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EXHIBIT 10(n)
Dated as of 31 October 2003
among
GREIF, INC.
as GI Seller
GREIF CONTAINERS INC.
as GCI Seller
GREAT LAKES CORRUGATED CORP.
as GLCC Seller
and
GREIF RECEIVABLES FUNDING LLC
as Purchaser
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SALE AND CONTRIBUTION AGREEMENT
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Cadwalader, Wickersham & Taft LLP
265 Strand
London WC2R 1BH
Tel: +44 (0) 20 7170 8700
Fax: +44 (0) 20 7170 860
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined
Terms...........................................1
SECTION 1.02. Other
Terms.....................................................7
ARTICLE II
AMOUNTS AND TERMS OF PURCHASES
SECTION 2.01.
Facility........................................................7
SECTION 2.02.
Purchases.......................................................7
SECTION 2.03. Transfer of
Collections.........................................8
SECTION 2.04. Settlement
Procedures...........................................9
SECTION 2.05. Payments and Computations,
Etc.................................10
SECTION 2.06. Security
Interest..............................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of
the Sellers..................11
ARTICLE IV
COVENANTS
SECTION 4.01. Covenants of the
Sellers.......................................14
ARTICLE
V
ADMINISTRATION AND COLLECTION
SECTION 5.01. Designation of
Servicer........................................17
SECTION 5.02. Transfer of
Records............................................18
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ARTICLE VI
EVENTS OF TERMINATION
SECTION 6.01. Events of
Termination..........................................18
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Indemnities of the
Sellers.....................................20
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments,
Etc................................................22
SECTION 8.02. Notices,
Etc...................................................22
SECTION 8.03. Binding Effect; Assignability,
Additional Sellers..............23
SECTION 8.04. Costs, Expenses and
Taxes......................................24
SECTION 8.05. Rights and
Remedies............................................24
SECTION 8.06. Transfer of Records to
Purchaser...............................25
SECTION 8.07.
Confidentiality................................................25
SECTION 8.08. Disclosure of Tax
Treatment....................................25
SECTION 8.09. GOVERNING
LAW..................................................26
SECTION 8.10. Third Party
Beneficiaries......................................26
SECTION 8.11. No
Proceedings.................................................26
SECTION 8.12. Execution in
Counterparts......................................27
SECTION 8.13. Submission to
Jurisdiction.....................................27
SECTION 8.14. Maximum
Interest...............................................27
SECTION 8.15. WAIVER OF JURY
TRIAL...........................................28
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EXHIBITS
EXHIBIT A Credit and Collection Policy
EXHIBIT B Seller Details
EXHIBIT C Form of Additional Seller
Accession Agreement
NOTE: All Exhibits to this Exhibit 10(n)
have not been included as part of this
Form
10-K.
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SALE AND CONTRIBUTION AGREEMENT
SALE AND CONTRIBUTION AGREEMENT (this
"Agreement"), dated as of 31 October 2003
by and among GREIF, INC., a Delaware
corporation, as Seller (the "GI Seller"),
GREIF CONTAINERS INC., a Delaware
corporation, as Seller (the "GCI Seller"),
GREAT LAKES CORRUGATED CORP., an Ohio
corporation, as Seller (the "GLCC Seller"
and, together with the GI Seller, the GCI
Seller and any Additional Sellers (as
defined below), the "Sellers" and each a
"Seller"), and GREIF RECEIVABLES
FUNDING LLC, a Delaware limited liability
company, as Purchaser (the
"Purchaser").
PRELIMINARY STATEMENTS
(A) Certain terms which are
capitalized and used throughout this Agreement (in
addition to those defined above) are
defined in Article I of this Agreement.
(B) The Sellers have Receivables that
they wish to sell from time to time to
the Purchaser, and the Purchaser is
prepared to purchase such Receivables on the
terms set forth herein.
NOW, THEREFORE, the parties agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.
Certain Defined
Terms.
---------------------
As used in this
Agreement, the following terms shall have the following
meanings (such meanings to be equally
applicable to both the singular and plural
forms of the terms defined):
"Accession
Agreement" has the meaning specified in Section 8.03(c).
"Additional
Seller" means a Person which becomes an Additional Seller
pursuant to and in accordance with Section
8.03(c).
"Administrative
Agent" means Fortis Bank S.A./N.V.
"Affected
Seller" has the meaning specified in Section 2.04(b).
"Alternate Base
Rate" means a fluctuating interest rate per annum as shall
be in effect from time to time which rate
shall be at all times equal to the
higher of:
(a) the rate of interest announced
publicly by the Administrative Agent in
New York, New York, from time to time as
its base rate, or
(b) the Federal Funds Rate.
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"Applicable
Daily Settlement Date" means, in relation to any Seller, any
Daily Settlement Date on which such Seller
has Receivables available for sale to
the Purchaser hereunder.
"Applicable
Transferred Receivable" means, in relation to any Seller, any
Transferred Receivable sold by such Seller
hereunder.
"Closing Date"
means 31 October 2003.
"Code" means the
Internal Revenue Code of 1986, as amended.
"Conduit
Purchaser" means Scaldis Capital LLC, a Delaware limited
liability
company.
"Credit and
Collection Policy" means those receivables credit and
collection policies and practices of the
Sellers in effect on the date of this
Agreement applicable to the Receivables and
described in Exhibit A, as modified
in compliance with this Agreement.
"Daily
Settlement Date" means each Business Day on which a Seller
holds
Receivables created by such Seller prior to
the close of business on the
preceding Business Day and not previously
transferred hereunder to the
Purchaser.
"Defaulted
Receivable" means a Receivable:
(i) as to
which any payment, or part thereof, remains unpaid for
more than 90 days from the
original due date for such payment; or
(ii) as to which
the Obligor thereof or any other Person obligated
thereon or
obligated in respect of any Related Security in respect thereof
has taken any
action, or suffered any event to occur, of the type described
in Section
7.01(g) of the Receivables Purchase Agreement; or
(iii) as to which
legal proceedings have been commenced against the
Obligor thereof
or any other Person obligated thereon to recover such
Receivable;
or
(iv) which, in
accordance with the Credit and Collection Policy or
GAAP, has been
or should have been written off or provided for in the
relevant
Seller's books as uncollectible.
"Eligible
Obligor" means an Obligor, so long as such Obligor meets the
following criteria:
(i) the
Obligor is organized under the laws of the United States or
any political
subdivision thereof and is domiciled within the United
States;
(ii)
the Obligor is
not a domestic or foreign government;
(iii) the Obligor is
not an Affiliate of any Seller; and
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(iv) the Obligor
is not the subject of any reorganization,
bankruptcy,
receivership, custodianship, insolvency or other similar
proceeding.
"Eligible
Receivables" mean, at any time, each Receivable with respect to
which each of the following is true:
(i)
such Receivable is free and clear of any Adverse Claim;
(ii) such
Receivable is denominated and payable in U.S. Dollars;
(iii) such
Receivable is not subject to withholding tax on payments
from the Obligor
in respect thereof (or the Outstanding Balance of such
Receivable has
been reduced by the amount of any such withholding tax
payable);
(iv) such
Receivable is due from an Eligible Obligor;
(v)
the terms of such Receivable require it to be paid in full
within 60 days
of the original billing date therefor, provided, however,
that up to 20%
of the aggregate Outstanding Balance of all Receivables may
consist of
Extended Term Receivables having a due date not more than 180
days from the
original billing date of such Receivable;
(vi) such
Receivable is not a Defaulted Receivable or a Delinquent
Receivable;
(vii) such
Receivable is able to be identified for ownership
purposes on any
day;
(viii) such Receivable
and the related Contract, if any, are in full
force and
effect, and constitute the legal, valid, binding and
enforceable
obligation of
the Obligor of such Receivable, enforceable against such
Obligor in
accordance with the terms of such related Contract, except as
enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization,
moratorium or similar laws affecting the enforcement of
creditors'
rights generally and by general equitable principles (whether
enforcement is
sought by proceedings in equity or at law) under the laws of
one of the
United States to pay a determinable amount;
(ix) such
Receivable is an "account" within the meaning of the UCC,
to the extent
the UCC is applicable in jurisdictions governing the
perfection of
the interest created by a Receivable Interest;
(x)
such Receivable was originated in connection with a sale of
goods and/or
services in the ordinary course of one of the Sellers'
businesses, was
underwritten in accordance with such Seller's written
credit
guidelines and otherwise satisfies the requirements of the
Credit
and Collection
Policy;
(xi) such
Receivable and the related Contract, if any, do not
contravene in
any material respect any laws, rules or regulations
applicable
thereto (including, without limitation, laws, rules and
regulations
relating to usury) and none of the Sellers or the
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Obligor is in
violation of any such law, rule or regulation in any material
respect in
relation to such Receivable and/or the related Contract, if
any;
(xii) the
relevant Seller has taken all other actions with respect
to such Receivable that are
required to permit the Purchaser to perfect an
assignment of
all its right, title and interest in the Receivables prior to
the rights of
any third parties;
(xiii) the transfer,
sale or assignment of such Receivable does not
contravene any
applicable law, rule or regulation;
(xiv) any goods
giving rise to such Receivable have been shipped and
any services
giving rise to such Receivable have been performed;
(xv) such
Receivable is not subject to any bona fide dispute,
setoff,
counterclaim or other claim or defense on the part of the
Obligor
or any other
Person denying liability under such Receivable; provided,
however, that
any such Receivable shall constitute an Eligible Receivable
to the extent it
is not subject to any such dispute, setoff, counterclaim
or other claim
or defense;
(xvi) such
Receivable is evidenced by a written contract with or
invoice rendered
to the Obligor (which shall include computer records) or
is reflected by
computer records maintained by the relevant Seller
evidencing such
Receivable and is not evidenced by any instrument or
chattel paper
(as the terms "instrument" and "chattel paper" are defined in
Section 9-102 of
the UCC) unless such instrument or chattel paper has been
delivered to the
Purchaser;
(xvii) such Receivable
is not a Receivable owing by an Obligor
having, at the
time of any determination of Eligible Receivables, Defaulted
Receivables with
an aggregate Outstanding Balance in excess of 5.75% of the
aggregate
Outstanding Balance of the Pool Receivables of such Obligor or
such other
higher percentage figure as may be determined by the
Administrative
Agent;
(xviii) such Receivable is not a Receivable which arose as a result
of
the sale of
consigned inventory owned by a third party or a sale in which
the Originator
acted as agent of any other Person or otherwise not as
principal;
(xix) such
Receivable directs payment to be made to a permitted
Lock-Box
Account;
(xx) such
Receivable has not been selected for funding under the
Facility
pursuant to any "adverse selection" procedures; and
(xxi) such
Receivable is not an Impaired Eligible Receivable,
provided that if
such Receivable is an Impaired Eligible Receivable it
shall be deemed
to be an Originator Deemed Collection.
"Event of
Termination" has the meaning specified in Section 6.01.
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"Extended Term
Receivable" means a Receivable associated with an extended
term program adopted by the relevant Seller
in accordance with the Credit and
Collection Policy.
"Facility" means
the commitment of the Purchaser to make Purchases of
Receivables from the Sellers from time to
time pursuant to the terms of this
Agreement.
"Facility
Termination Date" means the earlier of (i) the date of
termination of the Facility pursuant to
Section 6.01; (ii) the date which any
Seller designates by at least thirty (30)
Business Days' notice to the Purchaser
and (iii) the later of (A) 364 days from
the Closing Date or (B) the "Facility
Termination Date" in effect from time to
time under the Receivables Purchase
Agreement.
"Federal Funds
Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period
to the weighted average of the rates
on overnight federal funds transactions
with members of the Federal Reserve
System arranged by federal funds brokers,
as published for such day (or, if such
day is not a Business Day, for the next
preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate
is not so published for any day which
is a Business Day, the average of the
quotations for such day on such
transactions received by the Administrative
Agent from three federal funds
brokers of recognized standing selected by
it.
"Indemnified
Amounts" has the meaning specified in Sections 7.01.
"Indemnified
Party" has the meaning specified in Sections 7.01.
"Lock-Box
Accounts" means Lock-Box Account Numbers xxx-xxxxxx (Greif,
Inc.), xxx-xxxxxx (Great Lakes Corrugated
Corp.), xxx-xxxxxx (Massillon Mill)
and xxx-xxxxxx (Riverville Mill), each
maintained in the name of the GI Seller
at JPMorgan Chase Bank and Account No.
xxx-xxxxxx in the name of the GLCC
Seller at JPMorgan Chase Bank or (subject
to the Administrative Agent's prior
written approval) equivalent accounts
maintained by any Seller or Sellers at
another bank or other financial institution
for the purpose of receiving
Collections.
"Obligor" means
a Person (other than an employee, a division or a direct or
indirect Subsidiary of the Servicer or its
Affiliates) obligated to make
payments pursuant to a Receivable or a
Contract; provided that in the event that
any payments in respect of a Receivable or
a Contract are made by any other
Person (including without limitation a bank
obligated under a letter of credit),
such other Person shall be deemed to be an
Obligor.
"Originator
Deemed Collection" has the meaning specified in Section
2.04(a).
"Potential Event
of Termination" means an event that but for notice or
lapse of time or both would constitute an
Event of Termination.
"Purchase" has
the meaning specified in Section 2.02(a).
"Purchase Price"
has the meaning specified in Section 2.02(b).
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"Purchaser"
means Greif Receivables Funding LLC, a bankruptcy-remote single
purpose limited liability company formed in
the state of Delaware.
"Receivable"
means the indebtedness of any Obligor resulting from the sale
or provision of merchandise or services by
a Seller under a Contract, and
includes the right to payment of any
interest or finance charges and other
obligations of such Obligor with respect
thereto.
"Receivables
Purchase Agreement" means that certain Receivables Purchase
Agreement, dated as of 31 October 2003,
among Greif Receivables Funding LLC as
Seller, Greif, Inc. as GI Originator and as
Servicer, Greif Containers Inc. as
GCI Originator, Great Lakes Corrugated
Corp. as GLCC Originator, Scaldis Capital
LLC as Conduit Purchaser and Fortis Bank
S.A./N.V. as Administrative Agent, as
amended or restated from time to time.
"Related
Security" means with respect to any Receivable:
(i) all of the
relevant Seller's interest in any merchandise
(including
returned merchandise) relating to any sale giving rise to such
Receivable;
(ii) all security
interests or liens and property subject thereto
from time to
time purporting to secure payment of such Receivable, whether
pursuant to the
Contract related to such Receivable or otherwise, together
with all
financing statements signed by an Obligor describing any
collateral
securing such Receivable;
(iii) all guaranties, insurance and other agreements or
arrangements
of whatever
character from time to time supporting or securing payment of
such Receivable
whether pursuant to the Contract related to such Receivable
or
otherwise;
(iv) the Contract, the
invoice or invoices and all other books,
records and
other information (including, without limitation, computer
programs, tapes,
discs, punch cards, data processing software and related
property and
rights) relating to such Receivable and the related Obligor to
the extent
assignable or licensable under such Contract and under
applicable
law.
"Security
Agreements" means the agreements in substantially the form set
out in Annex E to the Receivables Purchase
Agreement.
"Solvent" means
as to any Person at any time, having a state of affairs
such that all of the following conditions
are met: (i) the fair value of the
property of such Person is greater than the
amount of such Person's liabilities
(including disputed, contingent and
unliquidated liabilities) as such value is
established and liabilities evaluated for
purposes of Section 101(31) of the
United States Bankruptcy Code, Title 11 of
the United States Code; (ii) the
present fair salable value of the property
of such Person in an orderly
liquidation of such Person is not less than
the amount that will be required to
pay the probable liability of such Person
on its debts as they become absolute
and matured; (iii) such Person is able to
realize upon its property and pay its
debts and other liabilities (including
disputed, contingent and unliquidated
liabilities) as they mature in the normal
course of business; (iv) such Person
does not intend to, and does not believe
that it will, incur debts or
liabilities beyond such Person's ability to
pay as such debts and liabilities
mature; and (v) such Person is not engaged
in business or a transaction, and is
not
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about to engage in a business or a
transaction, for which such Person's property
would constitute unreasonably small
capital.
"Subsidiary"
means any corporation or other legal entity of which
securities or other interests having
ordinary voting power to elect a majority
of the board of directors or other persons
performing similar functions are at
the time directly or indirectly owned by
any Seller, or by one or more of any
Seller's Subsidiaries, or by any
combination of the Sellers and their respective
Subsidiaries.
"Transferred
Receivable" means any Receivable that has been sold by a
Seller hereunder.
"Transferred
Relevant Receivable" means any Transferred Receivable in which
the Conduit Purchaser has purchased a
Receivable Interest and which was deemed
to be an Eligible Receivable for purposes
of calculating the related purchase
price paid by the Conduit Purchaser for
such Receivable Interest under Section
2.02(a) of the Receivables Purchase
Agreement.
SECTION 1.02.
Other Terms.
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All capitalized
terms contained herein that are not defined in Section 1.01
above shall have the respective meanings
assigned thereto in the Receivables
Purchase Agreement.
All accounting
terms not specifically defined herein shall be construed in
accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF PURCHASES
SECTION 2.01.
Facility.
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On the terms and
conditions hereinafter set forth and without recourse
(except to the extent as is specifically
provided herein), the Purchaser agrees
to purchase from the Sellers all
Receivables in existence on the date hereof and
all Receivables created by any Seller
during the period from the date hereof to
the Facility Termination Date as such
Receivables arise, other than any
Receivables transferred to the Purchaser
pursuant to Section 2.04(b).
SECTION 2.02.
Purchases.
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(a) Each Seller hereby sells,
transfers, absolutely assigns, conveys and
sets over to the Purchaser, effective on
the Closing Date and on each Applicable
Daily Settlement Date occurring after the
Closing Date and prior to the Facility
Termination Date, all Receivables owned by
such Seller as of the close of
business on the Business Day immediately
preceding such Closing Date or
Applicable Daily Settlement Date (each, a
"Purchase").
(b) The purchase price (the "Purchase
Price") for the Receivables
(together with the Related Security)
payable on the Closing Date or any Daily
Settlement Date shall be an amount equal to
the fair market value of such
Receivables, as agreed between the relevant
Seller and the Purchaser. The
Purchase Price for the Transferred
Receivables sold by each Seller to the
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Purchaser pursuant to this Agreement shall
be paid on the Closing Date and each
Daily Settlement Date (i) in cash, and (ii)
in the sole discretion of the
relevant Seller, as capital contributed by
that Seller to the Purchaser, or any
combination of the foregoing.
(c) Notwithstanding anything herein or
in any other Transaction Document
to the contrary, as of the Closing Date and
each Daily Settlement Date, if the
fair market value of any Transferred
Receivable exceeds the Purchase Price for
such Transferred Receivable previously
agreed between the relevant Seller and
the Purchaser, then such excess shall be
deemed to be a contribution to the
capital of the Purchaser by the relevant
Seller as of such date and shall
increase that Seller's beneficial ownership
interest in the Purchaser
accordingly.
(d) Each Seller shall, upon each
request of the Purchaser or the
Administrative Agent, confirm each Purchase
hereunder on any Applicable Daily
Settlement Date by a certificate of
assignment executed by such Seller, a copy
of which certificate shall be provided by
the Servicer to the Administrative
Agent pursuant to the Receivables Purchase
Agreement. Upon each Purchase of
Receivables, the ownership of each such
Receivable shall be vested in the
Purchaser, and no Seller shall take any
action inconsistent with such ownership
or claim any ownership interest in any such
Receivable.
(e) Each Seller shall indicate in its
records that the ownership of each
Applicable Transferred Receivable is held
by the Purchaser or its assignee. In
addition, such Seller shall respond to any
inquiries with respect to ownership
of an Applicable Transferred Receivable by
stating that it is no longer the
owner of such Receivable and that ownership
of such Applicable Transferred
Receivable is held by the Purchaser or its
assignee. Each Seller will furnish to
the Purchaser from time to time with
statements and schedules further
identifying and describing the Applicable
Transferred Receivables and with such
other reports in connection with such
Transferred Receivables as the Purchaser
may reasonably request, all in reasonable
detail.
SECTION 2.03.
Transfer of
Collections.
-----------------------
(a) On the Closing Date and each
Applicable Daily Settlement Date, each
Seller shall deposit or cause to be
deposited into a Lock-Box Account any
Collections of Applicable Transferred
Receivables received by such Seller on
such date or deemed to have been received
by such Seller on such date pursuant
to Section 2.04(a) and/or Section 2.04(b)
and then held by such Seller, provided
that, for the avoidance of doubt, in the
event any payment is received by a
Seller in the form of a negotiable
instrument or cash or cash equivalent
delivered to such Seller's offices
(notwithstanding item (xix) in the definition
of Eligible Receivables), the relevant
Seller shall not be obliged to deposit
such funds on the same date but shall take
reasonable steps to ensure that such
funds are promptly deposited into a
Lock-Box Account.
(b) In the event that a Seller
believes that cash and cash proceeds due to
such Seller which are not Collections of
Transferred Receivables have been
deposited into an account of the Purchaser
or the Purchaser's assignee, such
Seller shall so advise the Purchaser and,
promptly following such
identification, the Purchaser shall remit,
or shall cause to be remitted, to
such Seller, all cash and cash proceeds so
deposited which are identified, to
the Purchaser's satisfaction, to be cash
and cash proceeds of Receivables of
such Seller which are not Transferred
Receivables. Without limiting the
generality of the preceding sentence,
the
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Purchaser shall return or cause to be
returned to the relevant Seller any
Collections deposited in a Lock-Box Account
in respect of any Receivables
arising prior to the Closing Date and not
transferred hereunder.
(c) The parties hereto understand and
agree that the Purchaser intends,
contemporaneously with each purchase of
Receivables hereunder, to sell
fractional ownership interests in such
Receivables as Receivable Interests to
the Conduit Purchaser pursuant to the
Receivables Purchase Agreement.
SECTION 2.04.
Settlement
Procedures.
---------------------
(a) If on any day the outstanding
balance of any Transferred Receivable is
reduced or adjusted as a result of any
defective, rejected or returned
merchandise or services or any cash
discount, discount for quick payment or
other adjustment by a Seller or any
set-off, such Seller shall be deemed to have
received on such day a Collection of such
Transferred Receivable in the amount
of such reduction or adjustment (each, an
"Originator Deemed Collection"). Such
Seller shall pay to the Purchaser, in the
manner provided in Section 2.03(a),
within three (3) Business Days, all
Originator Deemed Collections deemed to have
been received pursuant to this
subsection.
(b) Upon discovery by any Seller (the
"Affected Seller") or the Purchaser
that at the time of purchase, a Transferred
Relevant Receivable sold by the
Affected Seller hereunder was not an
Eligible Receivable, such party shall give
prompt written notice thereof to the other
party, as soon as practicable and in
any event within three (3) Business Days
following such discovery. The Affected
Seller shall, upon not less than two (2)
Business Days' notice from the
Purchaser or its assignee or designee,
purchase such Transferred Relevant
Receivable for a repurchase price equal to
the Outstanding Balance of such
Transferred Relevant Receivable or replace
such Transferred Relevant Receivable
with an equivalent Eligible Receivable,
each to occur on the next succeeding
Applicable Daily Settlement Date. If such
Transferred Relevant Receivable is
replaced, with respect to any portion of
the outstanding principal balance of
the replacement Receivable in excess of the
outstanding principal balance of the
Transferred Relevant Receivable being
replaced, the Purchaser shall pay to the
Affected Seller an amount equal to such
portion. Each repurchase of a
Transferred Relevant Receivable shall
include repurchase of the Related Security
with respect to such Transferred Relevant
Receivable. The proceeds of any
repurchase shall be deemed to be a
Collection in respect of such Transferred
Relevant Receivable. The Affected Seller
shall pay to the Purchaser on or prior
to the next Applicable Daily Settlement
Date the repurchase price required to be
paid pursuant to this subsection as
provided in Section 2.03(a).
(c) Except as stated in subsection
(a), (b) or (c) of this Section 2.04 or
as otherwise required by law or the
underlying Contract, all Collections from an
Obligor of any Transferred Receivable shall
be applied to the Receivables of
such Obligor designated by such Obligor or,
if no Receivables are so designated,
in accordance with the Credit and
Collection Policy.
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SECTION 2.05.
Payments and
Computations, Etc.
------------------------------
All amounts to be paid or deposited by any
Seller or the Purchaser hereunder
shall be paid or deposited no later than
11:00 a.m. (New York time) on the day
when due in same day funds to the account
of the recipient of such funds as set
forth in a written notice delivered from
time to time by the Purchaser to the
Sellers or the applicable Seller to the
Purchaser.
(a) Each of the Sellers and the
Purchaser shall, to the extent permitted
by law, pay interest on any amount not paid
or deposited when due hereunder by
such Person. Such interest shall be payable
to the party to whom such amount is
due and at an interest rate per annum equal
to the Alternate Base Rate, payable
on demand.
(b) All computations of interest and
all computations of fees 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 (unless the interest
rate is the Alternate Base Rate, in which
case 365 days shall be used). Whenever
any payment or deposit to be made hereunder
shall be due on a day other than a
Business Day, such payment or deposit shall
be made on the next succeeding
Business Day and such extension of time
shall be included in the computation of
such payment or deposit.
SECTION 2.06.
Security Interest.
-----------------
The parties
hereto intend that the purchase and sale of Receivables from
each Seller to the Purchaser be treated as
a sale of such Receivables and the
proceeds thereof. However, if a
determination is made that such transfer shall
not be so treated, this Agreement shall be
deemed to constitute a security
agreement and the transactions effected
hereby shall be deemed to constitute a
secured financing in each case under
applicable law and to that end, as
collateral security for the performance by
the relevant Seller of all the terms,
covenants and agreements on the part of
such Seller (whether as a Seller or
otherwise) to be performed under this
Agreement and any document delivered in
connection with this Agreement in
accordance with the terms thereof, including
the punctual payment when due of all
obligations of the relevant Seller
hereunder or thereunder, whether for
indemnification payments, fees, expenses or
otherwise, each Seller hereby assigns to
the Purchaser a security interest in
all of such Seller's right, title and
interest in and to (a) all of its
Receivables, the Related Security with
respect thereto and the Collections (the
"Receivables Collateral") thereon, (b)
subject to the prior rights of the
Secured Parties (as defined in the
Receivables Purchase Agreement) under and/or
in connection with the Security Agreements,
all "deposit accounts", "securities
accounts", "security entitlements" and
"investment property" (as such terms are
defined in the UCC) constituting or
relating to the foregoing, and (c) to the
extent not included in the foregoing, all
proceeds of any and all of the
foregoing. Each Seller and the Purchaser
shall, to the extent consistent with
this Agreement, take such action as may be
necessary to ensure that such
security interest will be a perfected first
priority security interest in favor
of the Purchaser under applicable law and
will be maintained as such throughout
the term of this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01.
Representations and
Warranties of the Sellers.
---------------------------------------------
Each Seller
represents and warrants as follows:
(a) It is a corporation duly
incorporated and validly existing under the
laws of its jurisdiction of incorporation,
and is duly qualified to do business
in every jurisdiction where the nature of
its business requires it to be so
qualified except where the failure to be so
qualified would not have a material
adverse effect on the operations or
financial condition of such Seller or its
ability to perform its obligations
hereunder.
(b) The execution, delivery and
performance by it of this Agreement and
the other documents to be delivered by it
hereunder, including the sale of
Receivables hereunder and its use of the
proceeds of Purchases, (i) are within
its corporate powers, (ii) have been duly
authorized by all necessary corporate
action, (iii) do not contravene (1) its
articles of incorporation, (2) any law,
rule or regulation applicable to it, (3)
any contractual restriction binding on
or affecting it or its property or (4) any
order, writ, judgment, award,
injunction or decree binding on or
affecting it or its property, and (iv) do not
result in or require the creation of any
Adverse Claim upon or with respect to
any of its properties (except for the
transfer of its interest in the Applicable
Transferred Receivables pursuant to this
Agreement). This Agreement has been
duly executed and delivered by it.
(c) 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, delivery and performance by
it of this Agreement or any other
document to be delivered by it hereunder,
except for the filing of UCC financing
statements which are referred to
herein.
(d) This Agreement constitutes the
legal, valid and binding obligation of
such Seller, enforceable against such
Seller in accordance with its terms,
except as enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting the enforcement of
creditors' rights generally and by general
equitable principles (whether
enforcement is sought by proceedings in
equity or at law).
(e) Each sale of Receivables made by
such Seller pursuant to this
Agreement will constitute a valid sale,
transfer, and assignment of the
Applicable Transferred Receivables to the
Purchaser, enforceable against
creditors of, and purchasers from, such
Seller. Following each such sale such
Seller shall have no remaining property
interest in any Applicable Transferred
Receivable except to the extent that it
repurchases or replaces any such
Applicable Transferred Receivable pursuant
to Section 2.04(b).
(f) There is no pending or, to such
Seller's actual knowledge, threatened
action or proceeding affecting any Seller
or any of their respective
Subsidiaries before any court, governmental
agency or arbitrator which would
reasonably be expected to materially
adversely affect the financial condition or
operations of any Seller or the ability of
any Seller to perform its obligations
under this Agreement, or which purports to
affect the legality, validity or
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enforceability of this Agreement. No Seller
is in default with respect to any
order of any court, arbitration or
governmental body except for defaults with
respect to orders of governmental agencies
which defaults are not individually
or in the aggregate material to the
business or operations of any Seller.
(g) No proceeds of any Purchase will
be used by it to acquire any equity
security of a class which is registered
pursuant to Section 12 of the Securities
Exchange Act of 1934.
(h) All written factual information
and each exhibit, financial statement,
document, book, record or report furnished
by the Sellers to the Purchaser in
connection with this Agreement, taken as a
whole, and each representation or
warranty by or on behalf of the Seller
contained herein, is accurate in all
material respects as of its date (except as
otherwise disclosed in writing to
the Purchaser at such time), and no such
document contains any
