Collection Activities. (a) Buyer appoints AAR as its servicer and agent (in such capacity, the “Servicer”) for the administration and servicing of all Purchased Receivables sold to Buyer hereunder, and AAR hereby accepts such appointment and agrees to assume the duties and the administration and servicing obligations as Servicer, and perform all necessary and appropriate commercial collection activities in arranging the timely payment of amounts due and owing by any Account Debtor, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, including, without limitation, diligently and faithfully performing all servicing and collection actions (including, if necessary, acting as party of record in foreign jurisdictions); provided, however, that such appointment as Servicer shall not release any Seller from any of its duties, responsibilities, liabilities and obligations resulting from or arising hereunder. Buyer may replace the Servicer in the manner set forth in Section 4(e) hereto. In connection with its servicing obligations, Servicer will, and will ensure that each Seller will, perform their respective obligations and exercise their respective rights under contracts related to the Purchased Receivables with the same care and applying the same policies as they apply to their own Receivables generally and would exercise and apply if they owned the Purchased Receivables and shall use commercially reasonable efforts to maximize Collections. (b) Servicer has established the Collection Account to receive amounts owing under the Purchased Receivables and covenants to maintain such account so long as any Purchased Receivable remains unpaid unless otherwise agreed to in writing by Buyer. The Collection Account may contain funds relating to Receivables in addition to the amounts owing under the Purchased Receivables, provided that adequate records are created and maintained to identify clearly the funds in the Collection Account that relate to the Purchased Receivables. The parties shall use commercially reasonable efforts to negotiate and enter into an account control agreement covering the existing Collection Account in form and substance reasonably satisfactory to the Buyer on or prior to the DACA Date. If such account control agreement has not been entered into by such date, and neither the Seller Representative nor the Buyer shall have elected to terminate this Agreement pursuant to the second sentence of Section 12(c), then the Servicer shall establish a new bank account with an account bank reasonably acceptable to the Buyer (such new account shall replace the prior Collection Account as the new “Collection Account” hereunder and from and after that date for all purposes hereof), and within five (5) Business Days following the establishment of such account, all Account Debtors shall have been instructed by the Servicer to make all payments in respect of Purchased Receivables to such new Collection Account and such new Collection Account shall be under the sole dominion and control of the Buyer pursuant to an account control agreement in form and substance reasonably satisfactory to the Buyer. Servicer covenants and agrees (i) to take any and all reasonable actions necessary, consistent with applicable law, (including those requested by Buyer) to ensure that all Collections on account of the Purchased Receivables will be paid directly by each Account Debtor to the Collection Account, without adjustment, setoff or deduction of any kind or nature, except as otherwise required by law, (ii) not to change the payment instructions while any Purchased Receivable remains outstanding, (iii) to the extent any Collections or other amounts with respect to the Purchased Receivables are deposited in any account other than the Collection Account, to cause all such amounts to be deposited into the Collection Account within three (3) Business Days of receipt thereof by the Servicer or such Seller, and (iv) not to permit the Collection Account to become subject to any control, lien, pledge or adverse claim of or by any third party (other than any lien of the Buyer granted hereunder and under the other Transaction Documents). All Collections received or deposited into any Collection Account shall be transferred, delivered to or deposited in the Buyer’s Account by the Servicer within five (5) Business Days of receipt. (c) Until payments in respect of the Purchased Receivables have been remitted to the Collection Account, Seller and Servicer will hold such funds in trust as Buyer’s exclusive property and safeguard such funds for the benefit of Buyer. (d) Pursuant to its servicing obligations under Section 4(a) hereto, Servicer shall be responsible for identifying, matching and reconciling all payments received by the Servicer or any Seller in respect of the Purchased Receivables (as distinguished from any Receivables of a Seller not sold to the Buyer hereunder) associated with such payment and Posting all identification and reconciliation information for confirmation by Buyer in a format satisfactory to Buyer promptly, and in any event within five (5) Business Days of receipt thereof. Servicer shall cause all such payments to be directed and deposited into the Collection Account within the time and in the manner set forth in this Section 4. If any payment is received from an Account Debtor, and such payment is not identified by such Account Debtor as relating to a particular Receivable and cannot otherwise be reasonably identified as relating to a particular Receivable within five (5) Business Days of receipt thereof, such payment shall be applied first to the unpaid Purchased Receivables with respect to such Account Debtor in chronological order (beginning with the oldest unpaid Purchased Receivable), and then to Receivables with respect to such Account Debtor that are not Purchased Receivables, also in chronological order. Servicer and each Seller hereby represent, warrant and agree that no Collection Account is or shall ever be subject to the control, lien pledge or any other encumbrance in favor of any buyer from or creditor of any Seller, other than customary bankers’ liens of account banks arising under Article 4 of the UCC and the security interest granted to the Buyer hereunder and under the other Transaction Documents, unless the Buyer has consented thereto in writing and pursuant to an intercreditor or lien priority agreement in form and substance reasonably satisfactory to the Buyer. (e) Upon the occurrence of any Servicer Event Change, the Buyer may at any time thereafter (with notice to each Seller Party) replace the Servicer (which replacement may be made through the outplacement to a Person of all back office duties, including billing, collection and processing responsibilities, and reasonable access during normal business hours and subject to reasonable confidentiality restrictions, to all personnel, hardware and software utilized in connection with such responsibilities) with any other Person, as agent of Buyer, acceptable to the Buyer in its sole discretion at such time. Each Seller shall jointly and severally reimburse Buyer for all reasonable expenses incurred by Buyer in connection with such replacement. In the event that Servicer is replaced, Servicer (and each other Seller who may be acting as sub-servicer or sub-agent for Servicer in such capacity with respect to any Purchased Receivables) shall cease its activities as Servicer in a manner that Buyer determines and shall cooperate fully and facilitate the transition of the performance of such activities to any successor servicer who may be appointed by Buyer at such time (including the Buyer), and Buyer (or its designee as successor servicer) may assume the role as Servicer, to service and administer the Purchased Receivables, on the terms and subject to the conditions herein set forth or as may otherwise be agreed in writing between Buyer and such successor servicer. Thereafter, the replaced Servicer shall take such action or refrain from taking such action as Buyer may specify in order to assist Buyer (or its designee as successor servicer) in assuming and performing such obligations. Servicer and each Seller agrees, at its expense, to take all actions necessary to provide the successor servicer with access, whether or not at the offices and properties of Servicer or such Seller to all computer software (including its servicing software and its claims software), necessary or useful in collecting, billing or maintaining the records with respect to the Purchased Receivables. (f) Without duplication of any amounts recovered by any Servicer Indemnified Person pursuant to Section 7(b), Servicer hereby agrees to indemnify Buyer and its officers, directors, agents, representatives and employees (each, a “Servicer Indemnified Person”) from and against any and all claims, losses and liabilities (including, without limitation, reasonable attorneys’ fees) (all of the foregoing being collectively referred to as “Servicer Indemnified Amounts”) arising out of or resulting from (i) any failure by Servicer to perform its duties or obligations as Servicer hereunder in accordance with this Agreement and the other Transaction Documents, (ii) any claim brought by any Person other than a Servicer Indemnified Person arising from Servicer’s collection activities with respect to the Purchased Receivables or (iii) any other Material Adverse Change under clause (b) or (c) of the definition thereof; provided, however, that in all events there shall be excluded from the foregoing indemnification any claims, losses or liabilities to the extent resulting solely from the fraud, gross negligence or willful misconduct of such Servicer Indemnified Person (or any of its officers, directors, agents, representatives and employees who are controlled by, or under common control with, such Servicer Indemnified Person) as determined in a final non-appealable judgment by a court of competent jurisdiction. If at any time the Servicer delegates any of its servicing duties hereunder to one or more of the other Sellers, Servicer shall continue to remain fully responsible and liable for the performance of such duties. No Seller shall delegate or assign any of its duties to a sub-servicer or sub-agent, other than another Seller or AAR or any of its affiliates, without prior written consent of Buyer in its sole discretion. (g) Each Seller hereby appoints Buyer and Servicer (if other than such Seller) as the true and lawful attorney-in-fact of such Seller, with full power of substitution, coupled with an interest, and hereby authorizes and empowers Buyer in the name and on behalf of such Seller, to take such actions, and execute and deliver such documents, as Buyer deems necessary or advisable in connection with any Purchased Receivable (i) to obtain full benefits of the Transaction Documents and the Purchased Receivables, (ii) to perfect the purchase and sale of Purchased Receivables, including, without limitation, to send a notice of such purchase and sale to the Account Debtor of the transfers contemplated hereby and the sale of the Purchased Receivables, or (iii) to make collection of and otherwise realize the benefits of any Purchased Receivable. At any time Servicer has been replaced hereunder, Buyer shall have the right to bring suit, in Buyer’s or any Seller’s name, and generally have all other rights of an owner and holder respecting any Purchased Receivables, including without limitation the right to accelerate or extend the time of payment, settle, compromise, release in whole or in part any amounts owing on any Purchased Receivables and issue credits in its own name or the name of any Seller. At any time following removal of Servicer hereunder, Buyer may endorse or sign Buyer’s or such Seller’s name on any checks or other instruments with respect to any Purchased Receivables or the goods covered thereby. Except as Buyer may otherwise expressly agree in writing, any and all returned, reclaimed or repossessed inventory and goods relating to any Purchased Receivables shall be set aside by the applicable Seller marked with Buyer’s name and (in any case) held by such Seller in trust for Buyer as owner, and for Buyer’s account. (h) Upon any termination of AAR as Servicer pursuant to the terms of this Agreement, each Seller and AAR shall use commercially reasonable efforts to assist the Buyer in connection with recovering and enforcing payment of the Purchased Receivables, including by providing transitional services and related services as contemplated by Section 4(e) hereto.
Appears in 1 contract
Sources: Purchase Agreement (Aar Corp)
Collection Activities. (a) Buyer appoints AAR Seller as its servicer and agent (in such capacity, the “Servicer”) for the administration and servicing of all Purchased Receivables sold to Buyer hereunder, and AAR Seller hereby accepts such appointment and agrees to assume the duties and the administration and servicing obligations as Servicer, and perform all necessary and appropriate commercial collection activities with the same care and policies as are applied to its own Receivables in arranging the timely payment of amounts due and owing by any Account Debtor, Debtor all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, including, without limitation, diligently and faithfully performing all servicing and collection actions (including, if necessary, acting as party of record in foreign jurisdictions); provided, however, that such appointment as Servicer shall not release any Seller from any of its duties, responsibilities, liabilities and obligations resulting from or arising hereunder. Buyer may replace the Servicer in the manner set forth in Section 4(eSeller as its servicer pursuant to clause (f) heretobelow. In connection with its servicing obligations, Servicer will, and Seller will ensure that each Seller will, perform their respective its obligations and exercise their respective its rights under contracts related to the Purchased Receivables with the same care and applying the same policies as they apply to their own Receivables generally and it would exercise and apply if they it owned the Purchased Receivables and shall use commercially reasonable efforts act in the best interest of Buyer to maximize CollectionsCollections and provided, further that following an Insolvency Event of an Account Debtor of Receivables purchased hereunder on or after the Trigger Date (or any other event that Buyer may assume the risk thereof in writing from time to time after the date hereof), Buyer shall be fully responsible for all costs and expenses incurred by Seller in connection herewith, which costs and expenses shall not be adjusted or setoff against Collections in any manner.
(b) Servicer has established the Collection Account to receive amounts owing under the Purchased Receivables and covenants to maintain such account so long as any Purchased Receivable remains unpaid unless otherwise agreed to in writing by Buyer. The Collection Account may contain funds relating to Receivables in addition to the amounts owing under the Purchased ReceivablesSeller will, provided that adequate records are created and maintained to identify clearly the funds in the Collection Account that relate to the Purchased Receivables. The parties shall use commercially reasonable efforts to negotiate and enter into an account control agreement covering the existing Collection Account in form and substance reasonably satisfactory to the Buyer on or prior to the DACA initial Purchase Date. If such account control agreement has not been entered into by such date, and neither establish in its own name, the Seller Representative nor the Buyer shall have elected to terminate this Agreement pursuant to the second sentence of Section 12(c), then the Servicer shall establish a new bank account with an account bank reasonably acceptable to the Buyer (such new account shall replace the prior Collection Account as the new “Collection Account” hereunder and from and after that date for all purposes hereof), and within five (5) Business Days following the establishment of such account, all Account Debtors shall have been instructed by the Servicer to make all payments in respect of Purchased Receivables to such new Collection Account and such new Collection Account shall be under the sole dominion and control of the Buyer pursuant to an account control agreement in form and substance reasonably satisfactory to the Buyer. Servicer Seller covenants and agrees (i) to take any and all reasonable actions necessary, consistent with applicable law, (including those requested by Buyer) send a notice to ensure that all Collections on account of each Account Debtor substantially in the Purchased Receivables will be paid directly by form attached hereto as Exhibit E instructing each Account Debtor to pay all amounts owing under the Receivables to the Collection Account, without adjustment, setoff or deduction of any kind or nature, except as otherwise required by law, (ii) not to change the such payment instructions while any Purchased Receivable remains Receivables remain outstanding, and (iii) to take any and all other reasonable actions, including actions requested by Buyer, to ensure that all amounts owing under the extent any Collections or other amounts with respect Receivables will be deposited exclusively to the Purchased Receivables are deposited in any account other than the Collection Account, to cause all such amounts to be deposited into the Collection Account within three (3) Business Days of receipt thereof by the Servicer or such Seller, and (iv) not to permit the Collection Account to become subject to any control, lien, pledge or adverse claim of or by any third party (other than any lien of the Buyer granted hereunder and under the other Transaction Documents). All Collections received or deposited into any Collection Account shall be transferred, delivered to or deposited in the Buyer’s Account by the Servicer within five (5) Business Days of receipt.
(c) Until payments If Seller receives a misdirected payment of a Receivable from any Account Debtor, Seller will immediately notify Buyer and immediately (and in respect any event within two Business Days of receipt thereof) remit the Purchased Receivables have been remitted funds to the Collection Account. Until remitted, Seller and Servicer will hold such funds in trust as Buyer’s exclusive property and safeguard such funds for the benefit of Buyer.
(d) Pursuant to its servicing obligations under Section 4(a) heretoSeller, Servicer as servicer, shall be responsible for identifying, matching and reconciling all any payments received by in the Servicer or any Seller in respect of Collection Account with the Purchased Receivables (as distinguished from any Receivables of a Seller not sold to the Buyer hereunder) Receivable associated with such payment. If any payment and Posting all identification and reconciliation information for confirmation by Buyer is received in a format satisfactory to Buyer promptly, and in any event within five (5) Business Days of receipt thereof. Servicer shall cause all such payments to be directed and deposited into the Collection Account within other than payments on the time Receivables, such funds will immediately be forwarded to Seller, subject to receipt of evidence of payments details documenting that the payment is for transactions other than the Receivables and in the manner set forth in this that no event under Section 45 exists. If any payment is received from an Account Debtor, and such payment is not identified or misidentified by such Account Debtor as relating to a particular Receivable and cannot otherwise be reasonably identified (e.g. by invoice amount) as relating to a particular Receivable or if Buyer determines that the reconciliation is otherwise defective within five (5) Business Days of receipt thereofthereof or Seller defaults in its obligations as servicer as set forth under this Section 4, such payment shall be applied first to the unpaid Purchased Receivables with respect to of such Account Debtor in chronological order (beginning with the oldest unpaid Purchased Receivable), and then to Receivables with respect to such Account Debtor that are which have not Purchased Receivablesbeen purchased hereunder, also in chronological order. Servicer and each Seller hereby represent, warrant and agree that no Collection Account is or shall ever be subject to the control, lien pledge or any other encumbrance in favor of any buyer from or creditor of any Seller, other than customary bankers’ liens of account banks arising under Article 4 of the UCC and the security interest granted to the Buyer hereunder and under the other Transaction Documents, unless the Buyer has consented thereto in writing and pursuant to an intercreditor or lien priority agreement in form and substance reasonably satisfactory to the Buyer.
(e) Upon Based on the occurrence reconciliation information provided to Buyer by Seller as servicer prior to 11am Pacific time under clause (d) above and other information available to Buyer, (1) Buyer will remit to Seller’s Account the same day, if the reconciliation is in order, (i) Collections on account of Receivables not purchased hereunder and (ii) all other collections received in the Collection Account and not relating to the Receivables, and (2) Buyer will retain for its own account from Collections on account of Purchased Receivables an amount up to the Discount of such Purchased Receivables and any Servicer Event Changeamounts then owing to Buyer.
(f) If Seller defaults in its obligations as servicer as set forth under this Section 4, the Buyer may at any time thereafter (with and shall, without requirement of notice to each Seller Partyor any other Person, upon a Material Adverse Change or an Insolvency Event of Seller or Parent) replace the Servicer Seller as servicer (which replacement may be made effectuated through the outplacement to a Person of all back office duties, including billing, collection and processing responsibilities, and reasonable access during normal business hours and subject to reasonable confidentiality restrictions, to all personnel, hardware and software utilized in connection with such responsibilities) with any other Person, as agent of Buyer, acceptable to the Buyer in its sole discretion at such time. Each Seller shall jointly and severally reimburse Buyer for all reasonable expenses incurred by Buyer in connection with such replacement. In the event that Servicer is replaced, Servicer (and each other Seller who may be acting as sub-servicer or sub-agent for Servicer in such capacity with respect to any Purchased Receivables) shall cease its activities as Servicer in a manner that Buyer determines and shall cooperate fully and facilitate the transition of the performance of such activities to any successor servicer who may be appointed by Buyer at such time (including the Buyer), and Buyer (or its designee as successor servicer) may assume the role as Servicer, to service and administer the Purchased Receivables, on the terms and subject to the conditions herein set forth or as may otherwise be agreed in writing between Buyer and such successor servicer. Thereafter, the replaced Servicer shall take such action or refrain from taking such action as Buyer may specify in order to assist Buyer (or its designee as successor servicer) in assuming and performing such obligations. Servicer and each Seller agrees, at its expense, to take all actions necessary to provide the successor servicer with access, whether or not at the offices and properties of Servicer or such Seller to all computer software (including its servicing software and its claims software), necessary or useful in collecting, billing or maintaining the records with respect to the Purchased Receivables.
(f) Without duplication of any amounts recovered by any Servicer Indemnified Person pursuant to Section 7(b), Servicer hereby agrees to indemnify Buyer and its officers, directors, agents, representatives and employees (each, a “Servicer Indemnified Person”) from and against any and all claims, losses and liabilities (including, without limitation, reasonable attorneys’ fees) (all of the foregoing being collectively referred to as “Servicer Indemnified Amounts”) arising out of or resulting from (i) any failure by Servicer to perform its duties or obligations as Servicer hereunder in accordance with this Agreement and the other Transaction Documents, (ii) any claim brought by any Person other than a Servicer Indemnified Person arising from Servicer’s collection activities with respect to the Purchased Receivables or (iii) any other Material Adverse Change under clause (b) or (c) of the definition thereof; provided, however, that in all events there shall be excluded from the foregoing indemnification any claims, losses or liabilities to the extent resulting solely from the fraud, gross negligence or willful misconduct of such Servicer Indemnified Person (or any of its officers, directors, agents, representatives and employees who are controlled by, or under common control with, such Servicer Indemnified Person) as determined in a final non-appealable judgment by a court of competent jurisdiction. If at any time the Servicer delegates any of its servicing duties hereunder to one or more of the other Sellers, Servicer shall continue to remain fully responsible and liable for the performance of such duties. No Seller shall delegate or assign any of its duties to a sub-servicer or sub-agent, other than another Seller or AAR or any of its affiliates, without prior written consent of Buyer in its sole discretion.
(g) Each Seller hereby appoints Buyer and Servicer (if other than such Seller) as the true and lawful attorney-in-fact of such Seller, with full power of substitution, coupled with an interest, and hereby authorizes and empowers Buyer in the name and on behalf of such Seller, to take such actions, and execute and deliver such documents, as Buyer deems necessary or advisable in connection with any Purchased Receivable (i) to obtain full benefits of the Transaction Documents and the Purchased Receivables, (ii) to perfect the purchase and sale of Purchased Receivables, including, without limitation, to send a notice of such purchase and sale to the Account Debtor of the transfers contemplated hereby and the sale of the Purchased Receivables, or (iii) to make collection of and otherwise realize the benefits of any Purchased Receivable. At any time Servicer has been replaced hereunder, Buyer shall have the right to bring suit, in Buyer’s or any Seller’s name, and generally have all other rights of an owner and holder respecting any Purchased Receivables, including without limitation the right to accelerate or extend the time of payment, settle, compromise, release in whole or in part any amounts owing on any Purchased Receivables and issue credits in its own name or the name of any Seller. At any time following removal of Servicer hereunder, Buyer may endorse or sign Buyer’s or such Seller’s name on any checks or other instruments with respect to any Purchased Receivables or the goods covered thereby. Except as Buyer may otherwise expressly agree in writing, any and all returned, reclaimed or repossessed inventory and goods relating to any Purchased Receivables shall be set aside by the applicable Seller marked with Buyer’s name and (in any case) held by such Seller in trust for Buyer as owner, and for Buyer’s account.
(h) Upon any termination of AAR as Servicer pursuant to the terms of this Agreement, each Seller and AAR shall use commercially reasonable efforts to assist the Buyer in connection with recovering and enforcing payment of the Purchased Receivables, including by providing transitional services and related services as contemplated by Section 4(e) hereto.
Appears in 1 contract
Sources: Committed Receivables Purchase Agreement (Utstarcom Inc)
Collection Activities. (a) The Buyer appoints AAR the Company as its servicer and agent (in such capacity, the “Servicer”) for the administration and servicing of all Purchased Receivables sold to the Buyer by Seller hereunder, and AAR the Company hereby accepts such appointment and agrees to assume the duties and the administration and servicing obligations as Servicer, the Servicer and perform all necessary and appropriate 725594943 17555228 commercial collection activities in arranging the timely payment of amounts due and owing by any Account DebtorDebtor in respect of Purchased Receivables sold by Sellers hereunder, all in accordance with applicable laws, rules and regulations, regulations and with reasonable care and diligence, including, without limitation, diligently and faithfully performing all servicing and collection actions (including, if necessary, acting as party of record in foreign jurisdictions); provided, however, that such appointment as the Servicer shall not release the Company or any Seller from any of its duties, responsibilities, liabilities and obligations resulting from or arising hereunderhereunder or under any Purchased Receivables. The Buyer may replace the Servicer in the manner set forth in Section 4(e4(d) hereto. In connection with its servicing obligations, the Servicer will, and will ensure that each Seller will, perform their respective its obligations and exercise their respective its rights under contracts related to the Purchased Receivables with the same care and applying the same policies as they apply it applies to their its own Receivables generally and would exercise and apply if they it owned the Purchased Receivables and shall use commercially reasonable efforts act in the best interest of the Buyer to maximize Collections. The Sellers and the Servicer agree that the Purchase Price for each Purchased Receivable includes consideration for the cost of servicing such Purchased Receivables, the amount of which shall be determined by Sellers and the Servicer and shall be remitted by the applicable Seller to the Servicer (out of the proceeds of such Purchase Price payments) or otherwise accounted for by Sellers and the Servicer as Sellers and the Servicer determine, and no other or further compensation is required.
(b1) Each Seller and the Servicer has established the Collection hereby agree to instruct each Account Debtor to receive amounts owing under the make all payments made by such Account Debtors on account of Purchased Receivables and covenants to maintain such account so long as any Purchased Receivable remains unpaid unless otherwise agreed to in writing by Buyer. The Collection Account may contain funds relating to Receivables in addition to one or more of the amounts owing under the Purchased Receivablesbank accounts of Seller, provided that adequate records are created and maintained to identify clearly the funds in the Collection Account that relate to the Purchased Receivables. The parties shall use commercially reasonable efforts to negotiate and enter into an account control agreement covering the existing Collection Account in form and substance reasonably satisfactory identified to the Buyer in writing on or prior to the DACA Date. If date hereof (as such account control agreement has not been entered into accounts may be updated from time to time with prior written notice by such date, and neither the Seller Representative nor the Buyer shall have elected to terminate this Agreement pursuant Servicer to the second sentence of Section 12(c)Buyer, then the Servicer shall establish each, a new bank account with an account bank reasonably acceptable to the Buyer (such new account shall replace the prior Collection Account as the new “Collection Designated Account” hereunder and from and after that date for all purposes hereof”), and hereby further agrees that such Designated Accounts into which Collections are received shall at no time be subject to any charge, pledge or control by any creditor of such Seller or otherwise. Following the occurrence of any Material Adverse Change or Event of Termination with respect to the Servicer or any Seller, Seller and the Servicer shall, within five two (52) Business Days following the establishment occurrence thereof, notify each Account Debtor of such account, all the assignment of the related Purchased Receivables to the Buyer and instruct each Account Debtors shall have been instructed by the Servicer Debtor to make all payments in respect made by such Account Debtor on account of the related Purchased Receivables to such new Collection Account and such new Collection Account shall be under the sole dominion and control of the Buyer pursuant to an account control agreement in form and substance reasonably satisfactory to the Buyer’s Account. Each Seller and the Servicer further covenants and agrees (i) to take any and all reasonable actions necessary, consistent with applicable law, necessary (including those requested by the Buyer) to ensure that any and all Collections on account of the Purchased Receivables will Receivables, shall be paid wired directly by each Account Debtor to the Collection Buyer’s Account, without adjustment, setoff or deduction of any kind or nature, except as otherwise required by law, no later than one (ii) not to change the payment instructions while any Purchased Receivable remains outstanding, (iii) to the extent any Collections or other amounts with respect to the Purchased Receivables are deposited in any account other than the Collection Account, to cause all such amounts to be deposited into the Collection Account within three (31) Business Days of Day following such Seller’s or the Servicer’s receipt thereof thereof.
(i) No Collections shall be deemed received by the Servicer or such Seller, and (iv) not Buyer for purposes of this Agreement until funds are credited to permit the Collection Account to become subject to any control, lien, pledge or adverse claim of or by any third party (other than any lien of the Buyer granted hereunder and under the other Transaction Documents). All Collections received or deposited into any Collection Account shall be transferred, delivered to or deposited in the Buyer’s Account as immediately available funds or otherwise actually received by the Buyer.
(ii) Prior to being transferred to the Designated Account, funds received by a Seller or the Servicer in respect of any Purchased Receivables (within five (5) Business Days a Designated Account or otherwise), remain, nevertheless, the exclusive property of receiptthe Buyer, and Seller and the Servicer shall be deemed to be holding such funds in trust for the exclusive use and benefit of the Buyer. Neither the Servicer nor any Seller shall, directly or indirectly, utilize such 725594943 17555228 funds for its own purposes, and shall not have any right to pledge such funds as collateral for any obligations of the Servicer or a Seller or any other Person.
(c) Until payments in respect of the Purchased Receivables have been remitted to the Collection Account, Seller and Servicer will hold such funds in trust as Buyer’s exclusive property and safeguard such funds for the benefit of Buyer.
(d) Pursuant to its servicing obligations under Section 4(a) hereto, the Servicer shall be responsible for identifying, matching and reconciling all payments received by the Servicer or any Seller in respect of the Purchased Receivables (as distinguished from any Receivables of a Seller not sold to the Buyer hereunder) associated with such payment and Posting all identification and reconciliation information for confirmation by Buyer in a format satisfactory to Buyer promptly, and in any event within five (5) Business Days of receipt thereof. Servicer shall cause all such payments to be directed and deposited into the Collection Buyer’s Account within the time and in the manner set forth in this Section 44 above. If any payment is received from an Account Debtor, and such payment is not identified by such Account Debtor as relating to a particular Receivable and cannot otherwise be reasonably identified as relating to a particular Receivable within five (5) Business Days of receipt thereof, such payment shall be applied first to the unpaid Purchased Receivables with respect to such Account Debtor in chronological order (beginning with the oldest unpaid Purchased Receivable), and then to Receivables with respect to such Account Debtor that are not Purchased Receivables, also in chronological order. .
(d) Upon the earlier to occur of (A) the Servicer and each Seller hereby represent, warrant and agree that no Collection Account is defaulting in its obligations set forth under this Section 4 or shall ever be subject to the control, lien pledge otherwise in this Agreement or any other encumbrance in favor of any buyer from Transaction Document, (B) an Insolvency Event with respect to the Servicer or creditor of any Seller, other than customary bankers’ liens (C) a Material Adverse Change in the Servicer or any Seller or any Event of account banks arising under Article 4 Termination, (D) a breach of the UCC representations and warranties by a Seller or the security interest granted to the Buyer hereunder and Servicer under the other Transaction Documents, unless the Buyer has consented thereto in writing and pursuant to an intercreditor or lien priority agreement in form and substance reasonably satisfactory to the Buyer.
(e) Upon the occurrence of any Servicer Event Changethis Agreement, the Buyer may at any time thereafter (with without requirement of notice to each the Servicer, any Seller Partyor any other Person) replace the Servicer (which replacement may be made through the outplacement to a Person of all back office duties, including billing, collection and processing responsibilities, and reasonable access during normal business hours and subject to reasonable confidentiality restrictions, to all personnel, hardware and software utilized in connection with such responsibilities) with any other Person, as agent of Buyer, Person acceptable to the Buyer in its sole discretion at such time. Each Seller shall Seller, shall, jointly and severally severally, reimburse the Buyer for all reasonable expenses incurred by the Buyer in connection with such replacement. In the event that Servicer the Company is replacedreplaced as the Servicer, Servicer the Company (and each other Seller who may be acting as sub-servicer or sub-agent for Servicer the Company in such capacity with respect to any Purchased Receivables) shall cease its activities as the Servicer (and/or sub-servicer) in a manner that the Buyer determines and shall cooperate fully and facilitate the transition of the performance of such activities to any successor servicer who may be appointed by the Buyer at such time (including the Buyer), and the Buyer (or its designee as successor servicer) may assume the role as the Servicer, to service and administer the Purchased Receivables, on the terms and subject to the conditions herein set forth or as may otherwise be agreed in writing between the Buyer and such successor servicer. Thereafter, the Company and each replaced Servicer Seller shall take such action or refrain from taking such action as the Buyer may specify in order to assist the Buyer (or its designee as successor servicer) in assuming and performing such obligations. Servicer The Company and each Seller agrees, at its expense, to take all actions necessary to provide the successor servicer with access, whether or not at the offices and properties of Servicer the Company or such Seller Seller, to all computer software (including its servicing software and its claims software), ) necessary or useful in collecting, billing or maintaining the records with respect to the Purchased Receivables.
(fe) Without duplication of any amounts recovered by any Servicer Indemnified Person pursuant to Section 7(b)Each Seller and the Servicer, Servicer hereby agrees hereby, jointly and severally, agree to indemnify the Buyer and its respective officers, directors, agents, representatives representatives, shareholders, counsel and 725594943 17555228 employees (each, a “Servicer Indemnified Person”) from and against any and all claims, losses losses, costs, expenses and liabilities (including, without limitation, reasonable attorneys’ fees) (all of the foregoing being collectively referred to as “Servicer Indemnified Amounts”) arising out of or resulting from (i) any failure by the Servicer to perform its duties or obligations as the Servicer hereunder in accordance with this Agreement and the other Transaction DocumentsAgreement, (ii) any claim brought by any Person other than a Servicer Indemnified Person arising from the Servicer’s collection activities with respect to the Purchased Receivables or (iii) any other Material Adverse Change under clause (b) or (c) of the definition thereofChange; provided, however, that in all events there shall be excluded from the foregoing indemnification any claims, losses or liabilities liabilities, in the case of this paragraph (e), to the extent resulting solely from the fraud, gross negligence or willful misconduct of such the Servicer Indemnified Person (or any of its officers, directors, agents, representatives and employees who are controlled by, or under common control with, such Servicer Indemnified Person) as determined in a final non-appealable judgment by a court of competent jurisdiction. If at any time the Servicer, in its capacity as the Servicer hereunder, delegates any of its servicing duties hereunder to one or more of the other Sellers, such the Servicer shall continue to remain fully responsible and liable for the performance of such duties. No Seller shall delegate or assign any of its duties to a sub-servicer or sub-agent, other than another Seller or AAR or any of its affiliatesthe Company, without prior written consent of the Buyer in its sole discretion.
(g) Each Seller hereby appoints Buyer and Servicer (if other than such Seller) as the true and lawful attorney-in-fact of such Seller, with full power of substitution, coupled with an interest, and hereby authorizes and empowers Buyer in the name and on behalf of such Seller, to take such actions, and execute and deliver such documents, as Buyer deems necessary or advisable in connection with any Purchased Receivable (i) to obtain full benefits of the Transaction Documents and the Purchased Receivables, (ii) to perfect the purchase and sale of Purchased Receivables, including, without limitation, to send a notice of such purchase and sale to the Account Debtor of the transfers contemplated hereby and the sale of the Purchased Receivables, or (iii) to make collection of and otherwise realize the benefits of any Purchased Receivable. At any time Servicer has been replaced hereunder, Buyer shall have the right to bring suit, in Buyer’s or any Seller’s name, and generally have all other rights of an owner and holder respecting any Purchased Receivables, including without limitation the right to accelerate or extend the time of payment, settle, compromise, release in whole or in part any amounts owing on any Purchased Receivables and issue credits in its own name or the name of any Seller. At any time following removal of Servicer hereunder, Buyer may endorse or sign Buyer’s or such Seller’s name on any checks or other instruments with respect to any Purchased Receivables or the goods covered thereby. Except as Buyer may otherwise expressly agree in writing, any and all returned, reclaimed or repossessed inventory and goods relating to any Purchased Receivables shall be set aside by the applicable Seller marked with Buyer’s name and (in any case) held by such Seller in trust for Buyer as owner, and for Buyer’s account.
(h) Upon any termination of AAR as Servicer pursuant to the terms of this Agreement, each Seller and AAR shall use commercially reasonable efforts to assist the Buyer in connection with recovering and enforcing payment of the Purchased Receivables, including by providing transitional services and related services as contemplated by Section 4(e) hereto.
Appears in 1 contract
Sources: Receivables Purchase Agreement (Milacron Holdings Corp.)
Collection Activities. (a) Buyer appoints AAR Seller as its servicer and agent (in such capacity, the “Servicer”) for the administration and servicing of all Purchased Receivables sold to Buyer hereunder, and AAR Seller hereby accepts such appointment and agrees to assume the duties and the administration and servicing obligations as Servicer, and perform all necessary and appropriate commercial collection activities with the same care and policies as are applied to its own receivables in arranging the timely payment of amounts due and owing by any Account Debtor, Debtor all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, including, without limitation, diligently and faithfully performing all servicing and collection actions (including, if necessary, acting as party of record in foreign jurisdictions); provided, however, that such appointment as Servicer shall not release any Seller from any of its duties, responsibilities, liabilities and obligations resulting from or arising hereunder. Buyer may replace the Servicer in the manner set forth in Section 4(eSeller as its servicer pursuant to clause (f) heretobelow. In connection with its servicing obligations, Servicer will, and Seller will ensure that each Seller will, perform their respective its obligations and exercise their respective its rights under contracts related to the Purchased Receivables with the same care and applying the same policies as they apply to their own Receivables generally and it would exercise and apply if they it owned the Purchased Receivables and shall use commercially reasonable efforts act in the best interest of Buyer to maximize CollectionsCollections and provided, further that following an Insolvency Event of an Account Debtor of Receivables purchased hereunder (or any other event that Buyer may assume the risk thereof in writing from time to time after the date hereof), Buyer shall be fully responsible for all costs and expenses incurred by Seller in connection herewith, which costs and expenses shall not be adjusted or setoff against Collections in any manner.
(b) Servicer has established the Collection Account to receive amounts owing under the Purchased Receivables and covenants to maintain such account so long as any Purchased Receivable remains unpaid unless otherwise agreed to in writing by Buyer. The Collection Account may contain funds relating to Receivables in addition to the amounts owing under the Purchased ReceivablesSeller will, provided that adequate records are created and maintained to identify clearly the funds in the Collection Account that relate to the Purchased Receivables. The parties shall use commercially reasonable efforts to negotiate and enter into an account control agreement covering the existing Collection Account in form and substance reasonably satisfactory to the Buyer on or prior to the DACA initial Purchase Date. If such account control agreement has not been entered into by such date, and neither establish in its own name, the Seller Representative nor the Buyer shall have elected to terminate this Agreement pursuant to the second sentence of Section 12(c), then the Servicer shall establish a new bank account with an account bank reasonably acceptable to the Buyer (such new account shall replace the prior Collection Account as the new “Collection Account” hereunder and from and after that date for all purposes hereof), and within five (5) Business Days following the establishment of such account, all Account Debtors shall have been instructed by the Servicer to make all payments in respect of Purchased Receivables to such new Collection Account and such new Collection Account shall be under the sole dominion and control of the Buyer pursuant to an account control agreement in form and substance reasonably satisfactory to the Buyer. Servicer Seller covenants and agrees (i) to take any and all reasonable actions necessary, consistent with applicable law, (including those requested by Buyer) send a notice to ensure that all Collections on account of each Account Debtor substantially in the Purchased Receivables will be paid directly by form attached hereto as Exhibit E instructing each Account Debtor to pay all amounts owing under the Receivables to the Collection Account, without adjustment, setoff or deduction of any kind or nature, except as otherwise required by law, (ii) not to change the such payment instructions while any Purchased Receivable remains Receivables remain outstanding, and (iii) to take any and all other reasonable actions, including actions requested by Buyer, to ensure that all amounts owing under the extent any Collections or other amounts with respect Receivables will be deposited exclusively to the Purchased Receivables are deposited in any account other than the Collection Account, to cause all such amounts to be deposited into the Collection Account within three (3) Business Days of receipt thereof by the Servicer or such Seller, and (iv) not to permit the Collection Account to become subject to any control, lien, pledge or adverse claim of or by any third party (other than any lien of the Buyer granted hereunder and under the other Transaction Documents). All Collections received or deposited into any Collection Account shall be transferred, delivered to or deposited in the Buyer’s Account by the Servicer within five (5) Business Days of receipt.
(c) Until payments If Seller receives a misdirected payment of a Receivable from any Account Debtor, Seller will immediately notify Buyer and immediately (and in respect any event within two Business Days of receipt thereof) remit the Purchased Receivables have been remitted funds to the Collection Account. Until remitted, Seller and Servicer will hold such funds in trust as Buyer’s exclusive property and safeguard such funds for the benefit of Buyer.
(d) Pursuant to its servicing obligations under Section 4(a) heretoSeller, Servicer as servicer, shall be responsible for identifying, matching and reconciling all any payments received by in the Servicer or any Seller in respect of Collection Account with the Purchased Receivables (as distinguished from any Receivables of a Seller not sold to the Buyer hereunder) Receivable associated with such payment. If any payment and Posting all identification and reconciliation information for confirmation by Buyer is received in a format satisfactory to Buyer promptly, and in any event within five (5) Business Days of receipt thereof. Servicer shall cause all such payments to be directed and deposited into the Collection Account within other than payments on the time Receivables, such funds will immediately be forwarded to Seller, subject to receipt of evidence of payments details documenting that the payment is for transactions other than the Receivables and in the manner set forth in this that no event under Section 45 exists. If any payment is received from an Account Debtor, and such payment is not identified or misidentified by such Account Debtor as relating to a particular Receivable and cannot otherwise be reasonably identified (e.g. by invoice amount) as relating to a particular Receivable or if Buyer determines that the reconciliation is otherwise defective within five (5) Business Days of receipt thereofthereof or Seller defaults in its obligations as servicer as set forth under this Section 4, such payment shall be applied first to the unpaid Purchased Receivables with respect to of such Account Debtor in chronological order (beginning with the oldest unpaid Purchased Receivable), and then to Receivables with respect to such Account Debtor that are which have not Purchased Receivablesbeen purchased hereunder, also in chronological order. Servicer and each Seller hereby represent, warrant and agree that no Collection Account is or shall ever be subject to the control, lien pledge or any other encumbrance in favor of any buyer from or creditor of any Seller, other than customary bankers’ liens of account banks arising under Article 4 of the UCC and the security interest granted to the Buyer hereunder and under the other Transaction Documents, unless the Buyer has consented thereto in writing and pursuant to an intercreditor or lien priority agreement in form and substance reasonably satisfactory to the Buyer.
(e) Upon Based on the occurrence reconciliation information provided to Buyer by Seller as servicer prior to 11am Pacific time under clause (d) above and other information available to Buyer, (1) Buyer will remit to Seller’s Account the same day, if the reconciliation is in order, (i) Collections on account of Receivables not purchased hereunder and (ii) all other collections received in the Collection Account and not relating to the Receivables, and (2) Buyer will retain for its own account from Collections on account of Purchased Receivables an amount up to the Discount of such Purchased Receivables and any Servicer Event Changeamounts then owing to Buyer.
(f) If Seller defaults in its obligations as servicer as set forth under this Section 4, the Buyer may at any time thereafter (with and shall, without requirement of notice to each Seller Partyor any other Person, upon a Material Adverse Change or an Insolvency Event of Seller or Parent) replace the Servicer Seller as servicer (which replacement may be made effectuated through the outplacement to a Person of all back office duties, including billing, collection and processing responsibilities, and reasonable access during normal business hours and subject to reasonable confidentiality restrictions, to all personnel, hardware and software utilized in connection with such responsibilities) with any other Person, as agent of Buyer, acceptable to the Buyer in its sole discretion at such time. Each Seller shall jointly and severally reimburse Buyer for all reasonable expenses incurred by Buyer in connection with such replacement. In the event that Servicer is replaced, Servicer (and each other Seller who may be acting as sub-servicer or sub-agent for Servicer in such capacity with respect to any Purchased Receivables) shall cease its activities as Servicer in a manner that Buyer determines and shall cooperate fully and facilitate the transition of the performance of such activities to any successor servicer who may be appointed by Buyer at such time (including the Buyer), and Buyer (or its designee as successor servicer) may assume the role as Servicer, to service and administer the Purchased Receivables, on the terms and subject to the conditions herein set forth or as may otherwise be agreed in writing between Buyer and such successor servicer. Thereafter, the replaced Servicer shall take such action or refrain from taking such action as Buyer may specify in order to assist Buyer (or its designee as successor servicer) in assuming and performing such obligations. Servicer and each Seller agrees, at its expense, to take all actions necessary to provide the successor servicer with access, whether or not at the offices and properties of Servicer or such Seller to all computer software (including its servicing software and its claims software), necessary or useful in collecting, billing or maintaining the records with respect to the Purchased Receivables.
(f) Without duplication of any amounts recovered by any Servicer Indemnified Person pursuant to Section 7(b), Servicer hereby agrees to indemnify Buyer and its officers, directors, agents, representatives and employees (each, a “Servicer Indemnified Person”) from and against any and all claims, losses and liabilities (including, without limitation, reasonable attorneys’ fees) (all of the foregoing being collectively referred to as “Servicer Indemnified Amounts”) arising out of or resulting from (i) any failure by Servicer to perform its duties or obligations as Servicer hereunder in accordance with this Agreement and the other Transaction Documents, (ii) any claim brought by any Person other than a Servicer Indemnified Person arising from Servicer’s collection activities with respect to the Purchased Receivables or (iii) any other Material Adverse Change under clause (b) or (c) of the definition thereof; provided, however, that in all events there shall be excluded from the foregoing indemnification any claims, losses or liabilities to the extent resulting solely from the fraud, gross negligence or willful misconduct of such Servicer Indemnified Person (or any of its officers, directors, agents, representatives and employees who are controlled by, or under common control with, such Servicer Indemnified Person) as determined in a final non-appealable judgment by a court of competent jurisdiction. If at any time the Servicer delegates any of its servicing duties hereunder to one or more of the other Sellers, Servicer shall continue to remain fully responsible and liable for the performance of such duties. No Seller shall delegate or assign any of its duties to a sub-servicer or sub-agent, other than another Seller or AAR or any of its affiliates, without prior written consent of Buyer in its sole discretion.
(g) Each Seller hereby appoints Buyer and Servicer (if other than such Seller) as the true and lawful attorney-in-fact of such Seller, with full power of substitution, coupled with an interest, and hereby authorizes and empowers Buyer in the name and on behalf of such Seller, to take such actions, and execute and deliver such documents, as Buyer deems necessary or advisable in connection with any Purchased Receivable (i) to obtain full benefits of the Transaction Documents and the Purchased Receivables, (ii) to perfect the purchase and sale of Purchased Receivables, including, without limitation, to send a notice of such purchase and sale to the Account Debtor of the transfers contemplated hereby and the sale of the Purchased Receivables, or (iii) to make collection of and otherwise realize the benefits of any Purchased Receivable. At any time Servicer has been replaced hereunder, Buyer shall have the right to bring suit, in Buyer’s or any Seller’s name, and generally have all other rights of an owner and holder respecting any Purchased Receivables, including without limitation the right to accelerate or extend the time of payment, settle, compromise, release in whole or in part any amounts owing on any Purchased Receivables and issue credits in its own name or the name of any Seller. At any time following removal of Servicer hereunder, Buyer may endorse or sign Buyer’s or such Seller’s name on any checks or other instruments with respect to any Purchased Receivables or the goods covered thereby. Except as Buyer may otherwise expressly agree in writing, any and all returned, reclaimed or repossessed inventory and goods relating to any Purchased Receivables shall be set aside by the applicable Seller marked with Buyer’s name and (in any case) held by such Seller in trust for Buyer as owner, and for Buyer’s account.
(h) Upon any termination of AAR as Servicer pursuant to the terms of this Agreement, each Seller and AAR shall use commercially reasonable efforts to assist the Buyer in connection with recovering and enforcing payment of the Purchased Receivables, including by providing transitional services and related services as contemplated by Section 4(e) hereto.
Appears in 1 contract