EXHIBIT 10.89
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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
Dated as of November 15, 2001
Among
MAXTOR RECEIVABLES CORPORATION
as Seller
and
MAXTOR CORPORATION
as initial Servicer
and
THE COMMERCIAL PAPER CONDUITS NAMED HEREIN
as Conduit Purchasers
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Committed Purchasers
and
THE PARTIES NAMED HEREIN
as Agents
and
FLEET NATIONAL BANK
as Administrator
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TABLE OF CONTENTS
Page
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ARTICLE I PURCHASES AND REINVESTMENTS........................................... 2
Section 1.1 Commitment to Purchase; Limits on Purchasers' Obligations....... 2
Section 1.2 Purchase Procedures; Assignment of Purchasers' Interests........ 2
Section 1.3 Reinvestments of Certain Collections; Payment of Remaining
Collections..................................................... 3
Section 1.4 Asset Interest.................................................. 3
Section 1.5 Voluntary Termination of Purchase and Reinvestment
Obligations or Reduction of Purchase Limit...................... 4
Section 1.6 Increases in Purchase Limit..................................... 4
ARTICLE II COMPUTATIONAL RULES.................................................. 5
Section 2.1 Computation of Capital.......................................... 5
Section 2.2 Computation of Concentration Limit.............................. 5
Section 2.3 Computation of Earned Discount.................................. 5
Section 2.4 Estimates of Earned Discount Rate, Fees, Etc.................... 5
ARTICLE III SETTLEMENTS......................................................... 6
Section 3.1 Settlement Procedures........................................... 6
Section 3.2 Deemed Collections; Reduction of Capital, Etc................... 8
Section 3.3 Payments and Computations, Etc.................................. 9
ARTICLE IV FEES AND YIELD PROTECTION............................................ 10
Section 4.1 Fees............................................................ 10
Section 4.2 Yield Protection................................................ 10
Section 4.3 Funding Losses.................................................. 12
ARTICLE V CONDITIONS TO PURCHASES............................................... 12
Section 5.1 Conditions Precedent to Initial Purchase........................ 12
Section 5.2 Conditions Precedent to All Purchases and Reinvestments......... 13
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................... 14
Section 6.1 Representations and Warranties of Seller. Seller represents
and warrants as follows:........................................ 14
Section 6.2 Representations and Warranties of Parent........................ 17
ARTICLE VII GENERAL COVENANTS................................................... 18
Section 7.1 Affirmative Covenants........................................... 18
Section 7.2 Reporting Requirements. From the date hereof until the
Final Payout Date:.............................................. 20
Section 7.3 Negative Covenants.............................................. 21
Section 7.4 Extension or Amendment of Receivables........................... 21
Section 7.5 Change in Business or Credit and Collection Policy.............. 21
Section 7.6 Change in Payment Instructions to Obligors...................... 21
Section 7.7 Separate Existence.............................................. 22
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ARTICLE VIII ADMINISTRATION AND COLLECTION...................................... 24
Section 8.1 Designation of Servicer......................................... 24
Section 8.2 Duties of Servicer.............................................. 25
Section 8.3 Rights of the Administrator..................................... 26
Section 8.4 Responsibilities of Seller. Anything herein to the contrary
notwithstanding:................................................ 27
Section 8.5 Further Action Evidencing Purchases and Reinvestments........... 28
Section 8.6 Application of Collections...................................... 28
ARTICLE IX SECURITY INTEREST.................................................... 29
Section 9.1 Grant of Security Interest...................................... 29
Section 9.2 Further Assurances.............................................. 29
Section 9.3 Remedies........................................................ 29
ARTICLE X LIQUIDATION EVENTS.................................................... 29
Section 10.1 Liquidation Events.............................................. 29
Section 10.2 Remedies........................................................ 31
ARTICLE XI THE ADMINISTRATOR.................................................... 32
Section 11.1 Authorization and Action........................................ 32
Section 11.2 Delegation of Duties............................................ 32
Section 11.3 Administrator's Reliance, Etc................................... 33
Section 11.4 Each Agent and Affiliates....................................... 33
Section 11.5 Reliance by Agents.............................................. 33
Section 11.6 Notice of Liquidation Events.................................... 34
Section 11.7 Non-Reliance on Administrator, Agents and Other Purchasers...... 34
Section 11.8 Indemnification................................................. 35
Section 11.9 Successor Administrator......................................... 35
Section 11.10 Deliveries to Rating Agency..................................... 35
ARTICLE XII ASSIGNMENT OF PURCHASERS' INTEREST.................................. 35
Section 12.1 Restrictions on Assignments..................................... 35
Section 12.2 Rights of Assignee.............................................. 36
ARTICLE XIII INDEMNIFICATION.................................................... 36
Section 13.1 Indemnities..................................................... 36
ARTICLE XIV MISCELLANEOUS....................................................... 38
Section 14.1 Amendments, Etc................................................. 38
Section 14.2 Notices, Etc.................................................... 39
Section 14.3 No Waiver; Remedies............................................. 39
Section 14.4 Binding Effect; Survival........................................ 39
Section 14.5 Costs, Expenses and Taxes....................................... 39
Section 14.6 No Proceedings.................................................. 40
Section 14.7 Confidentiality of Program Information.......................... 40
Section 14.8 Confidentiality of Parent Information........................... 42
Section 14.9 Captions and Cross References .................................. 43
Section 14.10 Integration..................................................... 43
Section 14.11 Governing Law................................................... 43
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Section 14.12 Waiver Of Jury Trial........................................... 43
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities.................. 44
Section 14.14 Execution in Counterparts...................................... 44
Section 14.15 No Recourse Against Other Parties.............................. 45
SCHEDULES
SCHEDULE I Perfection Representations
SCHEDULE 6.1(m) List of Offices of Seller where Records Are Kept
SCHEDULE 6.1(n) List of Lock-Box Banks
SCHEDULE 7.1(e) Forms of Contracts
SCHEDULE 7.1(g) Description of Credit and Collection Policy
SCHEDULE 14.2 Notice Addresses
EXHIBITS
EXHIBIT 1.2(a) Form of Purchase Notice
EXHIBIT 3.1 Form of Servicer Report
EXHIBIT 3.1-A Form of Daily Report
EXHIBIT 5.1(g)-1 Form of In-House Counsel Opinion
EXHIBIT 5.1(g)-2 Form of Enforceability Opinion
EXHIBIT 5.1(g)-3 Form of True Sale Opinion
EXHIBIT 5.1(g)-4 Form of Substantive Consolidation Opinion
EXHIBIT 5.1 Form of Lock-Box Agreement
EXHIBIT 7.1(i) Calculation of Required Net Worth
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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
Dated as of November 15, 2001
THIS IS AN AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, among
MAXTOR RECEIVABLES CORPORATION, a California corporation ("Seller"), MAXTOR
CORPORATION, a Delaware corporation ("Parent"), as initial Servicer, the
commercial paper conduits identified on the signature pages hereto
(individually, each a "Conduit Purchaser" and collectively, the "Conduit
Purchasers"), the financial institutions identified on the signature pages
hereto (individually, each a "Committed Purchaser" and collectively, the
"Committed Purchasers"), the agents for each of the Purchasers (each an
"Agent"), and FLEET NATIONAL BANK, a national banking association ("Fleet"), as
agent for BLUE KEEL FUNDING, LLC (in such capacity, the "Blue Keel Agent") and
as administrator for the Purchasers (in such capacity, the "Administrator").
Unless otherwise indicated, capitalized terms used in this Agreement are defined
in Appendix A.
BACKGROUND
1. Parent is engaged in the business of manufacturing hard disk drives and
storage systems.
2. Seller is a single purpose corporation formed for the purpose of
purchasing, and accepting contributions of, Receivables generated by Parent or
an other Originator in the ordinary course of its business.
3. Seller has, and expects to have, Pool Receivables in which Seller
intends to sell an undivided interest. Seller has requested the Purchasers to,
and the Conduit Purchasers may (and if a Conduit Purchaser elects not to so fund
a purchase, its related Committed Purchasers shall), subject to the terms and
conditions contained in this Agreement, fund the purchase of such undivided
interest, referred to herein as the Asset Interest, from Seller from time to
time during the term of this Agreement.
4. Seller and the Purchasers also desire that, subject to the terms and
conditions of this Agreement, certain of the daily Collections in respect of the
Asset Interest be reinvested in Pool Receivables, which reinvestment shall
constitute part of the Asset Interest.
5. Parent has been requested, and is willing, to act as initial Servicer.
6. Fleet has been requested, and is willing, to act as the Administrator.
7. Seller, Parent, Blue Keel Funding, LLC and the Blue Keel Agent are
parties to that certain Receivables Purchase Agreement, dated as of July 31,
1998, as amended by the First Amendment to Receivables Purchase Agreement, dated
as of January 26, 2000, and the Second Amendment to Receivables Purchase
Agreement, dated as of April 25, 2000 (the "Original Purchase Agreement"), which
Original Purchase Agreement the parties hereto desire to further amend and
restate in its entirety pursuant hereto in order to, among other things,
evidence the addition of various commercial paper conduits and financial
institutions as Purchasers, the extension of the Termination Date and the
increase in the Purchase Limit.
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto hereby amend and restate the Original
Purchase Agreement in its entirety and agree as follows:
ARTICLE I.
PURCHASES AND REINVESTMENTS
Section 1.1 Commitment to Purchase; Limits on Purchasers' Obligations.
Upon the terms and subject to the conditions of this Agreement, from time to
time prior to the Termination Date, Seller may request that Administrator, for
the benefit of the Purchasers, purchase from Seller an undivided ownership
interest in the Pool Assets (each being a "Purchase") and each Conduit Purchaser
may fund its Percentage of such Purchase (and if any Conduit Purchaser elects
not to fund its Percentage of such Purchase, each of its related Committed
Purchasers shall fund its respective Pro Rata Share of such Conduit Purchaser's
Percentage of such Purchase); provided that no Purchase shall be funded by any
Purchaser if, after giving effect thereto, either (a) the then Capital would
exceed an amount equal to $300,000,000 (the "Purchase Limit"), as such amount
may be decreased from time to time as provided in Section 1.5, (b) the Asset
Interest would exceed 100% (the "Allocation Limit"), (c) such Purchaser's Funded
Percentage of the then Capital would exceed its Commitment or (d) the aggregate
Funded Percentages of such Purchaser's Purchaser Group of the then Capital would
exceed the related Conduit Purchaser's Commitment; and provided further that
each Purchase made pursuant to this Section 1.1 shall have a purchase price of
at least $5,000,000. Notwithstanding the use of the term "Commitment" or any
other provision of this Agreement, no Conduit Purchaser shall have any
obligation to fund any Purchase; any election to fund a Purchase shall be at a
Conduit Purchaser's discretion, provided that each Conduit Purchaser that elects
not to fund a Purchase shall give notice of such election to the Administrator,
the Servicer and such Conduit Purchaser's Agent on or prior to 12:00, noon
(Boston, Massachusetts time) on the date of Purchase.
Section 1.2 Purchase Procedures; Assignment of Purchasers' Interests.
(a) Notice of Purchase. Each Purchase from Seller shall be made on
notice from Seller to the Administrator received by the Administrator not later
than 11:00 a.m. (San Francisco, California, time) on the second Business Day
next preceding the date of such proposed Purchase. Each such notice of a
proposed Purchase shall be substantially in the form of Exhibit 1.2(a) (each a
"Purchase Notice"), and shall specify the desired amount and date of such
Purchase, which shall be a Settlement Date.
(b) Funding of Purchase. On the date of each Purchase, each Purchaser
funding a portion of such Purchase shall severally, upon satisfaction of the
applicable conditions set forth in Article V, make available to the
Administrator at the Administrator's Office its Percentage (or in the case of a
Committed Purchaser, its Pro Rata Share) of the related Purchase in immediately
available funds, and after receipt by the Administrator of such funds, the
Administrator will make such funds immediately available to Seller at such
office.
(c) Assignment of Asset Interest. Seller hereby sells, assigns and
transfers to Administrator, for the benefit of the Purchasers, the Asset
Interest.
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Section 1.3 Reinvestments of Certain Collections; Payment of Remaining
Collections. (a) On the close of business on each day during the period from the
date hereof to the Termination Date, Servicer will, out of all Collections
received on such day:
(i) determine the portion of Collections attributable on any day
to the Asset Interest by multiplying (x) the amount of all Collections times (y)
the Asset Interest;
(ii) out of the portion of Collections allocated to the Asset
Interest pursuant to clause (i), set aside and hold in trust for the Purchasers
in the Collection Account an amount equal to the sum of the estimated amount of
Earned Discount accrued in respect of the Capital (based on rate information
provided by each Agent pursuant to Section 2.4), the accrued Fees, all other
amounts due to the Purchasers, the Administrator, the Agents, the Affected
Parties or the Indemnified Parties hereunder (other than the Capital) and the
Purchasers' Share of the Servicer's Fee (in each case, accrued through such day)
and not so previously set aside;
(iii) apply the Collections allocated to the Asset Interest
pursuant to clause (i) and not set aside pursuant to clause (ii) to the purchase
from Seller of ownership interests in Pool Assets (each such purchase being a
"Reinvestment"); provided that (A) if the Excess Amount exceeds zero, then
Servicer shall not reinvest, but shall set aside and hold for the benefit of the
Purchasers, in the Collection Account a portion of such Collections which,
together with other Collections previously set aside and then so held, shall
equal the Excess Amount; and (B) if the conditions precedent to Reinvestment in
Section 5.2 are not satisfied, then Servicer shall not reinvest any of such
Collections;
(iv) pay to Seller the Collections applied to Reinvestment
pursuant to clause (iii);
(v) out of the portion of Collections not allocated to the Asset
Interest pursuant to clause (i), pay to the Servicer the Seller's Share of the
Servicer's Fee accrued through such day; and
(vi) hold in the Collection Account for distribution on the next
Settlement Date all other Collections.
(b) Unreinvested Collections. Servicer shall set aside and hold in
trust for the benefit of the Purchasers in the Collection Account all
Collections which pursuant to clause (iii) of Section 1.3(a) may not be
reinvested in Pool Assets. If, prior to the date when such Collections are
required to be paid to the Administrator pursuant to Section 3.1, the amount of
Collections set aside pursuant to clause (iii) of Section 1.3(a) exceeds the
Excess Amount, if any, and the conditions precedent to Reinvestment set forth in
Section 5.2 are satisfied, then the Servicer shall apply such Collections (or,
if less, a portion of such Collections equal to the amount of such excess) to
the making of a Reinvestment.
Section 1.4 Asset Interest.
(a) Components of Asset Interest. On any date the Asset Interest will
represent Administrator's (for the benefit of the Purchasers) combined undivided
percentage ownership interest in (i) all then outstanding Pool Receivables, (ii)
all Related Security with
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respect to such Pool Receivables, (iii) all of Seller's right and claims under
the Purchase Agreement, (iv) all Collections with respect to, and other proceeds
of, the foregoing as at such date, (v) all lock-boxes and lock-box or collection
accounts into which Collections of Pool Receivables are or may be deposited, and
all investments therein, and (vi) all books and records (including computer
disks, tapes and software) evidencing or relating to any of the foregoing, in
each case, whether now owned by Seller or hereafter acquired or arising, and
wherever located (all of the foregoing, collectively referred to as "Pool
Assets").
(b) Computation of Asset Interest. On any date, the Asset Interest
will be equal to a percentage, expressed as the following fraction:
C
------------
NPB x (1-RRP)
where:
C = the then Capital.
RR = the then Required Reserves Percentage.
NPB = the then Net Pool Balance;
provided, however, that from and after the Termination Date, Asset Interest,
shall be 100%.
(c) Frequency of Computation. The Asset Interest shall be computed as
of the Cut-Off Date for each Settlement Period. In addition, the Administrator
may require Servicer to provide a Servicer Report for purposes of computing the
Asset Interest as of any other date, and the Servicer agrees to do so within two
Business Days of its receipt of the Administrator's request.
Section 1.5 Voluntary Termination of Purchase and Reinvestment Obligations
or Reduction of Purchase Limit. Seller may, upon at least 15 days' prior written
notice to the Administrator, either (a) reduce the Purchase Limit to $0 and
terminate each Purchaser's Commitment to fund Purchases and Reinvestments
hereunder, or (b) reduce the Purchase Limit to an amount not less than
$100,000,000; provided, however, that (i) each partial reduction of the Purchase
Limit shall be in an amount equal to $1,000,000 or an integral multiple thereof,
(ii) after giving effect to such reduction, the Capital will not exceed the
Purchase Limit as so reduced and (iii) each partial reduction shall result in a
pro rata reduction in each Purchaser's Commitment.
Section 1.6 Increases in Purchase Limit. Seller may request the
Administrator, the Agents and the Purchasers to increase the Purchase Limit or
seek other qualified commercial paper conduits with the Required Ratings and
with appropriate back-up liquidity arrangements, which conduits are acceptable
to the Administrator, to become new conduit purchasers hereunder (each, a "New
Purchaser"), and each Purchaser or New Purchaser may accept or reject such
request in its sole discretion, and may condition its acceptance on such terms
and conditions as it may determine. Each Purchaser shall notify the other
Purchasers and their respective Agent as to whether it has accepted or rejected
such request, the amount that such Purchaser is willing to
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increase its Commitment by and any conditions with respect thereto. Each Conduit
Purchaser's Percentage and each Committed Purchaser's Pro Rata Share shall be
adjusted to reflect any non-pro rata increase. Any such increase shall be
evidenced by an amendment to this Agreement signed by the accepting Purchasers
and New Purchasers, as applicable. Failure by the Administrator, any Agent or
any Purchaser to respond in writing to any such request within 30 days shall be
deemed to be a rejection thereof. Each New Purchaser shall be deemed to be a
Conduit Purchaser hereunder and its related Liquidity Banks shall be deemed to
be Committed Purchasers hereunder.
ARTICLE II
COMPUTATIONAL RULES
Section 2.1 Computation of Capital. In making any determination of Capital,
the following rules shall apply:
(a) Capital shall not be considered reduced by any allocation, setting
aside or distribution of any portion of Collections unless such Collections
shall have been actually delivered to the Administrator pursuant hereto for
application to the Capital; and
(b) Capital shall not be considered reduced by any distribution of any
portion of Collections if at any time such distribution is rescinded or must
otherwise be returned for any reason.
Section 2.2 Computation of Concentration Limit. In the case of any Obligor
that is an Affiliate of any other Obligor, the Concentration Limit and the
aggregate Unpaid Balance of Pool Receivables of such Obligor shall be calculated
as if such Obligors were one Obligor.
Section 2.3 Computation of Earned Discount. In making any determination of
Earned Discount, the following rules shall apply:
(a) no provision of this Agreement shall require the payment or permit
the collection of Earned Discount in excess of the maximum permitted by
Applicable Law; and
(b) Earned Discount for any period shall not be considered paid by any
distribution if at any time such distribution is rescinded or must otherwise be
returned for any reason.
Section 2.4 Estimates of Earned Discount Rate, Fees, Etc. For purposes of
determining the amounts required to be set aside by Servicer pursuant to Section
1.3, each Agent shall notify Servicer and Administrator from time to time of the
Earned Discount Rate applicable to its related Conduit Purchaser's Funded
Percentage of the Capital and the Administrator shall notify Servicer of the
rates at which fees and other amounts are accruing hereunder. It is understood
and agreed that (i) each Purchaser's Earned Discount Rate may change from time
to time, (ii) certain rate information provided by an Agent or the Administrator
to Servicer shall be based upon such Agent's or the Administrator's good faith
estimate, (iii) the amount of Earned Discount actually accrued with respect to
any Conduit Purchaser's Funded Percentage of the Capital during any Settlement
Period may exceed, or be less than, the amount set aside with
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respect thereto by Servicer, and (iv) the amount of fees or other payables
accrued hereunder with respect to any Settlement Period may exceed, or be less
than, the amount set aside with respect thereto by Servicer. Failure to set
aside any amount so accrued shall not relieve Servicer of its obligation to
remit Collections to the Administrator with respect to such accrued amount, as
and to the extent provided in Section 3.1.
ARTICLE III
SETTLEMENTS
Section 3.1 Settlement Procedures.
The parties hereto will take the following actions with respect to each
Settlement Period:
(a) Servicer Report. On or before the sixth Business Day after each
Cut-Off Date (each, a "Reporting Date"), Servicer shall deliver to the
Administrator and each Agent a report containing the information described in
Exhibit 3.1 (each, a "Servicer Report"). On or before the close of business on
each Business Day, Servicer shall deliver to the Administrator and each Agent a
report containing the information described in Exhibit 3.1-A as of the close of
business of the preceding Business Day (each, a "Daily Report").
(b) Earned Discount; Other Amounts Due. Two Business Days prior to
each Reporting Date, (i) each Agent shall notify Servicer of the amount of
Earned Discount that will have accrued in respect of its related Conduit
Purchaser's Funded Percentage of the Capital as of the next Settlement Date and
(ii) the Administrator shall notify the Servicer of all Fees and other amounts
that will have accrued and be payable by Seller under this Agreement on the next
Settlement Date (other than Capital).
(c) Settlement Date Procedure - Reinvestment Period. On the eighth
Business Day after each Cut-Off Date (each, a "Settlement Date") prior to the
Termination Date, the Servicer shall distribute from Collections set aside
pursuant to Sections 1.3(a)(i) through (iii) during the immediately preceding
Settlement Period the following amounts in the following order:
(1) to each Agent, an amount equal to the Earned Discount accrued
with respect to its related Conduit Purchaser's and Committed Purchasers' Funded
Percentages of the Capital during such Settlement Period, plus any previously
accrued Earned Discount with respect to its related Conduit Purchaser's and
Committed Purchasers' Funded Percentages of the Capital not paid on a prior
Settlement Date, which amount shall be distributed by such Agent to its related
Conduit Purchaser and Committed Purchasers for application to such Earned
Discount (and if these are insufficient funds to pay all of the amounts
described in this subparagraph (1), such funds shall be distributed to the
Agents, pro rata, on the basis of the amounts due to each Agent pursuant to this
subparagraph (1);
(2) to each Agent, an amount equal to the Program Fee and
Commitment Fee accrued with respect to its related Conduit Purchaser during such
Settlement Period, plus any previously accrued Program Fees and Commitment Fees
due to such Agent (or its related Conduit Purchaser) not paid on a prior
Settlement Date (and if there are insufficient
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funds to pay all of the amounts described in this subparagraph (2), such funds
shall be distributed to the Agents, pro rata, on the basis of the amounts due to
each Agent pursuant to this subparagraph(2));
(3) to the Administrator, an amount equal to the Administration
Fee accrued during such Settlement Period, plus any previously accrued
Administration Fee not paid on a prior Settlement Date;
(4) to the Servicer, if the Servicer is not Parent, an amount
equal to the Purchasers' Share of the Servicer's Fee accrued during such
Settlement Period, plus any previously accrued Purchasers' Share of the
Servicer's Fee not paid on a prior Settlement Date;
(5) to the Administrator, an amount equal to the Excess Amount,
if any, which amount shall be distributed by the Administrator to each Purchaser
(on the basis of its Funded Percentage of such amount) for application to such
Purchaser's Capital;
(6) to the Persons to whom such amounts are payable, all other
amounts (other than Capital) then due under this Agreement to the Administrator,
the Purchasers, the Affected Parties, the Agents or the Indemnified Parties;
(7) to the Servicer, if the Servicer is Parent, an amount equal
to the Purchasers' Share of the Servicer's Fee accrued during such Settlement
Period, plus any previously accrued Purchasers' Share of the Servicer's Fee not
paid on a prior Settlement Day; and
(8) to the Seller, any remaining amounts.
(d) Settlement Date Procedure - Liquidation Period. On each Settlement
Date during the Liquidation Period, the Servicer shall distribute from
Purchasers' Share of Collections received or deemed received pursuant to Section
3.2 during the immediately preceding Settlement Period the following amounts in
the following order:
(1) to each Agent, an amount equal to the Earned Discount accrued
with respect to its related Conduit Purchaser's and Committed Purchasers' Funded
Percentage of the Capital during such Settlement Period, plus any previously
accrued Earned Discount with respect to its related Conduit Purchaser's and
Committed Purchasers' Funded Percentage of the Capital not paid on a prior
Settlement Date, which amount shall be distributed by such Agent to its related
Conduit Purchaser and Committed Purchasers for application to such Earned
Discount (and if there are insufficient funds to pay all of the amounts
described in this subparagraph (1), such funds shall be distributed to the
Agents, pro rata, on the basis of the amounts due to the Agents pursuant to this
subparagraph (1));
(2) to each Agent, an amount equal to the Program Fee and
Commitment Fee accrued with respect to its related Conduit Purchaser during such
Settlement Period, plus any previously accrued Program Fees and Commitment Fees
due to such Agent (or its related Conduit Purchaser) not paid on a prior
Settlement Date (and if there are insufficient funds to pay all of the amounts
described in this subparagraph (2), such funds shall be distributed to the
Agents, pro rata, on the basis of the amounts due to each Agent pursuant to this
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subparagraph(2));
(3) to the Administrator, an amount equal to the Administration
Fee accrued during such Settlement Period, plus any previously accrued
Administration Fee not paid on a prior Settlement Date;
(4) to the Servicer, if the Servicer is not Parent, an amount
equal to the Purchasers' Share of the Servicer's Fee accrued during such
preceding Settlement Period, plus any previously accrued Purchasers' Share of
the Servicer's Fee not paid on a prior Settlement Date;
(5) to the Administrator, an amount equal to the remaining
Purchasers' Share of Collections until the Capital is reduced to zero, which
amount shall be distributed by the Administrator to each Purchaser (on the basis
of its Funded Percentage of such amount) for application to such Purchaser's
Capital;
(6) to the Persons to whom such amounts are payable, all other
amounts (other than Capital) then due under this Agreement to the Administrator,
the Purchasers, the Affected Parties, the Agents or the Indemnified Parties;
(7) to the Servicer, if the Servicer is Parent, an amount equal
to the Purchasers' Share of the Servicer's Fee accrued during such Settlement
Period, plus any previously accrued Purchasers' Share of the Servicer's Fee not
paid on a prior Settlement Date; and
(8) to the Seller, any remaining amounts.
(e) Delayed Payment. If on any day described in this Section 3.1,
because Collections during the relevant Settlement Period were less than the
aggregate amounts payable, Servicer does not make any payment otherwise
required, the next available Collections in respect of the Asset Interest shall
be applied to such payment, and no Reinvestment shall be permitted hereunder
until such amount payable has been paid in full.
Section 3.2 Deemed Collections; Reduction of Capital, Etc.
(a) Deemed Collections. If on any day
(i) a Dilution occurs or the Unpaid Balance of any Pool
Receivable is less than the amount included in calculating the Net Pool Balance
for purposes of any Servicer Report for any other reason, or
(ii) any of the representations or warranties of Seller set forth
in Section 6.1(k) or (o) with respect to any Pool Receivable was not true when
made with respect to any Pool Receivable, or is, as of such date, no longer true
with respect to any Pool Receivable, or
(iii) without duplication, Seller receives a Deemed Collection
pursuant to the Purchase Agreement,
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then, on such day, Seller shall be deemed to have received a Collection of such
Pool Receivable
(I) in the case of clause (i) above, in the amount of such
Dilution or the difference between the actual Unpaid Balance and the amount
included in calculating such Net Pool Balance, as applicable; and
(II) in the case of clause (ii) above, in the amount of the
Unpaid Balance of such Pool Receivable; and
(III) in the case of clause (iii) above, in the amount of such
Deemed Collection.
(b) Seller's Optional Reduction of Capital. Seller may at any time
elect to reduce the Capital as follows:
(i) Seller shall give the Administrator and each Agent at least
five (5) Business Days' prior written notice of such reduction (including the
amount of such proposed reduction and the proposed date on which such reduction
will commence),
(ii) on the proposed date of commencement of such reduction and
on each day thereafter, Servicer shall refrain from reinvesting Collections
pursuant to Section 1.3 until the amount thereof not so reinvested shall equal
the desired amount of reduction, and
(iii) Servicer shall hold such Collections in trust for the
Purchasers, pending payment to the Administrator on the next Settlement Date, as
provided in Section 1.3;
provided that,
(A) the amount of any such reduction shall be not less than
$5,000,000, and the Capital after giving effect to such reduction shall be
not less than $50,000,000 (unless Capital shall thereby be reduced to
zero), and
(B) Seller shall use reasonable efforts to attempt to choose a
reduction amount, and the date of commencement thereof, so that such
reduction shall commence and conclude during the same Settlement Period.
Section 3.3 Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by Seller or
Servicer to the Administrator or any other Person (other than to Seller, Parent
or Servicer) hereunder (other than amounts payable under Section 4.2) shall be
paid or deposited in accordance with the terms hereof no later than 11:00 a.m.
(Boston, Massachusetts time) on the day when due in lawful money of the United
States of America in immediately available funds. If such payments are to be
made to the Blue Keel Agent or to the Administrator, such payments shall be
payable at ABA# 011 000 138, account # 000 000 0000; attention: Blue Keel. If
such payments are to be made to another Purchaser, such payments shall be
payable to such account as such Purchaser (or its related Agent) shall specify
in writing to the Administrator and Servicer.
9
(b) Late Payments. Seller or Servicer, as applicable, shall, to the
extent permitted by law, pay to each Purchaser or the Administrator, as the case
may be, interest on all amounts not paid or deposited when such amount is due
hereunder at 2% per annum above the Alternate Base Rate, payable on demand,
provided, however, that such interest rate shall not at any time exceed the
maximum rate permitted by Applicable Law, and provided, further that such late
interest rate shall not begin to accrue with respect to any payment until such
payment is at least three (3) hours late.
(c) Method of Computation. All computations of interest, Earned
Discount and any fees payable hereunder shall be made on the basis of a year of
360 days for the actual number of days (including the first day but excluding
the last day) elapsed.
ARTICLE IV
FEES AND YIELD PROTECTION
Section 4.1 Fees. Seller shall pay to the Administrator and each Conduit
Purchaser the fees in the amounts and at the times set forth in the fee letter,
dated as of November 15, 2001, among the Administrator, the Agents and Seller
(as amended or supplemented from time to time, the "Fee Letter"). Seller shall
pay to the Administrator the fees in the amounts and at the times set forth in
the fee letter, dated as of November 15, 2001, between the Administrator and
Seller (as amended or supplemented from time to time, the "Administrator's Fee
Letter").
Section 4.2 Yield Protection.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after
the date hereof
(A) shall subject an Affected Party to any tax, duty or other
charge with respect to any Asset Interest owned by or funded by it, or any
obligations or right to make Purchases or Reinvestments or to provide
funding therefor, or shall change the basis of taxation of payments to the
Affected Party of any Capital or Earned Discount owned by, owed to or
funded in whole or in part by it or any other amounts due under this
Agreement in respect of the Asset Interest owned by or funded by it or its
obligations or rights, if any, to make Purchases or Reinvestments or to
provide funding therefor (except for franchise taxes or changes in the rate
of tax on the overall net income of such Affected Party imposed by the
United States of America, by the jurisdiction in which such Affected
Party's principal executive office is located and, if such Affected Party's
principal executive office is not in the United States of America, by the
jurisdiction where such Affected Party's principal office in the United
States is located); or
(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal Reserve
Board), special deposit, compulsory loan or similar requirement against
assets of any Affected Party, deposits or obligations with or for the
account of any Affected Party or with or for the account of any affiliate
(or entity deemed by the Federal Reserve Board to be an affiliate) of any
Affected Party, or credit extended by any Affected Party, but excluding any
reserve,
10
special deposit or similar requirement included in the determination of
Earned Discount; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting any Asset Interest
owned or funded in whole or in part by any Affected Party, or its
obligations or rights, if any, to make Purchases or Reinvestments or to
provide funding therefor; or
(E) shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or a successor thereto) assesses, deposit
insurance premiums or similar charges;
and the result of any of the foregoing is
(x) to increase the cost to or to impose a cost on an Affected Party
funding or making or maintaining any Purchases or Reinvestments, any
purchases, reinvestments, or loans or other extensions of credit under any
Program Agreement, or any commitment of such Affected Party with respect to
any of the foregoing,
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement, or under any Program Agreement with
respect thereto, or
(z) to reduce the rate of return on the capital of an Affected Party
as a consequence of its obligations hereunder or under any Program
Agreement or arising in connection herewith to a level below that which
such Affected Party could otherwise have achieved,
then within thirty days after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth the basis for, calculation of, and
amount of such additional costs or reduced amount receivable; provided, however,
that no Affected Party shall be required to disclose any confidential or tax
planning information in any such statement), Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such additional or increased cost or such reduction.
(b) Each Affected Party will promptly notify Seller and the
Administrator of any event of which it has knowledge which will entitle such
Affected Party to compensation pursuant to this Section 4.2; provided, however,
no failure to give or delay in giving such notification shall adversely affect
the rights of any Affected Party to such compensation.
(c) In determining any amount provided for or referred to in this
Section 4.2, an Affected Party may use any reasonable averaging and attribution
methods that it shall deem applicable. Any Affected Party when making a claim
under this Section 4.2 shall submit to Seller a statement as to such increased
cost or reduced return (including a calculation thereof in reasonable detail),
which statement shall, in the absence of demonstrable error, be conclusive and
binding upon Seller.
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Section 4.3 Funding Losses. In the event that any Affected Party shall
incur any loss or expense (including any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Affected Party to make or maintain any funding with respect to the Asset
Interest) as a result of (i) any settlement with respect to any portion of
Capital funded by such Affected Party being made on any day other than the
scheduled last day of an applicable Settlement Period with respect thereto, or
(ii) any Purchase not being made in accordance with a request therefor under
Section 1.2, then, immediately upon written demand from the Administrator to
Seller, Seller shall pay to the Administrator for the account of such Affected
Party, the amount of such loss or expense. Such written notice (which shall
include calculations in reasonable detail) shall, in the absence of demonstrable
error, be conclusive and binding upon the Seller.
ARTICLE V
CONDITIONS TO PURCHASES
Section 5.1 Conditions Precedent to Initial Purchase. The initial Purchase
under this Amended and Restated Receivables Purchase Agreement is subject to the
condition precedent that the Administrator shall have received, on or before the
date of such Purchase, the following, each (unless otherwise indicated) dated
such date and in form and substance satisfactory to the Administrator and each
Agent:
(a) Good standing certificates for each of Parent and Seller issued by
the Secretary of State of the jurisdiction of its incorporation and its
principal place of business;
(b) A certificate of the Secretary of each of Seller and Parent
certifying (i) a copy of the resolutions of its Board of Directors approving
this Agreement and the other Transaction Documents to be delivered by it
hereunder and the transactions contemplated hereby; (ii) the names and true
signatures of the officers authorized on its behalf to sign this Agreement and
the other Transaction Documents to be delivered by it hereunder (on which
certificate the Administrator, each Agent and each Purchaser may conclusively
rely until such time as the Administrator shall receive from Seller or Parent,
as the case may be, a revised certificate meeting the requirements of this
subsection (b)); (iii) a copy of its by-laws; and (iv) all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and the other Transaction Documents;
(c) The Certificate of Incorporation or Articles of Incorporation, as
applicable, of each of Seller and Parent, duly certified by the Secretary of
State of California (in the case of Seller) and Delaware (in the case of
Parent), as of a recent date acceptable to Administrator;
(d) Acknowledgment copies, or time stamped receipt copies, of
amendments to the financing statements filed pursuant to the Original Purchase
Agreement;
(e) A search report provided in writing to and approved by the
Administrator listing all effective financing statements that name Parent or
Seller as debtor or assignor and that are filed in the jurisdictions in which
filings were made pursuant to subsection (d) above and in
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such other jurisdictions that Administrator shall reasonably request, together
with copies of such financing statements (none of which, other than those filed
in favor of the Administrator, shall cover any Pool Assets, unless executed
termination statements with respect thereto have been delivered to the
Administrator), and tax and judgment lien search reports from a Person
satisfactory to Servicer and the Administrator showing no evidence of such liens
filed against Parent or Seller;
(f) (i) A favorable opinion of Xxxxx X. Xxxxxxx, general counsel to
Parent and Seller, in substantially the form of Exhibit 5.1(g)-1 and (ii)
favorable opinions from Xxxxxxxx & Xxxxxxxx LLP, special counsel to Parent and
Seller, in substantially the forms of Exhibits 5.1(g)-2, 5.1(g)-3 and 5.1(g)-4;
(g) Evidence of payment by the Seller of all accrued and unpaid fees,
costs and expenses to the extent then due and payable on the date thereof,
together with attorneys' fees of the Administrator and each Purchaser to the
extent invoiced prior to or on such date, plus such additional amounts of
attorneys' fees as shall constitute the Administrator's or any Purchaser's
reasonable estimate of attorneys' fees incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude final settling of accounts between the Seller and the Administrator or
any Purchaser), including any such costs, fees and expenses arising under or
referenced in Section 14.5;
(h) A Liquidity Agreement with respect to each Conduit Purchaser, duly
executed by such Conduit Purchaser, its Liquidity Agent and each related
Liquidity Bank;
(i) A Lock-Box Agreement, with respect to the Collection Account, duly
executed by the Seller, the Administrator and the applicable Lock-Box Bank;
(j) The Amended and Restated Purchase and Sale Agreement, duly
executed by the parties thereto, and a replacement Initial Purchaser Note duly
executed by Seller;
(k) The Fee Letter and the Administrator's Fee Letter, duly executed
by the parties thereto; and
(l) Such other documents, certificates or opinions as the
Administrator may reasonably request.
Section 5.2 Conditions Precedent to All Purchases and Reinvestments. Each
Purchase (including the initial Purchase) and each Reinvestment hereunder, shall
be subject to the further conditions precedent that:
(a) in the case of each Purchase, the Servicer shall have delivered to
the Administrator on or prior to such purchase, in form and substance
satisfactory to the Administrator, a completed Servicer Report with respect to
the immediately preceding calendar month and a Daily Report, dated within two
(2) Business Days prior to the date of such Purchase, together with such
additional information as may be reasonably requested by the Administrator for
any Agent; and
(b) on the date of such Purchase or Reinvestment the following
statements
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shall be true (and Seller by accepting the amount of such Purchase or by
receiving the proceeds of such Reinvestment shall be deemed to have certified
that):
(i) the representations and warranties contained in Article VI
are correct on and as of such day as though made on and as of such day and shall
be deemed to have been made on such day (except that any such representation or
warranty that is expressly stated as being made only as of a specified earlier
date shall be true and correct in all material respects as of such earlier
date),
(ii) no event has occurred and is continuing, or would result
from such Purchase or Reinvestment, that constitutes a Liquidation Event or
Unmatured Liquidation Event,
(iii) after giving effect to each proposed Purchase or
Reinvestment, Capital will not exceed the Purchase Limit and the Asset Interest
will not exceed the Allocation Limit, and
(iv) the Termination Date shall not have occurred;
provided, however, the absence of the occurrence and continuance of an Unmatured
Liquidation Event shall not be a condition precedent to any Reinvestment.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties of Seller. Seller represents and
warrants as follows:
(a) Organization and Good Standing. Seller has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of California, with power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted, and had at all relevant times, and now has, all necessary
power, authority, and legal right to acquire and own the Pool Assets.
(b) Due Qualification. Seller is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals, except where the failure to so qualify or have such licenses or
approvals has not had, and could not reasonably be expected to have, a Material
Adverse Effect.
(c) Power and Authority; Due Authorization. Seller (i) has all
necessary power, authority and legal right to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party, (B) carry
out the terms of the Transaction Documents to which it is a party, and (C) sell
and assign the Asset Interest on the terms and conditions herein provided and
(ii) has duly authorized by all necessary corporate action the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party and the sale and assignment of the Asset Interest on the
terms and conditions
14
herein provided.
(d) Valid Transfer; Binding Obligations. This Agreement constitutes a
valid transfer and assignment of the Asset Interest to the Administrator, for
the benefit of the Purchasers, enforceable against creditors of, and purchasers
from, Seller; and this Agreement constitutes, and each other Transaction
Document to be signed by Seller when duly executed and delivered will
constitute, a legal, valid and binding obligation of Seller enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which Seller is a party
and the fulfillment by Seller of the terms hereof and thereof will not (i)
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the Seller's certificate of incorporation or by-laws or any Contractual
Obligation of Seller, (ii) result in the creation or imposition of any Lien upon
any of Seller's properties pursuant to the terms of any such Contractual
Obligation, other than this Agreement, or (iii) violate any Applicable Law.
(f) No Proceedings. There is no litigation, proceedings or
investigations pending, or to the best of Seller's knowledge, threatened, before
any Governmental Authority or arbitrator (i) asserting the invalidity of this
Agreement or any other Transaction Document to which Seller is a party, (ii)
seeking to prevent the sale and assignment by Seller of the Asset Interest or
the consummation of any of the other transactions contemplated by this Agreement
or any other Transaction Document, or (iii) seeking any determination or ruling
that could reasonably be expected to have a Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) Government Approvals. No Governmental Action is required for the
due execution, delivery and performance by Seller of this Agreement or any other
Transaction Document to which Seller is a party, except for the filing of the
UCC financing statements referred to in Article V of the Original Purchase
Agreement, all of which, at the time required in Article V of the Original
Purchase Agreement, shall have been duly made and shall be in full force and
effect.
(i) Financial Condition. Since the date of Seller's formation, there
has been no material adverse change in Seller's financial condition, business,
assets or operations.
(j) Margin Regulations. The use of all funds obtained by Seller under
this Agreement will not conflict with or contravene any of Regulations T, U and
X promulgated by the Board of Governors of the Federal Reserve System from time
to time.
(k) Quality of Title. Upon consummation of the first Purchase, each
Pool Asset is legally and beneficially owned by Seller free and clear of any
Lien (other than any Lien
15
arising solely as the result of any action taken by a Purchaser or the
Administrator); when the Administrator, for the benefit of the Purchasers, makes
a Purchase or Reinvestment, it shall acquire a valid and enforceable perfected
first priority undivided percentage interest (to the extent of the Asset
Interest) in each Pool Asset, free and clear of any Lien (other than any Lien
arising solely as the result of any action taken by a Purchaser or the
Administrator), enforceable against any creditor of, or purchaser from, Seller
or any Originator; and no financing statement or other instrument similar in
effect covering any Pool Asset is on file in any recording office except such as
may be filed (i) in favor of an Originator in accordance with the Contracts,
(ii) in favor of Seller in accordance with the Purchase Agreement, or (iii) in
favor of any Purchaser or the Administrator in accordance with this Agreement or
in connection with any Lien arising solely as the result of any action taken by
a Purchaser or the Administrator. The Perfection Representations are true and
correct, and shall be a part of this Agreement for all purposes.
(l) Accurate Reports. No Servicer Report or Daily Report (if prepared
by Seller, or to the extent information therein was supplied by Seller) or other
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by or on behalf of Seller to the Administrator, any
Agent or any Purchaser in connection with this Agreement was or will be
inaccurate in any material respect as of the date it was or will be dated or
(except as otherwise disclosed to the Administrator and each Agent at such time)
as of the date so furnished, or contained or will contain any material
misstatement of fact or omitted or will omit to state a material fact or any
fact necessary to make the statements contained therein not materially
misleading.
(m) Offices. The principal place of business and chief executive
office of Seller are located at the address of Seller referred to in Section
14.2, and the offices where Seller keeps all its books, records and documents
evidencing or relating to Pool Receivables are located at the addresses
specified in Schedule 6.1(m) (or at such other locations, notified to the
Administrator in accordance with Section 7.1(f), in jurisdictions where all
action required by Section 8.5 has been taken and completed).
(n) Lock-Box Accounts. The names and addresses of all the Lock-Box
Banks, together with the account numbers of the lock-box accounts of Seller at
such Lock-Box Banks, are specified in Schedule 6.1(n) (or have been notified to
the Administrator in accordance with Section 7.3(d)).
(o) Eligible Receivables. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Purchase, Reinvestment or
calculation of Net Pool Balance shall be an Eligible Receivable on such date.
(p) Accounting Sale. The Seller has accounted for each sale of
undivided percentage ownership interests in Pool Receivables in its books and
financial statements as sales, consistent with GAAP.
(q) Credit and Collection Policy. The Seller has complied in all
material respects with the Credit and Collection Policy with regard to each Pool
Receivable.
(r) Corporate Name. The Seller's complete corporate name is set forth
in the
16
preamble to this Agreement, and the Seller does not use and has not during the
last six years used any other corporate name, trade name, doing business name or
fictitious name.
Section 6.2 Representations and Warranties of Parent. Parent represents and
warrants as follows:
(a) Organization and Good Standing. Parent has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to conduct
its business as such properties are presently owned and such business is
presently conducted.
(b) Due Qualification. Parent is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals, except where the failure to so qualify or have such licenses or
approvals has not had, and could not reasonably be expected to have, a Material
Adverse Effect.
(c) Power and Authority; Due Authorization. Parent (i) has all
necessary power, authority and legal right to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party and (B)
carry out the terms of the Transaction Documents to which it is a party and (ii)
has duly authorized by all necessary corporate action the execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party.
(d) Binding Obligations. This Agreement constitutes, and each other
Transaction Document to be signed by Parent when duly executed and delivered
will constitute, a legal, valid and binding obligation of Parent enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which Parent is a party
and the fulfillment by Parent of the terms hereof and thereof will not (i)
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under the
Parent's articles of incorporation or by-laws or any Contractual Obligation of
Parent, (ii) result in the creation or imposition of any Lien upon any of
Parent's properties pursuant to the terms of any such Contractual Obligation
(other than any Lien created pursuant to the Transaction Documents), or (iii)
violate any Applicable Law.
(f) No Proceedings. There is no litigation, proceedings or
investigations pending or, to the best of Parent's knowledge, threatened, before
any Governmental Authority or arbitrator (i) asserting the invalidity of this
Agreement or any other Transaction Document to which Parent is a party, (ii)
seeking to prevent the sale and assignment of the Asset Interest or the
consummation of any of the other transactions contemplated by this Agreement or
any other Transaction Document, or (iii) seeking any determination or ruling
that could reasonably be
17
expected to have a Material Adverse Effect.
(g) Government Approvals. No Governmental Action is required for the
due execution, delivery and performance by Parent of this Agreement or any other
Transaction Document to which it is a party.
(h) Financial Condition. (x) The consolidated balance sheets of Parent
and its consolidated Subsidiaries as at December 30, 2000, and the related
statements of earnings, shareholders' equity and cash flows of Parent and its
consolidated Subsidiaries for the fiscal year then ended, certified by
PriceWaterhouseCoopers, and the consolidated balance sheets of Parent and its
consolidated Subsidiaries as at March 30, 2001 and as at June 30, 2001, and the
related statements of earnings, shareholders' equity and cash flows of Parent
and its consolidated Subsidiaries for the fiscal quarter then ended, copies of
which have been furnished to the Administrator, fairly present the consolidated
financial condition, business and operations of Parent and its consolidated
Subsidiaries as at such dates and the consolidated results of the operations of
Parent and its consolidated Subsidiaries for the period ended on such dates, all
in accordance with GAAP consistently applied, and (y) as of the date hereof,
since June 30, 2001 there has been no material adverse change in any such
condition, business or operations.
(i) Accurate Reports. No Servicer Report or Daily Report (if prepared
by Parent, or to the extent information therein was supplied by Parent) or other
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by or on behalf of Parent to the Administrator, any
Agent or any Purchaser, in connection with this Agreement was or will be
inaccurate in any material respect as of the date it was or will be dated or
(except as otherwise disclosed to the Administrator and each Agent at such time)
as of the date so furnished, or contained or will contain any material
misstatement of fact or omitted or will omit to state a material fact or any
fact necessary to make the statements contained therein not materially
misleading.
ARTICLE VII
GENERAL COVENANTS
Section 7.1 Affirmative Covenants. From the date hereof until the Final
Payout Date:
(a) Compliance with Laws, Etc. Each of Seller and Parent will comply
in all material respects with all Applicable Laws, including those with respect
to the Pool Receivables and the related Contracts, except where noncompliance
could not reasonably be expected to have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Each of Seller and Parent
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction where
the failure to preserve and maintain such existence, rights, franchises,
privileges and qualification could reasonably be expected to have a Material
Adverse Effect.
(c) Audits. (i) Each of Parent and Seller will at any time and from
time to time during regular business hours, permit each Agent (one at a time) or
any of its agents or
18
representatives, (A) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in its possession or under its control relating to Pool Assets, (B) to visit its
offices and properties for the purpose of examining such materials described in
clause (i)(A) above, and to discuss matters relating to Pool Assets or its
performance hereunder with any of its officers or employees having knowledge of
such matters, and (C) to verify the existence and amount of the Receivables; and
(ii) without limiting the provisions of clause (i) above, from time to time at
the request of such Agent, permit certified public accountants or other auditors
acceptable to such Agent to conduct, at Seller's or Parent's, as the case may
be, expense, a review of its books and records with respect to the Pool
Receivables; provided that unless a Liquidation Event exists, neither Seller nor
Parent shall be responsible for the cost of more than one audit in any calendar
year.
(d) Keeping of Records and Books of Account. Each of Seller and Parent
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Pool Receivables
in the event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Assets (including, without limitation,
records adequate to permit the daily identification of each new Pool Receivable
and all Collections of and adjustments to each existing Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts. Seller
will, at its expense, timely and fully perform and comply (or cause an
Originator to perform and comply pursuant to the Purchase Agreement) with all
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables and all other agreements related to
such Pool Receivables.
(f) Location of Records. Each of Seller and Parent will keep its
principal place of business and chief executive office, and the offices where it
keeps its records concerning the Pool Receivables and all related Contracts and
all other agreements related to such Pool Receivables (and all original
documents relating thereto), at its address(es) referred to in Section 14.2 or,
upon 30 days' prior written notice to the Administrator, at such other locations
in jurisdictions where all action required by Section 8.5 shall have been taken
and completed.
(g) Credit and Collection Policies. Each of Seller and Parent, at its
own expense, will timely and fully perform and comply in all material respects
with the Credit and Collection Policy in regard to each Pool Receivable and the
related Contracts.
(h) Collections. Each of Seller and Parent will instruct (i) all
Obligors to cause all Collections to be sent to a Lock-Box that is the subject
of a Lock-Box Agreement and (ii) each Lock-Box Bank to deposit all such
Collections directly into a Lock-Box Account that is the subject of a Lock-Box
Agreement. In the event that Parent or Seller receives Collections directly from
any Obligor, Parent or Seller, as the case may be, shall deposit such
Collections into a Lock-Box Account within two Business Days of receipt thereof.
(i) Net Worth. Seller will maintain a Tangible Net Worth of at least
the then Required Net Worth.
19
(j) Quality of Title. Each of Seller and Parent will take all action
necessary or desirable to establish and maintain a valid and enforceable
perfected first priority undivided percentage interest in favor of the
Administrator, for the benefit of the Purchasers, to the extent of the Asset
Interest in each Pool Asset, free and clear of any Lien (other than any Lien
arising solely as a result of any action taken by a Purchaser or the
Administrator), enforceable against any creditor of, or purchaser from, Seller
or Parent.
Section 7.2 Reporting Requirements. From the date hereof until the Final
Payout Date:
(a) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each of the first three quarters of each
fiscal year (i) Seller will furnish to the Administrator copies of its financial
statements, consisting of at least a balance sheet as at the close of such
quarter and statements of earnings for such quarter and for the period from the
beginning of the fiscal year to the close of such quarter, in each case in
conformity with GAAP (except for footnote disclosures), duly certified by the
chief financial officer of Seller and (ii) except as available on Xxxxx or other
readily available internet posting, Parent will furnish to the Administrator
copies of the financial statements of Parent and its Subsidiaries prepared on a
consolidated basis, consisting of at least a balance sheet as at the close of
such quarter and statements of earnings for such quarter and for the period from
the beginning of the fiscal year to the close of such quarter, in each case in
conformity with GAAP (except for footnote disclosures), duly certified by the
chief financial officer of Parent;
(b) Annual Financial Statements. As soon as available and in any event
within 120 days after the end of each fiscal year (i) Seller will furnish to the
Administrator copies of its financial statements, consisting of at least a
balance sheet of Seller for such year and statements of earnings, cash flows and
shareholders' equity, in each case in conformity with GAAP, consistently
applied, setting forth in each case in comparative form corresponding figures
from the preceding fiscal year, with all such statements duly certified by
independent certified public accountants of recognized standing selected by
Seller and (ii) except as available on Xxxxx or other readily available internet
posting, Parent will furnish to the Administrator copies of the financial
statements of Parent and its Subsidiaries prepared on a consolidated basis,
consisting of at least a balance sheet of Parent and its Subsidiaries for such
year and consolidated statements of earnings, cash flows and shareholders'
equity, in each case in conformity with GAAP, consistently applied, setting
forth in each case in comparative form corresponding consolidated figures from
the preceding fiscal year, with all such statements duly certified by
independent certified public accountants of recognized standing selected by
Parent;
(c) Compliance Certificate. Together with each quarterly and annual
financial statement delivered in accordance with the preceding paragraphs,
Parent will furnish to the Administrator a compliance certificate showing a
calculation of the financial covenants set forth in Sections 10.1(n), (o) and
(p) certified by an authorized officer of Parent;
(d) Liquidation Events. Each of Seller and Parent will furnish to each
Agent, as soon as possible and in any event within two (2) Business Days after
the occurrence of each Liquidation Event and each Unmatured Liquidation Event, a
written statement of an authorized officer of Seller or Parent, as the case may
be, setting forth details of such event and the action
20
that Seller or Parent, as the case may be, proposes to take with respect
thereto;
(e) Litigation. Each of Seller and Parent will furnish to each Agent,
as soon as possible and in any event within five Business Days of Seller's or
Parent's knowledge thereof, notice of (i) any litigation, investigation or
proceeding which may exist at any time which could be reasonably expected to
have a Material Adverse Effect and (ii) any material adverse development in
previously disclosed litigation;
(f) Change in Credit and Collection Policy. Each of Seller and Parent
will furnish to each Agent, prior to its effective date, notice of any material
change in the Credit and Collection Policy;
(g) Change in Name. Seller will furnish to the Administrator, at least
thirty days prior to any change in the Seller's name, location or any other
change requiring the amendment of UCC financing statements, a notice setting
forth such changes and the effective date thereof; and
(h) Other Information. Each of Seller and Parent will furnish to the
Agents and the Administrator such other information respecting the Receivables
or the condition or operations, financial or otherwise, of the Parent or Seller
or any of its Affiliates as the Administrator or any Agent may from time to time
reasonably request.
Section 7.3 Negative Covenants. From the date hereof until the Final Payout
Date:
(a) Sales, Liens, Etc. Seller will not, except as otherwise provided
herein, sell, assign (by operation of law or otherwise) or otherwise dispose of,
or create or suffer to exist any Lien upon or with respect to, any Pool Asset or
any interest therein.
Section 7.4 Extension or Amendment of Receivables. Neither Parent nor
Seller will, except as otherwise permitted in Section 8.2, extend, amend or
otherwise modify, or permit Servicer to extend, amend or otherwise modify, the
terms of any Pool Receivable; or amend, modify or waive, or permit Servicer to
amend, modify or waive, any term or condition of any Contract related to a Pool
Receivable.
Section 7.5 Change in Business or Credit and Collection Policy. Neither
Parent nor Seller will make any change in the character of its business or in
the Credit and Collection Policy, which change could impair the collectibility
of any Pool Receivable or otherwise adversely affect the interests or remedies
of the Administrator, the Agents or the Purchasers under this Agreement or any
other Transaction Document.
Section 7.6 Change in Payment Instructions to Obligors. Neither Parent or
Seller will add or terminate any bank as a Lock-Box Bank or any Lock-Box Account
from those listed in Schedule 6.1(n) or make any change, or permit Servicer to
make any change, in its instructions to Obligors regarding payments to be made
to Seller or Servicer or payments to be made to any Lock-Box Bank, unless prior
to the making of any such change, the Administrator shall have received notice
of such addition, termination or change and duly executed copies of Lock-Box
Agreements with each new Lock-Box Bank or with respect to each new Lock-Box
Account, as the case may be.
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(a) Mergers, Acquisitions, Sales, etc. Neither Parent nor Seller will (i)
be a party to any merger or consolidation, or purchase or otherwise acquire all
or substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person without the consent
of the Agents, unless, in the case of Parent, Parent is the surviving
corporation and no Liquidation Event has occurred and is continuing or would
result therefrom or (ii) sell, transfer, convey or lease all or any substantial
part of its assets (except to the extent such transaction does not result in a
Liquidation Event pursuant to Section 10.1(n)), or sell or assign with or
without recourse any Receivables or any interest therein (other than pursuant
hereto or to the Purchase Agreement). Parent will not sell any of the capital
stock of Seller, or permit any Lien to exist thereon.
(b) Deposits to Special Accounts. Neither Parent nor Seller will deposit or
otherwise credit, or cause or permit to be so deposited or credited, to any
Lock-Box Account cash or cash proceeds other than Collections of Pool
Receivables.
(c) Other Business. Seller will not (i) engage in any business other than
the transactions contemplated by the Transaction Documents; (ii) incur any
indebtedness, obligation, liability or contingent obligation of any kind other
than pursuant to this Agreement or the Purchase Agreement; or (iii) form any
Subsidiary or make any investments in any other Person.
(d) Certificate of Incorporation; Purchase Agreement. Seller will not
amend, modify, terminate, revoke or waive any provision of its certificate of
incorporation, the Initial Purchaser Note or the Purchase Agreement.
(e) Restricted Payments. Seller will not declare or make any dividend or
other distributions to any of its shareholders, redeem or purchase any of its
capital stock or make any loan or other payments to any of its shareholders
(other than (1) payments of the purchase price of Receivables as set forth in
the Purchase Agreement, (2) the turn-over of Collections of Reconveyed
Receivables to an Originator as set forth in the Purchase Agreement, (3) payment
of the Servicer's Fee so long as Parent is the Servicer and (4) payment of
reasonable management fees and reimbursement of reasonable expenses of Parent
incurred in connection with managing Seller, so long as such fees and expenses
are in an amount not in excess of those that would be paid in a similar
arms'-length transaction) unless, in each case, no Liquidation Event or
Unmatured Liquidation Event has occurred and is continuing or would result
therefrom.
(f) Change of Name or Location. Seller will not change its name or the
location of its principal place of business or chief executive office or its
corporate structure, unless Seller has given the Administrator at least thirty
(30) days prior notice thereof, and has taken all steps necessary or advisable
under the UCC to continue the perfection and priority of the Administrator's and
each Purchaser's interest in the Pool Assets.
Section 7.7 Separate Existence. Each of Seller and Parent hereby
acknowledges that each Purchaser, the Program Support Providers, the Agents and
the Administrator are entering into the transactions contemplated by this
Agreement and the other Transaction Documents in reliance upon Seller's identity
as a legal entity separate from Parent. Therefore, from and after the date
hereof, each of Seller and Parent shall take all steps specifically required by
this Agreement or by a Purchaser or the Administrator to continue Seller's
identity as a separate legal
22
entity and to make it apparent to third Persons that Seller is an entity with
assets and liabilities distinct from those of Parent and any other Person, and
is not a division of Parent or any other Person. Without limiting the generality
of the foregoing and in addition to and consistent with the other covenants set
forth herein, each of Seller and Parent shall take such actions as shall be
required in order that:
(a) Seller will be a limited purpose corporation whose primary
activities are restricted in its certificate of incorporation to purchasing or
otherwise acquiring from the Originators, owning, holding, granting security
interests, or selling interests, in Pool Assets, entering into agreements for
the selling and servicing of the Receivables Pool, and conducting such other
activities as it deems necessary or appropriate to carry out its primary
activities;
(b) Seller shall not engage in any business or activity, or incur any
indebtedness or liability other than as expressly permitted by the Transaction
Documents;
(c) Not less than one member of Seller's Board of Directors shall be
an Independent Director. The articles of incorporation or the by-laws of Seller
shall provide that (i) Seller's Board of Directors shall not approve, or take
any other action to cause the filing of, a voluntary bankruptcy petition or a
merger or dissolution with respect to Seller unless the Independent Director
shall approve the taking of such action in writing prior to the taking of such
action and (ii) such provision cannot be amended without the prior written
consent of the Independent Director;
(d) The Independent Director shall not at any time serve as a trustee
in bankruptcy for Seller, Parent or any Affiliate thereof;
(e) Any employee, consultant or agent of Seller will be compensated
from Seller's funds for services provided to Seller. Seller will not engage any
agents other than its attorneys, auditors and other professionals, and a
Servicer as contemplated by the Transaction Documents for the Receivables Pool,
which Servicer will be fully compensated for its services by payment of the
Servicer's Fee and a manager, which manager will be fully compensated from
Seller's funds;
(f) Seller will not incur any material indirect or overhead expenses
for items shared with Parent (or any other Affiliate thereof) which are not
reflected in the Servicer's Fee or the fee to Parent in its role as manager for
Seller. To the extent, if any, that Seller (or any other Affiliate thereof)
shares items of expenses not reflected in the Servicer's Fee or the manager's
fee, such as legal, auditing and other professional services, such expenses will
be allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual use
or the value of services rendered, it being understood that Parent shall pay all
expenses relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including, without limitation, legal, rating agency and
other fees;
(g) Seller's operating expenses will not be paid by Parent or any
other Affiliate thereof, other than certain expenses and liabilities related to
basic corporate overhead that may be allocated between Seller and Parent;
(h) Seller and Parent will have taken all steps necessary to make the
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assumptions set forth in the substantive consolidation opinion delivered by
Xxxxxxxx & Xxxxxxxx LLP in connection with this Agreement true and correct;
(i) Seller's books and records will be maintained separately from
those of Parent and any other Affiliate thereof;
(j) All financial statements of Parent or any Affiliate thereof that
are consolidated to include Seller will contain detailed notes clearly stating
that (A) all of Seller's assets are owned by Seller, and (B) Seller is a
separate entity with creditors who have received security interests in Seller's
assets;
(k) Seller's assets will be maintained in a manner that facilitates
their identification and segregation from those of Parent or any Affiliate
thereof;
(l) Seller will strictly observe corporate formalities in its dealings
with Parent or any Affiliate thereof, and funds or other assets of Seller will
not be commingled with those of Parent or any Affiliate thereof except as
permitted by this Agreement in connection with servicing the Pool Receivables.
Seller shall not maintain joint bank accounts or other depository accounts to
which Parent or any Affiliate thereof (other than Parent in its capacity as
Servicer) has independent access; and
(m) Seller will maintain arms'-length relationships with Parent (and
any Affiliate thereof). Any Person that renders or otherwise furnishes services
to Seller will be compensated by Seller at market rates for such services it
renders or otherwise furnishes to Seller. Neither Seller nor Parent will be or
will hold itself out to be responsible for the debts of the other or the
decisions or actions respecting the daily business and affairs of the other.
Seller and Parent will immediately correct any known misrepresentation with
respect to the foregoing, and they will not operate or purport to operate as an
integrated single economic unit with respect to each other or in their dealing
with any other entity.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer.
(a) Parent as Initial Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person designated
as Servicer hereunder ("Servicer") from time to time in accordance with this
Section 8.1. Until the Administrator gives to Parent a Successor Notice, Parent
is hereby designated as, and hereby agrees to perform the duties and obligations
of, Servicer pursuant to the terms hereof.
(b) Successor Notice; Servicer Transfer Events. Upon Parent's receipt
of notice from the Administrator of the Administrator's designation of a new
Servicer (a "Successor Notice"), Parent agrees that it will terminate its
activities as Servicer hereunder in a manner that the Administrator reasonably
believes will facilitate the transition of the performance of such activities to
the new Servicer, and the new Servicer shall assume each and all of Parent's
obligations to service and administer such Pool Receivables, on the terms and
subject to the
24
conditions herein set forth, and Parent shall use its best efforts to assist the
new Servicer in assuming such obligations. The Administrator agrees not to give
Parent a Successor Notice until after the occurrence of a Liquidation Event (any
such Liquidation Event being herein called a "Servicer Transfer Event"), in
which case such Successor Notice may be given at any time in the Administrator's
discretion (it being understood that the Administrator shall give such Successor
Notice upon written request to do so by any Agent).
(c) Resignation. The Parent acknowledges that the Administrator, the
Agents and the Purchasers have relied on the Parent's agreement to act as
Servicer hereunder in making their decision to execute and deliver this
Agreement. Accordingly, the Parent agrees that it will not voluntarily resign as
Servicer.
(d) Subcontracts. Servicer may, with the prior consent of each Agent,
subcontract with any other Person for servicing, administering or collecting the
Pool Receivables, provided that (i) such Sub-Servicer shall agree in writing to
perform the duties and obligations of the Servicer pursuant to the terms hereof;
(ii) Servicer shall remain primarily liable for the performance of the duties
and obligations of Servicer pursuant to the terms hereof, (iii) Seller, the
Administrator, the Agents and the Purchasers shall have the right to look solely
to the Servicer for performance, and (iv) any such subcontract may be terminated
at the option of the Administrator upon the occurrence of a Servicer Transfer
Event.
(e) Servicing Programs. In the event that Servicer uses any software
program in servicing the Pool Receivables that it licenses from a third party,
Servicer shall use its best efforts to obtain whatever licenses or approvals are
necessary to allow the Administrator or the new Servicer to use such program.
Section 8.2 Duties of Servicer.
(a) Appointment; Duties in General. Each of Seller, each Purchaser,
each Agent and the Administrator hereby appoints as its agent Servicer, as from
time to time designated pursuant to Section 8.1, to enforce its rights and
interests in and under the Pool Assets. Servicer shall take or cause to be taken
all such actions as may be necessary or advisable to collect each Pool
Receivable from time to time, all in accordance with Applicable Law, with
reasonable care and diligence and in accordance with the Credit and Collection
Policy.
(b) Allocation of Collections; Segregation. Within two (2) Business
Days of receipt Servicer shall deposit all Collections of Pool Receivables into
the Collection Account.
(c) Modification of Receivables. So long as no Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, Servicer may
(i) in accordance with the Credit and Collection Policy, adjust the Unpaid
Balance of any Defaulted Receivable or extend the time for payment of any
Defaulted Receivable (but in no event to a date later than 120 days from the
date of the original invoice), provided that (A) such extension or adjustment
shall not alter the status of such Pool Receivable as a Delinquent Receivable or
a Defaulted Receivable or limit the rights of any Agent, any Purchaser or the
Administrator under this Agreement, and (B) the aggregate amount of all such
adjustments made in any Settlement Period, plus the aggregate Unpaid Balance of
all Pool Receivables that have been extended
25
during such Settlement Period, shall not exceed 2% of the aggregate Unpaid
Balance of all Pool Receivables as at the Cut-Off Date for such Settlement
Period and (ii) adjust the Unpaid Balance of any Receivable to reflect the
reductions or cancellations described in the first sentence of Section 3.2(a).
(d) Documents and Records. Seller shall deliver to Servicer, and
Servicer shall hold in trust for Seller and the Purchasers in accordance with
their respective interests, all documents, instruments and records (including,
without limitation, computer tapes or disks) that evidence or relate to Pool
Receivables.
(e) Certain Duties to Seller. Servicer shall, as soon as practicable
following receipt, turn over to Seller (i) that portion of Collections of Pool
Receivables representing its undivided interest therein, less the Seller's Share
of the Servicer's Fee, and (ii) the Collections of any Receivable which is not a
Pool Receivable. Seller hereby directs Servicer to pay any Collections of any
Reconveyed Receivable directly to the related Originator to be applied pursuant
to the Purchase Agreement. Servicer shall, as soon as practicable upon demand,
deliver to Seller copies of documents, instruments and records in its possession
that evidence or relate to Pool Receivables.
(f) Termination. Servicer's authorization under this Agreement shall
terminate upon the Final Payout Date.
(g) Power of Attorney. Seller hereby grants to Servicer an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of Seller all steps which are necessary or advisable to
endorse, negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by Seller or transmitted or received by any Purchaser
(whether or not from Seller) in connection with any Receivable. Notwithstanding
anything to the contrary contained herein, the Administrator may direct the
Servicer to commence or settle any legal action to enforce collection of any
Pool Receivable or to foreclose upon or repossess any Related Security;
provided, however, that no such direction may be given unless either (i) a
Liquidation Event has occurred or (ii) the Administrator (or any Agent) believes
in good faith that failure to commence, settle, or effect such legal action,
foreclosure or repossession, could adversely affect Receivables constituting a
material portion of the Pool Receivables.
Section 8.3 Rights of the Administrator.
(a) Notice to Obligors. At any time after the occurrence of a
Liquidation Event, the Administrator may notify the Obligors of Pool
Receivables, or any of them, of the ownership of the Asset Interest by the
Administrator, for the benefit of the Purchasers.
(b) Notice to Lock-Box Banks. At any time following the earlier to
occur of (i) the occurrence of a Liquidation Event, and (ii) the commencement of
the Liquidation Period, the Administrator is hereby authorized to give notice to
the Lock-Box Banks, as provided in the Lock-Box Agreements, of the transfer to
the Administrator of dominion and control over the lock-boxes and Lock-Box
Accounts. Seller hereby transfers to the Administrator, effective when the
Administrator shall give notice to the Lock-Box Banks as provided in the
Lock-Box
26
Agreements, the exclusive dominion and control over such lock-boxes and
accounts, and shall take any further action that the Administrator may
reasonably request to effect such transfer. Any proceeds of Pool Receivables
received by the Seller or Parent, as Servicer or otherwise, thereafter shall be
sent immediately to the Administrator.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than Parent pursuant to Section 8.1:
(i) The Administrator may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable under any Pool
Receivable directly to the Administrator or its designee.
(ii) Parent shall, at the Administrator's request and at Parent's
expense, give notice of such ownership to each said Obligor and direct that
payments be made directly to the Administrator or its designee.
(iii) Parent and Seller shall, at the Administrator's request,
(A) assemble all of the documents, instruments and other records (including,
without limitation, computer programs, tapes and disks) which evidence the Pool
Receivables and the related Contracts and Related Security, or which are
otherwise necessary or desirable to collect such Pool Receivables and make the
same available to the Administrator at a place selected by the Administrator,
and (B) segregate all cash, checks and other instruments received by it from
time to time constituting Collections in a manner acceptable to the
Administrator and promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer, to the
Administrator.
(iv) Each of Seller and each Purchaser hereby authorizes the
Administrator, and grants to the Administrator an irrevocable power of attorney,
to take any and all steps in Seller's name and on behalf of Seller and the
Purchasers which are necessary or desirable, in the reasonable determination of
the Administrator, to collect all amounts due under any and all Pool Receivables
including, without limitation, endorsing Seller's name on checks and other
instruments representing Collections and enforcing such Pool Receivables and the
related Contracts.
Section 8.4 Responsibilities of Seller. Anything herein to the contrary
notwithstanding:
(a) Contracts. Seller shall perform, or cause an Originator to perform
under the Purchase Agreement, all of its obligations under the Contracts related
to the Pool Receivables and under the other agreements related thereto to the
same extent as if the Asset Interest had not been sold hereunder, and the
exercise by the Administrator or its designee of its rights hereunder shall not
relieve Seller from such obligations.
(b) Limitation of Liability. None of the Administrator, any Agent or
any Purchaser shall have any obligation or liability with respect to any Pool
Receivables, the related Contracts or any other related agreements, nor shall
any of them be obligated to perform any of the obligations of Seller or any
Originator thereunder.
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Section 8.5 Further Action Evidencing Purchases and Reinvestments.
(a) Further Assurances. The Seller shall, at its expense, take all
action necessary or desirable to establish and maintain a valid and enforceable
first priority perfected undivided interest, to the extent of the Asset
Interest, in the Pool Assets, free and clear of any Lien, in favor of the
Administrator, for the benefit of the Purchasers. Without limiting the
generality of the foregoing, Seller will upon the request of the Administrator
or its designee execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate to evidence or perfect the interest
described in the previous sentence.
(b) Data Processing Records. Each of Parent and Seller will xxxx its
master data processing records evidencing the Pool Receivables with a legend,
acceptable to the Administrator, evidencing that the Asset Interest has been
sold in accordance with this Agreement.
(c) Additional Financing Statements; Performance by Administrator.
Seller hereby authorizes the Administrator or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any portion of the Asset Interest now existing or
hereafter arising in the name of Seller. If Seller or Parent fails to perform
any of its agreements or obligations under this Agreement, the Administrator or
its designee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the
Administrator or its designee incurred in connection therewith shall be payable
by Seller or Parent, as the case may be.
(d) Continuation Statements; Opinion. Without limiting the generality
of subsection (a), Seller will, not earlier than six (6) months and not later
than three (3) months prior to the fifth anniversary of the date of filing of
the financing statement referred to in Section 5.1(d) of the Original Purchase
Agreement or any other financing statement filed pursuant to this Agreement or
in connection with any Purchase hereunder, unless the Final Payout Date shall
have occurred:
(i) execute and deliver and file or cause to be filed an
appropriate continuation statement with respect to such financing statement; and
(ii) deliver or cause to be delivered to the Administrator an
opinion of the counsel for Seller, in form and substance reasonably satisfactory
to each Agent, confirming and updating the opinion delivered pursuant to Section
5.1(g) with respect to perfection and otherwise to the effect that the Asset
Interest hereunder continues to be an enforceable and perfected ownership or
security interest, subject to no other Liens of record except as provided herein
or otherwise permitted hereunder, which opinion may contain usual and customary
assumptions, limitations and exceptions.
Section 8.6 Application of Collections. Any payment by an Obligor in
respect of any indebtedness owed by it to Seller shall, except as otherwise
specified by such Obligor, required by the underlying Contract or law or unless
the Administrator instructs otherwise, be applied, first, as a Collection of any
Pool Receivable or Receivables then outstanding of such Obligor in
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the order of the age of such Pool Receivables, starting with the oldest of such
Pool Receivable and, second, to any other indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
Section 9.1 Grant of Security Interest. To secure all obligations of
Seller arising in connection with this Agreement and each other Transaction
Document, whether now or hereafter existing, due or to become due, direct or
indirect, or absolute or contingent, including, without limitation, all
Indemnified Amounts, payments on account of Collections of Pool Receivables
received or deemed to be received and fees, effective as of the date of the
first Purchase, Seller hereby assigns and grants to Administrator, for the
benefit of the Secured Parties, a security interest in all of Seller's right,
title and interest (including specifically any undivided interest retained by
Seller hereunder) now or hereafter existing in, to and under all the Pool
Assets.
Section 9.2 Further Assurances. The provisions of Section 8.5 shall apply
to the security interest granted under Section 9.1 as well as to the Purchases,
Reinvestments and the Asset Interest hereunder.
Section 9.3 Remedies. Upon the occurrence of a Liquidation Event, the
Administrator and each Purchaser shall have, with respect to the collateral
granted pursuant to Section 9.1, and in addition to all other rights and
remedies available to the Purchasers or the Administrator under this Agreement
or other applicable law, all the rights and remedies of a secured party upon
default under the UCC.
ARTICLE X
LIQUIDATION EVENTS
Section 10.1 Liquidation Events. The following events shall be "Liquidation
Events" hereunder:
(a) (i) Servicer (if Parent or its Affiliate is Servicer) shall fail
to perform or observe any material term, covenant or agreement that is an
obligation of Servicer hereunder (other than as referred to in clause (ii) next
following) and such failure shall remain unremedied for more than five Business
Days or (ii) Seller or Servicer (if Parent or its Affiliate is Servicer) shall
fail to make any payment or deposit to be made by it hereunder when due; or
(b) Any representation or warranty made or deemed to be made by
Seller, any Originator or Parent under or in connection with this Agreement, any
other Transaction Document, any Daily Report or any Servicer Report or other
information or report delivered pursuant hereto shall prove to have been false
or incorrect in any material respect when made; or
(c) Seller, any Originator or Parent shall fail to perform or observe
any other term, covenant or agreement contained in this Agreement or any of the
other Transaction Documents on its part to be performed or observed and any such
failure shall remain unremedied for fifteen (15) Business Days after written
notice thereof shall have been given by the
29
Administrator to Seller, such Originator or Parent, as the case may be; or
(d) A default shall have occurred and be continuing under any
instrument or agreement evidencing, securing or providing for the issuance of
indebtedness for borrowed money in excess of $5,000,000 of, or guaranteed by,
Parent or any Subsidiary thereof, which default is a payment default that
continues beyond the applicable grace period, if any; or
(e) This Agreement or any Purchase or any Reinvestment pursuant to
this Agreement shall for any reason (other than pursuant to the terms hereof)
(i) cease to create, or the Asset Interest shall for any reason cease to be, a
valid and enforceable perfected undivided percentage interest to the extent of
the Asset Interest in each Pool Asset, free and clear of any other Lien or (ii)
cease to create with respect to the items described in Section 9.1, or the
interest of the Administrator (for the benefit of the Purchasers) with respect
to such items shall cease to be, a valid and enforceable first priority
perfected security interest, free and clear of any other Lien; or
(f) An Event of Bankruptcy shall have occurred and remain continuing
with respect to Seller, Parent, any Originator or any Subsidiary of Parent; or
(g) The average of the Sales-Based Dilution Ratios for any three
consecutive Cut-Off Dates exceeds 9%; or
(h) The Sales-Based Default Ratio for any Cut-Off Date exceeds 5%; or
(i) On any Settlement Date, after giving effect to the payments made
under Section 3.1(c), the Asset Interest exceeds the Allocation Limit; or
(j) The Delinquency Ratio for any Cut-Off Date is greater than 10%; or
(k) There shall exist any event or occurrence that has caused, or has
a reasonable possibility of causing, a Material Adverse Effect (other than a
Material Adverse Effect described in clause (i) of the definition thereof); or
(l) Seller, any Originator or Parent is subject to a
Change-in-Control; or
(m) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the assets of
Seller or Parent and such lien shall not have been released within 5 Business
Days, or the Pension Benefit Guaranty Corporation shall file notice of a lien
pursuant to Section 4068 of the Employee Retirement Income Security Act of 1974
with regard to any of the assets of Seller or Parent and such lien shall not
have been released within 5 Business Days; or
(n) Parent sells, assigns (by operation of law or otherwise) or
otherwise disposes of any of its assets, or any interest therein, other than (i)
sales of inventory in the ordinary course of business, (ii) sales of surplus,
damaged, worn or obsolete assets, or assets that are promptly being replaced,
(iii) sales of assets on commercially reasonable terms, (iv) sales of
receivables in connection with a securitization transaction, (v) sales to
Subsidiaries, and (vi) sales of other assets, provided that the aggregate fair
market value of such assets sold in any
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period of four consecutive fiscal quarters does not exceed the greater of (1)
25% of the Parent's Tangible Net Worth as of the last day of such fourth fiscal
quarter and (2) $75,000,000; or
(o) Parent makes any Investments other than (i) Permitted Investments,
(ii) Investments existing on the date hereof, (iii) Investments in Subsidiaries,
(iv) Investments in the nature of acquisitions, provided that the aggregate
amount of such acquisitions in any period of four consecutive fiscal quarters
does not exceed 25% of Parent's Tangible Net Worth as of the last day of such
fourth fiscal quarter, (v) Investments in businesses related to data and
information storage, and (vi) Investments not otherwise permitted by this
subparagraph (o), provided that the aggregate amount of such Investments does
not exceed the greater of (i) 25% of Parent's Tangible Net Worth as of the last
day of the most recently ended fiscal quarter and (ii) $50,000,000; or
(p) Parent permits:
(i) its Tangible Net Worth to be less than an amount equal to (1)
75% of Tangible Net Worth as of September 30, 2001, plus (2) 50% of consolidated
Net Income (not to be reduced by losses) from September 30, 2001 to the end of
the most recently ended fiscal quarter, minus (3) the amount paid by it for the
repurchase of certain shares of its stock in connection with the Hynix Secondary
Offering filed on a Form S-3 Registration Statement with the Securities and
Exchange Commission on May 29, 2001, but not to exceed $50,000,000, minus (4)
merger related charges taken after September 30, 2001, but not to exceed
$120,000,000; and
(ii) the aggregate amount of its unrestricted cash and cash
equivalents and marketable securities on hand to be less than the greater of (1)
the product of (A) 1.50 and (B) the outstanding Capital as of any Cut-Off Date
and (2) $150,000,000.
Section 10.2 Remedies.
(a) Optional Liquidation. Upon the occurrence of a Liquidation
Event (other than a Liquidation Event described in subsection (f) of Section
10.1), the Administrator shall, at the request, or may with the consent, of each
Conduit Purchaser, by notice to Seller declare the Purchase Termination Date to
have occurred and the Liquidation Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a Liquidation
Event described in subsection (f) or (m) of Section 10.1, the Purchase
Termination Date shall occur and the Liquidation Period shall commence
automatically.
(c) Additional Remedies. Upon any Purchase Termination Date
occurring pursuant to this Section 10.2, no Purchases or Reinvestments
thereafter will be made, and the Administrator and each Purchaser shall have, in
addition to all other rights and remedies under this Agreement or otherwise, all
other rights and remedies provided under the UCC of each applicable jurisdiction
and other Applicable Law, which rights shall be cumulative.
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ARTICLE XI
THE ADMINISTRATOR
Section 11.1 Authorization and Action. (a) Each Purchaser hereby appoints
and authorizes the Administrator (or its designees) to take such action as agent
on its behalf and to exercise such powers under this Agreement as are delegated
to the Administrator by the terms hereof, together with such powers as are
reasonably incidental thereto. The Administrator shall not have any duties other
than those expressly set forth herein or any fiduciary relationship with any
Purchaser or Agent, and no implied obligations or liabilities shall be read into
this Agreement, or otherwise exist, against the Administrator. The Administrator
does not assume, nor shall it be deemed to have assumed, any obligation to, or
relationship of trust or agency with, the Seller or Servicer. Notwithstanding
any provision of this Agreement or any other Transaction Document to the
contrary, in no event shall the Administrator ever be required to take any
action which exposes the Administrator to personal liability or which is
contrary to the provision of any Transaction Document or Applicable Law.
(b) Each Purchaser hereby irrevocably designates and appoints the
respective institution identified as its Agent on the signature pages hereto,
and each authorizes such Agent to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such duties
as are expressly delegated to such Agent by the terms of this Agreement, if any,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, no
Agent shall have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Purchaser or other Agent or
the Administrator, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities on the part of such Agent shall be read into
this Agreement or otherwise exist against such Agent.
(c) Except as otherwise specifically provided in this Agreement, the
provisions of this Article XI are solely for the benefit of the Agents, the
Administrator and the Purchasers, and none of the Seller or Servicer shall have
any rights as a third-party beneficiary or otherwise under any of the provisions
of this Article XI, except that this Article XI shall not affect any obligations
which any Agent, the Administrator or any Purchaser may have to the Seller or
the Servicer under the other provisions of this Agreement. Furthermore, no
Purchaser shall have any rights as a third-party beneficiary or otherwise under
any of the provisions hereof in respect of an Agent which is not the Agent for
such Purchaser.
(d) In performing its functions and duties hereunder, the
Administrator shall act solely as the agent of the Purchasers and the Agents and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller or Servicer or any of
their successors and assigns. In performing its functions and duties hereunder,
each Agent shall act solely as the agent of its respective Purchaser and does
not assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller, the Servicer, any other Purchaser, any
other Agent or the Administrator, or any of their respective successors and
assigns.
Section 11.2 Delegation of Duties. The Administrator may execute any of its
duties
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through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrator shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Administrator's Reliance, Etc. None of the Administrator, any
Agent, or any of their respective directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them under or in
connection with the Transaction Documents (including, without limitation, the
servicing, administering or collecting of Pool Receivables as Servicer pursuant
to Section 8.1), except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each of the
Administrator and each Agent: (a) may consult with legal counsel (including
counsel for Seller), independent certified public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no warranty or representation to any
Purchaser, any Agent or any other holder of any interest in Pool Receivables and
shall not be responsible to any Purchaser, any Agent or any such other holder
for any statements, warranties or representations made in or in connection with
any Transaction Document; (c) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any Transaction Document on the part of Seller or Parent or to inspect the
property (including the books and records) of Seller, any Originator or Parent;
(d) shall not be responsible to any Purchaser, any Agent or any other holder of
any interest in Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Transaction Document;
and (e) shall incur no liability under or in respect of this Agreement by acting
upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
Section 11.4 Each Agent and Affiliates. Each Agent and any of its
Affiliates may generally engage in any kind of business with Seller, Parent, any
Originator or any Obligor, any of their respective Affiliates and any Person who
may do business with or own securities of Seller, Parent, any Originator or any
Obligor or any of their respective Affiliates, all as if such Agent were not the
Administrator (in the case of Fleet) or an Agent, and without any duty to
account therefor to any Purchaser, any other Agent or any other holder of an
interest in Pool Receivables.
Section 11.5 Reliance by Agents. (a) Each Agent and the Administrator shall
in all cases be entitled to rely, and shall be fully protected in relying, upon
any document or other writing or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person and upon
advice and statements of legal counsel (including counsel to the Seller or
Parent), independent accountants and other experts selected by the
Administrator. Each Agent and the Administrator shall in all cases be fully
justified in failing or refusing to take any action under any Transaction
Document unless it shall first receive such advice or concurrence of the
Required Purchasers, and assurance of its indemnification, as it deems
appropriate.
(b) The Administrator shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement in accordance with a request
of the Required
33
Purchasers or the Agents, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all Purchasers, the Administrator and
all Agents.
(c) Unless otherwise advised in writing by an Agent or by any
Purchaser on whose behalf such Agent is purportedly acting, each party to this
Agreement may assume that (i) such Agent is acting for the benefit of each of
the Purchasers in respect of which such Agent is identified as being the
"Agent", as well as for the benefit of each assignee or other transferee from
any such Person, and (ii) each action taken by such Agent has been duly
authorized and approved by all necessary action on the part of the Purchaser on
whose behalf it is purportedly acting. Each Agent and its Purchaser shall agree
amongst themselves as to the circumstances and procedures for removal,
resignation and replacement of such Agent.
Section 11.6 Notice of Liquidation Events. Neither any Agent nor the
Administrator shall be deemed to have knowledge or notice of the occurrence of
any Liquidation Event or Unmatured Liquidation Event unless such Agent or the
Administrator has received notice from any Purchaser, any Agent, the Servicer or
the Seller stating that a Liquidation Event or Unmatured Liquidation Event has
occurred hereunder and describing such Liquidation Event or Unmatured
Liquidation Event. In the event that the Administrator receives such a notice,
it shall promptly give notice thereof to each Agent whereupon each such Agent
shall promptly give notice thereof to its related Purchasers and to the Rating
Agencies then rating its related Conduit Purchaser's Commercial Paper Notes. In
the event that an Agent receives such a notice (other than from the
Administrator), it shall promptly give notice thereof to the Administrator. The
Administrator shall take such action concerning a Liquidation Event or Unmatured
Liquidation Event as may be directed by the Required Purchasers (unless such
action otherwise requires the consent of all Purchasers), but until the
Administrator receives such directions, the Administrator may (but shall not be
obligated to) take such action, or refrain from taking such action, as the
Administrator deems advisable and in the best interests of the Purchasers and
Agents.
Section 11.7 Non-Reliance on Administrator, Agents and Other Purchasers.
Each Purchaser expressly acknowledges that none of the Administrator, the Agents
nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Administrator, or any Agent hereafter taken, including
any review of the affairs of the Seller, Servicer or the Parent, shall be deemed
to constitute any representation or warranty by the Administrator or such Agent,
as applicable. Each Purchaser represents and warrants to the Administrator and
the Agents that, independently and without reliance upon the Administrator, the
Agents or any other Purchaser and based on such documents and information as it
has deemed appropriate, it has made and will continue to make its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of the Seller, the Servicer
or the Parent, and the Receivables and its own decision to enter into this
Agreement and to take, or omit, action under any Transaction Document. Except
for items specifically required to be delivered hereunder, the Administrator
shall not have any duty or responsibility to provide any Agent with any
information concerning the Seller, the Parent, or any of their Affiliates that
comes into the possession of the Administrator or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
34
Section 11.8 Indemnification. Each Purchaser Group shall indemnify and hold
harmless the Administrator (but solely in its capacity as Administrator) and its
officers, directors, employees, representatives and agents (to the extent not
reimbursed by the Seller or Servicer and without limiting the obligation of the
Seller or Servicer to do so), ratably in accordance with such Purchaser Group's
related Conduit Purchaser's Percentage from and against any and all liabilities,
obligations, losses, damages, penalties, judgments, settlements, costs, expenses
and disbursements of any kind whatsoever (including in connection with any
investigative or threatened proceeding, whether or not the Administrator or such
Person shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against the Administrator or such Person as a result of,
or related to, any of the transactions contemplated by the Transaction Documents
or the execution, delivery or performance of the Transaction Documents or any
other document furnished in connection therewith (but excluding any such
liabilities, obligations, losses, damages, penalties, judgments, settlements,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Administrator or such Person as finally determined by
a court of competent jurisdiction); provided, that in the case of each Conduit
Purchaser, such indemnity shall be provided solely to the extent of amounts
received by such Conduit Purchaser under this Agreement which exceed the amounts
required to repay such Conduit Purchaser's outstanding Commercial Paper Notes.
Section 11.9 Successor Administrator. The Administrator may, upon at least
five (5) days notice to the Seller and each Purchaser and Agent, resign as
Administrator. Such resignation shall not become effective until a successor
agent is appointed by the Required Purchasers and has accepted such appointment.
Upon such acceptance of its appointment as Administrator hereunder by a
successor Administrator, such successor Administrator shall succeed to and
become vested with all the rights and duties of the retiring Administrator, and
the retiring Administrator shall be discharged from its duties and obligations
under the Transaction Documents. After any retiring Administrator's resignation
hereunder, the provisions of this Article XI and Article XIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrator.
Section 11.10 Deliveries to Rating Agency. Upon request of a Rating Agency,
the Administrator shall promptly deliver to such Rating Agency such information
that the Administrator has received from the Servicer in connection with the
transactions contemplated by this Agreement and that is requested by such Rating
Agency. Each of Parent and Seller hereby consent to each delivery of information
by the Administrator pursuant to the foregoing sentence.
ARTICLE XII
ASSIGNMENT OF PURCHASERS' INTEREST
Section 12.1 Restrictions on Assignments.
(a) Neither Seller nor Parent may assign its rights, or delegate its
duties, hereunder or any interest herein without the prior written consent of
each Agent. No Conduit Purchaser may assign its rights hereunder (although it
may delegate its duties hereunder as expressly indicated herein) or the Asset
Interest (or any portion thereof) to any Person without
35
the prior written consent of Seller, which consent shall not be unreasonably
withheld; provided, however, that each Conduit Purchaser may assign all of its
rights and interests in the Transaction Documents, together with all its
interest in the Asset Interest, to (i) its Agent or any Affiliate thereof, or
(ii) to any "bankruptcy remote" special purpose entity the business of which is
administered by its Agent or any Affiliate thereof, so long as such entity has
the ability to issue commercial paper notes, or to cause the issuance of
commercial paper notes, to fund the Asset Interest or (iii) to any of its
Program Support Providers. If a Conduit Purchaser notifies Seller and Parent
that it has decided to assign its rights and delegate its duties hereunder to
one or more Program Support Providers (or an agent therefor), Seller and Parent
agree to enter into such amendments hereto and to the other Transaction
Documents as its Agent may reasonably request to reflect such assignment and
delegation. No Committed Purchaser may assign its rights or obligations
hereunder to any Person without the prior written consent of its Agent and
without complying with the provisions with respect to assignment set forth in
the Liquidity Agreement to which it is a party.
(b) Seller agrees to advise the Administrator within five (5) Business
Days after notice to Seller of any proposed assignment by a Conduit Purchaser of
the Asset Interest (or any portion thereof), not otherwise permitted under
subsection (a), of Seller's consent or non-consent to such assignment and if it
does not consent, the reasons therefor. If Seller does not respond in such time
period, Seller shall be deemed to have consented to such assignment. All of the
aforementioned assignments shall be upon such terms and conditions as the
related Purchaser and the assignee may mutually agree.
Section 12.2 Rights of Assignee. Upon the assignment by a Purchaser in
accordance with this Article XII, the assignee receiving such assignment shall
have all of the rights and obligations of such Purchaser with respect to the
Transaction Documents and the Asset Interest (or such portion thereof as has
been assigned).
ARTICLE XIII
INDEMNIFICATION
Section 13.1 Indemnities.
(a) General Indemnity by Seller. Without limiting any other rights
which any such Person may have hereunder or under Applicable Law, Seller hereby
agrees to indemnify each of the Administrator, each Purchaser, each Agent, each
Program Support Provider, each of their respective Affiliates, and all
successors, permitted transferees, participants and permitted assigns and all
officers, directors, shareholders, controlling persons, members, employees and
agents of any of the foregoing (each an "Indemnified Party"), within five
Business Days of demand, from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or relating to the Transaction Documents or the ownership or funding of the
Asset Interest or in respect of any Receivable or any Contract, excluding,
however, (a) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of any Indemnified Party or (b) Indemnified
Amounts which have the effect of recourse for non-
36
payment of the Pool Receivables due to credit problems of the Obligors (except
as otherwise specifically provided in this Agreement). Without limiting the
foregoing, Seller shall indemnify each Indemnified Party for Indemnified Amounts
arising out of or relating to:
(i) the transfer by Seller of any interest in any Pool Receivable
other than the transfer of an Asset Interest to the Administrator, for the
benefit of the Purchasers, pursuant to this Agreement and the grant of a
security interest to the Administrator pursuant to Section 9.1;
(ii) any representation or warranty made by Seller under or in
connection with any Transaction Document, any Servicer Report, any Daily Report
or any other information or report delivered by or on behalf of Seller pursuant
hereto, which shall have been false, incorrect or misleading in any respect when
made or deemed made;
(iii) the failure by Seller to comply with any Applicable Law, or
the nonconformity of any Pool Receivable or the related Contract with any
Applicable Law;
(iv) the failure to vest and maintain vested in the
Administrator, for the benefit of the Purchasers, an undivided percentage
ownership or security interest, to the extent of the Asset Interest, in the Pool
Assets, free and clear of any Lien, other than a Lien arising solely as a result
of an act of a Purchaser, an Agent or the Administrator, whether existing at the
time of any Purchase or Reinvestment of such Asset Interest or at any time
thereafter;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any Pool
Assets, whether at the time of any Purchase or Reinvestment or at any time
thereafter;
(vi) any dispute, claim, offset or defense (other than discharge
in bankruptcy or payment) of the Obligor to the payment of any Receivable
included in the Net Pool Balance (including, without limitation, a defense based
on such Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise or services
related to such Receivable or the furnishing or failure to furnish such
merchandise or services;
(vii) any failure of Seller to perform its duties or obligations
in accordance with this Agreement;
(viii) any products liability claim arising out of or in
connection with merchandise or services that are the subject of any Pool
Receivable;
(ix) any litigation, proceedings or investigation against Seller
other than by an Indemnified Person; or
(x) any tax or governmental fee or charge (but not including
taxes upon or measured by net income or representing a franchise or
unincorporated business tax of such Person), all interest and penalties thereon
or with respect thereto, and all out-of-pocket costs
37
and expenses, including the reasonable fees and expenses of counsel in defending
against the same, which may arise by reason of the purchase or ownership of any
Asset Interest, or any other interest in the Pool Receivables or in any goods
which secure any such Pool Receivables.
(b) Indemnity by Servicer. Without limiting any other rights which any
such Person may have hereunder or under applicable law, Servicer hereby agrees
to indemnify each Indemnified Party, forthwith on demand, from and against any
and all Indemnified Amounts awarded against or incurred by any of them arising
out of or relating to (i) any representation or warranty made by Servicer under
or in connection with any Transaction Document, any Servicer Report, any Daily
Report or any other information or report delivered by or on behalf of Servicer
pursuant hereto, which shall have been false, incorrect or misleading in any
respect when made or deemed made, (ii) the failure by Servicer to comply with
any Applicable Law, (iii) the failure of Servicer to perform its duties or
obligations in accordance with this Agreement or (iv) the commingling of any
Collections with other funds.
(c) After-Tax Basis. Indemnification hereunder shall be in an amount
necessary to make the related Indemnified Party whole after taking into account
any tax consequences to such Indemnified Party of the receipt of the indemnity
provided hereunder, including the effect of such tax or refund on the amount of
tax measured by net income or profits which is or was payable by such
Indemnified Party.
(d) Contribution. If for any reason the indemnification provided above
in this Section 13.1 is unavailable to an Indemnified Party or is insufficient
to hold an Indemnified Party harmless, then Seller or Servicer, as the case may
be, shall contribute to the amount paid or payable by such Indemnified Party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and Seller or Servicer, as the case may be, on
the other hand but also the relative fault of such Indemnified Party as well as
any other relevant equitable considerations.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by any party therefrom shall in any
event be effective unless the same shall be in writing and signed by (a) Seller,
the Administrator, Parent and the Required Purchasers (with respect to an
amendment) or (b) the Administrator and the Required Purchasers (with respect to
a waiver or consent by them) or Seller or Parent (with respect to a waiver or
consent by it), as the case may be, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however that no such amendment or waiver shall without the
consent of each affected Purchaser (i) increase the amount of a Purchaser's
Commitment, (ii) change the date of the payment of any amount payable hereunder,
(iii) reduce the amount of Capital, Earned Discount or any Fee (other than by
payment in accordance with this Agreement), (iv) modify the definition of
"Required Purchasers" or this Section 14.1, (v) consent to or permit the
assignment or transfer of the Seller or Parent of any of its rights or
obligations under this Agreement or the Purchase Agreement or (vi) change the
definition of "Required Reserves"; provided, further that no such amendment or
38
consent shall adversely affect the rights of any Agent hereunder without such
Agent's written consent. The parties acknowledge that, before entering into such
an amendment or granting such a waiver or consent, a Conduit Purchaser may also
be required to obtain the approval of some or all of the Program Support
Providers or to obtain confirmation from certain rating agencies that such
amendment, waiver or consent will not result in a withdrawal or reduction of the
ratings of such Conduit Purchaser's Commercial Paper Notes. In addition, no
material amendment to this Agreement shall be effective unless the Rating Agency
Condition has been satisfied with respect thereto.
Section 14.2 Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on Schedule 14.2 or at such other address or facsimile number as shall
be designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (a) if personally delivered
or sent by express mail or courier or if sent by certified mail, when received,
and (b) if transmitted by facsimile, when sent, receipt confirmed by telephone
or electronic means.
Section 14.3 No Waiver; Remedies. No failure on the part of the
Administrator, any Affected Party, any Indemnified Party, any Purchaser, each
Agent or any other holder of the Asset Interest (or any portion thereof) to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 14.4 Binding Effect; Survival. This Agreement shall be binding upon
and inure to the benefit of Seller, Parent, the Administrator, each Purchaser,
each Agent and their respective successors and assigns, and the provisions of
Section 4.2 and Article XIII shall inure to the benefit of the Affected Parties
and the Indemnified Parties, respectively, and their respective successors and
assigns; provided, however, nothing in the foregoing shall be deemed to
authorize any assignment not permitted by Section 12.1. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
Final Payout Date. The rights and remedies with respect to any breach of any
representation and warranty made by Seller or Parent pursuant to Article VI and
the provisions of Article XIII and Sections 4.2, 14.5, 14.6, 14.7, 14.8 and
14.15 shall be continuing and shall survive any termination of this Agreement.
Section 14.5 Costs, Expenses and Taxes. In addition to its obligations
under Article XIII, Seller or Parent, as the case may be, agrees to pay within
five Business Days of demand;
(a) all costs and expenses incurred (i) by the Administrator, each
Agent and each Purchaser, and their respective Affiliates, in connection with
the negotiation, preparation, execution and delivery of, and (ii) by the
Administrator, any Program Support Provider, any Agent, and any Purchaser and
their respective Affiliates, in connection with the enforcement against Seller
or Parent, as the case may be, of, or any actual or claimed breach by Seller or
Parent, as the case may be, of, this Agreement and the other Transaction
Documents, including,
39
without limitation (A) the reasonable fees and expenses of counsel to any of
such Persons incurred in connection with any of the foregoing or in advising
such Persons as to their respective rights and remedies under any of the
Transaction Documents, and (B) all reasonable out-of-pocket expenses incurred in
connection with the foregoing (including reasonable fees and expenses of
independent accountants incurred in connection with any review of Seller's or
Parent's, as the case may be, books and records either pursuant to Section
7.1(c) or otherwise); and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
Section 14.6 No Proceedings.
(a) Conduit Purchasers. Seller, Parent, Servicer, each Agent and Fleet
(individually, as Blue Keel Agent and as Administrator) each hereby agrees that
it will not institute against any Conduit Purchaser, or join any other Person in
instituting against any Conduit Purchaser, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Event of Bankruptcy)
so long as any Commercial Paper Notes of such Conduit Purchaser shall be
outstanding or there shall not have elapsed one year plus one day since the last
day on which any such Commercial Paper Notes of such Conduit Purchaser shall
have been outstanding. Notwithstanding any provisions contained in this
Agreement to the contrary, no Conduit Purchaser shall, nor shall be obligated
to, pay any amount pursuant to this Agreement unless (i) such Conduit Purchaser
has received funds which may be used to make such payment pursuant to its
securitization program documents and (ii) after giving effect to such payment,
either such Conduit Purchaser could issue Commercial Paper Notes to refinance
all of its outstanding Commercial Paper Notes (assuming such outstanding
Commercial Paper Notes matured at such time) without violating any of its
securitization program documents or all of its Commercial Paper Notes are paid
in full. Any amount which any Conduit Purchaser does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in
Section 101 of the Bankruptcy Code) against or an obligation of such Conduit
Purchaser for such insufficiency unless and until such Conduit Purchaser
satisfies the provisions of such preceding sentence. The parties hereto hereby
agree and covenant that the foregoing provision shall constitute a subordination
agreement for purposes of Section 510(a) of the Bankruptcy Code.
(b) Seller. Each of the parties hereto hereby agrees that it will not
institute against Seller, or join any other Person in instituting against
Seller, any insolvency proceeding (namely, any proceeding of the type referred
in the definition of Event of Bankruptcy) as if there shall not have elapsed one
year plus one day since the Final Payout Date. All amounts due from Seller shall
be subject to the priorities set forth in Section 3.1(c) or (d), as applicable,
and to the extent that funds are not available to pay any such amount pursuant
to such section, such failure shall not constitute a claim (as defined in
Section 101 of the Bankruptcy Code) against or an obligation of Seller unless
and until such funds are available for such payment.
Section 14.7 Confidentiality of Program Information.
40
(a) Confidential Information. Each party hereto acknowledges that each
Agent regards the structure of the transactions contemplated by this Agreement
to be proprietary, and each such party severally agrees that:
(i) it will not disclose without the prior consent of each Agent
or as is required or authorized by the Transaction Documents (other than to the
directors, employees, agents, auditors, counsel or affiliates (collectively,
"representatives") of such party, each of whom shall be informed by such party
of the confidential nature of the Program Information (as defined below) and of
the terms of this Section 14.7), (A) any information regarding the pricing in,
or copies of, this Agreement or any transaction contemplated hereby, (B) any
information regarding the organization, business or operations of any Purchaser
generally or the services performed by the Administrator for the Purchasers, or
(C) any information which is furnished by an Agent to such party and which is
designated by such Agent to such party in writing or otherwise as confidential
or not otherwise available to the general public (the information referred to in
clauses (A), (B) and (C) is collectively referred to as the "Program
Information"); provided, however, that such party may disclose any such Program
Information (I) to any other party to this Agreement for the purposes
contemplated hereby, (II) as may be required by any Governmental Authority
having or claiming to have jurisdiction over such party, (III) in order to
comply with Applicable Law, (IV) to the underwriters for securities to be issued
by the Parent, and their counsel, and the Securities and Exchange Commission in
connection with any public offering of such securities (provided that in no
event shall such disclosure include any Fee Letter) or (v) subject to subsection
(c), in the event such party is legally compelled (by interrogatories, requests
for information or copies, subpoena, civil investigative demand or similar
process) to disclose any such Program Information;
(ii) it will use the Program Information solely for the purposes
of evaluating, administering and enforcing the transactions contemplated by this
Agreement and making any necessary business judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to the related Agent, all documents or other written
material (other than documents executed by such party) received from such Agent,
as the case may be, in connection with (a)(i)(B) or (C) above and all copies
thereof made by such party which contain the Program Information.
(b) Availability of Confidential Information. This Section 14.7 shall
be inoperative as to such portions of the Program Information which are or
become generally available to the public or such party on a nonconfidential
basis from a source other than the related Agent or were known to such party on
a nonconfidential basis prior to its disclosure by such Agent.
(c) Legal Compulsion to Disclose. In the event that any party or
anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will, to
the extent that it may legally do so,
41
(i) provide the related Agent with prompt written notice so that
such Agent may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 14.7; and
(ii) unless the related Agent waives compliance by such party
with the provisions of this Section 14.7, make a timely objection to the request
or confirmation to provide such Program Information on the basis that such
Program Information is confidential and subject to the agreements contained in
this Section 14.7.
In the event that such protective order or other remedy is not obtained, or the
related Agent waives compliance with the provisions of this Section 14.7, such
party will furnish only that portion of the Program Information which (in such
party's good faith judgment) is legally required to be furnished and will
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Program Information.
(d) Survival. This Section 14.7 shall survive termination of this
Agreement.
Section 14.8 Confidentiality of Parent Information.
(a) Confidential Information. Each party hereto acknowledges that
Parent regards certain information to be proprietary, and each such party
severally agrees that:
(i) it will not disclose without the prior consent of Parent or
as is required or authorized by the Transaction Documents (other than to the
directors, employees, agents, auditors, counsel or affiliates (collectively,
"representatives") of such party, each of whom shall be informed by such party
of the confidential nature of the Parent Information (as defined below) and of
the terms of this Section 14.8), any information which is furnished by Parent to
such party and which is designated by Parent to such party in writing or
otherwise as confidential or not otherwise available to the general public
("Parent Information"); provided, however, that such party may disclose any such
Parent Information (I) to any other party to this Agreement for the purposes
contemplated hereby, (II) as may be required by any Governmental Authority
having or claiming to have jurisdiction over such party, (III) in order to
comply with any Applicable Law, (IV) subject to subsection (c), in the event
such party is legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to disclose any
such Program Information, (V) to any Affected Party, (VI) to the Rating
Agencies, or (VII) to any potential Liquidity Bank or any potential assignee or
participant of any Liquidity Bank, and any placement agent for, or investor or
potential investor in, the Commercial Paper Notes, provided, in each case set
forth in this clause (VII), that such Person has agreed to be bound by
confidentiality restrictions substantially similar to this Section 14.8; and
(ii) it will use the Parent Information solely for the purposes
of evaluating, administering and enforcing the transactions contemplated by this
Agreement and making any necessary business judgments with respect thereto.
(b) Availability of Confidential Information. This Section 14.8 shall
be inoperative as to such portions of the Parent Information which are or become
generally available to the public or such party on a nonconfidential basis from
a source other than Parent or
42
were known to such party on a nonconfidential basis prior to its disclosure by
Parent.
(c) Legal Compulsion to Disclose. In the event that any party or
anyone to whom such party or its representatives transmits the Parent
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Parent Information, such party will, to
the extent that it may legally do so,
(i) provide Parent with prompt written notice so that Parent may
seek a protective order or other appropriate remedy and/or waive compliance with
the provisions of this Section 14.8; and
(ii) unless Parent waives compliance by such party with the
provisions of this Section 14.8, make a timely objection to the request or
confirmation to provide such Parent Information on the basis that such Parent
Information is confidential and subject to the agreements contained in this
Section 14.8.
In the event that such protective order or other remedy is not obtained, or
Parent waives compliance with the provisions of this Section 14.8, such party
will furnish only that portion of the Parent Information which (in such party's
good faith judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential treatment will
be accorded the Parent Information.
(d) Survival. This Section 14.8 shall survive termination of this
Agreement.
Section 14.9 Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.
Section 14.10 Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.
Section 14.11 GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT TO THE EXTENT THAT THE PERFECTION
OF THE INTERESTS OF THE ADMINISTRATOR IN THE POOL ASSETS IS GOVERNED BY THE LAWS
OF THE JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 14.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
43
HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
BE IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT A JURY TRIAL.
Section 14.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. EACH OF PARENT
AND SELLER HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT HEREBY IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN, STATE OF NEW YORK, OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (ii) AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE
OR UNITED STATES FEDERAL COURT; (iii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (iv) CONSENTS TO THE SERVICE OF
ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF
SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN SECTION 14.2; AND (v) TO
THE EXTENT ALLOWED BY LAW, AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
SECTION 14.13 SHALL AFFECT THE ADMINISTRATOR'S, ANY AGENT'S OR ANY PURCHASER'S
RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
ANY ACTION OR PROCEEDING AGAINST ANY OF SELLER OR PARENT OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTIONS.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN
CONNECTION WITH THIS AGREEMENT.
Section 14.14 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
44
Section 14.15 No Recourse Against Other Parties. No recourse under any
obligation, covenant or agreement of any Purchaser contained in this Agreement
shall be had against any stockholder (solely in its capacity as stockholder),
employee, officer, director, member or incorporator of such Purchaser, provided,
however, that nothing in this Section 14.15 shall relieve any of the foregoing
Persons from any liability which such Person may otherwise have for his/her or
its gross negligence or willful misconduct.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
MAXTOR RECEIVABLES CORPORATION, as
Seller
By: /s/ XXXX XXXXX
------------------------------------
Name Printed: Xxxx Xxxxx
--------------------------
Title: Chief Financial Officer
---------------------------------
MAXTOR CORPORATION, as initial Servicer
By: /s/ XXXX XXXXXX
------------------------------------
Name Printed: Xxxx Xxxxxx
--------------------------
Title: Chief Financial Officer
---------------------------------
Related Agent: Fleet
BLUE KEEL FUNDING, LLC,
as a Conduit Purchaser
By: /s/ XXXXXX XXXXXX
------------------------------------
Name Printed: Xxxxxx Xxxxxx
--------------------------
Title: Vice President
---------------------------------
45
FLEET NATIONAL BANK, as Administrator
and as Blue Keel Agent
By: /s/ XXXX XXXXXXXXX
------------------------------------
Name Printed: Xxxx Xxxxxxxxx
--------------------------
Title: Director
---------------------------------
46
Related Conduit: Blue Keel FLEET NATIONAL BANK, as a
Commitment: $90,000,000 Committed Purchaser
Pro Rata Share: 75%
By: /s/ XXX X. XXXXXX-XXXXXXX
------------------------------------
Name Printed: Xxx X. Xxxxxx-Xxxxxxx
--------------------------
Title: Director
---------------------------------
47
Related Conduit: Blue Keel COMERICA BANK, as a Committed Purchaser
Commitment: $30,000,000
Pro Rata Share: 25%
By: /s/ DEVIN SEATTIHI
------------------------------------
Name Printed: Devin Seattihi
--------------------------
Title: Vice President
---------------------------------
48
Related Agent: ING Barings HOLLAND LIMITED SECURITIZATION, INC.,
as a Conduit Purchaser
By: ING Baring (U.S.) Capital Markets
LLC, as Attorney-in-Fact
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name Printed: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
---------------------------------
49
ING BARING (U.S.) CAPITAL MARKETS LLC,
as Holland Limited Agent
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name Printed: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
---------------------------------
50
Related Conduit: Holland ING BARING (U.S.) CAPITAL MARKETS LLC,
Commitment: $90,000,000 as a Committed Purchaser
Pro Rata Share: 100%
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name Printed: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
---------------------------------
51
Related Agent: The Bank of Nova Scotia
LIBERTY STREET FUNDING CORP., as a
Conduit Purchaser
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name Printed: Xxxxx X. Xxxxxx
--------------------------
Title: Vice President
---------------------------------
00
XXX XXXX XX XXXX XXXXXX, as
Liberty Street Agent
By: /s/ J. XXXX XXXXXXX
------------------------------------
Name Printed: J. Xxxx Xxxxxxx
--------------------------
Title: Managing Director
---------------------------------
53
Related Conduit: Xxxxxxx Xxxxxx XXX XXXX XX XXXX XXXXXX, as a
Commitment: $90,000,000 Committed Purchaser
Pro Rata Share: 100%
By: /s/ J. XXXX XXXXXXX
------------------------------------
Name Printed: J. Xxxx Xxxxxxx
--------------------------
Title: Managing Director
---------------------------------
54
SCHEDULE I
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained in
this Agreement, to induce the Purchasers and Administrator to enter into this
Agreement and, in the case of the Purchasers, to fund the Purchases hereunder,
Seller hereby represents, warrants, and covenants to Administrator and the
Purchasers as follows:
General
1. This Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Pool Assets in favor of the Administrator,
which security interest is prior to all other Liens, and is enforceable as such
as against creditors of and purchasers from Seller.
2. The Pool Receivables constitute "accounts," within the meaning of the
applicable UCC.
3. Each Lock-Box Account constitutes a "deposit account" within the meaning
of the applicable UCC.
4. The rights of Seller under the Purchase Agreement constitute "general
intangibles" within the meaning of the applicable UCC.
Creation
5. Seller owns and has good and marketable title to the Pool Assets free
and clear of any Lien, claim or encumbrance of any Person.
Perfection
6. Seller has caused or will have caused, within ten days after the
effective date of this Agreement, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of the Receivables from the
Originators to Seller, and the security interest in the Pool Assets granted to
the Administrator hereunder.
7. With respect to each Lock-Box Account, Seller has delivered to the
Administrator a fully executed Lock-Box Agreement pursuant to which the bank
maintaining the deposit accounts has agreed to comply with all instructions
originated by the Administrator directing disposition of the funds in the such
Lock-Box Account without further consent by the Seller.
Priority
8. Other than the transfer of the Receivables to Seller under the Purchase
Agreement and the security interest granted to the Administrator pursuant to
this Agreement, neither Seller nor any Originator has pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Receivables or
the other Pool Assets. Neither Seller nor any Originator has
Schedule I-1
authorized the filing of, or is aware of any financing statements against Seller
or any Originator that include a description of collateral covering the
Receivables or any other Pool Assets other than any financing statement relating
to the security interest granted to the Administrator hereunder or that has been
terminated.
9. Neither Seller nor any Originator is aware of any judgment, ERISA or tax
lien filings against either Seller or any Originator.
10. No Lock-Box Account is in the name of any person other than the Seller
or the Administrator. The Seller has not consented to the bank maintaining any
Lock-Box Account to comply with instructions of any person other than the
Administrator.
11. Survival of Perfection Representations. Notwithstanding any other
provision of this Agreement or any other Transaction Document, the Perfection
Representations contained in this Schedule shall be continuing, and remain in
full force and effect (notwithstanding any termination of the Commitments or any
replacement of the Servicer or termination of Servicer's rights to act as such)
until the Final Payout Date. No Perfection Representation will be waived by the
Administrator or any Purchaser unless the Rating Agency Condition has been
satisfied with respect thereto.
12. Servicer to Maintain Perfection and Priority. The Servicer covenants
that, in order to evidence the interests of Seller and the Administrator under
the Purchase Agreement and this Agreement, Servicer shall take such action, or
execute and deliver such instruments (other than effecting a Filing (as defined
below), unless such Filing is effected in accordance with this paragraph) as may
be necessary or advisable (including, without limitation, such actions as are
requested by the Administrator) to maintain and perfect, as a first priority
interest, the Administrator's security interest in the Pool Assets. Servicer
shall, from time to time and within the time limits established by law, prepare
and present to the Administrator for the Administrator to authorize the Servicer
to file, all financing statements, amendments, continuations, initial financing
statements in lieu of a continuation statement, terminations, partial
terminations, releases or partial releases, or any other filings necessary or
advisable to continue, maintain and perfect the Administrator's security
interest in the Pool Assets as a first-priority interest (each a "Filing").
Servicer shall present each such Filing to the Administrator together with an
Opinion of Counsel in form and substance reasonably satisfactory to the
Administrator and, to the extent required by any Rating Agency, to such Rating
Agency. The Administrator shall promptly authorize in writing Servicer to, and
Servicer shall, effect such Filing under the Uniform Commercial Code without the
signature of Seller or the Administrator where allowed by applicable law.
Notwithstanding anything else in this Agreement to the contrary, the Servicer
shall not have any authority to effect a Filing without obtaining written
authorization from the Administrator in accordance with this paragraph.
Schedule I-2
SCHEDULE 6.01(m)
LIST OF OFFICES OF SELLER WHERE RECORDS ARE KEPT
Maxtor Receivables Corporation
000 XxXxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
SCHEDULE 6.01(n)
LIST OF LOCK-BOX BANKS
First Union National Bank
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxx
Account No. 0109-7086
SCHEDULE 7.01(e)
FORMS OF CONTRACTS
SEE ATTACHED
SCHEDULE 7.01(g)
DESCRIPTION OF CREDIT AND COLLECTION POLICY
SEE ATTACHED
SCHEDULE 14.02
NOTICE ADDRESSES
BLUE KEEL:
Blue Keel Funding, LLC
c/o Global Securitization Services, LLC
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 212/000-0000
Facsimile: 212/302-8767
ADMINISTRATOR AND BLUE KEEL AGENT:
Fleet National Bank
Fleet Corporate Finance
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Stop: MA-DE-100-11-F
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Telephone: 617/000-0000
Facsimile: 617/346-4690
SELLER:
Maxtor Receivables Corporation
000 XxXxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx, Treasurer
Telephone: 408/000-0000
Facsimile No.: 408/432-4480
PARENT:
Maxtor Corporation
000 XxXxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx, Treasurer
1
Telephone: 408/000-0000
Facsimile: 408/432-4480
LIBERTY STREET:
Liberty Street Funding Corp.
c/o Global Securitization Services, LLC
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: 212/000-0000
Facsimile: 212/302-8767
LIBERTY STREET AGENT:
The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telephone: 212/000-0000
Facsimile: 212/225-5090
HOLLAND:
Holland Limited Securitization, Inc.
c/o Lord Securities Corporation
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Telephone: 212/000-0000
Facsimile: 212/346-9012
2
HOLLAND AGENT:
ING Baring (U.S.) Capital Markets LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: 646/000-0000
Facsimile: 646/424-6251
3
EXHIBIT 3.01
FORM OF SERVICER REPORT
SEE ATTACHED
EXHIBIT 3.01-A
FORM OF DAILY REPORT
SEE ATTACHED
EXHIBIT 5.01(g)-1
FORM OF IN-HOUSE COUNSEL OPINION
SEE ATTACHED
EXHIBIT 5.01(g)-2
FORM OF ENFORCEABILITY OPINION
SEE ATTACHED
EXHIBIT 5.01(g)-3
FORM OF TRUE SALE OPINION
SEE ATTACHED
EXHIBIT 5.01(g)-4
FORM OF SUBSTANTIVE CONSOLIDATION OPINION
SEE ATTACHED
EXHIBIT 5.01
FORM OF LOCK-BOX AGREEMENT
[Letterhead of Seller]
LOCK-BOX AGREEMENT
______________, 200__
[Name and Address of
Lock-Box Bank]
Ladies and Gentlemen:
Reference is made to our [lock-box]*/ account[s] no[s]. maintained with you
(the "Account[s]"). Pursuant to an Amended and Restated Receivables Purchase
Agreement dated as of November 15, 2001 among us, as Seller, Blue Keel Funding,
LLC ("Blue Keel") and the other parties named therein, as Conduit Purchasers,
the financial institutions party thereto, as Committed Purchasers, the parties
named therein as Agents, Maxtor Corporation, as Servicer, and Fleet National
Bank, as agent for Blue Keel and as administrator (the "Administrator"), we have
assigned and/or may hereafter assign to the Administrator, for the benefit of
the Purchasers and their assigns, one or more undivided percentage interests in
accounts, chattel paper, instruments or general intangibles (collectively,
"Receivables") with respect to which payments are or may hereafter be made to
the Account[s], and have granted to the Administrator, for the benefit of the
Purchasers and their assigns, a security interest in such Receivables, the
Account[s], amounts on deposit therein and related property. Your execution of
this letter agreement is a condition precedent to our continued maintenance of
the Account[s] with you.
We hereby transfer exclusive ownership and control of the Account[s] to the
Administrator on behalf of the Purchasers and their assigns, subject only to the
condition subsequent that the Administrator shall have given you notice of its
election to assume such ownership and control, which notice may be in the form
attached hereto as Exhibit A or in any other form that gives you reasonable
notice of such election.
We hereby irrevocably instruct you, at all times from and after the date of
your receipt of notice from the Administrator as described above, to make all
payments to be made by you out of or in connection with the Account[s] directly
to the Administrator, at its address set forth below its signature hereto or as
the Administrator otherwise notifies you, for the account of the Purchasers
(account # , ABA # ____), or otherwise in accordance with the instructions of
the Administrator.
We also hereby notify you that, at all times from and after the date of
your receipt of notice from the Administrator as described above, the
Administrator shall be irrevocably entitled to exercise in our place and stead
any and all rights in respect of or in connection with the Account[s],
including, without limitation, (a) the right to specify when payments are to be
made out of or in connection with the Account[s] and (b) the right to require
preparation of duplicate monthly bank statements on the Account[s] for the
Administrator's audit purposes and mailing of such statements directly to an
address specified by the Administrator.
Notice from the Administrator may be personally served or sent by facsimile
or U.S. mail, certified return receipt requested, to the address or facsimile
number set forth under your signature to this letter agreement (or to such other
address or facsimile number as to which you shall notify the Administrator in
writing). If notice is given by facsimile, it will be deemed to have been
received when the notice is sent and the receipt is confirmed by telephone or
other electronic means. All other notices will be deemed to have been received
when actually received or, in the case of personal delivery, delivered.
By executing this letter agreement, you acknowledge and consent to the
existence of the Administrator's right to ownership and control of the
Account[s] and the Administrator's security interest in the Account[s] and
amounts from time to time on deposit therein and agree that from the date hereof
the Account[s] shall be maintained by you for the benefit of, and amounts from
time to time therein held by you as agent for, the Administrator on the terms
provided herein. The Account[s] [is/are] to be titled "Maxtor Receivables
Corporation and Fleet National Bank as the Administrator for the Purchasers and
their assigns, as their interests may appear". Except as otherwise provided in
this letter agreement, payments to the Account[s] are to be processed in
accordance with the standard procedures currently in effect. All service charges
and fees with respect to the Account[s] shall continue to be payable by us as
under the arrangements currently in effect.
By executing this letter agreement, you irrevocably waive and agree not to
assert, claim or endeavor to exercise, irrevocably bar and estop yourself from
asserting, claiming or exercising, and acknowledge that you have not heretofore
received a notice, writ, order or any form of legal process from any other
person or entity asserting, claiming or exercising, any right of set-off,
banker's lien or other purported form of claim with respect to [any of] the
Account[s] or any funds from time to time therein. Except for your right to
payment of your service charges and fees and to make deductions for returned
items, you shall have no rights in the Account[s] or funds therein. To the
extent you may ever have such rights, you hereby expressly subordinate all such
rights to all rights of the Administrator.
You may terminate this letter agreement by canceling the Account[s]
maintained with you, which cancellation and termination shall become effective
only upon thirty days' prior written notice thereof from you to the
Administrator. Incoming [mail addressed to] [wire transfers to] the Account[s]
received after such cancellation shall be forwarded in accordance with the
Administrator's instructions. This letter agreement may also be terminated upon
written notice to you by the Administrator stating that the Receivables Purchase
Agreement pursuant to which this letter agreement was obtained is no longer in
effect. Except as otherwise provided in this paragraph, this letter agreement
may not be terminated or amended without the prior written consent of the
Administrator. This letter agreement may be executed in any number of
counterparts, and by the parties hereto on separate counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing the two copies of this letter agreement enclosed herewith
in the space provided below, sending one such signed copy to the Administrator
at its address provided above and returning the other signed copy to us.
Very truly yours,
MAXTOR RECEIVABLES CORPORATION
By:
------------------------------------
Name Printed:
------------------------
Title:
-------------------------------
Acknowledged and agreed to as of the
date first written above:
FLEET NATIONAL BANK, as Administrator
By:
------------------------------------
Name Printed:
------------------------
Title:
-------------------------------
Address for notice:
Fleet Corporate Finance
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Mail Stop: MA-DE-100-11-F
Xxxxxx, Xxxxxxxxxxxxx 00000
Tel. No. 617/000-0000
Facsimile No. 617/346-4690
[NAME OF LOCK-BOX BANK]
By:
------------------------------------
Name Printed:
------------------------
Title:
-------------------------------
Address for notice:
Attention:
-----------------------------
Tel. No.:
-----------------------------
Facsimile No.:
-------------------------
EXHIBIT A to
Lock-Box Agreement
[Letterhead of Fleet National Bank]
[Name and Address
of Lock-Box Bank]
Re: Maxtor Receivables Corporation
[Lock-Box]**/ Account No[s]. [and ]
Ladies and Gentlemen:
Reference is made to the letter agreement dated _ , 200_ (the "Letter
Agreement") among Maxtor Receivables Corporation, the undersigned, as
Administrator and you concerning the above described [lock-box]* account[s] (the
"Account[s]"). We hereby give you notice of our assumption of ownership and
control of the Account[s] as provided in the Letter Agreement.
We hereby instruct you to make all payments to be made by you out of or in
connection with the Account[s] [directly to the undersigned, at [our address set
forth above], for the account of the Purchasers (account no. _)].
[other instructions]
Very truly yours,
FLEET NATIONAL BANK, as Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 7.01(i)
CALCULATION OF REQUIRED NET WORTH
SEE ATTACHED
APPENDIX A
DEFINITIONS
This is Appendix A to the Amended and Restated Receivables Purchase
Agreement dated as of November 15, 2001 among Maxtor Receivables Corporation, as
Seller, the parties identified therein, as Conduit Purchasers, the parties
identified therein, as Committed Purchasers, the parties identified therein, as
Agents, Maxtor Corporation, as initial Servicer, and Fleet National Bank, as
Blue Keel Agent and as Administrator (as further amended, supplemented or
otherwise modified from time to time and including the Original Purchase
Agreement for the period it was in effect, the "Agreement"). Unless otherwise
indicated, all Section, Exhibit and schedule references in this Appendix are to
Sections of and Exhibits and Schedules to the Agreement.
A. Defined Terms. As used in the Agreement, unless the context requires
a different meaning, the following terms have the meanings indicated herein
below:
"Administration Fee" has the meaning set forth in the Administrator's
Fee Letter.
"Administrator" has the meaning set forth in the preamble.
"Administrator's Fee Letter" has the meaning set forth in Section 4.01.
"Administrator's Office" means the office of the Administrator at 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Mail Stop: MA-DE-100-11-F, Xxxxxx, Xxxxxxxxxxxxx
00000 or such other address as shall be designated by the Administrator in
writing to Seller and the Agents.
"Affected Party" means each of each Purchaser, each Program Support
Provider, any assignee or participant of any Purchaser or any Program Support
Provider, each Agent, Fleet, any successor to Fleet as Administrator, and any
sub-agent of the Administrator.
"Affiliate" when used with respect to a Person means any other Person,
directly or indirectly, controlling, controlled by, or under common control with
such Person, except, when used with respect to the Purchaser, Affiliate shall
mean the holder(s) of its limited liability company interests.
"Agent" means each Person identified on a signature page to the
Agreement as the "Related Agent" for a Purchaser.
"Allocation Limit" has the meaning set forth in Section 1.01.
"Alternate Base Rate" means, on any date, a fluctuating rate of interest
per annum equal to the higher of
(a) the rate of interest most recently announced by Fleet in
Boston,
1
Massachusetts, as its prime rate; and
(b) the Federal Funds Rate most recently determined by Fleet plus
0.50% per annum.
The Alternate Base Rate is not necessarily intended to be the lowest
rate of interest determined by Fleet in connection with extensions of credit.
"Applicable Law" means all existing and future applicable laws, rules,
regulations (including proposed, temporary and final income tax regulations),
statutes, treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by any Governmental Authority, and applicable
judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or
agency of competent jurisdiction.
"Asset Interest" means an undivided ownership or security interest
determined from time to time as provided in Section 1.04(b) in all Pool Assets.
"Blue Keel" has the meaning set forth in the preamble.
"Blue Keel Agent" has the meaning set forth in the preamble.
"Business Day" means a day other than a Saturday or a Sunday on which
both (a) the Administrator at its principal office in Boston, Massachusetts is
open for business and (b) commercial banks in New York City, Chicago, Illinois
and San Francisco, California are not authorized or required to be closed for
business.
"Canadian Receivable" means a Receivable the Obligor of which is a
resident of Canada.
"Canadian Receivables Limit" at any time means an amount equal to the
product of (i) the aggregate Unpaid Balance of all Eligible Receivables at such
time, times (ii) 10% (or, if the foreign currency rating of Canada by Xxxxx'x or
S&P is less than A, 5%).
"Capital" means at any time with respect to the Asset Interest an amount
equal to (a) the aggregate of the amounts theretofore paid to Seller for
Purchases pursuant to Section 1.01, less (b) the aggregate amount of Collections
theretofore received and actually distributed to a Purchaser on account of the
Capital pursuant to Section 3.01.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee which would,
in accordance with GAAP, be required to be classified and accounted for as a
capital lease on a balance sheet of such Person, other than, in the case of
Parent or any of its Subsidiaries, any such lease under which Parent or a
wholly-owned Subsidiary of Parent is the lessor.
"Change in Control" means any of the following:
2
(a) in relation to Parent, the acquisition by any person or group of
persons (within the meaning of Section 13 or 14 of the Exchange Act) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of issued and
outstanding shares of the capital stock of Parent entitled (without regard to
the occurrence of any contingency) to vote for the election of members of the
board of directors of Parent and having a then present right to exercise 51% or
more of the voting power for the election of members of the board of directors
of Parent attached to all such outstanding shares of capital stock of Parent,
unless otherwise agreed in writing by the Agents; or
(b) the creation or imposition of any Lien on any shares of capital
stock of Seller; or
(c) the failure by Parent to own all of the issued and outstanding
capital stock of Seller and each Originator (other than Parent).
"Collection Account" means a segregated deposit account in the name of
the Seller at Fleet or another bank reasonably satisfactory to the
Administrator.
"Collections" means, with respect to any Receivable, all funds which
either (a) are received by Seller, Servicer, an Originator or any other Person
from or on behalf of the related Obligors in payment of any amounts owed
(including, without limitation, purchase prices, finance charges, interest and
all other charges) in respect of such Receivable, or applied to such amounts
owed by such Obligors (including, without limitation, insurance payments that
Seller, an Originator or Servicer applies in the ordinary course of its business
to amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligor
or any other party directly or indirectly liable for payment of such Receivable
and available to be applied thereon), or (b) are deemed to have been received by
Seller or any other Person as a Collection pursuant to Section 3.02.
"Commercial Paper Holders" means the holders from time to time of the
Commercial Paper Notes.
"Commercial Paper Notes" means short-term promissory notes issued or to
be issued by a Conduit Purchaser, or the proceeds of which are loaned to a
Conduit Purchaser, to fund its investments in accounts receivable or other
financial assets.
"Commitment" means (i) $90,000,000 with respect to each of Liberty \
Street Funding Corp. and Holland Limited Securitization Inc. and $120,000,000
with respect to Blue Keel, and (ii) with respect to any Committed Purchaser, the
amount shown on such Committed Purchaser's signature page. The Commitments of
each Conduit Purchaser and its related Committed Purchasers are not cumulative;
the available Commitment of any Conduit Purchaser shall be reduced by the
outstanding Capital, if any, of its related Committed Purchasers and the
available Commitment of any Committed Purchaser shall be reduced by such
Committed Purchaser's Pro Rata Share of the outstanding Capital of its related
Conduit Purchaser. Notwithstanding the use of the term "Commitment", no Conduit
Purchaser is or shall be obligated to fund any Purchase
3
under the Agreement; each such funding shall be at the sole discretion of such
Conduit Purchaser.
"Commitment Fee" means, for each day, for any Conduit Purchaser the
amount equal to the product of (x) the unused Liquidity Commitment Amount for
such Conduit Purchaser on such day, times (y) the Commitment Fee Rate for such
Conduit Purchaser, times (z) 1/360.
"Commitment Fee Rate" with respect to any Conduit Purchaser has the
meaning set forth in the Fee Letter.
"Committed Purchaser" has the meaning set forth in the preamble.
"Concentration Limit" for any Obligor at any time means an amount equal
to (i) the aggregate Unpaid Balance of all Eligible Receivables at such time
times (ii) the applicable percentage as set forth below opposite the appropriate
ratings of such Obligor's long-term and short-term unsecured debt, provided that
the percentage for Dell Computer Corporation ("Dell") shall be the lesser of (A)
20% and (B) (i) the greater of 10% and the most recently calculated Dynamic Loss
Reserve Percentage, if Dell's long term unsecured debt is rated BBB+ by S&P and
Baa1 by Moody's or higher, (ii) the greater of 6% and 1/2 of the most recently
calculated Dynamic Loss Reserve Percentage, if Dell's long term unsecured debt
is rated BBB to BBB- by S&P and Baa3 to Baa2 by Moody's and (iii) the greater of
3% and 1/4 of the most recently calculated Dynamic Loss Reserve Percentage, if
Dell's long term unsecured debt is rated less than BBB- by S&P or Baa3 by
Moody's or is unrated. Any Obligor that has a split rating shall be deemed to be
in the lower rating category.
Applicable
Long Term Rating Short-Term Rating Percentage
---------------- ----------------- ----------
S&P Moody's S&P Moody's
--- ------- --- -------
A+ or better A1 or better A-1 P-1 12%
BBB+ to A Baa1 to A2 A-2 P-2 10%
BBB- to BBB Baa3 to Xxx0 X-0 P-3 5%
Below BBB-/Baa3 Below A-3/P-3 3%
or Not Rated or Not Rated
"Conduit Facilitator" means any entity that issues Commercial Paper
Notes the proceeds of which are loaned to Blue Keel to fund its investments in
accounts receivable or other financial assets.
"Conduit Purchaser" has the meaning set forth in the preamble.
"Consolidated Interest Expense" means, for any period, total interest
expense of the Parent and its consolidated Subsidiaries (including without
limitation, interest expense attributable to Capital Leases, all capitalized
interest, all commissions, discounts and other fees
4
and charges owed with respect to bankers acceptance financing, net costs (i.e.,
costs minus benefits) under Interest Rate Contracts, and total interest expense
(whether shown as interest expense or as loss and expenses on sales of
receivables) under a receivables purchase facility) determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income (Loss)" means, with reference to any period,
the net income (or deficit) of the Parent and its consolidated Subsidiaries for
such period (taken as a cumulative whole), after deducting all operating
expenses, provisions for all taxes and reserves (including reserves for deferred
income taxes) and all other proper deductions, all determined in accordance with
GAAP on a consolidated basis, after eliminating all intercompany transactions
and after deducting portions of income properly attributable to minority
interests, if any, in the stock and surplus of the Subsidiaries of the Parent.
"Contract" means a contract between an Originator and any Person, or an
invoice from an Originator to any Person, or any purchase order from any Person
to an Originator pursuant to or under which such Person shall be obligated to
make payments to an Originator. A "related" Contract with respect to the
Receivables means a Contract under which Receivables in the Receivables Pool
arise, which evidence such Receivables, or which is relevant to the collection
or enforcement of such Receivables.
"Contractual Obligation" with respect to any Person, means any provision
of any securities issued by such Person or any indenture, mortgage, deed of
trust, contract, undertaking, agreement, instrument or other document to which
such Person is party or by which it or any of its property is bound or is
subject.
"Cost of Funds Rate" means for any Settlement Period or portion thereof
(A) with respect to Blue Keel, the sum of (i) the per annum rate equivalent to
the weighted average of the per annum rate which may be paid or payable by Blue
Keel from time to time as interest on or otherwise (by means of Hedge Agreements
or otherwise) in respect of those commercial paper notes issued by or on behalf
of Blue Keel that are allocated, in whole or in part by, or on behalf of, Blue
Keel to fund or maintain Purchases during such Settlement Period as determined
by or on behalf of Blue Keel, which rates shall reflect and give effect to the
commissions of placement agents and dealers in respect of such commercial paper
notes and to net payments owed or received by Blue Keel under any Hedge
Agreements entered into by Blue Keel in connection with such allocated
commercial paper; provided, however, that if any component of such rate is a
discount rate, in calculating the "Cost of Funds Rate" for such Settlement
Period for the purposes of this definition, Blue Keel shall for such component
use the rate resulting from converting such discount rate into an interest
bearing equivalent rate per annum, and (B) with respect to any other Conduit
Purchaser, a rate calculated by such Conduit Purchaser's Agent equal to: (i) the
rate (or if more than one rate, the weighted average of the rates) at which
Commercial Paper Notes of such Conduit Purchaser on each day during such period
have been outstanding; provided, that if such rate(s) is a discount rate(s),
then the Cost of Funds Rate shall be the rate (or if more than one rate, the
weighted average of the rates) resulting from converting such discount rate(s)
to an interest-bearing equivalent rate plus (ii) the commissions and charges
charged by such placement agent or commercial paper dealer with respect to such
Commercial Paper Notes, expressed as a
5
percentage of the face amount of such Commercial Paper Notes and converted to an
interest-bearing equivalent per annum.
"Credit and Collection Policy" means those credit and collection
policies and practices relating to Contracts and Receivables described in
Schedule 7.01(g), as modified without violating Section 7.03(c).
"Cut-Off Date" means the last day of each fiscal month, as set forth on
Schedule I hereto.
"Daily Report" has the meaning set forth in Section 3.01(a).
"Deemed Collection" has the meaning set forth in the Purchase Agreement.
"Defaulted Receivable" means a Receivable: (a) as to which any payment,
or part thereof, remains unpaid for more than 90 days from the original due date
for such payment, (b) as to which the Obligor thereof is the subject of an Event
of Bankruptcy, or (c) which, consistent with the Credit and Collection Policy,
would be written off the Seller's books as uncollectible.
"Default Ratio" means the ratio (expressed as a percentage) computed as
of a Cut-Off Date by dividing (x) the aggregate Unpaid Balance of all Past Due
Receivables as of such Cut-Off Date by (y) the aggregate Unpaid Balance of all
Pool Receivables on such date.
"Delinquency Ratio" means the ratio (expressed as a percentage) computed
as of the Cut-Off Date by dividing (x) the aggregate Unpaid Balance of all
Overdue Receivables on such Cut-Off Date by (y) the aggregate Unpaid Balance of
all Pool Receivables on such date.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and as to which any payment, or part thereof, remains unpaid for more
than 30 days from the original due date for such payment.
"Dilution" means any credit, adjustment, rebate, refund or setoff with
respect to any Receivable granted or allowed by Seller or any Affiliate of
Seller.
"Dilution Reserve" means, at any time, an amount equal to (i) the Net
Pool Balance at such time times (ii) the greater of (A) the most recently
calculated Dilution Reserve Percentage and (B) a percentage equal to the most
recently calculated Expected Dilution times the most recently calculated
Dilution Horizon Ratio (each as defined in the definition of "Dilution Reserve
Percentage" set forth below).
"Dilution Reserve Percentage" as measured on any Reporting Date means a
percentage determined in accordance with the following formula:
[(SF x ED) + ((DS-ED) x DS/ED)] x DHR where:
SF = the Stress Factor, which shall be 2.5;
6
ED = the "Expected Dilution", which shall be equal to the twelve-month
rolling average Sales-Based Dilution Ratio, expressed as a
percentage;
DS = the "Dilution Spike", which shall be equal to the highest average
of the Sales-Based Dilution Ratios for three successive Cut-Off
Dates over the immediately preceding twelve months, expressed as a
percentage; and
DHR = the "Dilution Horizon Ratio", which shall be equal to the Sales
for the month ending on the related Cut-Off Date divided by the
Net Pool Balance as of such Cut-Off Date.
"Dollars" means dollars in lawful money of the United States of America.
"Dynamic Loss Reserve Percentage" shall be measured as an amount
calculated pursuant to the following formula:
DLRP = LR x LH x SF
where:
DLRP = the Dynamic Loss Reserve Percentage;
LR = the Loss Ratio, which shall be equal to the highest average of the
Sales-Based Default Ratios for any three consecutive calendar
months during the previous twelve calendar months, provided that
until January 1, 2003, the Loss Ratio shall be the greater of the
foregoing amount and 5.5%;
LH = the Loss Horizon, which shall be equal to the cumulative Sales over
the previous 75 days divided by the Net Pool Balance as of the most
recent Cut-Off Date; and
SF = the Stress Factor, which shall be 2.
"Earned Discount" means for any Settlement Period for any Purchaser:
C x ER x ED + LF
-----------
360
where:
C = the daily average (calculated at the close of business each day) of
such Purchaser's Funded Percentage of the Capital during such
Settlement Period,
ER = the Earned Discount Rate for such Settlement Period for such
Purchaser,
7
ED = the actual number of days elapsed during such Settlement Period,
and
LF = the Liquidation Fee, if any, during such Settlement Period for such
Purchaser.
"Earned Discount Rate" means for any Settlement Period for any
Purchaser:
(a) in the case of any portion of such Purchaser's Funded Percentage
of the Capital funded by a Liquidity Funding and in the case of any Committed
Purchaser's Funded Percentage of the Capital, at the option of Seller as set
forth in a written notice delivered to the related Agent at least three (3)
Business Days prior to the first day of such Settlement Period, (1) the sum of
(i) the Eurodollar Rate (Reserve Adjusted) for such Settlement Period, plus (ii)
2.50% per annum or (2) the sum of (i) the Alternate Base Rate in effect from
time to time during such Settlement Period, plus (ii) 0.50% per annum; and
(b) in the case of any portion of such Purchaser's Percentage of the
Capital funded by any Commercial Paper Notes, the Cost of Funds Rate for such
Settlement Period;
provided, however, that on any day during a Settlement Period when any
Liquidation Event or Unmatured Liquidation Event shall have occurred and be
continuing, the Earned Discount Rate for the Capital shall mean the higher of
(i) the Alternate Base Rate in effect on such day plus 2% per annum and (ii) the
Eurodollar Rate (Reserve Adjusted) for such Settlement Period plus 3.50% per
annum.
"EBITDAR" shall mean for any period, the Consolidated Net Income (Loss)
of the Parent and its consolidated Subsidiaries, plus, to the extent deducted
therefrom in determining Consolidated Net Income (Loss), the sum of (i)
Consolidated Interest Expense, (ii) provision for income taxes (whether paid or
deferred), (iii) Rental Obligations for such period, and (iv) depreciation and
amortization, and without giving effect to any extraordinary gains or losses,
and any other non-cash charges or gains or losses, including but not limited to,
gains or losses from sales of assets other than inventory sold in the ordinary
course of business.
"EBITDAR Ratio" as of the last day of any fiscal quarter means the ratio
of (i) EBITDAR for the four consecutive fiscal quarters ending on such date
divided by (ii) the Fixed Charges for such four consecutive fiscal quarters
(provided that for the last day of the fiscal quarter ending in June of 1998,
such ratio shall be calculated by annualizing the three consecutive fiscal
quarters ending on such date).
"Eligible Contract" means a Contract in one of the forms set forth in
Schedule 7.01(e) or otherwise approved by the Agents.
"Eligible Receivable" means, at any time, a Receivable:
(a) which is originated by an Originator in the ordinary course of
its business;
(b) which constitutes an account as defined in the UCC;
8
(c) the Obligor of which is not an Affiliate of Seller and is not a
Governmental Authority;
(d) which was purchased or otherwise acquired by Seller pursuant to
the Purchase Agreement and which was designated by the related Originator as an
"Eligible Receivable" pursuant to the Purchase Agreement;
(e) which is not a Delinquent Receivable or a Defaulted Receivable;
(f) with respect to which the warranty of Seller in Section 6.01(k)
is true and correct;
(g) the sale of which, or of an undivided interest in which, does
not contravene or conflict with Applicable Law, or require the consent of the
Obligor or any other Person;
(h) which is denominated and payable only in Dollars in the United
States;
(i) which arises under an Eligible Contract, which contract has been
duly authorized by the parties thereto and that, together with such Receivable,
is in full force and effect and constitutes the legal, valid and binding
obligation of the Obligor of such Receivable enforceable against such Obligor in
accordance with its terms and is not subject to any defense whatsoever (other
than discharge in bankruptcy and payment);
(j) which, together with the Contract related thereto, does not
contravene in any material respect any Applicable Law and with respect to which
no party to the Contract related thereto is in violation of any Applicable Law;
(k) which (i) satisfies all material applicable requirements of the
Credit and Collection Policy and (ii) complies with such other criteria and
requirements (other than those relating to the collectibility of such
Receivable) as the Administrator may from time to time specify to Seller;
(l) as to which the payment terms have not been altered or extended
so as to materially affect the collectibility of such Receivable;
(m) the Unpaid Balance of which is due within 45 days or less from
the invoice date therefor;
(n) which are not Receivables owed by an Obligor for which more than
20% of the aggregate Unpaid Balance of Receivables of such Obligor constitute
Defaulted Receivables;
(o) which arise from the completion of the sale and delivery of
goods and services performed, and which do not represent an invoice in advance
of such completion;
9
(p) which are not subject to any contingent performance requirements
of the Seller or the related Originator unless such requirements are guaranteed
or insured by third parties acceptable to the Agents and S&P has confirmed the
rating of the transactions contemplated by this Agreement after giving effect to
such guaranty or insurance; and
(q) the Obligor of which resides in the United States or a province
of Canada that has enacted the Personal Property Security Act.
"Equity Proceeds" means the net proceeds received by Parent or any of
its Subsidiaries from the sale of stock or convertible subordinated debt.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any
Settlement Period and any portion of the Capital, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined pursuant to the
following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1 - Eurodollar
Reserve Percentage
where:
"Eurodollar Rate" means, with respect to any Settlement Period and any
portion of the Capital, the rate per annum at which Dollar deposits in
immediately available funds are offered to the Eurodollar Office of the related
Agent two Eurodollar Business Days prior to the beginning of such period by
prime banks in the interbank eurodollar market at or about 11:00 a.m., New York
City time for delivery on the first day of such Settlement Period, for the
number of days comprised therein and in an amount equal or comparable to the
applicable portion of the Capital for such Settlement Period.
"Eurodollar Business Day" means a day of the year on which dealings are
carried on in the eurodollar interbank market and banks are open for business in
London and are not required or authorized to close in New York City.
"Eurodollar Reserve Percentage" means, with respect to any Settlement
Period, the then maximum reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/100th of 1%) prescribed by the Federal Reserve Board for
determining the maximum reserve requirements applicable to "Eurocurrency
Liabilities" pursuant to Regulation D having a term comparable to such
Settlement Period.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a
Person if either:
(a) any case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt
10
arrangement, dissolution, winding up, or composition or readjustment of debts of
such Person, the appointment of a trustee, receiver, custodian, liquidator,
assignee, sequestrator or the like for such Person or all or substantially all
of its assets, or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall continue undismissed, or
unstayed and in effect, for a period of 60 consecutive days; or an order for
relief in respect of such Person shall be entered in an involuntary case under
the federal bankruptcy laws or other similar laws now or hereafter in effect and
shall either not be contested or shall remain undismissed for 60 consecutive
days; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail to, or admit in writing its
inability to, pay its debts generally as they become due, or, if a corporation
or similar entity, its board of directors shall vote to implement any of the
foregoing.
"Excess Amount" as of any date, means the amount, if any, by which the
sum of the Capital, plus the Required Reserves on such date exceeds the Net Pool
Balance, as most recently calculated.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal (for each day during such period) to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions received by
Fleet from three federal funds brokers of recognized standing selected by it.
"Fee Letter" has the meaning set forth in Section 4.01.
"Fees" means, collectively, the Commitment Fee, the Administration Fee
and the Program Fee.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Final Payout Date" means the date following the Termination Date on
which the Capital
11
shall have been reduced to zero and all other amounts payable by Seller to the
Purchasers, the Administrator, the Agents, the Affected Parties and the
Indemnified Parties under the Transaction Documents shall have been paid in
full.
"Fitch" means Fitch, Inc.
"Fixed Charges" shall mean, with reference to any period, determined in
accordance with GAAP on a consolidated basis, the sum of the following for the
Parent and its consolidated Subsidiaries, after eliminating all intercompany
items:
(a) Consolidated Interest Expense for such period; and
(b) all Rental Obligations payable as lessee under any operating
lease properly charged or chargeable to income during such period in accordance
with GAAP;
provided that any interest charges or rentals paid or accrued by any Person
acquired by the Parent or any of its Subsidiaries during such period, through
purchase, merger, consolidation or otherwise, shall be included in "Fixed
Charges" only to the extent that the earnings of such Person are taken into
account in determining EBITDAR for such period.
"Fleet" has the meaning set forth in the preamble.
"Funded Percentage" means for any Purchaser at any time the ratio,
expressed as percentage, of (i) the amount funded by such Purchaser pursuant to
Section 1.02(b) that has not been repaid as of such date divided by (ii) the
outstanding Capital on such date.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgements,
decrees, licenses, exemptions, publications, filings, notices to and declaration
of or with, or required by, any Governmental Authority, or required by any
Applicable Law.
"Governmental Authority" means any foreign or domestic federal, state,
county, municipal or other governmental or regulatory authority, agency, board,
body, commission, instrumentality, court or any political subdivision thereof.
"Hedge Agreement" means any financial futures contract, option, forward
contract, warrant, swap, swaption, collar, floor, cap and other agreement,
instrument and derivative and other transactions of a similar nature (whether
currency linked, rate linked, index linked, insurance risk linked, credit risk
linked or otherwise) entered into by or on behalf of a Conduit Purchaser.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
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"Indemnified Party" has the meaning set forth in Section 13.01.
"Independent Director" shall mean an individual who is not, and never
was, (1) a member, stockholder, director, officer, employee, Affiliate, customer
or supplier of, or an individual that has received any benefit (excluding,
however, any compensation received in such individual's capacity as Independent
Director) in any form whatever from, or an individual who has provided any
service (excluding, however, any service provided by such individual in such
individual's capacity as Independent Director) in any form whatever to, the
Parent or any of its subsidiaries or Affiliates, or (2) an individual owning
beneficially, directly or indirectly, any interest in the Parent, or a
stockholder, director, officer, employee, Affiliate, customer or supplier
thereof, or an individual who has received any direct economic benefit
(excluding, however, any compensation received in such individual's capacity as
Independent Director) in any form whatever from, or an individual who has
provided any service (excluding, however, any service provided by such
individual in such individual's capacity as Independent Director) in any form
whatever to, such beneficial owner or any of such beneficial owner's Affiliates,
or (3) an individual who is a relative or spouse of an individual described in
clause (1) or (2) above.
"Interest Rate Contract" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance and other agreements and arrangements designed to provide protection
against fluctuations in interest rates, in each case as the same may be from
time to time amended, restated, renewed, supplemented or otherwise modified.
"Investment" means, when used with respect to any Person, any direct or
indirect advance, loan or other extension of credit (other than the creation of
receivables in the ordinary course of business) or capital contribution by such
Person (by means of transfers of property to others or payments for property or
services for the account or use of others, or otherwise) to any Person, or any
direct or indirect purchase or other acquisition by such Person of, or of a
beneficial interest in, capital stock, partnership interests, bonds, notes,
debentures or other securities issued by any other Person.
"Lien" means any mortgage, lien, pledge, encumbrance, charge, title
retention or other security interest of any kind, whether arising under a
security agreement, mortgage, deed of trust, assignment, pledge or financing
statement or arising as a matter of law, judicial process or otherwise.
"Liquidation Event" has the meaning set forth in Section 10.01.
"Liquidation Fee" means, for each day in any Settlement Period during
the Liquidation Period following the occurrence of a Liquidation Event, for each
Purchaser the amount, if any, by which:
(a) the additional Earned Discount (calculated without taking
into account any Liquidation Fee) which would have accrued on the reductions of
such Purchaser's Percentage of the Capital during such Settlement Period
(as so computed) if such reductions had not been
13
made, exceeds
(b) the income, if any, received by such Purchaser from investing
the proceeds of such reductions of such Purchaser's Percentage of the Capital.
"Liquidation Period" means the period commencing on the date on which
the conditions precedent to Purchases and Reinvestments set forth in Section
5.02 are not satisfied (or expressly waived by the Purchasers) and the
Administrator shall have notified Seller and Servicer in writing that the
Liquidation Period has commenced, and ending on the Final Payout Date.
"Liquidity Agent" means the party so specified as agent for the
Liquidity Banks under each Liquidity Agreement, or any successor to such party
in such capacity.
"Liquidity Agreement" means each liquidity agreement, liquidity asset
purchase agreement, loan agreement, asset purchase agreement or similar
agreement among a Conduit Purchaser, the related Liquidity Agent, and certain
other financial institutions party thereto as liquidity providers, which
provides for the making of loans, purchases of undivided interests or other
extensions of credit to such Conduit Purchaser to support all or part of such
Conduit Purchaser's payment obligations with respect to its Commercial Paper
Notes.
"Liquidity Bank" means any one of, and "Liquidity Banks" means all
financial institutions that are at any time parties to a Liquidity Agreement as
liquidity providers.
"Liquidity Commitment Amount" means, at any time, with respect to a
Conduit Purchaser, the then aggregate amount of the Liquidity Banks' commitments
under the Liquidity Agreement with such Conduit Purchaser.
"Liquidity Funding" means a loan or purchase made by a Liquidity Bank
(or simultaneous loans or purchases made by the Liquidity Banks) pursuant to a
Liquidity Agreement.
"Lock-Box" means any post office box to which Collections of Pool
Receivables are sent.
"Lock-Box Account" means any bank account to which Collections of Pool
Receivables are sent or deposited, including the Collection Account
"Lock-Box Agreement" means a letter agreement, in substantially the form
of Exhibit 5.01(f), among Seller, Parent and any Lock-Box Bank.
"Lock-Box Bank" means any of the banks holding one or more Lock-Box
Accounts for receiving Collections from Pool Receivables.
"Loss Reserve" means the product of (A) the greater of (1) 12%; and (2)
the Dynamic Loss Reserve Percentage as most recently calculated and (B) the Net
Pool Balance.
"Material Adverse Effect" with respect to any event or circumstance,
means a material adverse effect on:
14
(i) the business, financial condition, assets, prospects or
operations of Seller or Parent;
(ii) the ability of Servicer or Parent to perform its obligations
under this Agreement or any other Transaction Document;
(iii) the validity, enforceability or collectibility of this
Agreement or any other Transaction Document or the validity, enforceability or
collectibility of the Receivables; or
(iv) the status, existence, perfection, priority or enforceability
of the Administrator's or any Purchaser's interest in the Pool Assets.
"Monthly Servicer's Fee" means the Servicer's Fee accrued in a calendar
month.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Pool Balance" at any time means an amount equal to (i) the
aggregate Unpaid Balance of the Eligible Receivables in the Receivables Pool at
such time, minus (ii) the aggregate amount by which the aggregate Unpaid Balance
of the Eligible Receivables of each Obligor and its Affiliates exceeds the
Concentration Limit for such Obligor at such time, minus (iii) the aggregate
amount by which the aggregate Unpaid Balance of Canadian Receivables exceeds the
Canadian Receivables Limit.
"New Purchaser" has the meaning set forth in Section 1.06.
"Obligor" means a Person obligated to make payments with respect to a
Receivable, including any guarantor thereof.
"Original P&S Agreement" has the meaning set forth in the Background of
the Purchase Agreement.
"Original Purchase Agreement" has the meaning set forth in Paragraph 7
of the Background.
"Originator" means the Parent in its capacity as originator of
Receivables, together with any other originator added as a party to the Purchase
Agreement pursuant to the terms thereof.
"Overdue Receivable" means a Receivable that remains unpaid for more
than 30 days but no more than 60 days from the original due date for such
payment.
"Parent" has the meaning set forth in the preamble.
"Past Due Receivable" means a Receivable that remains unpaid for more
than 60 days but no more than 90 days from the original due date for such
payment, or that has been charged off before it has become 61 days past due.
"Percentage" with respect to any Conduit Purchaser means the ratio,
expressed as a
15
percentage, of (i) such Conduit Purchaser's Commitment to (ii) the aggregate
Commitments of all of the Conduit Purchasers.
"Perfection Representations" means the representations, warranties and
covenants set forth on Schedule I to the Agreement.
"Permitted Investments" means any one or more of the following
obligations or securities:
(i) direct non-callable obligations of, and non-callable obligations
fully guaranteed by, the United States of America, or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;
(ii) demand and time deposits in, certificates of deposits of, and
bankers' acceptances issued by, any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof, having a combined capital and surplus of at least $250,000,000, and
subject to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual commitment
providing for such investment the commercial paper or other short-term debt
obligations of such depository institution or trust company (or, in the case of
a depository institution that is the principal subsidiary of a holding company,
the commercial paper or other short-term debt obligations of such holding
company) have one of the two highest short-term credit rating available from
Xxxxx'x and S&P and, if rated by Fitch, from Fitch;
(iii) repurchase obligations with respect to and collateralized
by (A) any security described in clause (i) above or (B) any other security
issued or guaranteed by an agency or instrumentality of the United States of
America, in each case entered into with a depository institution or trust
company (acting as principal) of the type described in clause (ii) above,
provided that the Administrator has taken delivery of such security;
(iv) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations, but excluding Commercial
Paper Notes) payable on demand or on a specified date not more than one year
after the date of issuance thereof having the highest short-term credit rating
from Xxxxx'x and S&P and, if rated by Fitch, from Fitch at the time of such
investment; and
(v) shares in a mutual fund investing solely in short term
securities of the United States government and/or securities described in clause
(iii) above where the mutual fund custodian has taken delivery of the
collateralizing securities, provided that (i) such fund shall have one of the
two highest short-term credit rating available from Xxxxx'x and S&P and, if
rated by Fitch, from Fitch and (ii) such shares shall be freely transferable by
the holder on a daily basis.
"Person" means an individual, partnership, corporation (including a
business trust), joint
16
stock company, trust, unincorporated association, joint venture, limited
liability company, government or any agency or political subdivision thereof or
any other entity.
"Pool Assets" has the meaning set forth in Section 1.04(a).
"Pool Receivable" means a Receivable in the Receivables Pool.
"Pro Rata Share" with respect to any Committed Purchaser means the ratio
expressed as a percentage of (i) such Committed Purchaser's Commitment divided
by (ii) such Committed Purchaser's related Conduit Purchaser's Commitment.
"Program Agreement" means with respect to any Purchaser, each Liquidity
Agreement of such Conduit Purchaser, each agreement pursuant to which such
Conduit Purchaser obtains funding, through the issuance of Commercial Paper
Notes or otherwise, each agreement pursuant to which a Person provides credit
enhancement to such Conduit Purchaser and each other agreement entered into by
such Conduit Purchaser in connection with its securitization program.
"Program Fee" means, for each day for each Conduit Purchaser, the amount
equal to the product of (x) such Conduit Purchaser's Percentage of the Capital
on such day, times (y) the Program Fee Rate for such Conduit Purchaser, times
(z) 1/360.
"Program Fee Rate" with respect to each Conduit Purchaser has the
meaning set forth in the Fee Letter.
"Program Information" has the meaning set forth in Section 14.07.
"Program Support Provider" means each of each entity that issues
Commercial Paper Notes, each Liquidity Bank and each other Person (other than
any customer of a Conduit Purchaser) now or hereafter extending credit or having
a commitment to extend credit to or for the account of, or to make a purchase
from, a Conduit Purchaser pursuant to a Program Agreement.
"Purchase" has the meaning set forth in Section 1.01.
"Purchase Agreement" means the Amended and Restated Purchase and Sale
Agreement, dated as of November 15, 2001, among Seller and the Originators, and
includes the Original P&S Agreement for the period that it was in effect.
"Purchase Limit" has the meaning set forth in Section 1.01.
"Purchase Termination Date" means that day
(a) the Administrator declares a Purchase Termination Date in a
notice to Seller in accordance with Section 10.02(a); or
(b) in accordance with Section 10.02(b), becomes the Purchase
Termination
17
Date automatically.
"Purchaser" means each of the Conduit Purchasers and the Committed
Purchasers, individually and
"Purchaser Group" means a Conduit Purchaser and its related Committed
Purchasers, collectively.
"Purchasers" means the Conduit Purchasers and the Committed Purchasers,
collectively.
"Purchasers' Share" of any amount means the then Asset Interest,
expressed as a percentage, (but not greater than 100%) times such amount.
"Rating Agencies" at any time means those rating agencies then rating
the Commercial Paper Notes.
"Rating Agency Condition" means with respect to any event that the
Rating Agencies have confirmed the then rating of the Commercial Paper Notes of
Liberty Street Funding Corp. and Holland Limited Securitization Inc. after
giving effect to such event.
"Receivable" means any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising under a Contract and includes the right to payment of any interest or
finance charges and other obligations of such Person with respect thereto.
Indebtedness and other obligations arising from any one transaction, including,
without limitation, indebtedness and other obligations represented by an
individual invoice or agreement, shall constitute a Receivable separate from a
Receivable consisting of the indebtedness and other obligations arising from any
other transaction.
"Receivables Pool" means at any time all then outstanding Receivables,
other than Reconveyed Receivables.
"Reconveyed Receivable" means a Receivable for which an Originator has
paid the full Unpaid Balance pursuant to the Purchase Agreement.
"Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"Regulatory Change" means, relative to any Affected Party
(a) any change in (or the adoption, implementation, change in
phase-in or commencement of effectiveness of) any
(i) United States federal or state law or foreign law applicable
to such Affected Party;
18
(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to such Affected
Party of (A) any court, government authority charged with the interpretation or
administration of any law referred to in clause (a)(i) or of (B) any fiscal,
monetary or other authority having jurisdiction over such Affected Party; or
(iii) GAAP or regulatory accounting principles applicable to
such Affected Party and affecting the application to such Affected Party of any
law, regulation, interpretation, directive, requirement or request referred to
in clause (a)(i) or (a)(ii) above; or
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request or
accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii) above.
"Reinvestment" has the meaning set forth in Section 1.03.
"Related Security" means, with respect to any Pool Receivable: (a) all
of Seller's or the related Originator's right, title and interest in and to all
Contracts that relate to such Pool Receivable; (b) all security interests or
liens and property subject thereto from time to time purporting to secure
payment of such Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise; (c) all UCC financing statements covering any
collateral securing payment of such Pool Receivable; (d) all guarantees and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Pool Receivable whether pursuant to the
Contract related to such Pool Receivable or otherwise; and (e) all of Seller's
and the related Originator's interest in the merchandise (including returned
merchandise), if any, relating to the sale that gave rise to such Pool
Receivable.
"Rental Obligations" means, with reference to any period, the aggregate
amount of all rental obligations for which the Parent and its consolidated
Subsidiaries are directly or indirectly liable (as lessee or as guarantor or
other surety but without duplication) under all leases in effect at any time
during such period (other than operating leases for motor vehicles, computers,
office equipment and other similar items used in the ordinary course of business
of the Parent and its consolidated Subsidiaries), including all such amounts for
which any Person was liable during the period immediately prior to the date such
Person became a Subsidiary of the Parent or was merged into or consolidated with
the Parent or a Subsidiary of the Parent, as determined in accordance with GAAP.
"Reporting Date" means the sixth Business Day after each Cut-Off Date.
"Required Net Worth" means as of any date of determination the amount
calculated as of such date pursuant to the formula set forth on Exhibit 7.01(i).
"Required Purchasers" means 100% of the Committed Purchasers.
"Required Ratings" means at least two of the following ratings: A-1 or
A-1+ by S&P, P-1 by Xxxxx'x and F1 by Fitch.
19
"Required Reserves Percentage" means, on any day, an amount equal to (A)
the sum of (1) the Dilution Reserve, plus (2) the Loss Reserve, plus (3) the
Yield Reserve, in each case as most recently calculated, divided by (B) the Net
Pool Balance as of such day.
"S&P" means Standard & Poor's, a division of the XxXxxx-Xxxx Companies,
Inc.
"Sales" means sales of goods and services by the Originators which
generate trade receivables.
"Sales-Based Default Ratio" means, as of any Cut-Off Date, the ratio,
expressed as a percentage, of (i) the aggregate Unpaid Balance of all Past Due
Receivables as of such Cut-off Date, divided by (ii) the Sales for the month
ending three months prior to the date in which such Cut-Off Date occurs. For
example, as of April 30, the numerator of the Sales-Based Default Ratio would be
the aggregate Unpaid Balance of all Pool Receivables that were Past Due
Receivables as of April 30; the denominator of the Sales-Based Default Ratio
would be the Sales for the month of January.
"Sales-Based Dilution Ratio" as of any Cut-Off Date means (a) the
aggregate reduction attributable to Dilutions occurring in the Unpaid Balance of
Pool Receivables which Dilutions were granted during the month ending on such
Cut-Off Date; divided by (b) the Sales for the month immediately prior to the
month in which such Cut-Off Date occurs.
"Secured Parties" means the Purchasers, the Administrator, the Agents,
the Indemnified Parties and the Affected Parties.
"Seller" has the meaning set forth in the preamble.
"Seller's Share" of any amount means (x) 100% minus the Asset Interest
times (y) such amount.
"Servicer" has the meaning set forth in Section 8.01(a).
"Servicer Report" has the meaning set forth in Section 3.01.
"Servicer Transfer Event" has the meaning set forth in Section 8.01(b).
"Servicer's Fee" means, for each day, an amount equal to (x) the
Servicer's Fee Rate, times (y) the aggregate Unpaid Balance of all Pool
Receivables at the close of business on such day, times (z) 1/360.
"Servicer's Fee Rate" means .75% per annum or, in the event that Parent
is no longer the Servicer, such higher rate as may be charged by the successor
Servicer.
"Settlement Date" means the tenth (10th) calendar day of each month or,
if such day is not a Business Day, the next succeeding Business Day.
20
"Settlement Period" means the period (i) in the case of the first
Settlement Period, from, and including, the date of the initial Purchase to, but
excluding the next Settlement Date and (ii) thereafter, from, and including,
each Settlement Date to, but excluding, the next Settlement Date.
"Subsidiary" means a corporation of which Parent and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"Successor Notice" has the meaning set forth in Section 8.01(b).
"Tangible Net Worth" means, with respect to any Person, the net worth of
such Person calculated in accordance with GAAP, after subtracting therefrom the
aggregate amount of such Person's intangible assets (including, without
limitation, goodwill, franchises, licenses, patents, trademarks, tradenames,
copyrights and service marks), but, in the case of Parent only, including in
such net worth such Person's deferred tax liabilities up to $338,000,000.
"Termination Date" means with respect to any Purchaser the earliest of
(a) the date of termination or reduction (whether by scheduled
expiration, termination on default or otherwise) of any Program Support
Provider's commitment under any Program Agreement;
(b) the Purchase Termination Date;
(c) November 15, 2004; and
(d) the date on which Seller terminates Purchaser's right to make
Purchases and Reinvestments pursuant to Section 1.05(a).
"Transaction Documents" means this Agreement, the Lock-Box Agreements,
the Purchase Agreement, the Fee Letters and the other documents to be executed
and delivered in connection herewith.
"Turnover Rate" means, as of any Cut-Off Date, the ratio (expressed as a
percentage) of (i) the aggregate Unpaid Balance of the Pool Receivables as of
such Cut-Off Date, divided by (ii) the aggregate Collections for the month
ending on such Cut-Off Date.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Unmatured Liquidation Event" means any event which, with the giving of
notice or lapse of time, or both, would become a Liquidation Event.
"Unpaid Balance" of any Receivable means at any time the unpaid
principal amount thereof, minus the maximum potential volume rebates and
advertising allowances that could be
21
credited or offset against such principal amount.
"Yield Reserve" means, at any time, an amount equal to the product of
(i) the Net Pool Balance at such time, times (ii) the sum of (A) 1.5 times the
Earned Discount Rate set forth in paragraph (a) of the definition thereof as
determined as of the most recent Cut-Off Date, plus (B) the Servicer's Fee Rate,
plus, 2.50%, divided by (iii) 12, times (iv) 2, times (v), the most recently
calculated Turnover Rate.
B. Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of California, and not specifically defined herein, are used
herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
D. Interpretation. In each Transaction Document, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
the Transaction Documents, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Transaction
Document), document or instrument means such agreement, document or instrument
as amended, supplemented or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the other
Transaction Documents and reference to any promissory note includes any
promissory note which is an extension or renewal thereof or a substitute or
replacement therefor; and
(v) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated thereunder
and reference to any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision.
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