EXHIBIT 10.5
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT
Dated as of December 10, 2001
by and among
AFC RECEIVABLES HOLDING CORPORATION
as Receivables Seller,
ADVANCE FUNDING CORPORATION
as Receivables Purchaser
ADVP MANAGEMENT L.P.
as Servicer
and
ADVANCEPCS
as Parent
TABLE OF CONTENTS
Page
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Article I Definitions and Interpretation..........................................................................1
SECTION 1.1 DEFINITIONS.................................................................................1
SECTION 1.2 RULES OF CONSTRUCTION.......................................................................1
Article II Transfers of Receivables...............................................................................2
SECTION 2.1 AGREEMENT TO TRANSFER.......................................................................2
SECTION 2.2 GRANT OF SECURITY INTEREST..................................................................4
Article III Conditions Precedent..................................................................................4
SECTION 3.1 CONDITIONS TO INITIAL TRANSFER..............................................................4
SECTION 3.2 CONDITIONS TO ALL TRANSFERS.................................................................5
Article IV Representations, Warranties and Covenants..............................................................6
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE RECEIVABLES SELLER....................................6
SECTION 4.2 AFFIRMATIVE COVENANTS OF THE RECEIVABLES SELLER............................................13
SECTION 4.3 NEGATIVE COVENANTS OF THE RECEIVABLES SELLER...............................................18
SECTION 4.4 BREACH OF REPRESENTATIONS, WARRANTIES OR COVENANTS.........................................21
Article V Indemnification........................................................................................21
SECTION 5.1 INDEMNIFICATION............................................................................21
Article VI Parent Loan...........................................................................................23
SECTION 6.1 PARENT LOAN................................................................................23
SECTION 6.2 THE PARENT NOTE............................................................................23
SECTION 6.3 TERMS OF PARENT NOTE.......................................................................24
SECTION 6.4 INTEREST...................................................................................24
SECTION 6.5 RECEIPT OF PAYMENTS........................................................................25
SECTION 6.6 SEPARATENESS OF PARENT LOAN FROM TRANSFER OF RECEIVABLES...................................25
Article 6A Intercompany Loans...................................................................................25
SECTION 6A.1 INTERCOMPANY LOANS.........................................................................25
SECTION 6A.2 THE INTERCOMPANY NOTE......................................................................26
SECTION 6A.3 TERMS OF INTERCOMPANY NOTE.................................................................26
SECTION 6A.4 INTEREST...................................................................................26
SECTION 6A.5 RECEIPT OF PAYMENTS........................................................................27
SECTION 6A.6 SEPARATENESS OF INTERCOMPANY LOANS FROM TRANSFER OF RECEIVABLES............................27
Article VII Collateral Security..................................................................................28
SECTION 7.1 SECURITY INTEREST..........................................................................28
SECTION 7.2 OTHER COLLATERAL; RIGHTS IN RECEIVABLES....................................................28
SECTION 7.3 RECEIVABLES SELLER REMAINS LIABLE..........................................................28
Article VIII Miscellaneous.......................................................................................29
SECTION 8.1 NOTICES....................................................................................29
SECTION 8.2 NO WAIVER; REMEDIES........................................................................30
SECTION 8.3 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES..........................................31
SECTION 8.4 TERMINATION; SURVIVAL OF OBLIGATIONS.......................................................31
SECTION 8.5 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT..............................................32
SECTION 8.6 AMENDMENTS AND WAIVERS.....................................................................32
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SECTION 8.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...............................32
SECTION 8.8 COUNTERPARTS...............................................................................34
SECTION 8.9 SEVERABILITY...............................................................................34
SECTION 8.10 SECTION TITLES.............................................................................34
SECTION 8.11 NO SETOFF..................................................................................34
SECTION 8.12 CONFIDENTIALITY............................................................................34
SECTION 8.13 FURTHER ASSURANCES.........................................................................35
SECTION 8.14 FEES AND EXPENSES..........................................................................36
Exhibits
Exhibit 2.1(a) Form of Assignment
Exhibit 2.1(c) Form of Subordinated Note
Exhibit 6.2(a) Form of Parent Note
Exhibit 6A.2(a) Form of Intercompany Note
Schedules
Schedule 4.1(b) Formation Jurisdiction; Executive Offices; Collateral Locations;
Corporate Names
Schedule 4.1(d) Litigation
Schedule 4.1(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock
Schedule 4.1(i) Tax Matters
Schedule 4.1(r) Deposit and Disbursement Accounts
Schedule 4.3(b) Existing Liens
Annexes
Annex X Definitions
Annex Y Schedule of Documents
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THIS
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement") is entered into as of December 10, 2001, by and among AFC
RECEIVABLES HOLDING CORPORATION, a Delaware corporation (the "Receivables
Seller" or "Holding"), ADVANCE FUNDING CORPORATION, a Delaware corporation (the
"Receivables Purchaser" or "AFC"), ADVP MANAGEMENT, L.P., a Delaware limited
partnership (the "Servicer"), and
ADVANCEPCS, a Delaware corporation (the
"Parent").
RECITALS
A. The Receivables Seller owns all of the outstanding Stock of the
Receivables Purchaser.
B. The Receivables Purchaser has been formed for the sole purpose of
purchasing, or otherwise acquiring by capital contribution, and reselling to the
Purchasers, all Transferred Receivables acquired by the Receivables Seller
pursuant to the Contribution Agreement.
C. The Receivables Seller intends to sell, and the Receivables
Purchaser intends to purchase, such Transferred Receivables, from time to time,
as described herein.
D. The Servicer is willing to service, administer and collect the
Transferred Receivables on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in Annex X.
SECTION 1.2 RULES OF CONSTRUCTION.
For purposes of this Agreement, the rules of construction set forth in
Annex X shall govern. All Appendices hereto, or expressly identified to this
Agreement, are incorporated
herein by reference and, taken together with this Agreement, shall constitute
but a single agreement.
ARTICLE II
TRANSFERS OF RECEIVABLES
SECTION 2.1 AGREEMENT TO TRANSFER.
(a) Receivables Transfers. Subject to the terms and conditions hereof,
the Receivables Seller agrees to sell (without recourse except to the extent
specifically provided herein) or contribute to Receivables Purchaser on the
Closing Date and on each Business Day thereafter (each such date, a "Transfer
Date") all Transferred Receivables owned by it on each such Transfer Date and
Receivables Purchaser agrees to purchase or acquire all such Transferred
Receivables on each such Transfer Date. In furtherance thereof, the Receivables
Seller hereby sells, transfers and assigns to Receivables Purchaser all of
Receivables Seller's right, title and interest (but none of the duties or
obligations) in, to and under the Contribution Agreement. All such Transfers
shall be evidenced by a certificate of assignment substantially in the form of
Exhibit 2.1(a) (the "Assignment"), and the Receivables Seller and Receivables
Purchaser shall execute and deliver the Assignment on or before the Closing
Date.
(b) Determination of Sold Receivables. On and as of each Transfer Date,
all Transferred Receivables owned by the Receivables Seller and not previously
acquired by Receivables Purchaser shall be identified for sale to Receivables
Purchaser such that the Sale Price to be paid by Receivables Purchaser therefor
does not exceed the sum of (i) the amount of cash available to Receivables
Purchaser for the payment thereof and (ii) the proceeds of a Subordinated Loan
(as defined below) (each such Transferred Receivable identified for sale,
individually, a "Sold Receivable" and, collectively, the "Sold Receivables");
provided, however, on the initial Transfer Date, the Sale Price to be paid by
the Receivables Purchaser for Sold Receivables shall not exceed the amount of
cash available to Receivables Purchaser for the payment thereof.
(c) Payment of Sale Price. In consideration for each Sale of Sold
Receivables hereunder, Receivables Purchaser shall pay to the Receivables Seller
on the Transfer Date therefor the Sale Price in the following manner:
(i) for any Sale of Sold Receivables occurring on the initial
Transfer Date:
(A) by delivery in Dollars in immediately available
funds, to the extent of the amount of cash available to
Receivables Purchaser; and
(ii) for any Sale of Sold Receivables occurring on any
Transfer Date after the initial Transfer Date:
(A) by delivery in Dollars in immediately available
funds, to the extent of the amount of cash available to
Receivables Purchaser; and
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(B) the balance, by delivery of the proceeds of a
subordinated revolving loan from the Receivables Seller to
Receivables Purchaser (each, a "Subordinated Loan" and
collectively, the "Subordinated Loans") in an amount not to
exceed the least of (A) the remaining unpaid portion of the
Sale Price, (B) the maximum Subordinated Loan that could be
borrowed without rendering the Receivables Purchaser's Net
Worth Percentage to be less than 5% and (C) fifteen percent
(15%) of the maximum then Outstanding Balance of the
Transferred Receivables. On the date hereof, the Receivables
Purchaser shall issue to the Receivables Seller, a
subordinated note (the "Subordinated Note") substantially in
the form of Exhibit 2.1(c) hereto. The Receivables Seller is
hereby authorized by Receivables Purchaser to endorse on the
schedule attached to the Subordinated Note an appropriate
notation evidencing the date and amount of each advance
thereunder, as well as the date of each payment with respect
thereto, provided that the failure to make such notation shall
not affect any obligation of Receivables Purchaser thereunder.
Subject to the limitations set forth in this Section 2.1(c), the
Receivables Seller irrevocably agrees to advance each Subordinated Loan
requested by Receivables Purchaser on each applicable Transfer Date occurring on
or prior to the Facility Termination Date. The Subordinated Loans shall be
evidenced by, and shall be payable in accordance with the terms and provisions
of the Subordinated Note and shall be payable solely from funds which
Receivables Purchaser is not required under the Purchase Agreement to set aside
for the benefit of, or otherwise pay over to, the Purchasers or the
Administrative Agent.
(d) Determination of Contributed Receivables. To the extent that, on
and as of any Transfer Date, Transferred Receivables owned by the Receivables
Seller do not constitute Sold Receivables pursuant to Section 2.1(b) then the
Receivables Seller shall, unless it has delivered an Election Notice (as defined
below) to Receivables Purchaser, contribute such Transferred Receivables to
Receivables Purchaser as a capital contribution (each such contributed
Transferred Receivable, individually, a "Contributed Receivable," and
collectively, the "Contributed Receivables"). If the Receivables Seller elects
not to contribute Transferred Receivables to Receivables Purchaser on any
Transfer Date, or if any Transferred Receivables eligible for sale and owned by
the Receivables Seller are not sold on any Transfer Date, the Receivables Seller
shall deliver to Receivables Purchaser not later than 5:00 p.m. (
New York time)
on the Business Day immediately preceding such Transfer Date a notice of
election thereof (each such notice, an "Election Notice").
(e) Ownership of Transferred Receivables. On and after each Transfer
Date and after giving effect to the Transfers to be made on each such date,
Receivables Purchaser shall own the Transferred Receivables and all of the
Receivables Seller's rights, but none of the duties or obligations, in, to and
under the Contribution Agreement with respect to the Transferred Receivables and
the Receivables Seller or the Originator shall not take any action inconsistent
with such ownership nor shall the Receivables Seller or the Originator claim any
ownership interest in such Transferred Receivables. The Sold Receivables and the
Contributed Receivables will be identified by reference to the Receivables
General Trial Balance of the Receivables Seller.
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(f) Reconstruction of Receivables General Trial Balance. If at any time
the Receivables Seller fails to generate its Receivables General Trial Balance,
Receivables Purchaser shall have the right to cause the Receivables Seller to
reconstruct or to reconstruct directly such Receivables General Trial Balance so
that a determination of the Sold Receivables and the Contributed Receivables can
be made pursuant to Section 2.1(e). The Receivables Seller agrees to cooperate
with such reconstruction, including by delivery to Receivables Purchaser, upon
Receivables Purchaser's request, of copies of all Contracts and Records..
(g) Servicing of Receivables. So long as no Servicer Termination Event
shall have occurred and be continuing and no Successor Servicer has assumed the
responsibilities and obligations of the Servicer pursuant to Section 9.2 of the
Purchase Agreement, the Servicer shall (i) conduct the servicing, administration
and collection of the Transferred Receivables and shall take, or cause to be
taken, all such actions as may be necessary or advisable to service, administer
and collect the Transferred Receivables, all in accordance with (A) the terms of
the Purchase Agreement, (B) customary and prudent servicing procedures for trade
receivables of a similar type and (C) all applicable laws, rules and
regulations, and (ii) hold all Contracts and other documents and incidents
relating to the Transferred Receivables in trust for the benefit of Receivables
Purchaser, as the owner thereof, and for the sole purpose of facilitating the
servicing of the Transferred Receivables in accordance with the terms of the
Purchase Agreement.
SECTION 2.2 GRANT OF SECURITY INTEREST.
The parties hereto intend that each Transfer shall constitute a
purchase and sale or a capital contribution, as applicable, and not a loan.
Notwithstanding the foregoing, in addition to and not in derogation of any
rights now or hereafter acquired by Receivables Purchaser under Section 2.1
hereof, the parties hereto intend that this Agreement shall constitute a
security agreement under applicable law and that the Receivables Seller shall be
deemed to have granted, and the Receivables Seller does hereby grant, to the
Receivables Purchaser a continuing security interest in (i) all of the
Receivables Seller's right, title and interest in, to and under the Transferred
Receivables whether now owned or hereafter acquired by the Receivables Seller
and (ii) all of the Receivables Seller's right, title and interest, but none of
the duties or obligations, in, to and under the Contribution Agreement to secure
the obligations of the Receivables Seller to the Receivables Purchaser hereunder
(including, if and to the extent that any Transfer is recharacterized as a
transfer for security, the repayment of a loan deemed to have been made by the
Receivables Purchaser in the amount of the Sale Price with respect thereto and
which secures the Receivables Purchaser's right to receive all Collections of
the Transferred Receivables as otherwise contemplated under this Agreement).
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS TO INITIAL TRANSFER.
The initial Transfer hereunder shall be subject to satisfaction of each
of the following conditions precedent (any one or more of which may be waived in
writing by each of the Receivables Purchaser and the Administrative Agent):
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(a) Sale Agreement; Other Documents. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, the Receivables
Seller and Receivables Purchaser, and the Receivables Purchaser shall have
received such documents, instruments, agreements and legal opinions as the
Receivables Purchaser shall request in connection with the transactions
contemplated by this Agreement, including those identified in the Schedule of
Documents attached hereto as Annex Y, each in form and substance satisfactory to
the Receivables Purchaser.
(b) Governmental Approvals. Receivables Purchaser shall have received
(i) satisfactory evidence that the Receivables Seller has obtained all required
consents and approvals of all Persons, including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Related Documents and the consummation of the transactions
contemplated hereby and thereby or (ii) an Officer's Certificate from the
Receivables Seller in form and substance satisfactory to Receivables Purchaser
affirming that no such consents or approvals are required.
(c) Compliance with Laws. The Originator shall be in compliance with
all applicable foreign, federal, state and local laws and regulations, including
those specifically referenced in Section 4.2(f).
(d) Purchase Agreement Conditions. Each of the conditions precedent set
forth in Sections 3.1 and 3.2 of the Purchase Agreement shall have been
satisfied or waived in writing as provided therein.
(e) Sale Agreement Conditions. Each of the conditions precedent set
forth in Sections 3.1 and 3.2 of the Contribution Agreement shall have been
satisfied or waived in writing as provided therein.
SECTION 3.2 CONDITIONS TO ALL TRANSFERS.
Each Transfer hereunder (including the initial Transfer) shall be
subject to satisfaction of the following further conditions precedent as of the
Transfer Date therefor:
(a) the representations and warranties of the Receivables Seller
contained herein or in any other Related Document shall be true and correct as
of such Transfer Date, both before and after giving effect to such Transfer and
to the application of the Sale Price therefor, except to the extent that any
such representation or warranty expressly relates to an earlier date and except
for changes therein expressly permitted by this Agreement;
(b) no Incipient Termination Event or Termination Event shall have
occurred and be continuing or would result after giving effect to such Transfer
or the application of the Sale Price therefor;
(c) the Receivables Seller shall be in compliance with each of its
covenants and other agreements set forth herein;
5
(d) the Receivables Seller shall have taken such other action,
including delivery of approvals, consents, opinions, documents and instruments
to Receivables Purchaser as Receivables Purchaser may request;
(e) no event or circumstance having a Material Adverse Effect shall
have occurred since the date of this Agreement as determined by either the
Receivables Purchaser or the Administrative Agent;
(f) each of the conditions precedent set forth in Sections 3.1 and 3.2
of the Purchase Agreement shall have been satisfied or waived in writing as
provided therein; and
(g) each of the conditions precedent set forth in Sections 3.1 and 3.2
of the Contribution Agreement shall have been satisfied or waived in writing as
provided therein.
The acceptance by the Receivables Seller of the Sale Price for any Sold
Receivables on any Transfer Date shall be deemed to constitute, as of any such
Transfer Date, a representation and warranty by the Receivables Seller that the
conditions in this Section 3.2 have been satisfied. Upon any such acceptance,
title to the Transferred Receivables sold or contributed on such Transfer Date
shall be vested absolutely in Receivables Purchaser, whether or not such
conditions were in fact so satisfied.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE RECEIVABLES SELLER.
To induce Receivables Purchaser to purchase the Sold Receivables and to
acquire the Contributed Receivables, the Receivables Seller makes the following
representations and warranties to Receivables Purchaser, each and all of which
shall survive the execution and delivery of this Agreement.
(a) Corporate Existence; Compliance with Law. The Receivables Seller
(i) is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation; (ii) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to be so qualified is not reasonably likely to result
in a Material Adverse Effect; (iii) has the requisite corporate power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates under lease, and to
conduct its business, in each case, as now, heretofore and proposed to be
conducted; (iv) has all licenses, permits, consents or approvals from or by, and
has made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct, except where the failure to obtain such licenses,
permits, consents or approvals is not reasonably likely to result in a Material
Adverse Effect; (v) is in compliance with its charter and bylaws; and (vi)
subject to specific representations set forth herein regarding ERISA,
Environmental Laws, tax laws and other laws, is in compliance with all
applicable provisions of law, except where the failure to comply,
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individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Jurisdiction of Formation; Executive Offices; Collateral Locations;
Corporate or Other Names; FEIN. The Receivables Seller's Formation Jurisdiction
is set forth in Schedule 4.1(b) and the Receivables Seller is a "registered
entity" (as defined in the UCC) in such Formation Jurisdiction. As of the
Closing Date, the current location of the Receivables Seller's chief executive
office, jurisdiction of incorporation, principal place of business, other
offices, the warehouses and premises within which any Receivables Collateral is
stored or located, and the locations of all records concerning the Receivables
Collateral are set forth in Schedule 4.1(b) and none of such locations have
changed within the past 12 months. During the prior five (5) years, except as
set forth in Schedule 4.1(b), the Receivables Seller has not been known as or
used any corporate, fictitious or trade name. In addition, Schedule 4.1(b) lists
the federal employer identification number and jurisdiction of incorporation of
the Receivables Seller.
(c) Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by the Receivables Seller of this Agreement
and the execution, delivery and performance by each such Person of any other
Related Documents to which it is a party and the creation and perfection of all
Transfers and Liens provided for herein and therein: (i) are within such
Person's corporate power; (ii) have been duly authorized by all necessary or
proper corporate and shareholder action; (iii) do not contravene any provision
of such Person's charter or bylaws; (iv) do not violate any law or regulation,
or any order or decree of any court or Governmental Authority; (v) do not
conflict with or result in the breach or termination of, constitute a default
under or accelerate or permit the acceleration of any performance required by,
any indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Person is a party or by which such Person or any of its property is
bound; (vi) do not result in the creation or imposition of any Adverse Claim
upon any of the property of such Person; and (vii) do not require the consent or
approval of any Governmental Authority or any other Person, except those which
will have been duly obtained, made or complied with prior to the Closing Date as
provided Section 3.1(b). The exercise by Receivables Purchaser of any of its
rights and remedies under any Related Document to which it is a party, do not
require the consent or approval of any Governmental Authority or any other
Person (other than consents or approvals solely relating to or required to be
obtained by the Receivables Purchaser, and subject to the Bankruptcy Code),
except those which will have been duly obtained, made or complied with prior to
the Closing Date as provided in Section 3.1(b). Each of the Related Documents to
which the Receivables Seller is a party has been duly executed and delivered by
it and each such Related Document constitutes a legal, valid and binding
obligation of it enforceable against it in accordance with its terms.
(d) No Litigation. No Litigation is now pending or, to the knowledge of
the Receivables Seller, threatened against the Receivables Seller that (i)
challenges the Receivables Seller's or any of its Affiliates' right or power to
enter into or perform any of its obligations under the Related Documents to
which it is a party, or the validity or enforceability of any Related Document
or any action taken thereunder, (ii) seeks to prevent the Transfer, Purchase,
contribution or pledge of any Receivable or the consummation of any of the
transactions contemplated under this Agreement or the other Related Documents or
(iii) has a reasonable risk of being determined adversely to the Receivables
Seller and that, if so determined, could reasonably
7
be expected to have a Material Adverse Effect. Except as set forth on Schedule
4.1(d), as of the Closing Date there is no Litigation pending or threatened that
seeks damages or injunctive relief against, or alleges criminal misconduct by,
the Receivables Seller.
(e) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Related Documents and
(ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Receivables Seller is and will be Solvent.
(f) Material Adverse Effect. Since the date of the Receivables Seller's
organization, (i) the Receivables Seller has not incurred any obligations,
contingent or non-contingent liabilities, liabilities for charges, long-term
leases or unusual forward or long-term commitments that, alone or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, (ii)
no contract, lease or other agreement or instrument has been entered into by the
Receivables Seller or has become binding upon the Receivables Seller's assets
and no law or regulation applicable to the Receivables Seller has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect
and (iii) the Receivables Seller is not in default and no third party is in
default under any material contract, lease or other agreement or instrument to
which the Receivables Seller is a party that alone or in the aggregate could
reasonably be expected to have a Material Adverse Effect. Since the date of the
Receivables Seller's organization, no event has occurred that alone or together
with other events could reasonably be expected to have a Material Adverse
Effect.
(g) Ownership of Transferred Receivables; Liens. No Transferred
Receivable and, none of the other properties and assets of the Receivables
Seller are subject to any Adverse Claims, and there are no facts, circumstances
or conditions known to the Receivables Seller that may result in (i) with
respect to the Transferred Receivables, any Adverse Claims (including Adverse
Claims arising under Environmental Laws) and (ii) with respect to its other
properties and assets, any Adverse Claims (including Adverse Claims arising
under Environmental Laws). The Receivables Seller has received all assignments,
bills of sale and other documents, and has duly effected all recordings, filings
and other actions necessary to establish, protect and perfect the Receivables
Seller's right, title and interest in and to the Transferred Receivables and its
other properties and assets. The Liens granted to the Receivables Purchaser
pursuant to Section 8.1 will at all times be fully perfected first priority
Liens in and to the Receivables Collateral.
(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Schedule 4.1(h), the Receivables Seller has
no Subsidiaries, is not engaged in any joint venture or partnership with any
other Person, and is not an Affiliate of any other Person. All of the issued and
outstanding Stock of the Receivables Purchaser and Receivables Seller is owned
by each of the Stockholders in the amounts set forth on Schedule 4.1(h). There
are no outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which the Receivables Seller or Receivables Purchaser may
be required to issue, sell, repurchase or redeem any of its Stock or other
equity securities or any Stock or other equity securities of its Subsidiaries.
(i) Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by the
Receivables Seller and each of its Affiliates included in the Parent Group have
been filed with the appropriate Governmental
8
Authority and all charges have been paid prior to the date on which any fine,
penalty, interest or late charge may be added thereto for nonpayment thereof (or
any such fine, penalty, interest, late charge or loss has been paid), excluding
charges or other amounts being contested in accordance with Section 4.2(e).
Proper and accurate amounts have been withheld by the Receivables Seller or such
Affiliate from its respective employees for all periods in full and complete
compliance with all applicable federal, state, local and foreign laws and such
withholdings have been timely paid to the respective Governmental Authorities.
Schedule 4.1(i) sets forth as of the Closing Date (i) those taxable years for
which the Receivables Seller's or such Affiliates' tax returns are currently
being audited by the IRS or any other applicable Governmental Authority and (ii)
any assessments or threatened assessments in connection with any such audit or
otherwise currently outstanding. Except as described on Schedule 4.1(i), neither
the Receivables Seller nor any such Affiliate has executed or filed with the IRS
or any other Governmental Authority any agreement or other document extending,
or having the effect of extending, the period for assessment or collection of
any charges. The Receivables Seller is not liable for any charges: (A) under any
agreement (including any tax sharing agreements) or (B) to the best of the
Receivables Seller's knowledge, as a transferee. As of the Closing Date, neither
the Receivables Seller nor any of its Affiliates included in the Parent Group
has agreed or been requested to make any adjustment under IRC Section 481(a), by
reason of a change in accounting method or otherwise, that would have a Material
Adverse Effect.
(j) Full Disclosure. All information contained in this Agreement, any
Investment Base Certificate or any of the other Related Documents, or any
written statement furnished by or on behalf of the Receivables Seller to the
Receivables Purchaser, any Purchaser or the Administrative Agent pursuant to the
terms of this Agreement or any of the other Related Documents is true and
accurate in every material respect, and none of this Agreement, any Investment
Base Certificate or any of the other Related Documents, or any written statement
furnished by or on behalf of the Receivables Seller to the Receivables
Purchaser, any Purchaser or the Administrative Agent pursuant to the terms of
the Purchase Agreement or any of the other Related Documents is misleading as a
result of the failure to include therein a material fact.
(k) ERISA. The Receivables Seller is in compliance with ERISA and has
not incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC under
ERISA.
(l) Brokers. No broker or finder acting on behalf of the Receivables
Seller was employed or utilized in connection with this Agreement or the other
Related Documents or the transactions contemplated hereby or thereby and the
Receivables Seller has no obligation to any Person in respect of any finder's or
brokerage fees in connection therewith.
(m) Margin Regulations. The Receivables Seller is not engaged in the
business of extending credit for the purpose of "purchasing" or "carrying" any
"margin security," as such terms are defined in Regulation U of the Federal
Reserve Board as now and from time to time hereafter in effect (such securities
being referred to herein as "Margin Stock"). The Receivables Seller owns no
Margin Stock, and no portion of the proceeds of the Sale Price for any
Transferred Receivable sold hereunder will be used, directly or indirectly, for
the purpose of purchasing or carrying any Margin Stock, for the purpose of
reducing or retiring any Debt that was originally incurred to purchase or carry
any Margin Stock or for any other purpose that
9
might cause any portion of such proceeds to be considered a "purpose credit"
within the meaning of Regulations T, U or X of the Federal Reserve Board. The
Receivables Seller will not take or permit to be taken any action that might
cause any Related Document to violate any regulation of the Federal Reserve
Board.
(n) Nonapplicability of Bulk Sales Laws. No transaction contemplated by
this Agreement or any of the Related Documents requires compliance with any bulk
sales act or similar law.
(o) Securities Act and Investment Company Act Exemptions. Each purchase
and contribution of Purchaser Interests under this Agreement will constitute (i)
a "current transaction" within the meaning of Section 3(a)(3) of the Securities
Act and (ii) a purchase or other acquisition of notes, drafts, acceptances, open
accounts receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act.
(p) Government Regulation. The Receivables Seller is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act. The purchase of the Transferred Receivable by the Receivables
Purchasers hereunder, the application of the proceeds thereof and the
consummation of the transactions contemplated by this Agreement and the other
Related Documents will not violate any provision of any such statute or any
rule, regulation or order issued by the Securities and Exchange Commission.
(q) Separate Existence. The Receivables Seller is operated in such a
manner that the separate corporate existence of the Receivables Seller, on the
one hand, and any member of the Parent Group, on the other hand, would not be
disregarded in the event of the bankruptcy or insolvency of any member of the
Parent Group and, without limiting the generality of the foregoing:
(i) the Receivables Seller is a limited purpose corporation
whose activities are restricted in its certificate or articles of
incorporation to those activities expressly permitted hereunder and
under the other Related Documents and the Receivables Seller has not
engaged, and does not presently engage, in any activity other than
those activities expressly permitted hereunder and under the other
Related Documents, nor has the Receivables Seller entered into any
agreement other than this Agreement, the other Related Documents to
which it is a party and, with the prior written consent of the
Purchasers and the Administrative Agent, any other agreement necessary
to carry out more effectively the provisions and purposes hereof or
thereof;
(ii) no member of the Parent Group or any individual at the
time he or she is acting as an officer of any such member is or has
been involved in the day-to-day management of the Receivables Seller;
(iii) other than the purchase of Receivables, the making of
the Parent Loan and the Intercompany Loans, the repayment of
Subordinated Originator Loans, the issuance and the making of
Subordinated Loans, the payment of dividends and the return of capital
10
to the holders of its Stock (to the extent permitted by the Transaction
Documents) and the payment of Non-Transferred Receivables Servicing
Fees to the Servicer under the Contribution Agreement, the Receivables
Seller engages and has engaged in no intercorporate transactions with
any member of the Parent Group;
(iv) the Receivables Seller maintains corporate records and
books of account separate from that of each member of the Parent Group,
holds regular corporate meetings and otherwise observes corporate
formalities and has a business office separate from that of each member
of the Parent Group;
(v) the financial statements and books and records of the
Receivables Seller and the members of the Parent Group reflect the
separate corporate existence of the Receivables Seller;
(vi) (A) the Receivables Seller maintains its assets
separately from the assets of each member of the Parent Group
(including through the maintenance of separate bank accounts and except
for any Records to the extent necessary to assist the Servicer in
connection with the servicing of the Transferred Receivables), (B) the
Receivables Seller's funds (including all money, checks and other cash
proceeds) and assets, and records relating thereto, have not been and
are not commingled with those of any member of the Parent Group and (C)
the separate creditors of the Receivables Seller will be entitled to be
satisfied out of the Receivables Seller's assets prior to any value in
the Receivables Seller becoming available to the Receivables Seller's
Stockholders;
(vii) except as otherwise expressly permitted hereunder, under
the other Related Documents and under the Receivables Seller's
organizational documents, no member of the Parent Group (A) pays the
Receivables Seller's expenses, (B) guarantees the Receivables Seller's
obligations, or (C) advances funds to the Receivables Seller for the
payment of expenses or otherwise;
(viii) all business correspondence and other communications of
the Receivables Seller are conducted in the Receivables Seller's own
name, on its own stationery and through a separately-listed telephone
number;
(ix) the Receivables Seller does not act as agent for any
member of the Parent Group, but instead presents itself to the public
as a corporation separate from each such member and independently
engaged in the business of purchasing and financing Receivables;
(x) the Receivables Seller maintains at least two (2)
independent directors, one of whom has at least three (3) years of
employment experience with one (1) or more entities that provide, in
the ordinary course of their respective businesses, advisory,
management or placement services to issuers of securitization or
structured finance instruments, agreements or securities, and each of
whom (A) is not a Stockholder, director, officer, employee or
associate, or any relative of the foregoing, of any member of the
Parent Group, all as provided in its certificate or articles of
incorporation, (B) has prior experience as an independent director for
a corporation whose charter documents
11
required the unanimous consent of all independent directors thereof
before such corporation could consent to the institution of bankruptcy
or insolvency proceedings against it or could file a petition seeking
relief under any applicable federal or state law relating to
bankruptcy, (C) is otherwise acceptable to the Purchasers and the
Administrative Agent, and (D) is employed by a nationally-recognized
firm, satisfactory to the Purchasers and the Administrative Agent,
which specializes in providing independent directors or managers for
special purpose corporations or companies; and
(xi) the bylaws or the certificate or articles of
incorporation of the Receivables Seller require (A) the affirmative
vote of each independent director before a voluntary petition under
Section 301 of the Bankruptcy Code may be filed by the Receivables
Seller, and (B) the Receivables Seller to maintain (1) correct and
complete books and records of account and (2) minutes of the meetings
and other proceedings of its Stockholders and board of directors.
(r) Deposit and Disbursement Accounts. Schedule 4.1(r) lists all banks
and other financial institutions at which the Seller maintains deposit or other
bank accounts established for the receipt of collections on Transferred
Receivables as of the Closing Date, including any Lockbox Accounts, and such
schedule correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of the purpose
of the account, and the complete account number therefor.
(s) Transferred Receivables.
(i) Transfers. Each Transferred Receivable was purchased by or
contributed to the Receivables Seller on the relevant Transfer Date
pursuant to the Contribution Agreement.
(ii) Eligibility. Each Transferred Receivable designated as an
Eligible Receivable in each Investment Base Certificate constitutes an
Eligible Receivable as of the date specified in such Investment Base
Certificate.
(iii) No Material Adverse Effect. The Receivables Seller has
no knowledge of any fact (including any defaults by the Obligor
thereunder on any other Receivable) that would cause it or should have
caused it to expect that any payments on each Transferred Receivable
designated as an Eligible Receivable in any Investment Base Certificate
will not be paid in full when due or to expect any other Material
Adverse Effect.
(iv) Nonavoidability of Transfers. The Receivables Seller
shall (A) have received each Transferred Receivable from the Originator
for cash consideration, as a capital contribution or through an
increase in the amounts outstanding under the Subordinated Originator
Note and (B) have accepted assignment of any Eligible Receivables
transferred pursuant to clause (b) of Section 4.4 of this Agreement, in
each case in an amount that constitutes fair consideration and
reasonably equivalent value therefor. Each Sale of a Transferred
Receivable effected pursuant to the terms of this Agreement shall not
have been made for or on account of an antecedent debt owed by the
Receivables Seller to the
12
Receivables Purchaser and no such Sale is or may be avoidable or
subject to avoidance under any bankruptcy laws, rules or regulations.
(t) Representations and Warranties in Other Related Documents. Each of
the representations and warranties of the Receivables Seller contained in the
Related Documents (other than this Agreement) is true and correct in all
respects and the Receivables Seller hereby makes each such representation and
warranty to, and for the benefit of, the Receivables Purchasers as if the same
were set forth in full herein.
(u) No Termination Event. No event has occurred and no condition exists
which constitutes a Termination Even or an Incipient Termination Event.
(v) Good Title. Immediately preceding each Transfer hereunder, the
Receivables Seller shall be the owner of all of the Transferred Receivables free
and clear of all Adverse Claims (other than Adverse Claims in favor of the
Administrative Agent, for itself and as agent for the Purchasers).
(w) Perfection. This Agreement is effective to create a valid security
interest in favor of the Receivables Purchasers in the Transferred Receivables
free and clear of any Adverse Claim except as created by the Related Documents.
There have been duly filed all financing statements under the UCC (or any
comparable law) of all appropriate security interest in the Transferred
Receivables.
(x) Credit and Collection Policy. Since December 31, 2000, there have
been no changes in the Credit and Collection Policy.
(y) Dividend Payments. Except as permitted by Section 4.3(q), the
Receivables Seller has not declared or paid any dividends or made any
distribution of any kind to any entity whose Formation Jurisdiction or domicile
is outside the United States of America (including the District of Columbia).
SECTION 4.2 AFFIRMATIVE COVENANTS OF THE RECEIVABLES SELLER.
The Receivables Seller covenants and agrees that, unless otherwise
consented to by the Receivables Purchaser and the Administrative Agent, from and
after the Closing Date and until the Termination Date:
(a) Compliance with Agreements and Applicable Laws. The Receivables
Seller shall perform each of its obligations under this Agreement and the other
Related Documents and comply with all federal, state and local laws and
regulations applicable to it and the Transferred Receivables, including those
relating to truth in lending, retail installment sales, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices,
privacy, licensing, taxation, ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to so comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Maintenance of Existence and Conduct of Business. The Receivables
Seller shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its
13
corporate existence and its rights and franchises; (ii) continue to conduct its
business substantially as now conducted or as otherwise permitted hereunder and
in accordance with (A) the terms of its certificate of incorporation and bylaws,
(B) Section 4.1(q) and (C) the assumptions set forth in each legal opinion of
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P. or other counsel to the Receivables
Seller from time to time delivered pursuant to the Schedule of Documents with
respect to issues of substantive consolidation and true sale and absolute
transfer; (iii) at all times maintain, preserve and protect all of its assets
and properties used or useful in the conduct of its business, including all
licenses, permits, charters and registrations, and keep the same in good repair,
working order and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices; and (iv) transact business only in such
corporate and trade names as are set forth in Schedule 4.1(b).
(c) Deposit of Collections. The Receivables Seller and the Servicer
shall hold in trust, and shall deposit or cause to be deposited promptly into a
Lockbox Account, and in any event no later than the first (1st) Business Day
after receipt thereof, all Collections it may receive with respect to any
Transferred Receivable.
(d) Use of Proceeds. The Receivables Seller shall utilize the proceeds
of the Transfers made hereunder and other available cash solely for (i) the
purchase of Receivables from the Originator pursuant to the Contribution
Agreement, (ii) the payment of dividends to its Stockholders, (iii) the making
of the Parent Loan and the Intercompany Loans, (iv) the repayment of amounts
outstanding under the Subordinated Originator Note, (v) the payment of taxes and
(vi) the payment of administrative fees or servicing fees or expenses to the
Servicer or routine administrative or operating expenses, in each case only as
expressly permitted by and in accordance with the terms of this Agreement and
the other Related Documents.
(e) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 4.2(e)(ii), the Receivables Seller
shall pay, perform and discharge or cause to be paid, performed and
discharged promptly all charges payable by it, including (A) charges
imposed upon it, its income and profits, or any of its property (real,
personal or mixed) and all charges with respect to tax, social security
and unemployment withholding with respect to its employees, and (B)
lawful claims for labor, materials, supplies and services or otherwise
before any thereof shall become past due.
(ii) The Receivables Seller may in good faith contest, by
appropriate proceedings, the validity or amount of any charges or
claims described in Section 4.2(e)(i); provided, that (A) adequate
reserves with respect to such contest are maintained on the books of
the Receivables Seller, in accordance with GAAP, (B) such contest is
maintained and prosecuted continuously and with diligence, (C) none of
the Receivables Collateral becomes subject to forfeiture or loss as a
result of such contest, (D) no Lien shall be imposed to secure payment
of such charges or claims other than inchoate tax liens and (E)
Receivables Purchaser has affirmatively advised the Receivables Seller
in writing that Receivables Purchaser reasonably believes that
nonpayment or nondischarge could not reasonably be expected to have or
result in a Material Adverse Effect.
14
(f) ERISA. The Receivables Seller shall give the Receivables Purchaser
prompt written notice of any event that could result in the imposition of a Lien
under Section 412 of the IRC or Section 302 or 4068 of ERISA.
(g) Furnishing of Information and Inspection of Records. The
Receivables Seller will furnish to the Receivables Purchaser from time to time
such information with respect to the Transferred Receivables as the Receivables
Purchaser may reasonably request, including, without limitation, listings
identifying the Obligor and the Outstanding Balance for each Transferred
Receivable, together with an aging of Transferred Receivables.
(h) Credit and Collection Policy. The Receivables Seller will comply in
all respects with the Credit and Collection Policy in regard to each Transferred
Receivable and Related Contract. (i) Separate Existence. The Receivables Seller
shall at all times be operated in such a manner that the separate corporate
existence of the Receivables Seller, on the one hand, and any member of the
Parent Group, on the other hand, will not be disregarded in the event of the
bankruptcy or insolvency of any member of the Parent Group and, without limiting
the generality of the foregoing:
(i) the Receivables Seller shall at all times be a limited
purpose corporation whose activities are restricted in its certificate
or articles of incorporation to those activities expressly permitted
hereunder and under the other Related Documents and the Receivables
Seller does not presently engage and will not engage, in any activity
other than those activities expressly permitted hereunder and under the
other Related Documents, nor will the Receivables Seller enter into any
agreement other than this Agreement, the other Related Documents to
which it is a party and, with the prior written consent of the
Purchasers and the Administrative Agent, any other agreement necessary
to carry out more effectively the provisions and purposes hereof or
thereof;
(ii) no member of the Parent Group or any individual at the
time he or she is acting as an officer of any such member will be
involved in the day-to-day management of the Receivables Seller;
(iii) other than the purchase of Transferred Receivables, the
making of the Parent Loan and the Intercompany Loans pursuant to this
Agreement, the making of Subordinated Loans pursuant to this Agreement,
the repayment of Subordinated Originator Loans, the payment of
dividends and the return of capital to its Stockholders (to the extent
permitted by the Transaction Documents) and the payment of servicing
fees to the Servicer, the Receivables Seller will not engage in any
intercorporate transactions with any member of the Parent Group;
(iv) the Receivables Seller will maintain corporate records
and books of account separate from that of each member of the Parent
Group, hold regular corporate meetings and otherwise observe corporate
formalities and will have a business office separate from that of each
member of the Parent Group;
15
(v) the financial statements and books and records of the
Receivables Seller and the members of the Parent Group do and will
reflect the separate corporate existence of the Receivables Seller;
(vi) (A) the Receivables Seller will maintain its assets
separately from the assets of each member of the Parent Group
(including through the maintenance of separate bank accounts and except
for any Records to the extent necessary to assist the Servicer in
connection with the servicing of the Transferred Receivables), (B) the
Receivables Seller's funds (including all money, checks and other cash
proceeds) and assets, and records relating thereto, will not be
commingled with those of any member of the Parent Group and (C) the
separate creditors of the Receivables Seller will be entitled to be
satisfied out of the Receivables Seller's assets prior to any value in
the Receivables Seller becoming available to the Receivables Seller's
Stockholders;
(vii) except as otherwise expressly permitted hereunder, under
the other Related Documents and under the Receivables Seller's
organizational documents, no member of the Parent Group (A) will pay
the Receivables Seller's expenses, (B) guarantee the Receivables
Seller's obligations, or (C) advances funds to the Receivables Seller
for the payment of expenses or otherwise;
(viii) all business correspondence and other communications of
the Receivables Seller will be conducted in the Receivables Seller's
own name, on its own stationery and through a separately-listed
telephone number;
(ix) the Receivables Seller will not act as agent for any
member of the Parent Group, but instead will present itself to the
public as a corporation separate from each such member and
independently engaged in the business of purchasing and financing
Receivables;
(x) the Receivables Seller will maintain at least two (2)
independent directors, one (1) of whom has at least three years of
employment experience with one or more entities that provide, in the
ordinary course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities, and each of whom (A) is not a
Stockholder, director, officer, employee or associate, or any relative
of the foregoing, of any member of the Parent Group, all as provided in
its certificate or articles of incorporation, (B) has prior experience
as an independent director for a corporation whose charter documents
required the unanimous consent of all independent directors thereof
before such corporation could consent to the institution of bankruptcy
or insolvency proceedings against it or could file a petition seeking
relief under any applicable federal or state law relating to bankruptcy
and (C) is otherwise acceptable to the Purchasers and the
Administrative Agent, and both of whom are employed by a
nationally-recognized firm, satisfactory to the Purchasers and the
Administrative Agent, which specializes in providing independent
directors or managers for special purpose corporations or companies;
and
16
(xi) the bylaws or the certificate or articles of
incorporation of the Receivables Seller will require (A) the
affirmative vote of each independent director before a voluntary
petition under Section 301 of the Bankruptcy Code may be filed by the
Receivables Seller, and (B) the Receivables Seller to maintain (1)
correct and complete books and records of account and (2) minutes of
the meetings and other proceedings of its Stockholders and board of
directors.
(j) Performance and Enforcement of the Contribution Agreement. The
Receivables Seller will and will require the Originator to, perform its
obligations and undertakings under and pursuant to the Contribution Agreement,
will purchase Receivables in strict compliance with the terms thereof and will
enforce the rights and remedies accorded to the Receivables Seller under the
Contribution Agreement. The Receivables Seller will take all actions to perfect
and enforce its rights and interests under the Contribution Agreement, as the
Administrative Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Contribution
Agreement.
(k) Ownership. The Receivables Seller will (or will cause the
Originator to) take all necessary action to (i) vest legal and equitable title
to the Receivables acquired under the Contribution Agreement irrevocably in the
Receivables Seller, free and clear of Adverse Claims (other than Adverse Claims
in favor of the Administrative Agent, for the benefit of the Purchasers)
including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or comparable law) of
all appropriate jurisdictions to perfect, protect or more fully evidence the
interest of the Receivables Seller therein as the Administrative Agent may
reasonably request, and (ii) establish and maintain, in favor of the Receivables
Purchaser, a valid and perfected first priority security interest in all
Transferred Receivables, free and clear of any Adverse Claims, including,
without limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or comparable law) of all
appropriate jurisdictions to perfect the Receivables Purchaser's security
interest in the Transferred Receivables and such other action to perfect,
protect or more fully evidence the interest of the Receivables Purchaser as the
Administrative Agent may reasonably request.
(l) Adjustments to Sale Price. If on any day the Billed Amount of any
Transferred Receivable is reduced as a result of any Dilution Factors, and the
amount of such reduction exceeds the amount, if any, of Dilution Factors taken
into account in the calculation of the Sale Price for such Transferred
Receivable, the Receivables Seller shall make a cash payment to Receivables
Purchaser in the amount of such excess by remitting such amount to the
Collection Account in accordance with the terms of the Purchase Agreement.
(m) Keeping of Records and Books of Account. The Receivables Seller
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Transferred
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 Transferred Receivables
(including, without limitation, records adequate to permit the daily
identification of each new Transferred Receivable and all Collections of and
adjustments to each existing Transferred Receivable). The
17
Receivables Seller will give the Administrative Agent notice of any material
change in the administrative and operating procedures of the Receivables Seller
referred to in the previous sentence.
(n) Amendment to Certificate of Incorporation. As soon as possible, but
in any event within thirty (30) days from the Closing Date, the Receivables
Seller will complete all actions necessary to amend its certificate of
incorporation to provide for a liquidation preference in favor of the Class A
Stock issued by it and will provide a copy of such amendment to the
Administrative Agent.
SECTION 4.3 NEGATIVE COVENANTS OF THE RECEIVABLES SELLER.
The Receivables Seller covenants and agrees that, without the prior
written consent of Receivables Purchaser and the Administrative Agent, from and
after the Closing Date and until the Termination Date:
(a) Sale of Stock and Assets. The Receivables Seller shall not sell,
transfer, convey, assign or otherwise dispose of, or assign any right to receive
income in respect of, any of its properties or other assets, including its
capital Stock (whether in a public or a private offering or otherwise), any
Transferred Receivable or Contract therefor or any of its rights with respect to
any Lockbox or any Lockbox Account, the Collection Account, the Retention
Account or any other deposit account in which any Collections of any Transferred
Receivable are deposited except as otherwise expressly permitted by this
Agreement or any of the other Related Documents.
(b) Liens. The Receivables Seller shall not create, incur, assume or
permit to exist (i) any Adverse Claim on or with respect to its Transferred
Receivables or any other Receivables Collateral or (ii) any Adverse Claim on or
with respect to its other properties or assets (whether now owned or hereafter
acquired) except for the Liens set forth in Schedule 4.3(b). In addition, the
Receivables Seller shall not become a party to any agreement, note, indenture or
instrument or take any other action that would prohibit the creation of a Lien
on any of its properties or other assets in favor of the Receivables Purchasers
as additional collateral for the recourse and indemnity obligations of the
Receivables Seller to the Receivables Purchaser hereunder, including those
obligations set forth in Sections 4.2(o), 4.4 and 5.1, except as otherwise
expressly permitted by this Agreement or any of the other Related Documents.
(c) Modifications of Receivables, Contracts or Credit and Collection
Policies. The Receivables Seller shall not, without the prior written consent of
the Administrative Agent, (i) extend, amend, forgive, discharge, compromise,
waive, cancel or otherwise modify the terms of any Transferred Receivable or
amend, modify or waive any term or condition of any Contract related thereto,
provided, that the Seller may authorize the Servicer to take such actions as are
expressly permitted by the terms of any Related Document or the Credit and
Collection Policies, or (ii) amend, modify or waive any term or provision of the
Credit and Collection Policies.
(d) Changes in Instructions to Obligors. The Receivables Seller shall
not make any change in its instructions to Obligors regarding the deposit of
Collections with respect to the Transferred Receivables without the prior
written consent of the Administrative Agent.
18
(e) Capital Structure and Business. The Receivables Seller shall not
(i) make any changes in any of its business objectives, purposes or operations
that could have or result in a Material Adverse Effect, (ii) make any change in
its capital structure as described on Schedule 4.1(h), including the issuance of
any shares of Stock, warrants or other securities convertible into Stock or any
revision of the terms of its outstanding Stock, or (iii) amend its certificate
or articles of incorporation or bylaws. The Receivables Seller shall not engage
in any business other than as provided in its organizational documents and the
Related Documents.
(f) Mergers, Subsidiaries, Etc. The Receivables Seller shall not
directly or indirectly, by operation of law or otherwise, (i) form or acquire
any Subsidiary, or (ii) merge with, consolidate with, acquire all or
substantially all of the assets or capital Stock of, or otherwise combine with
or acquire, any Person.
(g) Sale Characterization; Sale and Contribution Agreement. The
Receivables Seller shall not make statements or disclosures, prepare any
financial statements or in any other respect account for or treat the
transactions contemplated by this Agreement (including for accounting, tax and
reporting purposes) in any manner other than (i) with respect to the sale of
each Sold Receivable effected pursuant to this Agreement, as a true sale and
absolute assignment of the title to and sole record and beneficial ownership
interest of the Transferred Receivables by the Receivables Seller to the
Receivables Purchaser and (ii) with respect to the contribution of each
Contributed Receivable effected pursuant to this Agreement, as an increase in
the stated capital of the Receivables Seller.
(h) Restricted Payments. The Receivables Seller shall not enter into
any lending transaction with any other Person. The Receivables Seller shall not
at any time (i) advance credit to any Person or (ii) declare any dividends,
repurchase any Stock, return any capital, or make any other payment or
distribution of cash or other property or assets in respect of the Receivables
Seller's Stock if, after giving effect to any such advance or distribution, a
Purchase Excess, Incipient Termination Event or Termination Event would exist or
otherwise result therefrom.
(i) Indebtedness. The Receivables Seller shall not create, incur,
assume or permit to exist any Debt, except (i) Debt of the Receivables Seller to
any Affected Party, Indemnified Person, the Servicer or any other Person
expressly permitted by this Agreement or any other Related Document, and (ii)
indorser liability in connection with the indorsement of negotiable instruments
for deposit or collection in the ordinary course of business.
(j) Prohibited Transactions. The Receivables Seller shall not enter
into, or be a party to, any transaction with any Person except as expressly
permitted hereunder or under any other Related Document.
(k) Investments. Except as otherwise expressly permitted hereunder or
under the other Related Documents, the Receivables Seller shall not make any
investment in, or make or accrue loans or advances of money to, any Person,
including any Stockholder, director, officer or employee of the Receivables
Seller or any member of the Parent Group through the direct or indirect lending
of money, holding of securities or otherwise, except with respect to Transferred
Receivables, the Parent Loan, the Intercompany Loans and Permitted Investments.
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(l) Commingling. The Receivables Seller shall not deposit or permit the
deposit of any funds that do not constitute Collections of Transferred
Receivables into any Lockbox Account. If such funds are nonetheless deposited
into a Lockbox Account and the Receivables Seller so notifies the Administrative
Agent, the Administrative Agent shall promptly remit any such amounts as
directed by the Originator or in accordance with the Intercreditor Agreement.
The Receivables Seller shall not commingle and shall not permit the commingling
of Transferred Receivables with other assets of the Receivables Seller or with
the assets of any other Person.
(m) ERISA. The Receivables Seller shall not, and shall not cause or
permit any of its ERISA Affiliates to, cause or permit to occur an event that
could result in the imposition of a Lien under Section 412 of the IRC or Section
302 or 4068 of ERISA. (n) Related Documents. The Receivables Seller shall not
amend, modify or waive any term or provision of any Related Document without the
prior written consent of the Administrative Agent.
(o) Receivables Seller. The Receivables Seller shall not modify the
terms of any policy or resolutions of its board of directors if such
modification could have or result in a Material Adverse Effect.
(p) Purchase of Receivables. The Receivables Seller shall not purchase
any accounts receivable directly or indirectly, from any Person other than the
Originator, without the express written consent of the Administrative Agent.
(q) Dividend Payments. Without the prior written consent of the
Administrative Agent, the Receivables Seller shall not declare or pay any
dividends or make any other distribution of any kind to any entity (a Foreign
Owner")whose Formation Jurisdiction or domicile is outside the United State of
America (including the District of Columbia) and, in no event shall the
Receivables Seller make any distribution of any kind to a Foreign Owner, whether
in the nature of a dividend or otherwise, unless (i) Foreign Owner has executed
and delivered to Receivables Seller, with a copy to the Administrative Agent,
IRS Form W-8BEN (or such other form as the IRS may prescribe) containing, among
other things, the declaration described hereinafter, and at the time of such
distribution, Foreign Owner continues to be entitled to the benefits claimed
under such Form W-8BEN, (ii) the Receivables Seller makes such distribution in
an amount equal to the full amount of such distribution minus any applicable
withholding amount (the "Withholding Amount") required by the Code or, if less,
by any applicable treaty to which benefit is claimed pursuant to the Form W-8BEN
in effect as specified in clause (i) hereof and (iii) the Withholding Amounts
for all previously made distributions have been paid at the times and in the
amounts required by the Code or, if payment thereof is not then due and payable,
such amounts are on deposit in a bank account in the name of the Receivables
Seller. Each Foreign Owner shall represent in the IRS Form W-8BEN (or an
accompanying statement) that it will file with the IRS the statement required
under section 301.6114-1(d) of the Treasury Regulations or represent that such
requirement is inapplicable due to the aggregate annual amount of payments to be
made hereunder. Simultaneously with the payment of any such distribution, the
Receivables Seller will deposit the Withholding Amount in a account in the name
of the Receivables Seller and shall pay such Withholding Amount and all other
Withholding Amounts at all times required by the Code.
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(r) Class B Stock of Receivables Seller. The Receivables Seller shall
not issue or permit the issuance of any Class B Stock after the Closing Date.
SECTION 4.4 BREACH OF REPRESENTATIONS, WARRANTIES OR COVENANTS.
Upon discovery by the Receivables Seller or Receivables Purchaser of
any breach of any representation, warranty or covenant described in Sections
4.1, 4.2 or 4.3 (other than a representation, warranty or covenant relating to
the absence of Dilution Factors), which breach is reasonably likely to have a
material adverse effect on the value of a Transferred Receivable or the
interests of Receivables Purchaser therein, the party discovering the same shall
give prompt written notice thereof to the other parties hereto. The Receivables
Seller may, at any time on any Business Day, or shall, if requested by notice
from Receivables Purchaser, on the first Business Day following receipt of such
notice, either (a) repurchase such Transferred Receivable from Receivables
Purchaser for cash or through a decrease in the amounts outstanding under the
Subordinated Note, (b) transfer ownership of a new Eligible Receivable or new
Eligible Receivables to Receivables Purchaser on such Business Day, or (c) make
a capital contribution in cash to Receivables Purchaser by remitting the amount
(the "Rejected Amount") of such capital contribution to the Collection Account
in accordance with the terms of the Purchase Agreement, in each case in an
amount equal to the Billed Amount of such Transferred Receivable minus the sum
of (i) Collections received in respect thereof and (ii) the amount of any
Dilution Factors taken into account in the calculation of the Sale Price
therefor. Notwithstanding the foregoing, if any Transferred Receivable is not
paid in full on account of any Dilution Factors, the Receivables Seller's
repurchase obligation under this Section 4.4 with respect to such Transferred
Receivable shall be reduced by the amount of any such Dilution Factors taken
into account in the calculation of the Sale Price therefor. The Receivables
Seller shall ensure that no Collections or other proceeds with respect to a
Transferred Receivable so reconveyed to it are paid or deposited into any
Lockbox Account.
ARTICLE V
INDEMNIFICATION
SECTION 5.1 INDEMNIFICATION.
Without limiting any other rights that Receivables Purchaser or any of
its Stockholders, officers, directors, employees, attorneys, agents or
representatives (each, an "AFC Indemnified Person") may have hereunder or under
applicable law, the Receivables Seller hereby agrees to indemnify and hold
harmless each AFC Indemnified Person from and against any and all Indemnified
Amounts that may be claimed or asserted against or incurred by any such AFC
Indemnified Person in connection with or arising out of the transactions
contemplated under this Agreement or under any other Related Document, any
actions or failures to act in connection therewith, including any and all legal
costs and expenses arising out of or incurred in connection with disputes
between or among any parties to any of the Related Documents, or in respect of
any Transferred Receivable or any Contract therefor or the use by the
Receivables Seller of the Sale Price therefor or the amounts repaid under the
Parent Note or the Intercompany Note; provided, that the Receivables Seller
shall not be liable for any indemnification to a AFC Indemnified Person to the
extent that any such Indemnified Amounts result from (a) such AFC
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Indemnified Person's gross negligence or willful misconduct, as finally
determined by a court of competent jurisdiction, (b) recourse for uncollectible
or uncollected Transferred Receivables due to the lack of creditworthiness of
the Obligor or the occurrence of any event of bankruptcy with respect to such
Obligor, or (c) any income tax or franchise tax incurred by any AFC Indemnified
Person, except to the extent that the incurrence of any such tax results from a
breach of or default under this Agreement or any other Related Document. Subject
to the exceptions set forth in clauses (a), (b) and (c) of the immediately
preceding sentence but otherwise without limiting the generality of the
foregoing, the Receivables Seller shall pay on demand to each AFC Indemnified
Person any and all Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or deemed
made by the Receivables Seller (or any of its officers) under or in
connection with this Agreement or any other Related Document or on any
other information delivered by the Receivables Seller pursuant hereto
or thereto that shall have been incorrect in any material respect when
made or deemed made or delivered;
(ii) the failure by the Receivables Seller to comply with any
term, provision or covenant contained in this Agreement, any other
Related Document or any agreement executed in connection herewith or
therewith, any applicable law, rule or regulation with respect to any
Transferred Receivable or Contract therefor, or the nonconformity of
any Transferred Receivable or the Contract therefor with any such
applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in Receivables
Purchaser, or to Transfer to Receivables Purchaser, valid and properly
perfected title to and sole record and beneficial ownership of the
Receivables that constitute Transferred Receivables, together with all
Collections in respect thereof, free and clear of any Adverse Claim;
(iv) any dispute, claim, offset or defense of any Obligor
(other than its discharge in bankruptcy) to the payment of any
Receivable that is the subject of a Transfer hereunder (including a
defense based on such Receivable or the Contract therefor 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 services giving rise to such Receivable or
the furnishing or failure to furnish such merchandise or services or
relating to collection activities with respect to such Receivable (if
such collection activities were performed by the Originator or any
Affiliate acting as the Servicer), except to the extent that such
dispute, claim, offset or defense results solely from any action or
inaction on the part of Receivables Purchaser;
(v) any products liability claim or other claim arising out of
or in connection with merchandise, insurance or services that is the
subject of any Contract;
(vi) the commingling of Collections with respect to
Transferred Receivables by the Originator at any time with its other
funds or the funds of any other Person or the commingling of any
Transferred Receivables with its other assets or the assets of any
other Person;
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(vii) any failure by the Receivables Seller to cause the
filing of, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable
jurisdiction or any other applicable laws with respect to any
Receivable that is the subject of a Sale hereunder, whether at the time
of any such Transfer or at any subsequent time;
(viii) any failure by the Receivables Seller or the Servicer
to perform, keep or observe any of their respective duties or
obligations hereunder, under any other Related Document or under any
Contract related to a Transferred Receivable;
(ix) any investigation, Litigation or proceeding related to
this Agreement or the use of the Sale Price obtained in connection with
any Sale or the ownership of Receivables or Collections with respect
thereto or in respect of any Receivable or Contract, except to the
extent any such investigation, Litigation or proceeding relates to a
matter involving a AFC Indemnified Person for which neither the
Receivables Seller nor any of its Affiliates is at fault, as finally
determined by a court of competent jurisdiction; or
(x) any claim brought by any Person other than a AFC
Indemnified Person arising from any activity by the Receivables Seller
or any of its Affiliates in servicing, administering or collecting any
Transferred Receivables.
NO AFC INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO
THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD
PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
ARTICLE VI
PARENT LOAN
SECTION 6.1 PARENT LOAN.
Subject to the terms and conditions hereof and upon the request of the
Parent, the Receivables Seller may advance the proceeds of the initial Transfer
of Transferred Receivables to the Parent (the "Parent Loan"). The aggregate
principal amount of the Parent Loan outstanding shall not exceed at any time the
Maximum Purchase Limit.
SECTION 6.2 THE PARENT NOTE.
(a) The Parent shall execute and deliver to the Receivables Seller a
single promissory note to evidence the Parent Loan made to it by the Receivables
Seller hereunder, which note shall be dated the Closing Date and be
substantially in the form of Exhibit 6.2(a) (the "Parent Note"). The Parent Note
shall represent the obligation of the Parent to pay the amount of the
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Maximum Purchase Limit or, if less, the aggregate unpaid principal amount of the
Parent Loan made to the Parent together with interest thereon as prescribed in
Section 6.4.
(b) The Parent shall record on a schedule attached to the Parent Note
(which schedule may be computer generated) with respect to each Parent Loan
thereunder: (i) the date and principal amount thereof and (ii) each repayment of
principal, if any, thereof. The balance as reflected on such schedule shall be
presumptive evidence of the amounts due and owing to Receivables Seller by the
Parent; provided, that any failure of the Receivables Seller to record a
notation on the schedule to the Parent Note as aforesaid or any error in so
recording shall not limit or otherwise affect the obligation of the Parent to
repay such Parent Loan in accordance with its respective terms as set forth
herein.
(c) Unless the Parent elects otherwise, the Parent Note will
automatically be repaid by an amount equal to the amount necessary to avoid a
capital contribution pursuant to Section 2.1(d) of the Contribution Agreement.
SECTION 6.3 TERMS OF PARENT NOTE.
The terms of the Parent Note shall be in form and substance
satisfactory to the Administrative Agent in its sole discretion and shall
include and each of the Receivables Seller and the Parent hereby represents
warrants and covenants that the Parent Note includes and shall include, without
limitation, provisions: (a) prohibiting any set off right between amounts due
under the Parent Note and amounts due to or from the Parent or any of its
Affiliates to any Person in respect of any of the Receivables, under the Parent
Guaranty and/or any other obligation of the Parent or any of its Affiliates, (b)
prohibiting the obligation represented by the Parent Note from being secured by
any Receivable or any other asset of the Parent, (c) representing that
notwithstanding the Parent Note and any transfer of any Receivable or other
property to the Receivables Seller by the Originator, any such transfer of a
Receivable or other property is not, and will not be made in extinguishment of
or to secure the obligation of the Parent to repay any amount at any time due
under the Parent Note or the Intercompany Note and (d) whereby the Parent waives
its right to assert any claim contrary to subsection (c) above.
SECTION 6.4 INTEREST.
(a) The Parent shall pay interest to the Receivables Seller, monthly in
arrears on each Interest Payment Date, at the Prime Rate on the unpaid principal
amount of the Parent Note for the period commencing on and including the date of
such Parent Note until but excluding the date such Parent Note is paid in full.
(b) [Reserved].
(c) All computations of interest shall be made by Receivables Seller on
the basis of a 360 day year, in each case for the actual number of days
occurring in the period for which such interest is payable. The Prime Rate shall
be determined (i) on the first Business Day immediately prior to the Closing
Date for calculation of the Prime Rate for the period from the Closing Date
through the end of the first calendar month following the Closing Date, and (ii)
as of the last Business Day of each month for use in calculating the interest
that is payable for the following calendar month, and the Prime Rate so
determined shall be utilized for such calendar month.
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Each determination by the Receivables Seller of an interest rate hereunder shall
be final, binding and conclusive on the Parent (absent manifest error).
(d) The Parent shall pay interest at the applicable Prime Rate on
unpaid interest, on the Parent Loan or any installment thereof, and on any other
amount payable by the Parent hereunder (to the extent permitted by law) that
shall not be paid in full when due (whether at stated maturity, by acceleration
or otherwise) for the period commencing on the due date thereof to (but
excluding) the date the same is indefeasibly paid in full.
SECTION 6.5 RECEIPT OF PAYMENTS.
All payments of principal, interest and other amounts (including
indemnities) payable by the Parent to Receivables Seller in or under the Parent
Note shall be made in Dollars, in immediately available funds, to Receivables
Seller not later than 12:00 noon (
New York City time), on the due date therefor.
Any such payment made on such date but after such time shall, if the amount paid
bears interest, be deemed to have been made on, and interest shall continue to
accrue and be payable thereon until, the next succeeding Business Day. All
payments under this Article VI and under the Parent Note shall be made without
setoff or counterclaim and in such amounts as may be necessary in order that all
such payments shall not be less than the amounts otherwise specified to be paid
under this Agreement and the Parent Note.
SECTION 6.6 SEPARATENESS OF PARENT LOAN FROM TRANSFER OF RECEIVABLES.
The parties hereto acknowledge and agree that the Parent Loan made by
Receivables Seller to the Parent hereunder is a separate and distinct
transaction from the Transfer of Receivables by the Originator to the
Receivables Seller and is not intended to derogate from the expressed intention
of the parties regarding the characterization of the Transfers of the
Receivables made under the Contribution Agreement as purchases and sales and not
as secured transactions.
ARTICLE 6A
INTERCOMPANY LOANS
SECTION 6A.1 INTERCOMPANY LOANS.
Subject to the terms and conditions hereof, from time to after the
initial Transfer and upon the request of the Parent, the Receivables Seller may
advance any available cash to the Parent (each an "Intercompany Loan"). The
principal amount of any Intercompany Loan shall not exceed the amount that the
Receivables Seller is permitted by applicable law and its certificate of
incorporation to make as a dividend or other distribution (the "Intercompany
Loan Limit"). The Receivables Seller shall make an Intercompany Loan only if and
to the extent of amounts available to the Receivables Seller to make as a
dividend or other distribution. Until the Facility Termination Date, the Parent
may from time to time borrow, repay and reborrow under the Intercompany Loan;
provided, that no such Intercompany Loans may be made if, after giving effect
thereto, (i) an Incipient Termination Event, a Termination Event, an Incipient
Servicer Termination Event or a Servicer Termination Event shall have occurred
or (ii) a Purchase Excess would exist.
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SECTION 6A.2 THE INTERCOMPANY NOTE.
(a) The Parent shall execute and deliver to the Receivables Seller a
single promissory note to evidence the Intercompany Loans made to it by the
Receivables Seller hereunder, which note shall be dated the Closing Date and be
substantially in the form of Exhibit 6A.2(a) (the "Intercompany Note"). The
Intercompany Note shall represent the obligation of the Parent to pay the amount
of the Intercompany Loan Limit or, if less, the aggregate unpaid principal
amount of all Intercompany Loans made to the Parent together with interest
thereon as prescribed in Section 6A.4.
(b) The Parent shall record on a schedule attached to the Intercompany
Note (which schedule may be computer generated) with respect to each
Intercompany Loan thereunder: (i) the date and principal amount thereof and (ii)
each prepayment of principal, if any, thereof. The balance as reflected on such
schedule shall be presumptive evidence of the amounts due and owing to
Receivables Seller by the Parent; provided, that any failure of the Receivables
Seller to record a notation on the schedule to the Intercompany Note as
aforesaid or any error in so recording shall not limit or otherwise affect the
obligation of the Parent to repay such Intercompany Loan in accordance with its
respective terms as set forth herein.
SECTION 6A.3 TERMS OF INTERCOMPANY NOTE.
(a) The terms of the Intercompany Note shall be in form and substance
satisfactory to the Administrative Agent in its sole discretion and shall
include and each of the Receivables Seller and the Parent hereby represents,
warrants and covenants that the Intercompany Note includes and shall include,
without limitation, provisions: (i) prohibiting any set off right between
amounts due under the Intercompany Note and amounts due to or from the Parent or
any of its Affiliates to any Person in respect of any of the Receivables, under
the Parent Guaranty and/or any other obligation of the Parent or any of its
Affiliates, (ii) prohibiting the obligation represented by the Intercompany Note
from being secured by any Receivable or any other asset of the Parent, (iii)
representing that notwithstanding the Intercompany Note and any transfer of any
Receivable or other property to the Receivables Seller by the Originator, any
such transfer of a Receivable or other property is not, and will not be made in
extinguishment of or to secure the obligation of the Parent to repay any amount
at any time due under the Intercompany Note or the Parent Note, and (iv) whereby
the Parent waives its right to assert any claim contrary to subsection (iii)
above.
(b) The Parent agrees to maintain such amounts in a manner such that
such amounts are always readily and easily identifiable. The acceptance by the
Parent of the proceeds of any Intercompany Loan on any day shall be deemed to
constitute a representation, warranty and covenant by the Parent that its shall
strictly comply with the requirements set forth in this Section 6A.3(b).
SECTION 6A.4 INTEREST.
(a) The Parent shall pay interest to the Receivables Seller, monthly in
arrears on each Interest Payment Date, at the Prime Rate on the unpaid principal
amount of each Intercompany
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Loan for the period commencing on and including the date of such Intercompany
Loan until but excluding the date such Intercompany Loan is paid in full.
(b) [Reserved].
(c) All computations of interest shall be made by Receivables Seller on
the basis of a 360 day year, in each case for the actual number of days
occurring in the period for which such interest is payable. The Prime Rate shall
be determined (i) on the first Business Day immediately prior to the Closing
Date for calculation of the Prime Rate for the period from the Closing Date
through the end of the first calendar month following the Closing Date, and (ii)
as of the last Business Day of each month for use in calculating the interest
that is payable for the following calendar month, and the Prime Rate so
determined shall be utilized for such calendar month. Each determination by the
Receivables Seller of an interest rate hereunder shall be final, binding and
conclusive on the Parent (absent manifest error).
(d) The Parent shall pay interest at the applicable Prime Rate on
unpaid interest, on any Intercompany Loan or any installment thereof, and on any
other amount payable by the Parent hereunder (to the extent permitted by law)
that shall not be paid in full when due (whether at stated maturity, by
acceleration or otherwise) for the period commencing on the due date thereof to
(but excluding) the date the same is indefeasibly paid in full.
SECTION 6A.5 RECEIPT OF PAYMENTS.
All payments of principal, interest and other amounts (including
indemnities) payable by the Parent to Receivables Seller in or under the
Intercompany Note shall be made in Dollars, in immediately available funds, to
Receivables Seller not later than 12:00 noon (
New York City time), on the due
date therefor. Any such payment made on such date but after such time shall, if
the amount paid bears interest, be deemed to have been made on, and interest
shall continue to accrue and be payable thereon until, the next succeeding
Business Day. All payments under this Article VIA and under the Intercompany
Note shall be made without setoff or counterclaim and in such amounts as may be
necessary in order that all such payments shall not be less than the amounts
otherwise specified to be paid under this Agreement and the Intercompany Note.
SECTION 6A.6 SEPARATENESS OF INTERCOMPANY LOANS FROM TRANSFER OF
RECEIVABLES.
The parties hereto acknowledge and agree that any Intercompany Loan
made by Receivables Seller to the Parent hereunder is a separate and distinct
transaction from the Transfer of Receivables by the Originator to the
Receivables Seller and is not intended to derogate from the expressed intention
of the parties regarding the characterization of the Transfers of the
Receivables made under the Contribution Agreement as purchases and sales and not
as secured transactions.
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ARTICLE VII
COLLATERAL SECURITY
SECTION 7.1 SECURITY INTEREST.
To secure the prompt and complete payment, performance and observance
of any and all recourse and indemnity obligations of the Receivables Seller to
Receivables Purchaser, including those set forth in Sections 4.2(o), 4.4, 5.1
and 8.14, and to induce Receivables Purchaser to enter into this Agreement in
accordance with the terms and conditions hereof, the Receivables Seller hereby
grants, assigns, conveys, pledges, hypothecates and transfers to Receivables
Purchaser a Lien upon all of the Receivables Seller's right, title and interest
in, to and under the following property, whether now owned by or owing to, or
hereafter acquired by or arising in favor of, the Receivables Seller (including
under any trade names, styles or derivations of the Receivables Seller), and
whether owned by or consigned by or to, or leased from or to, the Receivables
Seller, and regardless of where located (all of which being hereinafter
collectively referred to as the "Receivables Collateral"):
(a) all Transferred Receivables, all Contracts relating thereto and all
Collections thereon;
(b) all books and Records (including customer lists, credit files,
computer programs, tapes, disks, data processing software and other related
property and rights) pertaining to the foregoing;
(c) all rights, but none of the duties or obligations of the
Receivables Seller under the Contribution Agreement, the Subordinated Originator
Note, the Subordinated Note, the Parent Note and the Intercompany Note;
(d) all monies, securities and other property now or hereafter in the
possession or custody of, or in transit to, Receivables Purchaser, for any
purpose (including safekeeping, collection or pledge), from or for the
Receivables Seller, or as to which the Receivables Seller may have any right or
power, and all of Receivables Purchaser's credits and balances with the
Receivables Seller existing at any time; and
(e) to the extent not otherwise included, all proceeds and products of
the foregoing and all accessions to, and substitutions and replacements for,
each of the foregoing.
SECTION 7.2 OTHER COLLATERAL; RIGHTS IN RECEIVABLES.
Nothing contained in this Article VII shall limit the rights of
Receivables Purchaser in and to any other collateral that may have been or may
hereafter be granted to Receivables Purchaser by the Receivables Seller or any
third party pursuant to any other agreement or the rights of Receivables
Purchaser under any of the Transferred Receivables.
SECTION 7.3 RECEIVABLES SELLER REMAINS LIABLE.
It is expressly agreed by the Receivables Seller that, anything herein
to the contrary notwithstanding, the Receivables Seller shall remain liable
under any and all of the Receivables transferred by it, the Contracts therefor
and all other Receivables Collateral to observe and perform all the conditions
and obligations to be observed and performed by it thereunder. The Receivables
Purchaser shall not have any obligation or liability under any such Receivables,
Contracts or Receivables Collateral by reason of or arising out of this
Agreement or the granting herein of a Lien thereon or the receipt by the
Receivables Purchaser of any payment relating
28
thereto pursuant hereto. The exercise by the Receivables Purchaser of any of its
respective rights under this Agreement shall not release the Receivables Seller
from any of its respective duties or obligations under any such Receivables,
Contracts or Receivables Collateral. The Receivables Purchaser shall not be
required or obligated in any manner to perform or fulfill any of the obligations
of the Receivables Seller under or pursuant to any such Transferred Receivable,
Contract or Receivables Collateral, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such Transferred
Receivable, Contract or Receivables Collateral, or to present or file any
claims, or to take any action to collect or enforce any performance or the
payment of any amounts that may have been assigned to it or to which it may be
entitled at any time or times.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 NOTICES.
Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered (a) upon the earlier of actual receipt and three (3) Business Days
after deposit in the United States Mail, registered or certified mail, return
receipt requested, with proper postage prepaid, (b) upon transmission, when sent
by telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 8.1), (c) one (1)
Business Day after deposit with a reputable overnight courier with all charges
prepaid or (d) when delivered, if hand-delivered by messenger, all of which
shall be addressed to the party to be notified and sent to the address or
facsimile number set forth below in this Section 8.1 or to such other address
(or facsimile number) as may be substituted by notice given as herein provided:
Receivables Seller: AFC Receivables Holding Corporation
c/o Entity Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior-Vice President, Corporate Affairs
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
29
Receivables Purchaser: Advance Funding Corporation
c/o Entity Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior-Vice President, Corporate Affairs
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Servicer: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior-Vice President, Corporate Affairs
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
provided, that each such declaration or other communication shall be deemed to
have been validly delivered to the Administrative Agent under this Agreement
upon delivery to the Administrative Agent in accordance with the terms of the
Purchase Agreement. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration
or other communication to any Person (other than Receivables Purchaser)
designated in any written communication provided hereunder to receive copies
shall in no way adversely affect the effectiveness of such notice, demand,
request, consent, approval, declaration or other communication. Notwithstanding
the foregoing, whenever it is provided herein that a notice is to be given to
any other party hereto by a specific time, such notice shall only be effective
if actually received by such party prior to such time, and if such notice is
received after such time or on a day other than a Business Day, such notice
shall only be effective on the immediately succeeding Business Day.
SECTION 8.2 NO WAIVER; REMEDIES.
Receivables Purchaser's failure, at any time or times, to require
strict performance by the Receivables Seller of any provision of this Agreement
or any Assignment shall not waive, affect or diminish any right of Receivables
Purchaser thereafter to demand strict compliance and performance herewith or
therewith. Any suspension or waiver of any breach or default hereunder shall not
suspend, waive or affect any other breach or default whether the same is prior
or subsequent thereto and whether the same or of a different type. None of the
undertakings, agreements, warranties, covenants and representations of the
Receivables Seller contained in this Agreement or any Assignment, and no breach
or default by the Receivables Seller hereunder or thereunder, shall be deemed to
have been suspended or waived by
30
Receivables Purchaser unless such waiver or suspension is by an instrument in
writing signed by an officer of or other duly authorized signatory of
Receivables Purchaser and directed to the Receivables Seller specifying such
suspension or waiver. Receivables Purchaser's rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Receivables Purchaser may have under any other agreement, including the
other Related Documents, by operation of law or otherwise. Recourse to the
Receivables Collateral shall not be required.
SECTION 8.3 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES.
This Agreement shall be binding upon and shall inure to the benefit of
the Receivables Seller and Receivables Purchaser and their respective successors
and permitted assigns, except as otherwise provided herein. The Receivables
Seller may not assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder without the prior express written
consent of Receivables Purchaser, the Purchasers and the Administrative Agent
and unless the Rating Agency Condition shall have been satisfied with respect to
any such assignment. Any such purported assignment, transfer, hypothecation or
other conveyance by the Receivables Seller without the prior express written
consent of Receivables Purchaser, the Purchasers and the Administrative Agent
shall be void. The Receivables Seller acknowledges that, to the extent permitted
under the Purchase Agreement, Receivables Purchaser may assign its rights
granted hereunder, including the benefit of any indemnities under Article V and
any of its rights in the Receivables Collateral granted under Article VII, and
upon such assignment, such assignee shall have, to the extent of such
assignment, all rights of Receivables Purchaser hereunder and, to the extent
permitted under the Purchase Agreement, may in turn assign such rights. The
Receivables Seller agrees that, upon any such assignment, such assignee may
enforce directly, without joinder of Receivables Purchaser, the rights set forth
in this Agreement. All such assignees, including parties to the Purchase
Agreement in the case of any assignment to such parties, shall be third party
beneficiaries of, and shall be entitled to enforce Receivables Purchaser's
rights and remedies under, this Agreement to the same extent as if they were
parties hereto. Without limiting the generality of the foregoing, all notices to
be provided to the Receivables Purchaser hereunder shall be delivered to both
the Receivables Purchaser and the Administrative Agent under the Purchase
Agreement, and shall be effective only upon such delivery to the Administrative
Agent. The terms and provisions of this Agreement are for the purpose of
defining the relative rights and obligations of the Receivables Seller and
Receivables Purchaser with respect to the transactions contemplated hereby and,
except for the Purchasers and the Administrative Agent, no Person shall be a
third party beneficiary of any of the terms and provisions of this Agreement.
SECTION 8.4 TERMINATION; SURVIVAL OF OBLIGATIONS.
(a) 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 Termination Date.
(b) Except as otherwise expressly provided herein or in any other
Related Document, no termination or cancellation (regardless of cause or
procedure) of any commitment made by Receivables Purchaser under this Agreement
shall in any way affect or impair the obligations,
31
duties and liabilities of the Receivables Seller or the rights of Receivables
Purchaser relating to any unpaid portion of any and all recourse and indemnity
obligations of the Receivables Seller to Receivables Purchaser, including those
set forth in Sections 4.2(o), 4.4, 5.1 and 8.14, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring prior to such
termination, or any transaction or event, the performance of which is required
after the Facility Termination Date. Except as otherwise expressly provided
herein or in any other Related Document, all undertakings, agreements,
covenants, warranties and representations of or binding upon the Receivables
Seller, and all rights of Receivables Purchaser hereunder, all as contained in
the Related Documents, shall not terminate or expire, but rather shall survive
any such termination or cancellation and shall continue in full force and effect
until the Termination Date; provided, that the rights and remedies pursuant to
Sections 4.2(o), 4.4, the indemnification and payment provisions of Article V,
and the provisions of Sections 8.3, 8.12 and 8.14 shall be continuing and shall
survive any termination of this Agreement.
SECTION 8.5 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT.
This Agreement and the other Related Documents constitute the complete
agreement between the parties with respect to the subject matter hereof and
thereof, supersede all prior agreements and understandings relating to the
subject matter hereof and thereof, and may not be modified, altered or amended
except as set forth in Section 8.6.
SECTION 8.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or any of the other Related Documents, or any consent to any
departure by the Receivables Seller therefrom, shall in any event be effective
unless the same shall be in writing and signed by each of the parties hereto and
the Purchasers and the Administrative Agent. No consent or demand in any case
shall, in itself, entitle any party to any other consent or further notice or
demand in similar or other circumstances.
SECTION 8.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL.
(a) THIS AGREEMENT AND EACH RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT
ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS
ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES), EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT
OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE RECEIVABLES PURCHASER IN THE
RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
32
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN
NEW YORK CITY SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF THE BOROUGH OF MANHATTAN IN
NEW YORK CITY; PROVIDED FURTHER, THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE RECEIVABLES
PURCHASER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE RECEIVABLES COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS OF THE ORIGINATOR ARISING HEREUNDER, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF RECEIVABLES PURCHASER. EACH PARTY HERETO SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH
PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT
THE ADDRESS SET FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY'S
ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL,
PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY
PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN
33
CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 8.8 COUNTERPARTS.
This Agreement may be executed in any number of separate counterparts,
each of which shall collectively and separately constitute one agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile shall be as effective as delivery of a manually executed counterpart
of a signature page to this Agreement.
SECTION 8.9 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
SECTION 8.10 SECTION TITLES.
The section titles and table of contents contained in this Agreement
are provided for ease of reference only and shall be without substantive meaning
or content of any kind whatsoever and are not a part of the agreement between
the parties hereto.
SECTION 8.11 NO SETOFF.
The Receivables Seller's obligations under this Agreement shall not be
affected by any right of setoff, counterclaim, recoupment, defense or other
right the Receivables Seller might have against Receivables Purchaser, any
Purchaser or the Administrative Agent, all of which rights are hereby expressly
waived by the Receivables Seller.
SECTION 8.12 CONFIDENTIALITY.
(a) Except to the extent otherwise required by applicable law, as
required to be filed publicly with the Securities and Exchange Commission, or
unless each Affected Party shall otherwise consent in writing, the Receivables
Seller and Receivables Purchaser agree to maintain the confidentiality of this
Agreement (and all drafts hereof and documents ancillary hereto) in its
communications with third parties other than any Affected Party or any AFC
Indemnified Person and otherwise and not to disclose, deliver or otherwise make
available to any third party (other than its directors, officers, employees,
accountants or counsel) the original or any copy of all or any part of this
Agreement (or any draft hereof and documents ancillary hereto) except to an
Affected Party or an AFC Indemnified Person.
(b) The Receivables Seller agrees that it shall not (and shall not
permit any of its Subsidiaries to) issue any news release or make any public
announcement pertaining to the transactions contemplated by this Agreement and
the Related Documents without the prior written consent of Receivables Purchaser
and each of the Committed Purchaser and the Conduit Purchaser (which consent
shall not be unreasonably withheld) unless such news release or public
34
announcement is required by law, in which case the Receivables Seller shall
consult with Receivables Purchaser and each of the Committed Purchaser and the
Conduit Purchaser prior to the issuance of such news release or public
announcement. The Receivables Seller may, however, disclose the general terms of
the transactions contemplated by this Agreement and the Related Documents to
trade creditors, suppliers and other similarly-situated Persons so long as such
disclosure is not in the form of a news release or public announcement.
(c) Except to the extent otherwise required by applicable law, or in
connection with any judicial or administrative proceedings, as required to be
filed publicly with the Securities Exchange Commission, or unless the
Receivables Seller otherwise consents in writing, the Receivables Purchaser
agrees (i) to maintain the confidentiality of (A) this Agreement (and all drafts
hereof and documents ancillary hereto) and (B) all other confidential
proprietary information with respect to the Receivables Seller and its
Affiliates and each of their respective businesses obtained by the Receivables
Purchaser in connection with the structuring, negotiation and execution of the
transactions contemplated herein and in the other documents ancillary hereto, in
each case, in its communications with third parties other than any Affected
Party or the Receivables Seller and (ii) not to disclose, deliver, or otherwise
make available to any third party (other than its directors, officers,
employees, accountants or counsel) the original or any copy of all or any part
of this Agreement (or any draft hereof and documents ancillary hereto) except to
an Affected Party or the Receivables Seller.
SECTION 8.13 FURTHER ASSURANCES.
(a) The Receivables Seller shall, at its sole cost and expense, upon
request of Receivables Purchaser, any Purchaser or the Administrative Agent,
promptly and duly execute and deliver any and all further instruments and
documents and take such further actions that may be necessary or desirable or
that Receivables Purchaser, any Purchaser or the Administrative Agent may
request to carry out more effectively the provisions and purposes of this
Agreement or any other Related Document or to obtain the full benefits of this
Agreement and of the rights and powers herein granted, including (i) using its
best efforts to secure all consents and approvals necessary or appropriate for
the assignment to or for the benefit of Receivables Purchaser of any Transferred
Receivable or Receivables Collateral held by the Receivables Seller or in which
the Receivables Seller has any rights not heretofore assigned, (ii) filing any
financing or continuation statements under the UCC) with respect to the
ownership interests or Liens granted hereunder or under any other Related
Document, (iii) transferring Receivables Collateral to Receivables Purchaser's
possession if such collateral consists of chattel paper or instruments or if a
Lien upon such collateral can be perfected only by possession, or if otherwise
requested by Receivables Purchaser; and (iv) entering into "control agreements"
(as defined in the UCC with respect to any Receivables Collateral to the extent
that a first priority Lien upon such Receivables Collateral can be perfected
only by control. The Receivables Seller hereby authorizes Receivables Purchaser,
each Purchaser and the Administrative Agent to file any such financing or
continuation statements without the signature of the Receivables Seller to the
extent permitted by applicable law. A carbon, photographic or other reproduction
of this Agreement or of any notice or financing statement covering the
Transferred Receivables, the Receivables Collateral or any part thereof shall be
sufficient as a notice or financing statement where permitted by law. If any
amount payable under or in connection with any of the Receivables Collateral is
or shall become evidenced by any instrument, such instrument, other than checks
and notes received in the
35
ordinary course of business, shall be duly endorsed in a manner satisfactory to
Receivables Purchaser immediately upon the Receivables Seller's receipt thereof
and promptly delivered to Receivables Purchaser.
(b) If the Receivables Seller fails to perform any agreement or
obligation under this Section 8.13, Receivables Purchaser, any Purchaser or the
Administrative Agent may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the reasonable expenses of
Receivables Purchaser, such Purchaser or the Administrative Agent incurred in
connection therewith shall be payable by the Receivables Seller upon demand of
Receivables Purchaser, such Purchaser or the Administrative Agent.
SECTION 8.14 FEES AND EXPENSES.
In addition to its indemnification obligations pursuant to Article V,
the Receivables Seller agrees to pay on demand all costs and expenses incurred
by Receivables Purchaser in connection with the negotiation, preparation,
execution and delivery of this Agreement and the other Related Documents,
including the fees and out-of-pocket expenses of Receivables Purchaser's
counsel, advisors, consultants and auditors retained in connection with the
transactions contemplated thereby and advice in connection therewith, and the
Receivables Seller agrees to pay all costs and expenses, if any (including
attorneys' fees and expenses but excluding any costs of enforcement or
collection of the Transferred Receivables), in connection with the enforcement
of this Agreement and the other Related Documents.
[Remainder of Page Intentionally Left Blank]
36
IN WITNESS WHEREOF, the parties have caused this Receivables Sale
Agreement to be executed by their respective duly authorized representatives, as
of the date first above written.
AFC RECEIVABLES HOLDING CORPORATION
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
ADVANCE FUNDING CORPORATION
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
ADVP MANAGEMENT, L.P.
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
37
Exhibit 2.1(a)
Form of
Assignment
THIS ASSIGNMENT (the "Assignment") is entered into as of ______ __,
2001, by and between AFC RECEIVABLES HOLDING CORPORATION (the "Receivables
Seller") and ADVANCE FUNDING CORPORATION ("Receivables Purchaser").
1. We refer to that certain
Receivables Sale and Contribution Agreement
(as amended, restated, supplemented or otherwise modified from time to time, the
"Sale and Contribution Agreement") of even date herewith among the Receivables
Seller, the Receivables Purchaser and
AdvancePCS. All of the terms, covenants
and conditions of the Sale and Contribution Agreement are hereby made a part of
this Assignment and are deemed incorporated herein in full. Unless otherwise
defined herein, capitalized terms or matters of construction defined or
established in the Sale and Contribution Agreement shall be applied herein as
defined or established therein.
2. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Receivables Seller hereby sells, or sells or
contributes, to Receivables Purchaser, without recourse, except as provided in
Sections 4.2(o) and 4.4 of the Sale and Contribution Agreement, all of the
Receivables Seller's right, title and interest in, to and under all of its
Transferred Receivables (including all Collections, Records and proceeds with
respect thereto) existing as of the Closing Date and thereafter created or
arising at any time until the Facility Termination Date.
3. Subject to the terms and conditions of the Sale and Contribution
Agreement, the Receivables Seller hereby covenants and agrees to sign, sell or
contribute, as applicable, execute and deliver, or cause to be signed, sold or
contributed, executed and delivered, and to do or make, or cause to be done or
made, upon request of Receivables Purchaser and at the Receivables Seller's
expense, any and all agreements, instruments, papers, deeds, acts or things,
supplemental, confirmatory or otherwise, as may be reasonably required by
Receivables Purchaser for the purpose of or in connection with acquiring or more
effectively vesting in Receivables Purchaser or evidencing the vesting in
Receivables Purchaser of the property, rights, title and interests of the
Receivables Seller sold or contributed hereunder or intended to be sold or
contributed hereunder.
4. Wherever possible, each provision of this Assignment shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Assignment shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Assignment.
5. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW
YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, the parties have caused this Assignment to be
executed by their respective officers thereunto duly authorized, as of the day
and year first above written.
AFC RECEIVABLES HOLDING CORPORATION
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
ADVANCE FUNDING CORPORATION
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Exhibit 2.1(c)
FORM OF SUBORDINATED NOTE
[_____ __, 2001]
FOR VALUE RECEIVED, the undersigned, ADVANCE FUNDING
CORPORATION, a Delaware corporation (the "Borrower"), hereby promises to pay to
the order of AFC RECEIVABLES HOLDING CORPORATION, a Delaware corporation (the
"Subordinated Lender"), or its assigns, at c/o Entity Services, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the holder of
this Subordinated Note ("Note") may designate from time to time in writing, in
lawful money of the United States of America and in immediately available funds,
the aggregate unpaid principal amount of all Subordinated Loans (as defined in
the Sale Agreement referred to below) made to the Borrower, upon the earlier to
occur of (i) the Final Purchase Date and (ii) the Termination Date (in each
case, as defined in Annex X to the the Sale Agreement referred to below),
together with interest thereon at the Prime Rate (the "Interest Rate") on the
unpaid principal amount of each Subordinated Loan for the period commencing on
and including the date of such Subordinated Loan to but excluding the date such
Subordinated Loan is paid in full.
The date, amount and interest rate of each Subordinated Loan
made by the Subordinated Lender to the Borrower, and each payment made by or on
behalf of the Borrower on account of the principal thereof, shall be recorded by
the Subordinated Lender on its books and, prior to any transfer of this Note,
endorsed by the Subordinated Lender on the schedule attached hereto or any
continuation thereof. The books of the Subordinated Lender and such schedule
shall be presumptive evidence of the amounts due and owing to the Subordinated
Lender by the Borrower; provided; that any failure of the Subordinated Lender to
record a notation in its books or on the schedule to this Note as aforesaid or
any error in so recording shall not limit or otherwise affect the obligation of
the Borrower to repay Subordinated Loans in accordance with their respective
terms set forth herein.
All capitalized terms, unless otherwise defined herein, shall
have the meanings assigned to them in the
Receivables Sale and Contribution
Agreement of even date herewith (as the same may be subsequently amended,
restated or otherwise modified, the "Sale Agreement") by and among the Borrower,
the Subordinated Lender and ADVP Management L.P. This Note is issued pursuant to
the Sale Agreement and is the Subordinated Note referred to therein. All of the
terms, covenants and conditions of the Sale Agreement and all other instruments
evidencing the indebtedness hereunder, including the other Related Documents,
are hereby made a part of this Note and are deemed incorporated herein in full.
The Borrower may at any time and from time to time upon prior
written notice to the Subordinated Lender voluntarily repay, in whole or in
part, all Subordinated Loans made hereunder. Any amount so repaid may, subject
to the terms and conditions hereof, be reborrowed hereunder; provided, that all
repayments of Subordinated Loans or any portion thereof shall be made together
with payment of all interest accrued on the amount repaid to (but
excluding) the date of such repayment. Any such notice must be given in writing
on or before the Business Day immediately preceding the day the proposed
Subordinated Loan is to be repaid (which shall be a Business Day). Each such
notice of repayment shall specify the amount of Subordinated Loans to be repaid
and the repayment date thereof.
Interest shall be payable on the outstanding principal amount
of this Note from time to time in arrears on the first Business Day of each
month. All computations of interest shall be made by the Lender on the basis of
a 365 day year, in each case for the actual number of days occurring in the
period for which such interest is payable. The Interest Rate shall be determined
(i) on the first Business Day immediately prior to the date any Subordinated
Loan is made for calculation of the Interest Rate for the period from the date
such Subordinated Loan is made through the end of the first calendar month
following such date, and (ii) as of the last Business Day of each month for use
in calculating the interest that is payable for the following calendar month,
and the Interest Rate so determined shall be utilized for such calendar month.
Each determination by the Subordinated Lender of an interest rate hereunder
shall be final, binding and conclusive on the Borrower (absent manifest error).
The Borrower shall pay interest at the applicable Interest Rate on unpaid
interest on any Subordinated Loan or any installment thereof, and on any other
amount payable by the Borrower hereunder (to the extent permitted by law) that
shall not be paid in full when due (whether at stated maturity, by acceleration
or otherwise) for the period commencing on the due date thereof to (but
excluding) the date the same is indefeasibly paid in full.
If any payment or prepayment on this Note becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the Interest Rate during such
extension.
As set forth below, the indebtedness evidenced by this
Subordinated Note is subordinate in right of payment to all "Seller Secured
Obligations" (as defined in Annex X of the Sale Agreement) and all renewals,
extensions, refinancings or refundings of any such obligations (whether for
principal, interest (including but not limited to interest accruing after the
filing of a petition initiating any bankruptcy, insolvency or receivership
proceeding (each, an "Insolvency Proceeding") whether or not such interest is
allowed in such Insolvency Proceeding), fees, indemnities, repurchase price,
expenses or otherwise) (collectively, the "Senior Obligations"). The
subordination provisions contained herein are for the direct benefit of, and may
be enforced by, any holder of a Senior Obligation, and may not be terminated,
amended or otherwise revoked until the Senior Obligations have been indefeasibly
paid in full in cash and the Related Documents terminated in accordance with
their respective terms. Upon the occurrence and during the continuance of any
Termination Event or Incipient Termination Event, the Subordinated Lender shall
not demand, accelerate, ▇▇▇ for, take, receive or accept from the Borrower,
directly or indirectly, in cash or other property or by set-off or any other
manner (including, without limitation, from or by way of collateral) any payment
of or security for all or any part of the indebtedness under this Subordinated
Note or exercise any remedies or take any action or proceeding to enforce the
same. The Subordinated Lender hereby agrees that prior to the date that is one
year and one day after all of the Senior Obligations have been indefeasibly paid
in full in cash and the Related Documents terminated in accordance with their
respective terms, the Subordinated Lender will not take any action to institute
any Insolvency Proceeding in
respect of the Borrower or which would be reasonably likely to cause the
Borrower to be subject to, or seek the protection of, any such Insolvency
Proceeding.
If the Borrower becomes subject to any Insolvency Proceeding,
then the holders of the Senior Obligations shall receive payment in full of all
amounts due or to become due on or with respect to the Senior Obligations before
the Subordinated Lender shall be entitled to receive any payment on account of
this Subordinated Note. Accordingly, any payment or distribution of assets of
the Borrower of any kind or character, whether in cash, securities or other
property, in any applicable Insolvency Proceeding, that would otherwise be
payable to or deliverable upon or with respect to any or all indebtedness under
this Subordinated Note, is hereby assigned to and shall be paid or delivered by
the person making such payment or delivery (whether a trustee in bankruptcy, a
receiver, custodian or liquidating trustee or otherwise) directly to the
Administrative Agent for application to, or as collateral for the payment of,
the Senior Obligations until such Senior Obligations shall have been
indefeasibly paid in full in cash.
In no contingency or event whatsoever, whether by reason of
advancement of the proceeds hereof or otherwise, shall the amount paid or agreed
to be paid to Subordinated Lender for the use, forbearance or detention of money
advanced hereunder exceed the highest rate of interest permissible under law
(the "Maximum Lawful Rate"). In the event that a court of competent jurisdiction
determines that Subordinated Lender has charged or received interest hereunder
in excess of the Maximum Lawful Rate, the amount of interest payable hereunder
shall be equal to the amount payable under the Maximum Lawful Rate; provided,
that if at any time thereafter the amount of interest payable to Subordinated
Lender hereunder is less than the amount payable under the Maximum Lawful Rate,
the Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Subordinated Lender from the
making of Subordinated Loans hereunder is equal to the total interest that
Subordinated Lender would have received had the amount of interest payable to
Subordinated Lender hereunder been (but for the operation of this paragraph)
paid. Thereafter, the amount of interest payable hereunder shall be the amount
determined in accordance with the terms hereof unless and until the amount so
calculated again exceeds the amount payable under the Maximum Lawful Rate, in
which event this paragraph shall again apply. In no event shall the total
interest received by Subordinated Lender pursuant to the terms hereof exceed the
amount that Lender could lawfully have received had the interest due hereunder
been calculated for the full term hereof at the Maximum Lawful Rate. In the
event the amount payable under the Maximum Lawful Rate is calculated pursuant to
this paragraph, such interest shall be calculated at a daily rate equal to the
Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made. In the event that a court of competent jurisdiction,
notwithstanding the provisions of this Note, shall make a final determination
that Subordinated Lender has received interest hereunder in excess of the
Maximum Lawful Rate, Subordinated Lender shall, to the extent permitted by
applicable law, promptly apply such excess first to any interest due and not yet
paid hereunder, then to the outstanding principal amount of the Subordinated
Loans, then to fees and any other unpaid charges, and thereafter shall refund
any excess to the Borrower or as a court of competent jurisdiction may otherwise
order.
Wherever possible each provision of this Note shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited or invalid under
applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or remaining provisions of this Note.
Time is of the essence of this Note. To the fullest extent
permitted by applicable law, the Borrower expressly waives presentment, demand,
diligence, protest and all notices of any kind whatsoever with respect to this
Note.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
BORROWER HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS NOTE,
THE SALE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, WHETHER
ARISING IN CONTRACT, TORT OR OTHERWISE.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO
THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
signed and delivered by its duly authorized officer as of the date set forth
above.
ADVANCE FUNDING CORPORATION
By:
---------------------------------------------
Name:
Title:
SCHEDULE OF LOANS TO SUBORDINATED NOTE
Amount of Amount of Unpaid Principal Notation made by
Date Subordinated Loan Principal Paid Balance (initials)
---- ----------------- -------------- ---------------- ----------------
Exhibit 6.2(a)
FORM OF PARENT NOTE
_______ __, 2001
FOR VALUE RECEIVED, the undersigned,
ADVANCEPCS (the
"Borrower"), hereby promises to pay to the order of AFC RECEIVABLES HOLDING
CORPORATION, a Delaware corporation (the "Lender"), or its assigns at, c/o
Entity Services, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other place as the holder of this Parent Note ("Note") may designate from
time to time in writing, in lawful money of the United States of America and in
immediately available funds, the Maximum Purchase Limit or, if less, the
aggregate unpaid principal amount of the Parent Loan (as defined in the Sale
Agreement referred to below) made to the Borrower, upon the earlier to occur of
(i) the Final Purchase Date and (ii) the Termination Date (in each case, as
defined in Annex X to the Sale Agreement referred to below), together with
interest thereon at the Prime Rate (the "Interest Rate") on the unpaid principal
amount of the Parent Loan for the period commencing on and including the date of
the Note to but excluding the date the Note is paid in full. Notwithstanding
anything in the foregoing to the contrary, the Lender may, at any time, demand
payment of principal for the following reasons: (A) to avoid a capital
contribution under Section 2.1 of the Purchase and Contribution Agreement, and
(B) for the payment of any taxes or operating expenses which may be incurred by
the Lender.
The date, amount and interest rate of the Parent Loan made by
the Lender to the Borrower, and each payment made by or on behalf of the
Borrower on account of the principal thereof, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by the Lender on the
schedule attached hereto or any continuation thereof. The books of the Lender
and such schedule shall be presumptive evidence of the amounts due and owing to
the Lender by the Borrower; provided; that any failure of the Lender to record a
notation in its books or on the schedule to this Note as aforesaid or any error
in so recording shall not limit or otherwise affect the obligation of the
Borrower to repay the Parent Loan in accordance with the terms set forth herein.
All capitalized terms, unless otherwise defined herein, shall
have the meanings assigned to them in the
Receivables Sale and Contribution
Agreement of even date herewith (as the same may be subsequently amended,
restated or otherwise modified, the "Sale Agreement") by and among the Lender,
the Borrower, ADVP Management L.P. and Advance Funding Corporation. This Note is
issued pursuant to the Sale Agreement and is the Parent Note referred to
therein. All of the terms, covenants and conditions of the Sale Agreement and
all other instruments evidencing the indebtedness hereunder, including the other
Related Documents, are hereby made a part of this Note and are deemed
incorporated herein in full.
Interest shall be payable on the outstanding principal amount
of this Note monthly in arrears on each Interest Payment Date. All computations
of interest shall be made by the Lender on the basis of a 360 day year, in each
case for the actual number of days occurring in the period for which such
interest is payable. The Interest Rate shall be determined (i) on the first
Business Day immediately prior to the Closing Date for calculation of the
Interest Rate for the period from the Closing Date through the end of the first
calendar month following the Closing Date, and (ii) as of the last Business Day
of each month for use in calculating the interest that is payable for the
following calendar month, and the Interest Rate so determined shall be utilized
for such calendar month. Each determination by the Lender of an interest rate
hereunder shall be final, binding and conclusive on the Borrower (absent
manifest error). The Borrower shall pay interest at the applicable Interest Rate
on unpaid interest on the Parent Loan or any installment thereof, and on any
other amount payable by the Borrower hereunder (to the extent permitted by law)
that shall not be paid in full when due (whether at stated maturity, by
acceleration or otherwise) for the period commencing on the due date thereof to
(but excluding) the date the same is indefeasibly paid in full.
If any payment or repayment on this Note becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the Interest Rate during such
extension.
In no contingency or event whatsoever, whether by reason of
advancement of the proceeds hereof or otherwise, shall the amount paid or agreed
to be paid to Lender for the use, forbearance or detention of money advanced
hereunder exceed the highest rate of interest permissible under law (the
"Maximum Lawful Rate"). In the event that a court of competent jurisdiction
determines that Lender has charged or received interest hereunder in excess of
the Maximum Lawful Rate, the amount of interest payable hereunder shall be equal
to the amount payable under the Maximum Lawful Rate; provided, that if at any
time thereafter the amount of interest payable to Lender hereunder is less than
the amount payable under the Maximum Lawful Rate, the Borrower shall continue to
pay interest hereunder at the Maximum Lawful Rate until such time as the total
interest received by Lender from the making of the Parent Loan hereunder is
equal to the total interest that Lender would have received had the amount of
interest payable to Lender hereunder been (but for the operation of this
paragraph) paid. Thereafter, the amount of interest payable hereunder shall be
the amount determined in accordance with the terms hereof unless and until the
amount so calculated again exceeds the amount payable under the Maximum Lawful
Rate, in which event this paragraph shall again apply. In no event shall the
total interest received by Lender pursuant to the terms hereof exceed the amount
that Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. In the event the
amount payable under the Maximum Lawful Rate is calculated pursuant to this
paragraph, such interest shall be calculated at a daily rate equal to the
Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made. In the event that a court of competent jurisdiction,
notwithstanding the provisions of this Note, shall make a final determination
that Lender has received interest hereunder in excess of the Maximum Lawful
Rate, Lender shall, to the extent permitted by applicable law, promptly apply
such excess first to any interest due and not yet paid hereunder, then to the
outstanding principal amount of the Parent Loans, then to fees and any other
unpaid charges, and thereafter shall refund any excess to the Borrower or as a
court of competent jurisdiction may otherwise order.
Notwithstanding anything herein to the contrary, each of the
Lender, as the holder of this Note, and the Borrower, as the maker of this Note,
hereby represents, warrants and
covenants as to the following: (a) there shall be no set-off right between
amounts due under this Note and amounts due to or from the Borrower or any of
its Affiliates to any Person in respect of any of the Receivables, under the
Parent Guaranty and/or any other obligation of the Borrower or any of its
Affiliates, (b) the obligation represented by this Note shall not be secured by
any Receivable or any other asset of the Borrower, (c) notwithstanding this Note
and any transfer of any Receivables or any other property to the Lender from the
Originator, any such transfer of a Receivable or any other property is not, and
will not be made in extinguishment of or to secure an obligation of the Borrower
to repay any amount at any time due under this Note or the Intercompany Note.
Furthermore, the Borrower hereby waives its right to assert any claim contrary
to clause (c) above.
Wherever possible each provision of this Note shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or remaining provisions of this Note.
Time is of the essence of this Note. To the fullest extent
permitted by applicable law, the Borrower expressly waives presentment, demand,
diligence, protest and all notices of any kind whatsoever with respect to this
Note.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
BORROWER HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS NOTE,
THE SALE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, WHETHER
ARISING IN CONTRACT, TORT OR OTHERWISE.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO
THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
signed and delivered by its duly authorized officer as of the date set forth
above.
ADVANCEPCS
By:
---------------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED TO AS OF THE
DATE FIRST ABOVE WRITTEN:
AFC RECEIVABLES HOLDING CORPORATION
By:
---------------------------------------------
Name:
Title:
SCHEDULE OF LOANS TO PARENT NOTE
Unpaid
Amount of Amount of Principal Notation made
Date Parent Loan Principal Paid Balance by (initials)
---- ----------- -------------- --------- -------------
Exhibit 6A.2(a)
FORM OF INTERCOMPANY NOTE
_______ __, 2001
FOR VALUE RECEIVED, the undersigned,
ADVANCEPCS (the
"Borrower"), hereby promises to pay to the order of AFC RECEIVABLES HOLDING
CORPORATION, a Delaware corporation (the "Lender"), or its assigns at, c/o
Entity Services, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other place as the holder of this Intercompany Note ("Note") may designate
from time to time in writing, in lawful money of the United States of America
and in immediately available funds, the aggregate unpaid principal amount of the
Intercompany Loans (as defined in the Sale Agreement referred to below) made to
the Borrower, upon the earlier to occur of (i) the Final Purchase Date and (ii)
the Termination Date (in each case, as defined in Annex X to the Sale Agreement
referred to below), together with interest thereon at the Prime Rate (the
"Interest Rate") on the unpaid principal amount of the Intercompany Loans for
the period commencing on and including the date of the Note to but excluding the
date the Note is paid in full. Notwithstanding anything in the foregoing to the
contrary, the Lender may, at any time, demand payment of principal for the
payment of any taxes or operating expenses which may be incurred by the Lender.
The date, amount and interest rate of the Intercompany Loans
made by the Lender to the Borrower, and each payment made by or on behalf of the
Borrower on account of the principal thereof, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by the Lender on the
schedule attached hereto or any continuation thereof. The books of the Lender
and such schedule shall be presumptive evidence of the amounts due and owing to
the Lender by the Borrower; provided; that any failure of the Lender to record a
notation in its books or on the schedule to this Note as aforesaid or any error
in so recording shall not limit or otherwise affect the obligation of the
Borrower to repay the Intercompany Loans in accordance with the terms set forth
herein.
All capitalized terms, unless otherwise defined herein, shall
have the meanings assigned to them in the
Receivables Sale and Contribution
Agreement of even date herewith (as the same may be subsequently amended,
restated or otherwise modified, the "Sale Agreement") by and among the Lender,
the Borrower, ADVP Management L.P. and Advance Funding Corporation. This Note is
issued pursuant to the Sale Agreement and is the Intercompany Note referred to
therein. All of the terms, covenants and conditions of the Sale Agreement and
all other instruments evidencing the indebtedness hereunder, including the other
Related Documents, are hereby made a part of this Note and are deemed
incorporated herein in full.
Interest shall be payable on the outstanding principal amount
of this Note monthly in arrears on each Interest Payment Date. All computations
of interest shall be made by the
Lender on the basis of a 360 day year, in each case for the actual number of
days occurring in the period for which such interest is payable. The Interest
Rate shall be determined (i) on the first Business Day immediately prior to the
Closing Date for calculation of the Interest Rate for the period from the
Closing Date through the end of the first calendar month following the Closing
Date, and (ii) as of the last Business Day of each month for use in calculating
the interest that is payable for the following calendar month, and the Interest
Rate so determined shall be utilized for such calendar month. Each determination
by the Lender of an interest rate hereunder shall be final, binding and
conclusive on the Borrower (absent manifest error). The Borrower shall pay
interest at the applicable Interest Rate on unpaid interest on the Intercompany
Loans or any installment thereof, and on any other amount payable by the
Borrower hereunder (to the extent permitted by law) that shall not be paid in
full when due (whether at stated maturity, by acceleration or otherwise) for the
period commencing on the due date thereof to (but excluding) the date the same
is indefeasibly paid in full.
If any payment or repayment on this Note becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the Interest Rate during such
extension.
In no contingency or event whatsoever, whether by reason of
advancement of the proceeds hereof or otherwise, shall the amount paid or agreed
to be paid to Lender for the use, forbearance or detention of money advanced
hereunder exceed the highest rate of interest permissible under law (the
"Maximum Lawful Rate"). In the event that a court of competent jurisdiction
determines that Lender has charged or received interest hereunder in excess of
the Maximum Lawful Rate, the amount of interest payable hereunder shall be equal
to the amount payable under the Maximum Lawful Rate; provided, that if at any
time thereafter the amount of interest payable to Lender hereunder is less than
the amount payable under the Maximum Lawful Rate, the Borrower shall continue to
pay interest hereunder at the Maximum Lawful Rate until such time as the total
interest received by Lender from the making of Intercompany Loans hereunder is
equal to the total interest that Lender would have received had the amount of
interest payable to Lender hereunder been (but for the operation of this
paragraph) paid. Thereafter, the amount of interest payable hereunder shall be
the amount determined in accordance with the terms hereof unless and until the
amount so calculated again exceeds the amount payable under the Maximum Lawful
Rate, in which event this paragraph shall again apply. In no event shall the
total interest received by Lender pursuant to the terms hereof exceed the amount
that Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. In the event the
amount payable under the Maximum Lawful Rate is calculated pursuant to this
paragraph, such interest shall be calculated at a daily rate equal to the
Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made. In the event that a court of competent jurisdiction,
notwithstanding the provisions of this Note, shall make a final determination
that Lender has received interest hereunder in excess of the Maximum Lawful
Rate, Lender shall, to the extent permitted by applicable law, promptly apply
such excess first to any interest due and not yet paid hereunder, then to the
outstanding principal amount of the Intercompany Loans, then to fees and any
other unpaid charges, and thereafter shall refund any excess to the Borrower or
as a court of competent jurisdiction may otherwise order.
Notwithstanding anything herein to the contrary, each of the
Lender, as the holder of this Note, and the Borrower as the maker of this Note,
hereby represents, warrants and covenants as to the following: (a) there shall
be no set-off right between amounts due under this Note and amounts due to or
from the Borrower or any of its Affiliates to any Person in respect of any of
the Receivables, under the Parent Guaranty and/or any other obligation of the
Borrower or any of its Affiliates, (b) the obligation represented by this Note
shall not be secured by any Receivable or any other asset of the Borrower, (c)
notwithstanding this Note and any transfer of any Receivables or any other
property to the Lender from the Originator, any such transfer of a Receivable or
any other property is not, and will not be made in extinguishment of or to
secure an obligation of the Borrower to repay any amount at any time due under
this Note or the Parent Note. Furthermore, the Borrower hereby waives its right
to assert any claim contrary to clause (c) above.
Wherever possible each provision of this Note shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or remaining provisions of this Note.
Time is of the essence of this Note. To the fullest extent
permitted by applicable law, the Borrower expressly waives presentment, demand,
diligence, protest and all notices of any kind whatsoever with respect to this
Note.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
BORROWER HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS NOTE,
THE SALE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, WHETHER
ARISING IN CONTRACT, TORT OR OTHERWISE.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
signed and delivered by its duly authorized officer as of the date set forth
above.
ADVANCEPCS
By:
---------------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED TO AS OF THE
DATE FIRST ABOVE WRITTEN:
AFC RECEIVABLES HOLDING CORPORATION
By:
---------------------------------------------
Name:
Title:
SCHEDULE OF LOANS TO INTERCOMPANY NOTE
Amount of Unpaid
Intercompany Amount of Principal Notation made
Date Loan Principal Paid Balance by (initials)
---- ------------ -------------- --------- -------------
Schedule 4.1(b)
Formation Jurisdiction; Executive Offices; Collateral Locations;
Corporate Names; Trade Names; FEIN
SCHEDULE 4.1(B)
Jurisdiction of incorporation: Delaware.
The Receivables Seller's chief executive office and principal place of business
are located at ▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Locations of Receivables Seller's offices, the warehouses and premises within
which any Receivables Collateral has been stored or located, and the locations
of all records concerning Receivables Collateral over the past 12 months and
names in which Receivables Collateral at such locations has been held over the
past 12 months are as follows:
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇*
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇*
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
Cardinal Tech Park
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
92 Mountain View Office Complex
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
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ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇*
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, ▇.▇.
▇▇▇▇▇▇ Center IV
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇*
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AdvancePCS Health, L.P.
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AdvancePCS, L.P.
AdvancePCS Health, L.P.
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*Locations where Receivables Collateral has been stored or located over the past
twelve (12) months.
Trade names: none.
FEIN: ▇▇-▇▇▇▇▇▇▇
Schedule 4.1(d)
Litigation
None.
Schedule 4.1(h)
Ventures, Subsidiaries and Affiliates; Outstanding Stock
Subsidiaries: Advance Funding Corporation.
The following entities are Affiliates of the Receivables Seller:
AdvancePCS
AdvancePCS Health Systems, LLC
ADVP Consolidation, L.L.C.
AdvancePCS Research, L.L.C.
AdvancePCS Health, L.P.
ADVP Management, L.P.
▇▇▇▇▇▇▇▇▇.▇▇▇, ▇.▇.
▇▇▇▇▇▇-▇▇▇▇▇▇ Neuromedical Institute, Inc.
First Florida International Holdings, Inc.
FFI Rx Managed Care, Inc.
Ambulatory Care Review Services, Inc.
HMN Health Services, Inc.
AdvancePCS Holding Corporation
AdvancePCS Puerto Rico, Inc.
AdvancePCS SpecialtyRx, LLC
AdvancePriority SpecialtyRx LLC
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇, Inc.
TheraCom, Inc.
Consumer Health Interactive, Inc.
AdvancePCS Mail Services of Birmingham, Inc.
Ownership: At closing, AdvancePCS Health, L.P. owns 100% of the stock of the
Receivables Seller.
Schedule 4.1(i)
Tax Matters
None.
Schedule 4.1(r)
Deposit and Disbursement Accounts
As of the Closing Date, the following accounts will be in the name of AFC
Receivables Holding Corporation:
1. Bank of America
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone # (▇▇▇) ▇▇▇-▇▇▇▇
Account # 12330355135
ACH and wire transfers are sent to this account for non-securitized
receivables and general receipts.
Lockboxes attached to account:
AdvancePCS
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This lockbox receives checks for non -securitized receivables and
general receipts.
Service Benefit Plan
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
This lockbox is being set-up to receive refund recovery checks from
members in the FEP program and will replace the ▇▇▇▇▇▇ FEP Lock Box.
2. ▇.▇. ▇▇▇▇▇▇ Chase
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone # (▇▇▇) ▇▇▇-▇▇▇▇
Account # 07001229780
This account receives wire payments for data service claims.
3. Bank One
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone # (▇▇▇) ▇▇▇-▇▇▇▇
Lockbox - Account # 1576386856
This lockbox receives checks for payment of data service claims.
Lockbox Address:
Bank One
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Schedule 4.3(b)
Existing Liens
All Liens imposed pursuant to the terms and conditions of the Senior Credit
Facility.