MasterAccounts Receivable Purchase Agreement among CalyonNew York Branch, as the Bank TheScotts CompanyLLC,asthe Company and TheScotts Miracle-Gro Company,asthe Parent Dated asof May 1, 2009

 

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Master Accounts Receivable Purchase Agreement

 

among

 

Calyon New York Branch, as the Bank

 

The Scotts Company LLC, as the Company

 

and

 

The Scotts Miracle-Gro Company, as the Parent

 

Dated as of May 1, 2009

 

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Schedule 1   —   Purchase Request

Schedule 2   —   Conditions Precedent

Schedule 3   —   UCC Details Schedule

Schedule 4   —   Form of Portfolio Report

Schedule 5   —   Approved Debtors

 

Master Accounts Receivable Purchase Agreement, dated as of May 1, 2009 (this “Agreement”), among The Scotts Company, LLC, a limited liability company organized under the laws of Ohio (the “Company”), The Scotts Miracle-Gro Company, a company organized under the laws of Ohio (the “Parent”), and Calyon New York Branch (the “Bank”), a duly licensed branch under the New York Banking Law of a foreign banking corporation organized and existing under the laws of the Republic of France.

 

Whereas, after the date hereof and subject to the terms and conditions of this Agreement, the Company may sell to the Bank and the Bank may purchase from the Company, on a revolving and uncommitted basis, certain Receivables.

 

Whereas, the transactions hereunder shall constitute a true sale of the Purchased Receivables, providing the Bank with the full risks and benefits of ownership of the Purchased Receivables without recourse to the Company, except as may otherwise be set forth herein.

 

Now, Therefore, in consideration of the above premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

In this Agreement and each Schedule:

“Act” has the meaning ascribed to it in Section 19.9(a).

 

“Adverse Claim” means any Encumbrance on a Purchased Receivable other than those arising under this Agreement.

 

“Agreed Base Value” shall be an amount equal to the product of (a) the difference between (i) the full Original Amount of the Receivable being purchased less (ii) the Trade Credit Amount and (b) 100% less the Agreed Dilution Percentage.

 

“Agreed Dilution Percentage” means, with respect to a Purchased Receivable at any time, a rate equal to (a) 5% if the sum of (i) the product of (x) two (2) and (y) Historical Dilution for the Approved Debtor in respect of such Purchased Receivable in the same month of the previous year, and (ii) Late Interest Percentage then in effect (the “Sum”) does not exceed 5%, (b) 10% if the Sum in respect of such Purchased Receivable is greater than 5% and does not exceed 10%, and (c) the actual Sum if greater than 10%.

 

 “Agreement Amount” means the maximum aggregate Funded Amounts of all Purchased Receivables, which shall not exceed $80,000,000 at any time.

 

“Agreement Office” means the office through which the Bank will perform its obligations under this Agreement.

 

“Applicable Margin” means the applicable margin per annum for each Approved Debtor as listed on Schedule 5 hereto.

 

“Approved Debtor” means each Person listed as an Approved Debtor on Schedule 5 hereto.

 

“Blocked Accounts” means each account opened by the Company in its name for each Approved Debtor with JPMorgan Chase Bank, N.A. or such other bank approved by the Bank for the purpose of collecting the Purchased Receivables of such Approved Debtor and which shall be subject to a blocked account agreement with the Bank providing the Bank with control over such account.

 

“Business Day” means a day on which banks are open for business in Chicago and New York City.

 

“Closing Date” means the date of this Agreement or such later Business Day upon which each condition described on Schedule 2 shall be satisfied or waived in a manner acceptable to the Bank in its reasonable discretion.

 

“Collections” means all payments made on each Purchased Receivable and any other payments, receipts or recoveries (including any casualty insurance proceeds) by, or on behalf of, any Debtor or otherwise with respect to any Purchased Receivable.

 

“Contract” means a contract or purchase order between the Company and a Debtor, as the same may be amended and supplemented from time to time in accordance with the terms hereof, out of which has arisen one or more Purchased Receivables.

 

“Cost of Funds” means, with respect to any Purchased Receivable(s), the rate, as determined by the Bank as of the relevant date (which determination shall be conclusive and binding on the Company absent manifest error) at which Dollars for a term comparable to the applicable period of time and in an amount comparable to the relevant amount in respect of such Receivable(s) are generally available to the Bank.

 

“Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of February 7, 2007, among the Parent, the subsidiary borrowers from time to time party thereto, the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent and the various lenders from time to time to the party thereto.

 

“Debtor” means a person obligated to make payments in respect of a Receivable.

 

“Debtor Sublimit” means the sublimit to the Agreement Amount for each Approved Debtor as listed on Schedule 5 hereto.

 

“Defaulted Receivable” means any Purchased Receivable which has not been paid when due or cannot be paid solely as a result of the applicable Approved Debtor’s Financial Inability to Pay.

 

“Dilution” means in respect of each Debtor, any discount, adjustment, set-off, counterclaim, deduction, reduction, warranty issue or refusal to pay not arising from such Debtor’s Financial Inability to Pay, which would have the effect of reducing the amount of part or all of any Purchased Receivable owed by a Debtor.

 

“Discount” means, with respect to each Purchased Receivable, 100% minus the product of (a) the sum of the applicable Cost of Funds for seven days as of the purchase date thereof plus the Applicable Margin applicable to the Approved Debtor in respect of such Purchased Receivable, and (b) a fraction the numerator of which seven days and the denominator of which is 360.

 

“Dollar, USD” and “$” shall mean the lawful currency of the United States of America.

“Economic and Trade Sanctions and Anti-Terrorism Laws” means any laws relating to economic or trade sanctions, terrorism or money laundering, including without limitation Executive Order 13224, the Patriot Act, the regulations administered by OFAC, the Trading with the Enemy Act (12 U.S.C. §95), and the International Emergency Economic Powers Act (50 U.S.C. §1701-1707).

 

“Encumbrance” means a mortgage, assignment, security interest, pledge, lien or other encumbrance securing any obligation of any person or any other type of adverse claim or preferential arrangement (including, without limitation, title transfer and retention arrangements) having a similar effect.

 

“Excess Amount” has the meaning ascribed to it in Section 15.1(b).

“Excess Fee” has the meaning ascribed to it in Section 15.1(b).

 

 “Fee Letter” means the letter among the Bank, the Company and the Parent of even date herewith providing for the payment of certain fees by the Company to the Bank as specified therein.

 

“Final Collection Date” means the date, following the termination of purchases under this Agreement, on which all amounts to which the Bank shall be entitled in respect of Purchased Receivables and all other amounts owing to the Bank hereunder and under the other Transaction Documents are paid in full.

 

“Financial Inability to Pay” means a Debtor’s failure or inability to pay a Receivable as a result of a deterioration in such Debtor’s credit quality as evidenced by an event where such Debtor (A)(i) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (iv) institutes or has instituted against it a proceeding seeking judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditor’s rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (aa) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding up or liquidation or (bb) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (v) has a resolution passed for its winding-up, official management or liquidation; (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all of its assets; (vii) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter, (viii) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (i) to (vii) (inclusive); (ix) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or (x) at any time that the long-term unenhanced, unsecured indebtedness rating of such Debtor is “CCC” (or its equivalent) or lower, fails to pay 10% or more of the aggregate amount of Purchased Receivables owed by it, for more than 30 days beyond the relevant Maturity Dates thereof (unless such Debtor claims, and the Company agrees, such failure to pay is a result of a commercial dispute related to such Purchased Receivables), or (B) fails, after giving effect to any applicable grace period for the relevant obligation(s) of such Debtor (other than such Receivable), to make, when due, any payments equal to or exceeding $10,000,000 under such obligations.

 

“Funded Amount” means the aggregate amount of Purchase Prices paid by the Bank hereunder, less the Collections, if any, theretofore paid to and received by the Bank.

 

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

 “Historical Dilution” means, with respect to a Debtor at any time, a rate equal to a fraction the numerator of which is the value of the “Credit Memos” for the same month of the previous year and the denominator of which is the value of “Sales” for such month and year, in each case for such Debtor as indicated in the relevant Portfolio Report received by the Bank.

 

“Invoice” means an invoice issued by the Company to a Debtor for payment for goods or services supplied pursuant to a Contract between the Company and such Debtor.  

 

“Late Interest Percentage” means, with respect to Purchased Receivables, a rate equal to the product of (a) the sum of (i) the Cost of Funds for ninety-eight (98) days as of the relevant date, and (ii) 2.25%, and (b) a fraction the numerator of which is ninety-eight (98) and the denominator of which is 360.

 

“Law” means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Governmental Authority.

 

“Maturity Date” means, with respect to a Purchased Receivable, the date on which such Purchased Receivable becomes due and payable by the Debtor.

 

“Monsanto Agreement” means the Amended and Restated Exclusive Agency and Marketing Agreement by and between The Monsanto Company and the Company.

 

“Monsanto Receivables” means accounts receivable (and all related proceeds) originated and owned by The Monsanto Company of an Approved Debtor and otherwise subject to the terms of the Monsanto Agreement.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“OFAC Lists” has the meaning ascribed to it in Section 19.9(b).

“OFAC Violation” has the meaning ascribed to it in Section 19.9(c).

 

“Original Amount” means, in relation to a Purchased Receivable, the amount owing from the Debtor in respect of such Purchased Receivable being the aggregate amount payable under the relevant Invoice.  For the avoidance of doubt, the Original Amount of any Purchased Receivable shall not be reduced as a result of any write-down or write-off of such Purchased Receivable by the Bank.

 

“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“Portfolio Report” means a report, substantially in the form of Schedule 4, signed by an officer of the Company and which shall contain, inter alia, the list of Receivables which have been determined to be Purchased Receivables hereunder as well as a list of all relevant Invoices.

 

“Purchase Price” means, in relation to any Purchased Receivable, the Agreed Base Value thereof times the applicable Discount.

 

“Purchased Receivable” means, at any time, any Receivable sold by the Company and acquired by the Bank under this Agreement.

 

“Purchase Request” means a request for purchase in the form attached hereto as Schedule 1.

 

“Receivable” means the indebtedness of an Approved Debtor to the Company arising under a Contract which is evidenced by an Invoice (including the right to receive payment of any interest or finance charges or other liabilities of such Debtor under the Contract), all Related Assets with respect thereto, and all Collections and other proceeds with respect to the foregoing.

 

“Related Assets” means, with respect to the Receivables (i) all related rights and remedies under or in connection with the Contract with respect thereto including bills of lading, bills of exchange, promissory notes and accessions, (ii) all guaranties, suretyships, letters of credit, security, liens and other arrangements supporting payment thereof, (iii) all Sales Records (including electronic records) with respect thereto, (iv) all related insurance, and (v) all proceeds of the foregoing.

 

“Relevant Quarter” means each three month period ending June 30, 2009, September 30, 2009, December 31, 2009, and March 31, 2010, respectively.

 

“Replacement Receivables” is defined in Section 4.2 hereof.

 

“Repurchase Event” means, with respect to a Purchased Receivable:

 

(i)     any representation or warranty made by the Company in Section 10 of this Agreement with respect to such Receivable is inaccurate, incorrect or untrue, in any material respect, on any date as of which it is made or deemed to be made; or

 

(ii)     the Company fails to comply with any of its covenants with respect to such Receivable set forth in Section 11 of this Agreement; or on any day the Original Amount of such Purchased Receivable (i) is reduced or adjusted as a result of any defective, rejected, returned, repossessed or foreclosed merchandise, any defective or rejected services, any discount or other adjustment by the Company (including on account of credits, rebates, chargebacks, inventory transfers, allowances for early payments and other allowances) or any obligation of the Company owed to the applicable Debtor to make such a discount or adjustment, (ii) is reduced or cancelled as a result of a setoff, deduction or counterclaim in respect of any claim by the Debtor thereof against the Company (whether such claim arises out of the same or a related or an unrelated transaction) or (iii) otherwise is less than the amount reported by the Company in (or for purposes of) any settlement statement delivered pursuant to this Agreement (for any reason other than receipt of Collections on such Purchased Receivable or such Purchased Receivable being written off as uncollectible based on Debtor’s Financial Inability to Pay); provided, however, that to the extent that the occurrence of any matter described in the foregoing paragraphs (i) or (ii) would otherwise result in a Repurchase Event, no Repurchase Event with respect to any such Purchased Receivable shall occur if the amount of any such adjustment caused by the occurrence of such event has already been included in the calculation of the Purchase Price paid with respect to such Purchased Receivable.

 

“Sales Records” means the accounts, all sales ledgers, purchase and sales day books, sales invoices, supply contracts and other related books and records of the Company relating to a Debtor and on an individual Purchased Receivable basis for the purpose of identifying amounts paid or to be paid in respect of such Purchased Receivable.

 

“Settlement Date” means, in respect of any Settlement Period, the Wednesday of the calendar week following such Settlement Period (or, if such Wednesday is not a Business Day, the immediately succeeding Business Day) or such other date as the Bank and the Company may from time to time agree to, provided that (i) with respect to the initial purchase hereunder, the date of such purchase shall be the initial Settlement Date and (ii) on or after the Termination Date, the Bank may select Settlement Dates by notice to the Company.

 

“Settlement Period” means (a) with respect to the initial purchase, a period from the date of such purchase pursuant to Section 4.1 to the Wednesday of the calendar week following the calendar week in which such purchase is made (or, if such Wednesday is not a Business Day, the immediately succeeding Business Day) or as otherwise agreed between the Bank and the Company and (b) thereafter, each period commencing on the last day of the immediately preceding such period and ending on the next Settlement Date or as otherwise agreed between the Bank and the Company, provided, however, that at any time the Bank and the Company may mutually agree to select any different period as the Settlement Period; provided, further, however, that if such agreement is not reached within 10 days, a Termination Event may be declared by the Bank.

 

“Stated Termination Date” means May 1, 2010, or such later date as may be extended by mutual agreement of the Bank and the Company.

 

“Tax” means any present or future withholding tax, levy, impost, duty or other tax or charge of any similar nature (including but not limited to any interest or penalty payable in connection with any failure to pay any of the same); and Taxation shall be construed accordingly.

 

“Termination Date” means the earliest to occur of (i) termination of this Agreement pursuant to Section 18, (ii) the Stated Termination Date and (iii) the Business Day designated by either party with no less than thirty (30) days prior notice to the other party.

 

“Termination Event” means any of the events set forth in Section 18.

 

“Termination Interest” means, with respect to the Total Purchased Receivables, a rate equal to the product of (a) the sum of (i) the Cost of Funds for five (5) days and (ii) 3.25%, (b) a fraction the numerator of which is the number of days during the period referred to in clause (i) above plus fifteen (15) days, and the denominator of which is 360 and (c) the aggregate Agreed Base Value of the Total Purchased Receivables.

 

“Trade Credit Amount” means, with respect to a Purchased Receivable, the Dollar amount from time to time accrued on the books and records of the Company and as reported to the Bank on each Portfolio Report as a trade credit, trade allowance, return allowance or similar arrangement between the Company and the related Approved Debtor that might result in a reduction of such Purchased Receivable in the future.

 

“Transaction Document” means each of this Agreement, each Purchase Request, each Portfolio Report, the blocked account agreements, and all related documents.

 

 

(o)     The Company has indicated, or will indicate as of the date of such sale, on its books and records, as appropriate, that the Purchased Receivables have been sold by the Company to the Bank (or its successors and assigns).

 

(p)     The transactions contemplated by this Agreement are being consummated by the Company in order to raise capital to carry out the Company’s ordinary business, with no contemplation of being or becoming insolvent and with no intent to hinder, delay or defraud any of its present or future creditors.  By virtue of the Company’s right to receive any payment of the Purchase Price for each Purchased Receivable as provided in Section 4 hereof, the Company has received reasonably equivalent value for the Purchased Receivables sold by it.

 

(q)     On the date of the sale of each Purchased Receivable by the Bank, the Bank shall acquire a valid ownership interest or a first perfected security interest in each Purchased Receivable free and clear of any Adverse Claim; and, upon transfer of ownership of such Purchased Receivable from the Company to the Bank, no financing statement or other similar instrument or other filing or recordation covering any such Purchased Receivable or any interest therein, is on file in any recording office except such as may be filed pursuant to this Agreement or except as to which a release or disclaimer in form satisfactory to the Bank has been provided, or as to which the Bank has consented.

 

(r)     The Company’s jurisdiction of organization and “location” for purposes of the UCC, or other relevant local law, is the State of Ohio (or at such other location, notified to the Bank in accordance with Section 11.1(m)), in a jurisdiction where all actions required by Section 9.1 have been completed). Except as described in Schedule 3, (i) the Company has no trade names, fictitious names, assumed names or “doing business as” names and (ii) the Company has not changed its jurisdiction of organization or location or its name, identity or corporate structure within the four months prior to the date of this Agreement.  The Company’s federal taxpayer identification number or other registration number is as set forth in Schedule 3.

 

(s)     All information provided by the Company to the Bank with respect to the Purchased Receivables (including without limitation relating to the applicable Debtor’s past payment history and commercial relationship with such Debtor) is true and accurate in all material respects and nothing has been given or withheld that would result in the information provided being untrue or misleading in any material respect.

 

(t)     The representations made or deemed to be made by the Company in each Transaction Document are and remain correct in all material respects as of the date made.

 

(u)     With respect to the Company’s obligations hereunder, no consent, license, authorization, registration, legalization, notification to, declaration with, approval or permit of, any governmental authority, agency or instrumentality (including any central banking or other monetary authority) is required by the Company in connection with its execution, delivery and performance, and the validity or enforceability of the Company’s obligations under the Transaction Documents, the Company’s sale of the Purchased Receivables, or the transactions contemplated thereby.

 

(v)     The sale of the Purchased Receivables by the Company to the Bank under the Transaction Documents would, under the law applicable to the Company as of the date of the sale thereof, constitute a true sale or other absolute transfer of the Purchased Receivables by the Company (except to the extent set forth in this Agreement) to the Bank and upon each purchase by the Bank, the Bank shall acquire a legally valid ownership interest or a first perfected security interest in each Purchased Receivable, free and clear of any lien, claim or other encumbrance without any need on the part of the Company or the Bank to (i) except as may be required under the applicable Contracts, notify the account debtors on the Purchased Receivables or (ii) except as may be required under applicable disclosure requirements, file, register or record the Transaction Documents or the sale of the Purchased Receivables under the laws applicable to the Company.

 

(w)     The obligation of the Company to remit payments received from the Debtors on the Purchased Receivables in U.S. dollars to the Bank in the United States, either directly or through the Blocked Accounts as designated by the Bank is legally valid under the laws applicable to the Company and no foreign exchange registrations or approvals are necessary to effectuate such U.S. dollar payments.

 

 

Section 11.     General Covenants.  The Company hereby agrees, at all times prior to the Final Collection Date:

 

(a)     to duly perform all its obligations under the relevant Contract in respect of each Purchased Receivable, so that each such Receivable remains a legal, valid and binding obligation of the Debtor enforceable against the Debtor in accordance with its terms, to inform the Bank of any material breach or default by the Company or the Debtor, within five Business Days after it becomes aware of any such breach or default and to take all measures necessary and consistent with the terms of the Contract to minimize or prevent any loss which may be incurred by the Bank in the event of nonperformance of the Contract or nonpayment of an invoice by the Company or the Debtor arising out of a dispute between the Company and the Debtor thereunder;

 

(b)     after the date of the Company’s sale of the related Purchased Receivable, not to amend any applicable Contract related thereto in any manner or have any dealing or other arrangement with the Debtor that, as between the Company and the Debtor, is intended to, or will, affect the collectability of the Purchased Receivable or the Original Amount or the Maturity Date for payment of any Purchased Receivable, cancel or terminate such Contract and not to, or purport to, terminate, revoke or vary any term or condition of or extend the Maturity Date by more than 30 days (so long as in no event shall the Maturity Date be extended beyond 90 days from the date of purchase of such Purchased Receivable) of any Purchased Receivable without the prior consent in writing of the Bank, if the same could adversely affect the financial value or economic return to the Bank in respect of the Purchased Receivable;

 

(c)     not to create or suffer to exist any Adverse Claim over all or any of the Company’s rights, title and interest in and to any Purchased Receivable or the Contract in respect of such Purchased Receivable or any lock-box or other account to which any Collections of any Purchased Receivables are sent (unless otherwise agreed to by the Bank) and not to, or purport to, assign, transfer or otherwise deal with any of its rights in respect of any such Contract or any Purchased Receivable other than in favor of the Bank, and Company shall provide the Bank with a release or disclaimer of any Adverse Claim purportedly created by any other Person over any Purchased Receivable;

 

(d)     to ensure that it has shipped all goods in respect of each Purchased Receivable in conformity with all applicable laws and regulations (including without limitation import and export laws and regulations);

 

(e)     to keep and maintain proper accounts and Sales Records and Invoices in connection with each Purchased Receivable in an up to date form (including details of each Invoice specified in the Portfolio Report) and ensure that they are retained in suitable storage and that they indicate:

 

(i)     which Receivables are Purchased Receivables;

 

(ii)     details of all Purchased Receivables which are specified in the Portfolio Reports; and

 

(iii)     that such Purchased Receivables have been sold to the Bank, and to provide the Bank with a quarterly report regarding a receivables aging, delinquency, write-offs, Receivables rolled forward and dilution report in the form attached as Schedule 4 as to the Purchased Receivables, showing a loss to liquidation ratio (monthly write-offs over collections), delinquency ratio (Receivables more than 90 days past due over closing Receivables balance) and dilution ratio (monthly credit memos over sales) within 5 days of the close of each month in a form satisfactory to the Bank, or as may otherwise be approved by the Bank;

 

(f)     to devote and assure that there is devoted to the servicing of Purchased Receivables at least the same amount of time and attention and that there is exercised at least the same level of skill, care and diligence in their servicing, as if it were servicing those receivables legally and beneficially owned by it;

 

(g)     to comply with any reasonable directions, orders and instructions (including any procedures for the administration and commencement and continuation of legal or other proceedings against the Debtor to enforce payment of Purchased Receivables) given by the Bank and to take such action on the Bank’s behalf as the Bank may request to procure the ordinary course collection of such accounts as directed by the Bank;

 

(h)     to use all reasonable efforts to recover and enforce payment of any or all Purchased Receivables and provide such reasonably requested information as to assist the Bank to recover and enforce payment of any or all Purchased Receivables (including at the request of the Bank joining in and being a party to any legal or other action which the Bank has taken or wishes to take against the Debtor with the Bank being entitled to full control of such action);

 

(i)     to take such action as may reasonably be required by applicable law to perfect a full legal assignment to the Bank of such Purchased Receivable, such that, among other things, the Bank shall be entitled to receive or take action to recover all Purchased Receivables outstanding from the Debtor without the Company being required to join in, being a party to or taking in its own name legal action against the Debtor;

 

(j)     upon the reasonable request of the Bank, to mark its accounting records evidencing or relating to the Purchased Receivables with a legend evidencing that the Purchased Receivables have been sold in accordance with this Agreement;

 

(k)     to provide information and reports as reasonably requested by the Bank reasonably related to the transactions contemplated by this Agreement, of which information and reports shall be complete and accurate in all material respects, including without limitation, annual audited financial statements for the Company and its consolidated subsidiaries within 120 days after the end of each fiscal year or as soon as available if earlier and unaudited financial statements for the Company and its consolidated subsidiaries within 60 days after the end of each fiscal quarter or as soon as available if earlier;

 

(l)     (i) at any time during regular business hours and upon reasonable prior notice, to permit the Bank or any of its agents or representatives, (A) to examine and make copies of and abstracts from the Company’s records relating to Purchased Receivables, including the Contracts and Sales Records, and (B) to visit the offices and properties of the Company for the purpose of examining such records and to discuss matters relating to Purchased Receivables or the Company’ performance hereunder with any of the officers or employees of the Company having knowledge of such matters; and (ii) without limiting the provisions of clause (i), from time to time on request of the Bank, permit certified public accountants or other auditors acceptable to the Bank to conduct, at the Company’s expense, a review of the Company’s books and records; provided that such examinations, visits and reviews by the Bank or accountants shall occur no more than once a year during any period of time that there is no default by the Company of its obligations hereunder; and

 

(m)     to keep its jurisdiction of organization and chief executive office at the location referred to in Schedule 3 or, upon 30 days’ prior written notice to the Bank, at such other location in a jurisdiction where all action required by Section 9.1 shall have been completed; and not change its name except upon like notice and after all action required by Section 9.1 shall have been completed.

 

 

If at any time any provision of the Transaction Documents shall be adjudged by any court or other competent tribunal to be illegal, invalid or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired nor shall the legality, validity or enforceability of such provisions under the law of any other jurisdiction be in any way affected or impaired thereby and the parties hereto will use their best efforts to revise the invalid provision so as to render it enforceable in accordance with the intention expressed in this Agreement.

 

 

The Company hereby acknowledges and agrees that the Bank shall not be in any way responsible for the performance of any Contract and the Bank shall not have any obligation to intervene in any dispute arising out of the performance of any Contract.  Any claim which the Company may have against any Debtor or any other party, including any successors or assignees, and/or the failure of the Debtor to fulfill its respective obligations under each Contract shall not affect the obligations of the Company to perform its obligations and make payments under this Agreement and shall not be used as a defense or as set-off, counterclaim or cross-complaint as against the performance or payment of any of its obligations.

 

 

Section 14.1     Notices, Addresses. (a) All notices, requests and demands given or made under the Transaction Documents shall be given or made in writing and unless otherwise stated shall be made by telefax or letter using the address as specified below or such other address as the party may designate to the other party:

 

 

(b)     All notices, requests and demands shall be deemed to have been duly given or made when dispatched by telefax when the confirmation showing the completed transmission received or, if mailed via a reputable international courier, when it has been left at the relevant address or five (5) Business Days after being delivered to such reputable international courier, in an envelope addressed to the applicable person at that address and to the attention of the person(s) set forth above.

 

(c)    The Company and the Bank shall promptly inform each other of any changes in their respective addresses, facsimile numbers and/or email addresses specified above.

 

Section 14.2.     English Language.  Each communication and document made or delivered by one party to another pursuant to this Agreement shall be in the English language or accompanied by a translation thereof into English (certified by an officer of the person making or delivering the same) as being a true and accurate translation thereof.

 

 

Section 15.1.     Fees.  (a)     The Company shall pay to the Bank on or before the Closing Date such fees as are set forth in the Fee Letter.

 

(b)     If the Bank agrees that on the last day of a Relevant Quarter the relevant Funded Amount may exceed $10,000,000 at such time (determined as provided in Section 2.1(c), the Company shall pay to the Bank an excess fee (the “Excess Fee”) equal to the product of the rate listed below and the amount by which Funded Amount on the Settlement Date immediately prior to such last day of such Relevant Quarter exceeds $10,000,000 (the “Excess Amount”), such Excess Fee to be payable  in arrears on each such Settlement Date beginning on the Settlement Date immediately prior to June 30, 2009:

 

Section 15.2.     Costs and Expenses.  All costs, charges and expenses, including reasonable fees and expenses of legal counsel, audit and due diligence expenses, in relation to the preparation, execution and enforcement of the Transaction Documents and each Purchased Receivable by the Bank shall be paid by the Company to the Bank on demand on a full indemnity basis whether or not any Receivables are purchased hereunder.

 

Section 15.3.     Duties and Taxes.  All stamp, documentary, registration or other like Taxes (excluding taxes upon or measured by the net income of the Bank), including withholding taxes and any penalties, additions, fines, surcharges or interest relating thereto, or any notarial fees which are imposed or chargeable on or in connection with this Agreement or any other Transaction Document or any other document executed pursuant hereto or thereto shall be paid by the Company, it being understood and agreed that the Bank shall be entitled but not obliged to pay any such Taxes (whether or not they are its primary responsibility), and the Company, jointly and severally, shall on demand indemnify the Bank against those Taxes and against any costs and expenses so incurred by it in discharging them.

 

Section 15.4.     Indemnity.  The Company agrees to indemnify, defend and save harmless the Bank (including each of its branches, affiliates, officers, directors, employees or other agents, the “Indemnified Party”), other than for such Indemnified Party’s own gross negligence or willful misconduct, forthwith on demand, from and against any and all related losses, claims, damages, liabilities, costs and expenses (including, without limitation, all attorneys’ fees and expenses, expenses incurred by their respective credit recovery groups (or any successors thereto) and expenses of settlement, litigation or preparation therefor) which any Indemnified Party may incur or which may be asserted against any Indemnified Party by any person (including, without limitation, any Debtor or any other person whether on its own behalf or derivatively on behalf of the Company) arising from or incurred in connection with any of the following events:

 

(i)     the failure to vest in the Bank a first priority perfected ownership interest or security interest in each Purchased Receivable, free and clear of any Adverse Claim;

 

(ii)     the commingling by the Company of Collections of Purchased Receivables at any time with other funds of the Company or other Person, provided that the Bank hereby acknowledges the lien on the Collections deposited in the Blocked Accounts of Receivables not sold under this Agreement of JPMorgan Chase Bank, N.A., as Administration Agent under the terms of the Credit Agreement, or the failure of the Company to direct any Debtor to make payment on Purchased Receivables to the Blocked Account;

 

(iii)     any representation or warranty made by the Company pursuant to this Agreement is inaccurate, incorrect or untrue in any material respect;

 

(iv)     any failure of the Company to perform any of its duties or obligations hereunder; or the violation of any applicable law, rule or regulation with respect to any Purchased Receivable or the related Contract;

 

(v)     any failure to promptly execute when reasonably requested to do so by the Bank, of any document or instrument confirming the sale to the Bank under applicable law with respect to the Purchased Receivables;

 

(vi)     (1) any claim or dispute resulting from the sale of the merchandise or services related to any Purchased Receivable or the furnishing or failure to furnish such merchandise or services including, without limitation, any discount (other than a discount already taken into account in determining the Purchase Price of a Purchased Receivable as set forth in a Portfolio Report), (2) any adjustment, offset, withholding tax, deduction, counterclaim, warranty issue or refusal of an Approved Debtor to pay not arising from the Financial Inability to Pay of such Debtor; or (3) any products liability claim arising out of or in connection with merchandise or services that are the subject of any Purchased Receivable (if any Receivable is more than 60 days past due, other than as a result of the Financial Inability to Pay of the Debtor, it shall be presumed that such Debtor has asserted a contractual claim or dispute);

 

(vii)     any tax or governmental fee or charge (but not including taxes upon or measured by net income of the Bank), all interest and penalties thereon or with respect thereto, and all out-of-pocket costs and expenses, including the reasonable fees and expenses of counsel in defending against the same, which may arise by reason of any act or omission by the Company with respect to the purchase or ownership of any Purchased Receivable or in any goods which secure any Purchased Receivable;

 

(viii)     any investigation, litigation or proceeding related to any act or omission by the Company with respect to this Agreement or the transactions contemplated hereby except to the extent that such investigation, litigation or proceeding arises due to the Bank’s gross negligence or willful misconduct;

 

(ix)     any material defect in authenticity or any material discrepancy between the records at the Company in respect of the Purchased Receivables or the documents issued by the Company supporting the Purchased Receivables and the information provided to the Bank by the Company or any failure by the Company to provide the Bank with information regarding the Purchased Receivables;

 

(x)     any claim or dispute arising out of or in connection with the Monsanto Agreement; and

 

(xi)     any and all reasonable out-of-pocket costs and expenses, including reasonable legal fees and court costs, incurred by the Bank in enforcing the obligations of the Company under this Agreement and the other Transaction Documents;

 

provided that nothing in this Section 15.4 shall be deemed to provide indemnity to the Bank for credit losses resulting from the Financial Inability to Pay of any Debtor.

 

 

Section 16.1.     Accounts.  Absent manifest error in any litigation or arbitration proceedings arising out of or in connection with a Transaction Document or a Purchased Receivable, the entries made in the accounts maintained by the Bank are presumptive evidence of the matters to which they relate.

 

Section 16.2.     Certificates and Determinations.  Any certification or determination by the Bank of a rate or amount under any Transaction Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

 

The Company hereby authorizes the Bank to apply any credit balance (in whatever currency denominated) on any account of the Company with the Bank or any affiliate of the Bank in satisfaction of any sum due and payable by the Company pursuant to the terms of this Agreement.  For this purpose the Bank is authorized to purchase at its spot rate of exchange with the moneys standing to the credit of any such account Dollars or such other currencies as may be necessary to effect such application.

 

 

 

(a)     the Company or the Parent shall fail to pay (i) any amount due by it pursuant to Section 4.4(e) or (ii) within five (5) calendar days of the date when due, any amount greater than $100,000 under this Agreement, including, without limitation, amounts payable by the Company in its capacity as servicer or under the indemnity for breaches of any warranties or covenants contained in this Agreement;

 

(b)     the Company or the Parent is in default (i) beyond the period of grace, if any, in the payment of any indebtedness exceeding $25,000,000, or (ii) under any agreement or instrument relating to any such indebtedness the result of which would allow the holder thereof to accelerate the payment of such indebtedness prior to its stated maturity;

 

(c)     the Company or the Parent (i) shall generally fail to pay its debts as they become due, (ii) has commenced against it any bankruptcy or insolvency proceeding which is not dismissed within 60 days or commences any bankruptcy or insolvency proceeding, (iii) has any receiver, trustee, liquidator or other similar person appointed for itself or a substantial portion of its property or (iv) takes any action to effectuate or authorize any of the foregoing;

 

(d)     any Adverse Claim shall occur as to any of the Purchased Receivables or proceeds thereof, which results in Collections thereof being reduced by an amount in excess of 10% of the Funded Amount thereof;

 

(e)     (i) the Company or Parent, as applicable,  breaches any covenant set forth in Section 4 (other than as provided in Section 18.1(a)(i)), 5.2, 6.1, 9.1, 15.4 or 22(a) of this Agreement and such breach shall continue for fifteen (15) calendar days after a responsible officer of the Company has knowledge thereof, (ii) the Company breaches any covenant set forth in  Section 11(c), (g), (i), (k), (l), or (m) of this Agreement and such breach shall continue for thirty (30) calendar days after a responsible officer of the Company has knowledge thereof or (iii) the Company breaches any covenant set forth in Section 11(h) of this Agreement or any similar covenant which requires, or upon the request of the Bank would require, the Company to file or join in any lawsuit against, or take any other legal action against, any Approved Debtor and such breach shall continue for thirty (30) calendar days after a responsible officer of the Company has knowledge thereof;

 

(f)     the failure of the Company and the Bank to mutually agree to a more frequent Settlement Period within five (5) calendar days of the Company’s receipt of written request from the Bank;

 

(g)     the failure by the Parent to own 100% of the outstanding equity interests of the Company;

 

(h)     default in the due observance or performance by the Parent of the covenant set forth in Section 22(b) of this Agreement;

 

(i)     the final termination of any blocked account agreement relating to a Blocked Account without the Bank’s prior written consent; and

 

(j)     an Approved Debtor is in default due to a Financial Inability to Pay of an amount equal to or greater than $3,000,000 with respect to its payment of any prior Purchased Receivables.

 

Section 18.2.     Upon the occurrence of any Termination Event, the Bank may immediately terminate any agreement it had made at such time to purchase additional Receivables and any authority it had given the Company to purchase Replacement Receivables.  Notwithstanding any other provision hereof, this Agreement shall continue in full force and effect with respect to Purchased Receivables already purchased and all other rights, benefits and entitlements of the Bank expressed or implied to continue after such termination until the Final Collection Date.

 

Section 18.3.     Upon the termination of this Agreement, the Bank will have, in addition to its rights and remedies hereunder and under the other Transaction Documents, all other rights and remedies under applicable laws and otherwise, which rights and remedies will be cumulative.

 

Section 18.4.     Without limiting the rights of the Bank, on the Termination Date, and on each day thereafter, the Company, subject to the terms and conditions of this Agreement, will hold or deposit in trust in the Blocked Accounts, for the benefit of the Bank, the Collections of Purchased Receivables received by the Company on each such day and the Bank may withdraw all such amounts from the Blocked Account upon giving the notice required under the relevant Blocked Account Agreement.  After the Bank has delivered any notice of termination under Section 18.1, Company shall not exercise any right of set-off or compensation with respect to any sum owing to the Bank.

 

Section 18.5.          On the Termination Date, and at all times thereafter, all Purchased Receivables described in Section 4.5, inclusive of those Purchased Receivables which are identified as Purchased Receivables in the Portfolio Report delivered by the Company, and which the Bank has funded the Purchase Price thereof as of the Company’s close of business on the day immediately preceding the Termination Date, shall, subject to verification and approval by the Bank and this Section 18.5, be the Total Purchased Receivables (the “Total Purchased Receivables”) for all purposes of this Agreement.

 

On the Termination Date other than one designated by the Bank in accordance with clause (iii) of the definition of Termination Date (“Bank Termination”), unless a Termination Event occurs following such Bank Termination, in which case the terms of this paragraph shall apply, and upon the identification of the Total Purchased Receivables, the Company shall immediately pay to the Bank the sum of the Agreed Base Value of the Total Purchased Receivables (other than Defaulted Receivables), the Termination Interest and applicable Dilutions which have not otherwise been taken into account, in each case as determined by the Bank absent manifest error, and the Bank shall sell, set over, assign, transfer and convey to the Company, without recourse, all of its right, title and interest in, to and under such Total Purchased Receivable.  

 

In the event of a Bank Termination, beginning on the Termination Date, the Bank shall no longer purchase Purchased Receivables or Replacement Receivables except to the extent provided in Section 4.4(e)(ii)(x), the Company shall cease to purchase Replacement Receivables from Collections but shall continue to purchase Receivables pursuant to Section 4.4(e)(i), and the terms of this Agreement will continue in effect until the Purchased Receivables other than Defaulted Receivables then held by the Bank have been paid or become Defaulted Receivables, or a Termination Event occurs.

 

If the Company fails to pay such amount, the list of the Total Purchased Receivables (other than Defaulted Receivables) shall be amended to include such amount of additional Receivables from the Approved Debtors as is necessary to make the Funded Amount of the Total Purchased Receivables (other than Defaulted Receivables) equal to the aggregate Purchase Price thereof as at the Termination Date.

 

 

Section 19.1.     Assignments and Transfers.  (a) The Bank may at any time assign, transfer or participate (including by way of novation) any of its rights and obligations under the Transaction Documents to another bank or financial institution; provided that the Bank shall notify the Company in writing at least fifteen days prior to such assignment and obtain the Company’s written consent thereto (so long as no Termination Event has occurred and is continuing and has not otherwise been waived or cured), which consent shall not be unreasonably withheld or delayed, and, if the Company so elects, the Company shall have fifteen days from the date of such notice to repurchase any outstanding Purchased Receivables from the Bank at the Purchase Price as set forth in Section 21.1 with respect to any amounts outstanding from each Debtor in relation to each Purchased Receivable, plus any other amounts outstanding from the Company to the Bank under this Agreement, including breakage costs under Section 7.4.  The Bank agrees that it shall not (i) assign, transfer or participate any of its rights or obligations hereunder after the date hereof in any manner that allows any such assignee, transferee or participant to directly enforce any rights or remedies of the Bank hereunder against the Company or the Parent, or (ii) permit or agree to any amendments or modifications to any participation agreement entered into with any such participants which change any of the voting rights and percentages in Section 11 thereof.

 

(b)     The Company may not assign or otherwise transfer its rights, benefits or obligations or any of them under the Transaction Documents.

 

(c)     Subject to the foregoing, this Agreement shall be binding on and shall inure to the benefit of each party hereto and its successors and assigns.

 

Section 19.2.     Waivers, Remedies Cumulative.  No failure to exercise, nor any delay in exercising, on the part of the Bank, any right or remedy under the Transaction Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy.  The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

 

Section 19.3.     Accounting Treatment.  The Company agrees and acknowledges that it is a sophisticated party in relation to this Agreement and that it has taken independent legal and accounting advice in relation to the accounting treatment to be applied to this Agreement.  It is agreed that the Company has not relied on any representation of the Bank in this regard.

 

Section 19.4.     Third Party Rights.  Other than as approved in this Agreement, no person not a party to this Agreement shall be deemed a third party beneficiary hereof.

 

Section 19.5.     Counterparts.  Each Transaction Document may be executed in any number of counterparts, and by the different parties thereto on separate counterparts; each such counterpart shall be deemed an original and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  A facsimile or electronic copy of an executed counterpart of this Agreement shall be effective as an original for all purposes.

 

Section 19.6.     Entire Agreement.  This Agreement constitutes the entire Agreement between the parties hereto in relation to the Agreement and supersedes all previous proposals, agreements and other written and oral communications in relation thereto.

 

Section 19.7.     Exclusion of Liability.  In no event shall the Bank be liable for any loss of profits, business, data or information or for any remote, incidental, indirect, special or consequential damages.

 

Section 19.8.     Continuing Obligations.  The Company shall remain liable to perform all obligations assumed by it under each Contract, and the Bank shall be under no obligation of any kind whatsoever thereunder or be under any liability whatsoever in the event of any failure by the Company to perform its obligations thereunder.

 

 

(a)               The Bank hereby notifies the Company that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify, and record information that identifies the Company, which information includes the name and address of the Company and other information that will allow the Bank to identify the Company in accordance with the Act.

 

(b)               Neither the Company, nor the Parent, nor, to the best of their knowledge, any Persons holding any legal or beneficial interest whatsoever in the Company or the Parent (whether directly or indirectly) (i) are named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC or any list of Persons issued by OFAC pursuant to Executive Order 13224 – Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, as in effect on the date hereof, or any similar list issued by OFAC (collectively, the “OFAC Lists”); (ii) are Persons determined by the Secretary of the Treasury of the United States to be owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship, or services of any kind to, or otherwise associated with any of the Persons referred to or described in the OFAC Lists; or (iii) have conducted business with or engaged in any transaction with any Person identified in (i) or (ii) above.

 

(c)               (i) Neither the Company nor the Parent will knowingly conduct business with or engage in any transaction with any Person named on any of the OFAC Lists or any Persons determined by the Secretary of the Treasury of the United States pursuant to Executive Order 13224 to be owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship, or services of any kind to, or otherwise associated with any of the Persons referred to or described in the OFAC Lists; (ii) if the Company or the Parent obtains actual knowledge or receives any written notice that it or any Person holding any legal or beneficial interest whatsoever therein (whether directly or indirectly), is named on any of the OFAC Lists (such occurrence, an “OFAC Violation”), the Company or the Parent will immediately (A) give written notice to the Bank  of such OFAC Violation, and (B) comply with all applicable laws with respect to such OFAC Violation (regardless of whether the party included on any of the OFAC Lists is located within the jurisdiction of the United States of America), including, without limitation, the Economic and Trade Sanctions and Anti-Terrorism Laws. The Company and the Parent hereby authorize and consent to the Bank taking any and all steps they deem necessary, in its sole discretion, to comply with all applicable laws with respect to any such OFAC Violation, including, without limitation, the requirements of the Economic and Trade Sanctions and Anti-Terrorism Laws (including the “freezing” and/or “blocking” of assets); and (iii) the Company and the Parent will comply at all times with the requirements of all Economic and Trade Sanctions and Anti-Terrorism Laws, and will, upon the Bank’s request from time to time during the term of this Agreement, deliver a certification confirming its compliance with the covenants set forth in this Section 19.9.

 

 

Section 20.1.     This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the principles of conflicts of law thereof (other than Section 5-1401 of the New York General Obligations Law).

 

Section 20.2.     Any litigation based hereon, or arising out of, under or in connection with this Agreement, may be brought and maintained in the courts of the State of New York sitting in New York County, New York or in the United States district court for the Southern District of New York; provided that any suit seeking enforcement against any receivables or other property may be brought, at the Bank’s option, in the courts of any jurisdiction where such receivables or other property may be found.  The Company and the Parent hereby expressly and irrevocably submit to the jurisdiction of the courts of the State of New York sitting in New York County, New York and of the United States district court for the Southern District of New York for the purpose of any such litigation.  The Company and the Parent further irrevocably consent to the service of process by registered mail, postage prepaid, to the address specified in Section 14.1 of this Agreement (or such other address as they shall have specified in writing to the Bank as their address for notices hereunder) or by personal service within or without the State of New York.  The Company, the Parent and the Bank expressly and irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any such litigation brought in any such court and any claim that any such litigation has been brought in an inconvenient forum.

 

Section 20.3.     The Company, the Parent and the Bank hereby waive any right to a trial by jury in any action or proceeding to enforce or defend any rights under this Agreement or any application, instrument, document, amendment or agreement delivered or which may in the future be delivered in connection herewith or arising from any banking relationship existing in connection with this Agreement, and agree that any such action or proceeding shall be tried before a court and not before a jury.

 

 

Section 21.1.     In the event that (i) the Bank gives notice to the Company of its intention to replace the Company as servicer and agent, (ii) the Bank informs the Company that it will not purchase any other Receivables due to a Termination Event, (iii) a Purchased Receivable is past due, or (iv) any bankruptcy or insolvency (however evidenced) of the Company or the Parent shall occur, the Company may, at its option, repurchase all of the outstanding Purchased Receivables from the Bank for an amount equal to the Agreed Base Value of such Purchased Receivables (or so much of it as was paid by the Bank to the Company and remains unpaid), less an amount equal to the product of such Agreed Base Value and Discount, where the numerator included in the calculation of  Discount is the number of days from the repurchase date to the next following Settlement Date, and if such Purchased Receivable is being repurchased by the Company after the Maturity Date of such Purchased Receivable, together with interest thereon at the interest rate specified in Section 7.6 from the due date to the date of the Company’s payment in full thereof, and any other amounts then payable by the Company hereunder, including, breakage costs under Section 7.4, whereupon such amount shall become due and payable from the Company to the Bank on the date specified in such notice and shall be paid into such account specified by the Bank.

 

Section 21.2.     In addition to the foregoing, the Company shall have the right at any time before or after a Termination Event, at its option, to repurchase all or a portion of the outstanding Purchased Receivables from the Bank for an amount equal to the Agreed Base Value of such Purchased Receivables (or so much of it as was paid by the Bank to the Company and remains unpaid), less an amount equal to the product of such Agreed Base Value and Discount, where the numerator included in the calculation of  Discount is the number of days from the repurchase date to the next following Settlement Date, and if such Purchased Receivable is being repurchased by the Company after the Maturity Date of such Purchased Receivable, together with interest thereon at the interest rate specified in Section 7.6 from the relevant Maturity Date to the date of the Company’s payment in full thereof, and any other amounts then payable by the Company hereunder, including, breakage costs under Section 7.4, whereupon such amount shall become due and payable from the Company to the Bank on the date specified in such notice and shall be paid into such account specified by the Bank.

 

 

(a)     Parent is the owner of the Company.  Parent hereby unconditionally and irrevocably guarantees to the Bank the due and punctual payment, performance and observance by the Company of all of the terms, covenants, conditions, agreements, representations, warranties, indemnities and undertakings on the part of the Company to be performed or observed under this Agreement, including, without limitation, the punctual payment when due of all obligations of the Company now or hereafter existing under this Agreement, whether for indemnification payments, fees, expenses, repurchase obligations or otherwise (all of the foregoing being collectively referred to as the “Obligations”).  In the event that the Company shall fail in any manner whatsoever to perform or observe any of the Obligations when the same shall be required to be performed or observed under this Agreement (subject to any applicable cure periods), then upon the written demand of the Bank, Parent shall perform, cause to be performed or make payment to allow such Obligations to be performed.

 

Parent further agrees that nothing contained herein shall prevent the Bank from foreclosing on its security interest in or lien on any asset, if any, or from exercising any other rights available to it under this Agreement or any other instrument of security, if any, and the exercise of any of the aforesaid rights and the completion of any foreclosure proceedings shall not constitute a discharge of any of Parent’s obligations hereunder; it being the purpose and intent of Parent that its obligations hereunder shall be absolute, independent and unconditional under any and all circumstances.  Neither Parent’s obligations hereunder nor any remedy for the enforcement thereof shall be impaired, modified, changed, released or limited in any manner whatsoever by an impairment, modification, change, release or limitation of the liability of the Company or by reason of the bankruptcy or insolvency of the Company.  Parent waives any and all notices of the creation, renewal, extension or accrual of or increase in any of the Obligations and notice of or proof of reliance by Bank upon this Section 22(a) or acceptance of this Section 22(a).  This Agreement shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Section 22(a).  All dealings between the Company and Parent, on the one hand, and the Bank, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Section 22(a).

 

Parent hereby waives any and all presentments, demands, notices, and protests against Parent, and any requirement that the Bank commence or exhaust any remedies against the Company or any collateral securing the Obligations.  Parent’s liability hereunder shall be unconditional irrespective of (i) any lack of enforceability of the Obligations, (ii) any law, regulation rights with respect thereto, and (iii) any other circumstance which might otherwise constitute a defense available to, or discharge of, the Company or Parent.  This guarantee is a guarantee of payment and performance and not of collection and shall remain in full force and effect until payment in full of the Obligations.  The Obligations of Parent under this Section 22(a) does rank and will rank pari passu in priority of payment with all other unsecured and unsubordinated obligations for borrowed money of Parent.  

 

All payments under this Section 22(a) by Parent shall be made by Parent on the date when due and shall be made in lawful currency of the United States of America and in immediately available and freely transferable funds at the payment office of the Bank in the United States of America as from time to time specified in writing by the Bank.

 

(b)     From and after the date hereof and so long as this Agreement is in effect, except to the extent compliance in any case or cases is waived in writing by the Bank, the Parent agrees that it will, for the benefit of the Bank, comply with, abide by, and be restricted by all the agreements, covenants, obligations and undertakings of the Parent contained in the provisions of Section 6.10 of the Credit Agreement, inclusive, regardless of whether any indebtedness is now or hereafter remains outstanding thereunder, or the Credit Agreement shall have terminated, all of which provisions, together with the related definitions, exhibits and ancillary provisions, are incorporated herein by reference, mutatis mutandis, and made a part hereof to the same extent and with the same force and effect as if the same had been herein set forth in their entirety, and will be deemed to continue in effect for the benefit of the Bank irrespective of whether the Credit Agreement remains in effect, and without regard or giving effect to any amendment or modification of such provisions or any waiver of compliance therewith, no such amendment, modification or waiver to in any manner constitute an amendment, modification or waiver of the provisions thereof as incorporated herein unless consented to in writing by the Bank; provided, that said provisions for purposes of the incorporation described herein shall be amended in the following respects:

 

(i)     the term “Borrower” appearing in said provisions shall mean and refer to the Parent;

 

(ii)     the term “Lenders” or “Administrative Agent” appearing in said provisions shall mean and refer to Bank as defined in this Agreement;

 

(iii)     the term “Agreement” appearing in said provisions shall mean and refer to this Agreement; and

 

(iv)     the term “herein” or “hereof” appearing in said provisions shall mean and refer to this Agreement.

 

Other than as hereinabove amended, any terms contained in the provisions of the Credit Agreement incorporated herein which are defined in the Credit Agreement shall have the same meaning herein as in the Credit Agreement.

 

 

 

Each party hereto agrees to hold the Transaction Documents and all non-public information received by it in connection therewith from any other party hereto or its agents or representatives in confidence and agrees not to provide any Person with copies of any Transaction Document or such non-public information other than to (i) any officers, directors, members, managers, employees or outside accountants, auditors or attorneys thereof, (ii) any prospective or actual assignee or participant which (in each case) has signed a confidentiality agreement containing provisions substantively identical to this Section 24 or has agreed to be subject to the terms of this Section 24, and (iii) Governmental Authorities with appropriate jurisdiction (including filings required under securities laws).  Notwithstanding the above stated obligations, provided that the other parties hereto are given notice of the intended disclosure or use, the parties hereto will not be liable for disclosure or use of such information which such Person can establish by tangible evidence: (i) was required by law, including pursuant to a valid subpoena or other legal process, (ii) was in such Person’s possession or known to such Person prior to receipt or (iii) is or becomes known to the public through disclosure in a printed publication (without breach of any of such Person’s obligations hereunder).

 

 

In Witness Whereof, the parties have executed this Agreement by their undersigned, duly authorized officers on the date first above written: