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Exhibit 10.2
RECEIVABLES SALE AGREEMENT
Dated as of April 30, 2002
among
▇▇▇▇▇ & MINOR, INC., ▇▇▇▇▇ & MINOR DISTRIBUTION, INC. and ▇▇▇▇▇ &
MINOR MEDICAL, INC.,
as Originators
and
O&M FUNDING CORP.,
as Buyer
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TABLE OF CONTENTS
Page
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ARTICLE I. AMOUNTS AND TERMS..................................................2
Section 1.1 Purchase of Receivables..................................2
Section 1.2 Payment for the Purchase.................................3
Section 1.3 Purchase Price Credit Adjustments........................4
Section 1.4 Payments and Computations, Etc...........................5
Section 1.5 Transfer of Records; License of Software.................5
Section 1.6 Characterization.........................................5
Section 1.7 Addition of Originators..................................6
Section 1.8 Termination of Status as an Originator...................6
Section 1.9 Facility Fee.............................................7
Section 1.10 Limited Role of the Parent...............................9
ARTICLE II. REPRESENTATIONS AND WARRANTIES....................................9
Section 2.1 Representations and Warranties of Originators............9
ARTICLE III. CONDITIONS OF PURCHASE..........................................13
Section 3.1 Conditions Precedent to Purchase........................13
Section 3.2 Conditions Precedent to Subsequent Payments.............13
ARTICLE IV. COVENANTS........................................................14
Section 4.1 Affirmative Covenants of Originators....................14
Section 4.2 Negative Covenants of Originators.......................18
ARTICLE V. TERMINATION EVENTS................................................19
Section 5.1 Termination Events......................................19
Section 5.2 Remedies................................................22
ARTICLE VI. INDEMNIFICATION..................................................22
Section 6.1 Indemnities by Originators..............................22
Section 6.2 Other Costs and Expenses................................28
ARTICLE VII. MISCELLANEOUS...................................................28
Section 7.1 Waivers and Amendments..................................28
Section 7.2 Notices.................................................28
Section 7.3 Protection of Ownership Interests of Buyer..............28
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TABLE OF CONTENTS
Page
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Section 7.4 Confidentiality.........................................29
Section 7.5 Limitation of Liability.................................30
Section 7.6 No Recourse.............................................30
Section 7.7 Bankruptcy Petition.....................................30
Section 7.8 CHOICE OF LAW...........................................30
Section 7.9 CONSENT TO JURISDICTION.................................30
Section 7.10 WAIVER OF JURY TRIAL....................................31
Section 7.11 Integration; Binding Effect; Survival of Terms..........31
Section 7.12 Counterparts; Severability; Section References..........32
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EXHIBITS AND SCHEDULES
EXHIBIT I -- Definitions
EXHIBIT II -- Principal Place of Business; Location(s) of Records; Federal
Employer Identification Number; Other Names
EXHIBIT III -- Lock-Boxes; Collection Accounts; Collection Banks
EXHIBIT IV -- Form of Compliance Certificate
EXHIBIT V -- Credit and Collection Policy
EXHIBIT VI -- Form of Subordinated Note
SCHEDULE A -- List of Documents to Be Delivered to Buyer Prior to the
Purchase
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RECEIVABLES SALE AGREEMENT
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THIS RECEIVABLES SALE AGREEMENT, dated as of April 30, 2002, is by and
among ▇▇▇▇▇ & MINOR, INC., a Virginia corporation ("Parent"), ▇▇▇▇▇ & MINOR
DISTRIBUTION, INC., a Virginia corporation ("O&M Distribution"), ▇▇▇▇▇ & MINOR
MEDICAL, INC. (formerly known as OMI Specialty, Inc.), a Virginia corporation
("O&M Medical") (each of the foregoing including Parent, an "Originator" and
collectively, the "Originators"), and O&M FUNDING CORP., a Virginia corporation
("Buyer"). Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Exhibit I hereto
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(or, if not defined in Exhibit I hereto, the meaning assigned to such term in
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Exhibit I to the Purchase Agreement).
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PRELIMINARY STATEMENTS
Pursuant to that certain Receivables Sale Agreement, dated as of July
14, 2000 (the "Amended Receivables Sale Agreement") among Koley's Medical
Supply, Inc. ("Koley's"), ▇▇▇▇▇ & Minor Medical, Inc., the Parent, ▇▇▇▇▇ & Minor
West, Inc.("O&M West") and Stuart Medical, Inc. ("Stuart") as originators and
O&M Funding Corp., as Buyer, as amended by Amendment No. 1 to the Receivables
Sale Agreement, dated as of December 31, 2001, among O&M Distribution (successor
in interest to each of Koley's, ▇▇▇▇▇ & Minor Medical, Inc., O&M West and
Stuart), the Parent, and O&M Funding Corp., each of O&M Distribution, O&M
Medical and the Parent has sold, transferred and assigned to Buyer, all of their
respective right, title and interest in and to the Receivables presently owned
by Buyer disregarding any purchases contemplated by this Receivables Sale
Agreement (the "Purchased Receivables"), together with the Related Security and
Collections with respect thereto.
Each of O&M Distribution, ▇▇▇▇▇ & Minor Medical, Inc., and the Parent
intends to terminate the Amended Receivables Sale Agreement as of the date
hereof.
Each of the Originators desire to sell and assign to Buyer, and Buyer
desires to purchase from the Originators, all of the Originators' right, title
and interest in and to future Receivables originated by the Originators on or
prior to the Termination Date in accordance with the terms hereunder.
The Originators and Buyer intend the transactions contemplated hereby
to be true sales of the Receivables from the Originators to Buyer, providing
Buyer with the full benefits of ownership of the Receivables, and the
Originators and Buyer do not intend these transactions to be, or for any purpose
to be characterized as, loans from Buyer to the Originators.
Following the acquisition of Receivables from the Originators, Buyer
will sell undivided interests therein and in the associated Related Security and
Collections pursuant to that certain Receivables Purchase Agreement dated as of
April 30, 2002 (as the same may from time to time hereafter be amended,
supplemented, restated or otherwise modified, the "Purchase Agreement") among
Buyer, Parent, O&M Medical, as the Servicer, Blue Ridge Asset Funding
Corporation ("Blue Ridge"), Wachovia Bank, National Association ("Wachovia"),
individually as a liquidity provider to Blue Ridge and as agent for Blue Ridge
and its liquidity providers (in
such latter capacity, a "Co-Agent"), Blue Keel Funding, L.L.C. ("Blue Keel" and,
together with Blue Ridge, the "Conduits"), and Fleet National Bank, individually
as a liquidity provider to Blue Keel and as agent for Blue Keel and its
liquidity providers (in such latter capacity, a "Co-Agent"), and Wachovia Bank,
National Association, as administrative agent for the Conduits and the Co-Agents
(in such capacity the "Collateral Agent" and, together with the Co-Agents, the
"Agents").
ARTICLE I.
AMOUNTS AND TERMS
Section 1.1 Purchase of Receivables.
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(a) Effective on the date hereof, in consideration for the Purchase Price
and upon the terms and subject to the conditions set forth herein, each
Originator does hereby sell, assign, transfer, set-over and otherwise convey to
Buyer, without recourse (except to the extent expressly provided herein), and
Buyer does hereby purchase from each Originator, all of such Originator's right,
title and interest in and to all Receivables existing as of the close of
business on the Business Day immediately prior to the date hereof and all
Receivables thereafter arising through and including the Termination Date,
together, in each case, with all Related Security, Lock-Boxes and Collection
Accounts relating thereto and all Collections thereof. In accordance with the
preceding sentence, on the date hereof Buyer shall acquire all of each such
Originator's right, title and interest in and to all Receivables existing as of
the close of business on the Business Day immediately prior to the date hereof
and thereafter arising through and including the Termination Date, together with
all Related Security relating thereto and all Collections thereof; provided that
Buyer shall be obligated to pay the Purchase Price therefor in accordance with
Section 1.2. In connection with the payment of the Purchase Price for any
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Receivables purchased hereunder, Buyer may request that each Originator deliver,
and each Originator shall deliver, such approvals, opinions, information,
reports or documents as Buyer may reasonably request.
(b) It is the intention of the parties hereto that the Purchase of
Receivables by an Originator hereunder shall constitute an absolute sale or
other outright conveyance, which sale is absolute and irrevocable and provides
Buyer with the full benefits of ownership of the Receivables. Except for the
Purchase Price Credits owed pursuant to Section 1.3, the sale of Receivables
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hereunder is made without recourse to the Originators; provided, however, that
(i) each Originator shall be liable to Buyer for all representations,
warranties, covenants, and indemnities made by such Originator pursuant to the
terms of the Transaction Documents to which such Originator is a party, and (ii)
such sale does not constitute and is not intended to result in an assumption by
Buyer or any assignee thereof of any obligation of any Originator or any other
Person arising in connection with the Receivables, the related Contracts and/or
other Related Security or any other obligations of any Originator. In view of
the intention of the parties hereto that the Purchase of Receivables made
hereunder shall constitute a sale of such Receivables rather than loans secured
thereby, each Originator agrees that it will, on or prior to the date hereof and
in accordance with Section 4.1(e)(ii), ▇▇▇▇ its master data processing records
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relating to the Receivables with a legend acceptable to Buyer (and the
Collateral Agent and each Co-Agent, as Buyer's assignees), evidencing that Buyer
has purchased such Receivables as provided in this Agreement and to note in its
financial statements that its Receivables have been
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sold to Buyer. Upon the request of Buyer (or the Collateral Agent or any
Co-Agent, as Buyer's assignee), each Originator will, at such Originator's
expense, execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate to perfect and maintain the
perfection of Buyer's ownership interest in the Receivables and the Related
Security and Collections with respect thereto, or as Buyer (or the Collateral
Agent, as Buyer's assignee) may reasonably request.
Section 1.2 Payment for the Purchase.
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(a) The Purchase Price for each Receivable coming into existence after the
Closing Date shall be due and owing in full by Buyer to each Originator or its
designee on the date each such Receivable came into existence (except that Buyer
may, with respect to any such Purchase Price, offset against such Purchase Price
any amounts owed by such Originator to Buyer hereunder and which have become due
but remain unpaid) and shall be paid to each Originator in the manner provided
in the following paragraphs (b), (c) and (d).
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(b) With respect to any Receivables coming into existence after the date
hereof, on each Settlement Date, Buyer shall pay the Purchase Price therefor in
accordance with Section 1.2(d) and in the following manner:
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first, by delivery of immediately available funds, to the extent of
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funds available to Buyer from its subsequent sale of an interest in
the Receivables to each Co-Agent for the benefit of the Purchasers
under the Purchase Agreement or other cash on hand, such funds to be
allocated among the Originators as determined by Buyer in its sole
discretion; and
second, to the extent any portion of the Purchase Price remains
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unpaid, by delivery of the proceeds of a subordinated revolving loan
from such Originator to Buyer (a "Subordinated Loan") in an amount not
to exceed the least of (i) the remaining unpaid portion of such
Purchase Price, (ii) the maximum Subordinated Loan that could be
borrowed without rendering Buyer's Tangible Net Worth less than
$10,000,000 and (iii) the maximum Subordinated Loan that could be
borrowed without rendering the Net Value less than the aggregate
outstanding principal balance of the Subordinated Loans (including the
Subordinated Loan proposed to be made on such date). Each Originator
is hereby authorized by Buyer to endorse on the schedule attached to
its Subordinated Note an appropriate notation evidencing the date and
amount of each advance thereunder, as well as the date of each payment
with respect thereto, provided that if the failure to make such
notation shall not affect any obligation of Buyer thereunder.
Subject to the limitations set forth above, each Originator irrevocably agrees
to advance each Subordinated Loan requested by Buyer on or prior to the
Termination Date. The Subordinated Loans shall be evidenced by, and shall be
payable in accordance with the terms and provisions of the Subordinated Notes
and shall be payable solely from funds which Buyer is not required under the
Purchase Agreement to set aside for the benefit of, or otherwise pay over to,
the
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Purchasers, the Collateral Agent, the Co-Agents or any other Person then
entitled to any amounts as specified in the Purchase Agreement.
(c) From and after the Termination Date, no Originator shall be obligated
to (but may, at its option) sell Receivables to Buyer unless such Originator
reasonably determines that the Purchase Price therefor will be satisfied with
funds available to Buyer from sales of interests in the Receivables pursuant to
the Purchase Agreement, Collections, proceeds of Subordinated Loans or
otherwise.
(d) Although the Purchase Price for each Receivable coming into existence
after the date hereof shall be due and payable in full by Buyer to each
Originator on the date such Receivable comes into existence, settlement of the
Purchase Price between Buyer and each Originator shall be effected on a monthly
basis on Settlement Dates with respect to all Receivables coming into existence
during the same Accrual Period and based on the information contained in the
Settlement Report delivered by the Servicer pursuant to Article VIII of the
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Purchase Agreement for the Accrual Period then most recently ended. Although
settlement shall be effected on Settlement Dates, increases or decreases in the
amount owing under the Subordinated Notes made pursuant to Section 1.2(b) shall
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be deemed to have occurred and shall be effective as of the last Business Day of
the Accrual Period to which such settlement relates.
Section 1.3 Purchase Price Credit Adjustments. If on any day:
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(a) the Outstanding Balance of a Receivable acquired from any Originator
is:
(i) reduced as a result of any defective, rejected or non-conforming
goods or services, any discount or any adjustment or otherwise by
an Originator (other than cash Collections on account of the
Receivables),
(ii) reduced or canceled as a result of a setoff in respect of any
claim by any Person (whether such claim arises out of the same or
a related transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in Article II are
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no longer true with respect to any Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a "Purchase
Price Credit") against the Purchase Price otherwise payable hereunder equal to
the Purchase Price of such Receivable plus any interest which accrued during the
related Accrual Period. If such Purchase Price Credit exceeds the Original
Balance of the Receivables coming into existence on any day, then the applicable
Originator shall pay the remaining amount of such Purchase Price Credit either
(i) in cash within five (5) Business Days thereafter, or (ii) by deducting the
remaining amount of such Purchase Price Credit from any indebtedness owed to
such Originator under its Subordinated Note; provided, however, that so long as
a Termination Event or a Potential Termination Event has occurred and is
continuing, such Purchase Price Credit shall be paid by such Originator, to
Buyer, in cash, by deposit of immediately available funds to the relevant
Collection Account for application by the Servicer to the same extent as if
Collections on the applicable Receivable in such amount had been received on
such date. In the event that an Originator has paid in full the Purchase Price
Credit of any Receivable pursuant to this Section 1.3, Buyer shall reconvey such
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Receivable to such Originator, without representation or warranty, but free and
clear of all liens created by Buyer.
Section 1.4 Payments and Computations, Etc. All amounts to be paid or deposited
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by Buyer hereunder shall be paid or deposited in accordance with the terms
hereof on the day when due in immediately available funds to the account of the
applicable Originator designated from time to time by such Originator or as
otherwise directed by such Originator. In the event that any payment owed by any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Originator
fails to pay any amount hereunder when due, such Originator agrees to pay, on
demand, the Default Fee in respect thereof until paid in full; provided,
however, that such Default Fee shall not at any time exceed the maximum rate
permitted by applicable law. All computations of interest payable hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.
Section 1.5 Transfer of Records; License of Software.
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(a) In connection with the Purchase of Receivables hereunder, each
Originator hereby sells, transfers, assigns and otherwise conveys to Buyer all
of such Originator's right and title to and interest in the Records relating to
all Receivables sold hereunder, without the need for any further documentation
in connection with the Purchase. In connection with such transfer, each
Originator hereby grants to each of Buyer, the Collateral Agent and the Servicer
an irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by such Originator to account for the Receivables, to
the extent necessary to administer the Receivables, whether such software is
owned by such Originator or is owned by others and used by such Originator under
license agreements with respect thereto, provided that should the consent of any
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licensor of such Originator to such grant of the license described herein be
required, such Originator hereby agrees that upon the request of Buyer (or the
Collateral Agent or any Co-Agent, as Buyer's assignees), such Originator will
use its reasonable efforts to obtain the consent of such third-party licensor.
The license granted hereby shall be irrevocable, and shall terminate on the date
this Agreement terminates in accordance with its terms and all amounts payable
hereunder in respect of any Receivables or otherwise have been paid in full.
(b) Each Originator (i) shall take such action requested by Buyer (or the
Collateral Agent or any Co-Agent, as Buyer's assignee), from time to time
hereafter, that may be necessary or appropriate to ensure that Buyer and its
assigns under the Purchase Agreement have an enforceable ownership interest in
the Records relating to the Receivables purchased from such Originator
hereunder, and (ii) shall use its reasonable efforts to ensure that Buyer, the
Collateral Agent and the Servicer each has an enforceable right (whether by
license or sublicense or otherwise) to use all of the computer software used to
account for the Receivables and/or to recreate such Records.
Section 1.6 Characterization. If, notwithstanding the intention of the parties
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expressed in Section 1.1(b), any sale or contribution by any Originator to Buyer
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of Receivables hereunder shall be characterized as a secured loan and not a sale
or such sale shall for any reason be ineffective or unenforceable, then this
Agreement shall be deemed to constitute a security agreement under the UCC and
other applicable law. For this purpose and without being in
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derogation of the parties' intention that the sale of Receivables hereunder
shall constitute a true sale thereof, each Originator hereby grants to Buyer a
duly perfected security interest in all of such Originator's right, title and
interest in, to and under all Receivables now existing and hereafter arising,
all Collections, Related Security and Records with respect thereto, each
Lock-Box and Collection Account and all proceeds of the foregoing, which
security interest shall be prior to all other Adverse Claims thereto. After the
occurrence of a Termination Event, Buyer (and the Collateral Agent and each
Co-Agent, as Buyer's assignees) shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies
provided to a secured creditor after default under the UCC and other applicable
law, which rights and remedies shall be cumulative.
Section 1.7 Addition of Originators. Any Subsidiary of the Parent may become an
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Originator hereunder with the prior written consent of Buyer (and the Collateral
Agent and each Co-Agent, as Buyer's assignees). Each Subsidiary of the Parent
that is proposed to be added as an Originator shall give to Buyer (and the
Collateral Agent and each Co-Agent, as Buyer's assignees) prior written notice
of its desire to be added as an Originator. Once the notice has been given, any
addition of a Subsidiary of the Parent as an Originator pursuant to this section
shall become effective on the first Business Day following the date on which (i)
such Subsidiary and the parties hereto shall have executed and delivered the
agreements, instruments and other documents (including, without limitation,
opinions of counsel, financing statements and collection account agreements) and
the amendments or other modifications to the Transaction Documents, in form and
substance satisfactory to Buyer (and to the Collateral Agent and each Co-Agent,
as Buyer's assignees), that Buyer (or the Collateral Agent or any Co-Agent, as
Buyer's assignee) determines are necessary or appropriate to effect the
addition, (ii) the Parent confirms in writing that the guaranty under Article
XIV of the Purchase Agreement covers the obligations of such new Originator as
an Originator and (iii) Buyer (and the Collateral Agent and each Co-Agent, as
Buyer's assignees) shall have consented, in writing, to the addition of such new
Originator. Upon such effectiveness, any reference to "Originator" in this
Agreement shall refer to each existing Originator and each Subsidiary of the
Parent added as an Originator pursuant to this Section.
Section 1.8 Termination of Status as an Originator. At any time when more than
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one Person is an Originator, an Originator may terminate its obligations as an
Originator hereunder if:
(a) the Originator (a "Terminating Originator") shall have given Buyer (and
the Collateral Agent and each Co-Agent, as Buyer's assignees) not less than
ninety (90) days' prior written notice of its intention to terminate; provided,
however, that the Originator shall not be required to give more than thirty (30)
days' notice in the case of a termination resulting from a merger permitted by
Section 4.2(g),
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(b) an Authorized Officer of the Parent shall have certified that the
termination by the Terminating Originator of its status as an Originator will
not have a Material Adverse Effect on the business, financial condition or
assets of Buyer,
(c) both immediately before and after giving effect to the termination by
the Terminating Originator, no Termination Event or Potential Termination Event
shall have
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occurred and be continuing or shall reasonably be expected to occur as a result
of such termination,
(d) both immediately before and after giving effect to the termination by
the Terminating Originator, the Aggregate Invested Amount shall not exceed the
Purchase Limit, and
(e) the Collateral Agent and each Co-Agent, as Buyer's assignees) shall
have consented (which such consent shall not be unreasonably withheld), in
writing, to the termination of the obligations of such Terminating Originator.
Any termination by an Originator shall become effective on the first
Business Day that follows the day on which the requirements of clauses (a)
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through (e) shall have been satisfied (or such later date specified in the
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notice or certificate referred to in the clauses). Any termination by an
Originator shall terminate its rights and obligations hereunder; provided,
however, that the termination shall not relieve the Terminating Originator of
obligations which relate to transferred Receivables owned by or obligations of
the Terminating Originator arising prior to the effective date of the
termination.
Section 1.9 Facility Fee.
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(a) In consideration for the agreement by Buyer to provide the receivables
purchase facility hereunder and to purchase Receivables from the Originators
pursuant to this Agreement, each Originator agrees to pay Buyer a facility fee
(the "Facility Fee") as set forth in this Section 1.9. The Facility Fee shall
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accrue from the date of the initial purchase from such Originator hereunder, in
each case to the Termination Date, and shall be payable in arrears by such
Originator on each Settlement Date and the Termination Date.
(b) The Facility Fee payable by each Originator on any Settlement Date and
on the Termination Date shall be calculated in accordance with the following
formula:
FF = FFOB x FFP
where:
FF = the Facility Fee payable by such Originator on such date.
FFOB = the aggregate Outstanding Balance of the Receivables that
were purchased from such Originator during the Accrual
Period immediately preceding such Settlement Date. (For
purposes of this calculation, the Outstanding Balance of a
Receivable shall be measured only at the time of such
Receivable's creation and sale to Buyer.)
FFP = the Facility Fee Percentage as measured on such Settlement
Date as determined pursuant to paragraph (c) below.
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(c) "Facility Fee Percentage" as measured on any Settlement Date (or the
Termination Date) means for each Originator a percentage determined in
accordance with the following formula:
FFP = (OTD/360) x FR
where:
FFP = the Facility Fee Percentage as measured on such Settlement
Date (or the Termination Date);
OTD = the "Originator Turnover Days" for such Originator, which
shall be equal to the product of (x) the quotient of (i) the
aggregate Outstanding Balance of Receivables originated by
such Originator during the Accrual Period which occurs two
months prior to the month in which such Settlement Date (or
the Termination Date) occurs, divided by (ii) the aggregate
amount of the Collections received during the Accrual Period
immediately preceding such Settlement Date (or the
Termination Date) on Receivables originated by such
Originator, multiplied by (y) the number of days in the
calendar month coinciding with such Accrual Period; and
FR = the Funding Rate as measured on such Settlement Date (or the
Termination Date), as determined pursuant to paragraph (d)
below.
(d) "Funding Rate" as measured on any Settlement Date (or the Termination
Date) means a per annum percentage rate determined in accordance with the
following formula:
FR = 0.02% + DRP + SFP + EXP
where:
FR = the Funding Rate as measured on such Settlement Date
(or the Termination Date);
DRP = the "Discount Rate Percentage", which shall be equal to a
fraction (expressed as a percentage) (x) the numerator of
which is the sum of the products obtained by multiplying (A)
each CP Rate, Base Rate or LIBO Rate applicable to Capital
outstanding as of the first day of the Accrual Period ending
immediately prior to such Settlement Date (or the
Termination Date), times (B) the amount of Capital to which
such CP Rate, Base Rate or LIBO Rate applied on such first
day, and (y) the denominator of which is the aggregate
outstanding amount of Capital on such first day;
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SFP = the "Servicer's Fee Percentage", which shall be equal to the
per annum percentage rate set forth in Section 8.6 of the
Purchase Agreement; and
EXP = the amount, which shall be equal to a fraction (expressed as
a percentage), (x) the numerator of which is the sum of any
fees, costs and expenses incurred by Buyer during the
Accrual Period preceding such Settlement Date or Termination
Date (and not accounted for in the Adjustment Factor),
including, without limitation, reserve costs, tax payments
and indemnity obligations of Buyer for which Buyer is not
indemnified pursuant to this Agreement and (y) the
denominator of which is the aggregate Outstanding Balance of
the Receivables that were purchased from such Originator
during the Accrual Period immediately preceding such
Settlement Date or Termination Date; provided, however,
that, for purposes of minimizing fluctuations in the rate
calculated as the Funding Rate, the Servicer may allocate
and spread any unscheduled or unaccruable costs and expenses
of Buyer over several Settlement Dates and the Termination
Date at the Servicer's reasonable discretion, subject to the
requirement that such allocation be reasonably calculated to
allow Buyer to recover such costs and expenses over a
reasonable period of time.
Section 1.10 Limited Role of the Parent. Although certain of the Originators may
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do business under the name "▇▇▇▇▇ & Minor", legal and beneficial ownership of
the Receivables (without giving effect to the transactions contemplated
hereunder) remains in the name of the Originator that generated such
Receivables. The Parent is an Originator for the sole purpose of transferring
any right, title or interest, if any, it may have in the Receivables.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originators. Each Originator
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hereby represents and warrants to Buyer and each Purchaser, as assignee of
Buyer, that:
(a) Corporate Existence and Power. Such Originator is a corporation duly
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organized, validly existing and in good standing under the laws of its state of
incorporation, and is duly qualified to do business and is in good standing as a
foreign corporation, and has and holds all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which failure to qualify would have a Material
Adverse Effect on such Originator or the Receivables originated by it.
(b) Power and Authority; Due Authorization Execution and Delivery. The
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execution and delivery by such Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, such Originator's use of the proceeds
of the Purchase made hereunder, are within its corporate powers and authority
and have been duly authorized by all necessary corporate action on its part.
This
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Agreement and each other Transaction Document to which such Originator is a
party has been duly executed and delivered by such Originator.
(c) No Conflict. The execution and delivery by such Originator of this
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Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws, (ii) any
law, rule or regulation (including without limitation Regulation U or Regulation
X) applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Originator or its Subsidiaries (except as
created hereunder and except, in any case described in the foregoing clauses
(ii), (iii) and (iv), where such contravention or violation would not have a
Material Adverse Affect); and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the financing
--------------------------
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Originator of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings pending, or
--------------
to the best of such Originator's knowledge, threatened, against or affecting
such Originator, or any of its properties, in or before any court, arbitrator or
other body, that, if adversely determined, would have a Material Adverse Effect
on such Originator or the Receivables originated by it. Such Originator is not
in default with respect to any order of any court, arbitrator or governmental
body.
(f) Binding Effect. This Agreement and each other Transaction Document to
--------------
which such Originator is a party constitute the legal, valid and binding
obligations of such Originator enforceable against such Originator in accordance
with their respective terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law). Each sale made by such Originator pursuant to this Agreement shall
constitute a valid sale, transfer and assignment of Receivables to Buyer,
enforceable against creditors of, and purchasers from, such Originator.
(g) Accuracy of Information. All information heretofore furnished by such
-----------------------
Originator or any of its Affiliates to Buyer (or to the Collateral Agent or any
Co-Agent, as Buyer's assignees) for purposes of or in connection with this
Agreement, any of the other Transaction Documents or any transaction
contemplated hereby or thereby is, and all such information hereafter furnished
by such Originator or any of its Affiliates to Buyer (or to the Collateral Agent
or any Co-Agent, as Buyer's assignees) will be, true and accurate in every
material respect on the date such information is stated or certified (or, if
such information specifies another date, such other date) and does not and will
not contain any material
10
misstatement of fact or omit to state a material fact or any fact necessary to
make the statements contained therein not materially misleading.
(h) Use of Proceeds. No use of the proceeds of the Purchases hereunder will
---------------
violate or result in a violation of the Securities Act of 1933, as amended, or
the regulations issued pursuant thereto, or the Securities Exchange Act of 1934,
as amended, or the regulations issued pursuant thereto, or Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System. "Margin
Stock" with the meaning of Regulation U promulgated by the Board of Governors of
the Federal Reserve System does not constitute more than 25% of the value of the
consolidated assets of the Performance Guarantor and its Subsidiaries.
(i) Good Title. Immediately prior to the time each Receivable is
----------
transferred to Buyer hereunder, such Originator shall be the legal and
beneficial owner of each such Receivable and Related Security with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect such Originator's
ownership interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the financing
-----------
statements contemplated hereby, is effective to transfer to Buyer (and Buyer
shall acquire from such Originator) legal and equitable title to, with the right
to sell and encumber each Receivable existing and hereafter arising, together
with the Related Security and Collections with respect thereto, free and clear
of any Adverse Claim, except as created by the Transactions Documents. There
have been duly filed all financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Buyer's ownership or security interest in the
Receivables, the Related Security and the Collections.
(k) Places of Business. The principal places of business and chief
------------------
executive office of such Originator and the offices where it keeps all of its
Records are located at the address(es) listed on Exhibit II or such other
locations of which Buyer has been notified in accordance with Section 4.2(a) in
--------------
jurisdictions where all action required by Section 4.2(a) has been taken and
--------------
completed. Such Originator's Federal Employer Identification Number and
Organizational Identification Number are correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in Section
----------- -------
4.1(i) have at all times been satisfied and duly performed. The names and
------
addresses of all Collection Banks, together with the account numbers of the
Collection Accounts of such Originator at each Collection Bank and the post
office box number of each Lock-Box, are listed on Exhibit III. Such Originator
has not granted any Person, other than Buyer (and its assigns) dominion and
control of any Lock-Box or Collection Account, or the right to take dominion and
control of any such Lock-Box or Collection Account at a future time or upon the
occurrence of a future event.
(m) Material Adverse Effect. Since December 31, 2001, no event has occurred
-----------------------
that would have a Material Adverse Effect.
11
(n) Names. The name in which such Originator has executed this Agreement is
-----
identical to the name of such Originator as indicated on the public record of
its state of organization which shows such Originator to have been organized. In
the past five (5) years, such Originator has not used any corporate names, trade
names or assumed names other than the name in which it has executed this
Agreement and as listed on Exhibit II.
(o) Ownership of Buyer. Parent and O&M Distribution, collectively, own,
------------------
directly or indirectly, 100% of the issued and outstanding equity interests of
Buyer. Such equity interests are validly issued, fully paid and nonassessable,
and there are no options, warrants or other rights to acquire securities of
Buyer.
(p) Not a Holding Company or an Investment Company. Such Originator is not
----------------------------------------------
a "holding company" or a "subsidiary holding company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or any successor statute. Such Originator is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Originator has complied in all respects with
-------------------
all applicable laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject which if violated would have a
Material Adverse Effect on such Originator or the Receivables originated by it.
Each Receivable, together with the Contract related thereto, does not contravene
any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation.
(r) Compliance with Credit and Collection Policy. Such Originator has
--------------------------------------------
complied in all material respects with its Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any
material change to such Credit and Collection Policy, except such material
change as to which the Agents have been notified in accordance with Section
-------
4.1(a)(iii).
-----------
(s) Payments to Originator. With respect to each Receivable transferred to
----------------------
Buyer hereunder, the Purchase Price received by such Originator constitutes
reasonably equivalent value in consideration therefor and such transfer was not
made for or on account of an antecedent debt. No transfer by such Originator of
any Receivable hereunder is or may be voidable under any section of the Federal
Bankruptcy Code.
(t) Enforceability of Contracts. Each Contract with respect to each
---------------------------
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
12
(u) Eligible Receivables. Each Receivable purchased by Buyer from such
--------------------
Originator hereunder and included in the Net Pool Balance was an Eligible
Receivable on the date of such Purchase.
(v) [Reserved].
(w) Accounting. Such Originator accounts for the transactions contemplated
----------
by this Agreement on its books and records and, for purposes of generally
accepted accounting principles, as sales in accordance with SFAS 140.
(x) Compliance with Representations. On and as of the date of the Purchase
-------------------------------
and on and as of each subsequent date each Receivable came into existence, each
Originator hereby represents and warrants that all of the other representations
and warranties set forth in this Article II are true and correct on and as of
each such date (and after giving effect to all Receivables in existence on each
such date) as though made on and as of each such date (except where such
representation or warranty relates to an earlier date, in which case as of such
earlier date).
(y) Nature of Receivables. Each Receivable originated by such Originator is
---------------------
an "account," a "payment intangible" or "chattel paper" under and as defined in
the UCC of all applicable jurisdictions.
ARTICLE III.
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. Any Purchase under this Agreement
--------------------------------
is subject to the conditions precedent that (a) Buyer shall have received on or
before the date of such purchase those documents listed on Schedule A and (b)
----------
all of the conditions precedent to the initial purchase under the Purchase
Agreement shall have been satisfied or waived in accordance with the terms
thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Buyer's obligation to
-------------------------------------------
pay for Receivables coming into existence after the date hereof shall be subject
to the further conditions precedent that (a) the Facility Termination Date shall
not have occurred under the Purchase Agreement; (b) Buyer (and the Collateral
Agent and each Co-Agent, as Buyer's assignees) shall have received such other
approvals, opinions or documents as it may reasonably request; and (c) on the
date such Receivable came into existence, the following statements shall be true
(and the acceptance of the proceeds of any payment for such Receivable shall be
deemed a representation and warranty by such Originator that such statements are
then true):
(a) the representations and warranties set forth in Article II are true and
----------
correct on and as of the date such Receivable came into existence as though made
on and as of such date; and
(b) no event has occurred and is continuing that will constitute a
Termination Event or a Potential Termination Event.
13
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable (whether by payment of cash, through an increase in the
amounts outstanding under the Subordinated Note, by offset of amounts owed to
Buyer and/or by offset of capital contributions), title to such Receivable and
the Related Security and Collections with respect thereto shall vest in Buyer,
whether or not the conditions precedent to Buyer's obligation to pay for such
Receivable were in fact satisfied. The failure of such Originator to satisfy any
of the foregoing conditions precedent, however, shall give rise to a right of
Buyer to rescind the related purchase and direct such Originator to pay to Buyer
an amount equal to the Purchase Price payment that shall have been made with
respect to any Receivables related thereto.
ARTICLE IV.
COVENANTS
Section 4.1 Affirmative Covenants of Originators. Until the date on which this
------------------------------------
Agreement terminates in accordance with its terms and all obligations of such
Originator have been paid in full, each Originator hereby covenants to Buyer
(and the Agents and Purchasers), as to itself, as set forth below:
(a) Reporting. Each Originator will maintain, for itself and each of its
---------
Subsidiaries, a system of accounting established and administered in accordance
with GAAP, and furnish to each of the Agents:
(i) Copies of Notices. Promptly upon its receipt of any notice,
-----------------
request for consent, financial statements, certification, report
or other communication under or in connection with any
Transaction Document from any Person other than Buyer or any of
the Agents or Purchasers, copies of the same.
(ii) Change in Credit and Collection Policy. Prior to the
--------------------------------------
effectiveness of any material change in or amendment to the
Credit and Collection Policy, a copy of the Credit and Collection
Policy then in effect and a notice indicating such proposed
change or amendment.
(iii) Other Information. Promptly, from time to time, such other
-----------------
information, documents, records or reports relating to the
Receivables or the condition or operations, financial or
otherwise, of such Originator as Buyer or any Agent may from time
to time reasonably request in order to protect the interests of
Buyer (and the Collateral Agent, as Buyer's assignees) under or
as contemplated by this Agreement.
(b) Notices. Each Originator will notify each of the Agents in writing of
-------
any of the following promptly upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
(i) Termination Events or Potential Termination Events. The
--------------------------------------------------
occurrence of each Termination Event and each Potential
Termination Event, by a statement of an Authorized Officer of
such Originator.
14
(ii) Judgment and Proceedings. The institution of any litigation,
------------------------
arbitration proceeding or governmental proceeding against any
such Originator or its Subsidiaries, which, if adversely
determined, would have a Material Adverse Effect on such
Originator or the Receivables originated by it, or which seeks to
enjoin performance of or otherwise relates to the Transaction
Documents.
(iii) Material Adverse Effect. The occurrence of any event or
-----------------------
condition that has, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) ERISA Events. The occurrence of any ERISA Event.
------------
(v) Downgrade of Parent. Any downgrade in the rating of any
-------------------
Indebtedness of Parent by S&P or by ▇▇▇▇▇'▇, setting forth the
Indebtedness affected and the nature of such change.
(c) Compliance with Laws and Preservation of Corporate Existence. Each
------------------------------------------------------------
Originator will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject which, if violated, would have a Material Adverse Effect. Each
Originator will preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified in good standing as a foreign corporation in each
jurisdiction where failure to do so would have a Material Adverse Effect;
provided, however, that the merger of any Originator as permitted by Section
-------
4.2(g) shall not be prohibited by the second sentence of this Section 4.1(c).
------ --------------
(d) Audits. Each Originator will furnish to the Agents from time to time
------
such information with respect to it and the Receivables as any of the Agents may
reasonably request. Each Originator will, from time to time during regular
business hours as requested by any of the Agents, upon reasonable notice, permit
each of the Agents or their respective agents or representatives: (i) to examine
and make copies of and abstracts from all Records in the possession or under the
control of such Originator relating to the Receivables and the Related Security,
including, without limitation, the related Contracts; provided, however, that
the Agents may not make and retain copies of any Contract, and (ii) to visit the
offices and properties of such Originator for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to such
----------
Originator's financial condition or the Receivables and the Related Security or
such Originator's performance under any of the Transaction Documents or such
Originator's performance under the Contracts (subject to confidentiality
restrictions in the relevant Contracts) and, in each case, with any of the
officers or employees of such Originator having knowledge of such matters. The
Originators shall be solely responsible for the reasonable costs of each such
examination; provided that so long as: (A) no Termination Event under the
--------
Purchase Agreement is outstanding, such Originator shall not be liable for the
cost of more than one (1) such examination during any calendar year, and (B) the
Agents will not request more than four (4) examinations in any one calendar
year.
15
(e) Keeping and Marking of Records and Books.
----------------------------------------
(i) Each Originator will maintain and implement administrative and
operating procedures (including, without limitation, an ability
to recreate records evidencing Receivables in the event of the
destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the
immediate identification of each new Receivable and all
Collections of and adjustments to each existing Receivable);
provided, however, that nothing in this sentence shall require
any Originator to retain records for a period longer than seven
(7) years after creation. Each Originator will give the Agents
notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(ii) Each Originator will (A) on or prior to the date hereof, ▇▇▇▇ its
master data processing records and other books and records
relating to the Receivables with a legend, acceptable to the
Agents, describing Buyer's ownership interests in the Receivables
and further describing the Receivable Interests under the
Purchase Agreement and (B) upon the request of any of the Agents,
(x) ▇▇▇▇ each Contract constituting an instrument, promissory
note, chattel paper, document or certificated security (each as
defined in the UCC) with a legend describing Buyer's ownership
interests in the Receivables and further describing the
Receivable Interests of the Collateral Agent (on behalf of the
Purchasers) and (y) deliver to the Collateral Agent (as Buyer's
assignee) all Contracts (including, without limitation, all
multiple originals of any such Contract) relating to the
Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Each
----------------------------------------------------------
Originator will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables, and (ii) comply in all material respects with its
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) [Reserved].
(h) Ownership. Each Originator will, at its expense, take all necessary
---------
action to establish and maintain, irrevocably in Buyer, legal and equitable
title to the Receivables, the Related Security and the Collections, free and
clear of any Adverse Claims other than Adverse Claims in favor of Buyer (and the
Collateral Agent, as Buyer's assignee) (including, without limitation, the
--------- ------- ----------
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Buyer's interest in such Receivables, Related Security and
Collections and such other action to perfect, protect or more fully evidence the
interest of Buyer (and the Collateral Agent, as Buyer's assignee) as Buyer (or
the Collateral Agent, as Buyer's assignee) may reasonably request).
16
(i) Purchasers' Reliance. Each Originator acknowledges that the Purchasers
--------------------
are entering into the transactions contemplated by the Purchase Agreement in
reliance upon Buyer's identity as a legal entity that is separate from each
Originator and any Affiliates thereof. Therefore, from and after the date of
execution and delivery of this Agreement, each Originator will take all
reasonable steps including, without limitation, all steps that any of the Agents
may from time to time reasonably request, to maintain Buyer's identity as a
separate legal entity and to make it manifest to third parties that Buyer is an
entity with assets and liabilities distinct from those of any Originator and any
Affiliates thereof and not just a division of any Originator. Without limiting
the generality of the foregoing and in addition to the other covenants set forth
herein, each Originator (i) will not hold itself out to third parties as liable
for the debts of Buyer nor purport to own the Receivables and other assets
acquired by Buyer, (ii) will take all other actions necessary on its part to
ensure that Buyer is at all times in compliance with the covenants set forth in
Section 7.1(i) of the Purchase Agreement and (iii) will cause all tax
--------------
liabilities arising in connection with the transactions contemplated herein or
otherwise to be allocated between such Originator and Buyer on an arm's-length
basis and in a manner consistent with the procedures set forth in U.S. Treasury
Regulations (S)(S) 1.1502-33(d) and 1.1552-1.
(j) Collections. Each Originator will cause (1) all proceeds from all
-----------
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each Lock-Box and Collection Account to be subject at all times
to a Collection Account Agreement that is in full force and effect; provided
--------
however, that with respect to each Existing Collection Account Agreement, such
-------
agreement shall have been assigned to the Collateral Agent on or prior to the
date hereof (in the case of each Existing Collection Account Agreement with
Wachovia Bank, National Association and Fleet National Bank), or shall be
replaced by a new Collection Account Agreement on or prior to the date thirty
(30) days after the date of this Agreement, and in the case of each Collection
Account Agreement assigned to the Collateral Agent on or before the date of this
Agreement, shall be replaced by a new Collection Account Agreement on or prior
to the date 90 days after the date of this Agreement. In the event any payments
relating to Receivables are remitted directly to an Originator or any Affiliate
of an Originator, such Originator will remit (or will cause all such payments to
be remitted by any such Affiliate) directly to a Collection Bank for deposit
into a Collection Account within two (2) Business Days following receipt thereof
and, at all times prior to such remittance, such Originator will itself hold or,
if applicable, will cause such payments to be held by any such Affiliate, in
trust for the exclusive benefit of Buyer (and the Collateral Agent, as Buyer's
assignee, for the benefit of the Purchasers). Each Originator will transfer
exclusive ownership, dominion and control of its respective Lock-Box and
Collection Account to Buyer and, will not grant the right to take dominion and
control of any Lock-Box or Collection Account at a future time or upon the
occurrence of a future event to any Person, except to Buyer (or the Collateral
Agent, as Buyer's assignee) as contemplated by this Agreement and the Purchase
Agreement. Only Collections of Receivables shall be deposited into the
Collection Accounts.
(k) Taxes. Each Originator will file all tax returns and reports required
-----
by law to be filed by it and promptly pay all material taxes and governmental
charges (including any governmental charges the nonpayment of which could result
in a Lien on the Receivables or the Related Security) at any time owing;
provided, however, that no Originator shall be required to pay any such taxes or
governmental charges which are not yet delinquent or are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in
17
accordance with GAAP shall have been set aside on its books unless the failure
to make any such payment (1) shall give rise to an immediate right to foreclose
on an Adverse Claim securing such amounts, (2) shall result in the attachment of
an Adverse Claim securing such amounts in excess of $1,000,000 in the aggregate,
or (3) would have a Material Adverse Effect.
Section 4.2 Negative Covenants of Originators. Until the date on which this
---------------------------------
Agreement terminates in accordance with its terms and all obligations or such
Originator hereunder have been paid in full, each Originator hereby covenants to
Buyer and the Agents and the Purchasers, as assignees of Buyer, as to itself,
that:
(a) Name Change, Offices and Records. Such Originator will not change its
--------------------------------
name, identity or corporate structure (within the meaning of Article 9 of any
---------
applicable enactment of the UCC), change its jurisdiction of organization or
organize in an additional jurisdiction or relocate its chief executive office or
any office where corporate credit management is administered unless it shall
have: (i) given Buyer (and the Collateral Agent, as Buyer's assignee) at least
forty-five (45) days' prior written notice thereof and (ii) delivered to Buyer
(and to the Collateral Agent, as Buyer's assignee) all financing statements,
instruments and other documents requested by any of the Agents in connection
with such change or relocation.
(b) Change in Payment Instructions to Obligors. Such Originator will not
------------------------------------------
add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Collateral Agent, as Buyer's assignee) shall have
received, at least ten (10) days before the proposed effective date therefor,
(i) written notice of such addition, termination or change and (ii) with respect
to the addition of a Collection Bank or a Collection Account or Lock-Box, an
executed Collection Account Agreement with respect to the new Collection Account
or Lock-Box; provided, however, that an Originator may make changes in
instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. Such
-----------------------------------------------------------
Originator will not make any change to its Credit and Collection Policy that
could materially and adversely affect the collectibility of the Receivables or
decrease the credit quality of any newly created Receivables, without the prior
written consent of the Agents. Except as otherwise permitted in its capacity as
Servicer pursuant to Article VIII of the Purchase Agreement, O&M Medical will
------------
not extend, amend or otherwise modify the terms of any Receivable or any
Contract related thereto other than in accordance with the related Originator's
Credit and Collection Policy.
(d) Sales, Liens. Such Originator will not sell, assign (by operation of
------------
law or otherwise) or otherwise dispose of, or grant any option with respect to,
or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, (1) the creation of the interests therein in favor of Buyer
provided for herein or (2) an Adverse Claim resulting from the nonpayment of
taxes which is permitted to exist under Section 4.1(k)), and such Originator
--------------
shall defend the right, title and interest of the Collateral Agent, as Buyer's
assignee) in, to and under
18
any of the foregoing property, against all claims of third parties claiming
through or under such Originator. Such Originator shall not create or suffer to
exist any mortgage, pledge, security interest, encumbrance, lien, charge or
other similar arrangement on any inventory the sale or lease of which would give
rise to a Receivable.
(e) [Reserved].
(f) Accounting for Purchase. Such Originator will not, and will not permit
-----------------------
any Affiliate to, account for or treat (whether in financial statements or
otherwise) the transactions contemplated hereby in any manner other than the
sale of the Receivables and the Related Security by such Originator to Buyer or
in any other respect account for or treat the transactions contemplated hereby
in any manner other than as a sale of the Receivables and the Related Security
by such Originator to Buyer except to the extent that such transactions are not
recognized on account of consolidated financial reporting in accordance with
generally accepted accounting principles.
(g) Merger. No Originator shall merge or consolidate with or into, or
------
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions, and except as otherwise contemplated herein) all or
any material part of its assets (whether now owned or hereafter acquired) to, or
acquire all or any material part of the assets of, any Person; provided,
however, that any Originator may merge with or into (i) any other Originator or
(ii) any direct or indirect wholly-owned subsidiary of the Parent (other than
Buyer), so long as the surviving entity of such merger expressly assumes the
obligations of such Originator hereunder and the Parent confirms that the
guaranty under the Performance Undertaking covers the obligations of such
surviving entity as Originator.
ARTICLE V.
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more of the
------------------
following events shall constitute a Termination Event:
(a) Such Originator shall fail to make any payment or deposit required
hereunder when due and such failure continues for two (2) Business Days.
(b) Such Originator shall fail to perform or observe any term, covenant or
agreement hereunder (other than as referred to in paragraph (a)) or any other
Transaction Document to which it is a party and such failure shall continue for
five (5) consecutive Business Days.
(c) Any representation, warranty, certification or statement made by such
Originator in this Agreement, any other Transaction Document or in any other
document delivered pursuant hereto or thereto shall prove to have been incorrect
in any material respect when made or deemed made; provided that the materiality
threshold in the preceding clause shall not be applicable with respect to any
representation or warranty which itself contains a materiality threshold and
provided further, that any misrepresentation or certification for which Buyer
has actually received a Purchase Price Credit shall not constitute a Termination
Event hereunder.
19
(d) Failure of the Performance Guarantor or any Originator to pay any
Indebtedness when due in excess of $10,000,000 after taking into account any
applicable period of grace; or the default by the Performance Guarantor or any
Originator in the performance of any term, provision or condition contained in
any agreement under which any such Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of the Performance Guarantor or any
Originator shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date of maturity
thereof.
(e) (i)The Performance Guarantor or any Originator or any of their
respective Subsidiaries shall generally not pay its debts as such debts become
due or shall admit in writing its inability to pay its debts generally or shall
make a general assignment for the benefit of creditors; or (ii) any proceeding
shall be instituted by or against the Performance Guarantor or such Originator
or any of their respective Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
which proceeding, if not instituted by such Originator, shall remain undismissed
or unstayed for a period of sixty (60) days; or (iii) the Performance Guarantor
or any Originator or any of their respective Subsidiaries shall take any
corporate action to authorize any of the actions set forth in the foregoing
clauses (i) or (ii) of this subsection (e).
(f) A Change of Control shall occur.
(g) One or more final judgments for the payment of money in an amount in
excess of $10,000,000 in the aggregate, shall be entered against the Performance
Guarantor or any Originator on claims not covered by insurance or as to which
the insurance carrier has denied its responsibility, and such judgment shall
continue unsatisfied and in effect for thirty (30) consecutive days without a
stay of execution.
(h) Any Pension Plan of Parent or any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum funding
standard required by applicable law, the terms of such Pension
Plan, Section 412 of the Tax Code or Section 302 of ERISA for any
plan year or a waiver of such standard is sought or granted with
respect to such Pension Plan under applicable law, the terms of
such Pension Plan or Section 412 of the Tax Code or Section 303
of ERISA, in either such case in an amount in excess of
$5,000,000; or
(ii) shall require Parent or any of its ERISA Affiliates to provide
security under applicable law, the terms of such Pension Plan,
Section 401 or 412 of the Tax Code or Section 306 or 307 of ERISA
in an amount in excess of $5,000,000; or
20
(iii) An ERISA Event shall occur (other than the termination of the
frozen Pension Plan maintained by Parent as of the date hereof,
but only to the extent that Parent terminates such Pension Plan
in a standard termination under Section 4041 of ERISA) and the
ERISA Event is reasonably likely to result in the imposition of
any liability on an Originator in an amount in excess of
$5,000,000.
(i) The Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the Tax Code with regard to any of the Receivables, Collections
or Related Security and such lien shall not have been released within fifteen
(15) days of the related Originator's receipt of the notice of the filing of
such lien, or the PBGC shall, or shall indicate its intention to, file notice of
a lien pursuant to Section 4068 of ERISA with regard to any of the Receivables,
Collections or Related Security.
(j) Any event shall occur which (i) materially and adversely impairs the
ability of the Originators to originate Receivables of a credit quality that is
at least equal to the credit quality of the Receivables sold or contributed to
Buyer on the date of this Agreement and (ii) has, or could be reasonably
expected to have, a Material Adverse Effect.
(k) As of the end of the fiscal quarter of the Parent, the Consolidated
Current Ratio (as defined in the Parent Credit Agreement as of the date hereof)
shall not be less than 1.40 to 1.0.
(l) Consolidated Net Worth (as defined in the Parent Credit Agreement as of
the date hereof) shall not be less than the sum of (A) $290,000,000 plus (B) as
of the end of each fiscal quarter beginning with the fiscal quarter ended March
31, 2002, an amount equal to fifty percent (50%) of Consolidated Net Income (as
defined in the Parent Credit Agreement as of the date hereof and to the extent
positive) for such fiscal quarter, such increases to be cumulative, plus (C) an
amount equal to one hundred percent (100%) of the net proceeds from Equity
Transactions (as defined in the Parent Credit Agreement as of the date hereof)
occurring after April 30, 2002 minus any payments made by the Parent to
repurchase Junior Subordinated Debentures (as defined in the Parent Credit
Agreement as of the date hereof) to the extent such repurchase is permitted
under Section 8.7(b)(iv) of the Parent Credit Agreement.
(m) As of the end of any fiscal quarter of the Parent set forth below, the
Consolidated Total Leverage Ratio (as defined in the Parent Credit Agreement as
of the date hereof) shall not be greater than 3.25:1.0.
(n) As of the end of any fiscal quarter of the Parent set forth below, the
Consolidated Fixed Charge Coverage Ratio (as defined in the Parent Credit
Agreement as of the date hereof) shall not be less than 1.5:1.0.
(o) Performance Guarantor shall fail to perform or observe any term,
covenant or agreement required to be performed by it under the Performance
Undertaking (after the expiration of any applicable grace period), or the
Performance Undertaking shall cease to be effective or to be the legally valid,
binding and enforceable obligation of Performance Guarantor,
21
or Performance Guarantor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability.
Section 5.2 Remedies. Upon the occurrence and during the continuation of an
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Termination Event, Buyer may take any of the following actions: (i) declare the
Termination Date to have occurred, whereupon the Termination Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by each Originator; provided, however, that
upon the occurrence of Termination Event described in Section 5.1(d), or of an
--------------
actual or deemed entry of an order for relief with respect to an Originator
under the Federal Bankruptcy Code, the Termination Date shall automatically
occur, without demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Originator and (ii) to the fullest extent
permitted by applicable law, declare that the Default Fee shall accrue with
respect to any amounts then due and owing by Buyer to such Originator. The
aforementioned rights and remedies shall be in addition to all other rights and
remedies of Buyer and its assigns available under this Agreement, by operation
of law, at equity or otherwise, all of which are hereby expressly preserved,
including, without limitation, all rights and remedies provided under the UCC,
all of which rights shall be cumulative.
ARTICLE VI.
INDEMNIFICATION
Section 6.1 Indemnities by Originators. (a) Without limiting any other rights
--------------------------
that Buyer may have hereunder or under applicable law, each Originator, jointly
and severally, hereby agrees to indemnify Buyer, each Agent and each Purchaser,
and their respective assigns, officers, directors, agents, employees, members
and direct or indirect owners (each an "Indemnified Party") from and against any
and all damages, losses, claims, taxes, liabilities, costs, expenses and for all
other amounts payable, including reasonable attorneys' fees and disbursements
(all of the foregoing being collectively referred to as "Indemnified Amounts")
awarded against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables, excluding, however:
(1) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(2) Indemnified Amounts to the extent the same includes losses in respect
of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(3) any Excluded Taxes except to the extent the Indemnified Party is
entitled to receive an amount equal to the sum it would have received had
no deductions for Taxes and Other Taxes been made as set forth in Section
6.1(c)(i);
provided, however, that nothing contained in this sentence shall limit the
liability of any Originator or limit the recourse of Buyer to any Originator for
amounts otherwise specifically provided to be paid by such Originator under the
terms of this Agreement.
22
Without limiting the generality of the foregoing indemnification, each
Originator shall, jointly and severally, indemnify Buyer for Indemnified Amounts
(including, without limitation, losses in respect of uncollectible receivables,
regardless of whether reimbursement therefor would constitute recourse to such
Originator) relating to or resulting from:
(i) any representation or warranty made by such Originator (or any
officers of such Originator) under or in connection with this
Agreement, any other Transaction Document or any other
information or report delivered by such Originator pursuant
hereto or thereto, which shall have been false or incorrect when
made or deemed made;
(ii) the failure by such Originator, to comply with any applicable
law, rule or regulation with respect to any Receivable or
Contract related thereto, or the nonconformity of any Receivable
or Contract included therein with any such applicable law, rule
or regulation or any failure of such Originator to keep or
perform any of its obligations, express or implied, with respect
to any Contract;
(iii) any failure of such Originator to perform its duties, covenants
or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability or similar claim arising out of or in
connection with merchandise, insurance or services that are the
subject of any Contract;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid
and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the
sale of the merchandise or service related to such Receivable or
the furnishing or failure to furnish such merchandise or
services;
(vi) the commingling of Collections of Receivables at any time with
other funds other than Collections in respect of sales taxes;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document,
the transactions contemplated hereby, such Originator's use of
the proceeds of the Purchase from it hereunder, the ownership of
the Receivables originated by such Originator or any other
investigation, litigation or proceeding relating to such
Originator in which any Indemnified Party becomes involved as a
result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being
immune from civil and commercial law or suit on the grounds of
sovereign immunity, failure to
23
comply with applicable state or federal assignment of claims acts
(or analogous laws) and the regulations promulgated thereunder,
or otherwise from any legal action, suit or proceeding;
(ix) any Termination Event described in Section 5.1(d);
--------------
(x) any failure to vest and maintain vested in Buyer, or to transfer
to Buyer, legal and equitable title to, and ownership of, the
Receivables originated by such Originator and the related
Collections, and all of such Originator's right, title and
interest in, the Related Security and the Collections, in each
case, free and clear of any Adverse Claim;
(xi) the failure to have filed, 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 Receivable originated by such Originator, the
Related Security and Collections with respect thereto, and the
proceeds of any thereof, whether at the time of the Purchase from
such Originator hereunder or at any subsequent time;
(xii) any action or omission by such Originator which reduces or
impairs the rights of Buyer with respect to any Receivable or the
value of any such Receivable;
(xiii) any attempt by any Person (other than a Purchaser) to void the
Purchase from such Originator hereunder under statutory
provisions or common law or equitable action; and
(xiv) any offset or recoupment against the Outstanding Balance of any
Receivable by any Governmental Authority of taxes due and owing
to it by any Originator or any of its Affiliates;
(b) Notwithstanding anything to the contrary in this Agreement, solely for
the purposes of determining Indemnified Amounts owing under this Section 6.1,
-----------
any representation, warranty or covenant qualified by materiality or the
occurrence of a Material Adverse Effect shall not be so qualified.
(c) Taxes.
-----
(i) Any and all payments made hereunder to an Indemnified Party shall
be made free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto excluding:
---------
(A) franchise taxes, excise taxes and taxes imposed on or
measured by all or part of the gross or net income (but not
including any such tax in the nature of a withholding tax) of
such Indemnified Party, in each case, by the jurisdiction under
the laws of which such Indemnified Party is organized or has its
applicable lending or administrative office or any political
subdivision of any thereof, to the extent that the imposition of
such taxes is consistent with the Intended
24
Characterization of the Receivable Interests for income tax
purposes, and (B) taxes that would not have been imposed if the
only connection between such Indemnified Party and the
jurisdiction imposing such taxes was the activities of such
Indemnified Party pursuant to or in respect of this Agreement
(including entering into, lending money or extending credit
pursuant to, receiving payments under, or enforcing this
Agreement) (all such excluded taxes, levies, imposts, deductions,
charges, withholding and liabilities collectively or individually
referred to herein as "Excluded Taxes" and all such nonexcluded
taxes, levies, imposts, deductions, charges, withholdings, and
liabilities collectively or individually referred to herein as
"Taxes"). If any Originator shall be required to deduct any Taxes
or Other Taxes from or in respect of any sum payable hereunder to
any Indemnified Party: (A) the sum payable shall be increased by
the amount (an "additional amount") necessary so that after
making all required deductions (including deductions applicable
to additional sums payable under this Section 6.1(c)) such
--------------
Indemnified Party shall receive an amount equal to the sum it
would have received had no such deductions been made, (B) such
Originator shall make such deductions and (C) such Originator
shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(ii) In addition, each Originator agrees to pay to the relevant
Governmental Authority in accordance with applicable law all
taxes, levies, imposts, deductions, charges, assessments or fees
of any kind (including but not limited to any current or future
stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies, but excluding any Excluded Taxes)
imposed upon any Indemnified Party as a result of the
transactions contemplated by this Agreement or that arise from
any payment made hereunder or from the execution, delivery, or
registration of or otherwise similarly with respect to, this
Agreement ("Other Taxes").
(iii) Each Originator agrees to indemnify each Indemnified Party from
and against the full amount of Taxes and Other Taxes arising out
of this Agreement (whether directly or indirectly) imposed upon
or paid by such Person and any liability (including penalties,
interest, and expenses (including reasonable attorneys' fees and
expenses)) arising with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted by the
relevant Governmental Authority (including any Taxes or Other
Taxes imposed upon such Person on account of the Intended
Characterization not being respected by a relevant Government
Authority). A certificate as to the amounts prepared by an
Indemnified Party, absent manifest error, shall be final,
conclusive, and binding for all purposes. Such indemnification
shall be made within 30 days after the date the Indemnified Party
makes a timely written demand therefor or the time at which such
amount is payable after a timely written demand therefor has been
made, whichever is earlier. A written demand will be considered
"timely" for purposes of the preceding sentence only if it is
25
received by such Originator no later than 180 days after the
earlier of (A) the date on which such Indemnified Party makes
such payment of Taxes or Other Taxes or liability arising
therefrom or with respect thereto and (B) the date on which the
relevant Governmental Authority or other party makes written
demand upon such Indemnified Party for payment of such Taxes or
Other Taxes or liability arising therefrom or with respect
thereto (after all appeals have been fully pursued) to the extent
the Indemnified Party elects to pursue such appeals. Each
Indemnified Party agrees to provide the related Originator with
written notice of any official demand for payment after the
appeals process with such Governmental Authority has been
completed by a Governmental Authority or other party pursuant to
clause (B) above promptly upon such Indemnified Party's receipt
of such official demand.
(iv) As soon as practicable after the date of any payment of Taxes or
Other Taxes by an Originator to a Governmental Authority
hereunder, such Originator will deliver to the relevant
Indemnified Party the original or a certified copy of a receipt
issued by such Governmental Authority evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in
this Section 6.1(c) shall survive the termination of this
--------------
Agreement.
(vi) Notwithstanding any other provision of this Section 6.1(c), no
Originator shall be required to indemnify or pay any additional
amounts to any Non-U.S. Purchaser or Agent pursuant to Sections
6.1(c)(i), (ii), or (iii) with respect to Taxes or Other Taxes
imposed by the United States if the obligation to withhold with
respect to such Taxes or Other Taxes results from, or would not
have occurred but for, the failure of any Non-U.S. Purchaser or
Agent to deliver the forms described in this paragraph (vi) (it
being understood that the Non-U.S. Purchaser or Agent shall not
have failed to comply with the provisions of paragraph (vi) if it
is legally unable to deliver the forms described therein) for any
period with respect to which the Non-U.S. Purchaser or Agent have
failed to provide the Originators with (A) a complete and
properly executed Internal Revenue Service Form W-8BEN or W-8ECI,
as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Indemnified Party is
entitled to benefits under an income tax treaty to which the
United States is a party which reduces to zero the rate of
withholding tax on payments due under this Agreement or
certifying that the income receivable pursuant to this Agreement
or any of the other Transaction Documents is effectively
connected with the conduct of a trade or business in the United
States, (B) a complete and properly executed Internal Revenue
Service Form W-9, or any successor form prescribed by the
Internal Revenue Service, (C) any other complete and properly
executed form or certificate required by any taxing authority
26
(including any certificate required by Sections 871(h) and 881(c)
of the Tax Code), certifying that such Indemnified Party is
entitled to a complete exemption from tax on payments pursuant to
this Agreement or any of the other Transaction Documents, (D) a
complete and properly executed Internal Revenue Service Form
W-8IMY and any related documents required in conjunction with
such W-8IMY, (unless such failure is due to a change in treaty,
law, or regulation occurring subsequent to the date on which a
form originally was required to be provided); provided, however,
-------- -------
that should an Indemnified Party, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become subject
to Taxes because of its failure to deliver a form required
hereunder, the Originators shall take such steps as the
Indemnified Party shall reasonably request to assist such
Indemnified Party in recovering such Taxes. The Originator shall
be required to pay any Taxes or Other Taxes resulting from a
change in law (or interpretation thereof) that becomes effective
after the date hereof. Upon becoming aware of a change in law (or
interpretation) each Party hereto will use its best efforts to
provide the other party with notice of such change.
(vii) Any Indemnified Party claiming any indemnity payment or
additional amounts payable pursuant to this Section 6.1(c) shall
--------------
use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document reasonably
requested in writing by an Originator or to change the
jurisdiction of its applicable lending office or administrative
office if the making of such a filing or change would avoid the
need for or reduce the amount of any such indemnity payment or
additional amounts that may thereafter accrue and would not, in
the good faith determination of such Indemnified Party, be
otherwise disadvantageous to such Indemnified Party.
(viii) Nothing contained in this Section 6.1(c) shall require an
--------------
Indemnified Party to make available any of its tax returns (or
any other information that it deems to be confidential or
proprietary).
(ix) If any Indemnified Party receiving an indemnification payment
hereunder with respect to Taxes or Other Taxes or liabilities
arising therefrom shall subsequently receive a refund from any
taxing authority which is specifically attributable to such
indemnification payment, such Person shall promptly pay such
refund to the applicable Originator.
Section 6.2 Other Costs and Expenses. The Originators shall pay to Buyer on
------------------------
demand all costs and out-of-pocket expenses in connection with the preparation,
execution, delivery and administration of this Agreement, the transactions
contemplated hereby and the other documents to be delivered hereunder. The
Originators shall pay to Buyer on demand any and all costs and expenses of
Buyer, if any, including reasonable counsel fees and expenses in connection with
the enforcement of this Agreement and the other documents delivered hereunder
and in connection
27
with any amendment, restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following an Termination
Event.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 Waivers and Amendments. (a) No failure or delay on the part of Buyer
----------------------
(or the Collateral Agent, on behalf of the Co-Agents and Purchasers, as Buyer's
assignee) in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing signed by each Originator and Buyer and, to the
extent required under the Purchase Agreement, the Co-Agents, the Collateral
Agent and the Financial Institutions or the Required Financial Institutions.
Section 7.2 Notices. Except as provided below, all communications and notices
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provided for hereunder shall be in writing (including bank wire, telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other parties hereto at their respective addresses or telecopy numbers set forth
on the signature pages hereof or at such other address or telecopy number as
such Person may hereafter specify for the purpose of notice to each of the other
parties hereto. Each such notice or other communication shall be effective (i)
if given by telecopy, upon the receipt thereof, (ii) if given by mail, three (3)
Business Days after the time such communication is deposited in the mail with
first class postage prepaid or (iii) if given by any other means, when received
at the address specified in this Section 7.2.
-----------
Section 7.3 Protection of Ownership Interests of Buyer. (a) Each Originator
------------------------------------------
agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that the Collateral Agent may request, to perfect,
protect or more fully evidence the Receivable Interests, or to enable Buyer (or
the Collateral Agent, as Buyer's assignee) to exercise and enforce their rights
and remedies hereunder. At any time, Buyer (or the Collateral Agent, as Buyer's
assignee) may, at each Originator's sole cost and expense, direct such
Originator to notify the Obligors of Receivables of the ownership interests of
Buyer and its assigns under this Agreement and the other Transaction Documents
and may also direct that payments of all amounts due or that become due under
any or all Receivables be made directly to Buyer or its designee (or the
Collateral Agent, as Buyer's assignee, for the benefit of the Purchasers).
(b) If any Originator fails to perform any of its obligations
hereunder, Buyer (or the Collateral Agent, as Buyer's assignee) may (but shall
not be required to) perform, or cause performance of, such obligation, and the
costs and expenses incurred by Buyer (or the Collateral Agent, as Buyer's
assignee) in connection therewith shall be payable by such Originator as
provided in Section 6.2. Each Originator irrevocably authorizes Buyer (or the
-----------
Collateral Agent,
28
as Buyer's assignee) at any time and from time to time in the sole discretion of
Buyer (or the Collateral Agent, as Buyer's assignee), and appoints Buyer (and
the Collateral Agent, as Buyer's assignee) as its attorney(s)-in-fact, to act on
behalf of such Originator (i) to execute on behalf of such Originator as debtor
and to file financing statements necessary or desirable in the sole discretion
of Buyer (or the Collateral Agent, as Buyer's assignee) to perfect and to
maintain the perfection and priority of the interest of Buyer in the Receivables
and (ii) to file a carbon, photographic or other reproduction of this Agreement
or any financing statement with respect to the Receivables as a financing
statement in such offices as Buyer (or the Collateral Agent, as Buyer's
assignee) in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of Buyer's interests in the Receivables.
This appointment is coupled with an interest and is irrevocable. If any
Originator fails to perform any of its obligations hereunder: (A) such
Originator hereby authorizes Buyer (or its assigns) to file financing statements
and other filing or recording documents with respect to the Receivables and
Related Security (including any amendments thereto, or continuation or
termination statements thereof), without the signature or other authorization of
such Originator, in such form and in such offices as Buyer (or any of its
assigns) reasonably determines appropriate to perfect or maintain the perfection
of the ownership or security interests of Buyer (or its assigns) hereunder, (B)
such Originator acknowledges and agrees that it is not authorized to, and will
not, file financing statements or other filing or recording documents with
respect to the Receivables or Related Security (including any amendments
thereto, or continuation or termination statements thereof), without the express
prior written approval by the Collateral Agent (as Buyer's assignee), consenting
to the form and substance of such filing or recording document, and (C) such
Originator approves, authorizes and ratifies any filings or recordings made by
or on behalf of the Collateral Agent (as Buyer's assignee) in connection with
the perfection of the ownership or security interests in favor of Buyer or the
Collateral Agent (as Buyer's assignee).
Section 7.4 Confidentiality. (a) Each Originator shall maintain and shall cause
---------------
each of its employees and officers to maintain the confidentiality of this
Agreement, the other Transaction Documents and the other confidential
proprietary information with respect to the Co-Agents, the Collateral Agent and
the Conduits and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that such Originator and its officers and employees
may disclose such information to such Originator's external accountants,
attorneys and any rating agency, and as required by any applicable law or order
of any judicial or administrative proceeding, and to the Parent Credit Agreement
Banks.
(b) Anything herein to the contrary notwithstanding, each Originator hereby
consents to the disclosure of any nonpublic information with respect to it (i)
to Buyer, the Agents and the Purchasers by each other, (ii) by Buyer, the Agents
or the Purchasers to any prospective or actual assignee or participant of any of
them or (iii) by any of the Agents to any rating agency, Commercial Paper dealer
or provider of a surety, guaranty or credit or liquidity enhancement to the
Conduits or any entity organized for the purpose of purchasing, or making loans
secured by, financial assets for which any of the Agents acts as the
administrative agent or collateral agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing, provided
--------
each such Person is informed of the confidential nature of such information. In
addition, the Purchasers and the Agents may disclose any such nonpublic
information
29
pursuant to any law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings (whether or not
having the force or effect of law).
Section 7.5 Limitation of Liability. No claim may be made by any Originator,
-----------------------
Buyer or any other Person against any Agent, any Purchaser or their respective
Affiliates, directors, officers, employees, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and each Originator and Buyer hereby waives,
releases, and agrees not to ▇▇▇ upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor;
provided, however, that this Section shall not bar Buyer from making a claim
against a Conduit, Co-Agent or Financial Institution with respect to liability
arising out of such party's gross negligence or willful misconduct.
Section 7.6 No Recourse. Notwithstanding anything in this Agreement or any other
-----------
Transaction Document to the contrary, the obligations of each Conduit under the
Transaction Documents are solely the corporate obligations of such Conduit. No
recourse shall be had for any obligation or claim arising out of or based upon
any Transaction Document against any stockholder, employee, officer, director or
incorporator of such Conduit. The agreements in this section shall survive the
termination of this Agreement and the other Transaction Documents.
Section 7.7 Bankruptcy Petition. (a) Each Originator and Buyer hereby covenants
-------------------
and agrees that, prior to the date that is one year and one day after the
payment in full of all outstanding senior Indebtedness of a Conduit, it will not
institute against, or join any other Person in instituting against such Conduit
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
(b) Each Originator hereby covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding
obligations of Buyer under the Purchase Agreement, it will not institute
against, or join any other Person in instituting against Buyer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 7.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
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ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, BUT NOT
LIMITED TO, NY GENERAL OBLIGATION LAWS (S) 5-1401 ET SEQ., BUT OTHERWISE WITHOUT
-- ---
REGARD TO CONFLICT OF LAW PROVISIONS) EXCEPT TO THE EXTENT THAT THE PERFECTION
OF BUYER'S SECURITY INTEREST IN THE RECEIVABLES IS GOVERNED BY THE LAW OF
ANOTHER STATE, AS REQUIRED BY THE LAWS OF THE STATE OF NEW YORK.
Section 7.9 CONSENT TO JURISDICTION. EACH ORIGINATOR HEREBY IRREVOCABLY SUBMITS
-----------------------
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY STATE COURT SITTING IN NEW YORK,
NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY
30
DOCUMENT EXECUTED BY SUCH ORIGINATOR PURSUANT TO THIS AGREEMENT AND EACH
ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR THE
COLLATERAL AGENT, AS BUYER'S ASSIGNEE) TO BRING PROCEEDINGS AGAINST ANY
ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT NECESSARY TO
REALIZE ON THE INTERESTS OF BUYER (OR THE COLLATERAL AGENT, AS BUYER'S ASSIGNEE)
IN ANY RECEIVABLES, RELATED SECURITY OR PROCEEDS THEREOF. ANY JUDICIAL
PROCEEDING BY ANY ORIGINATOR AGAINST BUYER (OR ANY AGENT) OR ANY AFFILIATE
THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH
ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE FEDERAL
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
Section 7.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY
--------------------
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.
Section 7.11 Integration; Binding Effect; Survival of Terms.
----------------------------------------------
(a) This Agreement hereby supersedes in its entirety the Amended
Receivables Sale Agreement as of the date hereof. From and after the
effectiveness of this Agreement, all representations, warranties and indemnities
shall be applicable to the Purchased Receivables with the same force and effect
as the Receivables arising on or after the date of this Agreement.
(b) This Agreement, the Purchase Agreement and each other document or
instrument executed or delivered in connection therewith and each Collection
Account Agreement contain the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.
(c) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns (including
any trustee in bankruptcy). No Originator may assign any of its rights and
obligations hereunder or any interest herein without the prior written consent
of Buyer and each of the Agents. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of any Originator. Without limiting the foregoing, each Originator
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acknowledges that Buyer, pursuant to the Purchase Agreement, may assign to the
Collateral Agent, for the benefit of the Purchasers, its rights, remedies,
powers and privileges hereunder and that the Collateral Agent may further assign
such rights, remedies, powers and privileges to the extent permitted in the
Purchase Agreement. Each Originator agrees that the Collateral Agent, as the
assignee of Buyer, shall, subject to the terms of the Purchase Agreement, have
the right to enforce this Agreement and to exercise directly all of Buyer's
rights and remedies under this Agreement (including, without limitation, the
right to give or withhold any consents or approvals of Buyer to be given or
withheld hereunder) and each Originator agrees to cooperate fully with the
Collateral Agent in the exercise of such rights and remedies. This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms and shall remain in full force and effect until
terminated in accordance with its terms; provided, however, that the rights and
remedies with respect to (i) any breach of any representation and warranty made
by any Originator pursuant to Article II; (ii) the indemnification and payment
----------
provisions of Article VI; and (iii) Section 7.6 shall be continuing and shall
---------- -----------
survive any termination of this Agreement. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any
Originator pursuant to Article II, (ii) the indemnification and payment
----------
provisions of Article VI, and Section 7.6 shall be continuing and shall survive
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any termination of this Agreement.
Section 7.12 Counterparts; Severability; Section References. 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. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
[Signature Pages Follow]
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
hereof.
▇▇▇▇▇ & MINOR, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
---------------
Phone:
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Fax:
---------------------
▇▇▇▇▇ & MINOR DISTRIBUTION, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
---------------
Phone:
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Fax:
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▇▇▇▇▇ & MINOR MEDICAL, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
---------------
Phone:
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Fax:
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O&M FUNDING CORP.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
---------------
Phone:
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Fax:
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Exhibit I
Definitions
-----------
This is Exhibit I to the Agreement (as hereinafter defined). As used
in the Agreement and the Exhibits, Schedules and Annexes thereto, capitalized
terms have the meanings set forth in this Exhibit I (such meanings to be equally
applicable to the singular and plural forms thereof). If a capitalized term is
used in the Agreement, or any Exhibit, Schedule or Annex thereto, and not
otherwise defined therein or in this Exhibit I, such term shall have the meaning
assigned thereto in Exhibit I to the Purchase Agreement.
"Accrual Period" means each calendar month or portion thereof which
elapses during the term of the Agreement. The first Accrual Period shall
commence on the date of the Purchase of Receivables hereunder and the final
Accrual Period shall terminate on the Termination Date.
"Adjustment Factor" means a percentage calculated to take account the
risk of nonpayment by the Obligors. Each Originator and Buyer may agree from
time to time to change the Adjustment Factor based on changes in one or more of
the items affecting the calculation thereof, provided that any change to the
--------
Adjustment Factor shall take effect as of the commencement of an Accrual Period,
shall apply only prospectively and shall not affect the Purchase Price payment
in respect of Purchase which occurred during any Accrual Period ending prior to
the Accrual Period during which such Originator and Buyer agree to make such
change.
"Agents" has the meaning set forth in the Preliminary Statements to
the Agreement.
"Agreement" means the Receivables Sale Agreement, dated as of April
30, 2002, among Originators and Buyer, as the same may be amended, restated or
otherwise modified.
"Authorized Officer" means, with respect to an Originator, its
respective corporate controller, treasurer, assistant treasurer, vice
president-finance or chief financial officer.
"Base Rate" means a rate per annum equal to the corporate base rate,
prime rate or base rate of interest, as applicable, announced by the Reference
Bank from time to time, changing when and as such rate changes.
"Blue Ridge" has the meaning set forth in the Preliminary Statements
to the Agreement.
"Blue Keel" has the meaning set forth in the Preliminary Statements to
the Agreement.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York, Richmond, Virginia, Charlotte, North
Carolina or Boston, Massachusetts and The Depository Trust Company of New York
is open for business.
I-1
"Buyer" has the meaning set forth in the preamble to the Agreement.
"Change of Control" means with respect to any Originator or Buyer, the
Parent's failure to own, directly or indirectly, 100% of the issued and
outstanding capital stock of such Person.
"Co-Agents" has the meaning set forth in the Preliminary Statements to
the Agreement.
"Collateral Agent" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Conduit" has the meaning set forth in the Preliminary Statements to
the Agreement.
"Credit and Collection Policy" means, with respect to each Originator,
such Originator's credit and collection policies and practices relating to
Contracts and Receivables existing on the date hereof and summarized in Exhibit
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V, as modified from time to time in accordance with the Agreement.
-
"Default Fee" means with respect to any amount due and payable by any
party hereunder, an amount equal to interest on any such unpaid amount at a rate
per annum equal to 2% above the Base Rate.
"Dilutions" means, at any time, the aggregate amount of reductions or
cancellations described in Section 1.3(a) of the Agreement.
--------------
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations issued thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Originator within the meaning of
Section 414(b) or (c) of the Tax Code (and Sections 414(m) and (o) of the Tax
Code for purposes of provisions relating to Section 412 of the Tax Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by any Originator or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001 (a) (2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by any Originator or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of an amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or; (e) an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan.
I-2
"Excluded Receivables" means (a) any indebtedness or obligations owed
to any Originator that was originated pursuant to a revolving charge agreement,
and (b) any amount owing to an Originator representing sales tax payable to any
state or political subdivision in connection with any transaction giving rise to
any Receivables.
"Excluded Taxes" has the meaning set forth in Section 6.1.
-----------
"Facility Fee" has the meaning set forth in Section 1.9.
-----------
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as amended and any successor statute thereto.
"Intended Characterization" means, for income tax purposes, the
characterization of the acquisition by the Purchasers of Receivable Interests
under the Purchase Agreement as a loan or loans by the Purchasers to Buyer
secured by the Receivables, the Related Security and the Collections.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of the Originators and their Subsidiaries,
taken as a whole, or Buyer, as applicable (except as otherwise disclosed to or
discussed with Buyer (and the Agents) prior to the date hereof), (ii) the
ability of any Originator, or Buyer, as applicable, to perform its obligations
under the Agreement or any other Transaction Document, (iii) the legality,
validity or enforceability of the Agreement or any other Transaction Document,
(iv) any Originator's, Buyer's, the Co-Agents', the Collateral Agent's or any
Purchaser's interest in the Receivables generally or in any significant portion
of the Receivables, the Related Security or Collections with respect thereto, or
(v) the collectibility of the Receivables generally or of any material portion
of the Receivables.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan", within the meaning
of Section 4001 (a) (3) of ERISA, to which any Originator or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
six calendar years, has made, or been obligated to make, contributions.
"Net Value" means, as of any date of determination, an amount equal to
the sum of (i) the aggregate Outstanding Balance of the Receivables at such
time, minus (ii) the sum of (A) the aggregate Invested Amount outstanding at
-----
such time, plus (B) the Required Reserve.
----
"New Lending Office" means, with respect to any Non-U.S. Purchaser,
any administrative office or lending office designated by such Non-U.S.
Purchaser after the date on which it first became a Non-U.S. Purchaser for
purposes of booking its interest or participation in the Receivable Interests.
"Non-U.S. Purchaser" means each Purchaser and each Participant that is
granted a participating interest in any Receivable Interest and that is not an
United States Person within the meaning of Section 7701(a)(30) of the Tax Code.
I-3
"Original Balance" means, with respect to any Receivable, the
Outstanding Balance of such Receivable on the date it was purchased by Buyer.
"Originators" has the meaning set forth in the preamble to the
Agreement.
"Parent" has the meaning set forth in the preamble to the Agreement.
"Parent Credit Agreement" means that certain Credit Agreement dated as
of April 30, 2002, by and among the Parent, as borrower, various of its
Subsidiaries, as guarantors, the banks, syndication agents and co-agents from
time to time party thereto, and Bank of America, N.A., as administrative agent,
as in effect on the date hereof.
"Parent Credit Agreement Banks" means the financial institutions party
to the Parent Credit Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA other than a Multiemployer Plan which any
Originator or ERISA Affiliate sponsors or maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five plan years.
"Performance Guarantor" means Parent in its capacity as guarantor of
the Originators' and Servicer's performance under the Performance Undertaking.
"Performance Undertaking" means that certain Performance Undertaking,
dated as of April 30, 2002, by the Performance Guarantor in favor of Buyer and
its assigns, substantially in the form of Exhibit XI to the Purchase Agreement,
as the same may be amended, restated or otherwise modified from time to time.
"Potential Termination Event" means an event which, with the passage
of time or the giving of notice, or both, would constitute an Termination Event.
"Purchase" means the purchase under the Agreement by Buyer from an
Originator of the Receivables, the Related Security and the Collections related
thereto, together with all related rights in connection therewith.
"Purchase Agreement" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Purchase Price" means, with respect to any Purchase on any date, the
aggregate price to be paid by Buyer to an Originator for such Purchase in
accordance with Section 1.2 of the Agreement for the Receivables, Collections
-----------
and Related Security being sold to Buyer on such date, which price shall equal
(i) the product of (x) the Original Balance of such Receivables, multiplied by
---------- --
(y) one minus the Adjustment Factor then in effect, minus (ii) any Purchase
Price
I-4
Credits to be credited against the Purchase Price otherwise payable in
accordance with Section 1.3 of the Agreement.
-----------
"Purchase Price Credit" has the meaning set forth in Section 1.3 of
-----------
the Agreement.
"Purchasers" has the meaning set forth in the Preliminary Statements
to the Agreement.
"Receivable" means the indebtedness and other obligations, other than
the indebtedness and other obligations constituting Excluded Receivables but
including the Purchased Receivables, owed to an Originator (without giving
effect to any transfer or conveyance under the Amended Receivables Sale
Agreement or this Agreement) or Buyer (after giving effect to the transfers
under the Amended Receivables Sale Agreement and this Agreement) whether
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of products and related services by such
Originator and includes, without limitation, the obligation to pay any Finance
Charges with respect thereto. Indebtedness and other rights and obligations
arising from any one transaction, including, without limitation, indebtedness
and other rights and obligations represented by an individual invoice, shall
constitute a Receivable separate from a Receivable consisting of the
indebtedness and other rights and obligations arising from any other
transaction; provided that any indebtedness, rights or obligations referred to
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in the immediately preceding sentence shall be a Receivable regardless of
whether the account debtor or applicable Originator treats such indebtedness,
rights or obligations as a separate payment obligation.
"Related Security" means, with respect to any Receivable:
(i) all of the applicable Originator's interest in the inventory
and goods (including returned or repossessed inventory or
goods), if any, the sale of which by such Originator gave
rise to such Receivable, and all insurance contracts with
respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure
payment of such Receivable, whether pursuant to the Contract
related to such Receivable or otherwise, together with all
financing statements and security agreements describing any
collateral securing such Receivable,
(iii) all guaranties, insurance and other agreements or
arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether
pursuant to the Contract related to such Receivable or
otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable, and
I-5
(vi) all proceeds of any of the foregoing.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Settlement Date" means the twentieth (20th) day of each calendar
month.
"Subordinated Loan" has the meaning set forth in Section 1.2(b) of the
--------------
Agreement.
"Subordinated Notes" means the promissory notes in substantially the
form of Exhibit VI hereto as more fully described in Section 1.2 of the
---------- -----------
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, limited liability company, joint venture
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
"Tangible Net Worth" means total stockholders' equity minus goodwill,
patents, trade names, trade marks, copyrights, franchises, organizational
expense, deferred assets other than prepaid insurance and prepaid taxes and such
other assets as are properly classified as "intangible assets", for any
corporation as determined in accordance with generally accepted accounting
principles.
"Tax Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Termination Date" means the earliest to occur of (i) the Facility
Termination Date (as defined in the Purchase Agreement), (ii) the Business Day
immediately prior to the occurrence of a Termination Event set forth in Section
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5.1(e), (iii) the Business Day specified in a written notice from Buyer to the
------
Originators following the occurrence of any other Termination Event, and (iv)
the date which is 10 Business Days after Buyer's receipt of written notice from
any Originator that it wishes to terminate the facility with respect to such
Originator evidenced by this Agreement.
"Termination Event" has the meaning set forth in Section 5.1 of the
-----------
Agreement.
"Transaction Documents" means, collectively, this Agreement, each
Collection Account Agreement, the Subordinated Notes and all other instruments,
documents and agreements executed and delivered in connection herewith.
I-6
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9.
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