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EXECUTION COPY
RECEIVABLES SALE AGREEMENT
DATED AS OF AUGUST 31, 2000
BETWEEN
GOLDEN EAGLE LEASING, INC.,
as Originator
AND
GOLDEN EAGLE RECEIVABLES LLC,
as Buyer
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TABLE OF CONTENTS
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ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE ............................................ 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 ................................... 5
Section 1.6 Characterization ....................................... 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES ............................................... 7
Section 2.1 Representations and Warranties of Originator ........... 7
ARTICLE III
CONDITIONS OF PURCHASE ....................................................... 11
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Section 3.1 Conditions Precedent to Purchase ....................... 11
Section 3.2 Conditions Precedent to All Purchases .................. 12
ARTICLE IV
COVENANTS .................................................................... 12
Section 4.1 Affirmative Covenants of Originator ................... 12
Section 4.2 Negative Covenants of Originator ....................... 18
ARTICLE V
TERMINATION EVENTS .......................................................... 19
Section 5.1 Termination Events .................................... 19
Section 5.2 Remedies ............................................... 20
ARTICLE VI
INDEMNIFICATION .............................................................. 21
Section 6.1 Indemnities by Originator ............................ 21
Section 6.2 Other Costs and Expenses ............................... 24
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ARTICLE VII
MISCELLANEOUS ................................................................ 24
Section 7.1 Waivers and Amendments ............................... 24
Section 7.2 Notices ................................................ 25
Section 7.3 Protection of Ownership Interests of Buyer ............. 25
Section 7.4 Confidentiality ........................................ 26
Section 7.5 Bankruptcy Petition .................................... 27
Section 7.6 Limitation of Liability ................................ 27
Section 7.7 CHOICE OF LAW .......................................... 28
Section 7.8 CONSENT TO JURISDICTION ................................ 28
Section 7.9 WAIVER OF JURY TRIAL ................................... 28
Section 7.10 Integration; Binding Effect; Survival of Terms ......... 28
Section 7.11 Counterparts; Severability; Section References ......... 29
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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 - Form of Sale Assignment
Exhibit IV - Names of Receiving Banks; Receiving Accounts
Exhibit V - Form of Compliance Certificate
Exhibit VI - Credit and Collection Policy
Exhibit VII - Form of LLC Agreement
Exhibit VIII - 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
THIS RECEIVABLES SALE AGREEMENT, dated as of August 31, 2000,
is by and between Golden Eagle Leasing, Inc., an Arizona corporation
("Originator"), and Golden Eagle Receivables LLC, a Delaware limited liability
company ("Buyer"). Unless defined elsewhere herein, capitalized terms used in
this Agreement shall have the meanings assigned to such terms in Exhibit I
hereto (or, if not defined in Exhibit I hereto, the meaning assigned to such
term in Exhibit I to the Purchase Agreement).
PRELIMINARY STATEMENTS
Originator now owns, and from time to time hereafter will own,
Receivables. Originator wishes to sell and assign to Buyer, and Buyer
wishes to purchase from Originator, all of Originator's right, title
and interest in and to such Receivables, together with the Related
Security and Collections with respect thereto.
Originator and Buyer intend the transactions contemplated
hereby to be true sales of the Receivables from Originator to Buyer,
providing Buyer with the full benefits of ownership of the Receivables,
and Originator and Buyer do not intend these transactions to be, or for
any purpose to be characterized as, loans from Buyer to Originator.
Originator wishes to grant Buyer a security interest in the
Obligor Owned Equipment.
Following the purchase of Receivables from Originator, Buyer
will sell undivided interests therein and in the associated Related
Security and Collections and in its security interests in the Obligor
Owned Equipment pursuant to that certain Receivables Purchase Agreement
dated as of August 31, 2000 (as the same may from time to time
hereafter be amended, supplemented, restated or otherwise modified, the
"Purchase Agreement") among Buyer, Originator, as Servicer, Falcon
Asset Securitization Corporation ("Company"), the financial
institutions from time to time party thereto as "Financial
Institutions" and Bank One, NA (Main Office Chicago) or any successor
agent appointed pursuant to the terms of the Purchase Agreement, as
agent for Company and such Financial Institutions (in such capacity,
the "Agent").
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NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Purchase of Receivables.
(a) On each Purchase Date hereunder, in consideration for the
Purchase Price and upon the terms and subject to the conditions set forth
herein, Originator shall sell, assign, transfer, set-over and otherwise convey
to Buyer, without recourse (except to the extent expressly provided herein), and
Buyer shall hereby purchase from Originator, all of Originator's right, title
and interest in and to all Receivables identified on the related Schedule of
Receivables, together with all Related Security relating thereto and all
Collections thereof. In accordance with the preceding sentence, on the date of
the initial Purchase Buyer shall acquire all of Originator's right, title and
interest in and to all Receivables identified on the related Schedule of
Receivables, together with all Related Security relating thereto and all
Collections thereof. Buyer shall be obligated to pay the Purchase Price for the
Receivables purchased hereunder in accordance with Section 1.2. In connection
with consummation of the Purchase Price for any Receivables purchased hereunder,
Buyer may request that Originator deliver, and Originator shall deliver, such
approvals, opinions, information, reports or documents as Buyer may reasonably
request.
(b) Not less than two Business Days prior to each date which
Originator proposes to be a Purchase Date, Originator shall deliver to Buyer (i)
a notice that Originator proposes to sell Receivables to Buyer on the specified
Purchase Date, and (ii) an executed Sale Assignment (substantially in the form
of Exhibit IV hereto), to which shall be attached a schedule (the "Schedule of
Receivables") of the Originated Receivables that Originator will sell to Buyer
on the specified Purchase Date.
(c) It is the intention of the parties hereto that each
Purchase of Receivables made hereunder shall constitute a sale in the state of
Connecticut, 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, each sale of Receivables hereunder is made
without recourse to Originator; provided, however, that (i) Originator shall be
liable to Buyer for all representations, warranties, covenants and
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indemnities made by Originator pursuant to the terms of the Transaction
Documents to which 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 Originator or any other Person arising in connection with
the Receivables, the related Contracts and/or other Related Security or any
other obligations of Originator. In view of the intention of the parties hereto
that the Purchases of Receivables made hereunder shall constitute sales of such
Receivables rather than loans secured thereby, 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 relating to the Receivables with a legend
acceptable to Buyer and to the Agent (as Buyer's assignee), evidencing that
Buyer has purchased such Receivables as provided in this Agreement and to note
in its financial statements that its Receivables have been sold to Buyer. Upon
the request of Buyer or the Agent (as Buyer's assignee), Originator will 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 Agent (as Buyer's assignee) may reasonably
request.
(d) The Originator does not intend to sell, and has not sold,
the Originator Owned Equipment to the Buyer pursuant to the foregoing provisions
of this Section 1.1. Instead, the Originator hereby grants to the Buyer a
security interest in all Originator Owned Equipment now existing or hereafter
arising, to secure the performance by the Originator of its obligations
hereunder.
Section 1.2 Payment for the Purchase.
(a) The Purchase Price for each Purchase of Receivables
hereunder shall be payable in full by Buyer to Originator on the date of such
Purchase, and shall be paid to Originator in the following manner:
first, by delivery of immediately available funds, to
the extent of (x) funds made available to Buyer in connection with its
subsequent sale of an interest in such Receivables to the Purchasers
under the Purchase Agreement and (y) any Collections on Receivables or
other funds available to Buyer on such Purchase Date;
second, the balance, by delivery of the proceeds of a
subordinated revolving loan from Originator to Buyer (a "Subordinated
Loan") in an
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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 Net Worth less than the Required
Capital Amount 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). Originator is
hereby authorized by Buyer to endorse on the schedule attached to the
Subordinated Note an appropriate notation evidencing the date and
amount of each advance thereunder, as well as the date of each payment
with respect thereto, provided that the failure to make such notation
shall not affect any obligation of Buyer thereunder; and
third, unless Originator has declared the Termination
Date to have occurred pursuant to Section 5.2, by accepting a
contribution to its capital pursuant to the Subscription Agreement in
an amount equal to the remaining unpaid balance of such Purchase Price.
Subject to the limitations set forth in Section 1.2(a)(ii), 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
Note 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 Purchasers.
(b) From and after the Termination Date, Originator shall not
be obligated to (but may, at its option): (i) sell Receivables to Buyer, or (ii)
contribute Receivables to Buyer's capital pursuant to clause third of Section
1.2(b) unless 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, other cash on hand or otherwise.
Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective or rejected
or returned goods or services, any discount or any adjustment or
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otherwise by 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, or
(b) any of the representations and warranties set forth in
Article II are not true when made or deemed made 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 Outstanding Balance of such Receivable (calculated before giving effect to
the applicable reduction or cancellation). If such Purchase Price Credit exceeds
the Outstanding Balance of the Receivables coming into existence on any day,
then Originator shall pay the remaining amount of such Purchase Price Credit in
cash immediately, provided that if the Termination Date has not occurred,
Originator shall be allowed to deduct the remaining amount of such Purchase
Price Credit from any indebtedness owed to it under the Subordinated Note.
Section 1.4 Payments and Computations, Etc. All amounts to be paid or
deposited 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 Originator designated from time to time by Originator or as otherwise
directed by 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 Person fails to pay
any amount hereunder when due, such Person 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.
(a) In connection with each Purchase of Receivables hereunder,
Originator hereby sells, transfers, assigns and otherwise conveys to Buyer all
of 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 the initial such transfer,
Originator hereby grants to each of Buyer, the Agent and the Servicer
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an irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by Originator to account for the Receivables, to the
extent necessary to administer the Receivables, whether such software is owned
by Originator or is owned by others and used by Originator under license
agreements with respect thereto, provided that should the consent of any
licensor of such software be required for the grant of the license described
herein, to be effective, Originator hereby agrees that upon the request of Buyer
(or Buyer's assignee), Originator will use its reasonable efforts to obtain the
consent of such third-party licensor. The license granted hereby shall be
irrevocable until the indefeasible payment in full of the Aggregate Unpaids, and
shall terminate on the date this Agreement terminates in accordance with its
terms.
(b) Originator (i) shall take such action requested by Buyer and/or the
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 Originator hereunder, and (ii) shall use its
reasonable efforts to ensure that Buyer, the 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 expressed in Section 1.1(c), any sale or contribution by Originator to
Buyer 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 derogation of
the parties' intention that the sale of Receivables hereunder shall constitute a
true sale thereof, Originator hereby grants to Buyer a duly perfected security
interest in all of Originator's right, title and interest in, to and under the
Receivables, the Collections, each Collection Account, all Related Security, all
other rights and payments relating to the Receivables and all proceeds of the
foregoing to secure the prompt and complete payment of a loan deemed to have
been made in an amount equal to the Purchase Price of the Receivables together
with all other obligations of Originator hereunder, which security interest
shall be prior to all other Adverse Claims thereto. Buyer and its assigns 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 under
the UCC and other applicable law, which rights and remedies shall be cumulative.
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Section 1.7 Repurchases. The Originator shall be entitled at any time
to repurchase from Buyer any Receivable which Buyer has reacquired from the
Agent pursuant to Section 2.7 of the Purchase Agreement (a "Repurchased
Receivable"). The purchase price in respect of any Repurchased Receivable shall
be an amount equal to fair market value of such Receivable on the date of such
repurchase, payable in immediately available funds. Such repurchase shall be
without representation, warranty or recourse of any kind by, on the part of, or
against Buyer.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originator. Originator
hereby represents and warrants to Buyer on the date hereof, on each Purchase
Date:
(a) Corporate Existence and Power. Originator is a corporation
duly 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 its business is conducted except
where failure to so qualify or so hold could not reasonably be expected to have
a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by 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, 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
Agreement and each other Transaction Document to which Originator is a party has
been duly executed and delivered by Originator.
(c) No Conflict. The execution and delivery by Originator of
this 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 (or
equivalent organizational documents) or any shareholder agreements, voting
trusts, and similar arrangements applicable to any of its authorized shares,
(ii) any law, rule or regulation applicable to it, the violation of which could
reasonably be expected to have a Material Adverse Effect, (iii) any restrictions
under any
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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, the violation of which
could be reasonably expected to have a Material Adverse Effect, and do not
result in the creation or imposition of any Adverse Claim on assets of
Originator or its Subsidiaries (except as created hereunder); 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 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 Originator's knowledge, threatened, against or
affecting Originator, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. 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 Originator is a party constitute the legal, valid and binding
obligations of Originator enforceable against 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).
(g) Accuracy of Information. All information heretofore
furnished by Originator or any of its Affiliates to Buyer (or its assigns) 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 Originator or any of its Affiliates to Buyer
(or its assigns) will be, true and accurate in every material respect on the
date such information is stated or certified and does not and will not contain
any material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
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(h) Use of Proceeds. No proceeds of any Purchase Price payment
hereunder will be used (i) for a purpose that violates, or would be inconsistent
with, any law, rule or regulation applicable to Originator or (ii) to acquire
any security in any transaction which is subject to Section 12, 13 or 14 of the
Securities Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to each Purchase hereunder,
Originator (i) is the legal and beneficial owner of the Receivables and (ii) is
the legal and beneficial owner of the Related Security with respect thereto or
possesses a valid and perfected security interest therein, in each case, free
and clear of any Adverse Claim, except (x) as created by the Transaction
Documents and (y) that Originator shall not be deemed to represent that its
security interest in the Related Equipment securing any Excepted Contract has
been perfected. 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 Originator's ownership interest in
each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the executed
Sale Assignments and the filing of the financing statements contemplated hereby,
is effective to transfer to Buyer (and Buyer shall acquire from Originator) (i)
legal and equitable title to, with the right to sell and encumber each
Receivable, together with the Collections with respect thereto, (ii) all of
Originator's right, title and interest in the Related Security associated with
each Receivable, in each case, free and clear of any Adverse Claim, except as
created by the Transactions Documents and (iii) a valid, enforceable, perfected
and first priority security interest in all of the Originator Owned Equipment.
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 interest in the Receivables, the
Related Security and the Collections and Buyer's security interest in the
Originator Owned Equipment.
(k) Places of Business and Locations of Records. The principal
places of business and chief executive office of 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. Originator's Federal Employer
Identification Number is correctly set forth on Exhibit II.
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(l) Collections. The conditions and requirements set forth in
Section 4.1(j) have at all times been satisfied and duly performed. The names
and addresses of all Receiving Banks, together with the account numbers of the
Receiving Accounts of Originator at each Receiving Bank and the post office box
number of each Lock-Box, are listed on Exhibit IV. Originator has not granted
any Person, other than Buyer (and its assigns) dominion and control of any
Lock-Box or Receiving Account, or the right to take dominion and control of any
such Lock-Box or Receiving Account at a future time or upon the occurrence of a
future event.
(m) Material Adverse Effect. Since December 31, 1999 no event
has occurred that would have a Material Adverse Effect.
(n) Names. In the past five (5) years, Originator has not used
any corporate names, trade names or assumed names other than (i) the name in
which it has executed this Agreement, (ii) "Golden Eagle Credit Corporation" and
(iii) "Hypercom Financial, Inc."
(o) Ownership of Buyer. Originator owns, directly or
indirectly, 100% of the issued and outstanding membership interests having
economic value of Buyer, free and clear of any Adverse Claim.
(p) Not a Holding Company or an Investment Company. 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. 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. 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 except to the extent
any failure to comply would not have a Material Adverse Effect. 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.
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(r) Compliance with Credit and Collection Policy. Originator
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any change
to such Credit and Collection Policy, except such material change as to which
Buyer (or its assigns) has been notified in accordance with Section 4.1(a)(vii).
(s) Payments to Originator. With respect to each Receivable
transferred to Buyer hereunder, the Purchase Price to be received by Originator
will constitute reasonably equivalent value in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
Originator of any Receivable hereunder is or may be voidable under any section
of the Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101 et seq.), as
amended.
(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 Finance Charges 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).
(u) Eligible Receivables. Each Receivable included at any time
in the Net Receivables Balance as an Eligible Receivable was, on its Purchase
Date, an Eligible Receivable.
(v) Accounting. The manner in which Originator accounts for
the transactions contemplated by this Agreement does not jeopardize the
characterization of the transactions contemplated herein as being true sales.
(w) No Adverse Selection. To the extent that Originator has
retained Originated Receivables that would be Eligible Receivables but which
have not been transferred to Buyer hereunder, Originator has not selected those
Originated Receivables to be transferred hereunder in any manner that materially
adversely affects Buyer.
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ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The initial 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 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 All Purchases. Buyer's obligation
to pay for Receivables on any Purchase Date shall be subject to the further
conditions precedent that (a) the Facility Termination Date shall not have
occurred; (b) Buyer (or its assigns) shall have received such other approvals,
opinions or documents as it may reasonably request and (c) on the Purchase Date
for such Receivable, the following statements shall be true (and acceptance of
the proceeds of any payment for such Receivable shall be deemed a representation
and warranty by Originator that such statements are then true):
(i) the representations and warranties set forth in Article II are true
and correct on and as of the Purchase Date as though made on and as of such
date; and
(ii) no event has occurred and is continuing that will constitute a
Termination Event or a Potential Termination Event.
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 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 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.
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ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originator. Until the date on
which this Agreement terminates in accordance with its terms, Originator hereby
covenants as set forth below:
(a) Financial Reporting. Originator will maintain, for itself
and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to Buyer (or its assigns):
(i) Annual Reporting. Within 90 days after the close
of each of its respective fiscal years, unaudited financial statements
(which shall include balance sheets, statements of income and retained
earnings and a statement of cash flows) for Originator and its
consolidated subsidiaries for such fiscal year.
(ii) Quarterly Reporting. Within 45 days after the
close of the first three (3) quarterly periods of each of its
respective fiscal years, balance sheets of Originator as at the close
of each such period and statements of income and retained earnings and
a statement of cash flows for Originator for the period from the
beginning of such fiscal year to the end of such quarter, all certified
by its chief financial officer.
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by Originator's Authorized
Officer and dated the date of such annual financial statement or such
quarterly financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly
upon the furnishing thereof to the shareholders of Originator, copies
of all financial statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly, monthly or
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other regular reports which Originator or any of its Subsidiaries files
with the Securities and Exchange Commission.
(vi) 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, the Agent or
Company, copies of the same.
(vii) Change in Credit and Collection Policy. At
least thirty (30) days prior to the effectiveness of any material
change in or material amendment to the Credit and Collection Policy, a
copy of the Credit and Collection Policy then in effect and a notice
(A) indicating such change or amendment, and (B) if such proposed
change or amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any
newly created Receivables, requesting Buyer's consent thereto.
(viii) 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 Originator as Buyer (or its assigns) may from time to time
reasonably request in order to protect the interests of Buyer (and its
assigns) under or as contemplated by this Agreement.
(b) Notices. Originator will notify the Buyer (or its assigns)
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
Originator.
(ii) Judgment and Proceedings. The entry of any
judgment or decree against Originator or any of its Subsidiaries; or
the institution of any litigation, arbitration proceeding or
governmental proceeding
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against Originator if the aggregate amount of all judgments and decrees
then outstanding against Originator exceeds $250,000.
(iii) Material Adverse Effect. The occurrence of any
event or condition that has had, or could reasonably be expected to
have, a Material Adverse Effect.
(iv) Defaults Under Other Agreements. The occurrence
of a default or an event of default under any other financing
arrangement pursuant to which Originator is a debtor or an obligor.
(v) Downgrade of the Originator. Any downgrade in any
rating that may be assigned to any Indebtedness of Originator by
Standard and Poor's Ratings Services or by ▇▇▇▇▇'▇ Investors Service,
Inc., setting forth the Indebtedness affected and the nature of such
change.
(c) Compliance with Laws and Preservation of Corporate
Existence. Originator will comply in all material respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject. 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 its business is conducted .
(d) Audits. Originator will furnish to Buyer (or its assigns)
from time to time such information with respect to it and the Receivables as
Buyer (or its assigns) may reasonably request. Originator will, from time to
time during regular business hours as requested by Buyer (or its assigns), upon
reasonable notice and at the sole cost of Originator, permit Buyer (or its
assigns) or their respective agents or representatives cause Original Seller to
permit Buyer (or its assigns) or their respective agents and representatives (i)
to examine and make copies of and abstracts from all Records in the possession
or under the control of Originator relating to the Receivables and the Related
Security, including, without limitation, the related Contracts, and (ii) to
visit the offices and properties of Originator for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to
Originator's financial condition or the Receivables and the Related Security or
Originator's performance under any of the Transaction Documents or Originator's
performance under the
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Contracts and, in each case, with any of the officers or employees of Originator
having knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) 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). Originator will give Buyer (or its assigns)
notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(ii) 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 Buyer
(or its assigns), describing Buyer's ownership interests in the
Receivables and further describing the Purchaser Interests of the Agent
(on behalf of the Purchasers) under the Purchase Agreement and (B) upon
the request of Buyer (or its assigns), (x) ▇▇▇▇ each Contract with a
legend describing Buyer's ownership interests in the Receivables and
further describing the Purchaser Interests of the Agent (on behalf of
the Purchasers) and (y) deliver to Buyer (or its assigns) 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. 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 respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) Ownership. Originator will take all necessary action to
establish and maintain, irrevocably in Buyer, (A) legal and equitable title to
the Receivables and the Collections and (B) all of Originator's right, title and
interest in the Related Security
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associated with the Receivables, in each case, free and clear of any Adverse
Claims other than Adverse Claims in favor of Buyer (and its assigns) (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 as Buyer (or its assigns) may
reasonably request). Originator shall obtain and maintain a perfected security
interest, free and clear of any Adverse Claims, in all related equipment (except
that the security interest in any Related Equipment securing an Excepted
Contract need not be perfected).
(h) Purchasers' Reliance. Originator acknowledges that the
Agent and 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 Originator and any Affiliates thereof. Therefore, from and after
the date of execution and delivery of this Agreement, Originator will take all
reasonable steps including, without limitation, all steps that Buyer or any
assignee of Buyer 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
Originator and any Affiliates thereof and not just a division of Originator or
any such Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, 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 Originator and Buyer on
an arm's-length basis and in a manner consistent with the procedures set forth
in U.S. Treasury Regulations Sections 1.1502-33(d) and 1.1552-1.
(i) Collections. Originator will cause (1) all proceeds from
each Lock-Box to be directly deposited by the related Lock-Box Bank into the
related Lock-Box Account and (2) all Automatic Debit Collections to be deposited
directly into the Collection Account. In the event any payments relating to
Receivables are remitted directly to Originator or any Affiliate of Originator,
Originator will remit (or will cause all such payments to be remitted) directly
to the Collection Account Bank and deposited into the Collection Account within
one (1) Business Day following receipt thereof and, at all times prior to such
remittance, Originator will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of Buyer and its assigns.
Originator will transfer exclusive ownership,
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dominion and control of each Lock-Box and each Receiving Account to Buyer and
shall not grant the right to take dominion and control of any Lock-Box or
Receiving Account at a future time or upon the occurrence of a future event to
any Person, except to Buyer (or its assigns) as contemplated by this Agreement
and the Purchase Agreement.
(j) Taxes. Originator will file all tax returns and reports
required by law to be filed by it and promptly pay all taxes and governmental
charges at any time owing Originator will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of Buyer and its assigns.
(k) Insurance. Originator will maintain in effect, or cause to
be maintained in effect, at Originator's own expense, such casualty and
liability insurance covering the Related Equipment as Originator deems
appropriate in its good faith business judgement. Buyer and the Agent, for the
benefit of the Purchasers, shall be named as additional insureds with respect to
all such liability insurance maintained by Originator. Originator will pay or
cause to be paid, the premiums therefor and deliver to Buyer and the Agent
evidence satisfactory to Buyer and the Agent of such insurance coverage. Copies
of each policy shall be furnished to Buyer, the Agent and any Purchaser in
certificated form upon Buyer's, the Agent's or such Purchaser's request.
Section 4.2 Negative Covenants of Originator. Until the date on which
this Agreement terminates in accordance with its terms, Originator hereby
covenants that:
(a) Name Change, Offices and Records. Originator will not
change its name, identity or corporate structure (within the meaning of Section
9-402(7) of any applicable enactment of the UCC) or relocate its chief executive
office or any office where Records are kept unless it shall have: (i) given
Buyer (or its assigns) at least forty-five (45) days' prior written notice
thereof and (ii) delivered to Buyer (or its assigns) all financing statements,
instruments and other documents requested by Buyer (or its assigns) in
connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Originator
will not add or terminate any bank as a Receiving Bank, or make any change in
the instructions to Obligors regarding payments to be made to any Receiving
Account, unless Buyer (or its assigns) shall have received, at least ten (10)
days before the proposed effective date therefor, (i) written notice of such
addition, termination or change; provided, however, that Originator may make
changes in instructions to Obligors regarding payments if such new instructions
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require such Obligor to make payments to another existing Lock-Box Account or
Collection Account.
(c) Modifications to Contracts and Credit and Collection
Policy. Originator will not make any change to the Credit and Collection Policy
that could adversely affect the collectibility of the Receivables or decrease
the credit quality of any newly created Receivables. Except as otherwise
permitted in its capacity as Servicer pursuant to Article VIII of the Purchase
Agreement, Originator will not extend, amend or otherwise modify the terms of
any Receivable or any Contract related thereto other than in accordance with the
Credit and Collection Policy.
(d) Sales, Liens. 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, the creation of the interests therein in favor of Buyer provided
for herein), and Originator will defend the right, title and interest of Buyer
in, to and under any of the foregoing property, against all claims of third
parties claiming through or under Originator. Originator shall not create or
suffer to exist any mortgage, pledge, security interest, encumbrance, lien,
charge or other similar arrangement on any of its inventory, except pursuant to
the Bank One Credit Agreement.
(e) No Adverse Selection. To the extent that Originator has
retained Originated Receivables that would be Eligible Receivables but which
have not been transferred to Buyer hereunder, Originator will not select those
Originated Receivables which are transferred hereunder in any manner that
materially adversely affects Buyer.
(f) Accounting for Purchase. 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 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
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.
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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) Originator shall fail (i) to make any payment or deposit
required hereunder when due and such failure continues for one (1) Business Day,
or (ii) to perform or observe any term, covenant or agreement hereunder (other
than as referred to in clause (i) of this paragraph (a)) or any other
Transaction Document to which it is a party and such failure shall continue for
three (3) consecutive Business Days.
(b) Any representation, warranty, certification or statement
made by Originator in this Agreement, any other Transaction Document or in any
other document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.
(c) Failure of Originator to pay when due any Indebtedness in
excess of $250,000, or failure of Originator to pay any interest or premium on
such Indebtedness when due or within any applicable grace period; or the default
by 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 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.
(d) (i) Originator or any of its 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
Originator or any of its 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
or (iii) Originator or any of its Subsidiaries shall take any
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corporate action to authorize any of the actions set forth in the foregoing
clauses (i) or (ii) of this subsection (d).
(e) A Change of Control shall occur.
(f) One or more final judgments for the payment of money in an
amount in excess of $250,000, individually or in the aggregate, shall be entered
against 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 fifteen (30) consecutive days without a
stay of execution.
Section 5.2 Remedies. Upon the occurrence and during the continuation
of a 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 Originator; provided, however, that upon
the occurrence of a Termination Event described in Section 5.1(d), or of an
actual or deemed entry of an order for relief with respect to 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 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 Originator to Buyer. The aforementioned rights and
remedies shall be without limitation and shall be in addition to all other
rights and remedies of Buyer and its assigns otherwise available under any other
provision of 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 Originator. Without limiting any other
rights that Buyer may have hereunder or under applicable law, Originator hereby
agrees to indemnify (and pay upon demand to) Buyer and its assigns, officers,
directors, agents and employees (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 (which attorneys
may be employees of Buyer or any such assign) and disbursements (all of the
foregoing together with the exclusions below being collectively referred to as
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"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:
(i) 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;
(ii) 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
(iii) taxes imposed by the jurisdiction in which such
indemnified party is subject to taxation, on or measured by the overall
net income of such Indemnified Party(a) to the extent that the
computation of such taxes is consistent with the characterization for
income tax purposes of the acquisition by the Purchasers of Purchaser
Interests under the Purchase Agreement as a loan or loans by the
Purchasers to Buyer secured by, among other things, the Receivables,
the Related Security, the Collection Accounts and the Collections or
(b) such tax was assessed due to the failure of such Indemnified Party
to observe its obligations under Section 14.14(c) of the Purchase
Agreement hereof and such reporting was not otherwise required by
applicable law;
provided, however, that nothing contained in this sentence shall limit the
liability of Originator or limit the recourse of Buyer to Originator for amounts
otherwise specifically provided to be paid by Originator under the terms of this
Agreement. Without limiting the generality of the foregoing indemnification,
Originator shall indemnify Buyer for Indemnified Amounts (including, without
limitation, losses in respect of uncollectible receivables, regardless of
whether reimbursement therefor would constitute recourse to Originator) relating
to or resulting from:
(i) any representation or warranty made by Originator
(or any officers of Originator) under or in connection with this
Agreement, any other Transaction Document or any other information or
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report delivered by Originator pursuant hereto or thereto that shall
have been false or incorrect when made or deemed made;
(ii) the failure by 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 Originator to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(iii) any failure of 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, personal injury or
damage, suit or other similar claim arising out of or in connection
with merchandise, insurance or services that are the subject of any
Contract or any Receivable;
(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;
(vii) any investigation, litigation or proceeding
related to or arising from this Agreement or any other Transaction
Document, the transactions contemplated hereby, the use of the proceeds
of any Purchase Price Payment, the ownership of the Receivables or any
other investigation, litigation or proceeding relating to Originator in
which any
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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 and suit on the grounds of
sovereignty 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 and the Collections, and all of Originator's right,
title and interest in the Related Security associated with the
Receivables, 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, the Related Security and Collections
with respect thereto, and the proceeds of any thereof, whether at the
time of the Purchase or at any subsequent time;
(xii) any action or omission by 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 to void the Purchase
hereunder under statutory provisions or common law or equitable action;
(xiv) any failure of performance by any party or any
default under or termination of any Interest Rate Hedge; and
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(xv) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to
be an Eligible Receivable at the time so included.
Section 6.2 Other Costs and Expenses. Originator 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.
Originator 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 with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following a Termination
Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its assigns)
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 Originator and
Buyer and, to the extent required under the Purchase Agreement, the Agent and
the Financial Institutions or the Required Financial Institutions.
Section 7.2 Notices. All communications and notices 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
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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) 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 Buyer (or its assigns) may
request, to perfect, protect or more fully evidence the interest of Buyer
hereunder and the Purchaser Interests, or to enable Buyer (or its assigns) to
exercise and enforce their rights and remedies hereunder. At any time, Buyer (or
its assigns) may, at Originator's sole cost and expense, direct Originator to
notify the Obligors of Receivables of the ownership interests of Buyer under
this Agreement 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.
(b) If Originator fails to perform any of its obligations
hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or
cause performance of, such obligations, and Buyer's (or such assigns') costs and
expenses incurred in connection therewith shall be payable by Originator as
provided in Section 6.2. Originator irrevocably authorizes Buyer (and its
assigns) at any time and from time to time in the sole discretion of Buyer (or
its assigns), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact,
to act on behalf of Originator (i) to execute on behalf of Originator as debtor
and to file financing statements necessary or desirable in Buyer's (or its
assigns') sole discretion 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 its assigns) in their sole discretion deem 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.
Section 7.4 Confidentiality.
(a) Originator shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of this Agreement and the
other confidential or proprietary information with respect to the Agent and
Company and their respective businesses obtained by it or them in connection
with the structuring, negotiating and execution
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of the transactions contemplated herein, except that Originator and its officers
and employees may disclose such information to Originator's external accountants
and attorneys and as required by any applicable law or order of any judicial or
administrative proceeding.
(b) Anything herein to the contrary notwithstanding,
Originator hereby consents to the disclosure of any nonpublic information with
respect to it (i) to Buyer, the Agent, the Financial Institutions or Company by
each other, (ii) by Buyer, the Agent or the Purchasers to any prospective or
actual assignee or participant of any of them and (iii) by the Agent to any
rating agency, Commercial Paper dealer or provider of a surety, guaranty or
credit or liquidity enhancement to Company or any entity organized for the
purpose of purchasing, or making loans secured by, financial assets for which
Bank One acts as the administrative agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing. In
addition, the Purchasers and the Agent may disclose any such nonpublic
information 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).
(c) Buyer shall maintain and shall cause each of its employees
and officers to maintain the confidentiality of this Agreement and the other
confidential or proprietary information with respect to Originator, the Obligors
and their respective businesses obtained by it in connection with the due
diligence evaluations, structuring, negotiating and execution of the Transaction
Documents, and the consummation of the transactions contemplated herein and any
other activities of Buyer arising from or related to the transactions
contemplated herein provided, however, that each of Buyer and its employees and
officers shall be permitted to disclose such confidential or proprietary
information: (i) to the Agent and the other Purchasers, (ii) to any prospective
or actual assignee or participant of the Agent or the other Purchasers who
execute a confidentiality agreement for the benefit of Originator and Buyer on
terms comparable to those required of Buyer hereunder with respect to such
disclosed information, (iii) to any rating agency, provider of a surety,
guaranty or credit or liquidity enhancement to Company, (iv) to any officers,
directors, employees, outside accountants and attorneys of any of the foregoing,
and (v) to the extent required pursuant to any applicable law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings with competent jurisdiction (whether or not having the
force or effect of law) so long as such required disclosure is made under seal
to the extent permitted by applicable law or by rule of court or other
applicable body.
Section 7.5 Bankruptcy Petition.
-27-
33
(a) Originator and Buyer each 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 Company or any Financial Institution
that is a special purpose bankruptcy remote entity, it will not institute
against, or join any other Person in instituting against, Company or any such
entity 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) Originator 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 7.6 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of Company, the Agent
or any Financial Institution, no claim may be made by Originator or any other
Person against Company, the Agent or any Financial Institution 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 Originator 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.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS.
Section 7.8 CONSENT TO JURISDICTION. ORIGINATOR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY
ORIGINATOR PURSUANT TO THIS AGREEMENT AND ORIGINATOR HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
-28-
34
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 ITS ASSIGNS) TO BRING
PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) 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 ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
Section 7.9 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 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document 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.
(b) This Agreement shall be binding upon and inure to the
benefit of Originator, Buyer and their respective successors and permitted
assigns (including any trustee in bankruptcy). Originator may not assign any of
its rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of Originator. Without limiting the foregoing, Originator acknowledges
that Buyer, pursuant to the Purchase Agreement, may assign to the Agent, for the
benefit of the Purchasers, its rights, remedies, powers and privileges hereunder
and that the Agent may
-29-
35
further assign such rights, remedies, powers and privileges to the extent
permitted in the Purchase Agreement. Originator agrees that the 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 Originator agrees to cooperate fully with the 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 Originator
pursuant to Article II; (ii) the indemnification and payment provisions of
Article VI; and (iii) Section 7.5 shall be continuing and shall survive any
termination of this Agreement.
Section 7.11 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.
Section 7.12 Subordination. Originator shall have the right to receive,
and Buyer shall make, any and all payments relating to any indebtedness,
obligation or claim, Originator may from time to time hold or otherwise have
against Buyer or any assets or properties of Buyer, whether arising hereunder or
otherwise existing, provided that, after giving effect to any such payment, the
aggregate Outstanding Balance of Receivables owned by Buyer at such time exceeds
the sum of (a) the Aggregate Unpaids under the Purchase Agreement, plus (b) the
aggregate outstanding principal balance of the Subordinated Loans.
[SIGNATURE PAGE FOLLOWS]
-30-
36
IN WITNESS WHEREOF, the parties hereto have caused this Receivables
Sale Agreement to be executed and delivered by their duly authorized officers as
of the date hereof.
GOLDEN EAGLE LEASING, INC.
By:_________________________________
Name:
Title:
Address:
GOLDEN EAGLE RECEIVABLES LLC
By:_________________________________
Name:
Title:
Address:
37
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.
"Agent" has the meaning set forth in the Preliminary Statements to the
Agreement.
"Agreement" means the Receivables Sale Agreement, dated as of August
31, 2000 between Originator and Buyer, as the same may be amended, restated or
otherwise modified.
"Bank One Credit Agreement" means that certain credit agreement, dated
August 31, 2000, by and among Hypercom Corporation, a Delaware corporation (the
"Borrower"), the banks and financial institutions that are parties to the credit
agreement from time to time, and Bank One, Arizona, NA.
"Buyer" has the meaning set forth in the preamble to the Agreement.
"Calculation Period" means each calendar month or portion thereof which
elapses during the term of the Agreement. The first Calculation Period shall
commence on the date of the Purchase of Receivables hereunder and the final
Calculation Period shall terminate on the Termination Date.
"Change of Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of voting stock of
Originator.
"Company" has the meaning set forth in the Preliminary Statements to
the Agreement.
38
"Credit and Collection Policy" means Originator's credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in Exhibit VI, as modified from time to time in
accordance with the Agreement.
"Default Fee" means a per annum rate of interest equal to the sum of
(i) the Base Rate, plus (ii) 2% per annum.
"Dilutions" means, at any time, the aggregate amount of reductions or
cancellations described in Section 1.3(a) of the Agreement.
"Discounted Balance" means, with respect to Receivables being sold on
any Purchase Date, the discounted present value of the remaining payments which
will become due on such Receivables, which present value shall be established by
discounting on a monthly basis such remaining payments using the monthly
equivalent of the Receivables Discount Factor as the discount rate.
"Initial Cutoff Date" has the meaning set forth in Section 1.2(a).
["LLC AGREEMENT" MEANS THAT CERTAIN LIMITED LIABILITY COMPANY
AGREEMENT, DATED AS OF JUNE 26, 2000, BETWEEN ORIGINATOR AND BUYER,
SUBSTANTIALLY IN THE FORM OF EXHIBIT VII HERETO.]
"Loss Discount Factor" means a percentage calculated to provide Buyer
with a reasonable return on its investment in the Receivables after taking
account of the risk of nonpayment by the Obligors. Originator and Buyer may
agree from time to time to change the Loss Discount Factor based on changes in
one or more of the items affecting the calculation thereof, provided that any
change to the Loss Discount Factor shall take effect as of the commencement of a
Calculation Period, shall apply only prospectively and shall not affect the
Purchase Price payment made prior to the Calculation Period during which
Originator and Buyer agree to make such change.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of Originator and its Subsidiaries, (ii) the
ability of Originator 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) Originator's, Buyer's, the
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
Exh. I-2
39
thereto, or (v) the collectibility of the Receivables generally or of any
material portion of the Receivables.
"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 Capital outstanding at such time,
plus (B) the Aggregate Reserves.
"Net Worth" means as of the last Business Day of each Calculation
Period preceding any date of determination, the excess, if any, of (a) the
aggregate Outstanding Balance of the Receivables at such time, over (b) the sum
of (i) the Aggregate Capital outstanding at such time, plus (ii) the aggregate
outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
"Obligor Owned Equipment" means, with respect to any Receivable, (i)
goods (a) which are leased (or sold) to an Obligor under a lease (or in a
transaction that involved a loan to the Obligor) that gave rise to such
Receivable and (b) which the Originator treats as owned by the Obligor or a
third party for federal, state and local income and sales tax purposes and (ii)
all financing statements or other filings with respect thereto.
"Originated Receivable" means the indebtedness and other obligations
owed to the Originator (at the time it arises, and before giving effect to any
transfer or conveyance under the Receivables Sale Agreement or otherwise)
whether constituting an account, chattel paper, instrument or general
intangible, arising in connection with the provision of financing to a purchaser
or lessor of Point of Sale Equipment or Wireless Equipment, and further
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 further,
that any indebtedness, rights or obligations referred to in the immediately
preceding sentence shall be a Receivable regardless of whether the account
debtor or Seller treats such indebtedness, rights or obligations as a separate
payment obligation.
"Originator" has the meaning set forth in the preamble to the
Agreement.
Exh. I-3
40
"Originator Owned Equipment" means, with respect to any Receivable, (i)
goods (a) which are leased to an Obligor under a lease that gave rise to such
Receivable and (b) which the Originator treats as owned by it for federal, state
and local income and sales tax purposes and (ii) all financing statements or
other filings with respect thereto.
"Outstanding Balance" of any Originated Receivable at any time means
the arithmetic sum of all remaining payments which will become due on such
Originated Receivable; provided, that payments which will become due on a POS
Receivable during its renewal term, if any, shall not be counted for purposes of
the definition unless and until such renewal term has commenced.
"Potential Termination Event" means an event which, with the passage of
time or the giving of notice, or both, would constitute a Termination Event.
"Purchase" means the purchase pursuant to Section 1.1(a) of the
Agreement by Buyer from Originator of the Receivables and the Related Security
and 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 Date" means, as provided in Section 1.1(b) of the Agreement,
any Business Day selected by Originator on which a Purchase shall occur.
"Purchase Price" means, with respect to the Purchase, the aggregate
price to be paid by Buyer to Originator for such Purchase in accordance with
Section 1.2 of the Agreement for the Receivables, Collections and Related
Security being sold to Buyer, which price shall equal on any date (i) the
product of (x) the Discounted Balance of such Receivables on such date,
multiplied by (y) one minus the Loss Discount Factor in effect on such date,
minus (ii) any Purchase Price 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.
"Receivable" means, at any time, any Originated Receivable that has
been identified for sale to the Buyer or sold to the Buyer, as context may
require, but excluding (i)
Exh. I-4
41
any Originated Receivable conveyed by the Originator to the Seller prior to the
date of this Agreement and (ii) any Originated Receivable conveyed by the Seller
back to the Originator or to another Person, either pursuant to the terms of
this Agreement or with the written consent of the Agent.
"Receivable Discount Factor" means, as of any Purchase Date, the most
recently computed "Receivable Discount Factor" established pursuant to the
Purchase Agreement.
"Related Equipment" means the Originator Owned Equipment or the Obligor
Owned Equipment.
"Related Security" means, with respect to any Receivable:
(i) all of Originator's interest in the Obligor Owned
Equipment or other inventory and goods (including returned or
repossessed inventory or goods), if any, the sale, financing or lease
of which by Originator gave rise to such Receivable, and all insurance
contracts with respect thereto (but expressly excluding any Originator
Owned Equipment),
(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, letters of credit, 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,
Exh. I-5
42
(vi) all of Originator's right, title and interest in
each Collection Account, and
(vii) all proceeds of any of the foregoing.
"Repurchased Receivable" has the meaning it is given in Section 1.7 of
the Agreement.
"Required Capital Amount" means, as of any date of determination, an
amount equal to 15% of the Outstanding Balance of the Receivables on such date.
"Settlement Date" means (A) the fourteenth day of each month (or if
such day is not a Business Day, then the next Business Day) and (B) the last day
of the relevant Tranche Period in respect of each Purchaser Interest of the
Financial Institutions.
"Subordinated Loan" has the meaning set forth in Section 1.2(a) of the
Agreement.
"Subordinated Note" means a promissory note in substantially the form
of Exhibit VIII 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.
"Termination Date" means the earliest to occur of (i) the Facility
Termination Date, (ii) the Business Day immediately prior to the occurrence of a
Termination Event set forth in Section 5.1(d), (iii) the Business Day specified
in a written notice from Buyer to Originator following the occurrence of any
other Termination Event, and (iv) the date which is 15 Business Days after
Buyer's receipt of written notice from Originator that it wishes to terminate
the facility 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
Lock-Box Account Agreement, the Subordinated Note, the Subscription Agreement
and all other instruments, documents and agreements executed and delivered in
connection herewith.
Exh. I-6
43
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
Illinois, and not specifically defined herein, are used herein as defined in
such Article 9.
Exh. I-7
44
EXHIBIT II
Places of Business; Locations of Records;
Federal Employer Identification Number(s); Other Names
Places of Business:
1. Golden Eagle Receivables LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Golden Eagle Leasing, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Locations of Records:
1. Golden Eagle Receivables LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Golden Eagle Leasing, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Federal Employer Identification Numbers:
1. Golden Eagle Receivables LLC
None
2. Golden Eagle Leasing, Inc.
▇▇-▇▇▇▇▇▇▇
45
EXHIBIT III
Form of Sale Assignment
GOLDEN EAGLE LEASING, INC.
AND
GOLDEN EAGLE RECEIVABLES LLC
SALE ASSIGNMENT, dated as of [__], 200[_], between Golden Eagle
Leasing, Inc. (the "Seller") and Golden Eagle Receivables LLC (the "Buyer").
1. We refer to the Receivables Sale Agreement (the "Sale Agreement")
dated as of August 31, 2000 between the Seller and the Buyer. All provisions of
such Sale Agreement are incorporated herein by reference. All capitalized terms
shall have the meanings set forth in the Sale Agreement.
2. The Seller does hereby sell, transfer, assign, set over and convey
to the Buyer all right, title and interest of the Seller in and to the
Receivables listed on Schedule 1 hereto (each, a "Receivable"), and the Buyer
does hereby purchase each such Receivable.
3. The Outstanding Balance for the Receivables sold and purchased,
pursuant to paragraph 2 hereof is $[ ]. The Purchase Price for the Receivables
sold and purchased hereby is $ [__] , representing (i) the product of (x) the
Discounted Balance of such Receivables, multiplied by (y) one minus the Loss
Discount Factor (as defined in the Sale Agreement) then in effect minus (ii) any
Purchase Price Credits to be credited against the Purchase Price otherwise
Payable in accordance with Section 1.3 of the Sale Agreement. The Purchase Price
shall be payable in full contemporaneously with the execution of this Sale
Assignment, as provided in Section 1.1 of the Sale Agreement.
46
IN WITNESS WHEREOF, the parties have caused this Sale Assignment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
GOLDEN EAGLE LEASING, INC.,
as Seller
By: _________________________
Name:
Title:
GOLDEN EAGLE RECEIVABLES LLC,
as Buyer
By: ________________________
Name:
Title:
Exh. III-2
47
EXHIBIT IV
Names of Receiving Banks; Receiving Accounts
--------------------------------------------------------------------------------------
Name of Receiving Type of Account(1) Lock-Box No. Related Account
Bank (if any) No.
--------------------------------------------------------------------------------------
Fleet Bank Lock-Box Account ▇.▇. ▇▇▇ ▇▇▇▇▇ DDA#941-755-5686
--------------------------------------------------------------------------------------
Fleet Bank Collection Account DDA#▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------------
----------
(1) Lock-Box Account, Operating Account or Collection Account.
48
EXHIBIT V
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that
certain Receivables Sale Agreement dated as of August 31, 2000, between Golden
Eagle Leasing, Inc. ("Originator") and Golden Eagle Receivables LLC (the
"Agreement"). Capitalized terms used and not otherwise defined herein are used
with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected______________ of Originator.
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of Originator and its Subsidiaries during the
accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes a Termination Event or a Potential Termination Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth below.
4. Described below are the exceptions, if any, to paragraph 3
by listing, in detail, the nature of the condition or event, the period during
which it has existed and the action
49
which Originator has taken, is taking, or proposes to take with respect to each
such condition or event:
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of_____,____.
______________________________
[Name]
Exh. V-2
50
EXHIBIT VI
Credit and Collection Policy
See Attached
51
EXHIBIT VII
Form of LLC Agreement
52
EXHIBIT VIII
Form of Subordinated Note
SUBORDINATED NOTE
August 31, 2000
1. Note. FOR VALUE RECEIVED, the undersigned, Golden Eagle Receivables
LLC, a Delaware limited liability company ("SPV"), hereby unconditionally
promises to pay to the order of Golden Eagle Leasing, Inc., an Arizona
corporation ("Originator"), in lawful money of the United States of America and
in immediately available funds, on the date following the Termination Date which
is one year and one day after the date on which (i) the Outstanding Balance of
all Receivables sold under the "Sale Agreement" referred to below has been
reduced to zero and (ii) Originator has paid to the Buyer all indemnities,
adjustments and other amounts which may be owed thereunder in connection with
the Purchases (the "Collection Date"), the aggregate unpaid principal sum
outstanding of all "Subordinated Loans" made from time to time by Originator to
SPV pursuant to and in accordance with the terms of that certain Receivables
Sale Agreement dated as of August 31, 2000 between Originator and SPV (as
amended, restated, supplemented or otherwise modified from time to time, the
"Sale Agreement"). Reference to Section 1.2 of the Sale Agreement is hereby made
for a statement of the terms and conditions under which the loans evidenced
hereby have been and will be made. All terms which are capitalized and used
herein and which are not otherwise specifically defined herein shall have the
meanings ascribed to such terms in the Sale Agreement.
2. Interest. SPV further promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full hereof
at a rate equal to the Base Rate; provided, however, that if SPV shall default
in the payment of any principal hereof, SPV promises to pay, on demand, interest
at the rate of the Base Rate plus 2.00% per annum on any such unpaid amounts,
from the date such payment is due to the date of actual payment. Interest shall
be payable on the first Business Day of each month in arrears; provided,
53
however, that SPV may elect on the date any interest payment is due hereunder to
defer such payment and upon such election the amount of interest due but unpaid
on such date shall constitute principal under this Subordinated Note. The
outstanding principal of any loan made under this Subordinated Note shall be due
and payable on the Collection Date and may be repaid or prepaid at any time
without premium or penalty.
3. Principal Payments. Originator is authorized and directed by SPV to
enter on the grid attached hereto, or, at its option, in its books and records,
the date and amount of each loan made by it which is evidenced by this
Subordinated Note and the amount of each payment of principal made by SPV, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered; provided that neither the failure of
Originator to make any such entry or any error therein shall expand, limit or
affect the obligations of SPV hereunder.
4. Subordination. Originator shall have the right to receive, and SPV
shall make, any and all payments relating to the loans made under this
Subordinated Note provided that, after giving effect to any such payment, the
aggregate Outstanding Balance of Receivables (as each such term is defined in
the Receivables Purchase Agreement hereinafter referred to) owned by SPV at such
time exceeds the sum of (a) the Aggregate Unpaids (as defined in the Receivables
Purchase Agreement) outstanding at such time under the Receivables Purchase
Agreement, plus (b) the aggregate outstanding principal balance of all loans
made under this Subordinated Note. Originator hereby agrees that at any time
during which the conditions set forth in the proviso of the immediately
preceding sentence shall not be satisfied, Originator shall be subordinate in
right of payment to the prior payment of any indebtedness or obligation of SPV
owing to the Agent or any Purchaser under that certain Receivables Purchase
Agreement dated as of August 31, 2000 by and among SPV, Originator, as Servicer,
various "Purchasers" from time to time party thereto, and Bank One, NA (Main
Office Chicago), as the "Agent" (as amended, restated, supplemented or otherwise
modified from time to time, the "Purchase Agreement"). The subordination
provisions contained herein are for the direct benefit of, and may be enforced
by, the Agent and the Purchasers and/or any of their respective assignees
(collectively, the "Senior Claimants") under the Purchase Agreement. Until the
date on which all "Capital" outstanding under the Purchase Agreement has been
repaid in full and all other obligations of SPV and/or the Servicer thereunder
and under the "Fee Letter" referenced therein (all such obligations,
collectively, the "Senior Claim") have been indefeasibly paid and satisfied in
full, Originator shall not institute against SPV any proceeding of the type
described in Section 5.1(d) of the Sale Agreement unless and until the
Collection Date has occurred. Should any payment, distribution or security or
proceeds thereof be received by Originator in violation of this Section 4,
Originator agrees that such payment shall be segregated, received and held in
trust for the benefit of, and deemed to be the property of, and shall be
immediately paid over and delivered to the Agent for the benefit of the Senior
Claimants.
Exh. VIII-2
54
5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of the
type described in Section 5.1(d) of the Sale Agreement involving SPV as debtor,
then and in any such event the Senior Claimants shall receive payment in full of
all amounts due or to become due on or in respect of the Aggregate Capital and
the Senior Claim (including "CP Costs" and "Yield" as defined and as accruing
under the Purchase Agreement after the commencement of any such proceeding,
whether or not any or all of such CP Costs or Yield is an allowable claim in any
such proceeding) before Originator is entitled to receive payment on account of
this Subordinated Note, and to that end, any payment or distribution of assets
of SPV of any kind or character, whether in cash, securities or other property,
in any applicable insolvency proceeding, which would otherwise be payable to or
deliverable upon or with respect to any or all indebtedness under this
Subordinated Note, is hereby assigned to and shall be paid or delivered by the
Person making such payment or delivery (whether a trustee in bankruptcy, a
receiver, custodian or liquidating trustee or otherwise) directly to the Agent
for application to, or as collateral for the payment of, the Senior Claim until
such Senior Claim shall have been paid in full and satisfied.
6. Amendments. This Subordinated Note shall not be amended or modified
except in accordance with Section 7.1 of the Sale Agreement. The terms of this
Subordinated Note may not be amended or otherwise modified without the prior
written consent of the Agent for the benefit of the Purchasers.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT
CHICAGO, ILLINOIS, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE
STATE OF ILLINOIS. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
SUBORDINATED NOTE.
Exh. VIII-3
55
8. Waivers. All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor. Originator additionally expressly waives all notice of the
acceptance by any Senior Claimant of the subordination and other provisions of
this Subordinated Note and expressly waives reliance by any Senior Claimant upon
the subordination and other provisions herein provided.
9. Assignment. This Subordinated Note may not be assigned, pledged or
otherwise transferred to any party other than Originator without the prior
written consent of the Agent, and any such attempted transfer shall be void.
GOLDEN EAGLE RECEIVABLES, LLC
By:_____________________________
Title:
Exh. VIII-4
56
Schedule
to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
Amount of Amount of Unpaid
Subordinated Principal Principal Notation made
Date Loan Paid Balance by
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Exh. VIII-6
58
SCHEDULE A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE PURCHASE
SEE PART I OF SCHEDULE B TO THE PURCHASE AGREEMENT.