as Originator,
as Buyer
ARTICLE 1 AMOUNTS AND TERMS OF THE PURCHASE | 1 | |||
Section 1.1 Initial Contribution of Receivables | 1 | |||
Section 1.2 Purchase of Receivables | 1 | |||
Section 1.3 Payment for the Purchases | 2 | |||
Section 1.4 Purchase Price Credit Adjustments | 3 | |||
Section 1.5 Payments and Computations, Etc | 4 | |||
Section 1.6 License of Software | 4 | |||
Section 1.7 Characterization | 5 | |||
ARTICLE 2 REPRESENTATIONS AND WARRANTIES | 5 | |||
Section 2.1 Representations and Warranties of Originator | 5 | |||
Section 2.2 Representations and Warranties of Originator Concerning the Receivables | 8 | |||
ARTICLE 3 CONDITIONS OF PURCHASE | 9 | |||
Section 3.1 Conditions Precedent to Purchase | 9 | |||
Section 3.2 Conditions Precedent to Subsequent Payments | 10 | |||
ARTICLE 4 COVENANTS | 10 | |||
Section 4.1 Covenants of Originator | 10 | |||
Section 4.2 Negative Covenants of Originator | 14 | |||
ARTICLE 5 TERMINATION EVENTS | 16 | |||
Section 5.1 Termination Events | 16 | |||
Section 5.2 Remedies | 17 | |||
ARTICLE 6 INDEMNIFICATION | 17 | |||
Section 6.1 Indemnities by Originator | 17 | |||
Section 6.2 Other Costs and Expenses | 19 | |||
ARTICLE 7 MISCELLANEOUS | 19 | |||
Section 7.1 Waivers and Amendments | 19 | |||
Section 7.2 Notices | 19 | |||
Section 7.3 Protection of Ownership Interests of Buyer | 19 | |||
Section 7.4 Confidentiality | 20 | |||
Section 7.5 Bankruptcy Petition | 21 | |||
Section 7.6 Limitation of Liability | 21 | |||
Section 7.7 CHOICE OF LAW | 21 | |||
Section 7.8 CONSENT TO JURISDICTION | 21 | |||
Section 7.9 WAIVER OF JURY TRIAL | 21 | |||
Section 7.10 Integration; Binding Effect; Survival of Terms | 22 | |||
Section 7.11 Counterparts; Severability; Section References | 22 |
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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 | ||||||
Exhibit VIII | — | Pending or Threatened Actions, Suits, Investigations or Proceedings | ||||||
Schedule A | List of Documents to be Delivered to Buyer Prior to the Purchases |
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AMERISOURCEBERGEN DRUG CORPORATION | ||||
By: | /s/ J.F. Quinn | |||
Name: | J.F. Quinn | |||
Title: | Vice President & Corporate Treasurer | |||
Address: | AmerisourceBergen Drug Corporation 1300 Morris Drive Chesterbrook, PA 19087 Attention: Jack Quinn Telephone: (610) 727-7116 Facsimile: (610) 727-3639 | |||
AMERISOURCE RECEIVABLES FINANCIAL CORPORATION | ||||
By: | /s/ J.F. Quinn | |||
Name: | J.F. Quinn | |||
Title: | Vice President & Corporate Treasurer | |||
Address: | Amerisource Receivables Financial Corporation P. O. Box 1735 Southeastern, PA 19399 Attention: Jack Quinn Telephone: (610) 727-7453 Facsimile: (610) 727-3639 |
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Federal Employer Identification Number(s); Other Names
Exhibit II to Receivables Sale Agreement
Locations of Records, Federal Employer Identification Numbers, Other Names
Name of Originator:
AmerisourceBergen Drug Corporation
Subsidiaries and Divisions:
Subsidiaries of Originator:
AmeriSource Health Services Corporation
AmeriSource Heritage Corporation
AmeriSource Sales Corporation
AmeriSource Receivables Financial Corporation
Anderson Packaging, Inc.
ASD Specialty Healthcare, Inc.
Blue Hill, Inc.
Bridge Medical, Inc.
Committed Provider Services, LLC
General Drug Company
Health Services Capital Corporation
Home Medical Equipment Health Company
Inteplex, Inc.
Interfill, LLC
J.M. Blanco, Inc.
M.D.P. Properties, Inc.
Pharmacy Healthcare Solutions, Ltd.
Southwestern Drug Corporation
Telepharmacy Solutions, Inc.
Value Apothecaries, Inc.
Divisions of Originator:
The Diabetes Shoppe
Family Pharmacy
Good Neighbor Pharmacy
MedAssess
Rita Ann
Pharmabuy
Location of Books and Records:
Name of Location | Address/Location of Records | |||
Chesterbrook | 1300 Morris Drive, Suite 100, Chesterbrook, PA 19087 | |||
Orange | 4000 Metropolitan Drive, Orange, CA 92868 | |||
Atlanta | 1085 Satellite Blvd., Suwanee, GA 30024 | |||
Birmingham | 172 Cahaba Valley Pkwy., Pelham, AL 35124 | |||
Boston | 101 Norfolk Street, Mansfield, MA 02048 | |||
Chicago | 980 Lombard Road, Lombard, IL 60148 | |||
Columbus | 1200 E. 5th Avenue, Columbus, OH 43219 | |||
Corona | 1851 California Avenue, Corona, CA 92881 | |||
Dallas | 1229 Avenue R, Grand Prairie, TX 75050 | |||
Dallas | 1841 Monetary Lane, Carrollton, TX 75006 | |||
Denver | 501 W. 44th Avenue, Denver, CO 80216 | |||
Honolulu | 238 Sand Island Access Rd. #M1, Honolulu, HI 96819 | |||
Houston | 12727 W. Airport Blvd., Sugar Land, TX 77478 | |||
Johnson City | 410 Princeton Road, Johnson City, TN 37601 | |||
Kansas City | 1501 Southern Road, Kansas City, MO 64120 | |||
Louisville (Pharmabuy) | 7841 National Turnpike, Louisville, KY 40214 | |||
Louisville | 244 E. Woodlawn Ave., Louisville, KY 40214 | |||
Meridian | 6300 St. Louis Street, Meridian, MS 39301 | |||
Minneapolis | 6810 Shady Oak Rd., Eden Prairie, MN 55344 | |||
Mishawaka | 1655 E. 12th Street, Mishawaka, IN 46544 | |||
Mobile | 85 Sidney Phillips Drive, Mobile, AL 36607 | |||
Montgomery | 2061 W. Fairview Ave., Montgomery, AL 36108 | |||
Nashville | 12980 Old Hickory Rd., Antioch, TN 37013 | |||
Orlando | 2100 Directors Row, Orlando, FL 32809-6234 | |||
Orlando | 2702 Directors Row, Orlando, FL 32809 | |||
Paducah | 322 North 3rd Street, Paducah, KY 42001 | |||
Phoenix | 1825 S. 43rd Avenue, Phoenix, AZ 85009 | |||
Pinebrook | Rte. 80 @ Hook Mountain Rd., Pine Brook, NJ 07058 | |||
Raleigh | 8605 Ebenezer Church Rd., Raleigh, NC 27613 | |||
Richmond | 9900 J.E.B. Stuart Pkwy., Glen Allen, VA 23060 | |||
Rita Ann | 8410 B Kelso Drive, Baltimore, MD 21221 | |||
Sacramento Admin Office | 2520 Venture Oaks Way, Suite 140, Sacramento, CA 95833 | |||
Salt Lake City | 1765 Fremont Drive, Salt Lake City, UT 84104 | |||
San Antonio | 1949 Hormel Drive, San Antonio, TX 78219 | |||
San Jose | 450 Charcot Avenue, San Jose, CA 95131 | |||
Seattle | 19220 64th Avenue South, Kent, WA 98032 | |||
St. Joseph | 3907 S. 48th Terrace, St. Joseph, MO 64503 | |||
St. Louis | 8190 Lackland Road, St. Louis, MO 63114-4524 | |||
Tulsa | 9401 E. 54th Street, Tulsa, OK 74145 | |||
Thorofare | 100 Friars Lane, Thorofare, NJ 08086 | |||
Toledo | 3145 Nebraska Avenue, Toledo, OH 43607 | |||
Valencia | 24903 Avenue Kearny, Valencia, CA 91355 | |||
Williamston | One Industrial Park, Williamston, MI 48895 |
Legal, Trade and Assumed Names:
AmerisourceBergen
AmerisourceBergen Drug Corporation
AmeriSource Corporation
Bergen Brunswig Drug Company
C.D. Smith Healthcare, Inc.
Durr-Fillauer Medical, Inc.
HealthCare Purchasing Agency
Impact Distribution Company
Intelligent Drug Information
James Brudnick Company, Inc.
MedNet, MPC Corp.
Pharmabuy
Rita Ann
Mergers:
Effective on or about May 24, 2001, AmeriSource Medical Supply, Inc., a Tennessee corporation, merged into AmeriSource Corporation.
Effective on or about August 30, 2001, MedNet, MPC Corp. merged into Bergen Brunswig Drug Company.
Effective as of October 1, 2002, Durr-Fillauer Medical, Inc., a Delaware corporation, merged into Bergen Brunswig Drug Company, a California corporation; Bergen Brunswig Drug Company merged into AmeriSource Corporation (and was renamed AmerisourceBergen Drug Corporation), and C.D. Smith Healthcare, Inc., a Missouri corporation; merged into AmerisourceBergen Drug Corporation.
Corporate Information Regarding the Originator
Federal Tax Identification Number: 23-2353106
Delaware Corporate Organization Number: 2564484
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EXHIBIT A
Company | Division | Bank | Account # | Account Name | Type | Lockbox(es) | Status | |||||||||||
Amerisource Receivables Financial Corporation | ||||||||||||||||||
ARFC | Rita Ann- Baltimore, MD | Allfirst Bank | Amerisource Receivables Financial Corporation — Rita Ann | Depository | 1596 | Open | ||||||||||||
ARFC | Corp- Chesterbrook, PA | Bank of America | Amerisource Receivables Financial Corporation | Master | NA | Open | ||||||||||||
ARFC | Birmingham, AL | Bank of America | Amerisource Receivables Financial Corporation | Depository | 403279 | Open | ||||||||||||
ARFC | Columbus, OH | Bank of America | Amerisource Receivables Financial Corporation | Depository | 12581 | Open | ||||||||||||
Toledo/Louisville | ||||||||||||||||||
ARFC | Dallas, TX | Bank of America | Amerisource Receivables Financial Corporation | Depository | 8410046 | Open | ||||||||||||
ARFC | Mishawaka, IN | Bank of America | Amerisource Receivables Financial Corporation | Depository | 12571 | Open | ||||||||||||
ARFC | Orlando, FL | Bank of America | Amerisource Receivables Financial Corporation | Depository | 502978/403163 | Open | ||||||||||||
ARFC | Johnson City, TN | Bank of America | Amerisource Receivables Financial Corporation | Depository | 502964 | Open | ||||||||||||
ARFC | Minneapolis, MN | Bank of America | Amerisource Receivables Financial Corporation | Depository | 502620 | Open | ||||||||||||
ARFC | Paducah, KY | Bank of America | Amerisource Receivables Financial Corporation | Depository | 503270 | Open | ||||||||||||
ARFC | Columbus, OH | Bank One | Amerisource Receivables Financial Corporation | Depository | 0813 | Open | ||||||||||||
Toledo, OH | ||||||||||||||||||
ARFC | St. Joseph, MO | Commerce Bank | Amerisource Receivables Financial Corporation | Depository | 802240 | Open | ||||||||||||
ARFC | Mishawaka, IN | First Source Bank | Amerisource Receivables Financial Corporation | Depository | 4181 | TBC March 2003 | ||||||||||||
ARFC | Thorofare, NJ | First Union Nat’l Bank | Amerisource Receivables Financial Corporation | Depository | 52598 | Open | ||||||||||||
ARFC | Corp- Chesterbrook, PA | First Union Nat’l Bank | Amerisource Receivables Financial Corporation | Depository | NA | Open | ||||||||||||
ARFC | Corp- Chesterbrook, PA | First Union Nat’l Bank | Amerisource Receivables Financial Corporation | Master | NA | Open | ||||||||||||
ARFC | Thorofare, NJ | First Union Nat’l Bank | Amerisource Receivables Financial Corporation | Depository | 8500-41950 | Open | ||||||||||||
ARFC | Springfield, MA | First Union Nat’l Bank | Amerisource Receivables Financial Corporation | Depository | 54873 | Open | ||||||||||||
ARFC | Corp- Chesterbrook | PNC Bank | Amerisource Receivables Financial Corporation | Depository | NA | Open | ||||||||||||
ARFC | Hawaii | Bank of Hawaii | Amerisource Receivables Financial Corporation | Depository | 31000-5356 | Open | ||||||||||||
ARFC | Chicago, IL | Bank One | Amerisource Receivables Financial Corporation | Depository | 21978, 100708, | Open | ||||||||||||
Corona, CA | 22016, 22103, | |||||||||||||||||
Denver, CO | 100459, 100741, | |||||||||||||||||
Kansas City, MO | 21983, 100801, | |||||||||||||||||
Phoenix, AZ | 100491, 24900, | |||||||||||||||||
Sacramento, CA | 730034, 100806, | |||||||||||||||||
Salt Lake City, UT | 27550 | |||||||||||||||||
San Jose, CA | ||||||||||||||||||
Seattle, WA | ||||||||||||||||||
St. Louis, MO | ||||||||||||||||||
Tulsa, OK | ||||||||||||||||||
Valencia, CA | ||||||||||||||||||
Williamston, MI | ||||||||||||||||||
ARFC | Corp-Orange, CA | Chase Manhattan Bank | Amerisource Receivables Financial Corporation | Master | NA | Open | ||||||||||||
ARFC | Corp-Orange, CA | PNC Bank | Amerisource Receivables Financial Corporation | Master | NA | Open | ||||||||||||
ARFC | Atlanta, GA | PNC Bank | Amerisource Receivables Financial Corporation | Depository | 530431, 642723, | Open | ||||||||||||
Boston, MA | 676337, 676380, | |||||||||||||||||
Dallas, TX | 530439, 530448, | |||||||||||||||||
Houston, TX | 530456, 530463, | |||||||||||||||||
Meridian, MS | 530477, 642755. | |||||||||||||||||
Mobile, AL | 530494, 642800, | |||||||||||||||||
Montgomery, AL | 676405 | |||||||||||||||||
Nashville, TN | ||||||||||||||||||
Orlando, FL | ||||||||||||||||||
Pine Brook, NJ | ||||||||||||||||||
Raleigh, NC | ||||||||||||||||||
Richmond, VA | ||||||||||||||||||
San Antonio, TX | ||||||||||||||||||
ARFC | Kansas City, KS | PNC Bank | Amerisource Receivables Financial Corporation | Depository | 771732 | Open | ||||||||||||
ARFC | Tulsa, OK | PNC Bank | Amerisource Receivables Financial Corporation | Depository | 667604 | Open | ||||||||||||
ARFC | Mansfield, MA | PNC Bank | Amerisource Receivables Financial Corporation | Depository | 643393 | Open | ||||||||||||
ARFC | Raleigh, NC | PNC Bank | Amerisource Receivables Financial Corporation | Depository | 643364 | Open | ||||||||||||
ARFC | Richmond, VA | PNC Bank | Amerisource Receivables Financial Corporation | Depository | 643376 | Open | ||||||||||||
ARFC | Corp-Orange, CA | PNC Bank | Amerisource Receivables Financial Corporation | Depository | NA | Open | ||||||||||||
ARFC | PharmaBuy | PNC Bank | Amerisource Receivables Financial Corporation | Depository | 771530 | Open | ||||||||||||
Louisville, KY | ||||||||||||||||||
ARFC | Corp-Orange, CA | Wells Fargo Bank | Amerisource Receivables Financial Corporation | Depository | 77825 | Open |
[Name] |
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1.0 | APPLICABILITY | |
AmerisourceBergen Drug Company | ||
2.0 | PURPOSE | |
To formalize policies and procedures pertaining to the extension of credit, quality control of trading assets (accounts and notes receivable) and support of both internal and external customers. | ||
3.0 | OBJECTIVES | |
3.1 | To provide for the development and retention of a broad and financially viable customer base. | |
3.2 | To promote sales of product and services. | |
3.3 | To maximize cash flow | |
3.4 | To enhance profitability through reduction of Bad Debt Expense and optimization of the investment in Accounts/Notes Receivable. | |
4.0 | AUTHORITY | |
4.1 | The Vice President, Finance and the Chief Financial Officer, with the concurrence of the Vice President of Financial Services and Corporate Director of Credit shall have the responsibility and authority for the establishment, revision and implementation of Corporate Credit & Collections Policies & Procedures. | |
4.2 | Approval Limits: The grid below identifies authority requirements for the approval and administration of new accounts and increases to existing total accounts receivable exposure. Total accounts receivable exposure is defined as the sum of trade receivables, including future dated sales, and notes receivable. |
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Increasing Existing Credit Limits
Level of | ||||
Position | Authority | |||
Corporate or Regional Directors of Credit | $ | [*****] | ||
Regional Vice President | [*****] | |||
Vice President Financial Services | [*****] | |||
VP Finance Drug Co. | [*****] | |||
CFO and COO | >[*****] |
5.0 | TRADE ACCOUNT APPLICATION AND EVALUATION PROCEDURES | |
5.1 | Documentation requirements |
a. | Original Applications, Purchase Agreements, Guarantees and Loan Agreements are to be retained by the Regional Director of Credit (RDC) or designee. | ||
b. | Original note documents are to be retained where the note is being serviced. |
5.1.1 | All new account applications and requests to increase credit limits must include: |
a. | Application, completed, signed and dated original ABC form, (see Exhibit A, ABC Credit Application) |
• | Must be signed by authorized signed | ||
• | Chains with multiple locations under same legal entity may attach a statement certified by authorized signer showing multiple delivery addresses and attach to one Application |
b. | Purchase Agreement or approved National Contract. (See Exhibit B, Sales Agreement and Guaranty). |
• | National contracts are approved by the Corporate Director of Credit or above (see section 4.2) |
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c. | ID – Verification of legal name |
• | Corporations – obtain Articles of Incorporation | ||
• | Partnerships – obtain copy of Partnership Agreement | ||
• | Obtain copies of any fictitious name statements (doing business as filings “dba”) |
5.1.2 | Purchase Accounts, Independent Pharmacies – in addition to the above (see requirements stated in 5.1 to 5.1.1), obtain: |
a. | Continuing Guarantee of stockholders/partners | ||
b. | Any other documentation deemed necessary by the Regional Director of Credit or designee including but not limited to the three most recent current supplier statements |
5.1.3 | Start-up non-public companies | |
For purposes of this section, a business is no longer considered a start-up after two consecutive years of positive cash flow with all trade payments current. |
a. | Cash flow projections prepared on a monthly basis covering the first operating year. Must be signed and dated by borrowers. | ||
b. | Cash verifications – three most recent months’ bank/brokerage statements verifying source of down payment and starting cash. | ||
c. | Opening Balance Sheet. | ||
d. | Other possible documents (At the discretion of the RDC or designee): |
• | Resume | ||
• | Board of Pharmacy Application copy | ||
• | Loss payee endorsement – hazard insurance |
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• | Assignment of life/disability insurance [*****] | ||
• | Asset verifications | ||
• | Landlord waiver | ||
• | Own use certification (closed door) |
5.2 | Credit Request Processing Procedure – Supplemental Information: | |
The RDC or designee shall supplement the information required above by obtaining and reviewing the following: |
a. | Credit Agency Reports – D&B, Experlan Business and personal profiles (public companies exempt from personal profiles) | ||
b. | Trade References where possible and/or review of three most recent supplier statements | ||
c. | Verify the legal name, state of formation, business form and good standing of the legal entity. This may include obtaining Good Standing Certificates, Statement by Domestic Stock Company, Secretary of State verifications or other documents deemed necessary by the RDC or designee. | ||
d. | Where applicable, verifying major assets (real estate, business ownership) | ||
e. | Other – Any other credit information including bank references, UCC-1 lien searches, business filings, judgments, other public record information, or other information that in the judgment of the Credit Executive is applicable to the credit evaluation process. |
5.3 | Responsibility for tracking new account applications | |
5.3.1 | The RDC or designee will monitor the progress of new account applications to assure timely processing and respond to inquiries regarding the status of the request. (For samples of tracking tools, see Exhibit C, Credit Request Checklist and Exhibit D, Credit Request Processing log.) | |
5.4 | Trade Account Evaluation Guidelines | |
5.4.1 | The RDC or designee will, if necessary, contact the applicant to obtain clarification of information in addition to that required above and evaluate the application based on the following criteria: |
a. | Character – Character of the borrower(s) as evidenced by their credit history and previous experience. | ||
b. | Capacity – Does management have the experience and talents to successfully manage this business plan? – Tested management. |
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c. | Cash flow – Ability of the business to service the proposed debt. | ||
d. | Collateral – Adequacy of secondary support. | ||
e. | Any other legal, financial or operational factor in the judgment of the Credit Executive that affects the quality of the credit. |
5.4.2 | If review of the above disqualifies the applicant from open credit terms, it is recommended that sales be secured using one of the following alternatives: |
a. | Letters of Credit |
• | A standby Letter of Credit guarantees financial performance by the initiating bank and are preferred to conventional L/Cs. Standby L/Cs have a specific time period during which the issuing bank is obligated to pay in the event of a customer’s default. | ||
• | All fees (issuing, negotiating, confirming and wire) should be paid by the purchaser (customer) or including in the cost of goods. | ||
• | All letters of credit are to be irrevocable and provide for partial draws. | ||
• | All accounts supported by letters of credit should have a “switch on” credit line no larger than the stated amount. | ||
• | Purchasing accounts must be calendared to expire at a time prior to L/C expiration so that if payment is not made, ABC has at least two weeks remaining to submit a draft for payment on all balances. The last purchase must be resolved at least two weeks prior to expiration of the L/C. | ||
• | All L/Cs must be payable to the beneficiary (AmerisourceBergen) in U.S. dollars. | ||
• | All non-USA sales are to be via letters of credit. | ||
• | The Treasury Department is to be advised of proposed letters of credit to assure the issuing bank is of acceptable quality and reliability. No letter of credit can be drawn on a Liberian Bank, for example, and the Treasury Department is aware of any government or political restrictions. |
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d. | Depository accounts | ||
All accounts approved based on depository balances due to credit risk should be supported by ABC standard Security Agreement. The Security Agreement, incorporated into the Application for Credit and Purchase Agreement, provides ABC with appropriate collateral rights to deposits. |
5.5 | Secondary Account to an Existing Customer: | |
5.5.1 | In the event an existing customer requests a secondary account, it is not necessary to request a completed new account application if a fully-approved application is in the customer file. The customer is requested instead to submit a signed first page of the Application for Credit (Exhibit A) that identifies the ownership of the secondary account. In addition, the customer must submit a Payment Terms confirmation (Exhibit E, Additional Account Confirmation) that asks for acknowledgement that the obligations of the secondary account are the responsibility of the primary account owner. The signed copy of the Application for Credit and the Payment Terms form are to be retained in the customer’s credit file. | |
5.6 | PROMISSORY NOTE APPLICATION AND EVALUATION PROCEDURES | |
5.6.1 | Applications for House Notes (see Exhibit F): |
a. | All new money promissory note applications, regardless of dollar value or purpose, are to be initiated by the Regional Directors of Credit. Approvals from the VP DCM and the RVP are required prior to sending the request to the Corporate Director of Credit for processing. Final review of the note application will be completed by the Note Review Committee, consisting of V.P. of Financial Services, V.P. Finance, and CFO. Any approved applications will then be processed for funding by the Corporate Director of Credit, who will retain the original copies of the application and supporting documentation. The Corporate Director of Credit will also provide notification of approval/disapproval and copies of the documentation to the initiating RDC for loan maintenance. Original promissory notes will be drafted, executed, and filed centrally in the Legal Department. | ||
b. | The recommended interest rate will be [*****]%. The term of the loan should not exceed [*****] years. | ||
c. | All notes are to have collateral that is valued at [*****] times the amount of the Note. The Note Application should include a calculation of the collateral with the following limitations: | ||
[*****] |
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d. | Personal Guarantees are required, and must be validated with personal financial statements of the owners (Exhibit G, Individual Financial Statement). The guarantees must be signed as individuals, not as officers of the company. | ||
e. | Mortgages on real estate are preferred collateral, and are valued through a licensed appraisal service. | ||
f. | Life insurance policies on the corporate officers, partners and/or individual owners are also valid collateral with AmerisourceBergen as the assigned beneficiary. The insurance carrier should notify ABC of delinquency or non-payment of premiums. | ||
g. | UCC-1 filings are necessary to perfect our priority position, and value our collateral. Attach copies of UCC-1s to the note application. | ||
h. | Any additional documentation that the RDC or designee deems appropriate to support the approval of the loan application. | ||
i. | Applications for all Promissory Notes are to be approved by Regional Director of Credit, and Regional Vice President. Forward to Corporate for review and approval by VP of Finance and CFO. |
5.6.2 | Supplemental New Money Loan Criteria: | |
All new money loans should have an identifiable and dependable primary and secondary source of repayment. If the secondary source of payment is a life insurance policy, the policy should be assigned to the Company. Simply being named as a beneficiary on the policy is not full security. Conforming Loan Parameters should include the following: |
a. | [*****] | ||
b. | Tangible net worth (aggregate business and guarantor(s)) should be at least [*****]% of the requested loan amount. | ||
c. | Acceptable collateral valuations should be supported by real estate appraisals from a qualified appraiser and physical inventory reports. | ||
d. | Sufficient liquidity ([*****]) to meet immediate requirements. | ||
e. | Positive cash flow as evidence by two most recent, consecutive financial statements (balance sheets and P&L). | ||
f. | Positive working capital with positive trends. | ||
g. | Financial statement trends which if continued for the term of the loan would not endanger repayment. |
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h. | No split borrowings with other suppliers. | ||
i. | ABC collateral position senior to other suppliers. | ||
j. | [*****] | ||
k. | Letter of Credit should be reviewed by our Treasury Department or Bank to verify the acceptability of the issuing bank. If the issuing bank is not of sufficient reliability, the negotiating bank should confirm the L/C. Standby letters of credit are preferred (see letters of credit section 5.4.2.a.). |
5.6.3 | [*****] | |
6.0 | TRADE ACCOUNT TERMS OF SALE | |
6.1 | Standard terms of sale are shown in Exhibit H1, Payment Terms. | |
6.2 | Letter of Credit should be reviewed by our Treasury Department or Bank to verify the acceptability of the issuing bank. If the issuing bank is not of sufficient reliability, the negotiating bank should confirm the L/C. Standby letters of credit are preferred (see letters of credit section 5.4.2). | |
6.3 | Other terms of sale are to be approved in advance by the RDC or Designee and the Director of Accounts Receivable after confirming systems capability. | |
6.4 | All prepay deposits are to be recorded in the current or future due aging buckets. | |
6.5 | A terms code letter should be sent to the customer confirming the terms of sale, payment requirements, and late charge parameters. (See Exhibit H, Terms of Sale and Late Fee Confirmation). | |
6.6 | Customers which have been placed on COD terms may request open credit terms, the granting of which is subject to review and approval of the RDC or Designee, per Credit & Collections Policies & Procedures $10, Collection Procedures. If open terms are reinstated, a letter confirming the change in terms should be sent to the customer. This acknowledgement letter should be kept in the customer’s file. In addition, reinstatement of open terms must be periodically reviewed to assure compliance. | |
7.0 | CREDIT LIMITS | |
The RDC or Designee will have the authority to set credit limits according to 4.2. |
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7.1 | Trade account credit limits are to be based on: |
a. | Anticipated normal purchases including dating. (Dating increase in credit limit is only during the dating period. Once the dating period has expired, the credit limit should be decreased to normal purchases.) | ||
b. | Approved payment terms. | ||
c. | Financial strength of the account, if financial statement information is available to the RDC. | ||
d. | Type of credit line (hard/soft) at the election of the Regional Director of Credit or Designee. |
7.2 | The Regional Director of Credit or Designee can establish alternative maximum credit limits not to exceed amounts based on the following criteria: |
a. | [*****] | ||
b. | [*****] | ||
c. | The Regional Director of Credit or Designee is to review Regional aging reports, delinquency reports and other accounts receivable tools that are available on a periodic basis, at least monthly, and revise customer credit limits as necessary. | ||
d. | If an account is less than 3 days beyond due date, resulting from delays in receiving payment, the Regional Accounts Receivable Manager will have the authority to exceed the credit limit on a temporary basis up to a maximum of [*****]% ([*****] percent) of the established limit. | ||
e. | The Regional Director of Credit or Designee will have the authority to exceed the credit limit on a temporary basis up to a maximum of [*****]% ([*****] percent) of the established limit, if reevaluation of the credit line occurs within 3 days of exceeding the established limit. This authority is not limited to circumstances resulting from delays in receiving payment. |
7.3.1 | The credit limit either determined by the procedure outlined in 7.1 or 7.2 will be made by the Regional Director of Credit or Designee and reflect normal requirements including: |
a. | Dependability of cash flow as a source of repayment for anticipated outstanding balance, which includes orders that are dated but not yet due. | ||
b. | Adequacy of collateral and our perfected position | ||
c. | Trade payment history | ||
d. | Strength of the guarantors |
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e. | Any other factor which in the judgment of the Regional Director of Credit or Designee might be appropriate |
If a basis for the establishment of a credit limit other than the normal requirements is to be utilized, it will be so indicated in the customer’s credit file. | ||
8. | DATING | |
Dating is to be used for inventory build-up only. |
a. | Accounts on non-voluntary COD or other restrictive terms are not eligible for Dating. | ||
b. | Legal and “Watch” accounts are not eligible for Dating. |
8.1 | Manufacturer Promotion – Participation in all manufacturer’s promotions require validation of Dating Terms offered by the manufacturer and the Customer Credit Approval per Accounting and Finance Policy. The decision process is, however, subject to the authorization grid defined in 4.2. | |
8.2 | Trade Show – The RDC or Designee will determine which customers are eligible for Trade Show Dating and the maximum amount of dating for each customer. | |
8.2.1 | Other Dating |
a. | A request for Dating (Exhibit I) is to be submitted to and approved by the appropriate RDC or Designee prior to the offering of dating terms. | ||
b. | The RDC or Designee has approval authority for dating for amounts per section 4.2 with consideration that the total exposure is within the established authority limits. | ||
c. | Approval limits for all original datings or extension of dating which term is longer than six months requires the approval of the RDC or Designee. | ||
d. | A Personal Guaranty and Security Agreement, as required in the Application for Credit & Purchase Agreement, must be provided by customers seeking extended payment terms. |
8.3 | Dating Terms: |
a. | Total amount due in 90 days, or | ||
b. | 1/3rd payable monthly for three months, or | ||
c. | 1/6th monthly for six months |
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8.4 | Customer Notification – Trade Show and Other Dating | |
Declination, or change of dating status is to be communicated to the customer by the RDC or Designee. Written documentation of the communication with the customer is not required, however. A copy of the approved Request for Dating is to be forwarded to the appropriate Sales associate and Accounts Receivable Supervisor with a copy retained in the customer credit file. | ||
9.0 | DROP SHIP ACCOUNTS |
a. | The RDC or Designee is responsible for the communication of drop ship issues to the customer service and procurement departments. The customer service department must be educated to identify those customers that are restricted, and to decline the entry of orders to those customers. | ||
b. | Manufacturers are required to obtain credit approval prior to shipping goods to an account. If credit approval is not obtained, the RDC or Designee has the responsibility to decline the manufacturer’s invoice. | ||
c. | Drop ships can only be initiated by the receiving customer via a P.O. This P.O. should then be included as part of the drop ship documentation. | ||
d. | Vendor agreements should include verbiage that drop ships require approval by the credit department prior to shipment. This will provide AmerisourceBergen with recourse should a shipment be sent to a customer not deemed creditworthy. | ||
e. | Under no circumstances should the RDC or Designee or the customer service department sign a drop ship authorization form that states a wholesaler agrees to pay the distributor (or manufacturer) for purchases of the customer, or that the wholesaler agrees to accept and pay all customer purchase orders or shipments. The distributor (or manufacturer) must present the wholesaler with an invoice for goods shipped within a reasonable time frame to allow AmerisourceBergen to collect from the customer. Inordinate delays should be returned to the distributor (or manufacturer) if we are unable to present a valid proof of delivery for the transaction. |
10.0 | COLLECTION PROCEDURES | |
10.1 | Delinquency |
a. | An account is considered delinquent when any portion of a balance due is not paid within the invoiced terms. A short payment is a delinquent payment. | ||
b. | Payments remitted with dishonored tender are considered delinquent. |
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10.2 | Notes on Collection Activities |
a. | The RDC or Designee will maintain a record of all communications with all accounts. | ||
b. | The note is to include information on who was called, the date of the call, who was contacted and any relevant information as to repayment or facts related to the delinquency or business. |
10.3 | “Plus” payments | |
Provided the account has not indicated the intent to file bankruptcy, the collector may negotiate a plus payment schedule with a duration not to exceed 3 months, if the balance is below $50,000. Otherwise, the negotiation should be the responsibility of the RDC or Designee. |
a. | The agreement for a plus payment must be confirmed in writing with the account. This agreement is to contain language indicating that the Plus is in consideration for continued service. (See Exhibit J). | ||
b. | Plus payments must be sufficient to repay all delinquent balances with lost discounts and late charges in no longer than 6 months. Any exceptions must be documents and approved by RVP. | ||
c. | If dishonored checks are received, if invoices are not paid in full when due or if required plus payment is missed, the account is to be placed on credit hold. See Policy #12, Returned items (NSF Checks) for additional guidance on handling dishonored checks. | ||
d. | It is recommended that a file be maintained to include all accounts on plus payment status, and an amortization schedule to eliminate the delinquency by account. The RDC or Designee has responsibility for monitoring the progress and identifying missed payments. |
10.4 | First delinquent payment |
a. | Within one day of the first missed payment, the appropriate customer contact person is to be called to arrange payment. | ||
b. | Short payments are considered missed payments. |
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10.5 | Second delinquent payments |
a. | All accounts will be placed on COD or credit hold. The choice between the two is at the discretion of the RDC or Designee. |
10.6 | Severe Delinquencies |
a. | All accounts delinquent three or more payments are the direct responsibility of the Corporate Director, RDC or Designee, as appropriate. | ||
b. | All customers who carry a delinquent balance that exceeds $[*****] greater than 60 days past due must have authorization from the Regional VP to continue service. The authorization signature of the RVP is to be recorded on the Division bad debt reserve analysis, and forwarded to Corporate for record keeping. See Item #16.1.f, Reports. | ||
c. | [*****] | ||
d. | Should the customer fail to comply with the terms of the work out agreement, the account is to be referred to outside legal counsel or a collections agency immediately after the 2nd payment default. The decision to place with an attorney or collection agency is the responsibility of the RDC or Designee. Each situation is unique, and the RDC or Designee has the discretion to determine what is appropriate. If the decision is made to refer the matter to an attorney, it isrequiredthat the Senior Litigation Counsel at the Corporate Legal Department is consulted to select the firm to represent our company. [*****] | ||
e. | Cases placed with a collection service or assigned to an attorney remain the responsibility of the Corporate Director of Credit or RDC, as appropriate, until the case is fully resolved. | ||
f. | All accounts that threaten to file complaints or counter-suits against ABC must be referred to ABC Legal Department. |
10.7 | Bankruptcy |
a. | All accounts that have filed for bankruptcy protection are to be placed on credit hold upon notification. | ||
b. | The account is to be immediately referred to the RDC or Designee, and all penalty accruals are to immediately terminate. | ||
c. | Future shipments must be approved by the RDC or Designee and should be made through a separate Debtor in Possession (DIP) account number to isolate pre-petition sales from post-petition sales activity on prepayment or COD terms at the discretion of the Regional Director of Credit or Designee. The account’s pre-petition invoice summary, invoice copies, and Proofs of Delivery will provide substantiation of our Proof of Claim (POC) with the Bankruptcy Court through the ABC Legal Department. The POC is to be processed immediately upon receipt from the Bankruptcy Court. |
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d. | Collection efforts on the pre-filing balance must stop. | ||
e. | A special statement as of the filing date of the bankruptcy should be requested immediately and forwarded as soon as possible to the RDC or Designee. Generally, a reclamation claim letter is prepared by the litigation paralegal at the AmerisourceBergen Legal Department immediately upon receipt of the bankruptcy notification. The original reclamation letter is faxed or sent overnight to the customer to recover goods received within the ten days immediately preceding the bankruptcy filing date. (See Exhibit K). Alternatively, if timing issues prohibit the use of the ABC Legal Department for the letter preparation, the RDC may elect to prepare the reclamation letter. Copies of all RDC-prepared reclamation letters must be forwarded to the litigation paralegal at the ABC Legal Department on the date of the letter distribution to the customer. | ||
f. | The bad debt reserve is to be increased to [*****]% of the total A/R, unless otherwise authorized by both the Regional Director of Credit and the Corporate Director of Credit. |
10.8 | Denied Chargebacks |
a. | Denied chargebacks are the responsibility of the customer. | ||
b. | All contract pricing accounts must sign our Application for Credit and Purchase Agreement (see Exhibit A & B) or National Contract that are to include language that “Penalties on contract accounts are subject to terms in their particular contracts. I/we agree to promptly pay when invoiced all chargebacks for disallowed/ineligible contract pricing, and to look solely to the relevant manufacturer(s) and/or buying group(s) for redress.” | ||
c. | Denied chargebacks are to be paid within the cycle on which they are invoiced. |
11.0 | LATE FEES AND PRICE ADJUSTMENT | |
11.1 | Late Fees: | |
For all accounts that have not paid within the agreed upon terms, a late fee, charged at a rate of [*****]% per month, or the maximum percentage permitted by applicable State and Federal laws, as well as purchase contract provisions, will be assessed. |
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11.2 | Price Adjustment: | |
To the extent permitted by applicable State and Federal laws, as well as purchase contract provisions, all accounts that have not paid within the agreed upon terms will lose their reduction in cost of goods, if any. | ||
12.0 | RETURNED PAYMENTS | |
This policy is applicable to NSF, UCF, stop payments on any form of tender. | ||
12.1 | The Treasury Department shall arrange with the depository banks to advice the RDC or Designee within 24 hours of any dishonored payments. The RDC or Designee may authorize the re-deposit of the returned item. | |
12.2 | Immediately upon final notification of a non-payment or second return of a re-deposited check, the RDC or Designee will place the account on credit hold, and request from the customer a cashier’s check or wire transfer of funds to replace the returned item. Deviations are at the discretion of the RDC or Designee. | |
12.3 | The RDC or Designee shall change the customer’s account a minimum of $[*****] for each time an item is returned. | |
12.4 | [*****] | |
12.5 | The RDC or Designee should take every caution to assure the customer is not habitually sending NSF payments before reinstalling open payment items. Copies of 3 consecutive bank statements, which show no evidence of NSF charges, will provide adequate support for reinstating open payment items. | |
13.0 | CREDIT WATCH | |
13.1 | Purpose |
a. | Identify higher risk accounts | ||
b. | Direct ownership to the appropriate associate | ||
c. | Identify an appropriate bad debt reserve | ||
d. | Restrict handling authority and options |
13.2 | Credit Watch Customer Characteristics |
a. | Three or more delinquent payments in the past six months | ||
b. | Three or more returned payments in the previous six months | ||
c. | Operating losses with insufficient working capital | ||
d. | Any other financial, operational or legal factor that in the opinion of the Regional Director of Credit sufficiently impairs or might impair the customer’s solvency or liquidity so as to create an unwarranted credit risk |
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13.3 | Credit Watch Procedures |
a. | The RDC or Designee will notify the appropriate Sales Directors of the change of designation of each Credit Watch Account. | ||
b. | The RDC or Designee is to review the status of Credit Watch accounts on a monthly basis and change payment terms as justified with a written memo outlining the reasons for any changes or removal from Credit Watch included in the customer’s credit file. | ||
c. | Watch accounts require RDC or Designee approval to change payment terms, pricing, rebates, dating, special promotional offers, new programs or any other change in which monetary exposure of ABC might increase. | ||
d. | Once current, the account is to remain on the Watch list for an additional three months to monitor continued performance. | ||
e. | If a customer requested COD as payment terms, it is NOT necessary to place the customer on Credit Watch. |
14.1 | Specific Allowance for Doubtful Accounts | |
A Specific Allowance for Doubtful Accounts must be created for 100% of the balance greater than 60 days past due for intercompany accounts and accounts in bankruptcy. For all other accounts, a Specific Allowance for Doubtful Accounts is to be created for each account, which, in the judgments of the RDC or Designee, demonstrates higher than acceptable risk. Characteristics of such accounts include, but are not limited to: |
a. | Continuing delinquent payments | ||
b. | Dishonored payments | ||
c. | Filing of, or the stated intent to file for bankruptcy protection | ||
d. | Debt balances which cannot be supported | ||
e. | Suits, liens or judgments which could adversely affect the ongoing operations | ||
f. | Any financial condition which could threaten the ongoing business | ||
g. | Any other factor that in the judgments of the RDC or Designee might create a loss |
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The amount of the specific reserve, for non-intercompany and bankruptcy accounts, is to be based on the available information, as well as the judgment and experience of the RDC or Designee. This reserve is an estimate of the probability the account will deteriorate and the likely amount recoverable. | ||
14.2 | General Reserve | |
A General Allowance for Doubtful Accounts shall be maintained for all accounts, including Intercompany accounts and notes receivable accounts, for which no specific allowance is provided. [*****] | ||
14.3 | Monthly Division Allowances for Doubtful Accounts | |
The Regional Director of Credit or Designee shall submit to the VP of Financial Services, a monthly analysis of the Allowance for Doubtful Accounts in the Corporate-provided format. The submission shall occur at least one working day prior to the deadline for submission to the Accounting Department. | ||
14.4 | The Allowances for Doubtful Accounts are to be reviewed at least monthly by the RDC or Designee. The review is to be conducted to ensure that all un-collectable and/or potential loss accounts are adequately reserved, and to ensure that there are sufficient reserves related to other expenses. | |
15.0 | BAD DEBT WRITE OFFS | |
15.1 | Bankruptcies and Termination of Sales Agreements: | |
Balances of Accounts Receivable and Notes that are un-collectable due to bankruptcy or termination of Sales Agreements are to be written off as bad debt as determined by the RDC or Designee. |
a. | Documentation: All requests for Bad Debt Write Offs and Receivables are to be submitted by the RDC or Designee on Request for Write Off Form (Exhibit L) with the following documentation attached as soon as an account is determined to be un-collectable: |
• | Photocopy of Accounts Receivable Statement indicating the balance to be written off | ||
• | Correspondence from attorney or collections agency indicating that the account is to be closed | ||
• | In the case of bankruptcy, include a copy of the final distributions made | ||
• | Any other data that would aid in the verification that the data provided on the Request for Write-Off Form is valid |
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b. | Processing: All Bad Debt Write Off requests are to be properly authorized before submitting to the VP of Financial Services for further processing. The appropriate authorization levels are as follows: |
Corporate | Regional | |||||||
Regional or Corporate Director of Credit and Vice President Distribution Center Managers | [*****] | [*****] | ||||||
Corporate Director of Credit and VP Financial Services | [*****] | [*****] | ||||||
Regional Vice President and VP Financial Services | [*****] | [*****] | ||||||
VP Finance | [*****] | [*****] | ||||||
CFO and COO | [*****] | [*****] | ||||||
CEO | [*****] | [*****] | ||||||
Executive Management Committee (any 4 signatures of the following: CFO, COO, CEO, Pres. Drug Co., Pres. Pharmerica, Pres. ABSG) | [*****] | [*****] | ||||||
Executive Committee of the Board of Directors | >[*****] | >[*****] |
15.2 | Service Charges: | |
Service charges, including those charged against accounts written off per 15.1, are to be charged against the customer relations account, not bad debt expense. | ||
15.3 | Disputes: | |
Overdue balances resulting from customer disputes that are deemed to be uncollectible are to be written off to bad debt expense only after all reasonable collections efforts have been exhausted. If the customer is inactive or no longer purchasing from ABC, the account is to be referred to a collections agency or to an attorney for further action. |
a. | Delivery Documentation – Uncollectable balances due to lack of proof of delivery are to be charged to Returns and Allowances, not bad debt expense. |
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b. | Other Irreconcilable Differences – Overdue balances resulting from irreconcilable differences can be written off only with concurrence of the RVP in the interest of maintaining positive account relations. |
16.0 | REPORTS | |
The following table illustrates the minimum reports that are required to be reviewed or prepared by Credit & Collections and Accounts Receivable personnel: |
Report | Preparer | Reviewer | Due To | Frequency | ||||
Aged A/R Trial Balance | System | RDC | N/A | Semi-monthly | ||||
Reserve Analysis and Override Summary | Divisional or Regional Personnel, as determined by RDC | RDC | VP of Financial Services | Monthly, on Day 4 of the Close | ||||
VP of Financial Services | Accounting | Monthly, on Day 5 of the Close | ||||||
Legal Update | Divisional or Regional Personnel, as determined by RDC | RDC | VP of Financial Services | Monthly | ||||
VP of Financial Services | Executive Team | Quarterly, during Month 2 | ||||||
Approaching Credit Limit | System | RDC | N/A | When Available | ||||
Exceeding Credit Limit | System | RDC | N/A | Daily |
16.1 | A monthly executive management report package will be prepared for review by the corporate officers (CFO, VP of Financial Services, Sales, COO, and CEO). The package will include the following report formats and topics: |
a. | Accounts Receivable Aging by Distribution Center, summarized by Region | ||
b. | Accounts Receivable Aging Trend by Region | ||
c. | Top Customers by total sales volume year to date, with A/R aging summary for each customer |
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d. | Division Held Noted Receivable, summarized by Region | ||
e. | Corporate Held Notes Receivable | ||
f. | Reserve Analysis, including Collection Plans for customers with delinquent balances exceeding $[*****] beyond 60 days delinquent. |
17.0 | CREDIT REFERENCES | |
17.1 | The company is often contacted to provide credit reference experience with existing customers to potential suppliers. | |
17.2 | Verbal references can be provided to suppliers who are within the National Association of Credit Management (NACM) membership, or who have affiliation with other regional credit information exchange groups common with AmerisourceBergen. Otherwise, the requests for credit references must always be in writing. | |
17.3 | The reference is to be factual, historical information. No opinions or statements of future actions can be shared with the requestor. | |
17.4 | Written information must be limited to the list provided: |
• | Sold since | ||
• | High Credit $ amount | ||
• | Current total amount owed | ||
• | Total amount now past due | ||
• | Experience with NSF or returned payments | ||
• | Payment patterns such as prompt, slow (# of days past due) |
17.5 | No written credit reference can include discussion relating to price of products or terms of sale. | |
17.6 | Only copies of written credit references are required to be maintained in the customer’s credit files, although it is encouraged that verbal referencing also be noted. | |
18.0 | INACTIVE ACCOUNTS | |
18.1 | Run a query at each month end to determine which accounts have not purchased during the month. |
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18.2 | Review the list and eliminate any accounts that should not be placed on credit hold (example: intercompany accounts). | |
18.3 | Change the status of the remaining accounts to credit hold. | |
18.4 | Review the customer file, pay history, etc. before allowing future purchases. | |
19.0 | EXCEPTIONS | |
Any exceptions to these policies are to be approved in writing per the levels of authority outlined in section 4.2 |
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AMERISOURCE RECEIVABLES FINANCIAL CORPORATION | ||||
By: | ||||
Title: | ||||
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to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
AMOUNT OF | AMOUNT OF | UNPAID | ||||||
SUBORDINATED | PRINCIPAL | PRINCIPAL | NOTATION MADE | |||||
DATE | LOAN | PAID | BALANCE | BY (INITIALS) | ||||
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Aggregate Receivables generated and sold during the period: | $ | A | ||||||
Less:Purchase Price discount during the Period: | $ | ( | ) | (B | ) | |||
Equals:Gross Purchase Price payable during the period (A - B) | $ | =C | ||||||
Less:Total Purchase Price Credits arising during the period: | $ | ( | ) | (D | ) | |||
Equals:Net Purchase Price payable during the period (C - D): | $ | =E | ||||||
Cash Purchase Price Paid to Originator during the period: | $ | F | ||||||
Subordinated Loans made during the period: | $ | G | ||||||
Less:Repayments of Subordinated Loans received during the period: | $ | ( | ) | (H | ) | |||
Equals:Purchase Price paid in cash or Subordinated Loans during the period (F + G - H): | $ | =I | ||||||
Aggregate Outstanding Balance of Receivables contributed during the period: | $ | J |
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ON OR PRIOR TO THE PURCHASE
1. | Executed copies of the Receivables Sale Agreement, duly executed by the parties thereto. | |
2. | Copy of the Credit and Collection Policy to attach to the Receivables Sale Agreement as an Exhibit. | |
3. | A certificate of Originator’s Secretary certifying: |
4. | Pre-filing state and federal tax lien, judgment lien and UCC lien searches against Originator from the following jurisdictions: |
5. | Time stamped receipt copies of proper financing statements, duly filed under the UCC on or before the date of the initial Purchase (as defined in the Receivables Sale Agreement) in all jurisdictions as may be necessary or, in the opinion of Buyer (or its assigns), desirable, under the UCC of all appropriate jurisdictions or any comparable law in order to perfect the ownership interests contemplated by the Receivables Sale Agreement. |
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6. | Time stamped receipt copies of proper UCC termination statements, if any, necessary to release all security interests and other rights of any Person in the Receivables, Contracts or Related Security previously granted by Originator. | |
7. | Executed Collection Account Agreements for each Lock-Box and Collection Account. |
8. | A favorable opinion of legal counsel for Originator licensed to give opinions under New York law reasonably acceptable to Buyer (and the Administrator, as Buyer’s assignee) as to the following: |
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9. | A“true sale”opinion and“substantive consolidation”opinion of counsel for Originator with respect to the transactions contemplated by the Receivables Sale Agreement. |
10. | A Certificate of Originator’s Vice President and Corporate Treasurer certifying that, as of the closing date, no Termination Event or Unmatured Termination Event exists and is continuing. |
11. | Executed copies of (i) all consents from and authorizations by any Persons and (ii) all waivers and amendments to existing credit facilities, that are necessary in connection with the Receivables Sale Agreement. |
12. | Executed Subordinated Note by Buyer in favor of Originator. |
13. | If applicable, a direction letter executed by Originator authorizing Buyer (and the Administrator, as its assignee) and directing warehousemen to allow Buyer (and the Administrator, as its assignee) to inspect and make copies from Originator’s books and records maintained at off-site data processing or storage facilities. |
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