Exhibit 10.2
RECEIVABLES SALE AGREEMENT
RECEIVABLES SALE AGREEMENT, dated as of May 1, 2001 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"AGREEMENT"), among UNITED STATIONERS FINANCIAL SERVICES LLC, an Illinois
limited liability company ("USFC"); USS RECEIVABLES COMPANY, LTD., a Cayman
Islands limited liability company (the "COMPANY"); and USFC, in its capacity as
servicer (the "SERVICER").
W I T N E S S E T H :
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Sellers (as defined herein), USFC, and the Servicer, have entered
into an Amended and Restated Receivables Sale Agreement (as amended,
supplemented or otherwise modified and in effect from time to time, the "Amended
and Restated Receivables Sale Agreement") dated as of the date hereof, pursuant
to which the Sellers have agreed to sell and USFC has agreed to purchase
Receivables and Receivables Property (each as defined herein);
WHEREAS, USFC intends to sell Receivables and Receivables Property
(both as hereinafter defined) to the Company on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the Company desires to purchase Receivables and Receivables
Property from USFC on the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, USFC and the Company desire the sale of Receivables and
Receivables Property from the Sellers to the Company to be a true sale providing
the Company with the full benefits of ownership of the Receivables; and
WHEREAS, to obtain a portion of the necessary funds to purchase such
Receivables and Receivables Property, the Company has entered into the Amended
and Restated Pooling Agreement, the Second Amended and Restated Series 1998-1
Supplement and the Amended and Restated Series 2000-1 Supplement, each dated as
of the date hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 CERTAIN DEFINED TERMS. (a) As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ABR" means, for any day, rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate.
"AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT" has the meaning
specified in the receitals hereto.
"AUTHORIZED OFFICERS" means those officers of USFC designated in
Schedule I hereto (or in such other Schedule as may be delivered by USFS to the
other parties hereto from time to time) as duly authorized to execute and
deliver this Agreement and any instruments or documents in connection herewith
on behalf of USFS and to take, from time to time, all other actions on behalf of
USFS in connection herewith.
"CLOSING DATE" means May 1, 2001.
"CODE" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder or any successor statute and related regulations.
"CONTRACT" means a contract between any Seller and any Person pursuant
to or under which such Person shall be obligated to make payments to such
Seller.
"DISCOUNTED PERCENTAGE" has the meaning specified in Schedule VII
hereto.
"DOCUMENTS" has the meaning specified in subsection 5.01(r)(iv)(B).
"EARLY TERMINATION" has the meaning specified in Section 6.01.
"EFFECTIVE DATE" means May 1, 2001.
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"ERISA AFFILIATE" means, with respect to any Person, any trade or
business (whether or not incorporated) that is a member of a group of which such
Person is a member and which is treated as a single employer under Section 414
of the Code.
"EXCLUDED RECEIVABLE" means any Receivable which either (i) arises
from any Seller's advertising business; (ii) is owed by a Person who is not a
resident of the United States, its territories or possessions and/or a payment
obligation of a Person that is not denominated and payable in U.S. Dollars in
the United States; (iii) is owed by a Governmental Authority; or (iv) the
payment for which is evidenced or required to be evidenced by a note or other
promissory instrument; provided that in the event any Excluded Receivable is
included in a Required Report, for the purposes of Section 2.01 hereof and
Section 2.1 of the Pooling Agreement and the definition of "Collections", such
receivable shall not be an Excluded Receivable.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by The Chase Manhattan Bank from three federal funds
brokers of recognized standing selected by The Chase Manhattan Bank.
"INDEMNIFIED AMOUNTS" has the meaning specified in Section 7.01.
"INITIAL CLOSING DATE" means the date of the initial issuance of the
Investor Certificates.
"INITIAL SUBORDINATED NOTE AMOUNT" has the meaning specified in
subsection 8.01(b).
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or other similar right
of a third party with respect to such securities; PROVIDED, HOWEVER, that if a
lien is imposed under Section 412(n) of the Code or Section 302(f) of ERISA for
a failure to make a required installment or other payment to a plan to which
Section 412(n) of the Code or Section 302(f) of ERISA applies, then such lien
shall not be treated as a "Lien" from and after the time any
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Person who is obligated to make such payment pays to such plan the amount of
such lien determined under Section 412(n)(3) of the Code or Section 302(f)(3) of
ERISA, as the case may be, and provides to the Trustee, any Agent and each
Rating Agency written evidence reasonably satisfactory to the Rating Agencies of
the release of such lien, or such lien expires pursuant to Section 412(n)(4)(B)
of the Code or Section 302(f)(4)(B) of ERISA.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the meaning
of Section 4001(a)(3) of ERISA) and to which such Person or any ERISA Affiliate
of such Person (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code) is making or accruing an
obligation to make contributions, or has within any of the preceding five years
made or accrued an obligation to make contributions.
"OUTSTANDING SALE PRICE AMOUNT" means, at any time, the aggregate
Purchase Price received by USFC or, prior to the Effective Date, by the Sellers
from the Company with respect to the aggregate outstanding Principal Amount at
such time of the Purchased Receivables or, prior to the Effective Date, received
by the applicable Seller.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PAYMENT DATE" has the meaning specified in subsection 2.03(a).
"PLAN" means, with respect to any Person, any pension plan (other than
a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code which is maintained for employees of such Person or any ERISA
Affiliate of such Person.
"POOLING AGREEMENT" means the Amended and Restated Pooling Agreement,
dated as of the date hereof, among the Company, the Servicer and the Trustee on
behalf of the Holders, as such agreement may be further amended, supplemented,
waived, or otherwise modified from time to time, including, without limitation,
the Series 1998-1 Supplement.
"POTENTIAL PURCHASE TERMINATION EVENT" means any condition or act
specified in Section 6.01 that, with the giving of notice or the lapse of time
or both, would become a Purchase Termination Event.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
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principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"PURCHASE PRICE" has the meaning specified in Section 2.02.
"PURCHASE TERMINATION DATE" means the date on which the Company's
obligation to purchase Receivables from USFC shall terminate, which shall be the
date on which an Early Termination occurs with respect to USFC.
"PURCHASE TERMINATION EVENT" has the meaning specified in Section
6.01.
"PURCHASED RECEIVABLE" means, at any time, any Receivable sold to the
Company by USFC pursuant to, and in accordance with the terms of, this Agreement
and not theretofore resold to USFC pursuant to subsection 2.01(b) or Section
2.06.
"RECEIVABLE" means the indebtedness and payment obligations of any
Person to a Seller (including, without limitation, obligations constituting an
account or general intangible or evidenced by a note, instrument, contract,
security agreement, chattel paper or other evidence of indebtedness or security)
arising from a sale of merchandise or the provision of services by such Seller,
including, without limitation, any right to payment for goods sold or for
services rendered, and including the right to payment of any interest, sales
taxes, finance charges, returned check or late charges and other obligations of
such Person with respect thereto; provided that, except as otherwise expressly
provided, for all purposes hereunder "Receivables" shall not include Excluded
Receivables.
"RECEIVABLES LIST" has the meaning specified in subsection 2.01(e).
"RECEIVABLES PROPERTY" has the meaning specified in subsection
2.01(a).
"RELATED PROPERTY" means, with respect to each Receivable:
(a) all of USFS's interest in the goods (including returned goods),
if any, relating to the sale which gave rise to such Receivable;
(b) all other security interests or Liens, and USFS's interest in
the property subject thereto from time to time purporting to secure payment of
such Receivable, together with all financing statements signed by an Obligor
describing any collateral securing such Receivable; and
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(c) all guarantees, insurance, letters of credit and other agreements
or arrangements of whatever character from time to time supporting or securing
payment of such Receivable;
in the case of clauses (b) and (c), whether pursuant to the contract related to
such Receivable or otherwise or including without limitation, pursuant to any
obligations evidenced by a note, instrument, contract, security agreement,
chattel paper or other evidence of indebtedness or security and the proceeds
thereof.
"RELEVANT UCC STATE" means each jurisdiction in which the filing of a
UCC financing statement is necessary or desirable to perfect the Company's
interest in the Receivables.
"REPORTABLE EVENT" means any reportable event as defined in Section
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate which is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).
"SEC" means the United States Securities and Exchange Commission.
"SELLER ADJUSTMENT PAYMENT" has the meaning specified in Section 2.05.
"SELLER REPURCHASE PAYMENT" has the meaning specified in Section 2.06.
"SELLERS" shall mean United Stationers Supply Co. in its capacity as
Seller under the Amended and Restated Receivables Sale Agreement and any
directly or indirectly wholly-owned subsidiary of United Stationers Inc. which
has been added as a Seller in accordance with the provisions of the Amended and
Restated Receivables Sale Agreement and the other Transaction Documents (but, in
each case, excluding any such Subsidiaries which have been terminated as Sellers
in accordance with the provisions thereof and of the other Transaction
Documents), all of the foregoing in their capacities as Sellers under the
Receivables Sale Agreement; each, individually, a "SELLER".
"SERIES 1998-1 SUPPLEMENT" means the Second Amended and Restated
Series 1998-1 Supplement, dated as of the date hereof, among the Company, the
Servicer and the Trustee, to the Pooling Agreement, as each such agreement may
be further amended, supplemented or otherwise modified from time to time.
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"SUBORDINATED NOTE" has the meaning specified in Section 8.01.
"UCC CERTIFICATE" means a certificate substantially in the form of
Exhibit C hereto.
"USSC" means United Stationers Supply Co., an Illinois corporation.
"WITHDRAWAL LIABILITIES" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
(b) All capitalized terms used herein and not otherwise defined have
the meanings assigned such terms in Section 1.1 of the Pooling Agreement.
Section 1.02 ACCOUNTING AND UCC TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP; and all
terms used in Article 9 of the UCC that are used but not specifically defined
herein are used herein as defined therein.
Section 1.03 OTHER TERMS. The words "herein", "hereof", and
"hereunder" and words of similar import refer to this Agreement as a whole,
including the exhibits and schedules hereto, as the same may from time to time
be amended or supplemented, and not to any particular section, subsection or
clause contained in this Agreement, and all references to Sections, subsections,
Exhibits and Schedules shall mean, unless the context clearly indicates
otherwise, the Sections and subsections hereof and the Exhibits and Schedules
attached hereto, the terms of which Exhibits and Schedules are hereby
incorporated into this Agreement. Whenever appropriate, in the context, terms
used herein in the singular also include the plural, and vice versa.
Section 1.04 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
Section 2.01 PURCHASE AND SALE OF RECEIVABLES. (a) USFC hereby sells,
assigns, transfers and conveys to the Company, without recourse (except to the
limited extent provided herein), all its respective right, title and interest
in, to and
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under (i) all Receivables now existing and hereafter arising from time to time,
(ii) all payment and enforcement rights (but none of the obligations) with
respect to such Receivables, (iii) all Related Property in respect of such
Receivables, (iv) all Collections with respect to the foregoing clauses (i),
(ii) and (iii) (the payment and enforcement rights, Related Property and
Collections referred to in clauses (ii), (iii) and (iv) above are hereinafter
collectively referred to as the "RECEIVABLES PROPERTY"), (v) all its rights
under the Amended and Restated Receivables Sale Agreement and (vi) all proceeds
of the foregoing.
(b) On the Effective Date and on the date of creation of each newly
created Receivable (but only so long as no Early Termination shall have occurred
and be continuing), all of USFC's right, title and interest in, to and under (i)
in the case of the Effective Date, all then existing Receivables and all
Receivables Property in respect of such Receivables and (ii) in the case of each
such date of creation, all such newly created Receivables and all Receivables
Property in respect of such Receivables shall be immediately and automatically
sold, assigned, transferred and conveyed to the Company pursuant to paragraph
(a) above without any further action by USFC or any other Person. If USFC shall
not have received payment from the Company of the Purchase Price for any newly
created Receivable and the related Receivables Property on the Payment Date
therefor in accordance with the terms of subsection 2.03(b), such newly created
Receivable and the Receivables Property with respect thereto shall, upon receipt
of notice from USFC of such failure to receive payment, immediately and
automatically be sold, assigned, transferred and reconveyed by the Company to
USFC without any further action by the Company or any other Person.
(c) The parties to this Agreement intend that the transactions
contemplated by subsections 2.01(a) and (b) hereby shall be, and shall be
treated as, a purchase by the Company and a sale by USFC of the Purchased
Receivables and the Receivables Property in respect thereof and not a loan
secured by such Purchased Receivables and Receivables Property. All sales of
Receivables and Receivables Property by USFC hereunder shall be without recourse
to, or representation or warranty of any kind (express or implied) by, USFC,
except as otherwise specifically provided herein. The foregoing sale,
assignment, transfer and conveyance does not constitute and is not intended to
result in a creation or assumption by the Company of any obligation of USFC or
any other Person in connection with the Receivables, the Receivables Property or
any agreement or instrument relating thereto, including any obligation to any
Obligor. If this Agreement does not constitute a valid sale, assignment,
transfer and conveyance of all right, title and interest of USFC in, to and
under the Purchased Receivables and the Receivables Property in respect thereof
despite the intent of the parties hereto, USFC hereby grants a "security
interest" (as
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defined in the UCC) in the Purchased Receivables, the Receivables Property in
respect thereof its rights under the Amended and Restated Receivables Sale
Agreement and all proceeds thereof to the Company and the parties agree that
this Agreement shall constitute a security agreement under the UCC.
(d) In connection with the foregoing conveyances, USFC agrees to
record and file, at its own expense, financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables and Receivables Property now existing and hereafter
acquired by the Company from USFC meeting the requirements of applicable state
law in such manner and in such jurisdictions as are necessary to perfect the
Company's ownership or security interest in the Receivables and Receivables
Property and its rights under the Amended and Restated Receivables Sale
Agreement, and to deliver evidence of the execution and delivery of such
financing statements to the Company on or prior to the related Effective Date.
(e) In connection with the foregoing conveyances, USFC agrees at its
own expense, as agent of the Company, (i) to indicate, or cause to be indicated,
on the computer files containing a master database of Receivables that all
Receivables included in such files and all Receivables Property, have been sold
to the Company in accordance with this Agreement and (ii) to deliver, or cause
to be delivered, to the Company computer files, microfiche lists, a typed or
printed list or other tangible evidence reasonably acceptable to the Company (a
"RECEIVABLES LIST") containing true and complete lists (A) on the Closing Date,
of (I) the Obligors whose Receivables have been transferred to the Company prior
to the Closing Date and the balance of the Receivables of each such Obligor as
of the Closing Date and (II) the obligors whose Receivables are to be
transferred to the Company on the Closing Date and the balance of the
Receivables each such Obligor as of the Closing Date and (B) on each Effective
Date, of Obligors whose Receivables are to be transferred to the Company on such
Effective Date and the balance of the Receivables originated by each such
Obligor as of such Effective Date.
Section 2.02 PURCHASE PRICE. The amount payable by the Company to USFC
(the "PURCHASE PRICE") for Receivables and Receivables Property on any Payment
Date under this Agreement shall be equal to the product of (a) the aggregate
outstanding Principal Amount of such Receivables as set forth in the applicable
Required Report and (b) the Discounted Percentage.
Section 2.03 PAYMENT OF PURCHASE PRICE. (a) Upon the fulfillment of
the conditions set forth in Article III, the Purchase Price for Receivables and
the Receivables Property shall be paid or provided for by the Company in the
manner provided below on each day for which a Required Report is delivered
pursuant to
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Section 4.1 of the Servicing Agreement (each such day, a "PAYMENT DATE") in
respect of a Reported Period (which Required Report shall specify the Principal
Amount of Receivables being sold on such Payment Date, the aggregate Purchase
Price for such Receivables and the components of payment as provided in
paragraph (b) below). USFC hereby appoints the Servicer as its agent to receive
payments of the Purchase Price of the Receivables and the Receivables Property
sold to the Company and hereby authorizes the Company to make all such payments
due to USFC directly to an account of, or as otherwise directed by, the
Servicer. The Servicer hereby accepts and agrees to such appointment. All
payments under this Agreement shall be made not later than 3:00 p.m. (New York
City time) on the date specified therefor in Dollars in same day funds or by
check, as the Servicer shall elect, and to the bank account designated in
writing by the Servicer to the Company.
(b) The Purchase Price for Receivables and Receivables Property shall
be paid by the Company on each Payment Date as follows:
(i) by netting the amount of any Seller Adjustment
Payments or Seller Repurchase Payments pursuant to Section 2.05 or 2.06,
respectively, against such Purchase Price;
(ii) to the extent available for such purpose, in cash
from Collections released to the Company pursuant to the Pooling Agreement;
(iii) to the extent available for such purpose, in cash
from the net proceeds of a transfer of interests in Purchased Receivables
by the Company to other Persons;
(iv) at the option of the Company, by means of an addition
to the principal amount of the Subordinated Note in an aggregate amount
equal to the remaining portion of the Purchase Price; PROVIDED, HOWEVER,
that the outstanding principal amount of the Subordinated Note shall not at
any time exceed 25% of the Outstanding Sale Price Amount; PROVIDED,
FURTHER, that the Company may pay the Purchase Price by means of additions
to the principal amount of the Subordinated Note only if, at the time of
such payment and after giving effect thereto, the fair market value of the
Company's assets, including, without limitation, any beneficial interests
in or indebtedness of a trust and all Receivables and Receivables Property
the Company owns, is greater than the amount of its liabilities including
its liabilities on the Subordinated Note and all interest and other fees
due and payable under the Pooling Agreement and the other Transaction
Documents. The Servicer may evidence such additional principal amounts by
recording
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the date and amount thereof on the grid attached to such Subordinated Note,
PROVIDED that the failure to make any such recordation or any error in such
grid shall not adversely affect USFC's rights; and
(v) in cash from the proceeds of capital contributed by
USSC to the Company, if any, in respect of its equity interest in the
Company.
(c) Whenever any payment to be made under this Agreement shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day. Amounts not paid when due in accordance
with the terms of this Agreement shall bear interest at a rate equal at all
times to the ABR PLUS 2%, payable on demand.
Section 2.04 NO REPURCHASE. Except to the extent expressly set forth
herein, USFC shall have no right or obligation under this Agreement, by
implication or otherwise, to repurchase from the Company any Purchased
Receivables or Receivables Property or to rescind or otherwise retroactively
affect any purchase of any Purchased Receivables or Receivables Property after
the Payment Date relating thereto.
Section 2.05 REBATES, ADJUSTMENTS, RETURNS AND REDUCTIONS;
MODIFICATIONS. From time to time, a Seller under the Amended and Restated
Receivables Sale Agreement may make Dilution Adjustments to Receivables in
accordance with Section 2.05 and subsection 5.03(c) thereof. USFC agrees to pay
to the Company in cash, on the first Business Day immediately succeeding the
date of the grant of any Dilution Adjustment, the amount of any such Dilution
Adjustment (a "SELLER ADJUSTMENT PAYMENT") received by it pursuant to the
Amended and Restated Receivables Sale Agreement; PROVIDED that, prior to the
occurrence of any Early Termination, any such Seller Adjustment Payment due to
the Company on any Payment Date shall, on such Payment Date, be netted against
the Purchase Price of newly purchased Receivables in accordance with subsection
2.03(b)(i) to the extent of such Purchase Price and the remaining amount of such
Seller Adjustment Payment due to the Company after such netting, if any, shall
be paid to the Company on such date in cash. The amount of any Dilution
Adjustment made with respect to any Reported Period shall be set forth on the
Required Report prepared with respect to such Reported Period.
Section 2.06 LIMITED REPURCHASE OBLIGATION. In the event that (i) any
representation or warranty contained in Section 4.02 in respect of any
Receivable transferred to the Company is not true and correct in any material
respect on the applicable Payment Date, or (ii) there is a breach of any
covenant contained in
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subsection 5.01(d), (g) or (h) or Section 5.03 with respect to any Receivable
and such breach has a material adverse effect on the Company's interest in such
Receivable or (iii) the Company's interest in any Receivable is not a first
priority perfected ownership or security interest at any time as a result of any
action taken by, or any failure to take action by, USFC, then USFC agrees to pay
to the Company in cash an amount equal to the Purchase Price of such Receivable
(whether the Company paid such Purchase Price in cash or otherwise) less
Collections received by the Company in respect of such Receivable, such payment
to occur no later than the Payment Date occurring on the 30th day (or, if such
30th day is not a Payment Date, on the Payment Date immediately succeeding such
30th day) after the day such breach or incorrectness becomes known (or should
have become known with due diligence) to USFC (unless such breach or
incorrectness shall have been cured on or before such day); PROVIDED that, prior
to any Early Termination, any such payment due and owing to the Company on such
Payment Date shall be netted against the Purchase Price of newly created
Receivables in accordance with subsection 2.03(b)(i) to the extent of such
Purchase Price and the remaining amount of such payment due to the Company after
such netting, if any, shall be paid to the Company in cash to the extent still
unpaid on such Payment Date. Any payment by USFC pursuant to this Section 2.06
is referred to as a "SELLER REPURCHASE PAYMENT." The obligation to reacquire any
Receivable shall, upon satisfaction thereof, constitute the sole remedy
respecting the event giving rise to such obligation available to the Company.
Simultaneously with any Seller Repurchase Payment with respect to any
Receivable, such Receivable and the Receivables Property with respect thereto
shall immediately and automatically be sold, assigned, transferred and conveyed
by the Company to USFC without any further action by the Company or any other
Person.
Section 2.07 OBLIGATIONS UNAFFECTED. The obligations of USFS to the
Company under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable or any sale of a Receivable.
Section 2.08 CERTAIN CHARGES. USFC and the Company agree that late
charge revenue, reversals of discounts, other fees and charges and other similar
items, whenever created, accrued in respect of Purchased Receivables shall be
the property of the Company notwithstanding the occurrence of an Early
Termination and all Collections with respect thereto shall continue to be
allocated and treated as Collections in respect of Purchased Receivables.
Section 2.09 RESERVED.
Section 2.10 FURTHER ASSURANCES. From time to time at the request of
USFC, the Company shall deliver to USFC such documents, assignments, releases
and instruments of termination as USFC may reasonably request to evidence the
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reconveyance by the Company to USFC of a Receivable pursuant to the terms of
subsection 2.01(b) or Section 2.06, PROVIDED that the Company shall have been
paid all amounts due thereunder; and the Company and the Servicer shall take
such action as USFC may reasonably request, at the expense of USFC, to assure
that any such Receivable, the Related Property and Collections with respect
thereto do not remain commingled with other Collections hereunder.
Section 2.11 PURCHASE OF COMPANY'S INTEREST IN RECEIVABLES AND
RECEIVABLES PROPERTY. (a) In the event of any breach by USFC of any of the
representations and warranties set forth in subsection 4.02(a), (b), (c), (e),
(f) or (g), as of the date made, which breach has a material adverse effect on
the interests of the Company in the Receivables or the Receivables Property,
then the Company, by notice then given in writing to USFC, may direct USFC to
purchase all Receivables and Receivables Property and USFC shall be obligated to
make such purchase on the next Distribution Date occurring at least five
Business Days after receipt of such notice on the terms and conditions set forth
in subsection 2.11(b) below; PROVIDED, HOWEVER, that no such purchase shall be
required to be made if, by such Distribution Date, the representations and
warranties contained in subsections 4.02(a), (b), (c), (e), (f) or (g) shall be
true and correct in all material respects, and any material adverse effect on
the Company caused thereby has been cured.
(b) USFC shall, as the purchase price for the Receivables and
Receivables Property to be purchased pursuant to subsection 2.11(a) above, pay
to the Company, on the Business Day preceding such Distribution Date, an amount
equal to the Purchase Price of the Purchased Receivables, less Collections
received by the Company in respect of such Purchased Receivables, as of such
Distribution Date. Upon payment of such amount, in immediately available funds,
to the Company, the Company's rights with respect to the Purchased Receivables
shall terminate and such interest therein will be transferred to USFC and the
Company shall have no further rights with respect thereto. If the Company gives
notice directing USFC to purchase the Purchased Receivables as provided above,
the obligation of USFC to purchase the Purchased Receivables pursuant to this
Section 2.11 shall upon satisfaction thereof constitute the sole remedy
respecting an event of the type specified in the first sentence of this Section
2.11 available to the Company.
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ARTICLE III
CONDITIONS TO PURCHASES
Section 3.01 CONDITIONS PRECEDENT TO COMPANY'S INITIAL PURCHASE. The
obligation of the Company to purchase Receivables and Receivables Property
hereunder on the Effective Date from USFC is subject to the conditions precedent
that the Company shall have received on or before the date of such purchase the
following, each (unless otherwise indicated) dated the Effective Date and in
form and substance reasonably satisfactory to the Company:
(a) RESOLUTIONS. Copies of the resolutions of the Board of
Directors of USFC approving this Agreement and the other Transaction Documents
to be delivered by USFC and the transactions contemplated thereby, certified by
the Secretary or Assistant Secretary of USFC;
(b) SECRETARY'S CERTIFICATE. A certificate of the Secretary or
Assistant Secretary of USFC certifying the names and true signatures of the
officers authorized on behalf of USFC to sign this Agreement and the other
Transaction Documents to be delivered by it (on which certificates the Company
may conclusively rely until such time as the Company shall receive from USFC a
revised certificate with respect to USFC meeting the requirements of this
subsection (b));
(c) CORPORATE DOCUMENTS. The certificate of formation of USFC,
duly certified by the secretary of state of USFC's jurisdiction of formation, as
of a recent date acceptable to the Company, together with a copy of the limited
liability company agreement of USFC, duly certified by the Secretary or an
Assistant Secretary of USFC;
(d) UCC CERTIFICATE, UCC FINANCING STATEMENTS. (i) A UCC
Certificate duly executed by a Responsible Officer of USFC and dated such date
of purchase and (ii) executed copies of such proper financing statements, filed
prior to the Effective Date, naming USFC as the seller, the Company as the
purchaser and the Trustee on behalf of the Holders as the assignee of the
Receivables, Receivables Property, USFS's rights under the Amended and Restated
Receivables Sale Agreement and all proceeds thereof in each jurisdiction in
which the Company (or any of its assignees) deems it necessary or desirable to
perfect the Company's ownership and/or security interest in all Receivables,
Receivables Property, USFS's rights under the Amended and Restated Receivables
Sale Agreement and all proceeds thereof under the UCC or any comparable law of
such jurisdiction;
(e) UCC SEARCHES. A written search report listing all effective
financing statements that name USFC as debtor or assignor and that are
14
filed in the jurisdictions in which filings were made pursuant to subsection
3.01(d) and in any other jurisdictions that the Company determines are necessary
or appropriate, together with copies of such financing statements (none of
which, except for those described in subsection 3.01(d) shall cover any
Receivables or Receivables Property), and tax and judgment lien searches showing
no such liens that are not permitted by the Transaction Documents;
(f) OTHER TRANSACTION DOCUMENTS. Original copies, executed by
each of the parties thereto, of each of the other Transaction Documents to be
executed and delivered in connection herewith;
(g) BACK-UP SERVICING ARRANGEMENTS. Evidence that USFS maintains
disaster recovery systems and back-up computer and other information management
systems that, in the Company's reasonable judgment, are sufficient to protect
USFS's business against material interruption or loss or destruction of its
primary computer and information management systems and to prevent any
disruption of the servicing of any Receivable conveyed to the Company pursuant
to this Agreement or the Amended and Restated Receivables Sale Agreement.
(h) CONSENTS. Copies of all consents, if any (including, without
limitation, consents under loan agreements and indentures to which any Seller,
USFC or its Affiliates are parties), necessary to consummate the transactions
contemplated by the Transaction Documents;
(i) LEGAL OPINIONS. One or more legal opinions from counsel to
USFC and counsel to the Company to the effect that:
(A) the sales of Receivables by USFC to the Company
pursuant to this Agreement are true sales and that such Receivables would
not be property of USFC's bankruptcy estate;
(B) a court should not order the substantive
consolidation of the assets and liabilities of the Company on the one hand
with those of any Seller or USFS, on the other hand;
(C) to the effect that USFC and the Company, as
applicable, has all approvals, judicial, regulatory, legal or otherwise,
needed to execute, deliver and perform each Transaction Document to which
it is a party and that no conflict or default will occur as a result of the
execution, delivery and performance thereof;
15
(D) to the effect that the Company has a perfected
ownership or security interest in the Receivables and Receivables Property;
and
(E) addressing other customary matters.
All of the legal opinions referred to in this subsection 3.01(i) shall be
addressed to the Trustee and any other Person reasonably requested by the
Company.
(j) LOCKBOX AGREEMENT. With respect to each Lockbox Processor, a
Lockbox Agreement substantially the form of Exhibit A to the Pooling Agreement.
(k) LIST OF OBLIGORS. A Receivables List.
(l) RESERVED.
Section 3.02 RESERVED.
Section 3.03 CONDITIONS PRECEDENT TO EACH OF THE COMPANY'S PURCHASES
OF RECEIVABLES. The obligation of the Company to pay for any Receivable and the
Receivables Property with respect thereto on each Payment Date (including the
Effective Date) shall be subject to the further conditions precedent that, on
and as of such Payment Date:
(a) the following statements shall be true (and the acceptance by
USFC of the Purchase Price for such Receivable on such Payment Date shall
constitute a representation and warranty by USFC that on such Payment Date such
statements are true):
(i) the representations and warranties of USFC contained
in Section 4.02 shall be true and correct in all material respects on and
as of such Payment Date as though made on and as of such date except to the
extent any such representation or warranty is expressly made only as of
another date (in which case it shall be true and correct in all material
respects on and as of such other date);
(ii) after giving effect to such purchase, no (A) Early
Termination or (B) Potential Purchase Termination Event with respect to a
Purchase Termination Event set forth in clause (g)(ii) of Section 6.01
shall have occurred and be continuing; and
16
(iii) there has been no material adverse change since the
date of this Agreement in the collectibility of the Receivables taken as a
whole;
(b) the Company and the Trustee shall be satisfied that USFC's
systems, procedures and record keeping relating to the Purchased Receivables
remain in all material respects sufficient and satisfactory in order to permit
the purchase and administration of the Purchased Receivables in accordance with
the terms and intent of this Agreement;
(c) the Company shall have received payment in full of all
amounts for which payment is due from USFC pursuant to Sections 2.05, 2.06 or
7.01;
(d) the Company shall have received such other approvals,
opinions or documents as the Company may reasonably request; and
(e) USFC shall have complied with all of its covenants in all
material respects and satisfied all of its obligations in all material respects
under this Agreement required to be complied with or satisfied as of such date;
PROVIDED, HOWEVER, that the failure of USFC to satisfy any of the foregoing
conditions shall not prevent USFC from subsequently selling Receivables upon
satisfaction of all such conditions or exercising its rights under subsection
2.01(b).
Section 3.04 CONDITION PRECEDENT TO USFC'S OBLIGATIONS. The obligation
of USFC on each Payment Date (including on the Effective Date) shall be subject
to the condition precedent that, on such date, the following statement shall be
true (and the payment by the Company of the Purchase Price for such Receivable
on such date shall constitute a representation and warranty by the Company that
on such Payment Date such statement is true): (i) no Early Amortization Event or
Potential Early Amortization Event of a type, with respect to the Company, set
forth in subsection 7.1(a) of the Pooling Agreement shall have occurred and be
continuing and (ii) no Early Termination, as set forth in Section 6 of the
Amended and Restated Receivables Sale Agreement, shall have occurred.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as to itself for the benefit of USFC as follows:
(a) It (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation, and is duly qualified as a foreign limited liability company and is
in good standing in each jurisdiction in which the ownership of its property or
its business as conducted and proposed to be conducted require such
qualification or in which the failure to so qualify would not reasonably be
expected to have a Material Adverse Effect, (ii) has the requisite limited
liability company power and authority to effect the transactions contemplated
hereby, and (iii) has all requisite limited liability company power and
authority and the legal right to own, pledge, mortgage and operate its
properties, and to conduct its business as now or currently proposed to be
conducted.
(b) The execution, delivery and performance by it of this
Agreement and all instruments and documents to be delivered hereunder by it, and
the transactions contemplated hereby and thereby, (i) are within its limited
liability company powers, have been duly authorized by all necessary limited
liability company action, including the consent of shareholders where required,
and do not (A) contravene its memorandum and articles of association, (B)
violate any law or regulation or any order or decree of any court or
governmental instrumentality, (C) conflict with or result in the breach of, or
constitute a default under, any indenture, mortgage or deed of trust or any
material lease, agreement or other instrument binding on or affecting it or any
of its respective subsidiaries or any of its material properties or (D) result
in or require the creation or imposition of any Lien except as created or
imposed hereunder or under the Pooling Agreement, and no transaction
contemplated hereby requires compliance on its part with any bulk sales act or
similar law, and (ii) do not require the consent of, authorization by or
approval of or notice to or filing or registration with, any governmental body,
agency, authority, regulatory body or any other Person other than those which
have been obtained or made except for the filing of the financing statements
referred to in Article III hereof, which filings USFS hereby represents shall
have been duly made prior to or substantially contemporaneously with any
purchases of Receivables and other Receivables Property and shall at all times
be in full force and effect (except as they may be terminated by the Company).
This Agreement has been duly executed and delivered by the Company and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms except (A) as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
18
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
Section 4.02 REPRESENTATIONS AND WARRANTIES OF USFC. USFC hereby
represents and warrants for the benefit of the Company and its assigns on the
Closing Date and on each Payment Date, as follows:
(a) Organization and Good Standing. USFC (i) is an Illinois
limited liability company duly organized and validly existing as a limited
liability company in good standing under the laws of the state of its formation,
(ii) is duly qualified as a foreign limited liability company and is in good
standing in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a Material Adverse Effect and (iii) and has full
limited liability company power, authority and legal right to own its properties
and conduct its business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.
(b) Due Qualification. USFC has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals and where the failure to preserve and maintain such qualification,
licenses or approvals is reasonably likely to have a Material Adverse Effect.
(c) Due Authorization. The execution and delivery of this
Agreement and the other Transaction Documents to which it is a party and the
consummation of the transactions provided for therein have been duly authorized
by USFC by all necessary limited liability company action on its part.
(d) No Default. USFC is not in default under or with respect to
any of its Contractual Obligations in any respect which would be reasonably
likely to have a Material Adverse Effect with respect to USFC. No (i) Early
Termination or (ii) Potential Purchase Termination Event with respect to a
Purchase Termination Event set forth in clause (g)(ii) of Section 6.01, in each
case with respect to USFC, has occurred and is continuing.
(e) Valid Sale; Binding Obligations. Each transfer of
Receivables and Receivables Property made pursuant to this Agreement shall
constitute a valid sale, transfer and assignment of the Receivables and the
Receivables Property to the Company which is perfected and of first priority
under applicable law, enforceable against creditors of, and purchasers from,
USFC; and
19
this Agreement constitutes, and each other Transaction Document to be signed by
USFC when duly executed and delivered will constitute, an enforceable obligation
of USFC in accordance with its terms, except (A) as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(f) No Violation. The execution, delivery and performance of,
and the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents and the fulfillment of the terms hereof and thereof
will not (i) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default (which, in the case of clauses (B) and (C) below would reasonably be
expected to cause a Material Adverse Effect) under, (A) the articles of
organization and limited liability company agreement of USFC, (B) any contract,
indenture, loan agreement, mortgage, deed of trust, or, (C) other agreement or
instrument to which USFC is a party or by which USFC or any of its material
properties is bound, (ii) result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such contract, indenture,
loan agreement, mortgage, deed of trust, or other agreement or instrument, other
than this Agreement and the other Transaction Documents, or (iii) violate any
law or any order, rule, or regulation of any court or of any federal, state,
local or other regulatory body, administrative agency, or other governmental
instrumentality of the United States of America having jurisdiction over USFC or
any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to the knowledge of USFC, threatened against USFC before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or any other
Transaction Document, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Document,
(iii) seeking any determination or ruling that, in the reasonable judgment of
USFC, could materially and adversely affect the performance by USFC of its
obligations under this Agreement or any other Transaction Document or (iv)
seeking any determination or ruling that could materially and adversely affect
the validity or enforceability of this Agreement or any other Transaction
Document.
(h) Bulk Sales Act. No transaction contemplated by this
Agreement or any other Transaction Document with respect to USFC requires
compliance with, or will be subject to avoidance under, any bulk sales act or
similar law.
20
(i) Government Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body in the United States of America is required for the due
execution, delivery and performance by USFC of this Agreement or any other
Transaction Document to which it is a party except for the filing of the UCC
financing statements referred to in Article III, all of which, at the time
required in Article III, shall have been duly made and shall be in full force
and effect.
(j) Bona Fide Receivables. USFC has no knowledge of any fact
which should have led it to expect at the time of its classification of any
Receivable as an Eligible Receivable hereunder that such Eligible Receivable
would not be paid in full when due. Each Receivable sold by it hereunder and
designated on a Required Report to be an Eligible Receivable will be, at its
respective Payment Date, an Eligible Receivable. The aggregate outstanding
Principal Amount of Receivables so sold by it on any Payment Date and so
designated as Eligible Receivables is correctly set forth on the Required Report
with respect to such Payment Date.
(k) Office. The principal place of business and the chief
executive office of USFC are as indicated on Schedule II hereto and have not
changed during the period of four consecutive months ending on such date (unless
otherwise indicated on the UCC Certificate delivered by USFC pursuant to
subsection 3.01(d) or 3.02(a), as the case may be), and the offices where USFC
keeps its records concerning the Receivables and related Contracts and all
purchase orders and other agreements related to the Receivables are as indicated
on Schedule II hereto (or at such other locations, notified to the Company in
accordance with Section 5.01(i), in jurisdictions where all action required by
subsections 5.01(p) and 5.01(r)(i) has been taken and completed).
(l) Margin Regulations. No use of any funds obtained by USFC
under this Agreement or the other Transaction Documents will conflict with or
contravene any of Regulations G, T, U and X promulgated by the Board of
Governors of the Federal Reserve System from time to time.
(m) Quality of Title. USFC is the legal and beneficial owner of
each Receivable and all Receivables Property which is to be transferred to the
Company by USFC, and such Receivables and Receivables Property shall be
transferred by USFC free and clear of any Lien (other than any Lien arising
under any other Transaction Document, or arising solely as the result of any
action taken by the Company hereunder); prior to such transfer USFC shall have
made all filings under applicable law in each relevant jurisdiction in order to
protect and perfect the Company's ownership or security interest in all
Receivables and Receivables
21
Property against all creditors of, and purchasers from, USFC; and the Company
shall have acquired and shall continue to have maintained a valid and perfected
first priority ownership or security interest in each Receivable and the
Receivables Property free and clear of any Lien (other than any Lien arising
solely as the result of any action taken by the Company hereunder or by the
Trustee); and no effective financing statement or other instrument similar in
effect covering any Receivable, any interest therein or any Receivables Property
with respect thereto is on file in any recording office except such as may be
filed in favor of (i) the applicable Seller of such Receivable in accordance
with the Contracts, (ii) USFC in accordance with the Amended and Restated
Receivables Sale Agreement, (iii) the Company pursuant to this Agreement and
(iv) the Trustee pursuant to the Pooling Agreement.
(n) Accuracy of Information. All factual written information
heretofore or contemporaneously furnished by USFC or its Affiliates (other than
the Company) to the Company for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby or thereby is, and
all other such factual, written information hereafter furnished (if prepared by
USFC or any Affiliate or, if not prepared by USFC or any Affiliate, to the
extent that information contained therein was supplied by USFC or any Affiliate)
by USFC or any Affiliate (other than the Company) to the Company pursuant to or
in connection with any Transaction Document shall be, true and accurate in every
material respect on the date as of which such information is or will be
furnished (unless such information relates to another date), and such
information is not, and shall not be (as the case may be) incomplete by omitting
to state a material fact or any fact necessary to make the statements contained
therein not misleading as of such date.
(o) Proceeds Banks, Payment Instructions. The names and
addresses of all the Lockbox Processors, together with the account numbers of
the Lockbox Accounts into which collections are deposited at such institutions,
are specified in Schedule III to the Amended and Restated Receivables Sale
Agreement. The Sellers under the Amended and Restated Receivables Sale Agreement
have transferred all of their right, title and interest in each Lockbox Account
to the Company. Each Lockbox Processor has executed and delivered to the Company
a Lockbox Agreement.
(p) Valid Transfers. No transfer of any Receivables or any
Receivables Property to the Company by USFC constitutes a fraudulent transfer or
fraudulent conveyance or is otherwise void or voidable under similar laws or
principles, the doctrine of equitable subordination or for any other reason. The
transfers of Receivables and Receivables Property by USFC to the Company
pursuant to this Agreement, and all other transactions between USFC and the
Company, have been and will be made in good faith and without intent to hinder,
22
delay or defraud creditors of USFC, and USFC acknowledges that it has received
and will receive fair consideration and reasonably equivalent value for the
purchases by the Company of Receivables and Receivables Property hereunder. The
purchase of Receivables and Receivables Property by the Company from USFC
constitutes a true sale of such Receivables and Receivables Property under
applicable state law.
(q) Trade Names. USFC uses no trade names other than its actual
corporate name and the trade names set forth in Schedule VI and in the case of
trade names, only in the jurisdictions indicated on Schedule VI. During the five
years preceding the date hereof, except as set forth in Schedule VI and in the
case of trade names, only in the jurisdictions indicated on Schedule VI, USFC
(i) has not been known by any legal name or trade name other than its corporate
name, and (ii) has not been the subject of any merger or other corporate
reorganization.
(r) Compliance with Applicable Laws. USFC is in material
compliance with the requirements of all applicable laws, rules, regulations, and
orders of all governmental authorities (federal, state, local or foreign, and
including, without limitation, environmental laws), a breach of any of which,
individually or in the aggregate, would be reasonably likely either (i) to have
a material adverse effect on (A) the business, operations, business prospects or
condition (financial or other) of USFC or (B) the ability of USFC to perform its
obligations under this Agreement and the other Transaction Documents, or (ii) to
impair the collectibility of any Receivables or any Receivables Property or the
enforceability or validity of any Contract.
(s) Taxes. USFC has filed all federal and all material state and
local tax returns required by law to be filed and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges due from USFC or is contesting any such tax, assessment or other
governmental charge in good faith through appropriate proceedings, except where
such failure would not reasonably be expected to cause a Material Adverse
Effect. USFC knows of no basis for any material additional tax assessment for
any fiscal year for which adequate reserves have not been established.
(t) Reserved.
(u) ERISA Matters.
(i) Except as specifically disclosed in Schedule VIII
hereto, USFC and each of its ERISA Affiliates are in compliance in all
material respects with the applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to each
Plan of USFC
23
or any of its ERISA Affiliates, except for such noncompliance which could
not reasonably be expected to result in a Material Adverse Effect with
respect to USFC.
(ii) No Reportable Event has occurred as to which USFC or
any of its ERISA Affiliates was required to file a report with the PBGC,
other than reports for which the 30-day notice requirement is waived,
reports that have been filed and reports the failure of which to file would
not reasonably be expected to result in a Material Adverse Effect with
respect to USFC.
(iii) Except as specifically disclosed in Schedule VIII
hereto, as of the Effective Date, the present value of all benefit
liabilities under each Plan of USFC or any of its ERISA Affiliates (on an
ongoing basis and based on those assumptions used to fund such Plan) did
not, as of the last valuation report applicable thereto, exceed the value
of the assets of such Plan, except to the extent that such excess would not
have a Material Adverse Effect with respect to USFC.
(iv) Neither USFC nor any of its ERISA Affiliates has
incurred any Withdrawal Liability that could reasonably be expected to
result in a Material Adverse Effect with respect to USFC.
(v) Neither USFC nor any of its ERISA Affiliates has
received any notification that any Multiemployer Plan is in reorganization
or has been terminated within the meaning of Title IV of ERISA, or that a
reorganization or termination has resulted or could reasonably be expected
to result, through increases in the contributions required to be made to
such Plan or otherwise, in a Material Adverse Effect with respect to such
USFC.
(v) Reserved.
(w) Solvency. Both prior to and after giving effect to the
transactions contemplated by the Transaction Documents, (i) the assets of USFC,
at fair valuation, will exceed its liabilities (including contingent
liabilities), (ii) the capital of USFC will not be unreasonably small to conduct
its business, and (iii) USFC will not have incurred debts, and does not intend
to incur debts, beyond its ability to pay such debts as they mature.
(x) Investment Company Act. Neither USFC nor any of USFC's
Subsidiaries is (i) an "investment company" registered or required to be
registered under the 1940 Act, or (ii) a "holding company", or a "subsidiary
24
company" or an "affiliate" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(y) Ownership. All of the issued and outstanding capital stock
of USFC is owned, directly or indirectly, by United Stationers Inc.
(z) Indebtedness to Company. Immediately prior to consummation
of the transactions contemplated hereby on the Effective Date, USFC had no
outstanding Indebtedness to the Company other than amounts permitted by this
Agreement.
(aa) Receivables Documents. Upon the delivery, if any, by USFC to
the Company of licenses, rights, computer programs, related materials, computer
tapes, disks, cassettes and data relating to the administration of the Purchased
Receivables pursuant to subsection 5.01(r), the Company shall have been
furnished with all materials and data reasonably necessary to permit timely
collection of the Purchased Receivables without the participation of USFC in
such collection.
(bb) Receivables Lists. The Receivables Lists delivered pursuant
to subsection 2.01(e) set forth in all material respects an accurate and
complete listing as of the Effective Date of all Receivables to be transferred
to the Company on the Effective Date and the information contained therein with
respect to the identity and Principal Amount of each such Receivable is true and
correct in all material respects as of the Cut-Off Date.
(cc) Seller's Representations and Warranties. Each of the
representations and warranties made in the Amended and Restated Receivables Sale
Agreement by the applicable Seller is true and correct in all material respects.
The representations and warranties set forth in this Section 4.02
shall survive the transfer and assignment of the respective Receivables to the
Company pursuant to this Agreement. USFC hereby represents and warrants to the
Company, as of the Effective Date and each Payment Date, that the
representations and warranties of USFC set forth in Section 4.02 are true and
correct in all material respects as of such date, except for any representation
and warranty specifically made as of an earlier date, in which case such
representation and warranty shall be true and correct in all material respects
as of such earlier date. Upon discovery by USFC or the Company of any material
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other.
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ARTICLE V
GENERAL COVENANTS
Section 5.01 AFFIRMATIVE COVENANTS OF USFS. USFC covenants that, until
the Purchase Termination Date shall have occurred and there are no amounts
outstanding with respect to the Purchased Receivables (other than Charged-off
Receivables):
(a) Preservation of Existence as a Limited Liability Company and
Name. USFC will preserve and maintain in all material respects its existence as
a limited liability company, rights, franchises and privileges in the
jurisdiction of its formation, and qualify and remain qualified in good standing
as a foreign limited liability company in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification could have a Material Adverse Effect with respect to USFC.
(b) Maintenance of Property. USFC will keep all material
property and assets useful and necessary in its business in good working order
and condition (normal wear and tear excepted), except to the extent that the
failure to do any of the foregoing with respect to any such property would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect with respect to the Company.
(c) Delivery of Collections. In the event that USFC receives
Collections, USFC agrees to pay to the applicable Lockbox Account all payments
received by USFC in respect of the Receivables as soon as practicable after
receipt thereof by USFC.
(d) Compliance with Laws, Etc. USFC shall comply in all material
respects with all applicable laws, rules, regulations and orders applicable to
the Receivables and the Receivables Property, including, without limitation,
rules and regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy, where failure to so comply could reasonably be expected to have a
materially adverse impact on the amount of Collections thereunder.
(e) Visitation Rights. At any reasonable time during normal
business hours and from time to time upon reasonable prior notice, USFC shall
permit (i) the Company, or any of its agents or representatives, (A) to examine
and make copies of and abstracts from the records, books of account and
documents (including, without limitation, computer tapes and disks) of USFC
relating to Receivables and Related Property owned or to be purchased by the
Company
26
hereunder, including, without limitation, the related Contracts and purchase
orders and other agreements and (B) following the termination of the appointment
of USFS as Servicer, [or of any Seller USFC as a Servicing Party] with respect
to the Receivables, to be present at the offices and properties of USFC to
administer and control the collection of amounts owing on the Purchased
Receivables and (ii) the Company, or any of its agents or representatives, or
the Trustee (upon the giving of appropriate notice to the Company) to visit the
properties of USFC for the purpose of examining such records, books of account
and documents, and to discuss the affairs, finances and accounts of USFC
relating to the Receivables or USFC's performance hereunder with any of its
officers or directors and with its independent certified public accountants;
PROVIDED, that the Company or its agents or representatives, as the case may be,
shall notify USFC prior to any contact with such accountants and shall give USFC
the opportunity to participate in such discussions.
(f) Keeping of Records and Books of Account. USFC will maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables and the
Receivables Property in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other information which,
in each case, in the reasonable discretion of the Company, are necessary or
advisable for the collection of all Receivables and the Receivables Property
(including, without limitation, records adequate to permit the identification of
each new Receivable and all Collections of and adjustments to each existing
Receivable).
(g) Performance and Compliance with Policies, Receivables and
Contracts. USFC will (i) perform its obligations in accordance with and comply
in all material respects with the Policies, as amended from time to time in
accordance with the Transaction Documents and (ii) at its expense, cause each
Seller to timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the Receivables
and the Contracts related to the Receivables and Related Property and all
purchase orders and other agreements related to such Receivables and Related
Property.
(h) Obligations. USFC shall pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its other obligations of whatever nature, except where (a) the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on its books, or (b) the failure to so pay, discharge or satisfy all
such obligations would not, in the aggregate, be reasonably likely to have a
Material Adverse Effect in respect of
27
USFC and would not subject any of its properties to any Lien prohibited by
subsection 5.03(b).
(i) Location of Records. USFC will keep its principal place of
business and chief executive office, and the offices where it keeps its records
concerning the Receivables, all Receivables Property, all Contracts and purchase
orders and other agreements related to such Receivables (and all original
documents relating thereto), at the address referred to in Schedule II or, upon
30 days' prior written notice to the Company, at such other locations in
jurisdictions where all action required by subsection 5.01(r) shall have been
taken and completed; provided, however, that the Rating Agency Condition shall
have been satisfied with respect to any changes in location of USFC's principal
place of business or chief executive office and such location is not in a state
which is within the Tenth Circuit unless it delivers an opinion of counsel
reasonably acceptable to the Rating Agencies to the effect that Octagon Gas
Systems, Inc. ▇. ▇▇▇▇▇▇, 995 F.2d 948 (10th Cir. 1993), is no longer controlling
precedent in the Tenth Circuit.
(j) Furnishing Copies, Etc. USFC shall furnish to the Company (i)
upon the Company's request, a certificate of a Responsible Officer with
responsibilities over the finances of USFC certifying, as of the date thereof,
that to such Responsible Officer's knowledge, no Purchase Termination Event has
occurred and is continuing and setting forth the computations used by such
Responsible Officer in making such determination; (ii) as soon as possible and
in any event within two Business Days after a Responsible Officer of USFC
becomes aware of the occurrence of any Purchase Termination Event or Potential
Purchase Termination Event, a statement of a Responsible Officer of USFC setting
forth in reasonable detail the particulars of such Purchase Termination Event or
Potential Purchase Termination Event and the action that USFC proposes to take
or has taken with respect thereto; (iii) promptly after obtaining knowledge that
a Receivable was, at the time of the Company's purchase thereof, not an Eligible
Receivable, notice thereof; (iv) promptly after obtaining knowledge of any
threatened action or proceeding affecting USFC or its Subsidiaries before any
court, governmental agency or arbitrator that may reasonably be expected to
materially and adversely affect the enforceability of this Agreement and the
other Transaction Documents, notice of such action or proceeding; and (v)
promptly following the Company's request therefor, such other information,
documents, records or reports with respect to the Receivables or the related
Contracts or the conditions or operations, financial or otherwise, of USFC, as
the Company may from time to time reasonably request.
(k) Obligation to Record and Report. USFC shall, to the fullest
extent permitted by GAAP and by applicable law, record each purchase of the
28
Purchased Receivables as a sale on its books and records, reflect each purchase
of Purchased Receivables in its financial statements and tax returns as a sale
and recognize gain or loss, as the case may be, on each purchase of Purchased
Receivables.
(l) Continuing Compliance with the Uniform Commercial Code. USFC
shall, without limiting the requirements of subsection 5.01(r), at its expense,
preserve, continue, and maintain or cause to be preserved, continued, and
maintained the Company's valid and properly perfected title to each Receivable
and the Receivables Property purchased hereunder, including, without limitation,
filing or recording UCC financing statements in each relevant jurisdiction.
(m) Proceeds of Receivables. USFC shall use all reasonable
efforts to cause all payments made by Obligors in respect of Purchased
Receivables and Related Property to be made in accordance with subsection 2.3(a)
of the Servicing Agreement.
(n) Reserved.
(o) Taxes. USFC will file all federal and all material state and
local tax returns and reports required by law to be filed by it and will pay all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP have been
set aside on its books except where the failure to file such returns and reports
and pay such taxes and governmental charges would not reasonably be expected to
cause a Material Adverse Effect.
(p) Separate Corporate Existence of the Company. USFC hereby
acknowledges that the Trustee and the Holders are entering into the transactions
contemplated by the Transaction Documents in reliance upon the Company's
identity as a legal entity separate from the Sellers, USFC and all other
Affiliates thereof (each such Affiliate, a "USS Affiliate") and that the Trustee
and the Holders would be prejudiced by any substantive consolidation of the
Company with any Seller or USFC. Therefore, from and after the date hereof, USFC
will take (or refrain from taking, as the case may be) such actions, and will
cause each other USS Affiliate it controls to take (or refrain from taking, as
the case may be) such actions, as shall be required in order that:
(i) Except as specifically provided in Sections 7.01 and
9.05, no USS Affiliate will pay the Company's operating expenses and
liabilities, recognizing, however, that certain organizational expenses of
29
the Company and expenses relating to creation and initial implementation of
the securitization program contemplated by the Transaction Documents have
been or shall be paid by USFC.
(ii) Each USS Affiliate will conduct its business at
offices segregated from the Company's offices. If office space is leased
from any USS Affiliate, a separate written lease on arm's-length terms will
be in effect at a market rental rate.
(iii) Each USS Affiliate will maintain corporate records
and books of account separate from those of the Company and telephone
numbers, mailing addresses, stationery and other business forms that are
separate and distinct from those of the Company.
(iv) Any financial statements of any USS Affiliate that
are consolidated to include the Company will contain a detailed note
substantially in the form, and to the effect, of the note set forth on
Annex 1.
(v) The Company's assets will be maintained in a manner
that facilitates their identification and segregation from those of the
Sellers, USFC and the other USS Affiliates.
(vi) Each USS Affiliate will strictly observe corporate
formalities in its dealings with the Company, and funds or other assets of
the Company will not be commingled or pooled with those of any affiliated
Person. No USS Affiliate will maintain joint bank accounts with the Company
or other depository accounts with the Company to which any USS Affiliate
has independent access.
(vii) Any transaction between the Company and any USS
Affiliate will be fair and equitable to the Company, will be the type of
transaction which would be entered into by a prudent Person in the position
of the Company with a USS Affiliate, and will be on terms which are at
least as favorable to the Company as may be obtained from a Person which is
not a USS Affiliate, it being understood and agreed that the transactions
contemplated in the Transaction Documents meet the requirements of this
clause (vii).
(viii) No USS Affiliate will hold itself out, or permit
itself to be held out, as having agreed to pay or be liable for the debts
of the Company.
30
(ix) The duly elected Board of Directors of the Company
and the Company's duly appointed officers shall at all times have sole
authority to control decisions and actions with respect to the daily
business affairs of the Company.
(x) USFC shall comply with those procedures described in
the Specified Bankruptcy Opinion Provisions which are applicable to USFC,
except, in each case above, for such failure to take actions or refrain
from taking actions that are, in the aggregate, not material.
(q) Deposits in Program Accounts. USFC shall use all reasonable
efforts to minimize the deposit of any funds other than Collections in any of
the Lockbox Accounts, the Collection Concentration Account and the Collection
Account.
(r) Further Action Evidencing Purchases.
(i) USFC agrees that from time to time, at its expense,
it will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable or that the
Company may reasonably request, to protect or more fully evidence the
Company's ownership, right, title and interest in the Receivables and
Receivables Property sold by USFC and its rights under the Contracts with
respect thereto, or to enable the Company to exercise or enforce any of its
rights hereunder or under any other Transaction Document. Without limiting
the generality of the foregoing, USFC will upon the request of the Company
(A) execute and file, in accordance with the provisions of the UCC of the
applicable jurisdiction, continuation statements with respect to all
financing statements filed in connection with the transactions contemplated
hereby, as well as such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or, in
the reasonable opinion of the Company, desirable, (B) indicate on its books
and records (including, without limitation, master data processing records)
that the Receivables and Receivables Property have been sold and assigned
to the Company and, in turn, the Company has conveyed its interest therein
to the Trustee for the benefit of the Holders, and provide to the Company,
upon request, copies of any such records, (C) contact customers to confirm
and verify Receivables and (D) obtain the agreement of any Person having a
Lien on any Receivables owned by USFC (other than any Lien created or
imposed hereunder or under the Pooling Agreement or any Permitted Lien) to
release such Lien upon the purchase of any such Receivables by the Company.
31
(ii) USFC hereby irrevocably authorizes the Company and
the Trustee to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Receivables and
Receivables Property sold or to be sold by USFC, without the signature of
USFC where permitted by law.
(iii) If USFC fails to perform any of its agreements or
obligations under this Agreement, the Company or its assignees may (but
shall not be required to) perform, or cause performance of, such agreements
or obligations, and the expenses of the Company incurred in connection
therewith shall be payable by USFC as provided in Section 9.06.
(iv) USFC agrees that, whether or not a Purchase
Termination Event has occurred:
(A) the Company (and its assignees) shall have the
right at any time to notify, or require that USFC at its own expense
notify, the respective Obligors of the Company's ownership of the Purchased
Receivables and Receivables Property and may direct that payment of all
amounts due or to become due under the Purchased Receivables be made
directly to the Company or its designee;
(B) USFC shall, upon the Company's written request and
at USFC's expense, (I) assemble all of USFC's documents, instruments and
other records (including credit files and computer tapes or disks) that (A)
evidence or will evidence or record Receivables sold by USFC and (B) are
otherwise necessary or desirable to effect Collections of such Purchased
Receivables (collectively, the "DOCUMENTS") and (II) deliver the Documents
to the Company or its designee at a place designated by the Company. In
recognition of USFC's need to have access to any Documents which may be
transferred to the Company hereunder, whether as a result of its continuing
business relationship with any Obligor for Receivables purchased hereunder
or as a result of its responsibilities as Servicer, the Company hereby
grants to USFC an irrevocable license to access the Documents transferred
by USFC to the Company and to access any such transferred computer software
in connection with any activity arising in the ordinary course of USFC's
business or in performance of USFC's duties as a Servicing Party, PROVIDED
that USFC shall not disrupt or otherwise interfere with the Company's use
of and access to the Documents and its computer software during such
license period;
32
(C) USFC hereby grants to the Company an irrevocable
power of attorney (coupled with an interest) to take any and all steps in
USFC's name necessary or desirable, in the reasonable opinion of the
Company, to collect all amounts due under the Purchased Receivables,
including, without limitation, endorsing USFC's name on checks and other
instruments representing Collections, enforcing the Purchased Receivables
and exercising all rights and remedies in respect thereof, and
(D) upon written request of the Company, USFC will (I)
deliver to the Company or a party designated by the Company all licenses,
rights, computer programs, related material, computer tapes, disks,
cassettes and data necessary to the immediate collection of the Purchased
Receivables by the Company, with or without the participation of USFC
(excluding software licenses which by their terms are not permitted to be
so delivered, PROVIDED that USFC shall use reasonable efforts to obtain
consent of the relevant licensor to such delivery) and (II) make such
arrangements with respect to the collection of the Purchased Receivables as
may be reasonably required by the Company.
(s) Legend Requirement For Chattel Paper. USFC agrees (i) at all
times, with respect to chattel paper, to comply with the procedures set forth in
Schedule 3 to the Pooling Agreement and (ii) that any Receivable that
constitutes or is evidenced by "chattel paper" as defined in Article 9 of the
UCC as in effect in the Relevant UCC State shall bear a legend stating that such
Receivable has been sold to the Company and conveyed to the Trust.
(t) Computer Files. USFC shall, at its own cost and expense,
retain the ledger used by USFC as a master record of the Obligors and retain
copies of all documents relating to each Obligor as custodian and agent for the
Company and other Persons with interests in the Purchased Receivables and ▇▇▇▇
the computer tape or other physical records of the Purchased Receivables to the
effect that interests in the Purchased Receivables existing with respect to the
Obligors listed thereon have been sold to the Company and that the Company has
sold an interest therein and has granted a security interest therein.
Section 5.02 REPORTING REQUIREMENTS. USFC shall furnish to the Company
and its assigns from the date hereof until the Purchase Termination Date shall
have occurred with respect to USFC and until there are no amounts outstanding
with respect to Purchased Receivables previously sold by USFC to the Company:
(a) Compliance Certificate. Not later than 95 days after the end
of each fiscal year and not later than 50 days after the end of each of the
first
33
three fiscal quarters of each fiscal year, a certificate of a Responsible
Officer of USFC stating that, to the best of such Responsible Officer's
knowledge, USFC during such period, has observed or performed in all material
respects all of its covenants and other agreements, and satisfied in all
material respects every condition, contained in the Transaction Documents to
which it is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Purchase Termination Event
or Potential Purchase Termination Event except as specified in such certificate;
(b) ERISA. Promptly after the filing or receiving thereof,
copies of all reports and notices with respect to any Reportable Event which
USFC files under ERISA with the Internal Revenue Service, the PBGC or the U.S.
Department of Labor or which USFC receives from the PBGC if, in each case, such
report or notice relates to an event or condition that could reasonably be
expected to give rise to a Termination Notice, an Early Amortization Event or a
Material Adverse Effect;
(c) Termination Events; Other Material Events. As soon as
possible and in any event within two Business Days after a Responsible Officer
of USFC obtains knowledge of each Purchase Termination Event, Potential Purchase
Termination Event, Servicer Default, Potential Servicer Default or any other
event that has a material likelihood of having a Material Adverse Effect with
respect to USFC, a written statement of a Responsible Officer of USFC setting
forth details of such event and the action that USFC proposes to take with
respect thereto; and
(d) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of USFC as the Company may from time to time
reasonably request in order to protect the interests of the Company under or as
contemplated by the Transaction Documents.
Section 5.03 NEGATIVE COVENANTS. USFC covenants that, until the
Purchase Termination Date shall have occurred with respect to USFC and there are
no amounts outstanding with respect to Purchased Receivables previously sold by
USFC to the Company:
(a) Receivables to be Accounts, General Intangibles or Chattel
Paper. USFC will take no action to cause any Receivable to be evidenced by any
"instrument" other than, provided that the procedures set forth in Schedule 3 to
the Pooling Agreement are fully implemented with respect thereto, an instrument
which together with a security agreement constitutes "chattel paper" (each as
defined in the UCC as in effect in the Relevant UCC State). USFC will take no
action to
34
cause any Receivable to be anything other than an "account", "general
intangible" or "chattel paper" (each as defined in the UCC as in effect in the
Relevant UCC State).
(b) Security Interests. Except for the conveyances hereunder and
as provided below, USFC will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any other Lien on any
Receivable or Receivables Property, whether now existing or hereafter created,
or any interest therein; USFC will immediately notify the Company of the
existence of any other Lien (other than a Permitted Lien) on any Receivable or
Receivables Property; and USFC shall defend the right, title and interest of the
Company in, to and under the Receivables or Receivables Property, whether now
existing or hereafter created, against all claims of third parties claiming
through or under USFC; provided, however, that nothing in this subsection
5.03(b) shall prevent or be deemed to prohibit USFC from suffering to exist upon
any of the Receivables or Receivables Property any Permitted Lien.
(c) Extension or Amendment of Receivables; Ineligible
Receivables. USFC will not, nor will it permit any Seller to, extend, rescind,
cancel, make any Dilution Adjustment to, amend or otherwise modify, or attempt
or purport to extend, rescind, cancel, make any Dilution Adjustment to, amend or
otherwise modify, the terms of any Purchased Receivables, or otherwise take any
action to cause, or which would permit, a Receivable that was designated as an
Eligible Receivable on the Payment Date relating to such Receivable to cease to
be an Eligible Receivable, except in any such case (a) in accordance with the
terms of the Policies, (b) as required by any Requirement of Law or (c) in the
case of Dilution Adjustments (whether or not permitted by any other clause of
this sentence), upon making a Seller Adjustment Payment pursuant to Section
2.05.
(d) Change in Credit and Collection Policies. USFC will not make
or permit to be made any change in its Policies in any material respect that is
materially adverse to the interests of the Company or its assigns (including the
Trustee and the Holders).
(e) Place of Business, etc. USFC will not change its principal
place of business or chief executive office from the location listed on Schedule
II or change the location of its records relating to the Receivables and
Receivables Property from those specified on Schedule II, unless in any such
event USFC shall have given the Company at least thirty days' prior written
notice thereof fully in accordance with the terms and provisions of subsection
5.01(i) and shall have taken all action necessary or reasonably requested by the
Company to amend its existing financing statements and continuation statements
so that they are not misleading and to file additional financing statements in
all applicable jurisdictions,
35
if necessary, to perfect the interests of the Company in all of the Receivables
and Receivables Property.
(f) Change in Name. USFC will not change its name, identity or
corporate structure in any manner which would make any financing statement or
continuation statement (or other similar instrument) relating to this Agreement
seriously misleading within the meaning of Section 9-402(7) of the UCC, or
impair the perfection of the Company's interest in any Receivable under any
other similar law, without having (i) delivered 30 days' prior written notice to
the Company, the Servicer and the Trustee and (ii) taken all action required by
subsection 5.01(a) or 5.01(r).
(g) Change in Payment Instructions to Obligors. USFC shall not
instruct, nor shall it permit any Seller to, the Obligor on any Receivables to
make payments with respect to such Receivables and the Receivables Property with
respect thereto other than to the places listed in Schedule III of the Amended
and Restated Receivables Sale Agreement.
(h) Accounting Changes. USFC shall not make any material change
(i) in accounting treatment and reporting practices except as permitted or
required by GAAP, (ii) in tax reporting treatment except as permitted or
required by law, in any case, as disclosed in the notes to the financial
statements delivered pursuant to Section 5.02, or otherwise, (iii) in the
calculation or presentation of financial and other information contained in
other reports delivered hereunder, or (iv) in any financial policy of USFC if
such change could have a material adverse effect on the Receivables taken as a
whole or the collection thereof.
(i) Business of USFC. USFC shall not fail to maintain and
operate the business currently conducted or proposed to be conducted by USFC and
business activities reasonably incidental or related thereto in substantially
the manner in which it is presently conducted and operated if such failure would
change in any material respect the character of its business and such change
would be adverse to the interest of the Company or its assigns (including the
Trustee for the benefit of the Holders), except (x) if such change is necessary
under any Requirement of Law, (y) if such change would not reasonably be
expected to have a Material Adverse Effect with respect to the Servicer or (z)
the Rating Agency Condition is satisfied with respect thereto.
36
ARTICLE VI
PURCHASE TERMINATION EVENTS
Section 6.01 PURCHASE TERMINATION EVENTS. If, with respect to USFC,
any of the following events (each, a "PURCHASE TERMINATION EVENT" with respect
to USFC) shall have occurred and be continuing:
(a) USFC shall fail to make any payment or deposit to be made by
it hereunder when due and such failure shall remain unremedied for two Business
Days; or
(b) There shall have occurred (i) an Early Amortization Event
set forth in Section 7.1 of the Pooling Agreement or (ii) the Amortization
Period with respect to all outstanding Series shall have occurred and be
continuing; or
(c) Any representation or warranty made or deemed to be made by
USFC or any of its officers under or in connection with any Transaction
Document, Monthly Settlement Statement or other information, statement, record,
certificate, document or report delivered pursuant to a Transaction Document
shall prove to have been false or incorrect in any material respect when made or
deemed made (including in each case by omission of material information
necessary to make such representation, warranty, certificate or statement not
misleading); provided, that no such event shall constitute a Purchase
Termination Event unless such event shall continue unremedied for a period of 30
days from the earlier of (A) the date any Responsible Officer of USFC obtains
knowledge thereof and (B) the date USFC receives notice of the incorrectness of
such representation or warranty from the Company, the Servicer or the Trustee;
provided, further, that a Purchase Termination Event shall not be deemed to have
occurred under this paragraph (c) based upon a breach of any representation or
warranty set forth in Section 4.02 with respect to any Receivable if USFC shall
have complied with the provisions of Section 2.06 with respect to such
Receivable; or
(d) USFC shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in subsection 5.01(d),
(g) or (h) or Section 5.03 of this Agreement on its part to be performed or
observed and any such failure shall remain unremedied for five Business Days;
provided, that a Purchase Termination Event shall not be deemed to have occurred
under this paragraph (d) based upon a breach of any covenant set forth in
subsection 5.01(d), (g) or (h) or Section 5.03 with respect to any Receivable if
USFC shall have complied with the provisions of Section 2.06 with respect to
such Receivable; or
37
(e) USFC shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in any Transaction
Document on its part to be performed or observed and any such failure shall
remain unremedied for a period of 30 days from the earlier of (A) the date any
Responsible Officer of USFC obtains knowledge of such failure and (B) the date
USFC receives notice thereof from the Company, the Servicer or the Trustee; or
(f) Any Transaction Document to which USFC is a party shall
cease, for any reason, to be in full force and effect, or USSC, or other USFC
shall so assert in writing, or the Company shall fail to have a valid and
perfected first priority ownership or security interest in the Receivables and
the Receivables Property; or
(g) (i) USFC shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or USFC shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against USFC any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against USFC or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof, or (iv) USFC or any of its respective
Subsidiaries shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) USFC shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due;
(h) USFS has been terminated as Servicer following a Servicer
Default with respect to USFS under the Servicing Agreement;
(i) a Responsible Officer of USFS receives notice or becomes
aware that a notice of Lien has been filed by the PBGC against USFC, the Company
or the Trust under Section 4.12(n) of the Code or Section 302(f) of ERISA
38
for a failure to make a required installment or other payment to a plan to which
Section 4.12(n) of the Code or Section 302(f) of ERISA applies; or
(j) a Purchase Termination Event under the Amended and Restated
Receivables Sale Agreement has occurred;
then, (x) in the case of any Purchase Termination Event with respect to USFC
described in paragraph (b)(i), (g), (i) and (j) above, the obligation of the
Company to purchase Receivables from USFC shall thereupon automatically
terminate without further notice of any kind, which is hereby waived by USFC,
(y) in the case of any Purchase Termination Event with respect to USFS described
in paragraph (b)(ii) above, the obligation of the Company to purchase
Receivables from USFC shall thereupon terminate without notice of any kind,
which is hereby waived by USFC, unless both the Company and USFC agree in
writing that such event shall not trigger an Early Termination hereunder and (z)
in the case of any other Purchase Termination Event with respect to USFC, so
long as such Purchase Termination Event shall be continuing, the Company may
terminate its obligation to purchase Receivables from USFC by written notice to
USFC (any termination with respect to USFC pursuant to clause (x), (y) or (z) of
this Section 6.01 is herein called an "EARLY TERMINATION" with respect to USFC);
PROVIDED, HOWEVER, that in the event of an involuntary petition or proceeding as
described in paragraphs (g)(ii) and (g)(iii) above, the Company shall not
purchase Receivables from USFC until such time, if any, as such involuntary
petition or proceeding has been dismissed, PROVIDED that such dismissal shall
have occurred within 60 days of the filing of such petition or the commencement
of such proceeding.
Section 6.02 ADDITIONAL REMEDIES. Upon the occurrence of any Purchase
Termination Event, the Company shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of each applicable jurisdiction and other applicable
laws, which rights shall be cumulative. Without limiting the foregoing, the
occurrence of a Purchase Termination Event shall not deny to the Company any
remedy (in addition to termination of the Company's obligation to purchase
Receivables from USFC) to which the Company may be otherwise appropriately
entitled, whether by statute or other applicable law, at law or in equity.
39
ARTICLE VII
INDEMNIFICATION
Section 7.01 INDEMNITIES BY USFC. Without limiting any other rights
that the Company may have hereunder or under applicable law and subject to
Section 2.06, USFC hereby agrees to pay, indemnify and hold the Company harmless
from and against any and all claims, losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, reasonable costs (including reasonable
attorneys' fees), expenses and disbursements of any kind or nature whatsoever
related thereto (a) which may at any time be imposed on, incurred by or asserted
against the Company in any way relating to, arising out of or resulting from
this Agreement or any other Transaction Document or the transactions
contemplated hereby or thereby or any action taken or omitted by the Company
under or in connection with any of the foregoing or in respect of any Receivable
or (b) which would not have been imposed on, incurred by or asserted against the
Company but for its having purchased the Receivables hereunder (all such claims,
losses, liabilities, obligations, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements being collectively referred to as "INDEMNIFIED
AMOUNTS"), PROVIDED that USFC shall have no obligation under this Section 7.01
to the Company with respect to Indemnified Amounts (i) to the extent resulting
from gross negligence or willful misconduct on the part of the Company, its
agents or its assignees; (ii) resulting from any Obligor's inability to pay an
amount due and payable with respect to a Receivable for credit reasons (it being
understood that this clause (ii) shall not limit Section 2.05), and PROVIDED,
FURTHER, that if a court of competent jurisdiction in a final non-appealable
order determines that such Indemnified Amounts arose in part from the Company's
gross negligence or willful misconduct, USFC shall reimburse the Company for the
portion of such claim not resulting from the Company's gross negligence or
willful misconduct, and PROVIDED, FURTHER, that to the extent a determination of
gross negligence or willful misconduct is made after the payment of any
Indemnified Amounts related thereto, USFC shall be repaid any amounts reimbursed
under the preceding clause that, due to such determination, it should not have
paid. Without limiting or being limited by the foregoing and subject to Section
2.06, USFC shall pay on demand to the Company any and all amounts necessary to
indemnify the Company from and against any and all Indemnified Amounts relating
to or resulting from:
(a) the transfer by USFC of any interest in any Receivable or
Receivables Property or proceeds thereof which are not or which cease to be
Eligible Receivables;
(b) reliance on any representation or warranty or statement made
or deemed made by USFC (or any of its officers) under or in connection with
40
this Agreement or in any certificate or report delivered pursuant hereto that,
in either case, shall have been false or incorrect in any material respect when
made or deemed made;
(c) the failure by USFC to comply with any applicable law, rule
or regulation of any governmental authority with respect to any Receivable or
Receivables Property, or the nonconformity of any Receivable or Receivables
Property with any such applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an
ownership interest in any Receivable or Receivables Property, free and clear of
any Lien, other than a Lien arising under the Transaction Documents, whether
existing at the time of the purchase of such Receivable or Receivables Property
or at any time thereafter;
(e) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any Receivables
or Receivables Property of USFC;
(f) any dispute, claim, offset or defense (other than discharge
in bankruptcy of USFC) of the Obligor to the payment of any Receivable of USFC
(including, without limitation, a defense based on such Receivable or the
related Contract not being fully enforceable against the Obligor in accordance
with its terms), or any other claim resulting from the sale of the merchandise
or services related to any such Receivable or the furnishing or failure to
furnish such merchandise or services;
(g) any failure of USFC to perform its duties or obligations
under this Agreement or the Transaction Documents;
(h) any products liability claim arising out of or in connection
with merchandise, insurance or services that are the subject of any Receivable
or Receivables Property;
(i) the commingling of Collections of Receivables at any time
with other funds of USFC;
(j) any claim involving environmental liability that relates to
any property that has been, is now or hereafter will be owned, leased, operated
or otherwise used by USFC;
41
(k) any tax or governmental fee or charge (but not including
franchise taxes and taxes upon or measured by net income of the Company), all
interest and penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase or
ownership of any Receivable or Receivables Property, or any interest therein or
in any goods which secure any such Receivables, any Receivables Property or any
other rights or assets transferred hereunder; and
(l) any investigation, litigation or proceeding related to this
Agreement or in respect of any Receivable or Receivables Property of USFC.
Notwithstanding the foregoing, USFC shall not under any circumstances
be required to indemnify the Company for any Indemnified Amounts that result
from any delay in the collection of any Receivables or any default by an Obligor
with respect to any Receivables. The agreements set forth in this Section 7.01
shall survive the collection of all Receivables, the termination of this
Agreement and the payment of all amounts payable hereunder.
Section 7.02 INDEMNITIES BY THE COMPANY. Without limiting any other
rights that USFC may have hereunder or under applicable law, the Company hereby
agrees to indemnify USFC from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) arising out of or resulting
from USFC's reliance on any representation or warranty made by the Company in
this Agreement or in any certificate delivered pursuant hereto that, in either
case, shall have been false or incorrect in any material respect when made or
deemed made.
ARTICLE VIII
SUBORDINATED NOTE
Section 8.01 SUBORDINATED NOTE. (a) On the initial Effective Date,
contemporaneously with the sale of Receivables and Receivables Property by USFC,
the Company shall issue to USFC a subordinated note substantially in the form of
Exhibit A hereto (as amended, supplemented or otherwise modified from time to
time, the "SUBORDINATED NOTE").
(b) The initial aggregate principal amount of the Subordinated
Note (the "Initial Subordinated Note Amount") shall be equal to $[-].
(c) Following the initial Effective Date, the aggregate
principal amount of the Subordinated Note at any time shall be equal to the
42
difference between (i) the sum of the Initial Subordinated Note Amount and each
addition to the principal amount of the Subordinated Note with respect to USFC
pursuant to Section 2.03 as of such time and (ii) the aggregate amount of all
payments made in respect of the principal of the Subordinated Note as of such
time. All payments made in respect of the Subordinated Note shall be allocated
by the Servicer to pay accrued and unpaid interest thereon, and second, to pay
the outstanding principal amount thereof.
(d) Interest on the outstanding principal amount of the
Subordinated Note shall accrue on the last day of each Settlement Period at a
rate per annum equal to the ABR plus 2% from and including the initial Effective
Date to but excluding the last day of each Settlement Period and shall be paid
(x) on each Distribution Date with respect to the principal amount of the
Subordinated Note outstanding from time to time during the Settlement Period
immediately preceding such Distribution Date and/or (y) on the maturity date
thereof. Principal thereunder not paid or prepaid pursuant to the terms thereof
shall be payable on the maturity date of the Subordinated Note. Default in the
payment of principal or interest under the Subordinated Note shall not
constitute a Purchase Termination Event under this Agreement, a Servicer Default
under any Servicing Agreement or an Early Amortization Event under the Pooling
Agreement or any Supplement thereto.
Section 8.02 RESTRICTIONS ON TRANSFER OF SUBORDINATED NOTE. Neither
the Subordinated Note, nor any right of USFC to receive payments thereunder,
shall be assigned, transferred, exchanged, pledged, hypothecated, participated
or otherwise conveyed.
ARTICLE IX
MISCELLANEOUS
Section 9.01 AMENDMENT. Neither this Agreement nor any of the terms
hereof may be amended, supplemented or modified except in a writing signed by
the Company and USFC. Any amendment, supplement or modification shall not be
effective until the Rating Agency Condition, if applicable, has been satisfied.
Section 9.02 NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage-prepaid, by facsimile or by overnight courier, (a) in
the case of the Company, to it at the address or facsimile number set forth in
Section 10.4 of the Pooling Agreement and (b) in the case of all other parties,
to such party at the address or facsimile number of the Servicer set forth in
Section 10.4 of the Pooling
43
Agreement or, in the case of the foregoing clause (a) or (b), at such other
address or facsimile number as shall be designated by the relevant party in a
written notice to the other parties hereto given in accordance with this Section
9.02. All notices and communications provided for hereunder shall be effective,
(a) if personally delivered by express mail or courier, when received, (b) if
sent by certified mail, three Business Days after having been deposited in the
mail, postage prepaid and (c) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
Section 9.03 NO WAIVER; REMEDIES. No failure on the part of the
Company to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
Section 9.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of USFC and the Company and their respective
successors (whether by merger, consolidation or otherwise) and assigns. USFC
agrees that it will not assign or transfer all or any portion of its rights or
obligations hereunder without the prior written consent of the Company. USFC
acknowledges that the Company shall assign all of its rights hereunder to the
Trustee, for the benefit of the Holders, pursuant to the Pooling Agreement. USFC
consents to such assignment and agrees that the Trustee, to the extent provided
in the Pooling Agreement, shall be entitled to enforce the terms of this
Agreement and the rights (including, without limitation, the right to grant or
withhold any consent or waiver) of the Company directly against USFC, whether or
not a Purchase Termination Event or a Potential Purchase Termination Event has
occurred. USFC further agrees that, in respect of its obligations hereunder, it
will act at the direction of and in accordance with all requests and
instructions from the Trustee until all amounts due to the Investor
Certificateholders are paid in full. The Trustee, on behalf of the Holders,
shall have the rights of a third-party beneficiary under this Agreement.
Section 9.05 COSTS, EXPENSES AND TAXES. In addition to the limited
rights of indemnification granted to the Company under Article VII hereof, USFC
agrees to pay on demand all reasonable out-of-pocket costs and expenses of the
Company in connection with the negotiation, preparation, execution and delivery
of, and any amendment, supplement or other modification to, this Agreement, the
other Transaction Documents and any other documents prepared in connection
herewith and therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Company with
respect thereto and
44
with respect to advising the Company as to its rights and remedies under this
Agreement, the other Transaction Documents and any such other documents, and all
costs and expenses (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the other Transaction
Documents and any such other documents. In addition, USFC agrees to pay any and
all stamp and other taxes and governmental fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents to be delivered hereunder, and
agrees to hold the Company harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omitting to pay such
taxes and fees.
Section 9.06 INTEGRATION. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
Section 9.07 CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise provided
herein, references in this Agreement to any "Section," "Exhibit," "Annex" or
"Schedule" are to such Section of or Exhibit or Annex or Schedule to this
Agreement, as the case may be.
Section 9.08 RESERVED.
Section 9.09 RESERVED.
Section 9.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
Section 9.11 ACKNOWLEDGMENT OF ASSIGNMENTS. USFC hereby acknowledges
and consents to the assignment by the Company of Receivables and Receivables
Property and the rights of the Company under this Agreement pursuant to the
Pooling and Servicing Agreements. USFC acknowledges that the Company will grant
a security interest in the Lockbox Accounts, the Collection Concentration
Account and the Collection Account to the Trustee for the benefit of the
Holders. USFC agrees to take any action that the Company or the Trustee may
reasonably request in connection with such assignment or security interest.
45
Section 9.12 NO PETITION IN BANKRUPTCY. USFC covenants and agrees that
prior to the date which is one year and one day after the date of termination of
this Agreement pursuant to Section 9.15, it will not institute against or join
any other Person in instituting against the Company any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States, any State of the United
States or the Cayman Islands.
Section 9.13 ADDITION OF SELLERS UNDER THE AMENDED AND RESTATED
RECEIVABLES SALE AGREEMENT. Subject to subsection 8.15(a) of the Pooling
Agreement, the Company shall direct USFC to agree to or deny the request of any
Subsidiary of United Stationers Inc. desiring to become an additional Seller
under the Amended and Restated Receivables Sale Agreement pursuant to Section
9.13 thereof.
Section 9.14 TERMINATION OF SELLERS UNDER THE AMENDED AND RESTATED
RECEIVABLES SALE AGREEMENT. Subject to subsection 8.15(b) of the Pooling
Agreement, the Company shall direct USFC to consent to or deny any Seller
Termination Request made pursuant to subsection 9.14 of the Amended and Restated
Receivables Sale Agreement.
Section 9.15 TERMINATION. This Agreement will terminate at such time
as (a) an Early Termination shall have occurred hereunder and (b) all
Receivables purchased hereunder have been collected, and the proceeds thereof
turned over to the Company and all other amounts owing to the Company hereunder
shall have been paid in full or, if Receivables sold hereunder have not been
collected, such Receivables have become Defaulted Receivables and the Company
shall have completed its collection efforts with respect thereto; PROVIDED,
HOWEVER, that the indemnities of USFC to the Company set forth in this Agreement
shall survive such termination and PROVIDED, FURTHER, that the Company shall
remain entitled to receive any collections on Receivables sold hereunder which
have become Defaulted Receivables.
Section 9.16 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION; OTHER
WAIVERS.
(a) EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR
46
THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), ACTIONS OF ANY OF THE PARTIES HERETO OR ANY OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
(b) Each of the Company and USFC hereby irrevocably and
unconditionally:
(i) submits itself and its property in any legal action
or proceeding relating to this Agreement and the other Transaction
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of
the courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Person at its address referred to in Section 9.02 or at
such other address of which USFC or the Company, as the case may be, shall
have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this subsection 9.07(b) any special, exemplary, punitive or
consequential damages.
SECTION 9.17 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS
47
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
48
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE SELLER:
UNITED STATIONERS FINANCIAL
SERVICES LLC
By:
---------------------------------------
Name:
Title:
THE SERVICER:
UNITED STATIONERS FINANCIAL
SERVICES LLC
By:
---------------------------------------
Name:
Title:
USS RECEIVABLES COMPANY, LTD.
By:
---------------------------------------
Name:
Title:
SCHEDULE I
AUTHORIZED OFFICERS
[to be provided]
SCHEDULE II
[information to be confirmed]
Principal place of business and Chief Executive Offices of USFC:
[information to be confirmed]
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇▇ County)
Offices where USFC keeps its records concerning Receivables and Related
Contracts, purchase orders and all other Agreements related to the Receivables:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇▇ County)
SCHEDULE III
[Reserved]
SCHEDULE IV
Policies Concerning Contracts and Receivables:
On File with USFC
SCHEDULE VI
CORPORATE AND TRADE NAMES
United Stationers Financial Services LLC
JURISDICTIONS USED
[to be confirmed]
Illinois
SCHEDULE VII
DISCOUNTED PERCENTAGE
[USSC TO ADVISE ON NEW DEFINITION]
The Discounted Percentage applicable to the Receivables purchased on any date
from USFC shall equal (a) until the date which is 90 days after the initial
Effective Date, [98.88]% and (b) thereafter, the percentage obtained from the
following formula:
100% - (A + B + C + D)
As determined by the Company as of the related Payment Date,
where
A= Adjusted Loss Reserve Percentage, which as of such Payment Date will
equal the ratio obtained by dividing (a) Charged-Off Receivables (net of
recoveries in respect of Charged-Off Receivables) with respect to USFC
during the six-fiscal-month period immediately preceding the Settlement
Report Date most recently preceding such Payment Date by (b) two times the
aggregate amount of Collections during the three-fiscal-month period
immediately preceding the Settlement Report Date most recent to such
Payment Date with respect to Receivables originated by USFC.
B= Adjusted Carrying Cost Reserve Percentage, which as of such Payment Date
will equal the amount obtained by dividing (a) the product of (i) 1.3, (ii)
Days Sales Outstanding and (iii) the ABR by (b) 365.
C= the Servicing Fee Percentage divided by 360.
D= Processing Expense Reserve Percentage, which will equal 0.1% and reflects
the cost of the Company's overhead, including costs of processing the
purchase of Receivables and other normal operating costs and a reasonable
profit margin.
None of the elements of the above-referenced formula, in respect of any purchase
of receivables, will be adjusted following the related Payment Date.
With respect to each calculation set forth above with respect to a Settlement
Report Date, such calculation as calculated on such Settlement Report Date and
included in the applicable Monthly Settlement Statement shall remain in effect
from and including the related Settlement Report Date to but excluding the
following Settlement Report Date.
SCHEDULE VIII
ERISA
None
Exhibit A
TO RECEIVABLES SALE AGREEMENT
FORM OF SUBORDINATED NOTE
FORM OF
SUBORDINATED PROMISSORY NOTE
Des Plaines, Illinois May 1, 2001
FOR VALUE RECEIVED, the undersigned, USS RECEIVABLES COMPANY, LTD., a
Cayman Islands limited company (the "COMPANY"), does hereby promise to pay to
the order of UNITED STATIONERS FINANCIAL SERVICES LLC, an Illinois limited
liability company (" USFC"), and its successors and permitted assigns, the
principal amount of this Subordinated Promissory Note (this "SUBORDINATED
NOTE"), determined as described below, together with interest thereon which
shall accrue on the last day of each Settlement Period at a rate per annum equal
to the ABR in effect from time to time plus two percent (2%) from and including
the initial Effective Date to but excluding the last day of each Settlement
Period and shall, subject to the terms and conditions hereof, be paid (x) on
each Distribution Date with respect to this Subordinated Note outstanding from
time to time during the Settlement Period immediately preceding such
Distribution Date and/or (y) on the Maturity Date (as hereinafter defined).
Capitalized terms used herein and not otherwise defined are used herein as
defined in the Receivables Sales Agreement dated as of May 1, 2001, among USFC,
the Company, and USFC, as Servicer (such agreement, as it may from time to time
be amended, supplemented or otherwise modified in accordance with its terms, the
" USFC RECEIVABLES SALE AGREEMENT") and the Amended and Restated Pooling
Agreement dated as of May 1, 2001, among the Company, USFC, as Servicer, and The
Chase Manhattan Bank, as Trustee and as Securities Intermediary (such agreement,
as it may from time to time further be amended, supplemented or otherwise
modified in accordance with its terms, the "POOLING AGREEMENT"). This
Subordinated Note is the Subordinated Note referred to in the USFC Receivables
Sale Agreement.
The Initial Subordinated Note Amount shall be equal to ____________
($___________). Following the Effective Date, the aggregate principal amount of
this Subordinated Note at any time shall be equal to the difference between (1)
the sum of the Initial Subordinated Note Amount and each addition to the
principal amount of the Subordinated Note with respect to USFC pursuant to
Section 2.03 of the USFC Receivables Sale Agreement as of such time and (ii) the
aggregate amount of all payments made in respect of the principal of this
Subordinated Note as of such time. All payment made in respect of this
Subordinated Note shall be distributed to USFC by the Servicer in accordance
with the USFC Receivables Sale Agreement and shall be allocated FIRST, to pay
accrued and unpaid interest thereon, and SECOND, to pay the outstanding
principal amount thereof. Principal hereunder not paid or prepaid pursuant to
the terms hereof shall be payable on the date (the "MATURITY DATE") on which all
of the Investor Certificateholders with respect to each Outstanding Series shall
have been paid in
full all amounts owing to them under any Pooling and Servicing Agreement.
Payments of interest on and principal under this Subordinated Note shall be paid
by wire transfer of immediately available funds to the account of USFC or any
other such account as USFC may designate in writing from time to time.
Notwithstanding the foregoing, no payment of interest or principal (any of the
foregoing, a "PAYMENT") may be made under this Subordinated Note at any time
unless (i) at the date such payment is to be made, the Company shall have made
all payments in respect of its repurchase obligations pursuant to the Pooling
Agreement at such date and (ii) such payment is effected in accordance with all
corporate and legal formalities applicable to the Company; PROVIDED, HOWEVER,
that (A) no payment shall be made on, and USFC shall make no claim for any
payment on, any date if (x) a Potential Early Amortization Event of a type
referred to in clause (a)(ii) or (iii) of Section 7.1 of the Pooling Agreement
or (y) an Early Amortization Event has occurred and is continuing (or would
occur as a result of such payment) on such date and (B) all payments made on any
date shall be payable by the Company solely from funds available to the Company
which are not otherwise needed or required on such date to be applied to the
payment of any amounts by the Company pursuant to any Pooling and Servicing
Agreement and USFC shall make no claim for payment in contravention of this
clause (B). Default in the payment of interest on and principal under this
Subordinated Note shall not constitute a Purchase Termination Event under the
USFC Receivables Sale Agreement, a Servicer Default under the Servicing
Agreement, or an Early Amortization Event under the Pooling Agreement or any
Supplement thereto.
The holder of this Subordinated Note agrees that it shall have no
right to be paid, and shall have no claim to payment, except in accordance with,
and subject to the terms and conditions of, this Subordinated Note.
Neither this Subordinated Note, nor any right of USFC to receive
payments hereunder, shall be assigned, transferred, exchanged, pledged,
hypothecated, participated or otherwise conveyed.
The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The failure of any holder to exercise any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
If any payment or distribution of any kind be collected or received by
USFC in respect of amounts owing to USFC under this Subordinated Note when
pursuant hereto such payment should not have been made to or received by USFC,
USFC forthwith shall deliver the same to the Trustee for the benefit of the
Holders. Until so delivered, such payment or distribution shall be held in trust
by USFC as the property of the Holders, segregated from other funds and property
held by USFC.
USFC covenants and agrees that, prior to the date which is one (1)
year and one (1) day after the date of termination of the USFC Receivables Sale
Agreement pursuant to Section 9.15 thereof, it will not institute against, or
join any other Person in instituting against, the Company any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law.
THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
USS RECEIVABLES COMPANY, LTD.
By:
---------------------------------------
Name:
Title:
EXHIBIT C TO
RECEIVABLES SALE
AGREEMENT
UCC CERTIFICATE
The undersigned, the Treasurer and Assistant Secretary of UNITED
STATIONERS FINANCIAL SERVICES LLC, an Illinois limited liability company ("
USFC"), makes reference to the USFC Receivables Sale Agreement dated as of May
1, 2001 (as may from time to time be amended, supplemented or otherwise
modified, the "AGREEMENT"), among USFC and USS RECEIVABLES COMPANY, LTD., a
Cayman Islands limited company, and USFC in its capacity as servicer (terms used
but not defined herein have the meaning given them in the Agreement), and in
connection therewith hereby certifies to the Company and the Trustee, on behalf
of USFC and not individually, as follows:
1. NAMES.
(a) The exact corporate name of USFC, as such name appears in its
certificate of formation, is as follows:
United Stationers Financial Services LLC
(b) Set forth below is each other corporate name USFC has had since
its organization, together with the date of the relevant change:
NONE
(a) (c) Except as set forth in Schedule A hereto, USFC has
not changed its identity or corporate structure in any way within the past five
years.
(d) SCHEDULE B hereto lists all other names (including trade names or
similar appellations) used by USFC or any of its divisions or other business
units in connection with the conduct of its business or the ownership of its
properties at any time during the past five years.
2. CURRENT LOCATIONS.
(b) (a) The chief executive office of USFC is located at
the following address:
[United Stationers Financial Services, LLC.
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(b) SCHEDULE C hereto lists all the locations where USFC maintains
any books or records relating to any Receivables and Receivables Property.
3. FEDERAL TAXPAYER IDENTIFICATION NUMBER. The following is USFC's Federal
Taxpayer Identification Number:
[ ]
4. SCHEDULE OF FILINGS. Attached hereto as SCHEDULE D is a schedule setting
forth each filing office in which a filing by USFC of a financing statement on
Form UCC-l is to be made in connection with the transactions contemplated by the
Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of April,
2001.
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[Name:]
[Title:]
SCHEDULE A
USFC has not changed its identity or corporate structure in any way within the
past five years.
SCHEDULE B
All other names (including trade names or similar appellations) used by USFC or
any of its divisions or other business units in connection with the conduct of
its business or the ownership of its properties at any time during the past five
years.
[None.]
SCHEDULE C
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SCHEDULE D
[to be confirmed]
Listed below is each filing office in which a filing by USFC of a financing
statement on Form UCC-l is to be made in connection with the transactions
contemplated by the Agreement.
Secretary of State of Illinois
ANNEX 1 TO THE USFC RECEIVABLES SALE AGREEMENT
USS Receivables Company, Ltd. is a separate wholly-owned, bankruptcy
remote, subsidiary of United Stationers Financial Services LLC established to
purchase accounts receivable from United Stationers Supply Co. and certain of
its other subsidiaries.