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International Paper - Receivables Sale And Contribution Agreement
Exhibit 10.5
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT
DATED AS OF MARCH 13, 2008 BETWEEN
INTERNATIONAL PAPER COMPANY,
AS ORIGINATOR
AND
RED BIRD RECEIVABLES, LLC, AS BUYER
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE 1 Section 1.1 [Intentionally Deleted] 1 Section 1.2 Purchase of Receivables. 1 Section 1.3 Payment for the Purchase 3 Section 1.4 Purchase Price Credit Adjustments 4 Section 1.5 Payments and Computations, Etc. 5 Section 1.6 Transfer of Records 5 Section 1.7 Characterization 5 ARTICLE II REPRESENTATIONS AND WARRANTIES 6 Section 2.1 Representations and Warranties of IPCO 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 10 Section 4.1 Affirmative Covenants of IPCO 10 Section 4.2 Negative Covenants of IPCO. 14 ARTICLE V TERMINATION EVENTS 15 Section 5.1 Termination Events 15 Section 5.2 Remedies 16 ARTICLE VI INDEMNIFICATION 17 Section 6.1 Indemnities by IPCO 17 Section 6.2 Other Costs and Expenses 19
i ARTICLE VII MISCELLANEOUS 20 Section 7.1 Waivers and Amendments. 20 Section 7.2 Notices 20 Section 7.3 Protection of Ownership Interests of Buyer. 20 Section 7.4 Confidentiality 21 Section 7.5 Bankruptcy Petition. 22 Section 7.6 Limitation of Liability 23 Section 7.7 CHOICE OF LAW 23 Section 7.8 CONSENT TO JURISDICTION 23 Section 7.9 WAIVER OF JURY TRIAL 23 Section 7.10 Integration; Binding Effect; Survival of Terms. 24 Section 7.11 Counterparts; Severability; Section References 24 Section 7.12 Payment Recission 25
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EXHIBITS AND SCHEDULES Exhibit I - Definitions Exhibit II - Principal Place of Business; Location(s) of Records; Federal Employer Identification Number; Other Names Exhibit III - Lock Boxes; Collection Accounts; Collection Banks Exhibit IV - Form of Compliance Certificate Exhibit V - Copy of Credit and Collection Policy Exhibit VI - Form of Subordinated Note Exhibit VII Form of Purchase Report Schedule A List of Documents to Be Delivered to Buyer Prior to the Purchase Schedule B Receivables Created by Domestic Sales of Certain Businesses
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RECEIVABLES SALE AND CONTRIBUTION AGREEMENT THIS RECEIVABLES SALE AND CONTRIBUTION AGREEMENT, dated as of March 13, 2008, is by and between INTERNATIONAL PAPER COMPANY, a New York corporation (" IPCO" ), and RED BIRD RECEIVABLES, LLC, a Delaware limited liability company formerly known as Red Bird Receivables, Inc. (" Buyer" ). Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I hereto (or, if not defined in Exhibit I hereto, the meaning assigned to such term in Exhibit I to the Credit and Security Agreement).
PRELIMINARY STATEMENTS
IPCO now owns, and from time to time hereafter will own, Receivables. IPCO wishes to sell and assign to Buyer, and Buyer wishes to purchase from IPCO, all of IPCO' s right, title and interest in and to such Receivables, together with the Related Security and Collections with respect thereto.
IPCO and Buyer intend the transactions contemplated hereby to be true sales of the Receivables from IPCO to Buyer, providing Buyer with the full benefits of ownership of the Receivables, and IPCO and Buyer do not intend these transactions to be, or for any purpose to be characterized as, loans from Buyer to IPCO.
Buyer may finance its purchases hereunder by borrowing and pledging its assets pursuant to that certain Second Amended and Restated Credit and Security Agreement dated as of March 13, 2008 (as the same may from time to time hereafter be amended, supplemented, restated or otherwise modified, the " Credit and Security Agreement" ) among the Buyer, as Borrower, IPCO, as Servicer, various lenders (" Lenders" ) and co-agents (" Co-Agents" ) from time to time party thereto, and Citicorp North America, Inc., as administrative agent or any successor administrative agent appointed pursuant to the terms of the Credit and Security Agreement (in such capacity, the " Administrative Agent," and together with the Co-Agents, the " Agents" ).
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 [Intentionally Deleted] .
Section 1.2 Purchase of Receivables . (a) Effective on the date hereof, in consideration for the Purchase Price and upon the terms and subject to the conditions set forth herein, IPCO does hereby sell, assign,
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transfer, set-over and otherwise convey to Buyer, without recourse (except to the extent expressly provided herein), and Buyer does hereby purchase from IPCO, all of IPCO' s right, title and interest in and to all Receivables existing as of the close of business on the date hereof and all Receivables thereafter arising 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 IPCO' s right, title and interest in and to all Receivables existing as of the date hereof 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 in accordance with Section 1.3 .
(b) On the 12 th day of each month hereafter (or if any such day is not a Business Day, on the next succeeding Business Day thereafter, IPCO shall 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 IPCO 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 IPCO deliver, and IPCO shall deliver, such approvals, opinions, information or documents as Buyer may reasonably request.
(c) It is the intention of the parties hereto that the Purchase of Receivables made hereunder shall constitute a sale, which sale is absolute and irrevocable and provides Buyer with the full benefits of ownership of the Receivables. Except for the Purchase Price Credits owed pursuant to Section 1.4 , the sale of Receivables hereunder is made without recourse to IPCO; provided, however, that (i) IPCO shall be liable to Buyer for all representations, warranties, covenants and indemnities made by IPCO pursuant to the terms of the Transaction Documents to which IPCO is a party, and (ii) such sale does not constitute and is not intended to result in an assumption by Buyer or any assignee thereof of any obligation of IPCO or any other Person arising in connection with the Receivables, the related Contracts and/or other Related Security or any other obligations of IPCO. In view of the intention of the parties hereto that the Purchase of Receivables made hereunder shall constitute a sale of such Receivables rather than loans secured thereby, IPCO agrees that it will, on or prior to the date hereof and in accordance with Section 4.1(e)(ii) , mark its master data processing records relating to the Receivables with a legend acceptable to Buyer and to the Administrative 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 Administrative Agent (as Buyer' s assignee), IPCO will execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate to perfect and maintain the perfection of Buyer' s ownership interest in the Receivables and the Related Security and Collections with respect thereto, or as Buyer or the Administrative Agent (as Buyer' s assignee) may reasonably request.
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Section 1.3 Payment for the Purchase . (a) The Purchase Price for the Purchase of Receivables in existence as of the close of business on the date hereof shall be payable in full by Buyer to IPCO on the date hereof, and shall be paid to IPCO in the following manner:
(i) by delivery of immediately available funds, to the extent of funds made available to Buyer from its borrowings under the Credit and Security Agreement, and
(ii) the balance, by delivery of the proceeds of a subordinated revolving loan from IPCO to Buyer (a " Subordinated Loan" ) in an amount not to exceed the least of (A) the remaining unpaid portion of such Purchase Price, (B) the maximum Subordinated Loan that could be borrowed without rendering Buyer' s Net Worth less than the Required Capital Amount, and (C) fifteen percent (15%) of such Purchase Price. IPCO is hereby authorized by Buyer to endorse on the schedule attached to the Subordinated Note an appropriate notation evidencing the date and amount of each advance thereunder, as well as the date of each payment with respect thereto, provided that the failure to make such notation shall not affect any obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after the date hereof shall be due and owing in full by Buyer to IPCO 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 IPCO to Buyer hereunder and which have become due but remain unpaid) and shall be paid to IPCO in the manner provided in the following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into existence after the date hereof, on each Settlement Date, Buyer shall pay the Purchase Price therefor in accordance with Section 1.3(d) and in the following manner:
first , by delivery of immediately available funds, to the extent of funds available to Buyer from its borrowing, and pledge, of an interest in the Receivables to, the Administrative Agent for the benefit of the Lenders under the Credit and Security Agreement or other cash on hand; second , by delivery of the proceeds of a Subordinated Loan, provided that the making of any such Subordinated Loan shall be subject to the provisions set forth in Section 1.3(a)(ii) ; and
third , unless IPCO or Buyer has declared the Termination Date to have occurred pursuant to 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) , IPCO irrevocably agrees to advance each Subordinated Loan requested by Buyer on or prior to the Termination Date. The Subordinated Loans shall be evidenced by, and shall be payable in accordance with the terms and provisions of
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the Subordinated 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, IPCO shall not be obligated to (but may, at its option): (i) sell Receivables to Buyer, or (ii) contribute Receivables to Buyer' s capital pursuant to clause third of Section 1.3(b) unless IPCO reasonably determines that the Purchase Price therefor will be satisfied with funds available to Buyer from sales of interests in the Receivables pursuant to the Credit and Security Agreement, Collections, proceeds of Subordinated Loans, other cash on hand or otherwise. (d) Although the Purchase Price for each Receivable coming into existence after the date hereof shall be due and payable in full by Buyer to IPCO on the date such Receivable came into existence, settlement of the Purchase Price between Buyer and IPCO shall be effected on a monthly basis on Settlement Dates with respect to all Receivables coming into existence during the same Calculation Period and based on the information contained in the Purchase Report delivered by IPCO 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 Subordinated Note made pursuant to Section 1.3 and any contribution of capital by IPCO 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 is:
(i) reduced as a result of any defective or rejected or returned goods or services, any discount or any adjustment or otherwise by IPCO (other than as a result of such Receivable becoming a Defaulted Receivable or to reflect cash Collections on account of such Receivable),
(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(i), (j), (l), (q)(ii), (r), (s) or (t) hereof are not true when made or deemed made with respect to any Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a " Purchase Price Credit" ) against the Purchase Price otherwise payable hereunder equal to the Outstanding Balance of such Receivable (calculated before giving effect to the applicable reduction or cancellation). If such Purchase Price Credit exceeds the Original Balance of the Receivables coming into existence on any day, then IPCO shall pay the remaining amount of such Purchase Price Credit in cash immediately, provided that if the Termination Date has not occurred, IPCO shall be allowed to deduct the remaining amount of such Purchase Price Credit from any indebtedness owed to it under the Subordinated Note.
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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 IPCO designated from time to time by IPCO or as otherwise directed by IPCO. 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 Transfer of Records .
(a) In connection with the Purchase of Receivables hereunder, IPCO hereby sells, transfers, assigns and otherwise conveys to Buyer all of IPCO' s right and title to and interest in the Records relating to all Receivables sold or contributed hereunder, without the need for any further documentation in connection with the Purchase. In connection with such transfer, IPCO hereby grants to each of Buyer, the Administrative Agent and each Person who succeeds IPCO as Servicer an irrevocable, non-exclusive license to use, without royalty or payment of any kind, all software used by IPCO to account for the Receivables, to the extent necessary to administer the Receivables, whether such software is owned by IPCO or is owned by others and used by IPCO 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, IPCO hereby agrees that upon the request of Buyer (or Buyer' s assignee), IPCO will use its reasonable efforts to obtain the consent of such third-party licensor. The license granted hereby shall be irrevocable until the indefeasible payment in full of the Obligations, and shall terminate on the date this Agreement terminates in accordance with its terms. (b) IPCO (i) shall take such action requested by Buyer and/or the Administrative 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 interest in the Records relating to the Receivables purchased from IPCO hereunder, and (ii) shall use its reasonable efforts to ensure that Buyer, the Administrative Agent and the Servicer (if other than IPCO) each has an enforceable right (whether by license or sublicense or otherwise) to use all of the computer software used to account for the Receivables and/or to recreate such Records.
Section 1.7 Characterization . If, notwithstanding the intention of the parties expressed in Section 1.2(c) , any sale or contribution by IPCO to Buyer of Receivables hereunder shall be characterized as a secured loan and not a sale or such sale shall for any reason be ineffective or unenforceable, then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law. For this purpose and without being in derogation of the parties' intention that the sale of Receivables hereunder shall constitute a true sale thereof, IPCO hereby grants to Buyer a duly perfected security interest in all of IPCO' s right, title and interest in, to and under all Receivables now existing and hereafter arising, all Collections and Related
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Security with respect thereto, each Lock Box and Collection Account, all other rights and payments relating to the Receivables and all proceeds of the foregoing to secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the Purchase Price of the Receivables together with all other obligations of IPCO hereunder (collectively, the " IPCO Collateral" ), 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 IPCO . IPCO hereby represents and warrants to Buyer on the date hereof, on the date of the Purchase and on each date that any Receivable comes into existence that: (a) Existence and Power . IPCO is a corporation duly organized under the laws of New York, and no other state or jurisdiction. IPCO is validly existing and in good standing under the laws of New York and is duly qualified to do business and is in good standing as a foreign entity, and has and holds all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except where 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 IPCO of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, IPCO' s use of the proceeds of the Purchase made hereunder, are within its corporate powers and authority and have been duly authorized by all necessary corporate action on its part. This Agreement and each other Transaction Document to which IPCO is a party has been duly executed and delivered by IPCO. (c) No Conflict . The execution and delivery by IPCO of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder (i) do not contravene or violate (A) its Organizational Documents, (B) any law, rule or regulation applicable to it, (C) 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 (D) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and (ii) do not result in the creation or imposition of any Adverse Claim on assets of IPCO or its Material Subsidiaries (except as created hereunder) except, in the case of clauses (i)(B), (i)(C) and (i)(D) above 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
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or filing with, any governmental authority or regulatory body is required for the due execution and delivery by IPCO of this Agreement or any other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits . Except as set forth in IPCO' s filings with the Securities and Exchange Commission, there are no actions, suits or proceedings pending, or to the best of IPCO' s knowledge, threatened, against or affecting IPCO, 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. IPCO is not in default with respect to any order of any court, arbitrator or governmental body that could reasonably be expected to have a Material Adverse Effect.
(f) Binding Effect . This Agreement and each other Transaction Document to which IPCO is a party constitute the legal, valid and binding obligations of IPCO enforceable against IPCO in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (g) Accuracy of Information .
(i) Pre-Closing Information . All information regarding the Receivables and Related Security or IPCO furnished by IPCO or any of its Affiliates to the Buyer (or its assigns) prior to the date of this Agreement was true and accurate in every material respect on the date such information was so furnished except as otherwise disclosed to the Buyer (or its assigns) prior to the date hereof and, when taken as a whole together with such subsequent disclosures, did not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
(ii) Ongoing Information . All other information regarding the Receivables and Related Security not covered by clause (i) above which is hereafter furnished by IPCO to the Buyer (or its assigns) will be true and accurate in every material respect on the date such information is so furnished and, when taken as a whole, will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading as of the date when so furnished.
(iii) Other Information . All other information regarding IPCO, its business, operations, financial condition or prospects furnished by IPCO to the Buyer (or its assigns) in connection with the Transaction Documents after the date of this Agreement that is not covered by clauses (i) or (ii) above, will be true and accurate in every material respect on the date such information is so furnished and, when taken as a whole together with any subsequent updates to such information, will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading as of the date when furnished or updated.
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(h) Use of Proceeds . No portion of any Purchase Price payment hereunder will be used to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended; provided, however, that Originator may use Purchase Price payments hereunder to repurchase shares of its capital stock in accordance with applicable laws and regulations.
(i) Good Title . Immediately prior to the Purchase hereunder and upon the creation of each Receivable coming into existence after the date hereof, IPCO (i) is the legal and beneficial owner of the Receivables and (ii) is the legal and beneficial owner of the Related Security with respect thereto or possesses a valid and perfected security interest therein, in each case, free and clear of any Adverse Claim, except as created by the Transaction Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect IPCO' s ownership interest in each Receivable, its Collections and the Related Security. (j) Perfection . This Agreement, together with the filing of the financing statements contemplated hereby, is effective to transfer to Buyer (and Buyer shall acquire from IPCO) (i) legal and equitable title to, with the right to sell and encumber each Receivable existing and hereafter arising, together with the Collections with respect thereto, and (ii) all of IPCO' s right, title and interest in the Related Security associated with each Receivable, in each case, free and clear of any Adverse Claim, except as created by the Transactions Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer' s ownership interest in the Receivables, the Related Security and the Collections. (k) Places of Business and Locations of Records . The principal places of business and chief executive office of IPCO 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. IPCO' s Federal Employer Identification Number is 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 at each Collection Bank and the post office box number of each Lock Box, are listed on Exhibit III . IPCO has not granted any Person, other than Buyer (and its assigns) dominion and control of any Lock Box or Collection Account, or the right to take dominion and control of any such Lock Box or Collection Account at a future time or upon the occurrence of a future event. (m) Material Adverse Effect . Since December 31, 2006, and, for any date this representation and warranty is made or deemed made after delivery of annual audited financing statements pursuant to 4.1(a) hereof, the date of the most recently delivered annual audited financial statements delivered thereunder, no event has occurred that would have a Material Adverse Effect.
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(n) Names . The name in which IPCO has executed this Agreement is identical to the name of IPCO as indicated on the public record of its state of organization which shows IPCO to have been organized. In the past five (5) years, IPCO has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement and as listed on Exhibit II .
(o) Ownership of Buyer . IPCO owns, directly or indirectly, 100% of the issued and outstanding equity interests of Buyer, free and clear of any Adverse Claim. 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 an Investment Company . IPCO 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 . (i) IPCO has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it is subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect, and (ii) each Receivable, together with any 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), except where such contravention or violation could not reasonably be expected to have a Material Adverse Effect. (r) Compliance with Credit and Collection Policy . IPCO has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any change to such Credit and Collection Policy, except such material change as to which Buyer (or its assigns) has been notified in accordance with Section 4.1(a)(vii) .
(s) Payments to IPCO . With respect to each Receivable transferred to Buyer hereunder, the Purchase Price received by IPCO constitutes reasonably equivalent value in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by IPCO of any Receivable hereunder is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. a7a7 101 et seq . ), as amended.
(t) 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.
(u) Accounting . The manner in which IPCO accounts for the transactions contemplated by this Agreement does not jeopardize the characterization of the transactions contemplated herein as being true sales.
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ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase . The Purchase under this Agreement is subject to the conditions precedent that (a) Buyer shall have converted from a Delaware corporation to a Delaware limited liability company, (b) 100% of Buyer' s equity interests shall be owned directly by IPCO, (c) Buyer shall have received on or before the date of such purchase those documents listed on Schedule A and (d) all of the conditions to Amendment No. 4 to 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 date hereof 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 IPCO that such statements are then true):
(i) the representations and warranties set forth in Article II are true and correct on and as of the date such Receivable came into existence as though made on and as of such date; and (ii) no event has occurred and is continuing that will constitute a Termination Event or 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 Subordinated Note, by offset of amounts owed to Buyer and/or by offset of capital contributions), title to such Receivable and the Related Security and Collections with respect thereto shall vest in Buyer, whether or not the conditions precedent to Buyer' s obligation to pay for such Receivable were in fact satisfied. The failure of IPCO to satisfy any of the foregoing conditions precedent, however, shall give rise to a right of Buyer to rescind the related purchase and direct IPCO 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 IPCO . Until the date on which this Agreement terminates in accordance with its terms, IPCO hereby covenants as set forth below: (a) Financial Reporting . IPCO will maintain, for itself and each of its domestic Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish to Buyer (or its assigns):
(i) Annual Reporting . Within 100 days after the close of each of its respective fiscal years, unaudited, unqualified financial statements (which shall include balance sheets, statements of income and retained earnings and a statement of cash flows) for IPCO for such fiscal year certified by a senior financial officer.
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(ii) Quarterly Reporting . Within 55 days after the close of the first three (3) quarterly periods of each of its respective fiscal years, balance sheets of IPCO as at the close of each such period and statements of income and retained earnings and a statement of cash flows for IPCO for the period from the beginning of such fiscal year to the end of such quarter, all certified by a senior financial officer.
(iii) Compliance Certificate . Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit IV signed by IPCO' s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.
(iv) S.E.C. Filings . Promptly upon the filing thereof, copies of all registration statements and reports on form 10-K, 10-Q, 8-K or successor forms, which IPCO or any of its Subsidiaries files with the Securities and Exchange Commission.
(v) Copies of Notices . Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other material communication under or in connection with any Transaction Document from any Person other than Buyer or the Administrative Agent, copies of the same.
(vi) 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 Administrative Agent' s, as Buyer' s assignee) consent thereto.
(vii) Other Information . Promptly, from time to time, (A) such other information, documents, records or data relating to the Receivables or (B) such other information, documents, records or data relating to the condition or operations, financial or otherwise, of IPCO each 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 . IPCO will notify Buyer (or its assigns) in writing of any of the following as soon as possible upon learning of the occurrence thereof with respect to IPCO, 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 IPCO.
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(ii) Judgment and Proceedings . (1) The entry of any judgment or decree against IPCO or any of its Subsidiaries if the aggregate amount of all judgments and decrees then outstanding against IPCO and its Subsidiaries exceeds $200,000,000 after deducting (a) the amount with respect to which IPCO or any such Subsidiary is insured and with respect to which the insurer has not denied coverage, and (b) the amount for which IPCO or any such 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 IPCO 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 Other Agreements . The occurrence of a default or an event of default under any other financing arrangement pursuant to which IPCO is a de...
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