operations, properties or financial condition.
(b) Authorization. Seller has the corporate power and authority to
execute and deliver the Transaction Documents, to convey the Receivables to the
Buyer, and to perform its obligations hereunder and thereunder.
(c) Execution and Binding Effect. Each of the Transaction Documents
to which Seller is a party has been duly and validly executed and delivered by
Seller and constitutes a legal, valid and binding obligation of Seller
enforceable in accordance with its terms. This Agreement constitutes a legal,
valid and binding assignment of the Receivables by Seller enforceable in
accordance with the terms hereof, which will vest absolutely and unconditionally
in the Ownership Interest in the Receivables purported to be assigned hereby,
subject to no Liens whatsoever. Upon the filing of the financing statements
required under Section 4.1(e) hereof, the Ownership Interest to be acquired by
Buyer in the Receivables will be perfected under Article Nine of the Uniform
Commercial Code in all the applicable jurisdictions, prior to and enforceable
against all creditors of and purchasers from Seller and all other Persons
whatsoever. Upon the filing of the financing statements required under Section
4.02(c) of the Purchase Agreement, the Second Step Purchaser's Participation
Interest will be perfected under Article Nine of the Uniform Commercial Code in
all the applicable jurisdictions, prior to and enforceable against all creditors
of and purchasers from Seller or Buyer and all other Persons whatsoever.
(d) Authorizations and Filings. No authorization, consent, approval,
license, exemption or other action by, and no registration, qualification,
designation, declaration or filing with, any Official Body is or will be
necessary or, in the opinion of Seller, advisable in connection with the
execution and delivery of the Transaction Documents, the consummation of the
transactions herein or therein contemplated or the performance of or the
compliance with the terms and conditions hereof or thereof, to ensure the
legality, validity or enforceability hereof or thereof, or to ensure that the
Buyer will have its Ownership Interest in and to the Receivables perfected and
prior to all other Liens (including competing ownership interests) and that the
Second Step Purchaser will have its Participation Interest in and to the
Purchased Receivables perfected and prior to all other Liens (including
competing ownership interests), other than the filing of financing statements
under the Uniform Commercial Code in the jurisdictions required under Section
4.1(e) hereof or Section 4.02(c) of the Purchase Agreement.
(e) Absence of Conflicts. Neither the execution and delivery of the
Transaction Documents, nor the consummation of the transactions herein or
therein contemplated, nor the performance of or the compliance with the terms
and conditions hereof or thereof, will (i) violate any Law or (ii) conflict with
or result in a breach of or a default under (A) the certificate of incorporation
or by-laws of Seller or (B) any agreement or instrument, including, without
limitation, any and all indentures, debentures, loans or other agreements to
which Seller is a party or by which it or any of its properties (now owned or
hereafter acquired) may be subject or bound.
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(f) Location of Chief Executive Office, etc. As of the date hereof
Seller's Chief Executive Office is located at either ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Seller has only the Affiliates and operates only under the trade
names identified in Schedule 2 hereto, and has not changed its name, merged or
consolidated with any other corporation or been the subject of any proceeding
under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy) within the past ten (10) years,
except as disclosed in Schedule 2 hereto.
(g) No Termination Event. No event has occurred and is continuing
and no condition exists which constitutes a Termination Event or a Potential
Termination Event.
(h) Accurate and Complete Disclosure. No information, whether written
or oral, furnished by Seller to Buyer pursuant to or in connection with this
Agreement, the Purchase Agreement or any transaction contemplated hereby or
thereby is false or misleading in any material respect (and with respect to
notices and documents under this Agreement or the Purchase Agreement, when
furnished, in any respect, whether or not material) as of the date as of which
such information was furnished (including by omission of material information
necessary to make such information not misleading).
(i) No Proceedings. There are no proceedings or investigations
pending or threatened before any Official Body (A) asserting the invalidity of
the Transaction Documents, (B) seeking to prevent the consummation of any of the
transactions contemplated by the Transaction Documents, or (C) seeking any
determination or ruling that could materially and adversely affect (i) the
performance by Seller or Servicer of its obligations under this Agreement or the
Purchase Agreement, or (ii) the validity or enforceability of any Transaction
Document, any Contract or any material amount of the Receivables.
(j) Bulk Sales Act. No transaction contemplated hereby required
compliance with any bulk sales act or similar Law.
(k) Financial Condition. The consolidated balance sheets of Seller
and its consolidated subsidiaries as at March 31, 1996 and the related
statements of income and shareholders' equity of Seller and its consolidated
subsidiaries for the fiscal year then ended, certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co.,
independent accountants, copies of which have been furnished to the Buyer,
fairly present the consolidated financial position of Seller and its
consolidated subsidiaries as at such date and the consolidated results of the
operations of Seller and its consolidated subsidiaries for the period ended on
such date, all in accordance with GAAP, and (y) as of the date hereof, there has
been no material adverse change in any such condition, business, business
prospects or operations or in Seller's ability to perform its obligations under
this Agreement or the Purchase Agreement since March 31, 1996, except as
described in Schedule 1.
(l) Litigation. No injunction, decree or other decision has been
issued or made by any Official Body that prevents, and no threat by any Person
has been made to attempt to obtain any such decision that would prevent, Seller
from conducting a significant part of its business
11
operations, and no litigation, investigation or proceeding of the type referred
to in Section 5.1(i) hereof exists.
(m) Margin Regulations. No use of funds acquired by Seller under
this Agreement will conflict with or contravene any of Regulations G, T, U and X
of the Board of Governors of the Federal Reserve System, as the same may from
time to time be amended, supplemented or otherwise modified.
(n) Eligible Receivables. (i) On the date of each purchase of
Receivables hereunder from Seller (or contribution of Receivables by Seller),
each such Receivable, unless otherwise identified to Buyer and Second Step
Purchaser by Seller or Servicer, is an Eligible Receivable, and (ii) on the date
of each Sale Report that identifies a Receivable originated by Seller as an
Eligible Receivable, such Receivable is an Eligible Receivable.
(o) No Liens. Prior to the transfer of each Receivable from Seller
to Buyer pursuant to this Agreement and the Second Step Purchaser's purchase of
a Participation Interest in the related Purchased Receivable, Seller owned such
Receivable, together with the related Contract and all purchase orders and other
agreements related to such Receivable, free and clear of any Lien, except for
Liens of Second Step Purchaser pursuant to the Amended and Restated Receivables
Purchase Agreement between Seller and Second Step Purchaser dated as of December
20, 1995.
SECTION 5.2 Representations and Warranties of Buyer. From the date hereof
until the Purchase Termination Date, Buyer hereby represents and warrants that
(a) this Agreement (i) 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 does not violate any applicable Law or any agreement to which
Buyer is a party or by which its properties are bound.
ARTICLE VI
GENERAL COVENANTS OF SELLER
SECTION 6.1 Affirmative Covenants. From the date hereof until the first
day following the Purchase Termination Date on which all obligations of Seller
shall have been finally and fully paid and performed and the Second Step
Purchaser's Net Investment in the Participation Interest shall have been reduced
to zero and all other amounts accrued and owing to Second Step Purchaser by
Buyer under the Purchase Agreement have been paid in full, unless each of Second
Step Purchaser and Buyer shall otherwise give its prior written consent, Seller
hereby agrees that it will perform the covenants and agreements set forth in
this section.
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(a) Preservation of Corporate Existence. Seller shall preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification could materially adversely affect (i) the interests of the Buyer
hereunder or Second Step Purchaser under the Purchase Agreement or (ii) the
ability of the Seller or the Servicer to perform their respective obligations
hereunder or under the Purchase Agreement.
(b) Compliance With Laws. Seller shall comply in all material
respects with all Laws applicable to Seller, its business and properties, and
the Receivables.
(c) Enforceability of Obligations. The Seller shall ensure that, with
respect to each Receivable, the obligation of any related Obligor to pay the
Unpaid Balance of such Receivable in accordance with the terms of the related
Contract remains legal, valid, binding and enforceable against such Obligor,
except (i) as otherwise permitted by Section 6.3(d) hereof, (ii) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws which may be applied in the
Event of Bankruptcy of such Obligor, and (iii) as such enforceability may be
limited by general principles of equity (whether considered in a suit at law or
in equity).
(d) Receivables Reviews. Seller shall, during regular business hours,
permit Buyer and Second Step Purchaser and their respective agents or
representatives, at the expense of 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 Seller relating to the Receivables generated
by Seller, and (ii) to visit the offices and properties of Seller for the
purpose of examining the materials described in clause (i) above, and to discuss
matters relating to any Receivables of Seller or Seller's performance hereunder
with any of the Responsible Officers of Seller or, with the prior consent of a
Responsible Officer of Seller, with employees of 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 a Termination Event or Potential Termination
Event, Buyer (or its agent or representative) shall give Seller at least five
Business Days' prior notice of any Seller Receivables Review, and Buyer shall
have the right to request a Seller Receivables Review not more than twice in any
calendar year.
(e) Books and Records. Seller shall maintain and implement
administrative and operating procedures (including the ability to recreate
Records evidencing the Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, Records and
other information reasonably necessary or advisable for the collection of all
Receivables (including Records adequate to permit the identification of all
Collections and adjustments to each existing Receivable) at its Chief Executive
Office, except that any Records may be stored at other locations to the extent
temporary location elsewhere is necessary in
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connection with litigation, repossession, other collection activities or other
usual business purposes.
(f) Fulfillment of Obligations. The Seller will duly observe and
perform, or cause to be observed or performed, all obligations and undertakings
on its part to be observed and performed under or in connection with the
Receivables, including its obligations as Servicer, and will do nothing to
impair the rights, title and interest of the Buyer in and to the Ownership
Interest or the Second Step Purchaser in and to its Participation Interest.
(g) Customer List. The Seller shall at all times maintain (or cause
the Servicer to maintain) a current list (which may be stored on magnetic tapes
or disks) of all Obligors under Contracts related to Receivables, including the
name, address, telephone number and account number of each such Obligor. The
Seller shall deliver or cause to be delivered a copy of such list to the Buyer
as soon as practicable following the Buyer's request.
(h) Copies of Reports, Filings, Opinions, etc. Seller shall, or
shall cause the Servicer to, prepare and forward to the Buyer (i) copies of all
press releases, proxy statements, financial statements, reports and other
communications which Seller sends to its security holders or any nationally
recognized statistical rating agency, and copies of all regular, periodic and
special reports which Seller files with the Securities and Exchange Commission
or with any securities exchange or commission, and (ii) copies of all reports
and notices with respect to any Reportable Event defined in Article IV of ERISA
which Seller files under ERISA with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation or the Department of Labor, or which Seller
receives therefrom.
(i) Total Systems Failure. The Seller shall, or shall cause the
Servicer to, promptly notify the Buyer of any total systems failure and shall
advise the Buyer of the estimated time required to remedy such total systems
failure and of the estimated date on which a Sale Report can be delivered. Until
a total systems failure is remedied, the Seller or the Servicer (i) will furnish
to the Buyer such periodic status reports and other information relating to such
total systems failure as the Buyer may reasonably request and (ii) will promptly
notify the Buyer if the Seller or the Servicer believes that such total systems
failure cannot be remedied by the estimated date, which notice shall include a
description of the circumstances which gave rise to such delay, the action
proposed to be taken in response thereto, and a revised estimate of the date on
which a Sale Report can be delivered. The Seller or the Servicer shall promptly
notify the Buyer when a total systems failure has been remedied.
(j) Treatment of Purchase. For accounting purposes, Seller shall
treat the assignment of the Receivables (other than Contributed Receivables)
made hereunder as a sale of the Receivables. Seller shall also maintain its
Records and books of account in a manner which clearly reflects the sale of the
Receivables to Buyer and its Ownership Interest therein. Further, 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 Seller has sold or contributed
its Receivables to Buyer and that the
14
assets of Buyer will not be available to Seller and its other subsidiaries
unless Buyer's liabilities have been paid in full.
(k) Credit and Collection Policies. Seller will comply in all
material respects with the Credit and Collection Policy in regard to each
Receivable of Seller and the Contract related to each such Receivable.
(l) Certificates of Title.
(1) If any amount payable under or in connection with any
Receivable shall be or become evidenced by any promissory note,
chattel paper or other instrument, such note, chattel paper or
instrument shall be duly endorsed in a manner satisfactory to the
Buyer and delivered to the Buyer or its agent.
(2) The Seller shall deliver to the Buyer any certificate of
title or other evidence of ownership issued by the United States or
any state or any political subdivision thereof relating to any chattel
held as security for any amount payable under or in connection with
any Receivable, with evidence of perfection of the security interest
in such property noted thereon, if such notation is required under the
Laws of the jurisdiction in which such property is located in order to
perfect a security interest in such property.
(3) If the Contract relating to any Receivable requires the
related Obligor to maintain insurance upon the chattel security
relating to such Contract, the Seller shall deliver to the Buyer all
documents or certificates relating to such insurance.
(4) The Seller shall deliver to the Buyer any other document
required by the terms of the related Contracts.
(m) Separate Corporate Existence of Buyer. Seller hereby
acknowledges that the Second Step Purchaser is relying upon Buyer's identity as
a legal entity separate from Seller and its other Affiliates (each of Seller and
other Affiliates a "Seller Entity"). Therefore, from and after the Contribution
Date hereof until the first day following the Purchase Termination Date on which
all obligations shall have been fully paid and performed and the Second Step
Purchaser's Net Investment in the Participation Interest shall have been reduced
to zero and all other amounts accrued and owing to Second Step Purchaser by
Buyer under the Purchase Agreement have been paid in full, Seller will, and will
cause each other Affiliate to, take all necessary 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 Seller, Servicer or any other
Person. Without limiting the foregoing, Seller will operate, conduct its
businesses and otherwise act in a manner which is consistent with this Agreement
and Seller shall:
15
(1) require that all full-time employees of Buyer identify
themselves as such and not as employees of any Seller Entity
(including, without limitation, by means of providing appropriate
employees with business or identification cards identifying such
employees as Buyer's employees);
(2) to the extent any employee, consultant or agent of Buyer is
also an employee, consultant or agent of any Seller Entity, allocate
the compensation of such employee, consultant or agent between Buyer
and such Seller Entity on a basis which reflects the services rendered
to Buyer and such Seller Entity;
(3) allocate all overhead expenses (including, without
limitation, telephone and other utility charges) for items shared
between Buyer and any Seller Entity on a reasonable basis consistent
with GAAP;
(4) at all times from and after the Contribution Date have at
least one member of Buyer's Board of Directors (an "Independent
Director") who is not (A) a director, officer or employee of any
Seller Entity, (B) a person related to any officer or director of any
Seller Entity, (C) a holder (directly or indirectly) of more than 5%
of any voting securities of any Seller Entity, or (D) a person related
to a holder (directly or indirectly) of more than 5% of any voting
securities of any Seller Entity;
(5) ensure that all corporate actions are duly authorized by
vote of its Board of Directors in accordance with its charter and by-
laws;
(6) cause Buyer's books and Records to be maintained separate
from those of any Seller Entity and maintain such Records in a
location clearly identified as being allocated solely to Buyer;
(7) cause Buyer to prepare its financial statements separately
from those of other Seller Entities and insure that any consolidated
financial statements of Seller that include Buyer have a footnote
clearly stating that Buyer is a separate corporate entity and that its
assets will be available first to satisfy the claims of its creditors;
(8) except as herein specifically otherwise provided, not
commingle funds or other assets of Buyer with those of any other
Seller Entity and not maintain bank accounts or other depository
accounts to which any Seller Entity is an account party, into which
any Seller Entity makes deposits or from which any Seller Entity has
the power to make withdrawals;
(9) be obligated to reimburse any Seller Entity which pays any
of Buyer's operating expenses; and
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(10) not permit Buyer to be named as an insured on the insurance
policy covering the property of any Seller Entity except and only to
the extent that such policy also covers property of Buyer, or enter
into an agreement with the holder of such policy whereby in the event
of a loss in connection with such property, proceeds are paid to
Buyer.
(n) Payment Instructions to Obligors. Seller will instruct all
Obligors to submit all payments either (i) to one of the Permitted Lockboxes
maintained at the Permitted Lockbox Banks for deposit in a Lockbox Account or
(ii) directly to one of the Lockbox Accounts.
(o) Segregation of Collections. 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, Servicer and
Second Step Purchaser (following which notice, Buyer shall promptly return all
the funds to Seller).
(p) Identification of Eligible Receivables. 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) notify Buyer prior to
the assignment of a Receivable from Seller to Buyer if a Receivable to be sold
hereunder will, to Seller's knowledge, not be an Eligible Receivable as of the
date of such Purchase.
(q) Accuracy of Information. All written information furnished on and
after the date hereof by or on behalf of Seller to Buyer, Servicer or Second
Step Purchaser pursuant to or in connection with any Sale 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.
(r) Ownership of Buyer Stock. Seller will own the outstanding capital
stock of Buyer free of any Liens other than Liens pursuant to the Seller Credit
Agreement.
SECTION 6.2 Reporting Requirements. From the date hereof until the first
day following the Purchase Termination Date on which all obligations of Seller
shall have been finally and fully paid and performed and the Second Step
Purchaser's Net Investment in the Participation Interest shall have been reduced
to zero and all other amounts accrued and owing to Second Step Purchaser by
Buyer under the Purchase Agreement have been paid in full, Seller agrees that it
will, unless Buyer and Second Step Purchaser shall otherwise give prior written
consent, furnish to Buyer and Second Step Purchaser:
(a) Quarterly Financial Statements. Within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of Seller, copies of
the unaudited consolidated balance sheets of Seller and its consolidated
subsidiaries as at the end of the fiscal quarter and the
17
unaudited consolidated statements of income 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 a Responsible Officer of
Seller,
(b) Annual Financial Statements. As soon as possible and in any event
within 90 days after the end of each fiscal year of Seller, a copy of the
audited consolidated balance sheet of Seller and its consolidated subsidiaries
as at the end of the fiscal year and the statements of income and cash flows of
Seller 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 by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. (or such other
independent certified public accountants of a nationally recognized standing in
the United States as shall be selected by Seller),
(c) Notice of Termination Event. Promptly upon becoming aware of any
Termination Event or Potential Termination Event, the Seller shall give the
Buyer and Second Step Purchaser notice thereof, together with a written
statement of a Responsible Officer setting forth the details thereof and any
action with respect thereto taken or contemplated to be taken by the Seller,
(d) Material Adverse Effect. As soon as possible and in any event
within five Business Days after a Responsible Officer of 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 had, or reasonably could be expected to have, a material
adverse effect on its business, operations, properties or financial condition,
(e) Proceedings. As soon as possible and in any event within three
Business Days after a Responsible Officer of Seller has knowledge thereof,
written notice of (i) any litigation, investigation or proceeding of the type
described in Section 5.1(i) 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 (ii) such other
publicly available information respecting the condition or operations, financial
or otherwise, of Seller, in each case as Buyer or Second Step Purchaser may from
time to time reasonably request in order to protect the interests of Buyer or
Second Step Purchaser under or as contemplated by this Agreement.
SECTION 6.3 Negative Covenants. From the date hereof until the first day
following the Purchase Termination Date on which all obligations of Seller shall
have been finally and fully paid and performed and the Second Step Purchaser's
Net Investment in the Participation Interest shall have been reduced to zero and
all other amounts accrued and owing to Second Step Purchaser under the Purchase
Agreement have been paid in full, unless Buyer and Second Step Purchaser
18
shall otherwise give prior written consent, Seller hereby agrees that it will
perform the covenants and agreements set forth in this Section 6.3.
(a) Statementing for and Treatment of the Sales. Seller will not
prepare any financial statements for financial accounting or reporting purposes
which shall account for the transactions contemplated hereby in any manner other
than as a sale or contribution of the Receivables to Buyer.
(b) Sales, etc. Except in the ordinary course of its business, Seller
will not sell, transfer, convey, assign or lease all or any substantial part of
its assets, or sell or assign with or without recourse any Receivables (other
than pursuant hereto), or permit any of its subsidiaries to do any of the
foregoing, except for any such sale, transfer, conveyance, lease or assignment
of or by any of its wholly-owned subsidiaries to Seller or to any other wholly-
owned subsidiary of Seller.
(c) No Liens. Seller will not cause any of the Receivables to be
sold, pledged, assigned or transferred or to be subject to a Lien, other than
the sale or contribution of the Receivables to Buyer and the Liens created in
connection with the transactions contemplated by this Agreement.
(d) Extension or Amendment of Receivables; Change in Credit and
Collection Policy or Contracts. Seller will not, (i) without the prior written
consent of Buyer and Second Step Purchaser, which consent will not be
unreasonably withheld, extend, amend or otherwise modify the terms of any
Receivable or Contract in a manner that reasonably could be expected to have a
material adverse effect on Seller's business, operations, properties or
financial condition 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 Second Step
Purchaser and Buyer, (y) with respect to collection procedures, the change is
made with prior written notice to Second Step Purchaser and Buyer and no
material adverse effect on Seller's business, operations, properties or
financial condition or the collectibility of a material amount of Receivables
would result and (z) with respect to accounting policies relating to Receivables
that have become Defaulted Receivables, the change is made in accordance with
GAAP.
(e) Change in Payment Instructions to Obligors. Seller will not add
any bank as a Permitted Lockbox Bank, terminate any bank listed on Schedule 3
hereto as a Permitted Lockbox Bank, change any Lockbox Account listed on
Schedule 3 hereto, or make any change in its instructions to Obligors regarding
payments to be made to Seller or payments to be made to any Permitted Lockbox
Bank, unless the Buyer and Second Step Purchaser shall have received ten (10)
Business Days' prior notice of such addition, termination or change and, with
respect to the addition of any Permitted Lockbox Bank, a Lockbox Servicing
Agreement executed by such Permitted Lockbox Bank shall have been delivered to
the Buyer and Second Step Purchaser and become effective prior to its addition
as a Permitted Lockbox Bank.
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(f) Mergers, Acquisitions, Sales, etc. Seller will not be a party to
any merger or consolidation, or purchase or otherwise acquire all or
substantially all of the assets or any stock of any class of, or any partnership
or joint venture interest in, any other Person, except:
(1) a wholly-owned subsidiary of Seller may merge with Seller,
provided that Seller shall be the surviving corporation and no Termination
Event or Potential Termination Event shall occur and be continuing or shall
exist at such time or after giving effect to such transaction; and
(2) Seller may merge into or consolidate with any other
corporation, or purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest in any Person, if Seller is the surviving corporation
formed by such consolidation, merger, purchase or acquisition and prior to
such consolidation and merger Seller had not breached any of its
obligations hereunder and after giving effect to such consolidation and
merger no Termination Event or Potential Termination Event shall have
occurred.
(g) Change in Name. Seller will not change its name, identity or
corporate structure in any manner which would, could or might make any financing
statement or continuation statement filed in connection with this Agreement or
the transactions contemplated hereby seriously misleading within the meaning of
Section 9-402(7) of the Uniform Commercial Code of any applicable jurisdiction
or other applicable Laws unless it shall have given the Buyer and the Second
Step Purchaser at least sixty (60) days' prior written notice thereof.
(h) Amendments to Sale Documents. Seller will not amend or otherwise
modify or supplement any Sale Document to which it is a party unless Buyer and
Second Step Purchaser shall have given prior written consent to each amendment,
modification or supplement.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
SECTION 7.1 Rights of Buyer.
(a) Subject to Section 7.3(b), Seller hereby authorizes Buyer, Second
Step Purchaser, Servicer and/or their respective designees to take any and all
steps in Seller's name and on behalf of Seller that Buyer, Second Step
Purchaser, Servicer and/or their respective designees determine are reasonably
necessary or appropriate to collect all amounts due under any and all
Receivables, including endorsing the name of Seller on checks and other
instruments representing Collections and enforcing Seller's rights under such
Receivables.
(b) Buyer shall have no obligation to account for any Receivables to
Seller. Buyer shall have no obligation to account for, or to return Collections,
or any interest or other
20
finance charge collected pursuant thereto, to Seller, irrespective of whether
such Collections and charges are in excess of the Purchase Price for the
Receivables.
(c) Buyer shall have the unrestricted right to further assign,
transfer, deliver, hypothecate, subdivide or otherwise deal with the
Receivables, and all of Buyer's right, title and interest in, to and under this
Agreement, on whatever terms Buyer shall determine, pursuant to the Purchase
Agreement or otherwise.
(d) Buyer shall have the sole right to retain any gains or profits
created by buying, selling or holding the Receivables 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 Seller. Anything herein to the contrary
notwithstanding, Seller hereby agrees:
(a) to deliver directly to any of the Lockbox Accounts, 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 Seller until delivery of Collections to
Buyer,
(b) to perform all of its obligations hereunder and under the
Contracts to the same extent as if the Receivables had not been sold or
contributed hereunder, and the exercise by Buyer or its designee or assignee of
Buyer's rights hereunder or in connection herewith shall not relieve Seller from
any of its obligations under the Sale Documents and the Contracts related to the
Receivables, and
(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 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 Seller
or transmitted or received by Buyer (whether or not from Seller) in connection
with any Receivable.
SECTION 7.3 Further Action Evidencing Purchases. Seller agrees that from
time to time, at its expense, it will promptly, upon reasonable request by
Buyer, Servicer or Second Step Purchaser, execute and deliver all further
instruments and documents, and take all further action, in order to perfect,
protect or more fully evidence the sale or contribution of the
21
Receivables by Seller to Buyer under this Agreement, or to enable Buyer to
exercise or enforce any of its rights under any Sale Document. Seller further
agrees that from time to time, at its expense, it will promptly, upon request,
take all action that Buyer, Servicer or Second Step Purchaser may reasonably
request in order to perfect, protect or more fully evidence the sale or
contribution of the Receivables by Seller to Buyer or to enable Buyer or Second
Step Purchaser (as the assignee of Buyer) to exercise or enforce any of its
rights hereunder or under any other Sale Document. Without limiting the
generality of the foregoing, upon the request of Buyer or Second Step Purchaser,
Seller will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as Buyer or Second Step Purchaser may reasonably determine to be
necessary or appropriate, and
(b) ▇▇▇▇ the master data processing records evidencing the
Receivables with the following legend:
"THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD OR CONTRIBUTED TO
EXIDE U.S. FUNDING CORPORATION ("BUYER") PURSUANT TO A SALE AGREEMENT,
DATED AS OF MARCH 31, 1997, BETWEEN EXIDE CORPORATION AND BUYER; AND
SUCH RECEIVABLES HAVE BEEN TRANSFERRED TO THREE RIVERS FUNDING
CORPORATION PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF
THE SAME DATE, AMONG BUYER, AS TRANSFEROR, EXIDE CORPORATION, AS THE
INITIAL SERVICER, AND THREE RIVERS FUNDING CORPORATION, AS SECOND STEP
PURCHASER."
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 of Seller, in each case
whether now existing or hereafter generated by Seller. Except for material
performance obligations of Seller to any Obligor hereunder or under any of the
Contracts, if (i) 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 Seller as
provided in Section 9.1.
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination by Seller. Prior to the commencement of a
Termination Event under the Purchase Agreement, Seller may terminate its
agreement to sell Receivables hereunder to Buyer by giving Buyer and Second Step
Purchaser not less than thirty days' prior written notice of its election not to
continue to sell Receivables to Buyer; provided, that such notice shall specify
the effective date of termination.
22
SECTION 8.2 Automatic Termination.
(a) Unless otherwise agreed to by Seller, Buyer and Second Step
Purchaser in writing, the agreement of Seller to sell Receivables hereunder, and
the agreement of Buyer to purchase Receivables from Seller hereunder, shall
terminate automatically at the latest to occur of (i) the Expiration Date, (ii)
the first day on which the Net Investment equals zero, all other amounts accrued
and owing to the Second Step Purchaser under the Purchase Agreement have been
paid in full and the Maximum Net Investment has been reduced to zero, or (iii)
the first day on which all Eligible Receivables in the Receivables Pool have
been collected or written off by the Seller and the Maximum Net Investment has
been reduced to zero; provided, however, that the covenants, representations,
warranties and indemnities of the Seller to the Buyer contained herein or made
pursuant hereto shall survive such termination.
(b) If an Event of Bankruptcy shall occur with respect to Seller, the
Buyer's obligation to purchase Receivables from Seller hereunder shall be
terminated automatically without any action on the part of the Buyer.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by Seller.
(a) Seller agrees to indemnify, defend and save harmless the Buyer
and Second Step Purchaser and their respective directors, officers,
shareholders, employees and agents (each, an "Indemnified Party"), forthwith on
demand, from and against any and all losses, claims, damages, liabilities, costs
and expenses (including, without limitation, all attorneys' fees and expenses,
expenses incurred by their respective credit recovery groups (or any successors
thereto) and expenses of settlement, litigation or preparation therefor) which
the Buyer or Second Step Purchaser may incur or which may be asserted against
the Buyer or Second Step Purchaser by any Person (including, without limitation,
any Obligor or any other Person whether on its own behalf or derivatively on
behalf of Seller) (all of the foregoing being collectively referred to as
"Losses"), excluding, however, (a) Losses to the extent resulting from the gross
negligence or willful misconduct on the part of such Indemnified Party, (b)
recourse (except as otherwise provided in this Agreement) for Defaulted
Receivables, (c) any Losses with respect to any tax, reserve, capital charge or
expense related thereto (indemnification with respect to such Losses being
provided as and to the extent provided in the Purchase Agreement), or (d)
Losses, to the extent that such Losses resulted from an act or omission of the
Servicer if the Servicer is not Seller or an Affiliate of Seller, arising from
or incurred in connection with (i) any breach of a representation, warranty or
covenant by Seller or Buyer made or deemed made hereunder or under the Purchase
Agreement or in connection herewith or therewith or the transactions
contemplated herewith or therewith, or (ii) any suit, action, claim, proceeding
or governmental investigation, pending or threatened, whether based on statute,
regulation or order, on tort, on contract or otherwise, before any Official
Body, which arises out of or relates to the Transaction Documents, the Ownership
Interest or the Participation Interest in the Receivables or related Contracts,
or the use of the proceeds of the
23
Receivables pursuant hereto or to the Purchase Agreement or the transactions
contemplated hereby or thereby (all Losses, after giving effect to the
limitations set forth in clauses (a) through (d) hereof, being hereinafter
referred to as "Indemnified Amounts").
(b) Without limitation of the generality of Section 9.1(a), Seller
shall pay on demand to each Indemnified Party any and all amounts necessary to
indemnify such Indemnified Party from and against any and all Indemnified
Amounts relating to or resulting from any of the following:
(1) the creation of the Participation Interest in any Receivable
which is not at the date of the creation of such Ownership Interest an
Eligible Receivable;
(2) reliance on any representation or warranty made or deemed made
by Seller (or any of its respective Responsible Officers) or any
statement made by any Responsible Officer of Seller under or in
connection with this Agreement which shall have been incorrect in any
material respect when made;
(3) the failure by Seller to comply with any applicable Law, rule
or regulation;
(4) the failure to vest in the Buyer the Ownership Interest in the
Receivables and Collections in respect thereof, free and clear of any
Lien;
(5) the failure to vest in the Second Step Purchaser the
Participation Interest in the Receivables and Collections in respect
thereof, free and clear of any Lien;
(6) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the Uniform
Commercial Code of any applicable jurisdiction or under any other
applicable Law with respect to the sale or contribution of the
Receivables by Seller to Buyer;
(7) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale
of the merchandise or service related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(8) any failure of Seller to perform its duties or obligations in
accordance with the provisions of this Agreement;
(9) any products liability claim arising out of or in connection
with merchandise, insurance or services which are the subject of any
Contract; or
24
(10) any failure by Buyer to make any payment required by Section
11.03 of the Purchase Agreement.
(c) Promptly upon receipt by any Indemnified Party, hereunder of
notice of the commencement of any suit, action, claim, proceeding or
governmental investigation (an "Action"), such Indemnified Party shall, if
a claim in respect thereof is to be made against Seller hereunder, notify
Seller in writing of the commencement thereof. Seller may participate in
the defense of any such Action at its expense, and no settlement thereof
shall be made without the approval of Seller and the Indemnified Party. The
approval of Seller will not be unreasonably withheld or delayed. In case
any Action shall be brought against any Indemnified Party, Seller shall be
entitled to participate in and, to the extent that it shall wish, to assume
the defense thereof, with counsel satisfactory to the Indemnified Party,
and after notice from Seller to such Indemnified Party of its election so
to assume the defense thereof, Seller shall not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation. In any such Action, any Indemnified
Party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) Seller and such Indemnified Party shall have mutually agreed in
writing to the retention of such counsel or (ii) the named parties to any
such Action (including any impleaded parties) include both Seller and such
Indemnified Party and representation of both parties by the same counsel
would be in appropriate due to actual or potential differing interests
between them. It is understood that Seller shall not, in conjunction with
any Action or related Actions in the same jurisdiction, be liable for the
fees and expenses of more that one separate firm in addition to any local
counsel for all such Indemnified Parties, unless (i) Seller and such
Indemnified Parties shall have mutually agreed in writing to the retention
of separate counsel or (ii) the named parties to any such Action (including
any impleaded parties) include such Indemnified Parties and representation
of such Indemnified Parties by the same counsel would be inappropriate due
to actual or potential differing interests between them, and that all such
fees and expenses shall be reimbursed as they are incurred.
(d) The indemnity contained in this Section 9.1 shall survive the
termination of this Agreement.
ARTICLE X
MISCELLANEOUS
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 Seller (with respect to an amendment) or by Buyer (with
respect to a waiver or consent by it) and such amendment, modification or waiver
is consented to by Second Step Purchaser, and then
25
any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No failure or delay on the part of Buyer, any Indemnified Party 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 Seller in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by Buyer or Second Step
Purchaser 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 under its name
on the signature pages hereof 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 and to Second Step Purchaser at the
address or facsimile number set forth under its name on the signature pages of
the Purchase Agreement. 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 means 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, 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 Seller to Buyer that are then due and payable or that are not
then due and payable from Seller to Buyer but have then accrued, any and all
indebtedness or other obligations at any time owing to Seller by Buyer to or for
the credit or the account of any Seller or that are not then due and payable
from Buyer to 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 each of Buyer and
Seller and its respective successors and permitted assigns (including, in the
case of Buyer, Second Step Purchaser). Seller may not assign any of its rights
hereunder or any interest herein without the prior written consent of Buyer.
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 Purchase Agreement is terminated pursuant to
Section 2.03(c) of the Purchase Agreement, on which all obligations shall have
been finally and fully paid and performed or such other time as the parties
26
hereto shall agree. The rights and remedies with respect to any breach of any
representation and warranty made by 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, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF
BUYER IN THE RECEIVABLES 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 Seller under Article IX, Seller agrees to pay on demand:
(a) all reasonable out-of-pocket and other costs and expenses in
connection with the enforcement of this Agreement or the other Transaction
Documents by Buyer or Second Step Purchaser, 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 Sale Documents, and agrees to
indemnify each 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 [Reserved]
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 Sale 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 Sale 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 Sale 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.
27
SECTION 10.11 Acknowledgment and Consent.
--------------------------
(a) Seller acknowledges that, contemporaneously herewith, Buyer is
selling, transferring, assigning, setting over and otherwise conveying to Second
Step Purchaser all of Buyer's right, title and interest in, to and under the
Receivables, this Agreement and other Sale Documents pursuant to Section 2.01 of
the Purchase Agreement. Seller hereby consents to the sale, transfer,
assignment, set over and conveyance to Second Step Purchaser by Buyer of all
right, title and interest of Buyer in, to and under this Agreement and the other
Sale Documents, and all of Buyer's rights, remedies, powers and privileges, and
all claims of Buyer against Seller, under or with respect to this Agreement and
the other Sale 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 Seller and the
obligations of Seller hereunder, (ii) the right to appoint a successor to the
Servicer at the times and upon the conditions set forth in the Purchaser
Agreement, and (iii) the right, at any time, to give or withhold any and all
consents, requests, notices, directions, approvals, demands, extensions or
waivers under or with respect to this Agreement, any other Sale Document or the
obligations in respect of Seller thereunder to the same extent as Buyer may do.
Each of the parties hereto acknowledges and agrees that Second Step Purchaser is
a third party beneficiary of the rights of Buyer arising hereunder and under the
other Sale Documents to which Seller is a party.
(b) Seller hereby agrees to execute all agreements, instruments and
documents, and to take all other action, that Buyer or Second Step Purchaser
reasonably determines is necessary or appropriate to evidence its consent
described in subsection (a) above. To the extent that Buyer, individually or
through Servicer, has granted or grants powers of attorney to Second Step
Purchaser under the Purchase Agreement, Seller hereby grants a corresponding
power of attorney on the same terms to Buyer. Seller hereby acknowledges and
agrees that Buyer, in all of its capacities, shall assign to Second Step
Purchaser the powers of attorney and other rights and interests granted by
Seller to Buyer hereunder and agrees to cooperate fully with Second Step
Purchaser 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. Seller hereby agrees that it will not
institute against Buyer, or join any other Person in instituting against Buyer,
any insolvency proceeding (such as any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Net Investment of Second Step
Purchaser in the Participation Interest shall be outstanding or there shall not
have elapsed one year plus one day since the last day on which any such Net
Investment of Second Step Purchaser in the Participation Interest shall have
been outstanding. The foregoing shall not limit the right of Seller to file any
claim in or otherwise take any action with respect to any insolvency proceeding
that was instituted against Buyer or Second Step Purchaser by any Person other
than Seller or any other Affiliates of Seller (provided that no such action may
be
28
taken by Seller until such proceeding has continued undismissed, unstayed and
in effect for a period of ten (10) days).
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
Sale 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 Sale 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 Sale Documents.
SECTION 10.15 Recourse to Buyer. Except to the extent expressly provided
otherwise in the Sale Documents, the obligations of Buyer under the Sale
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 Sale 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.
[The Remainder of this page intentionally has been left blank.]
29
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.
EXIDE CORPORATION, as Seller
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Secretary
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
EXIDE U.S. FUNDING CORPORATION, as Buyer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
30
EXHIBIT A
to Sale Agreement
FORM OF
BUYER NOTE
----------
___________, 1997
FOR VALUE RECEIVED, the undersigned, EXIDE U.S. FUNDING CORPORATION, a
Delaware corporation ("Buyer"), promises to pay to EXIDE CORPORATION, a Delaware
corporation ("Seller" and together with its successors and assigns, "Holder"),
on the terms and subject to the conditions set forth in this promissory note
(this "Note") and in the Sale Agreement, dated as of March 31, 1997 (the
"Agreement") between Buyer and Seller, the amount specified pursuant to Article
III of the Agreement as owing hereunder. 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 the 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 Seller.
2. Rules of Construction; Definitions. Certain rules of construction
governing the interpretation of this Note are as 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 the Agreement.
In addition, as used herein, the following terms have the following meanings:
"Final Maturity Date" means the date occurring one year and one day after
the date specified in Section 8.2(a) of the Sale Agreement.
"Highest Lawful Rate" has the meaning set forth in paragraph 8.
3. Interest. 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) Buyer shall pay accrued interest on this Note on each Settlement
Date and on the Final Maturity Date. Buyer also shall pay accrued interest on
the principal amount of each repayment hereof on the date of such repayment.
(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. 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. Any unpaid principal of this Note shall only
become due and payable on the Final Maturity Date. The principal amount of and
accrued interest on this Note may be repaid on any Business Day without premium
or penalty in accordance with Section 3.3 of the Agreement.
7. 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 Seller, and (b) all consents
required for such actions under the Sale Documents shall have been received by
the appropriate Persons.
8. 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)
2
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.
9. No Negotiation. This Note is not negotiable.
10. Governing Law. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND CONSTRUED IN ACCORDANCE WITH THE AGREEMENT AND THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
11. Security Interest. Seller may grant a security interest in or
otherwise pledge this Note as security, 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
set forth herein.
12. 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.
13. No Petition. Seller agrees that, prior to a date that is one year and
one day after the termination of the Purchase Agreement and the reduction of the
Net Investment thereunder to zero, it will not (a) commence, or join with any
other creditor of Buyer in commencing, against Buyer, any bankruptcy,
insolvency, arrangement, reorganization, receivership, relief or similar
proceeding under any bankruptcy or similar law or assignment for the benefit of
creditors or any marshaling of assets an liabilities or (b) demand or accept
payment in respect of this Note, other than those required under the Sale
Documents, or declare an event of default under this Note or accelerate Buyer's
obligations under this Buyer Note.
14. Limited Recourse. Notwithstanding anything to the contrary herein,
Buyer shall make the payments required herein from the assets of Buyer. Buyer's
obligation to make payments hereunder shall not constitute a claim against Buyer
in excess of assets of Buyer available to pay such claim in the event such
assets are insufficient to pay the full amount otherwise due under this Note.
EXIDE U.S. FUNDING CORPORATION
By: ...........................
Name: ...........................
Title: ...........................
3
EXHIBIT B
to Sale Agreement
FORM OF
SELLER ASSIGNMENT CERTIFICATE
-----------------------------
Reference is made to the Sale Agreement, dated as of March 31, 1997 (as the
same may be amended, supplemented, amended and restated or otherwise modified
from time to time, the "Agreement") between EXIDE CORPORATION ("Seller") and
EXIDE U.S. FUNDING CORPORATION ("Buyer"). Unless otherwise defined herein,
capitalized terms used herein have the meanings ascribed to them pursuant to the
Agreement.
The undersigned hereby sells, transfers, assigns, sets over and conveys
unto Buyer and its successors and assigns all right, title and interest of
Seller in, to and under:
(a) all Receivables created by Seller that arise during the period from
and including the closing of Seller's business on the Initial Cut-Off Date to
but excluding the Purchase Termination Date; and
(b) all proceeds of the Receivables.
This Seller Assignment Certificate is made without recourse but on the
terms and subject to the conditions set forth in the Sale Documents to which
Seller is a party. Seller acknowledges and agrees that Buyer is accepting this
Seller Assignment Certificate in reliance on the representations, warranties and
covenants of Seller contained in the Sale Documents to which Seller is a party.
THIS SELLER ASSIGNMENT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE AGREEMENT AND THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
IN WITNESS WHEREOF, the undersigned has caused this Seller Assignment
Certificate to be duly executed and delivered by its Responsible Officer this
_____ day of _______________, 1997.
EXIDE CORPORATION
By: ......................
Name: ......................
Title: ......................
SCHEDULE 1
to Sale Agreement
CHANGES IN SELLER'S FINANCIAL CONDITION
---------------------------------------
None.
SCHEDULE 2
to Sale Agreement
AFFILIATES/LEGAL NAMES
----------------------
[Same as Exhibit D of Receivables Purchase Agreement]
TRADE NAMES
-----------
[Same as Exhibit D of Receivables Purchase Agreement,
SCHEDULE 3
to Sale Agreement
LIST OF PERMITTED LOCKBOX BANKS AND LOCKBOX ACCOUNTS
----------------------------------------------------
Lockbox Permitted
Name of Bank Address Account # Lockbox #
------------ ------- --------- ---------
▇▇▇▇▇▇ Trust & ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attention:
Savings Bank Check
Processing
311/5
CoreStates Bank, N.A. Reading, Pennsylvania 81-294771 9535
APPENDIX A
DEFINITIONS
A. Defined Terms. As used in the Sale Documents, unless otherwise defined
in the Purchase Agreement:
"Action" is defined in Section 9.1(c) of the Sale Agreement.
"Aggregate Unpaid Balance" is defined in Section 2.1(b) of the Sale
Agreement.
"Buyer" means Exide U.S. Funding Corporation, a Delaware corporation.
"Buyer Note" is defined in Section 3.2(a) of the Sale Agreement and
substantially in the form of Exhibit A to the Sale Agreement.
"Contributed Receivables" is defined in Section 1.1 of the Sale Agreement.
"Contribution Date" means the date on which Seller contributes the
Contributed Receivables to Buyer pursuant to Section 1.1 of the Sale Agreement.
"Cut-Off Date" means the last day of any Accounting Period.
"Indemnified Amounts" is defined in Section 9.1(a) of the Sale Agreement.
"Indemnified Party" is defined in Section 9.1 of the Sale Agreement.
"Independent Director" is defined in Section 6.1(l)(4) of the Sale
Agreement.
"Initial Cut-Off Date" means the Business Day immediately preceding the
date when the Sale Agreement becomes effective.
"Losses" is defined in Section 9.1(a) of the Sale Agreement.
"Ownership Interest" means the complete ownership of the Receivables Buyer
acquires from Seller under the Sale Documents.
"Purchase Agreement" is defined in the recitals in the Sale Agreement.
"Purchase Discount Reserve Ratio" is defined in Section 2.2(b) of the Sale
Agreement.
"Purchase Price Percentage" is defined in Section 2.2(a) of the Sale
Agreement.
"Purchase Termination Date" means the earlier to occur of (a) the date
specified by the Seller pursuant to Section 8.1 of the Sale Agreement and (b)
any event referred to in Section 8.2 of the Sale Agreement.
"Report Date" means the Business Day that is three Business Days prior to a
Settlement Date.
"Sale Agreement" means the Sale Agreement, dated as of March 31, 1997,
between Seller and Buyer, as it may be amended, supplemented or otherwise
modified from time to time.
"Sale Documents" mean the Sale Agreement, the Buyer Note and the other
documents executed and delivered by Buyer or Seller in connection therewith.
"Sale Report" is defined in Section 6.1(h) of the Sale Agreement.
"Second Step Purchaser" means Three Rivers Funding Corporation, a Delaware
corporation.
"Seller" means Exide Corporation, a Delaware corporation.
"Seller Assignment Certificate" means an assignment by Seller,
substantially in the form of Exhibit B to the Sale Agreement, evidencing Buyer's
acquisition of the Receivables generated by Seller, as it may be amended,
supplemented or otherwise modified from time to time.
"Seller Credit Agreement" is defined in Section 4.1(h) of the Sale
Agreement.
"Seller Maturity Date" is defined in Section 3.2 of the Sale Agreement.
"Seller Receivables Review" is defined in Section 6.1(d) of the Sale
Agreement.
"Transaction Documents" mean the Purchase Agreement and the Sale Documents.
"Unpaid Balance" of any Receivable means at any time the unpaid amount
thereof as shown in the books of Servicer at such time.
B. Other Interpretative Matters. For purposes of any Sale Document,
unless otherwise specified therein: (1) accounting terms used and not
specifically defined therein shall be construed in accordance with GAAP; (2)
terms used in Article 9 of the UCC, and not specifically defined in that Sale
Document, are used therein as defined in such Article 9; (3) the term
"including" means "including without limitation," and other forms of the verb
"to include" have correlative meanings; (4) references to any Person include
such Person's permitted successors and assigns; (5) in the computation of a
period of time from a specified date to a later specified date, the word "from"
page A-2
means "from and including" and the words "to" and "until" each means "to but
excluding"; (6) the words "hereof," "herein," "hereunder" and words of similar
import refer to such Sale Document as a whole and not to any particular
provision of such Sale Document; (7) references to "Section," "Schedule" and
"Exhibit" in such Sale Document are references to Sections, Schedules and
Exhibits in or to such Sale Document; (8) the various captions (including any
table of contents) are provided solely for convenience of reference and shall
not affect the meaning or interpretation of such Sale Document; and (9)
references to any statute or regulation refer to that statute or regulation as
amended from time to time, and include any successor statute or regulation of
similar import.
page A-3