AGREEMENT
THIS AGREEMENT IS MADE, ENTERED INTO, AND EFFECTIVE THIS 18TH DAY OF
SEPTEMBER, 1996 BY AND BETWEEN AT&T COMMERCIAL FINANCE CORPORATION AND
MERIDIAN FINANCIAL CORPORATION.
1. DEFINITIONS.
For the purposes of this Agreement:
(a) "Agreement" shall mean this Agreement between AT&T-CFC and the Company,
as the same may be amended, modified or supplemented, in writing, from
time to time.
(b) "AT&T-CFC" shall mean AT&T Commercial Finance Corporation, a Delaware
corporation.
(c) "Closing Date" shall mean, with respect to an item of Paper subject to
a Confirmation Letter, the business day by which the Company shall have
complied with all requirements set forth in Paragraph 8 of this
Agreement and AT&T-CFC shall have paid the Purchase Price to the
Company.
(d) "Complete Credit Package" shall include all of the items listed on
Exhibit A to this Agreement, together with such additional items that
AT&T-CFC may reasonably request with respect to a Customer.
(e) "Company" shall mean Meridian Financial Corporation, an Indiana
corporation.
(f) "Customer" shall mean the lessee or debtor, as the case may be, under
any item of Paper.
(g) "Confirmation Letter" shall mean a letter in the form of Exhibit B
hereto sent by telecopy to the Company which sets forth AT&T-CFC's
conditional agreement to purchase the Paper specified therein, the
Purchase Price of that Paper, the method of calculation thereof, and
other information relating thereto, if any, which shall be deemed to be
agreed to by the Company and AT&T-CFC upon the Company's acceptance of
the Purchase Price paid by AT&T-CFC.
(h) "Equipment" shall mean the machinery and equipment, other personal
property and all proceeds thereof subject to or covered by any Paper.
(i) "Expiration Date" shall mean with respect to a Confirmation Letter a
date sixty (60) calendar days after the date of that Confirmation
Letter.
(j) "Paper" shall mean all chattel paper (as defined in the Uniform
Commercial Code), now existing or hereafter arising out of the sale or
lease by the Company of any Equipment to any Customer, including without
limitation, equipment leases and conditional sale contracts.
(k) "Purchase Price" shall be the amount AT&T-CFC is willing to pay for an
item of Paper as set forth in a Confirmation Letter. The formulae for
determining the Purchase Price are set forth in Exhibit C hereto which
formulae are subject to change from time to time by AT&T-CFC on thirty
(30) days prior written notice to the Company.
(l) "Related Documents" shall mean, with respect to any Paper, related
instruments, guaranties, security agreements, representations and
warranties, letters of credit, financing statements, recourse
agreements, certificates of title, and other documents.
(m) "Repurchase Price" shall mean, the Unpaid Balance of any item of Paper
discounted to present value using the discount rate employed to compute
the Purchase Price, plus all out-of-pocket expenses. The term "out-of-
pocket expenses" shall include, without limitation, the cost of
repossession of Equipment, storage and sale of Equipment, compliance
with applicable legal requirements, reasonable outside attorneys' fees
and court costs, and similar costs and expenses incurred by AT&T-CFC in
connection with such Paper, including, without limitation, out-of-pocket
costs incurred by AT&T-CFC related to the acquisition of the Paper.
(n) "Unpaid Balance" shall mean the aggregate unpaid balance of any item of
Paper (including interest or finance charges) or the aggregate unpaid
rentals thereunder, as the case may be, including (without limitation)
the amount of any purchase option price, mandatory purchase price,
renewal option, or put option price (e.g., price payable by a Customer
under a purchase agreement upon demand by the Company) or other
payments, to the extent included in the computation of the Purchase
Price for such Paper.
2. CREDIT CONSIDERATION.
(a) With respect to Paper the Company decides to sell, the Company grants
to AT&T-CFC for the term of this Agreement a right of first acceptance
of all items of such Paper originated by the Company constituting
Equipment lease transactions between the Company and its national
franchise customers where the original cost of the related Equipment
equals or exceeds $150,000.00.
(b) As required pursuant to Paragraph 2(a), the Company will offer to sell
Paper to AT&T-CFC by delivering a Complete Credit Package for a Customer
and any other information reasonably requested by AT&T-CFC. With
respect to those franchise concepts and parameters set forth on Exhibit
D to this Agreement, AT&T-CFC shall provide its credit decision with
respect to the application and, if the credit decision is positive, a
Confirmation Letter with respect to the particular items of Paper
offered within five (5) business days after AT&T-CFC's receipt of a
Complete Credit Package. Any failure by AT&T-CFC to communicate its
decision to the Company concerning such an item of Paper within the
aforesaid five (5) business day period shall be deemed to constitute
AT&T-CFC's rejection of the Company's offer to sell such Paper. As to
all other items of Paper, AT&T-CFC shall have ten (10) business days to
complete its review, and any failure by AT&T-CFC to communicate its
credit decision to the Company within the aforesaid ten (10) business
day period shall be deemed to constitute AT&T-CFC's rejection of the
Company's offer to sell such Paper. Each credit approval, as evidenced
by a Confirmation Letter, shall be in effect until the Expiration Date;
provided, however, such Confirmation Letter and credit approval may be
terminated in writing by AT&T-CFC, at its election and AT&T-CFC shall
have no further duties or responsibilities pursuant to such Confirmation
Letter, if on or before the Closing Date (i) the Customer or any
guarantor or other provider of credit enhancement suffers any material
adverse change in its financial condition or management; (ii) there
exists an Event of Default (as hereinafter defined) with respect to the
Company; (iii) the Customer is in default of any obligation under the
offered Paper or any other item of Paper or other obligation held by or
due the Company, AT&T-CFC or any affiliate of AT&T-CFC; or (iv) any
Equipment subject to the Paper has not been timely delivered or has been
destroyed, repossessed, sold or substantially damaged. The Company
shall not sell or offer to sell an item of Paper to any other person or
entity during any period in which a Confirmation Letter covering such
Paper is in effect.
(c) When, from time to time during the term of this Agreement, the Company
is presented with a proposed leasing or financing transaction where the
cost of equipment and/or real estate in such transaction would exceed
$1,000,000 (each, an "Oversized Transaction"), the Company shall, so
long as the Company is not precluded by the proposed Customer from doing
so, forward the details of such Oversized Transaction to AT&T-CFC.
AT&T-CFC shall promptly review the terms of the such proposed Oversized
Transaction and confer with the Company regarding the fee or commission
to be paid to the Company in the event AT&T-CFC finances such Oversized
Transaction. In the event that AT&T-CFC and the Company cannot agree as
to the terms of such fee or commission within fifteen (15) days of the
Company's submission of the details of the proposed Oversized
Transaction to AT&T-CFC, then (i) the Company's referral obligations
hereunder shall be deemed satisfied, (ii) the Company may market such
proposed Oversized Transaction to other parties, (iii) AT&T-CFC shall be
deemed to have declined such Oversized Transaction, and (iv) AT&T-CFC
shall not directly finance (by origination) such Oversized Transaction
and AT&T-CFC shall not indirectly finance (by acquisition or referral
from another party) such Oversized Transaction if and only if the
Company demonstrates that it has been awarded the Oversized Transaction,
in writing, by the prospective Customer. If, notwithstanding
subparagraph 2(c)(iv), AT&T-CFC directly finances or indirectly finances
such Oversized Transaction (when the Company has been awarded such
Oversized Transaction in writing), the Company shall be paid a fee or
commission by AT&T-CFC which is the average of (x) the fee calculated in
the manner set forth, in good faith, in the initial transmittal of the
details of the proposed Oversized Transaction to AT&T-CFC and (y) the
highest or last fee or commission proposed, in good faith, by AT&T-CFC
during its negotiations with the Company.
(d) All credit and other decisions as to whether or not AT&T-CFC is willing
to purchase an item of Paper or deal with a prospective Customer are
solely and exclusively in the discretion of AT&T-CFC. This Agreement
does not obligate AT&T-CFC to purchase any item of Paper or any minimum
volume of Paper.
3. SALE OF PAPER.
Each sale of Paper to AT&T-CFC shall be without recourse as to the
Customer's ability to pay and shall convey to AT&T-CFC all of the right,
title and interest of the Company in and to:
(a) the Paper and all Related Documents;
(b) rentals, installments and other payments due and to become due
thereunder including, without limitation, all amounts payable by
Customers upon the exercise of any renewal options, purchase options,
mandatory purchase obligations or for any put option price (to the
extent included in the computation of the Purchase Price as reflected in
a Confirmation Letter) and all rights to the proceeds of insurance
covering the Equipment under any Paper, together with all of the rights
and remedies of the Company (but none of its obligations) thereunder and
under any Related Documents, including the right to take in the
Company's name, any and all proceedings legal, equitable or otherwise,
that the Company might otherwise take save for such assignment;
(c) all liens and security interests the Company holds in the Equipment
subject to the Paper; and
(d) all proceeds of all of the foregoing in any form.
AT&T-CFC shall have in addition to all other rights hereunder, the right
to:
(i) receive and retain all payments and rights thereto under any item of
Paper,
(ii) use or sell and dispose of Equipment and any of the Company's rights
thereto, and
(iii) apply and use such payments, rights, Equipment and proceeds to
satisfy any obligations of the Company hereunder; provided, however,
that none of the foregoing rights shall limit or impair the rights of
the Customer under such Paper.
4. GRANT OF SECURITY INTEREST
The Company hereby grants to AT&T-CFC a security interest in all Equipment,
wherever located, subject to or covered by all Paper purchased by AT&T-CFC
from the Company, and
in all proceeds thereof in any form.
5. NO ASSUMPTION OF OBLIGATIONS.
All obligations of the Company, if any, under the Paper shall remain the
sole and exclusive obligations of the Company, and notwithstanding any sale
of Paper to AT&T-CFC, AT&T-CFC DOES NOT ASSUME ANY OBLIGATIONS OF THE
COMPANY OR ANY OTHER PERSON OR ENTITY UNDER OR PURSUANT TO THE PAPER OR
WITH RESPECT TO ANY EQUIPMENT, AND AT&T-CFC SHALL HAVE NO DUTIES OR
RESPONSIBILITIES TO THE CUSTOMERS WITH RESPECT THERETO.
6. COMPUTATION AND PAYMENT OF PURCHASE PRICE.
(a) For each item of Paper which is acceptable to AT&T-CFC, AT&T-CFC hereby
agrees to pay to the Company the Purchase Price for such item of Paper
which, unless otherwise agreed by the parties, shall be the discounted
present value thereof, using the discount rates set forth in Exhibit C
hereto, as the same may change from time to time, as provided in
Paragraph 1(k).
(b) AT&T-CFC shall deliver its check or wire transfer to the order of the
Company (or make payment in such other place or manner as the Company
and AT&T-CFC may agree) in the amount of the Purchase Price within three
(3) business days after AT&T-CFC's receipt from the Company of all of
the items set forth in Paragraph 8.
- 1 -
7. FORM OF PAPER.
All Paper and Related Documents sold to AT&T-CFC shall be substantially in
the form of Exhibit E hereto, unless otherwise agreed by AT&T-CFC in
writing, and shall include, among other things, a master lease agreement
("Master Lease Agreement") and a schedule ("Schedule").
8. DELIVERY OF PAPER AND OTHER DOCUMENTS TO AT&T-CFC.
For each item of Paper sold to AT&T-CFC hereunder, the Company shall
deliver to AT&T-CFC at least three (3) business days before AT&T-CFC shall
be required to pay the Purchase Price:
(a) the one and only signed original counterparts of all items of the Paper
with the Master Lease Agreement and each Schedule sold to AT&T-CFC
marked "Original Counterpart No. 1.";
(b) all original copies of Related Documents, except for executed copies
retained by the Customer;
(c) the acknowledgment copies of Uniform Commercial Code financing
statements filed by the Company against each Customer in all appropriate
jurisdictions covering the Equipment which is described in such Paper,
and duly assigned to AT&T-CFC, in form and substance satisfactory to
AT&T-CFC;
(d) copies of the purchase orders, invoices, bills of sale and bills of
lading with respect to all Equipment subject to the Paper that relates
to the purchase thereof by the Company;
(e) an Assignment in the form of Exhibit F to this Agreement;
(f) evidence of insurance coverage on such Equipment, insuring AT&T-CFC's
interest therein and otherwise in form and substance satisfactory to
AT&T-CFC showing AT&T-CFC as loss payee (casualty) and an additional
insured (liability);
(g) the estoppel letter in the form of Exhibit G hereto;
(h) UCC-1 financing statements executed by the Company covering the
Company's interests in the Paper to be acquired by AT&T-CFC and the
Equipment subject to such Paper; and
(i) such other documents and instruments as AT&T-CFC may reasonably request
duly executed by the Company to further implement and effectuate the
purposes of this Agreement.
All documentation with respect to the transfer of Paper to AT&T-CFC shall
be in form and substance satisfactory to AT&T-CFC, and AT&T-CFC, at its
election, may conduct (or have conducted on its behalf) physical
inspections of the Equipment prior to or after payment of the Purchase
Price of a related item of paper.
9. WARRANTIES ON PAPER; DOCUMENTATION.
(a) As to each item of Paper now or hereafter sold by the Company to AT&T-
CFC, the Company warrants, represents and guarantees that, as of the
related Closing Date:
(1) it owns the item of Paper and the Related Documents free and clear
of all liens and security interests except those that are both
disclosed to AT&T-CFC in writing and are satisfied prior to, or
contemporaneously with, such closing;
(2) it is the owner of the Equipment described in the Paper or has a
perfected first security interest or lien thereon effective against
all persons and entities and free from all security interests,
liens, and encumbrances, except for the rights of the Customer under
the particular item of Paper, any security interests or liens in
favor of AT&T-CFC and those that are both disclosed and satisfied as
provided in Paragraph 9(a)(1);
(3) it has accomplished any filing, recordation or any other action
which is required to perfect the first priority security interest of
AT&T-CFC in the Equipment, subject to the rights of the Customer
therein pursuant to the terms of the Paper;
(4) such Paper and all Related Documents are true, valid and genuine;
and, based on the facts and circumstances and the applicable laws
then in existence, are binding and enforceable against the Customer
and the Company (where the Company is a party thereto) in accordance
with their respective terms, and the Master Lease Agreement and each
Schedule sold to AT&T-CFC shall be the one and only signed, original
version of each;
(5) such Paper is the only paper with respect to the Equipment described
therein and the balances due with respect to such Paper as provided
by the Company are true and accurate in all respects;
(6) such Paper and all Related Documents are free from all defenses,
setoffs and counterclaims of any kind, and no suit or other legal
action or proceeding, administrative, judicial or otherwise, has
been brought or threatened to be brought by or against the Company
in connection therewith;
(7) all signatures, names, addresses, amounts and other statements of
fact contained in the Paper and all Related Documents are true and
correct;
(8) the Equipment has been delivered to the Customer under such Paper
and has been unconditionally accepted by and is then in the actual
possession of such Customer at the respective equipment locations
shown in the Paper, and is being used in business operations and not
for personal, family, or household purposes;
(9) it has no knowledge of any denial of liability or the assertion of
any claim of invalidity or other defense by any Customer on or with
respect to any such Paper;
(10) any discounts or adjustments to which the Company has agreed are
written and apparent on the face of such Paper or Related Documents;
(11) except as provided in Paragraphs 9(a)(1) and 9(a)(2), it has not
sold, assigned or encumbered any such Paper, any Related Documents
or the Equipment covered thereby to others, nor has the Company done
any act, or omitted to do any act, which impairs the validity or
enforceability of any such Paper;
(12) the Customer under each such item of Paper shall have taken all
necessary corporate or other action and shall have obtained all
necessary permits or authorizations with respect to the execution
and delivery of such Paper and all Related Documents and performance
thereof;
(13) the assertion, statement and computation of all rentals,
interest, fees and other charges under any item of Paper have been
accurately made and charged, are not usurious, and are in full
conformity and compliance with all applicable laws, rules and
regulations;
(14) the Company's records pertaining to the Paper and all Related
Documents are accurate in all material respects;
(15) the Paper, the form and substance of the Paper, the transaction
giving rise to such Paper and the sale and delivery of the Equipment
to the Customer all conform with all applicable laws, rules and
regulations;
(16) no payments have been made on such Paper by the Company, any
affiliate of the Company, or by any vendor or broker who referred
the Customer to the Company;
(17) no Customer or any other responsible party with respect to the
Paper, including any endorser or guarantor thereof, is the subject
of any bankruptcy or insolvency proceeding;
(18) all insurance policies, certificates and coverages relating to
the Equipment or otherwise required under the Paper and conform with
all applicable laws, rules and regulations; and
(19) no Equipment covered by the Paper has been destroyed,
repossessed, sold or substantially damaged.
(b) The representations, warranties and guarantees set forth in Paragraph
9(a)(4) (subject to the qualifications set forth in that paragraph) are
continuing representations, warranties and guarantees that extend beyond
the Closing Date. In addition, the Company represents, warrants and
guarantees that it shall comply with all of its warranties and other
obligations, if any, with respect to the Equipment covered by such
Paper.
(c) The Company acknowledges that AT&T-CFC shall be relying upon the
warranties of the Company as to such item of Paper purchased, and the
Company agrees that the knowledge of AT&T-CFC of any breach of any such
warranties at the time of its purchase of any item of Paper, or at any
time before or thereafter, or the failure of AT&T-CFC to call any such
breach to the attention of the Company, shall not impair, limit or
constitute any waiver of any such warranties or of the obligations of
the Company with respect to such Paper, and that the Company shall
remain fully liable for any such breach. Furthermore, the review of any
such Paper by AT&T-CFC and the furnishing of any comments in respect
thereof to the Company or the failure to do so in any case, shall not
impair, limit, or constitute any waiver of any of the obligations or
warranties of the Company with respect to such Paper.
(d) In the event any filing or recording of any financing statements or
other documents are made by AT&T-CFC, or any such financing statements
or documents are prepared by or the execution thereof are supervised by
AT&T-CFC in respect of any Paper, it shall be solely for the convenience
of the Company and shall in no way impair, limit or constitute any
waiver of the obligations or warranties of the Company with respect to
its obligation to assure due compliance with any filing requirements.
(e) Until the Company has made full, final and irrevocable payment of the
Repurchase Price for an item of Paper pursuant to Paragraph 13, the
Company shall not, without the prior written consent of AT&T-CFC, waive,
modify, extend, renew, release, or discharge the terms or conditions of
any Paper purchased by AT&T-CFC or any Related Documents, or release any
related Equipment covered thereby or thereunder, repossess any Equipment
or consent to the return thereof, or accept any amounts payable under
the Paper (except payments due and paid prior to the Closing Date on
which it was sold by the Company to AT&T-CFC).
10. ESTOPPEL LETTERS.
As a condition precedent to the payment of the Purchase Price for any item
of Paper to AT&T-CFC, AT&T-CFC shall have received an estoppel letter in
the form of Exhibit G hereto, or such other or different form as AT&T-CFC
may agree to accept.
11. WAIVERS; GRANTS; DUTIES.
(a) The Company hereby waives presentment, demand, notice of nonpayment,
notice of dishonor, and protest as to all Paper sold to AT&T-CFC
hereunder. The Company shall transmit and deliver to AT&T-CFC,
immediately upon receipt thereof, all payments on account of any Paper
which the Company may receive subsequent to AT&T-CFC's purchase thereof,
and such payments are received and held by the Company in trust for
AT&T-CFC. The Company agrees that AT&T-CFC may sign or endorse in the
Company's name all checks and other remittances received and all notes
or other instruments, if any, evidencing obligations under the Paper and
any assignments thereof, and the Company hereby grants to AT&T-CFC an
irrevocable and durable power of attorney for such purposes. The
Company agrees that, at any time after the Closing Date of an item of
Paper, AT&T-CFC may take any one or more of the following actions with
respect to any Paper or any Related Documents or any Equipment subject
to such Paper, any Customer or other responsible party thereunder, at
any time and from time to time, without impairing, limiting or otherwise
affecting the obligations of the Company under this Agreement (the
"Permitted Actions"):
(i) make changes, modifications, amendments or alterations or
experience same by operation of law or otherwise;
(ii) grant releases or discharges or experience same by operation of
law or otherwise;
(iii) settle, compromise, adjust, compound, collect, liquidate or
accept partial payments of or with respect to any rights, claims,
liabilities, Equipment or other security;
(iv) grant renewals and extensions of time for payment (including
extensions of time beyond the original term) or otherwise;
(v) fail to perfect or to continue the perfection of any security
interest; or
(vi) permit the substitution of a Customer or any other responsible
party thereunder.
(b) The Company shall not be obligated to repurchase an item of Paper in
the event that:
(i) AT&T-CFC takes one or more of the Permitted Actions within its
control solely for the purpose of effectuating a repurchase event
under Paragraph 13(a) with respect to such item of Paper; and
(ii) there is no separate and independent basis for repurchase of such
item of Paper pursuant to Paragraph 13(a) other than the basis for
repurchase effectuated by said one or more Permitted Actions
described in subparagraph (i).
12.ADDITIONAL WARRANTIES BY THE COMPANY.
The Company represents, covenants and warrants to AT&T-CFC that:
(a)the Company is duly organized, validly existing and in good standing
under laws of its state of incorporation and the Company is duly qualified
as a foreign corporation to do business in each state in which the leasing
or ownership of property or the nature of the business of the Company
requires such qualification;
(b)The Company has good and marketable title to all properties and
assets, whether real or personal, shown on the latest balance sheets of
the Company furnished to AT&T-CFC prior to the execution of this
Agreement, subject to no mortgage, security interest, pledge, lien or
encumbrance except as are shown on said balance sheets and except for
current taxes not now in default, and since the date of the latest of
such balance sheets there has been no material adverse change in the
condition, financial or otherwise, of the Company from that shown on
said balance sheets;
(c)at the date of such balance sheets, the Company has no material
(individually or in the aggregate) liabilities or obligations of any
nature, whether absolute, accrued, contingent or otherwise, due or to
become due, other than as reflected or reserved against in said balance
sheets, and there have been no material changes since such date, and the
Company has no material liability for federal or state income taxes
other than as shown on said balance sheets and except for taxes relating
to operations since the date of said balance sheets and no federal or
state tax deficiency assessment has been made or threatened against the
Company and there is no pending claim of deficiency or recommendation of
the assessment of any deficiency against the Company;
(d)the execution and delivery of this Agreement and the performance
thereof by the Company are not in violation of any provisions of the
Company's Articles of Incorporation or by-laws or any indenture or
mortgage or other Agreement which the Company is a party or under which
it may be bound;
(e)the Company has taken all necessary corporate action to authorize its
execution, delivery and performance of the Agreement; and
(f)during the term of this Agreement, the Company will furnish to AT&T-
CFC:
(i) within ninety (90) days after the end of each fiscal year, a balance
sheet and statements of profit and loss and surplus of the Company as
at the end of such fiscal year, all prepared in accordance with
generally accepted principles and practices of accounting
consistently applied, and certified by independent certified public
accountants selected by the Company and acceptable to AT&T-CFC; and
(ii) within forty-five (45) days after the end of each of the first
three quarters of each fiscal year, a balance sheet of the Company
and statements of profit and loss and surplus as at the end of such
quarter, all prepared in accordance with generally accepted
principles and practices of accounting consistently applied and
certified by the chief financial officer of the Company.
13. REPURCHASE OF PAPER.
(a)In the event that there has been a breach, failure or default of any
warranty, representation, covenant or other obligation of the Company
under or pursuant to this Agreement, upon demand by AT&T-CFC, the
Company shall immediately repurchase the Paper affected by such breach,
failure or default by paying in full the Repurchase Price for such Paper
within fifteen (15) days after demand for repurchase by AT&T-CFC. If
the Company disputes that it is obligated to repurchase an item of Paper
demand for repurchase of which has been made by AT&T-CFC pursuant to
this Paragraph 13(a), the Company must initiate arbitration proceedings,
as provided in Paragraph 13(d), within fifteen (15) days after demand
for repurchase by AT&T-CFC. If the Company has not commenced such
arbitration proceedings within such fifteen (15) day period, it shall be
conclusively presumed that the Company is obligated to repurchase the
related item of Paper.
(b)The Repurchase Price shall be an amount computed as set forth in
Paragraph 1(m). In the event of any failure by the Company to
repurchase any item of Paper, AT&T-CFC may (but shall not be required
to) liquidate or otherwise dispose of such Paper, including, in the
event the Customer is in default under such Paper, the repossession and
disposition of Equipment, and the Company shall be liable for any
resulting deficiencies and all reasonable expenses incurred in
connection therewith. Any repossessed Equipment may be sold for cash or
on credit or re-leased, and the net sale proceeds or lease rentals
(present-valued) received by AT&T-CFC shall be applied to the Repurchase
Price obligation owed by the Company.
(c)If any such breach, failure or default occurs, the repurchase of
Paper and payment of the Repurchase Price resulting therefrom shall be
made whether or not the Customer is in default under the Paper. Full,
final and irrevocable payment of the Repurchase Price shall release and
satisfy all claims of AT&T-CFC against the Company with respect to such
Paper except that the Company's duty to indemnify AT&T-CFC, as provided
in Paragraph 17, shall survive any such payment.
(d)Arbitration proceedings may be commenced by the Company in the event
the Company disputes that it is obligated to repurchase an item of
Paper. Arbitration shall be administered by the American Arbitration
Association ("AAA") under its Commercial Arbitration Rules, and its
Expedited Procedures shall apply; provided, however, the following
procedures and requirements shall apply in any such arbitration
proceeding:
(i) The only matter that shall be arbitrable is whether or not the
Company is obligated under this Agreement to repurchase an item of
Paper purchased by AT&T-CFC hereunder. In the event the arbitrator
determines that the Company is so obligated, the arbitrator shall
apply the Repurchase Price to such item of Paper, together with
interest on such Repurchase Price from the date of demand for
repurchase by AT&T-CFC until full, final and irrevocable payment of
the Repurchase Price by the Company at a rate of interest equal to
the discount rate of interest used to calculate the Purchase Price
paid by AT&T-CFC for such Paper, and the arbitrator shall issue
his/her award in that amount with the continuing interest obligation
until payment of the award by the Company. A judgment on any award
rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
(ii) There shall be one arbitrator selected by the AAA from a list of
proposed arbitrators sent to both parties. The arbitrator shall
have at least ten (10) years of commercial equipment leasing
experience.
(iii) The arbitration proceeding and all arbitration hearings shall
take place in New York, New York.
(iv) The filing fee for the arbitration shall be paid by the Company.
Each party shall be responsible for its own costs, expenses and
attorneys fees in the arbitration proceeding; provided, however,
that the losing party shall be solely responsible to pay for all AAA
and arbitrator fees and expenses including the AAA filing fee.
(v) The arbitrator shall issue his/her final decision, in writing,
within sixty (60) days after the Company commences the arbitration
proceeding.
(vi) The arbitrator shall not limit, expand or otherwise modify the
terms of this Agreement.
(vii) Notices given to the parties in the arbitration proceeding shall
comply with the requirements set forth in Paragraph 24.
14. DEFAULT BY THE COMPANY.
An event of default with respect to the Company ("Event of Default") shall
exist if:
(a) the Company shall fail to repurchase and pay for any item of Paper
from AT&T-CFC, as provided in Paragraph 13, which repurchase is not the
subject of a pending arbitration proceeding pursuant to Paragraph 13(d);
or
(b) the Company defaults in any other payment obligations, or in the
performance of observance of any other covenant, agreement, warranty,
representation, or provision contained in this Agreement, or any other
agreement with AT&T-CFC, and such default shall have continued for a
period of twenty (20) days after written notice thereof to the Company
from AT&T-CFC; provided, however, if the default is curable and Company
shall have commenced in good faith and employing its best efforts to
cure such default within said twenty (20) day period, then an additional
twenty (20) days shall be afforded to Company to cure such default; or
(c) the Company defaults in the payment of any indebtedness of the Company
or under any agreement or instrument under or pursuant to which any such
indebtedness may have been issued, created, assumed, or guaranteed by
the Company and such default shall continue for more than the grace
period, if any, therein specified, and such indebtedness be declared due
and payable; or
(d) the Company shall cease to do business as a going concern; admit in
writing its inability to pay its debts generally as they become due;
make an assignment for the benefit of its creditors; commence a
proceeding for the appointment of a receiver, trustee, liquidator or
conservator of itself or of the whole or any substantial part of its
property; or a complaint petition, answer or other document seeking
reorganization, arrangement, liquidation or any similar relief under the
Bankruptcy Code or any other applicable law or statute of the United
States of America or any state is filed by the Company or against the
Company (and only if filed against the Company is not dismissed within
thirty (30) days); or a court of competent jurisdiction shall enter an
order, judgment or decree appointing a receiver, trustee, liquidator or
conservator (or shall otherwise assume custody or control) of the
Company or of the whole or any substantial part of its assets; or
(e) any written information furnished by or on behalf of the Company to
AT&T-CFC relating to the sale of any Paper or the financial condition or
business affairs of the Company is determined by AT&T-CFC to be false or
misleading in any material respect;
In addition to other rights and remedies available to AT&T-CFC pursuant to
this Agreement or applicable law or in equity, at any time an Event of
Default under Paragraph 14(a) exists and is continuing, AT&T-CFC, at its
sole election and option, may require the Company to repurchase all items
of Paper sold to AT&T-CFC by the Company, and if so required, the Company
shall immediately pay the aggregate Repurchase Price for all items of
Paper.
15. REASSIGNMENT.
Concurrently with the full, final and irrevocable payment by the Company of
the Repurchase Price pursuant to Paragraph 13 or 14 for any Paper, AT&T-CFC
shall reassign such item of Paper to the Company or such other single party
as the Company may direct, in writing, "AS IS" and without recourse,
representation or warranty of any kind, express or implied, except that
AT&T-CFC shall warrant that the Paper is free and clear of liens and
encumbrances created by or through AT&T-CFC. At the request of the
Company, AT&T-CFC shall provide the Company or such other single party as
the Company may direct, in writing, with copies of appropriate documents or
computerized material relating to repurchased Paper showing AT&T-CFC's
payment records in respect thereof. All financing statements relating to
the subject Paper shall be reassigned to the Company or such other single
party as the Company may direct, in writing, and AT&T-CFC shall deliver to
the Company or such other single party as the Company may direct, in
writing, such original copies of the Paper and Related Documents as may
have been previously delivered to AT&T-CFC by the Company.
16. ABSOLUTE SALE.
EACH SALE AND ASSIGNMENT OF PAPER TO AT&T-CFC IS AN ABSOLUTE AND
UNCONDITIONAL TRANSFER FROM THE COMPANY TO AT&T-CFC AND NOT AS A LOAN OR
OTHER SECURED FINANCING TO THE COMPANY. However, if any transactions
hereunder are deemed or construed to be loans or other secured financings
to the Company, the Company hereby grants to AT&T-CFC a security interest
in all Paper assigned to AT&T-CFC, together with all payments due or to
become due under such Paper, and all proceeds of all of the foregoing, in
any form.
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17. INDEMNITY.
The Company agrees, at its sole cost and expense, and without limiting any
other rights which AT&T-CFC has hereunder, to indemnify AT&T-CFC and hold
AT&T-CFC harmless from and against any and all losses, damages, penalties,
claims, suits and actions (collectively "Claims") which may be incurred by
AT&T-CFC and arising from or related to:
(a) claims by a Customer or a third party, in contract, tort or strict
liability concerning or relating to any Equipment, including, without
limitation, defective Equipment or any alleged infringement or violation
of a patent, copyright, trade secret or other third party proprietary
right; or
(b) any Event of Default by or with respect to the Company.
18. NON-SOLICITATION.
AT&T-CFC agrees that the Business Finance Division ("BFD") of AT&T-CFC (as
BFD is presently constituted or is hereafter only renamed, but not
restructured or otherwise changed) will not directly target and solicit for
future equipment lease transactions Customers under items of Paper
purchased by AT&T-CFC from the Company hereunder. This limitation shall
not apply: (i) to Customers who are already customers of AT&T-CFC, AT&T
Capital Corporation ("AT&T Capital"), or any of AT&T Capital's
subsidiaries, affiliates, or business units at the time of purchase of the
item of Paper from the Company hereunder; (ii) to any business unit,
subsidiary or affiliate of AT&T Capital other than BFD; (iii) at any time
after termination of this Agreement; or (iv) at any time after an Event of
Default occurs.
19. TERMINATION.
Either AT&T-CFC or the Company may terminate this Agreement upon thirty
(30) days written notice to the other party. Notwithstanding any
termination of this Agreement, the rights and obligations of AT&T-CFC and
the Company under this Agreement shall survive with respect to all Paper
and Related Documents assigned by the Company to AT&T-CFC pursuant to a
Confirmation Letter issued prior to the effective date of such termination.
20. ASSIGNMENT.
The Company shall not assign any of its rights and or delegate any of its
duties and obligations under this Agreement, in whole or in part, without
the prior written consent of AT&T-CFC, and any unauthorized purported
assignment shall be null and void. AT&T-CFC may sell or assign any Paper
purchased hereunder to any person or entity, subject to the terms and
conditions of this Agreement without the consent of the Company, and AT&T-
CFC may assign its rights and delegate its duties and obligations under
this Agreement, in whole or in part, without the consent of the Company;
provided, however, that the right of first acceptance set forth in
Paragraph 2(a) shall not survive any such assignment by AT&T-CFC unless the
Company otherwise agrees in writing.
21. RELATIONSHIP OF THE PARTIES.
Nothing contained in this Agreement shall be construed to place AT&T-CFC
and the Company in a relationship as partners, joint venturers, or
principal and agent. Neither AT&T-CFC nor the Company are authorized to
make any contract, agreement, warranty or representation on behalf of the
other or to create any obligation, express or implied, on behalf of the
other. Neither party shall act as or represent itself as an agent, partner
or joint venturer of the other party.
22. CREDIT MATTERS.
The Company authorizes AT&T-CFC or any of its affiliates to obtain credit
bureau reports regarding the Company, and to make such other credit
inquiries that AT&T-CFC feels are necessary or desirable.
23. CONFIDENTIALITY.
Any information or material which is transmitted by AT&T-CFC to the Company
or by the Company to AT&T-CFC shall be treated as confidential by the
recipient except for information which:
(a) was already known to the recipient prior to disclosure to it hereunder;
or
(b) becomes available to the recipient on a non-confidential basis from a
source other than the provider hereunder; or
(c) is or becomes available to the public other than as a result of the
disclosure by the recipient; or
(d) is required to be disclosed under applicable law, rule or regulation.
24. NOTICES.
Any notice hereunder by AT&T-CFC or the Company shall be in writing and
delivered by registered or certified mail (notices so mailed shall be
deemed given three (3) days after being mailed) or by telecopy (effective
upon receipt where there is an electronically generated confirmation of
receipt) or reputable overnight delivery (effective upon receipt) to the
addresses set forth below or to such other addresses for which notice of
change has been given.
If to the Company: Meridian Financial Corporation
8250 Haverstick Road, #110
Indianapolis, IN 46240
Attn: Gerald Gerichs
Telecopy No. 317-722-2905
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If to AT&T-CFC: AT&T Commercial Finance Corporation
44 Whippany Road
Morristown, NJ 07962
Attn: President, Business Finance Division
Telecopy No. 201-397-3218
With a copy to: AT&T Commercial Finance Corporation
44 Whippany Road
Morristown, NJ 07962
Attn: Chief Counsel, Business Finance Division
Telecopy No. 201-397-3218
25. TAXES.
The Company shall be liable for and shall pay (to AT&T-CFC or, if
permitted, directly to the appropriate authority) when due all taxes
imposed applicable to the lessor or seller under an item of Paper and the
related Equipment subject thereto attributable to the period ending on the
date such Paper is assigned to AT&T-CFC. In addition, the Company shall be
liable for any sales tax, use tax, documentary stamp tax or similar tax
attributable to the sale of any item of Paper to AT&T-CFC.
26. MERGER; AMENDMENT.
This Agreement and the Exhibits hereto constitute the entire agreement
between AT&T-CFC and the Company as to the subject matter hereof and
supersede all prior or contemporaneous oral or written agreements,
negotiations or understandings. This Agreement may not be amended or
altered, except in and by a writing signed by AT&T-CFC and the Company.
27. WAIVER.
The failure of either AT&T-CFC or the Company to enforce on one or more
occasions any right or remedy under this Agreement shall not be construed
as having created a custom contrary to the specific provisions of this
Agreement, or as having in any way modified or waived the same.
28. ENFORCEABILITY.
The provisions of this Agreement shall be severable; and if any provision
of this Agreement is held to be invalid or unenforceable, it shall be
construed to have the broadest interpretation which would make it valid and
enforceable. Invalidity or unenforceability of one provision shall not
affect any other provision of this Agreement.
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29. NO THIRD PARTY BENEFICIARIES.
This Agreement is solely for the benefit of AT&T-CFC, the Company and their
permitted successors and assigns, and no other person or entity, including
without limitation any Customer, shall have any rights or remedies under
this Agreement.
30. GOVERNING LAW; WAIVER OF JURY TRIAL.
THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW JERSEY. THE PARTIES CONSENT TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN NEW
JERSEY, AND WAIVE ANY OBJECTION RELATING TO IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF PROCEEDINGS IN ANY SUCH COURT. THE COMPANY
AND AT&T-CFC WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY
TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives effective the date first above
written.
AT&T Commercial Finance Corporation Meridian Financial Corporation
By: By:
Print Name: Print Name:
Title: Title:
570b3
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