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EXHIBIT 10.2
RECEIVABLES SALE AGREEMENT
DATED AS OF SEPTEMBER 7, 2004
AMONG
EQUIFAX INC., EQUIFAX
INFORMATION SERVICES LLC, EQUIFAX DIRECT MARKETING
SOLUTIONS
LLC, EQUIFAX INFORMATION SERVICES OF PUERTO RICO INC. AND
COMPLIANCE DATA CENTER, INC., AS ORIGINATORS,
AND
EQUIFAX CAPITAL MANAGEMENT, INC.,
AS BUYER
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TABLE OF CONTENTS
PAGE
ARTICLE I AMOUNTS AND TERMS OF THE
PURCHASE....................................2
Section 1.1 Initial Contribution of
Receivables..............................2
Section 1.2 Purchase of
Receivables..........................................2
Section 1.3 Payment for the
Purchases........................................3
Section 1.4 Purchase Price Credit
Adjustments................................4
Section 1.5 Payments and Computations,
Etc...................................5
Section 1.6 License of
Software..............................................5
Section 1.7
Characterization.................................................6
ARTICLE II REPRESENTATIONS AND
WARRANTIES......................................6
Section 2.1 Representations and
Warranties of Originators....................6
ARTICLE III CONDITIONS OF
PURCHASE............................................10
Section 3.1 Conditions Precedent to
Purchase................................10
Section 3.2 Conditions Precedent to
Subsequent Payments.....................10
ARTICLE IV
COVENANTS..........................................................11
SECTION 4.1 AFFIRMATIVE COVENANTS OF
ORIGINATORS............................11
SECTION 4.2 NEGATIVE COVENANTS OF
ORIGINATORS...............................16
ARTICLE V TERMINATION
EVENTS..................................................17
Section 5.1 Termination
Events..............................................17
Section 5.2
Remedies........................................................18
ARTICLE VI
INDEMNIFICATION....................................................19
Section 6.1 Indemnities by
Originators......................................19
Section 6.2 Other Costs and
Expenses........................................21
ARTICLE VII
MISCELLANEOUS.....................................................21
Section 7.1 Waivers and
Amendments..........................................21
Section 7.2
Notices.........................................................22
Section 7.3 Protection of Ownership
Interests of Buyer......................22
Section 7.4 Confidentiality; Tax
Treatment..................................23
Section 7.5 Bankruptcy
Petition.............................................24
Section 7.6 Limitation of
Liability.........................................24
SECTION 7.7 CHOICE OF
LAW...................................................24
SECTION 7.8 CONSENT TO
JURISDICTION.........................................25
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SECTION 7.9 WAIVER OF JURY
TRIAL............................................25
Section 7.10 Integration; Binding Effect;
Survival of Terms..................25
Section 7.11 Counterparts; Severability;
Section References..................26
EXHIBITS AND SCHEDULES
Exhibit I -
Definitions
Exhibit II -
Principal Place of Business; Location(s) of Records;
State of Organization; Federal Employer Identification
Number; Organizational Identification Number; Other
Names
Exhibit III -
Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV -
Form
of Compliance Certificate
Exhibit V -
Copy
of Credit and Collection Policy
Exhibit VI -
Form
of Revolving Note
Exhibit VII
Form of Purchase Report
Schedule A
List of Documents to Be Delivered to Buyer Prior to the
Purchases
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RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of September 7, 2004, is
by
and among EQUIFAX INC., a Georgia
corporation ("PARENT"), EQUIFAX INFORMATION
SERVICES LLC, a Georgia limited liability
company ("EIS"), EQUIFAX DIRECT
MARKETING SOLUTIONS LLC, a Georgia limited
liability company, Equifax
Information Services of Puerto Rico Inc., a
Georgia corporation, and Compliance
DatA Center, Inc., a Georgia corporation
(each of the foregoing, an "ORIGINATOR"
and collectively, the "ORIGINATORS"), and
EQUIFAX CAPITAL MANAGEMENT, INC., a
Georgia corporation ("BUYER") (as the same
may from time to time hereafter be
amended, supplemented, restated or
otherwise modified, this "AGREEMENT" or the
"FIRST STEP RECEIVABLES SALE AGREEMENT").
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 CREDIT AND SECURITY
AGREEMENT).
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time
hereafter will own, Receivables. Each of the Originators wishes to
sell
and assign to Buyer, and Buyer wishes to purchase from each
Originator,
all of such Originator's right, title and interest in and to
its
Receivables, together with the Related Security and Collections
with
respect thereto.
Each of the Originators and Buyer intend the transactions
contemplated hereby to be true sales to Buyer by such Originator of
the
Receivables originated by it, providing Buyer with the full
benefits of
ownership of such Receivables, and none of the Originators nor
Buyer
intends these transactions to be, or for any purpose to be
characterized
as, loans from Buyer to such Originator.
Following the purchase of the Receivables from each Originator
through the First Step Receivables Sale Agreement, Buyer will sell
or
contribute all of its interests in the Receivables to Equifax
Receivables Finance LLC. The sale and contribution of all of
Buyer's
right, title and interest in and to the Receivables will be
made
pursuant to that certain Receivable Sales Agreement dated as of
September 7, 2004 (as the same may from time to time hereafter
be
amended, supplement, restated or otherwise modified, the "SECOND
STEP
RECEIVABLES SALE AGREEMENT") between Buyer and Equifax
Receivables
Finance LLC.
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:
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ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 INITIAL
CONTRIBUTION OF RECEIVABLES. On the date hereof,
Parent does hereby contribute, assign,
transfer, set-over and otherwise convey
to Buyer, and Buyer does hereby accept from
Parent, Receivables originated by
Parent and existing as of the close of
business on the Business Day immediately
prior to the date hereof (the "INITIAL
CUTOFF DATE") having an aggregate
Outstanding Balance of $103,515,953.31 (the
"INITIAL CONTRIBUTED RECEIVABLES"),
together with all Related Security relating
thereto and all Collections thereof.
Section 1.2
PURCHASE OF RECEIVABLES.
(a)
Effective on the date hereof, in consideration for the
Purchase Price paid to each Originator and
upon the terms and subject to the
conditions set forth herein, each
Originator does hereby sell, assign, transfer,
set-over and otherwise convey to Buyer,
without recourse (except to the extent
expressly provided herein), and Buyer does
hereby purchase from such Originator,
all of such Originator's right, title and
interest in and to all Receivables
originated by such Originator and existing
as of the close of business on the
Initial Cutoff Date (other than the Initial
Contributed Receivables) and all
Receivables thereafter originated by such
Originator through and including the
Termination Date, together, in each case,
with all Related Security relating
thereto and all Collections thereof. In
accordance with the preceding sentence,
on the date hereof Buyer shall acquire all
of each Originator's right, title and
interest in and to all Receivables existing
as of the Initial Cutoff Date (other
than the Initial Contributed Receivables)
and thereafter arising through and
including the Termination Date, 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 from each Originator in
accordance with SECTION 1.3.
(b)
On the 20th day of each month hereafter (or if any such
day is not a Business Day, on the next
succeeding Business Day thereafter, each
Originator shall (or shall require the
Servicer to) deliver to Buyer a report in
substantially the form of Exhibit VII
hereto (each such report being herein
called a "PURCHASE REPORT") with respect to
the Receivables sold by such
Originator to Buyer during the Settlement
Period then most recently ended. In
addition to, and not in limitation of, the
foregoing, in connection with the
payment of the Purchase Price for any
Receivables purchased hereunder, Buyer may
request that the applicable Originator
deliver, and such Originator shall
deliver, such approvals, opinions,
information or documents as Buyer may
reasonably request.
(c)
It is the intention of the parties hereto that each
Purchase of Receivables from an Originator
made hereunder shall constitute a
sale, which sale is absolute and
irrevocable and provides Buyer with the full
benefits of ownership of the Receivables
originated by such Originator. Except
for the Purchase Price Credits owed to
Buyer pursuant to SECTION 1.4, the sale
of Receivables hereunder by each Originator
is made without recourse to such
Originator; PROVIDED, HOWEVER, that (i)
such Originator shall be liable to Buyer
for all representations, warranties,
covenants and indemnities made by such
Originator pursuant to the terms of the
Transaction Documents to which such
Originator is a party, and (ii) such sale
does not constitute and is not
intended to result in an assumption by
Buyer or any assignee thereof of any
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obligation of such Originator or any other
Person arising in connection with the
Receivables, the related Contracts and/or
other Related Security or any other
obligations of such Originator. In view of
the intention of the parties hereto
that each Purchase of Receivables made
hereunder shall constitute a sale of such
Receivables rather than loans secured
thereby, each Originator agrees that it
will, on or prior to the date hereof and in
accordance with SECTION 4.1(E)(II),
mark its books and records including aged
trial balance with respect to the
Receivables originated by it 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), each 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
originated by such Originator and the
Related Security and Collections with
respect thereto, or as Buyer or the Agent
(as Buyer's assignee) may reasonably
request.
Section 1.3 PAYMENT FOR THE
PURCHASES.
(a)
The Purchase Price for the Purchase from each Originator
of its Receivables in existence as of the
close of business on the Initial
Cutoff Date (other than the Initial
Contributed Receivables) shall be payable in
full by Buyer to such Originator on the
date hereof, and shall be paid to such
Originator in the following manner:
(i)
by
delivery of immediately available funds, and
(ii) the
balance, by delivery of the proceeds of a
revolving loan from such Originator to Buyer (a "REVOLVING LOAN")
in an
amount not to exceed the least of (A) the remaining unpaid portion
of
such Purchase Price, (B) the maximum Revolving Loan that could
be
borrowed without rendering Buyer insolvent, and (C) fifteen
percent
(15%) of such Purchase Price. Each Originator is hereby authorized
by
Buyer to endorse on the schedule attached to its Revolving 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.
The Purchase Price for each Receivable
coming into existence after the Initial
Cutoff Date shall be due and owing in full
by Buyer to the applicable Originator
or its designee on the date each such
Receivable came into existence (except
that Buyer may, with respect to any such
Purchase Price, offset against such
Purchase Price any amounts owed by such
Originator to Buyer hereunder and which
have become due but remain unpaid) and
shall be paid to such Originator in the
manner provided in the following paragraphs
(b), (c) and (d).
(b)
With respect to any Receivables coming into existence
after the Initial Cutoff Date, on each
Settlement Date, Buyer shall pay the
applicable Originator the Purchase Price
therefor in accordance with SECTION
1.3(D) and in the following manner:
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FIRST, by delivery to the applicable Originator or its
designee of immediately available funds, to the extent of funds
available to Buyer from cash on hand;
SECOND, by delivery to the applicable Originator or its
designee of the proceeds of a Revolving Loan, PROVIDED THAT the
making
of any such Revolving Loan shall be subject to the provisions set
forth
in SECTION 1.3(A)(II); and
THIRD, solely in the case of Receivables originated by
EIS, unless the Termination Date has occurred in accordance with
this
Agreement, by accepting a contribution to its capital in an amount
equal
to the remaining unpaid balance of such Purchase Price.
Subject to the limitations set forth in
SECTION 1.3(A)(II), each Originator
irrevocably agrees to advance each
Revolving Loan requested by Buyer on or prior
to the Termination Date. The Revolving
Loans owing to each Originator shall be
evidenced by, and shall be payable in
accordance with the terms and provisions
of its Revolving Note and shall be payable
solely from funds which Buyer is not
required under the Credit and Security
Agreement to set aside for the benefit
of, or otherwise pay over to, the
Lenders.
(c)
From and after the Termination Date, (i) no Originator
shall be obligated to (but may, at its
option) sell Receivables to Buyer, or
(ii) EIS shall not be obligated to (but
may, at its option) contribute
Receivables to Buyer's capital pursuant to
clause THIRD of SECTION 1.3(B).
(d)
Although the Purchase Price for each Receivable coming
into existence after the Initial Cutoff
Date shall be due and payable in full by
Buyer to the applicable Originator on the
date such Receivable came into
existence, settlement of the Purchase Price
between Buyer and such Originator
shall be effected on a monthly basis on
Settlement Dates with respect to all
Receivables originated by such Originator
during the same Calculation Period and
based on the information contained in the
Purchase Report delivered by such
Originator for the Calculation Period then
most recently ended. Although
settlement shall be effected on Settlement
Dates, increases or decreases in the
amount owing under the Revolving Note made
pursuant to SECTION 1.3 and any
contribution of capital by EIS to Buyer
made pursuant to SECTION 1.3(B) shall be
deemed to have occurred and shall be
effective as of the last Business Day of
the Calculation Period to which such
settlement relates.
Section 1.4 PURCHASE PRICE
CREDIT ADJUSTMENTS. If on any day:
(a)
the Outstanding Balance of a Receivable purchased from
any Originator is:
(i)
reduced as a result of any defective or rejected
or returned goods or services, any discount or any adjustment
or
otherwise by such Originator (other than as a result of such
Receivable
becoming a Defaulted Receivable or to reflect cash Collections
on
account of such Receivable),
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(ii)
reduced or canceled as a result of a setoff in
respect of any claim by any Person (whether such claim arises out
of the
same or a related transaction or an unrelated transaction), or
(b)
any of the representations and warranties set forth in
SECTIONS 2.1(H), (I), (J), (L), (R), (S),
(T), (U), the second sentence of
SECTION 2.1(Q) hereof and the last clause
(relating to bulk sales laws) of
SECTION 2.1(C) 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 to the applicable
Originator hereunder equal to (x) in the
case of a partial reduction, the amount
of such reduction, and (y) in the case of a
total reduction or cancellation, the
lesser of the total Purchase Price paid for
and the Outstanding Balance of such
Receivable (calculated before giving effect
to the applicable reduction or
cancellation). If such Purchase Price
Credit exceeds the Original Balance of the
Receivables originated by the applicable
Originator on any day, such Originator
shall pay the remaining amount of such
Purchase Price Credit in cash
immediately, PROVIDED THAT if the
Termination Date has not occurred, such
Originator shall be allowed to deduct the
remaining amount of such Purchase
Price Credit from any indebtedness owed to
it under its Revolving Note.
Section 1.5 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 the applicable Originator
designated from time to time by such
Originator or as otherwise directed by such
Originator. In the event that any
payment owed by any Person hereunder
becomes due on a day that is not a Business
Day, then such payment shall be made on the
next succeeding Business Day. If any
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 1.6 LICENSE OF
SOFTWARE.
(a)
To the extent that any software used by any Originator
to account for the Receivables originated
by it is non-transferable, such
Originator hereby grants to each of Buyer,
the Agent and the Servicer an
irrevocable, non-exclusive license to use,
without royalty or payment of any
kind, all such software used by such
Originator to account for such Receivables,
to the extent necessary to administer such
Receivables, whether such software is
owned by such Originator or is owned by
others and used by such Originator under
license agreements with respect thereto,
PROVIDED THAT should the consent of any
licensor of such software be required for
the grant of the license described
herein to be effective: (x) the license
granted herein shall not apply to such
software unless and until such consent is
obtained, and (y) such Originator
hereby agrees that, upon the request of
Buyer (or Buyer's assignee) made at any
time during the continuation of a
Termination Event or an Amortization Event,
such Originator will use its reasonable
efforts (i) to obtain the consent of
such third-party licensor, and (ii) in
advance of obtaining such consent, in
connection with each Review pursuant to
SECTION 4.1(D),
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to make personnel who are covered by such
Originator's license of such software
and knowledgeable about its use, available
to Buyer (or Buyer's assignee) to
test data or generate such reports relating
the Receivables that may be
reasonably requested. The license granted
hereby shall be irrevocable until the
later to occur of (i) indefeasible payment
in full of the Obligations (as
defined in the Credit and Security
Agreement), and (ii) the date each of this
Agreement, the Second Step Receivables Sale
Agreement and the Credit and
Security Agreement terminates in accordance
with its terms.
(b)
Each 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
Credit and Security Agreement have an
enforceable ownership or security interest
in the Records relating to the Receivables
purchased from such Originator
hereunder, and (ii) shall use its
reasonable efforts to ensure that Buyer, the
Agent and the Servicer each has an
enforceable right (whether by license or
sublicense or otherwise) in accordance with
SECTION 1.6(A) to use all of the
computer software used to account for such
Receivables and/or to recreate such
Records.
Section 1.7
CHARACTERIZATION. If, notwithstanding the intention of
the parties expressed in SECTION 1.2(c),
any sale or contribution by an
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 by
each Originator hereunder shall constitute
a true sale thereof, such Originator
hereby grants to Buyer a duly perfected
security interest in all of such
Originator's right, title and interest in,
to and under all Receivables of such
Originator which are now existing or
hereafter arising, all Collections and
Related Security with respect thereto, each
Lock-Box and Collection Account, all
other rights and payments relating to such
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 purchased
from such Originator together with all
other obligations of such 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.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS
AND WARRANTIES OF ORIGINATORS. Each
Originator hereby represents and warrants
to Buyer on the date hereof, on the
date of the Purchase from such Originator
hereunder and on each date that any
Receivable is originated by such Originator
on or after the date of such
Purchase, that:
(a)
EXISTENCE AND POWER. Such Originator is a corporation or
limited liability company, as applicable,
duly organized under the laws of the
jurisdiction set forth after its name in
the preamble to this Agreement (the
"APPLICABLE JURISDICTION"), and no other
jurisdiction, and as to which such
Applicable Jurisdiction must maintain a
public record showing the corporation
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or limited liability company, as
applicable, to have been organized. Such
Originator is validly existing and in good
standing under the laws of its
Applicable Jurisdiction and is duly
qualified to do business and is in good
standing as a foreign entity, and has and
holds all 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
the 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
such Originator of this Agreement and
each other Transaction Document to which it
is a party, and the performance of
its obligations hereunder and thereunder,
and such Originator's use of the
proceeds of the Purchase made from it
hereunder, are within its organizational
powers and authority and have been duly
authorized by all necessary
organizational action on its part. This
Agreement and each other Transaction
Document to which such Originator is a
party has been duly executed and
delivered by such Originator.
(c)
NO CONFLICT. The execution and delivery by such
Originator of this 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
Organizational Documents, (ii) any law, rule or
regulation applicable to it, (iii) any
restrictions under any agreement,
contract or instrument to which it is a
party or by which it or any of its
property is bound, or (iv) any order, writ,
judgment, award, injunction or
decree binding on or affecting it or its
property, and do not result in the
creation or imposition of any Adverse Claim
on assets of such Originator or its
Subsidiaries (except as created hereunder)
except, in any case, where such
contravention or violation could not
reasonably be expected to have a Material
Adverse Effect; and no transaction
contemplated hereby requires compliance with
any bulk sales act or similar law.
(d)
GOVERNMENTAL AUTHORIZATION. Other than the filing of the
financing statements required hereunder, no
authorization or approval or other
action by, and no notice to or filing with,
any governmental authority or
regulatory body is required for the due
execution and delivery by such
Originator of this Agreement and each other
Transaction Document to which it is
a party and the performance of its
obligations hereunder and thereunder.
(e)
ACTIONS, SUITS. There are no actions, suits or
proceedings pending, or to the best of such
Originator's knowledge, threatened,
against or affecting such Originator, or
any of its properties, in or before any
court, arbitrator or other body, that could
reasonably be expected to have a
Material Adverse Effect. Such Originator is
not in default with respect to any
order of any court, arbitrator or
governmental body.
(f)
BINDING EFFECT. This Agreement and each other
Transaction Document to which such
Originator is a party constitute the legal,
valid and binding obligations of such
Originator enforceable against such
Originator in accordance with their
respective terms, except as such enforcement
may be limited by applicable bankruptcy,
insolvency, reorganization or other
similar laws relating to or limiting
creditors' rights generally and by general
principles of equity (regardless of whether
enforcement is sought in a
proceeding in equity or at law).
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(g) ACCURACY OF
INFORMATION. All information heretofore
furnished by such 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
such 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,
taken as a whole, not misleading; provided
that, with respect to any projected
financial information, such Originator
represents only that such information was
prepared in good faith based upon
assumptions believed to be reasonable at the
time.
(h)
USE OF PROCEEDS. No portion of any Purchase Price
payment hereunder will be used by any
Originator (i) for a purpose that
violates, or would be inconsistent with,
any law, rule or regulation applicable
to such Originator or (ii) to acquire any
margin stock in violation of
Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(i)
GOOD TITLE. Immediately prior to the Purchase from such
Originator hereunder and upon the creation
of each Receivable originated by such
Originator after the Initial Cut-Off Date,
such Originator (i) is the legal and
beneficial owner of such 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 Permitted Encumbrances. There have
been duly filed all financing
statements or other similar instruments or
documents necessary under the UCC (or
any comparable law) of all appropriate
jurisdictions to perfect such
Originator's ownership interest in each
such Receivable, its Collections and the
Related Security.
(j)
PERFECTION. This Agreement, together with the filing of
the financing statements contemplated
hereby, is effective to transfer to Buyer
(and Buyer shall acquire from such
Originator) (i) legal and equitable title to,
with the right to sell and encumber each
Receivable originated by such
Originator, whether now existing and
hereafter arising, together with the
Collections with respect thereto, and (ii)
all of such Originator's right, title
and interest in the Related Security
associated with each such Receivable, in
each case, free and clear of any Adverse
Claim, except as created by the
Transactions Documents. There have been
duly filed all financing statements or
other similar instruments or documents
necessary under the UCC (or any
comparable law) of all appropriate
jurisdictions to perfect Buyer's ownership
interest in such Receivables, the Related
Security and the Collections.
Originator's jurisdiction of organization
is a jurisdiction whose law generally
requires information concerning the
existence of a nonpossessory security
interest to be made generally available in
a filing, record or registration
system as a condition or result of such a
security interest's obtaining priority
over the rights of a lien creditor which
respect to collateral.
(k)
PLACES OF BUSINESS AND LOCATIONS OF RECORDS. The
principal places of business and chief
executive office and jurisdiction of
organization of such Originator and the
offices where it keeps all of its
Records are located at the address(es)
listed on EXHIBIT II or such other
locations of which Buyer has been notified
in accordance with SECTION 4.2(A) in
jurisdictions where all action required by
SECTION 4.2(A) has been taken and
completed. Such
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Originator's Federal Employer
Identification Number and organizational
identification number are correctly set
forth on EXHIBIT II.
(l)
COLLECTIONS. The conditions and requirements set forth
in SECTION 4.1(J) have at all times been
satisfied and duly performed. The names
and addresses of all Collection Banks,
together with the account numbers of the
Collection Accounts of such Originator at
each Collection Bank and the post
office box number of each Lock-Box, are
listed on EXHIBIT III. Such Originator
has not granted any Person, other than
Buyer (and its assigns) dominion and
control of any Lock-Box or Collection
Account, or the right to take dominion and
control of any such Lock-Box or Collection
Account at a future time or upon the
occurrence of a future event.
(m)
MATERIAL ADVERSE EFFECT. Since March 31, 2004, and
except as disclosed in the reports made by
the Parent to the Securities and
Exchange Commission prior to the date of
this Agreement, no event has occurred
that could reasonably be expected to have a
Material Adverse Effect.
(n)
NAMES. The name in which such Originator has executed
this Agreement is identical to the name of
such Originator as indicated on the
public record of its jurisdiction of
organization which shows such Originator to
have been organized. In the past five (5)
years, such Originator has not used
any corporate or limited liability company
names, trade names or assumed names
other than the name in which it has
executed this Agreement except as disclosed
on Exhibit II attached hereto.
(o)
OWNERSHIP OF BUYER. Parent owns, directly or indirectly,
100% of the issued and outstanding equity
interests of EIS. EIS owns directly
100% of the issued and outstanding equity
interests of Buyer. Such equity
interests are validly issued, fully paid
and nonassessable, and there are no
options, warrants or other rights to
acquire securities of Buyer.
(p)
NOT A HOLDING COMPANY OR AN INVESTMENT COMPANY. Such
Originator is not a "HOLDING COMPANY" or a
"SUBSIDIARY HOLDING COMPANY" of a
"HOLDING COMPANY" within the meaning of the
Public Utility Holding Company Act
of 1935, as amended, or any successor
statute. Such Originator is not an
"INVESTMENT COMPANY" within the meaning of
the Investment Company Act of 1940,
as amended, or any successor statute.
(q)
COMPLIANCE WITH LAW. Such Originator has complied in all
respects with all applicable laws, rules,
regulations, orders, writs, judgments,
injunctions, decrees or awards to which it
may be subject, except where the
failure to so comply could not reasonably
be expected to 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, except
where such contravention or
violation could not reasonably be expected
to have a Material Adverse Effect.
(r)
COMPLIANCE WITH CREDIT AND COLLECTION POLICY. Such
Originator has complied in all material
respects with the Credit and Collection
Policy with regard to each Receivable
originated by it and the related Contract,
and has not made any material change to
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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 SUCH ORIGINATOR.
With respect to each
Receivable originated by such Originator
and sold to Buyer hereunder, the
Purchase Price received by such Originator
constitutes reasonably equivalent
value in consideration therefor. No
transfer hereunder by such Originator of any
Receivable originated by such Originator is
or may be voidable under any section
of the Bankruptcy Reform Act of 1978 (11
U.S.C. ss.ss. 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 interest thereon, enforceable
against the Obligor in accordance with its
terms, except as such enforcement may
be limited by applicable bankruptcy,
insolvency, reorganization or other similar
laws relating to or limiting creditors'
rights generally and by general
principles of equity (regardless of whether
enforcement is sought in a
proceeding in equity or at law).
(u)
ELIGIBLE RECEIVABLES. Each Receivable reflected in any
Purchase Report as an Eligible Receivable
was an Eligible Receivable on the date
of its acquisition by Buyer hereunder.
(v)
ACCOUNTING. The manner in which such Originator accounts
for the transactions contemplated by this
Agreement in its financial statements
does not jeopardize the characterization of
the transactions contemplated herein
as being true sales.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 CONDITIONS
PRECEDENT TO PURCHASE. The Purchases under
this Agreement are subject to the
conditions precedent that (a) Buyer shall have
been capitalized with the Initial
Contributed Receivables, (b) Buyer shall have
received on or before the date of such
purchase those documents listed on
SCHEDULE A and (c) all of the conditions to
the initial loan under the Credit
and Security Agreement shall have been
satisfied or waived in accordance with
the terms thereof.
Section 3.2 CONDITIONS
PRECEDENT TO SUBSEQUENT PAYMENTS. Buyer's
obligation to pay for Receivables coming
into existence after the Initial Cutoff
Date shall be subject to the further
conditions precedent that: (a) the Facility
Termination Date shall not have occurred
under the Credit and Security
Agreement; (b) Buyer (or its assigns) shall
have received such other approvals,
opinions or documents as it may reasonably
request and (c) on the date such
Receivable came into existence, the
following statements shall be true (and
acceptance of the proceeds of any payment
for such Receivable shall be deemed a
representation and warranty by such
Originator that such statements are then
true):
(i)
the representations and warranties set forth in
ARTICLE II are true and correct in all material respects on and as
of
the date such Receivable came into existence as though made on and
as of
such date; PROVIDED, HOWEVER, that the preceding
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standard shall not apply to those representations and warranties
which
themselves contain materiality standards; and
(ii) no
event has occurred and is continuing that
will constitute a Termination Event or an Unmatured 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 Revolving
Note, by offset of amounts owed to Buyer
and/or by offset of capital contributions),
title to such Receivable and the
Related Security and Collections with
respect thereto shall vest in Buyer,
whether or not the conditions precedent to
Buyer's obligation to pay for such
Receivable were in fact satisfied. The
failure of such Originator to satisfy any
of the foregoing conditions precedent,
however, shall give rise to a right of
Buyer to rescind the related purchase and
direct such Originator to pay to Buyer
an amount equal to the Purchase Price
payment that shall have been made with
respect to any Receivables related
thereto.
ARTICLE IV
COVENANTS
Section 4.1 AFFIRMATIVE
COVENANTS OF ORIGINATORS. Until the date on
which this Agreement terminates in
accordance with its terms, each Originator
hereby covenants as set forth below:
(a)
FINANCIAL REPORTING. Such 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. As soon as practicable and in
any event within ninety-five (95) days
after the end of each Fiscal Year, either
(i) a copy of a report on Form 10-K, or any
successor form, and any amendments
thereto, filed by the Parent with the
Securities and Exchange Commission with
respect to the immediately preceding Fiscal
Year or (ii) an audited consolidated
balance sheet of the Parent and its
Subsidiaries as of the close of such Fiscal
Year and audited Consolidated statements of
income, stockholders' equity and
cash flows for the Fiscal Year then ended,
including the notes thereto, all in
reasonable detail setting forth in
comparative form the corresponding figures
for the preceding Fiscal Year and prepared
by the Parent and certified by a
nationally recognized independent certified
public accounting firm acceptable to
the Agent in accordance with GAAP and, if
applicable, containing disclosure of
the effect on the financial position or
results of operation of any change in
the application of accounting principles
and practices during the year, and
accompanied by a report thereon by such
certified public accountants that is not
qualified with respect to scope limitations
imposed by the Parent or any of its
Subsidiaries or with respect to accounting
principles followed by the Parent or
any of its Subsidiaries not in accordance
with GAAP.
(ii)
QUARTERLY REPORTING. As soon as practicable and
in any event, within fifty (50) days after
the end of each of the first three
(3) fiscal quarters of each Fiscal Year,
either (i) a copy of a report on Form
10-Q, or any successor form, and any
amendments
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thereto, filed by the Parent with the
Securities and Exchange Commission with
respect to the immediately preceding fiscal
quarter or (ii) an unaudited
consolidated balance sheet of the Parent
and its Subsidiaries as of the close of
such fiscal quarter and unaudited
consolidated statements of income,
stockholders' equity and cash flows for the
fiscal quarter then ended and that
portion of the Fiscal Year then ended,
including any notes thereto, all in
reasonable detail setting forth in
comparative form the corresponding figures
for the corresponding period or periods of
(or, in the case of the balance
sheet, as of the end of) the preceding
Fiscal Year and prepared by the Parent in
accordance with GAAP and, if applicable,
containing disclosure of the effect on
the financial position or results of
operations of any change in the application
of accounting principles and practices
during the period, and certified by a
Responsible Officer of the Parent to
present fairly in all material respects the
financial condition of the Parent and its
Subsidiaries as of their respective
dates and the results of operations of the
Parent and its Subsidiaries for the
respective periods then ended, subject to
normal year-end adjustments and to the
absence of footnotes required by GAAP
(iii) COMPLIANCE
CERTIFICATE. Together with the
financial statements required hereunder, a
compliance certificate in
substantially the form of EXHIBIT IV signed
by Parent'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 the Parent, copies of all
financial statements, reports and proxy
statements so furnished.
(v)
S.E.C. FILINGS. Promptly after the filing
thereof, a copy of (i) each report or other
filing made by the Parent or any of
its Subsidiaries with the Securities and
Exchange Commission and required by the
Securities and Exchange Commission to be
delivered to the shareholders of the
Parent or any Subsidiary thereof, (ii) each
report made by the Parent or any
Subsidiary thereof to the Securities and
Exchange Commission on Form 8-K and
(iii) each final registration statement of
the Parent or any Subsidiary thereof
filed with the Securities and Exchange
Commission, except in connection with
pension plans and other employee benefit
plans.
(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
Blue Ridge, 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 proposed
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
(and the Agent's, as Buyer's assignee)
consent thereto.
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(viii) OTHER
INFORMATION. Promptly, from time to time,
such other information, documents, records
or reports relating to the
Receivables originated by such Originator
or the condition or operations,
financial or otherwise, of such 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. Such Originator will notify Buyer (or its
assigns) in writing of any of the following
promptly upon learning of the
occurrence thereof by any Responsible
Officer, describing the same and, if
applicable, the steps being taken with
respect thereto:
(i)
TERMINATION EVENTS OR UNMATURED TERMINATION
EVENTS. The occurrence of each Termination
Event and each Unmatured Termination
Event, by a statement of an Authorized
Officer of such Originator.
(ii)
JUDGMENT AND PROCEEDINGS. (1) The entry of any
judgment or decree against any Originator
or any of its Subsidiaries if the
aggregate amount of all judgments and
decrees then outstanding against the
Originators and their Subsidiaries exceeds
$10,000,000 after deducting (a) the
amount with respect to which the applicable
Originator or Subsidiary is insured
and with respect to which the insurer has
assumed responsibility in writing, and
(b) the amount for which the applicable
Originator or Subsidiary is otherwise
indemnified if the terms of such
indemnification are satisfactory to Buyer (or
its assigns), and (2) the institution of
any litigation, arbitration proceeding
or governmental proceeding against any
Originator which, individually or in the
aggregate, could reasonably be expected to
have a Material Adverse Effect.
(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 PARENT CREDIT AGREEMENT. The
occurrence of any Default or Event of
Default under (and as such term is defined
in) the Parent Credit Agreement.
(v)
ERISA EVENTS. The occurrence of any ERISA Event
that could reasonably be expected to have a
Material Adverse Effect.
(vi)
DOWNGRADE OF PARENT. Any downgrade in the rating
of any Indebtedness of Parent by S&P or
by Moody's, setting forth the
Indebtedness affected and the nature of
such change (but excluding any private
indicative ratings that the Parent may
request from time to time from Moody's or
S&P).
(c)
COMPLIANCE WITH LAWS AND PRESERVATION OF EXISTENCE. Such
Originator will (i) comply in all respects
with all applicable laws, rules,
regulations, orders, writs, judgments,
injunctions, decrees or awards to which
it may be subject, except where the failure
to so comply could not reasonably be
expected to have a Material Adverse Effect
and (ii) will preserve and maintain
its legal existence, rights, franchises and
privileges in the jurisdiction of
its organization, and qualify and remain
qualified in good standing as a foreign
entity in each jurisdiction where its
business is conducted, except where the
failure to so qualify or remain in good
standing could not reasonably be
expected to have a Material Adverse Effect;
provided, however, that nothing in
the foregoing shall prevent such Originator
from discontinuing any line of
business if (x) no Termination Event or
Unmatured Termination Event exists or
would result
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therefrom, and (y) with respect to the
discontinuance of a material line of
business, the board of directors (or
comparable governing body) of such
Originator determines in good faith that
such discontinuance is in the best
interest of the Parent and its Consolidated
Subsidiaries, taken as a whole.
(d)
AUDITS. Such Originator will furnish to Buyer (or its
assigns) from time to time such information
with respect to it and the
Receivables sold by it as Buyer (or its
assigns) may reasonably request. Such
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 such
Originator, permit Buyer (or its assigns)
or their respective agents or
representatives, (i) to examine and make
copies of and abstracts from all
Records in the possession or under the
control of such Originator relating to
the Receivables and the Related Security,
including, without limitation, the
related Contracts, and (ii) to visit the
offices and properties of such
Originator for the purpose of examining
such materials described in clause (i)
above, and to discuss matters relating to
such Originator's financial condition
or the Receivables and the Related Security
or such Originator's performance
under any of the Transaction Documents or
such Originator's performance under
the Contracts and, in each case, with any
of the officers or employees of such
Originator having knowledge of such matters
(each of the foregoing examinations
and visits, a "REVIEW"); PROVIDED, HOWEVER,
that, so long as no Amortization
Event (under and as defined in the Credit
and Security Agreement) has occurred
and is continuing: (A) the Originators,
collectively, shall only be responsible
for the reasonable costs and expenses of
one (1) Review in any one calendar
year, and (B) the Agent (as Buyer's
assignee) will not request more than four
(4) Reviews in any one calendar year. To
the extent that Buyer (or its assigns),
in the course of any Review, obtains any
Proprietary Information pertaining to
any Originator or any of its Affiliates,
Buyer (or its assign) shall handle such
information in accordance with the
requirements of SECTION 7.4 hereof.
(e)
KEEPING AND MARKING OF RECORDS AND BOOKS.
(i)
Such 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). Such 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) Such
Originator will (A) on or prior to the date
hereof, mark its books and records including aged trial balance
with
respect to the Receivables with a legend, acceptable to Buyer (or
its
assigns), describing Buyer's ownership interests in the Receivables
and
further describing the security interest in the Receivable of the
Agent
(on behalf of the Lenders) under the Credit and Security Agreement
and
(B) upon the request of Buyer (or its assigns) made at any time
when a
Termination Event has occurred and is continuing: (x) mark each
Contract
with a legend describing Buyer's ownership interests in the
Receivables
originated by such Originator and further
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describing the security interests in the Receivable of the Agent
(on
behalf of the Lenders) and (y) deliver to Buyer (or its assigns)
all
Contracts (including, without limitation, all multiple originals of
any
such Contract) relating to such Receivables.
(f)
COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION
POLICY. Such Originator will timely and
fully (i) perform and comply in all
material respects with all provisions,
covenants and other promises required to
be observed by it under the Contracts
related to the Receivables originated by
it, and (ii) comply in all material
respects with the Credit and Collection
Policy in regard to each such Receivable
and the related Contract.
(g)
[Intentionally Omitted]
(h)
OWNERSHIP. Such Originator will take all necessary
action to establish and maintain,
irrevocably in Buyer, (A) legal and equitable
title to the Receivables originated by such
Originator and the Collections and
(B) all of such Originator's right, title
and interest in the Related Security
associated with the Receivables originated
by such Originator, in each case,
free and clear of any Adverse Claims other
than Permitted Encumbrances
(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).
(i)
LENDERS' RELIANCE. Such Originator acknowledges that the
Agent and the Lenders are entering into the
transactions contemplated by the
Credit and Security Agreement in reliance
upon Buyer's identity as a legal
entity that is separate from such
Originator and any Affiliates thereof.
Therefore, from and after the date of
execution and delivery of this Agreement,
such 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 such Originator and
any
