[EXHIBIT 10 (b) (1)]
RECEIVABLES PURCHASE AGREEMENT
Dated as of June 30, 0000
Xxxxx
XXX TECHNOLOGY, INC.
as Seller
SCI SYSTEMS, INC.
as Guarantor
and
RECEIVABLES CAPITAL CORPORATION
as Purchaser
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Administrative Agent
TABLE OF CONTENTS
Section Page
ARTICLE I
THE COMMITMENT2
1.01.Commitment2
1.02.Purchase and Reinvestment Limits3
1.03.Making Purchases from Seller3
1.04.Number of Undivided Interests4
1.05.Commitment Termination Date4
1.06.Purchase Termination Date4
1.07.Voluntary Termination of Commitment or
Reduction of Maximum Purchase Limit5
1.08.Limitation of Ownership Interest 5
ARTICLE II
UNDIVIDED INTEREST AND PURCHASER'S SHARE5
2.01.Undivided Interest5
2.02.Required Allocation6
2.03.Purchaser's Investment7
0.00.Xxx Pool Balance8
2.05.Purchaser's Share9
ARTICLE III
SETTLEMENTS9
3.01.Non-Run Off Settlement Procedures for Collections9
0.00.Xxx Off Settlement Procedures for
Collections11
3.03.Special Settlement Procedures; Reduction
of Purchaser's Investment, Etc12
3.04.Reporting14
3.05.Payments and Computations, Etc15
3.06.Dividing or Combining Undivided Interests15
3.07.Treatment of Collections and Deemed
Collections16
ARTICLE IV
FEES AND YIELD PROTECTION16
4.01.Fees16
4.02.Yield Protection16
ARTICLE V
CONDITIONS OF PURCHASES18
5.01.Conditions Precedent to Initial Purchase18
5.02.Conditions Precedent to All Purchases
and Reinvestments20
5.03.Additional Condition Precedent to Purchases21
ARTICLE VI
REPRESENTATIONS AND WARRANTIES21
6.01.Representations and Warranties - Seller21
6.02.Representations and Warranties - Guarantor25
ARTICLE VII
GENERAL COVENANTS28
7.01.Affirmative Covenants28
7.02.Reporting Requirements31
7.03.Negative Covenants33
7.04. Financial Covenants34
ARTICLE VIII
ADMINISTRATION AND COLLECTION35
8.01.Designation of Servicer35
8.02.Duties of Servicer36
8.03.Rights of the Administrative Agent38
8.04.Responsibilities of Seller39
8.05.Further Action Evidencing Purchases40
8.06.Application of Collections41
ARTICLE IX
SECURITY INTEREST41
9.01.Grant of Security Interest41
9.02.Further Assurances41
9.03.Remedies41
ARTICLE X
TERMINATION EVENTS42
10.01.Termination Events42
10.02.Remedies44
ARTICLE XI
THE ADMINISTRATIVE AGENT45
11.01.Authorization and Action45
11.02.Administrative Agent's Reliance, Etc45
11.03.Administrative Agent and Affiliates46
11.04. Seller's Failure to Perform46
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST46
12.01.Restrictions on Assignments46 12.02.Rights of Assignee47 12.03.Allocation
of Payments47 12.04.Notice of Assignment48 12.05.Evidence of Assignment;
Endorsement of Certificate48 12.06.Rights of Program Support Provider and
Collateral Trustee48
ARTICLE XIII
INDEMNIFICATION49
13.01.Indemnities by Seller and Guarantor49
ARTICLE XIV
GUARANTEE51
14.01. Guarantee51
14.02. Maintenance of Ownership53
14.03. Representation and Warranty53
14.04. Subrogation54
ARTICLE XV
MISCELLANEOUS54
15.01.Amendments, Etc54
15.02.Notices, Etc54
00.00.Xx Waiver; Remedies54
15.04.Binding Effect; Survival55
15.05.Costs, Expenses and Taxes55
00.00.Xx Proceedings56
15.07.Confidentiality of BofA Information56
15.08.Captions and Cross References59
15.09.Integration59
15.10.Governing Law59
15.11.Waiver Of Jury Trial59
15.12.Consent To Jurisdiction; Waiver Of
Immunities59
15.13.Execution in Counterparts60
15.14.Originators 60
APPENDICES
APPENDIX A - DEFINITIONSA-1
APPENDIX B - CALCULATION OF DISCOUNT AND RESERVEB-1
SCHEDULE B-1 -Pricing Grid
SCHEDULES
SCHEDULE 2.04(c)Special Concentration Limits
SCHEDULE 6.01(d)Litigation
SCHEDULE 6.01(i)Exceptions to Perfection
SCHEDULE 6.01(k)List of Offices of Seller where Records Are Kept
SCHEDULE 6.01(l) List of Lock-Box Banks
SCHEDULE 6.01(m)-1Forms of Contracts
SCHEDULE 6.01(m)-2Description of Credit and Collection Procedure
EXHIBITS
EXHIBIT 1.03(a)Form of Purchase Notice
EXHIBIT 3.04(a)Form of Periodic Report
EXHIBIT 5.01(a)Form of Certificate of Assignments
EXHIBIT 5.01(i)Form of Lock-Box Agreement
EXHIBIT 5.01(j)-1Form of Opinion of Special Counsel for Seller and Guarantor
EXHIBIT 5.01(j)-2Form of Opinion and In-House Counsel for Seller and Guarantor
EXHIBIT 5.01(k)Form of Opinion of Counsel for Administrative Agent
EXHIBIT 7.01(j)-1Form of Bankruptcy - Remote Purchase and Sale Agreement
EXHIBIT 7.01(j)-2Form of Bankruptcy Remote/True Sale Opinion
EXHIBIT 12.05Form of Assignment (for assignment to third
party)
RECEIVABLES PURCHASE AGREEMENT
Dated as of June 30, 1995
THIS IS A RECEIVABLES PURCHASE AGREEMENT, among SCI TECHNOLOGY, INC., an Alabama
corporation having its principal office at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000, (together with its successors and permitted assigns, "Seller"),
SCI SYSTEMS, INC., a Delaware corporation having its principal office at c/o SCI
Systems (Alabama) Inc., 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000
(together with its successors and permitted assigns, "Guarantor"), RECEIVABLES
CAPITAL CORPORATION, a Delaware corporation having its principal office at World
Financial Center, South Tower, 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 (together with its successors and assigns, "Purchaser"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association
having its principal office at 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 ("BofA"), as administrative agent for the Purchaser (together
with its successors and assigns, in such capacity, the "Administrative Agent").
Unless otherwise indicated, capitalized terms used in this Agreement are defined
in Appendix A.
Background
1.Seller has, and expects to have, Pool Receivables in which Seller intends to
sell one or more undivided interests. Seller has requested Purchaser, and
Purchaser has agreed, subject to the terms and conditions contained in this
Agreement, to purchase such undivided interests, referred to herein as Undivided
Interests, from Seller from time to time during the term of this Agreement.
2.Seller and Purchaser also desire that, subject to the terms and conditions of
this Agreement, certain of the daily Collections in respect of such Undivided
Interests be reinvested in Pool Receivables through the sale by Seller to
Purchaser of additional undivided interests in the Pool Receivables, such daily
reinvestment of Collections to be effected by an automatic daily adjustment to
Purchaser's Undivided Interests, and to be
intended to permit Purchaser to maintain its Purchaser's Investments fully
invested in uncollected Pool Receivables.
3.Purchaser expects generally to fund its Purchases and Reinvestments through
the issuance of Commercial Paper Notes. Purchaser has entered into Program
Support Agreements providing for the purchase by a Program Support Provider of,
or the making by a Program Support Provider of loans secured by, Undivided
Interests in the event Purchaser hereunder is unable to fund its Purchases or
Reinvestments pursuant to this Agreement by the issuance of Commercial Paper
Notes or otherwise prefers to fund such Purchases or Reinvestments under the
Program Support Agreements rather than by the issuance of Commercial Paper
Notes, or is unable to pay such Commercial Paper Notes at maturity from the
proceeds of collections from Pool Receivables in which it holds Undivided
Interests hereunder. Purchaser has also entered into a Program Support Agreement
with a Program Support Provider providing for the issuance of a letter of credit
to the trustee for the holders of Commercial Paper Notes, and for the making of
loans to the Purchaser, to provide funds for the payment of Commercial Paper
Notes and for the making of Purchases and Reinvestments in the circumstances
described above when funding is not available under certain other Program
Agreements.
0.XxxX has been requested, and is willing, to act as the Administrative Agent.
0.Xx is a condition precedent for Purchaser and the Administrative Agent to
enter into this Agreement that Guarantor guaranty the performance of Seller
hereunder, and Guarantor is willing to guaranty such performance, in each case
upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
THE COMMITMENT
SECTION 1.01.Commitment. On the terms and subject to the conditions set forth in
this Agreement (including Article V):
(a)Purchases. Purchaser shall purchase from Seller Undivided Interests from time
to time during the period from the date hereof to the Purchase Termination Date.
Each such purchase and, as the context may require, the purchase price paid by
Purchaser to Seller in respect thereof (determined pursuant to Section 1.03(b)),
is herein called a "Purchase".
(b)Reinvestments. Pursuant to Section 3.01, during the period from the date
hereof to the Commitment Termination Date, Purchaser shall permit Servicer to
cause certain of the Collections in respect of the Undivided Interests to be
applied to the purchase of additional undivided interests in the Pool
Receivables, thereby resulting in an appropriate readjustment of such Undivided
Interests. Each such purchase of an additional undivided interest pursuant to
Section 3.01 is herein called a "Reinvestment".
Purchaser's obligation to make such Purchases and Reinvestments is herein called
the "Commitment". Purchases and Reinvestments made hereunder shall be without
recourse with regard to Defaulted Receivables (except as otherwise specifically
provided in Article II of this Agreement in connection with the calculation of
the Undivided Interests).
SECTION 1.02.Purchase and Reinvestment Limits. Under no circumstances shall
Purchaser make any Purchase or Reinvestment to the extent that, after giving
effect to such Purchase or Reinvestment, as the case may be:
(a)Purchase Limit. The Aggregate Purchaser's Investments would exceed an amount
(the "Purchase Limit") equal to $100,000,000, as such amount may be reduced
pursuant to Section 1.07; or
(b)Required Allocations Limit. The Aggregate Required Allocations (as defined in
Section 2.02) would exceed an amount (the "Required Allocations Limit") equal to
100% of the Net Pool Balance (as defined in Section 2.04).
SECTION 1.03.Making Purchases from Seller. (a) Notice of Purchase. Each Purchase
from Seller by Purchaser shall be made on notice from Seller to the
Administrative Agent received by the Administrative Agent not later than 10:00
a.m. (Chicago time) on the Business Day next preceding the date of such proposed
Purchase. Each such notice of a proposed Purchase shall be in substantially the
form attached as Exhibit 1.03(a) and shall specify the desired amount and date
of such Purchase and the desired duration of the initial Yield Period for the
resulting Undivided Interest. The Administrative Agent shall select the duration
of such initial, and each subsequent, Yield Period in its discretion; provided
that it shall use reasonable efforts, taking into account market conditions, to
accommodate Seller's preferences.
(b)Amount of Purchase. The amount of each Purchase shall be equal to the lesser
of (x) the amount proposed by Seller pursuant to Section 1.03(a) and (y) the
maximum amount permitted under Section 1.02.
(c)Funding of Purchase. On the date of each Purchase, Purchaser shall, upon
satisfaction of the applicable conditions set forth in Article V, make available
to the Administrative Agent at its office at 000 Xxxxx XxXxxxx Xxxxxx in
Chicago, Illinois not later than 11:00 a.m. (Chicago time) the amount of its
Purchase (determined pursuant to Section 1.03(b)) in same day funds, and after
receipt by the Administrative Agent of such funds, the Administrative Agent will
make such funds immediately available to Seller at such office.
SECTION 1.04.Number of Undivided Interests. The number of Undivided Interests
hereunder at any one time, after giving effect to any Purchase, Reinvestment,
division or combination, shall not exceed 15.
SECTION 1.05.Commitment Termination Date. (a) The "Commitment Termination Date"
shall be the earlier to occur of (i) June 30, 1998 (herein, as the same may be
extended, called the "Scheduled Commitment Termination Date"), and (ii) the date
of termination of the Commitment pursuant to Section 1.07 or 10.02.
(b)The then Scheduled Commitment Termination Date may be extended from time to
time for successive periods of one year by written notice of request given by
Seller to the Administrative Agent at least 120 days prior to the then Scheduled
Commitment Termination Date and written notice of acceptance given by the
Administrative Agent to Seller not later than 45 days prior to such Scheduled
Commitment Termination Date. Failure of the Administrative Agent to respond in
such time frame shall be deemed to be a rejection of such request.
SECTION 1.06.Purchase Termination Date. (a) The "Purchase Termination Date"
shall be the earlier to occur of (i) the Commitment Termination Date and (ii)
the date of termination of the Commitment with respect to Purchases pursuant to
subsection (b).
(b)The Commitment shall terminate with respect to Purchases, and Purchaser shall
have no obligation to make any further Purchases hereunder, on the scheduled
date of termination of any Program Support Agreement, it being understood that
no such termination shall affect Purchaser's obligation, subject to the terms
and conditions of this Agreement, to make Reinvestments until the Commitment
Termination Date with respect to Undivided Interests purchased by Purchaser
hereunder prior to such termination.
Purchaser agrees to give Seller at least 30 days' prior written notice of the
termination of the Commitment with respect to Purchases pursuant to this clause
(b), but no failure to give or delay in giving such notice shall prevent or
delay such termination.
SECTION 1.07.Voluntary Termination of Commitment or Reduction of Maximum
Purchase Limit. Seller may, upon at least 30 days' prior written notice to the
Administrative Agent, terminate the Commitment in whole or reduce in part the
unused portion of the Purchase Limit; provided, however, that (a) each partial
reduction shall be in an amount equal to $5,000,000 or an integral multiple
thereof and (b) after giving effect to such reduction, the remaining Purchase
Limit will not be less than $25,000,000.
SECTION 1.08.Limitation of Ownership Interest. Nothing in this Agreement shall
be interpreted as providing Purchaser with an ownership interest in any
Receivables that are not Pool Receivables.
ARTICLE II
UNDIVIDED INTEREST AND PURCHASER'S SHARE
SECTION 2.01.Undivided Interest. (a) Definition and Computation of Undivided
Interest. For purposes of this Agreement, "Undivided Interest" means, as the
context may require (i) an undivided ownership interest, in a percentage
determined from time to time as provided in clause (ii) below, in (a) all then
outstanding Pool Receivables, (b) all Related Security with respect to such Pool
Receivables, (c) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security and (d) all books and records (including,
without limitation, computer disks) related to the foregoing (collectively, the
"Pool"), and (ii) at any time, the quotient, expressed as a percentage, obtained
by dividing the Required Allocation for such Undivided Interest by the Net Pool
Balance. Each Undivided Interest shall be computed as follows:
UI=RA = PI + DF + CR + SFR + DR
NPB NPB
where:
UI=the Undivided Interest at any time;
RA=the Required Allocations of such Undivided Interest at such time, as
determined pursuant to Section 2.02; and
NPB=the Net Pool Balance at such time, as determined pursuant to Section 2.04.
(b)Frequency of Computation of Purchaser's Interest. Each Undivided Interest
shall initially be computed by Servicer as of the opening of business of
Servicer on the date of Purchase of such Undivided Interest from Seller, and
such Undivided Interest shall be recomputed upon receipt of each Periodic
Report. In addition, until such Undivided Interest shall be reduced to zero,
such Undivided Interest shall be deemed to be automatically recomputed as of the
close of business of Servicer on each day (other than a day on which an actual
recomputation is done), and, as so recomputed, shall constitute the percentage
ownership interest in Pool Receivables held by Purchaser on such day. Such
Undivided Interest shall become zero at such time as Purchaser shall have
received the accrued Earned Discount for such Undivided Interest, shall have
recovered the Purchaser's Investment of such Undivided Interest and shall have
received all other amounts payable to Purchaser pursuant to this Agreement in
respect of such Undivided Interest and Servicer shall have received the accrued
Servicer's Fee for such Undivided Interest. Such Undivided Interest shall remain
constant from the time as of which any such computation or recomputation is made
until the time as of which the next such recomputation, if any, shall be made.
SECTION 2.02.Required Allocation. The "Required Allocation" of an Undivided
Interest at any time means an amount determined as follows:
RA=PI + DF + CR + SFR + DR
where:
RA=the Required Allocation of an Undivided Interest at any time;
PI=the Purchaser's Investment of such Undivided Interest at such time, as
determined pursuant to Section 2.03;
DF=the Discount Factor of such Undivided Interest at such time, as determined
pursuant to Part I of Appendix B;
CR =the Credit Reserve of such Undivided Interest at such time, as determined
pursuant to Part II of Appendix B;
SFR=the Servicer's Fee Reserve of such Undivided Interest at such time, as
determined pursuant to Part IV of Appendix B; and
DR=the Dilution Reserve of such Undivided Interest at such time as determined
pursuant to Part III of Appendix B.
The "related" Undivided Interest with respect to any of the foregoing items
shall mean the Undivided Interest as to which such item is calculated.
SECTION 2.03.Purchaser's Investment. (a) Subject to subsections (b) and (c),
"Purchaser's Investment" of an Undivided Interest at any time means an amount
equal to
(i) the aggregate of the amounts theretofore paid to Seller for the acquisition
of such Undivided Interest (a) by Purchase pursuant to Sections 1.01(a) and 1.03
and (b) by Reinvestments pursuant to Sections 1.01(b) and 3.01, less
(ii) the aggregate amount of Collections (including Deemed Collections)
theretofore received and distributed on account of such Purchaser's Investment
pursuant to Sections 3.01 and 3.02.
(b)Solely for purposes of calculating the Earned Discount (and each component
thereof) with respect to a portion of an Undivided Interest pursuant to the
proviso to the definition of "Earned Discount" in Appendix B:
(i) "Purchaser's Investment" of any portion of an Undivided Interest owned by a
Program Support Provider (or any permitted assignee thereof) or otherwise funded
by a Funding shall be deemed to be the amount paid to Purchaser by such Program
Support Provider as the purchase price of, or the original principal amount
loaned with respect to, such portion (less any portion of such purchase price or
principal amount allocable to Earned Discount accrued and unpaid at the time of
assignment or Funding), as reduced from time to time by Collections received and
distributed to such Program Support Provider (or such assignee) on account of
such Funding (other than any portion allocable to Earned Discount) pursuant to
Sections 3.01 and 3.02 or by payments by Purchaser to the Program Support
Provider in reimbursement of any Funding (less any amount allocable to such
accrued and unpaid Earned Discount); and
(ii) "Purchaser's Investment" of any other portion of an Undivided Interest
shall mean Purchaser's Investment of such Undivided Interest less the sum of
Purchaser's Investments of all portions of such Undivided Interest described in
clause (i) above, calculated in accordance with such clause (i).
(c)Purchaser's Investment 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.
(d)The "related" Purchaser's Investment with regard to a Yield Period or
Undivided Interest (or portion thereof) means the Purchaser's Investment
calculated with regard to such Yield Period or Undivided Interest (or such
portion), as the case may be.
SECTION 0.00.Xxx Pool Balance. (a) The "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 (for all Obligors) of the amounts by which (x) the Unpaid
Balance of all Pool Receivables of each Obligor exceeds (y) the Concentration
Limit for such Obligor at such time, minus
(iii) the amount, if any, by which the Accounts Payable Amount at such time
exceeds 14% of the aggregate Unpaid Balance of all Eligible Receivables at such
time, minus
(iv) from and after the date the Administrative Agent shall have given notice to
Seller (which notice may be given at any time at the Administrative Agent's
discretion) and from and after the occurrence of a Trigger Event, the Accounts
Payable Amount at such time, to the extent not deducted pursuant to clause (iii)
above.
(b)"Concentration Limit" for any Obligor at any time means, as applicable, (x)
3.0% of the aggregate Unpaid Balance of Eligible Receivables at such time or (y)
the Special Concentration Limit for such Obligor.
(c) "Special Concentration Limit" for (i) (a) any Obligor identified on Schedule
2.04(c), means the applicable percentage set forth on Schedule 2.04(c) and (b)
for any other Obligor identified in writing by the
Administrative Agent to the Seller as an Obligor for which Special Concentration
Limits shall apply, means at any time, such percentage designated by the
Administrative Agent in written notice delivered to Seller of (ii) the aggregate
Unpaid Balance of all Eligible Receivables at such time; provided that the
Administrative Agent may, at its discretion, reduce any such Special
Concentration Limit upon ten (10) Business Days' prior written notice to Seller;
it being understood and agreed that the Administrative Agent, in so reducing any
Special Concentration Limit for any Obligor, shall be entitled to consider,
among other things, the credit rating of such Obligor and the credit exposure of
Purchaser and any Program Support Provider to such Obligor (and its Affiliates)
arising in connection with this Agreement and other agreements to which
Purchaser is a party.
(d)In the case of any Obligor which, to the actual knowledge of Seller, is an
Affiliate of any other Obligor, the Concentration Limit, the Special
Concentration Limit, if any, and the aggregate Unpaid Balance of Pool
Receivables of such Obligors shall be calculated as if such Obligors were one
Obligor.
SECTION 2.05.Purchaser's Share. With respect to each Undivided Interest,
"Purchaser's Share" of Collections of Pool Receivables received (or deemed
received) by Seller or Servicer on any day means an amount equal to the product
of
(a)the amount of all Collections of Pool Receivables received (or deemed
received) by Seller or Servicer on such day, times:
(b)(i) if such day is not a Run Off Day, such Undivided Interest on such day,
expressed as a decimal, and
(ii) if such day is a Run Off Day, either (a) such Undivided Interest on the day
immediately preceding the first Run Off Day to have occurred during the then
current Run Off Period or (b) if higher, upon the request of the Administrative
Agent, the most recently calculated Undivided Interest;
provided that (i) during the continuance of any Termination Event, the
Purchaser's Share shall be 100% and (ii) after such time as an Undivided
Interest shall equal zero the Purchaser's Share of Collections therefor shall
also equal zero.
ARTICLE III
SETTLEMENTS
SECTION 3.01.Non-Run Off Settlement Procedures for Collections. (a) Daily
Procedure. On each day (other than a Run Off Day) in any Yield Period for any
Undivided Interest, Servicer shall deem an amount equal to Purchaser's Share of
Collections of Pool Receivables received or deemed received on such day to be
received in respect of such Undivided Interest; and
(i) out of Purchaser's Share of such Collections, hold in trust for the benefit
of Purchaser an amount equal to the related Earned Discount and related
Servicer's Fee accrued through such day and not previously so held for the
benefit of Purchaser,
(ii) apply an amount equal to the remainder of Purchaser's Share of such
Collections (the "Remaining Collections") to reduce the Purchaser's Investment
of such Undivided Interest (it being understood that such amount need not be
physically paid to Purchaser under this clause (ii)), and
(iii) Subject to Section 3.03, after such reduction, (a) apply such Remaining
Collections to the Reinvestment, for the benefit of Purchaser, of additional
undivided interests in Pool Receivables by recomputation of such Undivided
Interest pursuant to Section 2.01 as of the end of such day, thereby increasing
the related Purchaser's Investment, and (b) pay to Seller such Remaining
Collections.
The recomputed Undivided Interest shall constitute the percentage ownership
interest in Pool Receivables on such day held by Purchaser with regard to such
Undivided Interest.
(b)Settlement Date Procedure. On the Settlement Date for each Undivided
Interest, for each day in the related Yield Period of such Settlement Period
that is not a Run Off Day for such Undivided Interest, Servicer shall deposit to
the Administrative Agent's Account the amounts set aside as described in Section
3.01(a)(i) and the amounts, if any, set aside pursuant to Section 3.03(b) or (c)
for payment to the Administrative Agent on such Settlement Date; provided,
however, that until Servicer receives written notice from the Administrative
Agent to the contrary, Servicer may retain amounts which would otherwise be
deposited in respect of Servicer's Fee, in which case no distribution shall be
made in respect of Servicer's Fee under clause (c) below.
(c)Order of Application. Upon receipt by the Administrative Agent of funds
distributed pursuant to subsection (b), the Administrative Agent shall
distribute them (i) to Purchaser in payment of the accrued and unpaid Earned
Discount for such Undivided Interest, (ii) unless retained pursuant to
subsection (b), to Servicer in payment of the accrued and unpaid Servicer's Fee
payable with respect to such Undivided Interest and (iii) in the case of any
amounts set aside pursuant to Section 3.03(b) or (c), to Purchaser in reduction
of the related Purchaser's Investment. If there shall be insufficient funds on
deposit for the Administrative Agent to distribute funds in payment in full of
the amounts referred to in clauses (i) and (ii), the Administrative Agent shall
distribute funds, first, in payment of such Earned Discount, and second, in
payment of such Servicer's Fee.
SECTION 0.00.Xxx Off Settlement Procedures for Collections. (a) Daily Procedure.
On each Run Off Day occurring in any Yield Period for an Undivided Interest,
Servicer shall set aside and hold in trust for Purchaser Purchaser's Share of
the Collections of Pool Receivables in respect of such Undivided Interest for
such Run Off Day and shall, if requested by the Administrative Agent or if a
Termination Event has occurred
and is continuing, deposit such Collections within one Business Day of
Servicer's receipt thereof into a bank account acceptable to the Administrative
Agent in which no other funds shall be deposited.
(b)Settlement Date Procedure. On each Settlement Date for each Undivided
Interest, if one or more Run Off Days for such Undivided Interest occurred
during the related Yield Period for the Settlement Period ending on such
Settlement Date for such Undivided Interest, Servicer shall deposit to the
Administrative Agent's Account the amounts set aside pursuant to Section 3.02(a)
during such Settlement Period, but not to exceed the sum of (i) the accrued and
unpaid related Earned Discount, (ii) the Purchaser's Investment of such
Undivided Interest, (iii) the aggregate of other amounts owed hereunder by
Seller to Purchaser or the Administrative Agent in respect of such Undivided
Interest, and (iv) the accrued Servicer's Fee payable with respect to such
Undivided Interest. If no Termination Event or Unmatured Termination Event shall
have occurred and be continuing, any amounts set aside pursuant to clause (a) of
this Section 3.02 and not required to be deposited to the Administrative Agent's
Account pursuant to the next preceding sentence shall be paid to Seller by
Servicer.
(c)Order of Application. Upon receipt of funds deposited to the Administrative
Agent's Account pursuant to Section 3.02(b), the Administrative Agent shall
distribute them (i) to Purchaser or the Administrative Agent (as the case may
be) (a) in payment of the accrued and unpaid Earned Discount for such Undivided
Interest, (b) in reduction of the Purchaser's Investment of such Undivided
Interest and (c) in payment of any other amounts owed by Seller hereunder to
Purchaser or the Administrative Agent, in each case until reduced to zero, and
(ii) to Servicer in payment of the accrued Servicer's Fee payable with respect
to such Undivided Interest, also until reduced to zero. If there shall be
insufficient funds on deposit for the Administrative Agent to distribute funds
in payment in full of the aforementioned amounts, the Administrative Agent shall
distribute funds on deposit, first, in payment of the Earned Discount for such
Undivided Interest, second, in payment of the Servicer's Fee payable with
respect to such Undivided Interest, if any (if Servicer is not Seller or an
Affiliate of Seller), third, in reduction of Purchaser's Investment of such
Undivided Interest, fourth, in payment of other amounts payable to Purchaser or
the Administrative Agent hereunder, and fifth, in payment of the Servicer's Fee
payable with respect to such Undivided Interest (if Servicer is Seller or an
Affiliate of Seller).
SECTION 3.03.Special Settlement Procedures; Reduction of Purchaser's Investment,
Etc. (a) Deemed Collections. If on any day
(i) the Unpaid Balance of any Pool Receivable is
(A)reduced as a result of any defective, rejected or returned merchandise or
services, any cash discount, any credit, pricing adjustment or other adjustment
by Seller or any Affiliate of Seller (other than any adjustment permitted by
Section 8.02(c)(i)),
(B)reduced or cancelled as a result of a setoff in respect of any claim by the
Obligor thereof against Seller or any other Person (whether such claim arises
out of the same or a related or an unrelated transaction), or as a result of any
dispute, or
(C)reduced on account of the obligation of Seller or any other Person to pay to
the related Obligor any rebate or refund, or to rework any product or service
related to such Receivable; or
(ii) any of the representations or warranties of Seller set forth in Section
6.01(i) or (m) is no longer true with respect to a Pool Receivable,
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 reduction or
cancellation; and
(II)in the case of clause (ii) above, in the amount of the Unpaid Balance of
such Pool Receivable.
(b)Unreinvested Collections. Collections that may not be reinvested by means of
Reinvestments in an Undivided Interest on account of the application of the
Required Allocations Limit or the Purchase Limit pursuant to Section 2.01 shall
be so reinvested as soon as it is possible to do so without violating such
Required Allocations Limit or Purchase Limit, as the case may be. To the extent
and so long as such Collections may not be so reinvested, Servicer shall hold
such Collections in trust for the benefit of Purchaser (and, if requested by the
Administrative Agent or if a Termination Event has occurred and is continuing,
shall deposit in a separate interest-bearing deposit account containing only
such Collections and earnings thereon and no other funds; it being understood
that any interest earned on such funds shall be for the account of Seller and
shall be paid to Seller on the Settlement Date next succeeding the date on which
such interest is credited to such account, so long as no Termination Event has
occurred and is continuing), for payment to the Administrative Agent on the next
following Settlement Date, and the Purchaser's Investment of such Undivided
Interest shall be deemed reduced in the amount to be paid to the Administrative
Agent only when in fact finally so paid.
(c)Seller's Reduction of Purchaser's Investment. If at any xxxx Xxxxxx shall
wish to cause the reduction of the Purchaser's Investment of a related Undivided
Interest (but not to commence the liquidation, or reduction to zero, of all
Undivided Interests), Seller may do so as follows:
(i) Seller shall give the Administrative Agent at least five (5) Business Days'
prior written notice thereof (including the amount of such proposed reduction
and the proposed date on which such reduction will commence, which date shall be
a Business Day),
(ii) on the proposed date of commencement of such reduction and on each day
thereafter, Servicer shall refrain from reinvesting Remaining Collections until
the amount thereof not so reinvested shall equal the desired amount of
reduction, and
(iii) Servicer shall hold such Collections for the benefit of Purchaser, for
payment to the Administrative Agent on the next following Settlement Date, and
the Purchaser's Investment of such Undivided Interest shall be deemed reduced in
the amount to be paid to the Administrative Agent only when in fact finally so
paid;
provided that,
(A)the amount of any such reduction shall be not less than $1,000,000 and shall
be an integral multiple of $100,000, and the Purchaser's Investment of such
Undivided Interest after giving effect to such reduction shall be not less than
$5,000,000 (unless Purchaser's Investment of such Undivided Interest shall
thereby be reduced to zero) and shall be in an integral multiple of $100,000,
(B)if Seller shall commence any voluntary reduction in a Yield Period containing
all or a portion of any Run Off Period, Collections not so reinvested shall be
treated as if collected on the next following Run Off Day,
(C)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 in the same Yield Period, and
(D)if two or more Undivided Interests shall be outstanding at the time of any
proposed reduction, such proposed reduction shall be applied, unless the
Administrative Agent shall consent otherwise, to the Undivided Interest with the
shortest remaining Yield Period.
(d)Allocations of Obligor's Payments. Except as otherwise required by law or the
underlying Contract, all Collections received from an Obligor of any Pool
Receivable shall be applied to Pool Receivables then outstanding of such Obligor
in the order of the age of such Pool Receivables, starting with the oldest such
Pool Receivable; provided, however, that, if payment is designated by such
Obligor for application to specific Pool Receivables, it shall be applied to
such specified Pool Receivables.
SECTION 3.04.Reporting. (a) On or prior to the fifteenth (15th) day of each
month (or the next Business Day if such fifteenth (15th) day is not a Business
Day), Servicer shall prepare and forward to the Administrative Agent
(i) a Periodic Report relating to all Undivided Interests owned by Purchaser as
of the close of business of Servicer on the next preceding Month End Date,
(ii) if requested by the Administrative Agent, an aggregate listing of aged Pool
Receivables, and
(iii) a listing of the Unpaid Balance of Eligible Receivables for each Obligor
with Eligible Receivables equal to or greater than 3.0% of the aggregate Unpaid
Balance of Eligible Receivables as of the next preceding Month End Date.
If requested by the Administrative Agent, Servicer shall prepare and forward
Periodic Reports more frequently than once a month, using the most current
information available to Servicer.
(b)On or prior to the Settlement Date of any Settlement Period containing a Run
Off Day, Servicer shall prepare and forward to the Administrative Agent a
Periodic Report as of the close of business of Servicer on the next preceding
Month End Date.
(c)Seller will advise the Administrative Agent and, if Seller is not Servicer,
Servicer of each Run Off Day immediately upon the occurrence thereof.
SECTION 3.05.Payments and Computations, Etc. (a) All amounts to be paid or
deposited by Seller or Servicer hereunder shall be paid or deposited in
accordance with the terms hereof no later than 1:00 p.m. (Chicago time) on the
day when due in lawful money of the United States of America in same day funds
to the Administrative Agent at BofA's office at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx, Account #0000000, ABA # 000-000-00, reference RC #1159 for
SCI Systems, Inc. (the "Administrative Agent's Account").
(b)Seller or Servicer, as applicable, shall, to the extent permitted by law, pay
to the Administrative Agent interest on all amounts not paid or deposited when
due hereunder at 2% per annum above the Alternate Reference Rate, payable on
demand, provided, however, that such interest rate shall not at any time exceed
the maximum rate permitted by applicable law. Such interest shall be retained by
the Administrative Agent except to the extent that such failure to make a timely
payment or deposit has continued beyond the date for distribution by the
Administrative Agent of such overdue amount to Purchaser or any other Person
having an interest in such overdue amount, in which case such interest accruing
after such date shall be for the account of, and distributed by the
Administrative Agent, to such Persons ratably in accordance with their
respective interests in such overdue amount.
(c)All computations of interest, Earned Discount, Negative Spread Fee and any
other fees 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.
SECTION 3.06.Dividing or Combining Undivided Interests.
(a)Division of Undivided Interests. The Administrative Agent may at any time, as
of the last day of any Yield Period for any then existing Undivided Interest,
divide such existing Undivided Interest on such last day into two or more new
Undivided Interests, each such new Undivided Interest having a Purchaser's
Investment as
designated in such notice and all such new Undivided Interests collectively
having aggregate Purchaser's Investments equal to the Purchaser's Investment of
such existing Undivided Interest.
(b)Combination of Undivided Interests. The Administrative Agent may at any time,
as of the last day of any Yield Period for two or more existing Undivided
Interests or on or before the date of any proposed Purchase of an Undivided
Interest pursuant to Sections 1.01 and 1.04 by Purchaser, on such last day or
such date of Purchase, as the case may be, combine into one new Undivided
Interest such existing and/or proposed Undivided Interests or any combination
thereof, such new Undivided Interest having a Purchaser's Investment equal to
the aggregate Purchaser's Investments of such Undivided Interests so combined.
(c)Effect of Division or Combination. On and after any division or combination
of Undivided Interests as described above, each of the new Undivided Interests
resulting from such division, or the new Undivided Interest resulting from such
combination, as the case may be, shall be a separate Undivided Interest having a
Purchaser's Investment as set forth above, and shall take the place of such
existing Undivided Interest or Undivided Interests or proposed Undivided
Interest, as the case may be, in each case under and for all purposes of this
Agreement. The Administrative Agent agrees to give Seller prompt notice of each
such division or combination.
SECTION 3.07.Treatment of Collections and Deemed Collections. Seller shall pay
to Servicer all Collections deemed received by Seller pursuant to Section
3.03(a), and Servicer shall hold or distribute such Collections to the same
extent as if such Collections had actually been received on the date of such
delivery to Servicer. If Collections are then being paid to the Administrative
Agent, or lock boxes or accounts directly or indirectly owned or controlled by
the Administrative Agent, Servicer shall forthwith cause such deemed Collections
to be paid to the Administrative Agent or to such lock boxes or accounts, as
applicable. So long as Seller shall hold any Collections or deemed Collections
required to be paid to Servicer or the Administrative Agent, it shall hold such
Collections in trust and separate and apart from its own funds.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01.Fees. Seller shall pay to the Administrative Agent, the structuring
agent and Purchaser certain fees on such dates and in such amounts as set forth
in the letter agreement dated as of June 30, 1995 between the Administrative
Agent and Seller (as amended from time to time, the "Fee Letter").
SECTION 4.02.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 Undivided 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
Purchaser's Investments or Earned Discount owned by, owed to or funded by it or
any other amounts due under this Agreement in respect of any Undivided 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 changes in the rate
of tax on or based upon the overall net income of such Affected Party imposed by
the United States of America and any state, local or foreign jurisdiction in
which such Affected Party is subject to income taxation); or
(B)shall impose, modify or deem applicable any reserve (including, without
limitation, any reserve imposed by the Federal Reserve Board, but excluding any
reserve included in the determination of Earned Discount), special deposit 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; 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 Undivided Interest owned or
funded by any Affected Party, or its obligations or rights, if any, to make
Purchases or Reinvestments or to provide funding therefor;
and the result of any of the foregoing is or would be
(x)to increase the cost or to impose a cost on (i) 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 Support
Agreement, or any Funding, or any commitment of such Affected Party with respect
to any of the foregoing, or (II) the Administrative Agent for continuing its, or
Seller's, relationship with Purchaser,
(y)to reduce the amount of any sum received or receivable by an Affected Party
under this Agreement or the Certificate of Assignments, or under any Program
Support Agreement with respect thereto, or
(z)in the sole determination of such Affected Party, to materially reduce the
rate of return on the capital of an Affected Party as a consequence of its
obligations hereunder or arising in connection herewith to a level below that
which such Affected Party could otherwise have achieved,
then within thirty (30) thirty days after written demand by such Affected Party
(which demand shall be accompanied by a statement setting forth in reasonable
detail the basis of such demand), 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 Administrative Agent
of any event of which it has actual knowledge which will entitle such Affected
Party to compensation pursuant to this Section 4.02; 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 4.02,
an Affected Party will use reasonable averaging and attribution methods. Any
Affected Party when making a claim under this Section 4.02 shall submit to
Seller a certificate setting forth such increased cost or reduced return in
reasonable detail, which certificate shall, in the absence of manifest error, be
presumed correct as to the amount thereof.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01.Conditions Precedent to Initial Purchase. The initial Purchase
hereunder is subject to the condition precedent that the Administrative Agent
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 Administrative Agent:
(a)A Certificate of Assignments;
(b)A copy of the resolutions of the Board of Directors of Seller approving this
Agreement, the Certificate of Assignments and the other Agreement Documents to
be delivered by it hereunder and the transactions contemplated hereby, certified
on behalf of Seller by Seller's Secretary or Assistant Secretary; a copy of the
resolutions of the Board of Directors of Guarantor approving this Agreement and
the other Agreement Documents to be delivered by it hereunder and the
transactions contemplated hereby, certified on behalf of Guarantor by
Guarantor's Secretary or Assistant Secretary;
(c)Good standing or foreign qualification certificates for Seller issued by the
Secretaries of State of Alabama, California, Colorado, New Hampshire, North
Carolina, Maine and South Dakota; and good standing or foreign qualification
certificates for Guarantor issued by the Secretaries of State of Delaware and
California;
(d)A certificate of the Secretary or Assistant Secretary of each of Seller and
Guarantor certifying on behalf of such Person the names and true signatures of
the officers authorized on its behalf to sign this Agreement and the other
Agreement Documents to be delivered by it hereunder (on which certificate the
Administrative Agent and Purchaser may conclusively rely until such time as the
Administrative Agent shall receive a revised certificate meeting the
requirements of this subsection (d));
(e)The Articles of Incorporation of Seller and the Certificate of Incorporation
of Guarantor, duly certified by the Secretary of State or similar office of the
State under the laws of which the Seller or Guarantor, as the case may be, was
organized, as of a recent date, together with a copy of the By-laws of Seller
and Guarantor, duly certified on behalf of such Person by the Secretary or an
Assistant Secretary of Seller and Guarantor, respectively;
(f)Acknowledgment copies (or other evidence of filing reasonably satisfactory to
the Administrative Agent), of proper Financing Statements (Form UCC-1), filed on
or prior to the date of the initial Purchase naming Seller as the debtor and
seller of Receivables or an undivided interest therein and Purchaser as the
secured party and purchaser, or other, similar instruments or documents, as may
be necessary or, in the reasonable opinion of the Administrative Agent,
desirable under the UCC or any comparable law of all appropriate jurisdictions
to perfect Purchaser's interests in all Undivided Interests assigned to it or
otherwise created or arising hereunder;
(g)A search report provided in writing to the Administrative Agent listing all
effective Financing Statements filed in the jurisdictions in which filings were
made pursuant to subsection (f) above and in such other jurisdictions that
Administrative Agent shall reasonably request, together with copies of such
financing statements (none of which shall cover the Pool or any part thereof);
(h)executed copies of all releases, if any, necessary to release all security
interests and other rights or interests of any Person in the Pool or any part
thereof previously granted by any Person, together with copies of the relevant
financing statements (Form UCC-3);
(i)Duly executed copies of Lock-Box Agreements with each of the Lock-Box Banks;
(j)A favorable opinion of Powell, Goldstein, Xxxxxx & Xxxxxx, counsel for Seller
and Guarantor, in substantially the form of Exhibit 5.01(j)-1, and a favorable
opinion of Xxxxxxx X. Xxxxxxxx, Esq., in-house counsel for Seller and Guarantor,
in substantially the form of Exhibit 5.01(j)-2;
(k)A favorable opinion of Xxxxx, Xxxxx & Xxxxx, counsel for the Administrative
Agent, substantially in the form of Exhibit 5.01(k);
(l)Such powers of attorney as the Administrative Agent shall reasonably request
to enable the Administrative Agent to collect all amounts due under any and all
Pool Receivables;
(m)A Periodic Report as of the most recent Month End Date; and
(n)A report from Coopers & Xxxxxxx or other independent certified public
accountants or other auditors acceptable to the Administrative Agent, with
respect to the application of certain procedures to Seller's books and records
relating to the Pool Receivables.
SECTION 5.02.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 ("Conditions Precedent") that on
the date of such Purchase or Reinvestment the following statements 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):
(a)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,
(b)No event has occurred and is continuing, or would result from such Purchase
or Reinvestment, that constitutes a Termination Event or Unmatured Termination
Event,
(c)After giving effect to each proposed Purchase or Reinvestment, the Aggregate
Purchaser's Investments will not exceed the Purchase Limit and Aggregate
Required Allocations will not exceed the Required Allocations Limit, and
(d)The Commitment Termination Date shall not have occurred;
provided, however, the absence of the occurrence and continuance of an Unmatured
Termination Event shall not be a Condition Precedent to
(i)any Reinvestment being made with the proceeds of Collections that were, on
the same day, applied in reduction of the Aggregate Purchaser's Investments, or
(ii)any other Reinvestment on any day which does not cause the Aggregate
Purchaser's Investments, after giving effect to such Reinvestment (and to any
Reinvestment referred to in clause (i) next above) to exceed the Aggregate
Purchaser's Investments as of the opening of business on such day.
SECTION 5.03.Additional Condition Precedent to Purchases. Each Purchase
(including the initial Purchase) shall be subject to the further condition
precedent that the Purchase Termination Date shall not have occurred.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01.Representations and Warranties - Seller. Seller represents and
warrants as follows:
(a)Organization, Good Standing and Qualification. It is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do business, and is
in good standing, and has obtained all necessary licenses and approvals, in
every jurisdiction where the ownership of property or the nature of its business
requires it to be so qualified or have such licenses and approvals except where
the failure to so qualify or have such licenses and approvals would not have a
Material Adverse Effect.
(b)Power and Authority; Due Authorization. The execution, delivery and
performance by it of this Agreement, the Certificate of Assignments and any
other Agreement Documents to be delivered by it hereunder and thereunder, and
the assignment of Undivided Interests and the other transactions contemplated
hereby and thereby, are within its corporate powers, have been duly authorized
by all necessary corporate action, do not (i) contravene (1) its charter or
by-laws, or (2) any law, rule or regulation or any contractual restriction to
which Seller or its property is subject and, in the case of this clause (2),
which contravention would have a Material Adverse Effect; (ii) result in or
require the creation of any Lien upon or with respect to any of its properties
other than as specifically contemplated by this Agreement; or (iii) violate any
law or any order, rule, or regulation applicable to Seller of any court or of
any federal or state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over Seller or any of its
properties, which violation would have a Material Adverse Effect; and no
transaction contemplated hereby requires compliance with Article 6 of the
Alabama UCC.
(c)Valid Sale; Binding Obligations. This Agreement constitutes a valid sale,
transfer, and assignment of the Undivided Interests to Purchaser, enforceable
against creditors of, and purchasers from, Seller. This Agreement, the
Certificate of Assignments and each other Agreement Document constitute Seller's
legal, valid and binding obligations enforceable against it in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(d)No Proceedings. Except as listed on Schedule 6.01(d), there are no
proceedings or investigations pending or, to the best of its knowledge,
threatened, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement, the Certificate of Assignments or any other Agreement Document to
which Seller is a party, (ii) seeking to prevent the sale and assignment of any
Receivable, Undivided Interest, the issuance of the Certificate of Assignments
or the consummation of any of the other transactions contemplated by this
Agreement, or any other Agreement Document to which Seller is a party, (iii)
seeking any determination or ruling that could reasonably be expected to have a
Material Adverse Effect or (iv) seeking to adversely affect the federal income
tax attributes of the Purchases hereunder or the Certificate of Assignments.
(e)Government Approvals. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance
by it of this Agreement, the Certificate of Assignments or any other document or
instrument to be delivered hereunder except for the filing of the Financing
Statements referred to in Article V, all of which, at the time required in
Article V, shall have been duly made and shall be in full force and effect.
(f)Financial Condition. The balance sheet of Seller as at June 30, 1994, and the
related statements of earnings, stockholders' equity and statement of cash flows
of Seller for the fiscal year then ended, and the balance sheet of Seller as at
March 26, 1995, and the related statements of earnings, stockholders' equity and
statement of cash flows of Seller for the nine fiscal months then ended, in each
case certified on behalf of Seller by Seller's chief financial or accounting
officer, copies of which have been furnished to the Administrative Agent, fairly
present the financial condition of Seller as at such dates and the results of
the operations of Seller for the periods ended on such dates, all in accordance
with GAAP consistently applied and since June 30, 1994, there has been no
material adverse change in Seller's financial condition, business, assets,
prospects or operations.
(g)Litigation. No injunction, decree or other decision has been issued or made
by any court, governmental agency or instrumentality thereof in a proceeding to
which Seller is a party that prevents, and, to its knowledge, no threat by any
Person has been made in writing to attempt to obtain any such decision that
would prevent, Seller from conducting a material part of its business
operations.
(h)Margin Regulations. No proceeds of any Purchase will be used to acquire any
security in any transaction which is subject to Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended; and the use of all funds obtained
by Seller under this Agreement will not conflict with or contravene any of
Regulations G, T, U and X promulgated by the Board of Governors of the Federal
Reserve System from time to time.
(i)Quality of Title. Each Pool Receivable, together with the related Contract
and all purchase orders and other agreements related to such Pool Receivable, is
owned by Seller free and clear of any Adverse Claim (other than any Adverse
Claim arising solely as the result of any action taken by Purchaser or by the
Administrative Agent) except as provided herein; if such Pool Receivable was
purchased by Seller from an Originator, Seller acquired such Pool Receivable in
a true sale transaction, which sale is enforceable against all creditors of, and
purchasers from, such Originator, and, except as set forth on Schedule 6.01(i),
Seller took all steps necessary to perfect its ownership interest in such Pool
Receivable against such Originator; when Purchaser makes a Purchase, it shall
have acquired and shall continue to have maintained a valid and perfected
undivided percentage ownership interest to the extent of its Undivided Interest
in each Pool Receivable and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim (other than any Adverse Claim
arising solely as the result of any action taken by Purchaser or by the
Administrative Agent); and no effective financing statement or other instrument
similar in effect covering the Pool or any part thereof is on file in any
recording office except such as may be filed (i) in favor of Seller in
accordance with the Contracts, or in accordance with this Agreement with respect
to Pool Receivables purchased by Seller from any Originator, (ii) in favor of
Purchaser or the Administrative Agent in accordance with this Agreement or in
connection with any Adverse Claim arising solely as the result of any action
taken
by Purchaser or by the Administrative Agent, or (iii) in favor of BofA, as
Collateral Trustee, or any successor in such capacity, as described in Section
11.01.
(j)Accurate Reports. Each Periodic Report (if prepared by Seller, or to the
extent that information contained therein is supplied by Seller), information,
exhibit, financial statement, document, book, record or report furnished at any
time by Seller to the Administrative Agent, Purchaser or any Owner in connection
with this Agreement is accurate in all material respects as of its date or as of
the date so furnished, and no such document contains any material misstatement
of fact or omits to state a material fact or any fact necessary to make the
statements contained therein not materially misleading in light of the
circumstances when made.
(k)Offices. The chief place of business and chief executive office of Seller and
each Originator are located at the address of Seller or the applicable
Originator referred to in Section 15.02, and the offices where Seller keeps all
its books, records and documents evidencing Pool Receivables, the related
Contracts and all purchase orders and other agreements related to such Pool
Receivables are located at the addresses specified in Schedule 6.01(k) (or, in
each case, at such other locations, notified to the Administrative Agent in
accordance with Section 7.01(f), in jurisdictions where all action required by
Section 8.05 has been taken and completed).
(l)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 6.01(l) (or have been notified to the
Administrative Agent in accordance with Section 7.03(d)).
(m)Eligible Receivables. Each Receivable included in the Net Pool Balance as an
Eligible Receivable on the date of any Purchase or Reinvestment shall be an
Eligible Receivable on such date.
(n)Compliance With Certain Statutes. Each Purchase of an Undivided Interest from
Seller hereunder, and each Reinvestment of Collections in Pool Receivables made
hereunder, will constitute (a) a "current transaction" within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended, and (b) a purchase or
other acquisition of notes, drafts, acceptances, open accounts receivable or
other obligations representing part or all of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of the Investment
Company Act of 1940, as amended.
(o)No Defaults. Seller is not in default under or with respect to any
contractual obligation or any law or court order in any respect which could
reasonably be expected to have a Material Adverse Effect.
(p)Originators. Each Originator is a Wholly Owned Subsidiary of Seller or
Guarantor.
SECTION 6.02.Representations and Warranties - Guarantor. Guarantor represents
and warrants as follows:
(a)Organization, Good Standing and Qualification. It is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do business, and is
in good standing, and has obtained all necessary licenses and approvals in every
jurisdiction where the nature of its business requires it to be so qualified or
have such licenses and approvals except where the failure to so qualify or have
such licenses and approvals would not have a Material Adverse Effect.
(b)Power and Authority; Due Authorization. The execution, delivery and
performance by it of this Agreement and any other Agreement Documents to be
delivered by it hereunder and thereunder, are within its corporate powers, have
been duly authorized by all necessary corporate action, do not (i) contravene
(1) its charter or by-laws, or (2) any law, rule or regulation or any
contractual restriction to which Guarantor or its property is subject and, in
the case of this clause (2), which contravention would have a Material Adverse
Effect, (ii) do not result in or require the creation of any Lien upon or with
respect to any of its properties other than as specifically contemplated by this
Agreement; or (iii) violate any law or any order, rule, or regulation applicable
to Seller of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over Seller or any of its properties, which violation would have a Material
Adverse Effect; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law.
(c)Binding Obligations. This Agreement and each other Agreement Document to
which Guarantor is a party constitute its legal, valid and binding obligations
enforceable against it in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d)No Proceedings. Except as listed on Schedule 6.01(d), there are no
proceedings or investigations pending or, to the best of its knowledge,
threatened, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement or any other Agreement Document to which Guarantor is a party, (ii)
seeking to prevent the consummation of any of the other transactions
contemplated by this Agreement, or any other Agreement Document to which
Guarantor is a party, or (iii) seeking any determination or ruling that could
reasonably be expected to have a Material Adverse Effect.
(e)Government Approvals. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by it of this Agreement
or any other document or instrument to be delivered hereunder.
(f)Financial Condition. The consolidated balance sheet of Guarantor and its
consolidated Subsidiaries as at June 30, 1994, and the related statements of
earnings, stockholders' equity and statement of cash flows of Guarantor and its
consolidated Subsidiaries for the fiscal year then ended certified by Ernst &
Young, independent public accountants, and the consolidated balance sheet of
Guarantor and its consolidated
Subsidiaries as at March 26, 1995, and the related statements of earnings,
stockholders' equity and statement of cash flows of Guarantor and its
consolidated Subsidiaries for the nine fiscal months then ended, certified on
behalf of Guarantor by Guarantor's chief financial or accounting officer, copies
of which have been furnished to the Administrative Agent, fairly present the
consolidated financial condition of Guarantor and its consolidated Subsidiaries
as at such dates and the consolidated results of the operations of Guarantor and
its consolidated Subsidiaries for the periods ended on such dates, all in
accordance with GAAP consistently applied and since June 30, 1994, there has
been no material adverse change in the financial condition, business, assets,
prospects or operations of Guarantor and its consolidated Subsidiaries, taken as
a whole.
(g)Litigation. No injunction, decree or other decision has been issued or made
by any court, governmental agency or instrumentality thereof in a proceeding to
which Guarantor is a party that prevents, and, to its knowledge, no threat by
any Person has been made in writing to attempt to obtain any such decision that
would prevent, Guarantor from conducting a material part of its business
operations.
(h)Accurate Reports. All information, exhibits, financial statements, documents,
books, records or reports furnished at any time by Guarantor to the
Administrative Agent, Purchaser or any Owner in connection with this Agreement
is accurate in all material respects as of its date or as of the date so
furnished, and no such document contains any material misstatement of fact or
omits to state a material fact or any fact necessary to make the statements
contained therein not materially misleading in light of the circumstances when
made.
(i)No Defaults. Guarantor is not in default under or with respect to any
contractual obligation or any law or court order in any respect which could
reasonably be expected to have a Material Adverse Effect.
ARTICLE VII
GENERAL COVENANTS
SECTION 7.01.Affirmative Covenants. From the date hereof until the End Date,
unless the Administrative Agent shall otherwise consent in writing:
(a)Compliance with Laws, Etc. Seller will, and Guarantor will, and will cause
Seller to, comply in all respects with all applicable laws, rules, regulations,
orders and contractual obligations with respect to it, its business and
properties and all Pool Receivables and related Contracts, the noncompliance
with which would, either singly or in the aggregate, have a Material Adverse
Effect.
(b)Conduct of Business and Preservation of Corporate Existence. Seller will, and
Guarantor will, and will cause Seller to, continue to engage in business of
substantially the same general type as now conducted by it, and preserve, renew
and keep in full force and effect its corporate existence and take all action to
maintain all rights, privileges and franchises material to the conduct of its
business, and comply with all its contractual obligations and all Requirements
of Law, except where such failure would not have a Material Adverse Effect.
(c)Audits. Subject to contractual, statutory, regulatory or other similar
limitations regarding confidential or proprietary information, Seller will, and
Guarantor will, and will cause Seller to, at any time and from time to time
during regular business hours upon at least three (3) Business Days' prior
written notice (unless a Termination Event has occurred and is continuing, in
which case, no such notice shall be required), permit the Administrative Agent,
or its agents or representatives, (i) 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 Receivables, including, without limitation, the related Contracts, purchase
orders and other agreements, and (ii) to visit the offices and properties of
Seller and Guarantor for the purpose of examining such materials described in
clause (i) next above, and to discuss matters relating to Pool Receivables or
Seller's or Guarantor's performance hereunder with any of the officers or
employees of Seller or Guarantor having knowledge of such matters. Seller and
Guarantor expressly reserve the right to restrict access to any of their
facilities in accordance with reasonably adopted procedures relating to safety
and security. Article XIII notwithstanding, the reasonable costs and expenses
incurred by the Administrative Agent or its agents or representatives in
connection with any such examinations, copies, abstracts, visits or discussions
occurring or made (i) more than twice during any calendar year, (ii) prior to
the occurrence of a Termination Event and (iii) other than in connection with a
change by Seller of its information systems, shall be for the account of
Purchaser. Each Owner of Undivided Interests, by acceptance of the benefits of
such ownership, and the Administrative Agent agree to use their reasonable
efforts to ensure that any information concerning Guarantor and its Subsidiaries
obtained by the Administrative Agent pursuant to this Section 7.01(c) which is
not contained in a report or other document filed by Guarantor or Seller with
the SEC or otherwise available to the public generally or to the Administrative
Agent from a source other than Seller or Guarantor will, to the extent permitted
by law and except as may be required by subpoena, by any agency or other
governmental entity which regulates the Administrative Agent's or any such
Owner's business under federal, state or local law (the "Regulators") or in the
normal course of the business operations of the Administrative Agent or such
Owner, be treated confidentially by the Administrative Agent and each such Owner
and, so long as no Termination Event has occurred and is then continuing
hereunder, will not be distributed or otherwise made available to any Person,
other than the Regulators, any Program Support Provider or potential Program
Support Provider, any rating agency then rating the Commercial Paper Notes and
the employees, authorized agents, Affiliates or representatives of the
Administrative Agent or such Owner, and except as may otherwise be required by
law, unless the Administrative Agent or such Owner, as applicable, shall have
given Guarantor and Seller ten (10) days' prior written notice of such
distribution or other disclosure. In the event that the Administrative Agent or
any such Owner is required by law to disclose any information concerning
Guarantor and its Subsidiaries (or any of them), the Administrative Agent or
such Owner shall provide prompt written notice thereof (to the extent
practicable, prior to disclosure; otherwise promptly after such disclosure) to
Guarantor and Seller so that Guarantor and Seller (or either of them) may seek a
protective order or other appropriate remedy.
(d)Keeping of Records and Books of Account. Seller will, and Guarantor will
cause Seller to, 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 Receivables (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, and
Guarantor will cause Seller to, at Seller's expense timely and fully perform and
comply with all provisions, covenants and other promises required to be observed
by it under the Contracts related to the Pool Receivables, all purchase orders
and other agreements related to such Pool Receivables subject, however, to the
right of Seller to dispute or contest its obligations so to perform or comply
with any such provision, covenant or other promise where it reasonably believes
that such performance or compliance is not required or is not in the best
interest of Seller, and such failure to perform or comply would not have a
material adverse effect on the collectability or enforceability of the related
Pool Receivable or Receivables.
(f)Location of Records. Seller will, and Guarantor will cause Seller to, keep
its chief place of business and chief executive office, and the offices where it
keeps its records concerning the Pool Receivables, all related Contracts and all
purchase orders and other agreements related to such Pool Receivables (and all
original documents relating thereto), at the address(es) of Seller referred to
in Section 6.01(k) or, upon thirty (30) days' prior written notice to the
Administrative Agent, at such other locations in jurisdictions where all action
required by Section 8.05 shall have been taken and completed.
(g)Credit and Collection Policies. Seller will, and Guarantor will cause Seller
to, comply in all material respects with its Credit and Collection Procedure and
all other policies and practices of Seller referred to in, or discussed in
connection with, the due diligence report prepared by Coopers & Xxxxxxx on or
prior to the date hereof in regard to each Pool Receivable and the related
Contract and otherwise comply with past business practices in regard to Pool
Receivables.
(h)Collections. Seller will, and Guarantor will cause Seller to, instruct all
Obligors to cause all Collections of Pool Receivables to be deposited directly
with a Lock-Box Bank. If a Trigger Event has occurred and is continuing, Seller
will, and Guarantor will cause Seller to, segregate all payments that do not
constitute Collections from the lock-box accounts into which any Collections are
deposited.
(i)Marking of Records. Seller will, and Guarantor will cause Seller to, at its
expense, xxxx its master data processing records evidencing Pool Receivables to
the extent reasonably practicable and xxxx the related Contracts with a legend
evidencing that a Certificate of Assignments related to such Pool Receivables
and related Contracts have been sold to Purchaser in accordance with this
Agreement.
(j)Bankruptcy Remote Subsidiary. Seller will, and Guarantor will cause Seller
to, promptly (and in any event within 90 days) after the request of the
Administrative Agent, which may be given at any time after the occurrence of a
Trigger Event, (i) form a new, wholly owned, bankruptcy remote Subsidiary, in
form and substance reasonably satisfactory to the Administrative Agent, (ii)
transfer, in a true sale, contribution to capital or combination thereof, all of
its right, title and interest in the Pool to such Subsidiary, pursuant to
documentation substantially in the form of Exhibit 7.01(j)-1 and otherwise
reasonably satisfactory in form and substance to the Administrative Agent, (iii)
cause such Subsidiary to become the seller hereunder pursuant to amendments to
the Agreement Documents reasonably satisfactory to the Administrative Agent and
(iv) deliver to Purchaser and the Administrative Agent an opinion of counsel,
substantially in the form of Exhibit 7.01(j)-2, from counsel reasonably
acceptable to the Administrative Agent.
SECTION 7.02.Reporting Requirements. From the date hereof until the End Date,
unless the Administrative Agent shall otherwise consent in writing:
(a)Quarterly Financial Statements. Guarantor will, furnish to the Administrative
Agent as soon as available and in any event within sixty (60) days after the end
of each of the first three quarters of each fiscal year of Guarantor copies of
such consolidated and consolidating (showing Seller) financial statements as
Guarantor may prepare for its own use for the fiscal quarter then ended,
prepared in conformity with GAAP applied on a Consistent Basis and certified by
the chief financial officer, chief executive officer, treasurer or chief
accounting officer of Guarantor; together with a certificate from such officer
containing a computation of, and showing compliance with, the financial
restrictions contained in Section 7.04.
(b)Annual Financial Statements. Guarantor will furnish to the Administrative
Agent as soon as available and in any event within ninety (90) days after the
end of each fiscal year of Guarantor, copies of both the consolidated and
consolidating (showing Seller) balance sheets as at the end of such fiscal year,
and the related statements of income and retained earnings, and, with respect to
the consolidated statements, related statements of cash flows and changes in
financial position for the fiscal year then ended, or statements providing
substantially similar information, in each case prepared in reasonable detail
and in accordance with GAAP applied on a Consistent Basis and, with respect to
the consolidated statements, certified by nationally recognized public
accountants; together with a certificate from such accountants containing, as
applicable, a computation of the financial restrictions contained in Section
7.04 and a statement that to the best knowledge of such accountants the
restrictions in Section 7.04 have not been violated.
(c)Reports to Holders and Exchanges. Seller will, and Guarantor will, and will
cause Seller to, furnish to the Administrative Agent, in addition to the reports
required by subsections (a) and (b) next above, promptly upon the Administrative
Agent's request, copies of any reports specified in such request which it sends
its public stockholders generally, and any reports or registration statements
that it files with the SEC or any national securities exchange other than
registration statements relating to employee benefit plans and to registrations
of securities for selling security holders.
(d)ERISA. Seller will, and Guarantor will, and will cause Seller to, furnish to
the Administrative Agent, promptly after the filing or receiving thereof, copies
of all reports and notices with respect to any Reportable Event defined in
Article IV of ERISA which it or any of its Affiliates files under ERISA with the
Internal Revenue Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which it or any of its Affiliates receives from the
Pension Benefit Guaranty Corporation.
(e)Termination Events. Seller will, and Guarantor will, and will cause Seller
to, furnish to the Administrative Agent, as soon as possible and in any event
within three (3) Business Days after any Executive Officer of Guarantor or
Seller has notice or actual knowledge of the occurrence of each Termination
Event and each Unmatured Termination Event, a written statement of an Executive
Officer of Seller or Guarantor, as the case may be, setting forth details of
such event and the action that Seller or Guarantor, as the case may be, proposes
to take with respect thereto.
(f)Litigation. Seller will, and Guarantor will, and will cause Seller to,
furnish to the Administrative Agent as soon as possible and in any event within
five Business Days of Seller's or Guarantor's knowledge thereof, notice of (i)
the commencement of or any development in any litigation, investigation or
proceeding which may exist at any time which could reasonably be expected to
have a Material Adverse Effect and (ii) any material adverse development in
previously disclosed litigation.
(g)Credit and Collection Procedure. Seller will, and Guarantor will cause Seller
to, deliver to the Administrative Agent any proposed material changes in the
Credit and Collection Procedure at least thirty (30) days prior to the
implementation of such changes.
(h)Other. Seller will, and Guarantor will, and will cause Seller to, promptly,
from time to time, furnish to the Administrative Agent such other information,
documents, records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of Seller or Guarantor as the Administrative
Agent may from time to time reasonably request in order to protect the interests
of the Administrative Agent or Purchaser under or as contemplated by this
Agreement.
SECTION 7.03.Negative Covenants. From the date hereof until the End Date,
without the prior written consent of the Administrative Agent:
(a)Sales, Liens, Etc. Seller will not, and Guarantor will not permit Seller to,
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 Receivable or related Contract or Related Security,
or any interest therein, or any lock-box account to which any Collections of any
Pool Receivable are sent, or any right to receive income from or in respect of
any of the foregoing.
(b)Extension or Amendment of Receivables. Seller will not, and Guarantor will
not permit Seller to, except as otherwise permitted in Section 8.02(c), extend,
amend or otherwise modify the terms of any Pool Receivable,
or amend, modify or waive any material term or condition of any Contract related
thereto, or any term or condition of any such Contract that relates to
collectability of the related Receivable.
(c)Change in Business or Credit and Collection Procedure. Seller will not, and
Guarantor will not permit Seller to, cease to engage in business of
substantially the same general type now conducted by it, or make any material
change in the Credit and Collection Procedure.
(d)Change in Payment Instructions to Obligors. Seller will not, and Guarantor
will not permit Seller to, add or terminate any bank as a Lock-Box Bank from
those listed in Schedule 6.01(l) or 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 the Administrative Agent shall have received
notice of such addition, termination or change and duly executed copies of
Lock-Box Agreements with each new Lock-Box Bank.
(e)Deposits to Special Accounts. Seller will not, and Guarantor will not permit
Seller to, 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.
(f)Purchase and Sale Agreement. Seller will not, and Guarantor will not permit
Seller to, amend, waive or terminate the Purchase and Sale Agreement or any
material provision thereof.
SECTION 7.04. Financial Covenants. From the date hereof until the End Date, the
Guarantor will:
(a)maintain as of and at the end of each of its fiscal quarters, a ratio of EBIT
to Interest Expense of at least 0.8 to 1.0; provided that the ratio required to
be maintained in this Section 7.04(a) shall be subject to Section 7.04(c);
provided, however that any A-12 Program Financial Statements Adjustments which
were recognized in accordance with GAAP during the fiscal year ending as of the
end of such fiscal quarter shall be added back into the calculation of the
covenant set forth in this Section 7.04(a), and provided further that the ratio
required to be maintained in this Section 7.04(a) shall be subject to Section
7.04(c).
(b)maintain at all times a ratio of Total Debt to Total Capital (calculated in
percentage terms as at the end of each fiscal quarter, beginning with the
quarter ending March 26, 1995) of not more than eighty percent (80%).
(c)maintain at all times a ratio of Adjusted Working Capital to Senior Debt of
at least 1.75 to 1.0, provided that if the ratio of EBIT to Interest Expense
(calculated in accordance with Section 7.04(a) above) is less than 1.20 to 1.0,
then the Guarantor will maintain a ratio of Adjusted Working Capital to Senior
Debt of at least 2.0 to 1.0. For purposes of this Section 7.04(c), the A-12
Program Financial Statements Adjustments previously recognized in accordance
with GAAP shall be added back into the computation of Adjusted Working Capital
unless the A-12 Program Financial Statements Adjustments equal or exceed
$50,000,000. If the A-12 Program Financial Statements Adjustments equal or
exceed $50,000,000, then all A-12 Program Financial
Statements Adjustments shall not be added back into the computation of Adjusted
Working Capital in this Section 7.04(c).
The covenants contained in this Section 7.04 shall be calculated in the same
manner as the corresponding covenants contained in the Bank Credit Agreement are
calculated. If the financial covenants set forth in the Bank Credit Agreement
which correspond to the financial covenants set forth in this Section 7.04 are
amended, the Guarantor will promptly provide notice of such event and a copy of
such amendments to the Administrative Agent. If requested by the Administrative
Agent, this Agreement shall be amended to reflect such changes, and the
Guarantor and the Seller hereby agree to promptly execute and deliver such
amendments hereto as the Administrative Agent shall reasonably request to effect
the foregoing.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01.Designation of Servicer. (a) Seller 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 8.01. Until the Administrative Agent
gives to Seller a Successor Notice (as defined in Section 8.01(b)), Seller 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 Seller's receipt of a notice
from the Administrative Agent of the Administrative Agent's designation of a new
Servicer (a "Successor Notice"), Seller agrees that it will terminate its
activities as Servicer hereunder in a manner that the Administrative Agent
believes will facilitate the transition of the performance of such activities to
the new Servicer, and the Administrative Agent (or, its designee) shall assume
each and all of Seller's said obligations to service and administer such
Receivables, on the terms and subject to the conditions herein set forth, and
Seller shall use its reasonable efforts to assist the Administrative Agent (or
its designee) in assuming such obligations. From and after the acceptance by a
new Servicer of its appointment as Servicer hereunder, the prior Servicer shall
be released from its obligations as Servicer under this Agreement, other than
its obligations set forth in the previous sentence. The Administrative Agent
agrees not to give Seller a Successor Notice until after the occurrence and
during the continuance of any Termination Event (any such Termination Event or
other event being herein called a "Servicer Transfer Event"), in which case such
Successor Notice may be given at any time in the Administrative Agent's
discretion. If Seller disputes the occurrence of a Servicer Transfer Event,
Seller may take appropriate action to resolve such dispute; provided that Seller
must terminate its activities hereunder as Servicer and allow the newly
designated Servicer to perform such activities on the date provided by the
Administrative Agent as described above, notwithstanding the commencement or
continuation of any proceeding to resolve the aforementioned dispute.
(c)Subcontracts. Servicer may, with the prior consent of the Administrative
Agent, subcontract with any other Person for servicing, administering or
collecting the Pool Receivables; provided that such Person agrees to conduct
such duties in accordance with the terms of this Agreement; and provided,
further, however, that Servicer shall remain liable for the performance of the
duties and obligations of Servicer pursuant to the terms hereof; and, provided,
further, that the Administrative Agent shall have the right to terminate or to
continue any such subcontract upon the designation of a new Servicer.
SECTION 8.02.Duties of Servicer. (a) Appointment; Duties in General. Each of
Seller, Purchaser and the Administrative Agent hereby appoints as its agent
Servicer, as from time to time designated pursuant to Section 8.01, to enforce
its rights and interests in and under the Pool Receivables, the Related Security
and the Contracts. 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 laws, rules and regulations, with reasonable
care and diligence, and in accordance with the Credit and Collection Procedure.
(b)Allocation of Collections; Segregation. Servicer shall set aside for the
account of Seller and Purchaser their respective allocable shares of the
Collections of Pool Receivables in accordance with Sections 3.01 and 3.02 but
shall not be required (unless otherwise requested by the Administrative Agent)
to segregate the funds constituting such portions of such Collections, or to
segregate the respective allocable shares of Purchaser and any Program Support
Party, if applicable, prior to the remittance thereof in accordance with such
Sections. If instructed by the Administrative Agent at any time, Servicer shall
segregate and deposit with a bank (which may be BofA) designated by the
Administrative Agent such allocable shares of Collections of Pool Receivables,
set aside for Purchaser, any Program Support Party and any other assignee from
Purchaser of any Undivided Interest, on the first Business Day following receipt
by Servicer of such Collections in immediately available funds.
(c)Modification of Receivables. So long as no Termination Event or Unmatured
Termination Event shall have occurred and be continuing, Seller, while it is
Servicer, may, in accordance with the Credit and Collection Procedure, (i)
extend the maturity or adjust the Unpaid Balance of any Defaulted Receivable as
Seller may reasonably determine to be appropriate to maximize Collections
thereof; provided that, no such extension shall be for more than a total of
thirty (30) days or cause any Defaulted Receivable to be an Eligible Receivable
and, after giving effect to such extension of maturity, the Aggregate Required
Allocations will not exceed the Required Allocations Limit, and (ii) adjust the
Unpaid Balance of any Receivable to reflect the reductions or cancellations
described in Section 3.03(a)(i).
(d)Documents and Records. Seller shall deliver to Servicer, and Servicer shall
hold in trust for Seller and Purchaser 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, except for Excluded Data.
(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, in the event Seller or an
Affiliate of the Seller is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses (excluding overhead and any subservicing costs)
of Servicer of servicing, collecting and administering the Pool Receivables to
the extent not covered by the Servicer's Fee received by it, and (ii) the
Collections of any Receivable that is not a Pool Receivable. Servicer, if other
than Seller or an Affiliate of the Seller, shall, as soon as practicable upon
demand, deliver to Seller all documents, instruments and records in its
possession that evidence or relate to Receivables of Seller other than Pool
Receivables, and 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 on
the End Date.
SECTION 8.03.Rights of the Administrative Agent. (a) Notice to Obligors. At any
time following the occurrence and during the continuance of a Termination Event,
the Administrative Agent may notify the Obligors of Pool Receivables, or any of
them, of the ownership of Undivided Interests by Purchaser.
(b)Notice to Lock-Box Banks. At any time following the earliest to occur of (i)
the occurrence of a Termination Event, (ii) any of the Conditions Precedent
shall not be satisfied and the Administrative Agent, by written notice to Seller
and Servicer, shall have requested implementation of the Settlement procedures
set forth in Section 3.02, and (iii) the warranty in Section 6.01(i) shall no
longer be true with respect to a material portion of the Pool Receivables, the
Administrative Agent is hereby authorized to give notice to the Lock-Box Banks,
as provided in the Lock-Box Agreements, of the transfer to the Administrative
Agent of dominion and control over the lock-box accounts to which the Obligors
of Pool Receivables make payments. Seller hereby transfers to the Administrative
Agent, effective when the Administrative Agent shall give notice to the Lock-Box
Banks as provided in the Lock-Box Agreements, the exclusive dominion and control
over such lock-box accounts, and shall take any further action that the
Administrative Agent may reasonably request to effect such transfer. Seller
shall promptly (but in any event within two (2) Business Days) identify any
amounts deposited into any lock-box account that do not constitute Collections.
(c)Rights on Servicer Transfer Event. At any time following the designation of a
Servicer other than Seller pursuant to Section 8.01:
(i) the Administrative Agent may direct the Obligors of Pool Receivables, or any
of them, to pay all amounts payable under any Pool Receivable directly to the
Administrative Agent or its designee.
(ii) Seller shall, at the Administrative Agent's request and at Seller's
expense, give notice of Purchaser's ownership to each said Obligor and direct
that payments be made directly to the Administrative Agent or its designee.
(iii) Seller shall, at the Administrative Agent's request, (a) assemble all of
the documents, instruments and other records (including, without limitation,
computer programs, tapes and disks), other than the Excluded Data, 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 shall make the same available to the Administrative Agent at a place
selected by the Administrative Agent or its designee, and (b) segregate all
cash, checks and other instruments received by it from time to time constituting
Collections of Pool Receivables in a manner acceptable to the Administrative
Agent and shall, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer, to the
Administrative Agent or its designee.
(iv) Each of Seller and Purchaser hereby authorizes the Administrative Agent to
take any and all steps, at any time after the Administrative Agent has given
notice to any Lock-Box Bank pursuant to Section 8.03(b), in Seller's name and on
behalf of Seller and Purchaser which are necessary or desirable, in the
reasonable determination of the Administrative Agent, 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.
(v) Actions taken by the Administrative Agent pursuant to this Article shall be
subject to the confidentiality provisions of Section 7.01(c).
SECTION 8.04.Responsibilities of Seller. Anything herein to the contrary
notwithstanding:
(a)Seller shall perform all of its obligations under the Contracts related to
the Pool Receivables and under the related purchase orders and other agreements
to the same extent as if Undivided Interests had not been sold hereunder and the
exercise by the Administrative Agent of its rights hereunder shall not relieve
Seller from such obligations.
(b)Neither the Administrative Agent nor Purchaser shall have any obligation or
liability with respect to any Pool Receivables, Contracts related thereto or any
other related purchase orders or other agreements, nor shall any of them be
obligated to perform any of the obligations of Seller thereunder.
(c)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 Purchaser (whether or not from Seller) in
connection with any Pool Receivable.
SECTION 8.05.Further Action Evidencing Purchases. (a) Seller agrees that from
time to time, at Seller's expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the
Administrative Agent may reasonably request in order to perfect, protect or more
fully evidence the Purchases hereunder and the resulting Undivided Interests, or
to enable Purchaser or the
Administrative Agent to exercise or enforce any of their respective rights
hereunder or under the Certificate of Assignments. Without limiting the
generality of the foregoing, Seller will:
(i) upon the request of the Administrative Agent, 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 that Undivided Interests have been sold in accordance
with this Agreement;
(ii) upon the request of the Administrative Agent, xxxx conspicuously each
Contract evidencing each Pool Receivable with a legend, acceptable to the
Administrative Agent, evidencing that Undivided Interests have been sold in
accordance with this Agreement; and
(iii) on or before the date of the initial Purchase, xxxx its master data
processing records evidencing such Pool Receivables and related Contracts with a
legend, acceptable to the Administrative Agent, evidencing that Undivided
Interests have been sold in accordance with this Agreement.
(b)Seller hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Pool now existing or hereafter arising in
the name of Seller.
(c)Without limiting the generality of subsection (a), Seller will, not earlier
than six (6) months and not later than two (2) months prior to the fifth
anniversary of the date of filing of each of the financing statement referred to
in Section 5.01(f) or any other financing statement filed pursuant to this
Agreement or in connection with any Purchase hereunder, unless the End Date
shall have occurred:
(i) deliver to Purchaser for execution and, upon receipt from Purchaser of such
executed statements, file or cause to be filed appropriate continuation
statements with respect to such financing statements; and
(ii) deliver or cause to be delivered to the Administrative Agent an opinion of
the counsel for Seller referred to in Section 5.01(j) (or other counsel for
Seller reasonably satisfactory to the Administrative Agent), in form and
substance reasonably satisfactory to the Administrative Agent, confirming and
updating the opinion delivered pursuant to Section 5.01(j)-1 with respect to
(and only with respect to) the matters set forth in paragraph no. 7 of Exhibit
5.01(j)-1 subject to customary qualifications, assumptions and exclusions
typically included in such opinions.
SECTION 8.06.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 or otherwise required by contract or law and unless the
Administrative Agent instructs otherwise, be applied as a Collection of any Pool
Receivable or Receivables of such Obligor to the extent of any amounts then due
and payable thereunder before such payment is applied to any other indebtedness
of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01.Grant of Security Interest. To secure all obligations of Seller
arising in connection with this Agreement and each other Agreement Document to
which it is a party, 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 received or deemed
to be received, fees and Earned Discount, in each case pro rata according to the
respective amounts thereof, Seller hereby assigns and grants to Purchaser 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 Receivables, the Related
Security and all Collections with regard thereto, and all proceeds of the
foregoing.
SECTION 9.02.Further Assurances. The provisions of Section 8.05 shall apply to
the security interest granted under Section 9.01 as well as to the Purchases and
all Undivided Interests hereunder.
SECTION 9.03.Remedies. Upon the occurrence and during the continuance of a
Termination Event, Purchaser shall have, with respect to the collateral granted
pursuant to Section 9.01, and in addition to all other rights and remedies
available to Purchaser or the Administrative Agent under this Agreement or other
applicable law, all the rights and remedies of a secured party upon default
under the UCC.
ARTICLE X
TERMINATION EVENTS
SECTION 10.01.Termination Events. If any of the following events ("Termination
Events") shall occur:
(a)(i) Servicer (if Seller or an Affiliate of Seller) shall fail to perform or
observe any term, covenant or agreement hereunder (other than as referred to in
clause (ii) next following) and such failure shall remain unremedied for two (2)
Business Days after notice (which may be by telephone) to Seller if such failure
is the failure to deliver a Periodic Report when due or ten (10) Business Days
after notice (which may be by telephone) to Seller in all other cases or (ii)
Servicer (if Seller or an Affiliate of Seller) or Seller (if not Servicer) shall
fail to make any payment or deposit to be made by it hereunder when due; or
(b)Seller or Guarantor shall fail to perform or observe any term, obligation,
covenant or agreement contained in Section 7.03 or 7.04 or to furnish to the
Administrative Agent, pursuant to Section 7.02(e), a certificate required as a
result of knowledge by an Executive Officer of Seller or Guarantor (as
applicable) of the occurrence of a Termination Event or an Unmatured Termination
Event; or
(c)(i) If Seller shall fail to perform or observe any other term, obligation,
covenant or agreement contained herein on its part to be performed or observed
(other than in Section 7.03 or 7.04) and any such failure remains unremedied,
until the first to occur of the date forty-five (45) days after an Executive
Officer of Seller or Guarantor first obtains knowledge, or should have, in the
exercise of reasonable diligence, obtained knowledge, thereof or the date thirty
(30) days after written notice thereof shall have been given to Seller by the
Administrative Agent, (ii) if any representation or warranty made by Seller or
Guarantor in this Agreement (other than in Section 6.01(b), 6.01(c), 6.01(e),
6.01(h), 6.02(b), 6.02(c) or 6.02(e)), or in any other Agreement Document to
which it is a party, shall prove to have been incorrect, incomplete or
misleading when made or deemed made in any material respect, and any such
representation or warranty continues to be incorrect, incomplete or misleading
in any material respect until the first to occur of the date forty-five (45)
days after an Executive Officer of Seller or Guarantor first obtains knowledge,
or should have, in the exercise of reasonable diligence, obtained knowledge,
thereof or the date thirty (30) days after written notice thereof shall have
been given to Seller by the Administrative Agent or (iii) any representation or
warranty made by Seller or Guarantor in Section 6.01(b), 6.01(c), 6.01(e),
6.01(h), 6.02(b), 6.02(c) or 6.02(e) shall prove to have been incorrect,
incomplete or misleading when made or deemed made in any material respect; or
(d) (i) An "Event of Default" shall have occurred and be continuing under the
Bank Credit Agreement; or (ii) with respect to any Indebtedness for money
borrowed (other than the notes issued under the Bank Credit Agreement) or for
the deferred purchase price of property created, issued, guaranteed, incurred or
assumed by Seller, Guarantor or any Affiliate thereof which Indebtedness is in
an aggregate principal amount equal to or greater than $10,000,000, Seller,
Guarantor or any Affiliate thereof shall (a) default in the payment of principal
of or interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created, or (b) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition described in either clause (i) or (ii) of this paragraph is a failure
to pay such Indebtedness at maturity or is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due prior to its stated maturity;
provided, however, that in the event any such default or other condition
described in either clause (i) or (ii) of this paragraph shall have been cured
or waived or any such acceleration rescinded in accordance with the terms
thereof prior to the time that the Administrative Agent has declared the
Commitment Termination Date to have occurred, this Termination Event shall
automatically cease to exist; or
(e)A Change of Control shall occur; or
(f)An Event of Bankruptcy shall have occurred and remained continuing with
respect to Seller or Guarantor; or
(g)(i) Any litigation (including, without limitation, derivative actions),
arbitration proceedings or governmental proceedings not disclosed in writing by
Seller to the Administrative Agent and Purchaser prior to the date of execution
and delivery of this Agreement is pending against Seller or Guarantor, or (ii)
any material development not so disclosed has occurred in any litigation
(including, without limitation, derivative actions), arbitration proceedings or
governmental proceedings so disclosed, which, in the case of clause (i) or (ii),
in the reasonable opinion of the Administrative Agent, is likely to have a
Material Adverse Effect; or
(h)At any time, the Aggregate Required Allocations shall exceed the Required
Allocations Limit; or
(i)The Default Ratio exceeds 5% or the Delinquency Ratio exceeds 8%; or
(j) The Losses to Liquidations Ratio exceeds 1.5%; or
(k) The Six Month Dilution Ratio exceeds 10%; or
(l)There shall have occurred any event which has a Material Adverse Effect; 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
Guarantor and such lien shall not have been released within five (5) 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 Guarantor and such lien shall not have been
released within five (5) days.
SECTION 10.02.Remedies. (a) Optional Termination. Upon the occurrence of a
Termination Event (other than a Termination Event described in subsection (f) of
Section 10.01), the Administrative Agent shall, at the request, or may with the
consent, of Purchaser, by written notice to Seller declare the Commitment
Termination Date to have occurred, which Commitment Termination Date shall be
the date of such notice.
(b)Automatic Termination. Upon the occurrence of a Termination Event described
in subsection (f) of Section 10.01, the Commitment Termination Date shall be
deemed to have occurred automatically upon the occurrence of such event.
(c)Additional Remedies. Upon any termination of the facility pursuant to this
Section 10.02, the Administrative Agent and Purchaser shall have, in addition to
all other rights and remedies under this Agreement and any other Agreement
Document or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing or the general applicability of
Article XII hereof, (i) the occurrence of a Termination Event shall not deny to
Purchaser any remedy in addition to termination of the Commitment to which
Purchaser may be otherwise appropriately entitled, whether at law or in equity,
and (ii) following the
occurrence of any Termination Event Purchaser may elect to assign to any Person
any Undivided Interest owned by Purchaser.
ARTICLE XI
THE ADMINISTRATIVE AGENT
SECTION 11.01.Authorization and Action. Purchaser hereby appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto.
SECTION 11.02.Administrative Agent's Reliance, Etc. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or the Administrative Agent
under or in connection with this Agreement (including, without limitation, the
servicing, administering or collecting Pool Receivables as Servicer pursuant to
Section 8.01), except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Administrative
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 Purchaser or any other holder of any
interest in Pool Receivables and shall not be responsible to Purchaser or any
such other holder for any statements, warranties or representations made in or
in connection with this Agreement or any other Agreement 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 this Agreement on the part of
Seller or Guarantor or to inspect the property (including the books and records)
of Seller or Guarantor; (d) shall not be responsible to Purchaser or any other
holder of any interest in Pool Receivables for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the Certificate of Assignments or any other Agreement Document; and (e) shall
incur no liability under or in respect of this Agreement or any other Agreement
Document 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 11.03.Administrative Agent and Affiliates. BofA and its Affiliates may
generally engage in any kind of business with Seller, Guarantor or any Obligor,
any of their respective Affiliates and any Person who may do business with or
own securities of Seller, Guarantor or any Obligor or any of their respective
Affiliates, all as if BofA were not the Administrative Agent and without any
duty to account therefor to Purchaser or any other holder of an interest in Pool
Receivables.
SECTION 11.04. Seller's Failure to Perform. If Seller fails to perform any of
its agreements or obligations under this Agreement within any applicable time or
grace period, the Administrative Agent may (but shall not be required to) itself
perform, or cause performance of, such agreement or obligation, and the expenses
of the Administrative Agent incurred in connection therewith shall be payable by
Seller as provided in Section 13.01, provided, however, that the Administrative
Agent shall not perform Seller's obligations under any Contract, other than
those necessary to service and collect the related Pool Receivables.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01.Restrictions on Assignments. (a) Neither Seller nor Purchaser may
assign its rights hereunder or any interest herein without the prior written
consent of the Administrative Agent, and Purchaser may not assign any Undivided
Interest (or portion thereof) to any Person without the prior written consent of
Seller, which consent shall not be unreasonably withheld; provided, however,
that
(i) Purchaser may assign, or grant a security interest in, any Undivided
Interest (or portion thereof) to BofA, any Program Support Provider (or any
successor of any thereof by merger, consolidation or otherwise), any other
commercial paper conduit administered by BofA or any Affiliate thereof, any
Affiliate of BofA or any Program Support Provider (which may then assign any
Undivided Interest (or portion thereof) so assigned or any interest therein to
such party or parties as it may choose); and
(ii) Purchaser may assign and grant a security interest in any interest in, to
and under any Undivided Interest, this Agreement and the other Agreement
Documents to BofA, as Collateral Trustee, and any successor in such capacity, to
secure Purchaser's obligations under or in connection with the Commercial Paper
Notes, any Program Support Agreement, and certain other obligations of Purchaser
incurred in connection with the funding of the Purchases and Reinvestments
hereunder, which assignment and grant of a security interest shall not be
considered an "assignment" for purposes of Section 12.01(b), Section 12.03 or
12.04 or, prior to the enforcement of such security interest, for purposes of
any other provision of this Agreement.
(b)Seller agrees to advise the Administrative Agent within five (5) Business
Days after receipt by Seller of written notice of any proposed assignment by
Purchaser of any Undivided Interest (or portion thereof), not otherwise
permitted under subsection (a), of Seller's consent or non-consent to such
assignment. If Seller does not consent to such assignment, Purchaser may
immediately assign such Undivided Interest (or portion thereof) to BofA, any
Program Support Provider or any Affiliate of BofA or any Program Support
Provider. All of the aforementioned assignments shall be upon such terms and
conditions as Purchaser and the assignee may mutually agree.
SECTION 12.02.Rights of Assignee. Upon the assignment by Purchaser of any
Undivided Interest (or portion thereof) in accordance with this Article XII, (a)
the assignee receiving such assignment shall have all of the rights, and shall
be deemed to have assumed all of the obligations, of Purchaser hereunder with
respect to such Undivided Interest (or such parties thereof) and (b) all
references to Purchaser in Section 4.02 shall be deemed to apply to such
assignee to the extent of its interest in the related Purchaser's Investment and
the related Collections.
SECTION 12.03.Allocation of Payments. If on any date there are sufficient funds
in the Administrative Agent's account to distribute a portion, but not all, of
the amounts payable pursuant to subsection (c)(i) of either Section 3.01 or
Section 3.02 and, due to any assignment of any Undivided Interest (or portion
thereof), such amounts are payable to more than one Person, then (unless
otherwise agreed between such Persons) (a) if any of such Persons is a Program
Support Provider, as assignee of or holder of a security interest in such
Undivided Interest pursuant to a Program Support Agreement, then the
Administrative Agent shall distribute such funds (i) first to such Program
Support Provider, to the extent of its interest in such Undivided Interest (or
shall hold such funds in trust for such Program Support Provider pending
distribution in accordance with the applicable Program Support Agreement) and
(ii) second to any Program Support Provider, to the extent of its accrued and
unpaid interest in any other Undivided Interest (or shall hold such funds in
trust for such Program Support Provider pending distribution in accordance with
the applicable Program Support Agreement), before distributing any such funds to
any other Person, and (b) in all other cases, the Administrative Agent shall
distribute funds to such Persons pro rata based upon the amounts so payable to
such Persons.
SECTION 12.04.Notice of Assignment. Purchaser shall provide written notice to
Seller of any assignment of any Undivided Interest (or portion thereof) by
Purchaser to any assignee, other than an assignment to a Program Support
Provider pursuant to an applicable Program Support Agreement or to the
Collateral Trustee.
SECTION 12.05.Evidence of Assignment; Endorsement on Certificate. Any assignment
of any Undivided Interest (or portion thereof) to any Person may be evidenced by
an instrument of assignment in the form of Exhibit 12.05 or by such other
instrument(s) or document(s) as may be satisfactory to Purchaser, the
Administrative Agent and the assignee. Purchaser authorizes the Administrative
Agent to, and the Administrative Agent agrees that it shall, endorse the
Certificate of Assignments to reflect any assignments made in accordance with
this Article XII or otherwise.
SECTION 12.06.Rights of Program Support Provider and Collateral Trustee. Seller
hereby agrees that, upon notice to Seller, a Program Support Provider and the
Collateral Trustee referred to in Section 12.01, or either of them, may exercise
all the rights of the Administrative Agent hereunder, in the case of a Program
Support Provider, with respect to Undivided Interests, and Collections with
respect thereto, which have been assigned (or in which a security interest has
been granted) to such Program Support Provider, and in the case of such
Collateral Trustee, with respect to all Undivided Interests (or portions
thereof), and Collections with respect thereto, which are owned by Purchaser
(and not subject to an assignment or security interest in favor of
such Program Support Provider under a Program Support Agreement), and all other
rights and interests of Purchaser in, to or under this Agreement or any other
Agreement Document. Without limiting the foregoing, upon such notice such
Program Support Provider and such Collateral Trustee, or either of them, may
request Servicer to segregate Purchaser's and Program Support Provider's
allocable shares of Collections from Seller's allocable share, and from each
other's allocable share, in accordance with Section 8.02(a), may give a
Successor Notice pursuant to Section 8.01(a), may give or require the
Administrative Agent to give notice to the Lock-Box Banks as referred to in
Section 8.03(a), and may direct the Obligors of Pool Receivables to make
payments in respect thereof directly to an account designated by them (provided
that such Program Support Provider and such Collateral Trustee together shall
designate a single account for the making of such payments with respect to any
Pool Receivable), in each case, to the same extent as the Administrative Agent
might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01.Indemnities by Seller and Guarantor. (a) General Indemnity.
Without limiting any other rights which any such Person may have hereunder or
under applicable law, each of Guarantor and the Seller hereby agrees, jointly
and severally, to indemnify each of the Administrative Agent, Purchaser, BASI,
each Program Support Provider, BofA, each of BofA's Affiliates, their respective
successors, transferees, participants and assigns and all officers, directors,
shareholders, controlling persons, employees and agents of any of the foregoing
(each an "Indemnified Party"), forthwith on 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 this Agreement, any other Agreement
Document or the ownership or funding of any Undivided Interest or in respect of
any Receivable or any Contract, excluding, however, (a) Indemnified Amounts to
the extent determined by a court of competent jurisdiction to have resulted from
gross negligence or willful misconduct on the part of the Administrative Agent,
Purchaser or such Indemnified Party and (b) recourse (except as otherwise
specifically provided in Article II of this Agreement in connection with the
calculation of Undivided Interests) for Defaulted Receivables. Without limiting
the foregoing, each of Guarantor and the Seller hereby agrees, jointly and
severally, to indemnify each Indemnified Party for Indemnified Amounts arising
out of or relating to:
(i) the transfer by Seller of any interest in any Receivable other than the
transfer of an Undivided Interest to Purchaser pursuant to this Agreement and
the grant of a security interest to Purchaser pursuant to Section 9.01;
(ii) the breach of any representation or warranty made by Seller or Guarantor
(or any of their respective officers) under or in connection with this
Agreement, any other Agreement Document, any Periodic Report or
any other information or report delivered by Seller or Guarantor pursuant
hereto, which shall have been false or incorrect in any material respect when
made or deemed made;
(iii) the failure by Seller or Guarantor to comply with any applicable law, rule
or regulation with respect to any Pool Receivable or the related Contract, or
the nonconformity of any Pool Receivable or the related Contract with any such
applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in Purchaser an undivided
percentage ownership interest, to the extent of each Undivided Interest owned by
it hereunder, in the Receivables in, or purporting to be in, the Receivables
Pool, free and clear of any Adverse Claim, other than an Adverse Claim arising
solely as a result of an act of Purchaser, any assignee from Purchaser or the
Administrative Agent, whether existing at the time of any Purchase or
Reinvestment of such Undivided 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 receivables in, or purporting to be
in, the Receivables Pool, 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)
of the Obligor to the payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense based on such
Receivable's or the related Contract's 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 or the Servicer (if Servicer is Seller or an
Affiliate of Seller) to perform its duties or obligations in accordance with the
provisions of Article VIII;
(viii) any breach of warranty or products liability claim arising out of or in
connection with merchandise or services that are the subject of any Pool
Receivable; or
(ix) any tax or governmental fee or charge (but not including taxes upon or
measured by net income), all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs 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 Undivided Interest, or any other interest in
the Pool Receivables or in any goods which secure any such Pool Receivables.
(b)Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall have
notice of any attempt to impose or collect any tax or governmental fee or charge
for which indemnification will be sought from Seller or Guarantor under Section
13.01(a)(ix), such Indemnified Party shall give prompt notice of such attempt to
Seller and Seller or Guarantor shall have the right, at its expense, to
participate in any proceedings resisting or objecting to the imposition or
collection of any such tax, governmental fee or charge. Indemnification
hereunder shall be in an amount necessary to make the Indemnified Party whole
after taking into account any tax consequences to the Indemnified Party of the
payment of any of the aforesaid taxes and the receipt of the indemnity provided
hereunder or of any refund of any such tax previously indemnified 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 the Indemnified Party.
(c)Contribution. If for any reason the indemnification provided above in this
Section 13.01 is unavailable to an Indemnified Party or is insufficient to hold
an Indemnified Party harmless, then each of Seller and Guarantor, jointly and
severally, agrees to 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 and Guarantor on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
ARTICLE XIV
GUARANTEE
SECTION 14.01. Guarantee. (a) Guarantor hereby unconditionally and irrevocably
covenants and agrees that it will cause Seller duly and punctually to perform
and observe all of the terms, conditions, covenants, agreements (including,
without limitation, agreements to make payments of Collections or deemed
Collections) and indemnities of Seller under this Agreement and the other
Agreement Documents strictly in accordance with the terms hereof and thereof and
that if for any reason whatsoever Seller shall fail to so perform and observe
such terms, conditions, covenants, agreements and indemnities, Guarantor will
duly and punctually perform and observe the same.
(b)The liabilities and obligations of Guarantor under this Section 14.01 shall
be absolute and unconditional under all circumstances and shall be performed by
Guarantor regardless of (i) whether Purchaser or the Administrative Agent shall
have taken any steps to collect from Seller any of the amounts payable by Seller
to Purchaser or the Administrative Agent under this Agreement or shall otherwise
have exercised any of their rights or remedies under this Agreement or the other
Agreement Documents against Seller or against any Obligor under any of the Pool
Receivables, (ii) the validity, legality or enforceability of this Agreement or
of any other Agreement Documents against Seller, or the disaffirmance of any
thereof in any Event of Bankruptcy relating to Seller, (iii) any law, regulation
or decree now or hereafter in effect which might in any manner affect any of the
terms or provisions of this Agreement or any other Agreement Document or any of
the rights of Purchaser or the Administrative Agent as against Seller or as
against any Obligor under any of such Pool Receivables or which might cause or
permit to be invoked any alteration in time, amount,
manner of payment or performance of any amount payable by Seller to Purchaser or
the Administrative Agent under this Agreement, (iv) the merger or consolidation
of Seller into or with any corporation or any sale or transfer by Seller or all
or any part of its property, (v) the existence or assertion of any Adverse Claim
with respect to any Pool Receivable, or (vi) any other circumstance whatsoever
(with or without notice to or knowledge of Guarantor) which may or might in any
manner or to any extent vary the risk of Guarantor, or might otherwise
constitute a legal or equitable discharge of a surety or guarantor, it being the
purpose and intent of Guarantor that the liabilities and obligations of
Guarantor under this Section 14.01 shall be absolute and unconditional under any
and all circumstances, and shall not be discharged except by payment and
performance as in this Agreement provided. The guaranty set forth in this
Section 14.01 is a guaranty of payment and performance and not just of
collection.
(c)Without in any way affecting or impairing the liabilities and obligations of
Guarantor under this Section 14.01, Purchaser or the Administrative Agent may at
any time and from time to time in its discretion, without the consent of, or
notice to, Guarantor, and without releasing or affecting Guarantor's liability
hereunder (i) extend or change the time, manner, place or terms of this
Agreement or any other Agreement Document, (ii) settle or compromise any of the
amounts payable by Seller to Purchaser under this Agreement or subordinate the
same to the claims of others, (iii) retain or obtain a lien upon or security
interest in any property to secure any of the obligations hereunder, (iv) retain
or obtain the primary or secondary obligation of any obligor or obligors, in
addition to Guarantor, with respect to any of the obligations due hereunder, or
(v) release or fail to perfect any lien upon or security interest in, or impair,
surrender, release or permit any substitution in exchange for, all or any part
of any property securing any of the obligations under this Agreement, it being
understood that nothing contained in this Section 14.01(c) shall give Purchaser
or the Administrative Agent the right to take any of the foregoing actions if
not permitted by the other provisions of this Agreement, by law or otherwise.
(d)The provisions of this Section 14.01 shall continue to be effective or be
reinstated, as the case may be, if any time payment of any of the amounts
payable by Seller to Purchaser or the Administrative Agent under this Agreement
is rescinded or must otherwise be restored or returned by Purchaser or the
Administrative Agent, as the case may be, upon any Event of Bankruptcy involving
Seller, or otherwise, all as though such payment had not been made. Guarantor
hereby waives (i) notices of the occurrence of any default hereunder (other than
notices expressly required under this Agreement), (ii) any requirement of
diligence or promptness on the part of Purchaser or the Administrative Agent in
making demand, commencing suit or exercising any other right or remedy under
this Agreement, or otherwise, and (iii) any right to require Purchaser or the
Administrative Agent to exercise any right or remedy against Seller or the Pool
Receivables prior to enforcing any of their rights against Guarantor under this
Section 14.01. Guarantor agrees that, in the event of an Event of Bankruptcy
with respect to either Seller or Guarantor, or both, and if such event shall
occur at a time when all of the Indemnified Amounts and other amounts due under
this Agreement may not then be due and payable, Guarantor will pay to Purchaser
forthwith the full amount which would be payable hereunder by Guarantor if all
such Indemnified Amounts and other obligations were then due and payable.
SECTION 14.02. Maintenance of Ownership. Guarantor covenants and agrees that
until the End Date, Guarantor, or one of its Wholly Owned Subsidiaries, will (a)
maintain, directly or indirectly, ownership of 100% of all of the issued and
outstanding shares of each class of voting capital stock of Seller, free and
clear of all liens and encumbrances and (b) maintain control of the election of
the Board of Directors of Seller.
SECTION 14.03. Representation and Warranty. Guarantor represents and warrants
that it now has, and will continue to have, independent means of obtaining
information concerning Seller's affairs, financial condition and business.
Neither Purchaser nor the Administrative Agent shall have any duty or
responsibility to provide Guarantor with any credit or other information
concerning Seller's affairs, financial condition or business which may come into
Purchaser's or the Administrative Agent's possession.
SECTION 14.04. Subrogation. Guarantor hereby agrees that no payment made by it
or for its account pursuant to this Agreement shall entitle Guarantor by
subrogation, indemnification, contribution, reimbursement or otherwise to any
payment by Seller or from or out of any property of Seller, until after the End
Date and Guarantor shall not exercise any rights or remedies it has or may in
the future have with respect to any of the foregoing until after the End Date.
ARTICLE XV
MISCELLANEOUS
SECTION 15.01.Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by Seller therefrom shall in any event be
effective unless the same shall be in writing and signed by (a) Seller, the
Administrative Agent and Purchaser (with respect to an amendment) or (b) the
Administrative Agent and Purchaser (with respect to a waiver or consent by any
of them) or Seller (with respect to a waiver or consent by Seller or Guarantor),
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.
SECTION 15.02.Notices, Etc. All notices and other communications provided for
hereunder shall, unless otherwise expressly stated herein, be in writing
(including Telex and facsimile communication) and shall be personally delivered
or sent by certified mail, postage prepaid, or by Telex, or by facsimile, to the
intended party at the address or Telex or facsimile number of such party set
forth under its name on the signature pages hereof or at such other address or
Telex 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, when received, (b) if sent by certified
mail, three Business Days after having been deposited in the mail, postage
prepaid, (c) if sent by overnight courier, one Business Day after having been
given to such courier, (d) if transmitted by Telex, when sent, answerback
confirmed, and (e) if transmitted by facsimile, when sent, receipt confirmed by
telephone or electronic means, except that notices and
communications pursuant to Article I, Section 2.04(c), Section 8.01(b) and the
definition of "Designated Obligor" shall not be effective until received.
SECTION 00.00.Xx Waiver; Remedies. No failure on the part of the Administrative
Agent, any Affected Party, any Indemnified Party, Purchaser or any other holder
of any Undivided Interest 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 15.04.Binding Effect; Survival. This Agreement shall be binding upon and
inure to the benefit of Seller, and Guarantor, the Administrative Agent,
Purchaser and their respective successors and assigns, and the provisions of
Section 4.02 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 12.01. 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
End Date. The rights and remedies with respect to any breach of any
representation and warranty made by Seller and Guarantor pursuant to Article VI
and the indemnification and payment provisions of Article XIII and Sections
4.02, 14.05, 14.06 and 14.07 shall be continuing and shall survive any
termination of this Agreement. After the End Date, the Administrative Agent
shall, at the request and expense of the Seller, execute and deliver to the
Seller such documents as the Seller shall reasonably request to evidence the
termination of such Undivided Interests, including, without limitation, UCC
termination statements.
SECTION 15.05.Costs, Expenses and Taxes. In addition to its obligations under
Article XIII, Seller and Guarantor, jointly and severally agree to pay on
demand:
(a)all reasonable costs and expenses incurred by the Administrative Agent,
Purchaser, BofA, BASI, each Program Support Provider and their respective
Affiliates in connection with the negotiation, preparation, execution and
delivery, the administration (including periodic auditing) or the enforcement
of, or any actual or claimed breach of, this Agreement, the Certificate of
Assignments and the other Agreement Documents, including, without limitation (i)
the reasonable fees and out-of-pocket 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 Agreement Documents,
provided, that Seller and Guarantor shall only be responsible for the fees and
expenses of one counsel for such Persons, unless a conflict of interest or
potential conflict of interest exists among such Persons, and (ii) all
reasonable out-of-pocket expenses (including reasonable fees and expenses of
independent accountants) incurred in connection with any review of Seller's or
Guarantor's books and records either prior to the execution and delivery hereof
or pursuant to the terms hereof; 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,
the Certificate of Assignments or the other Agreement 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 00.00.Xx Proceedings. Seller, Guarantor and BofA, individually and as
Administrative Agent, each hereby agrees that it will not institute against
Purchaser, or join any other Person in instituting against 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 issued
by 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 shall have
been outstanding. The foregoing shall not limit Seller's right to file any claim
in or otherwise take any action with respect to any insolvency proceeding that
was instituted by any Person other than Seller or Guarantor.
SECTION 15.07. Confidentiality of BofA Information. (a) Each party hereto (other
than BofA) acknowledges that BofA regards the structure of the transactions
contemplated by this Agreement, the other Agreement Documents, and by any
Program Support Agreement and the other Program Documents referred to therein,
to be proprietary, and each such party severally agrees that:
(i) unless BofA shall otherwise agree in writing, and except as provided in
subsection (b), such party will not disclose to any other person or entity:
(a) any information furnished to such party by any BofA Information Provider
regarding the asset securitization transaction contemplated hereby,
(b)copies of this Agreement,
(c) any information furnished to such party by any BofA Information Provider
regarding, or copies of, any Program Support Agreement, any of the other Program
Documents referred to therein, or any transaction contemplated thereby,
(d) any information furnished to such party by any BofA Information Provider
regarding the organization or business of Purchaser generally, or
(e) any information regarding BofA which is furnished to such party by any BofA
Information Provider and is designated by BofA 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), (c), (d) and
(e) above, whether furnished by Purchaser, BofA, (including any branch or agency
thereof), any Program Support Provider, any assignee of or participant in any
rights or obligations of Purchaser or any Program Support Provider identified to
Seller and Guarantor by written notice from the assignor or seller of such
participation interest, as the case may be, or any attorney for any of the
foregoing (each a "BofA Information Provider"), is collectively referred to as
the "BofA Information"; provided, however, "BofA Information" shall not include
any information which is or becomes generally available to the general public or
to such party on a nonconfidential basis from a source other than BofA or any
other BofA Information Provider, or which was known to such party on a
nonconfidential basis prior to its disclosure by BofA or any other BofA
Information Provider);
(ii) such party will make the BofA Information available to only such of its
officers, directors, employees and agents, and to officers, directors, employees
and agents of any of its Affiliates, who (a) in the good faith belief of such
party, have a need to know such BofA Information, and (b) are informed by such
party of the confidential nature of the BofA Information and the terms of this
Section 15.07; and
(iii) such party will not use the BofA Information as the basis of a similar
financing with any other party.
(b) Notwithstanding clause (i) of subsection (a), each party may disclose any
BofA Information:
(i) to its independent attorneys, consultants and auditors who (a) in the good
faith belief of such party, have a need to know such BofA Information and (b)
are informed by such party of the confidential nature of the BofA Information
and the terms of this Section 15.07;
(ii) to any other party to this Agreement;
(iii) as may be required in Seller's reasonable judgment, by any municipal,
state, federal or other regulatory body, whether domestic or foreign,
(including, without limitation, the SEC) having or claiming to have jurisdiction
over such party, in order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party (it being understood that in no event
will the Fee Letter be publicly filed without the Administrative Agent's prior
written consent); or
(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 such BofA Information.
(c) In the event that any party hereto (other than BofA) or anyone to whom such
party or its representatives transmits the BofA 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 BofA Information other than pursuant to subsections (b)(i) or (ii),
such party will (or will cause its representatives to)
(i) provide BofA with prompt written notice so that (a) Purchaser,
BofA, or any other BofA Information Provider, at BofA's sole cost and expense,
may seek a protective order or other appropriate remedy, or (b) BofA may, if it
so chooses, agree that such party (or its representatives) may disclose such
BofA Information pursuant to such request or legal compulsion;
(ii) unless BofA agrees that such BofA Information may be disclosed, make
(at BofA's sole cost and expense) a timely objection to the request or
compulsion to provide such BofA Information on the basis that such BofA
Information is confidential and subject to the agreements contained in this
Section 15.07;
(iii) take any action (at BofA's sole cost and expense) as BofA or any
other BofA Information Provider may reasonably request to seek a protective
order or other appropriate remedy, provided that, in connection therewith, such
party shall have first received such assurances as it may reasonably request
that BofA or such other BofA Information Provider shall reimburse such party's
or its representatives' reasonable costs and expenses or provide such other
assistance as such party or its representatives may reasonably require; and
(iv) in the event that such protective order or other remedy is not
obtained, or BofA agrees that such BofA Information may be disclosed, use its
best efforts to furnish only that portion of the BofA Information which such
party reasonably believes is legally required to be furnished, and, provided
such party (or its representative) is reimbursed or assisted as referred to in
clause (iii) above, exercise best efforts to obtain reliable assurance that
confidential treatment will be accorded the BofA Information.
(d) This Section 15.07 shall survive termination of this Agreement for a
period ending on the later of (i) June 30, 1998, or (ii) the End Date.
SECTION 15.08. 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 15.09. Integration. This Agreement contains 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 Agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.
SECTION 15.10. 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 ILLINOIS, EXCEPT TO THE EXTENT THAT THE PERFECTION
OF THE INTERESTS OF THE PURCHASER IN THE RECEIVABLES IS GOVERNED BY THE LAWS OF
THE JURISDICTION OTHER THAN THE STATE OF ILLINOIS.
SECTION 15.11. Waiver Of Jury Trial. SELLER AND GUARANTOR HEREBY EXPRESSLY WAIVE
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT, THE CERTIFICATE OF ASSIGNMENTS, ANY OTHER
AGREEMENT 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,
THE CERTIFICATE OF ASSIGNMENTS OR ANY OTHER AGREEMENT DOCUMENT AND AGREE THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY
TRIAL.
SECTION 15.12. Consent To Jurisdiction; Waiver Of Immunities. EACH OF SELLER,
PURCHASER AND GUARANTOR HEREBY ACKNOWLEDGES AND AGREES THAT:
(a)IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY ILLINOIS STATE COURT, IN EITHER CASE SITTING IN CHICAGO,
ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND (ii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING.
(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 15.13. 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.
SECTION 15.14. Originators. Until such time, if ever, that a Purchase and Sale
Agreement with an Originator is executed, delivered and approved by the
Administrative Agent, all references to such Originator, or a purchase from such
Originator, shall be inoperative.
[SIGNATURES FOLLOW]
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.
RECEIVABLES CAPITAL CORPORATION,
as Purchaser
By
Title
c/o Merrill Xxxxx Money Markets Inc.
World Financial Center - North Tower
250 Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
And with a copy to the Administrative Agent (except in the case of notice from
the Administrative Agent)
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as the Administrative Agent
By
Vice President
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx - Asset
Securitization Group
SCI TECHNOLOGY, INC.,
as Seller and initial Servicer
By
Title
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
SCI SYSTEMS, INC.
By
Title
c/o SCI Systems (Alabama), Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Counsel
APPENDIX A
DEFINITIONS
This is Appendix A to the Receivables Purchase Agreement dated as of June 30,
1995 among SCI Technology, Inc., as Seller, SCI Systems, Inc., as Guarantor,
Receivables Capital Corporation, as Purchaser, and Bank of America National
Trust and Savings Association, as Administrative Agent (as amended, supplemented
or otherwise modified from time to time, this "Agreement"). Each reference in
this Appendix A to any Section, Appendix or Exhibit refers to such Section of or
Appendix or Exhibit to this Agreement.
INDEX
Page No.
A.Defined Terms A-1
B.Other Terms A-22
C.Computations of
Time Periods A-22
A.Defined Terms. As used in this Agreement, unless the context requires a
different meaning, the following terms have the meanings indicated hereinbelow:
"A-12 Program" means the full scale engineering, development, production and
delivery of electronic assemblies for the Navy's proposed A-12 Advanced Tactical
Fighter contemplated by the following XxXxxxxxx-Xxxxxxx purchase orders: E83006,
E83004, E91369, E91324, E02929, E02927 and J00545.
"A-12 Program Financial Statements Adjustments" means any charge, expense,
write-off or reserve change of Guarantor arising out of or relating to the A-12
Program as determined in accordance with GAAP, cumulatively determined for the
periods as applicable, and which arose after March 28, 1993.
"Accounts Payable Amount" means at any time the aggregate amount owed by Seller
or any Originator to any Obligor at such time.
"Accounts Receivable" means all rights of any Person to payment for goods sold
or leased or for services rendered, whether or not such rights to payment have
been earned by performance,
including, without limitation, all accounts, contract rights, chattel paper,
instruments and documents of any Person arising from the sale of goods or
services by such Person, whether secured or unsecured, and whether now existing
or hereafter created or arising and including, further, without limitation,
federal and state tax refunds due and owing to such Person relating to taxes
previously paid by such Person less all doubtful accounts receivable owing to
such Person, as determined in accordance with GAAP. For the sole purpose of
testing the financial covenant set forth in Section 7.04(c) hereof, any A-12
Program Financial Statements Adjustments relating to Accounts Receivable
previously recognized in accordance with GAAP shall be added to the amount of
Accounts Receivable in order to determine the Adjusted Working Capital of the
Guarantor and its consolidated Subsidiaries, except as otherwise set forth in
Section 7.04(c) hereof.
"Adjusted Average Maturity" has the meaning set forth in Appendix B.
"Adjusted Working Capital" means at any date of determination, ninety percent
(90%) of the Accounts Receivable of Guarantor and its consolidated Subsidiaries
plus eighty-five percent (85%) of the Inventory of Guarantor and its
consolidated Subsidiaries.
"Administrative Agent" has the meaning set forth in the preamble.
"Administrative Agent's Account" has the meaning set forth in Section 3.05(a).
"Adverse Claim" means a Lien or other right or claim of any Person other than
(a) a potential claim or right (that has not yet been asserted) of a trustee
appointed for an Obligor in connection with any Event of Bankruptcy or (b) an
unfiled lien for taxes accrued but not yet payable.
"Affected Party" means each of Purchaser, each Program Support Provider, any
permitted assignee of Purchaser or a Program Support Provider, any assignee of
any of Purchaser's obligations to a Program Support Provider in respect of any
Funding, or any holder of a participation interest, in the rights and
obligations of any Program Support Provider under any Program Support Agreement
and in respect of any Funding, the Administrative Agent, BankAmerica Corporation
and any holding company of BofA.
"Affiliate" when used with respect to a Person means any other Person
controlling, controlled by, or under common control with, such Person.
"Aggregate Purchaser's Investments" at any time means the sum of the Dollar
amount of all Purchaser's Investments.
"Aggregate Required Allocations" at any time means the sum of all Required
Allocations of all Undivided Interests.
"Agreement Documents" means this Agreement, the Certificate of Assignments, the
Lock-Box Agreements, the Fee Letter and the other documents to be executed and
delivered in connection herewith.
"Alabama UCC" means the UCC, as in effect from time to time in the State of
Alabama.
"Alternate Reference Rate" has the meaning set forth in Appendix B.
"Arrangement Fee" has the meaning set forth in the Fee Letter.
"Average Maturity" has the meaning set forth in Appendix B .
"Bank Credit Agreement" means that certain Credit Agreement dated as of June 25,
1993, by and among Guarantor, as borrower thereunder, Citibank, N.A., as agent,
ABN AMRO Bank N.V., as co-agent, and the other lenders signatory thereto, as the
same may be amended, supplemented, extended, renewed, restated, refinanced or
replaced from time to time.
"Bank Rate" has the meaning set forth in Appendix B.
"BASI" means BA Securities, Inc.
"BofA" has the meaning set forth in the preamble.
"BofA Information" has the meaning set forth in Section 15.07.
"Business Day" means a day on which both (a) the Administrative Agent at its
office in Chicago, Illinois is open for business and (b) commercial banks in New
York City and Huntsville, Alabama are not authorized or required to be closed
for business.
"Certificate of Assignments" means a certificate of assignment, by Seller to
Purchaser, in the form of Exhibit 5.01(a), evidencing an Undivided Interest
owned by Purchaser or an assignee thereof.
"Change of Control" means (i) that Seller or any Originator ceases to be a
Wholly Owned Subsidiary of Guarantor or (ii) in relation to Guarantor, 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 SEC under the Exchange Act) of issued and outstanding
shares of the capital stock of Guarantor entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the board
of directors of Guarantor and having a then present right to exercise 50% or
more of the voting power for the election of members of the board of directors
of Guarantor attached to all such outstanding shares of capital stock of
Guarantor.
"Collateral Trustee" means BofA, in its capacity as collateral trustee for the
holders of the Commercial Paper Notes and the Program Support Providers, and any
successor to BofA in such capacity.
"Collections" means, with respect to any Receivable, all funds which either (a)
are received by Seller, any Originator or Servicer 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, any 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 3.03.
"Commercial Paper Notes" means short-term promissory notes issued or to be
issued by Purchaser to fund its investments in accounts receivable or other
financial assets.
"Commercial Paper Rate" has the meaning set forth in Appendix B.
"Commitment" has the meaning set forth in Section 1.01.
"Commitment Termination Date" has the meaning set forth in Section 1.05(a).
"Concentration Limit" has the meaning set forth in Section 2.04(b).
"Conditions Precedent" has the meaning set forth in Section 5.02.
"Consistent Basis" means, in reference to the application of GAAP, that the
accounting principles observed in the period referred to are comparable in all
material respects to those applied in the preceding period, except to the extent
required to reflect a change in GAAP or any other changes consented to by the
Administrative Agent.
"Contingent Obligation" as to any Person means any obligation of such Person
guaranteeing or in effect guaranteeing any indebtedness, leases, dividends or
other contractual obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such primary obligation
against loss in respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not state or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith.
"Contract" means a contract between Seller and any Person, or an invoice from
Seller to any Person or a purchase order from any Person to Seller, in each case
pursuant to or under which such Person shall be obligated to make payments to
Seller.
"Credit and Collection Procedure" means those credit and collection policies and
practices relating to Contracts and Receivables described in the Coopers &
Xxxxxxx report attached as Schedule 6.01(m)-2, as modified without violating
Section 7.03(c).
"Credit Reserve" with respect to any Undivided Interest at any time means an
amount equal to the greater of (1) the product of (i) the Purchaser's Investment
of such Undivided Interest at such time divided by the Aggregate Purchaser's
Investments at such time times (ii) $5,000,000 and (2) the product of (i) the
Purchaser's Investment of such Undivided Interest at such time, times (ii) the
greatest of (a) 12%, (b) the product of (1) five times (2) the highest Default
Ratio to have occurred for the most recent twelve Month End Dates (or, if less,
for the most recent Month End Dates occurring from the date hereof to the date
of determination) and (c) the product of (1) 2.5 times (2) the highest
Delinquency Ratio to have occurred for the most recent twelve Month End Dates;
it being understood, that until Servicer has reported the Default Ratio using at
least six months of data, clause (b) shall not be applicable.
"Debentures of 1987" means the Indebtedness of Guarantor in the aggregate
original principal amount of $75,000,000 evidenced by the Guarantor's 5-5/8%
Convertible Subordinated Debentures due March 1, 2012, issued pursuant to the
Indenture, dated as of March 1, 1987, between Guarantor and Wachovia Bank of
Georgia, N.A. (formerly known as The First National Bank of Atlanta), as
trustee. The Debentures of 1987 are subordinated on liquidation, on terms and
conditions set forth in the Indenture pursuant to which they were issued.
"Default Ratio" means the ratio (expressed as a percentage) computed as of each
Month End Date by dividing (x) the aggregate Unpaid Balance of all Pool
Receivables that were Defaulted Receivables on each of such Month End Date and
the five (5) immediately preceding Month End Dates by (y) the aggregate Unpaid
Balance of all Pool Receivables on such Month End Dates.
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid for 120 days (or
150 days if the Obligor thereof is a Governmental Authority) from the invoice
date, other than amounts deemed uncollectible, in Seller's reasonable judgment,
due to billing disputes, contract cancellations and adjustments, which, in each
case, are not related to and do not result from credit problems,
(b) is due from an Obligor with respect to which an Event of Bankruptcy has
occurred and remains continuing,
(c) as to which payments have been extended, or the terms of payment thereof
rewritten, without the Administrative Agent's consent, other than as permitted
in Section 8.02(c), or
(d) which has been or, consistent with the Credit and Collection Procedure,
should be, written off Seller's books as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage) computed as of
each Month End Date by dividing (x) the aggregate Unpaid Balance of all Pool
Receivables that were Delinquent Receivables on each of such Month End Date and
the five (5) immediately preceding Month End Dates by (y) the aggregate Unpaid
Balance of all Pool Receivables on such Month End Dates.
"Delinquent Receivable" means a Receivable as to which any payment, or part
thereof, remains unpaid for 90 days from the invoice date, other than amounts
deemed uncollectible, in Seller's reasonable judgment, due to billing disputes,
contract cancellations for other than credit reasons and adjustments.
"Designated Obligor" means, at any time, all Obligors except Excluded Obligors
and any such Obligor as to which the Administrative Agent has, at least three
(3) Business Days prior to the date of determination, given written notice to
Seller that such Obligor shall not be considered a Designated Obligor.
"Dilution Factors" means any event or condition described in clause (i) of
Section 3.03(a) that would cause any Pool Receivable or portion thereof to be
deemed a Collection.
"Dilution Ratio" means, as of any Month End Date, the quotient (expressed as a
percentage) of (a) the aggregate reduction attributable to Dilution Factors
occurring prior to such day in the Unpaid Balance of Eligible Receivables
originated during the six successive months (or, if less, the months from the
month of this Agreement to the month of the date of determination) ending on
such Month End Date divided by (b) the aggregate amount of Collections for such
period.
"Dilution Reserve" with respect to any Undivided Interest at any time means an
amount equal to the greater of (1) (i) the Purchaser's Investment of such
Undivided Interest at such time, times (ii)
the greater of (a) 6% and (b) 2 times the highest Dilution Ratio to have
occurred for the most recent twelve Month End Dates (or, if less, the number of
Month End Dates from the first Month End Date to occur after the date hereof to
the last Month End Date to have occurred prior to the date of determination) and
(2) (i) $2,000,000 times (ii) the Purchaser's Investment of such Undivided
Interest divided by the Aggregate Purchaser's Investments.
"Discount Factor" has the meaning set forth in Appendix B.
"Dollars" means dollars in lawful money of the United States of America.
"Domestic CD Rate (Adjusted)" has the meaning set forth in Appendix B.
"Earned Discount" has the meaning set forth in Appendix B.
"EBIT" means for any fiscal year of the Guarantor, an amount equal to the sum
for such fiscal year of (i) Net Income plus (ii) provisions for income taxes
plus (iii) Interest Expense, all determined by Guarantor and its Subsidiaries on
a consolidated basis in accordance with GAAP; provided, however, that all cash
items of gain or loss for such fiscal period which are not ordinary by GAAP
definition shall be included in the computation of EBIT and provided, further,
that all non-cash items of gain or loss for such fiscal period which are not
ordinary by GAAP definition shall be excluded from the computation of EBIT.
"Eligible Contract" means a Contract similar to one of the forms set forth in
Schedule 6.01(m)-1 or in another form approved by Seller in the exercise of its
reasonable business judgment.
"Eligible Receivable" means, at any time, a Receivable:
(a)the Obligor of which is not an Affiliate of Seller and is a Designated
Obligor at the time of the creation of an interest in such Receivable hereunder;
(b)the Obligor of which is located in the United States (or is fully guaranteed
by an Affiliate of the Obligor that is located in the United States pursuant to
a guaranty in substantially the form attached hereto as Exhibit I-1 or such
other form satisfactory in form to the Administrative Agent), or the Obligor is
a foreign Subsidiary of a United States corporation and the Unpaid Balance of
which, when combined with the Unpaid Balance of all other foreign Obligors whose
obligations are not guaranteed by a United States Affiliate, does not exceed 3%
of the Net Pool Balance;
(c)which is not a Defaulted Receivable;
(d)(i) which arose in the ordinary course of Seller's or an Originator's
business from the sale of Seller's or such Originator's merchandise, insurance
or services; provided that, if such Receivable was not originated by Seller, the
Unpaid Balance of such Receivable, when added to the aggregate
Unpaid Balance of all other Pool Receivables not originated by Seller, does not
exceed (5)% of the aggregate Unpaid Balance of all Eligible Receivables and (ii)
which, according to the Contract related thereto, is required to be paid in full
within thirty (30) days of the original billing date or statement date therefor;
(e) which is an account receivable representing all or part of the sales price
of merchandise, insurance or services within the meaning of Section 3(c)(5) of
the Investment Company Act of 1940, as amended;
(f)which is denominated and payable only in United States dollars;
(g)which arises under an Eligible Contract which has been duly authorized and
which, 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, as to all material terms thereof,
in accordance with its terms;
(h)the Obligor of which is not the Obligor of Defaulted Receivables that
represent more than 10% of the aggregate Unpaid Balance of all Receivables of
such Obligor;
(i)which is not subject to any existing dispute, offset, counter-claim or
defense whatsoever, except for Accounts Payable Amounts;
(j)which, together with the Contract related thereto, does not contravene any
laws, rules or regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy) in any material respect and with respect to which no party to the
Contract related thereto is in violation of any such law, rule or regulation in
any material respect;
(k)as to which, at or prior to the time of the initial creation of an interest
in such Receivable through a Purchase, the Administrative Agent has not notified
the Seller that the Administrative Agent (exercising its reasonable credit
judgment) has determined that such Receivable (or the class of Receivables into
which such Receivable falls) is not acceptable for purchase by the Purchaser
hereunder;
(l)no portion of which includes any amounts payable in respect of sales taxes;
(m)which is not a progress billing;
(n)which, (i) if the perfection of Purchaser's undivided ownership interest
therein is governed by the laws of a jurisdiction where the UCC -- Secured
Transactions is in force, constitutes an account as defined in the UCC as in
effect in such jurisdiction, and (ii) if the perfection of Purchaser's undivided
ownership interest therein is governed by the law of any jurisdiction where the
UCC --
Secured Transactions is not in force, Seller has furnished to the Administrative
Agent such opinions of counsel as have reasonably been requested and/or other
evidence as has reasonably been requested, establishing to the reasonable
satisfaction of the Administrative Agent that Purchaser's undivided ownership
interest and other rights with respect thereto are not significantly less
protected and favorable than such rights under the UCC;
(o)with regard to which the warranty of Seller in Section 6.01(i) is true and
correct;
(p)which arises out of a current transaction, or the proceeds of which have been
or are to be used for current transactions, within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended;
(q)which (i) satisfies all applicable requirements of the related Credit and
Collection Procedure and (ii) complies with such other criteria and requirements
as the Administrative Agent (exercising its reasonable credit judgment) may from
time to time specify to the Seller; and
(r)if such Receivable was originated by an Originator, which was sold in a true
sale to Seller pursuant to a Purchase and Sale Agreement that has been approved
by the Administrative Agent and with respect to which all conditions precedent
have been met to the satisfaction of the Administrative Agent (including,
without limitation, the delivery of opinions of counsel).
"End Date" means the date after the Commitment Termination Date on which all of
the Undivided Interests have been reduced to zero and all other amounts payable
to Purchaser or the Administrative Agent hereunder have been paid in full.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Rate (Reserve Adjusted)" has the meaning set forth in Appendix B.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a Person
if either:
(a) a case or other proceeding shall be commenced, without the application or
consent of such Person, in any court, seeking the liquidation, reorganization,
debt 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; 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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Data" means any information or data pertaining to an Obligor, the
disclosure of which information and data by Seller, Guarantor or any Affiliate
of either of them (collectively, the "Disclosing Parties") to the Administrative
Agent or Purchaser could violate, in the good faith belief of counsel, any
applicable "fair credit" law, privacy law or any similar statute, rule or
regulation, or any contractual provision binding on any such Disclosing Party.
"Excluded Obligors" means NEC Technologies, Inc, and each Governmental
Authority.
"Executive Officer " means those officers of Guarantor or Seller, as the case
may be, who are deemed to be "Executive Officers" thereof pursuant to Rule 405
of Regulation C of the Exchange Act or any officer of Guarantor or Seller, as
the case may be, who is a senior vice president thereof, or any individual
performing a similar role as any individual who is a senior vice president of
Guarantor or Seller on the date of this Agreement.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any successor thereto or to the functions thereof.
"Fee Letter" has the meaning set forth in Section 4.01.
"Financing Lease(s)" shall mean (a) any lease of property, real or personal, the
then present value of the minimum rental commitment of which should, in
accordance with GAAP, be capitalized on a balance sheet of the lessee, and (b)
any other such lease the obligations under which are capitalized on a
consolidated balance sheet of Seller or Guarantor and its Subsidiaries.
"Financing Statement" means any financing statement that lists the Seller (under
any current name, any previous name or any trade name) as debtor and that is
filed in any jurisdiction in which filings would be appropriate under the UCC or
any comparable law to perfect a security interest in any Receivable, any
Collections with respect thereto, any Related Security or any Contract.
"Funding" means a drawing under a letter of credit, surety bond or other
instrument issued pursuant to a Program Support Agreement, a drawing on a cash
collateral account funded pursuant to a Program Support Agreement, a purchase,
loan or other extension of credit made by a Program Support Provider to the
Purchaser under a Program Support Agreement, or any other advance or
disbursement of funds from or to the Purchaser or for the Purchaser's account or
for which the Purchaser is obligated to reimburse a Program Support Provider
pursuant to a Program Support Agreement.
"GAAP" means United States generally accepted accounting principles.
"Governmental Authority" means any nation or government (including, without
limitation, the United States government), any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative function of or pertaining to government.
"Guarantor" has the meaning set forth in the preamble.
"Indebtedness" of a Person, at a particular date, means any of the following at
such date, without duplication, (a) indebtedness of such Person for borrowed
money or evidenced by notes, bonds, debentures or like instruments, (b)
indebtedness of such Person for the deferred purchase price of property or
services, except current accounts payable and accrued expenses arising in the
ordinary course of business, (c) obligations of such Person under any Financing
Lease, (d) indebtedness of such Person arising under acceptance facilities, (e)
unreimbursed draws on letters of credit and (f) Contingent Obligations.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
"Indemnified Party" has the meaning set forth in Section 13.01.
"Interest Expense" means for any fiscal year of Guarantor, total interest
expense (including, without limitation, interest expense attributable to
capitalized leases in accordance with GAAP) of Guarantor and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Inventory" means, with respect to any Person, all goods, merchandise and other
personal property held for sale, and all raw materials, components, work or
goods in process, finished goods, goods in transit and packing and shipping
materials, accretions and accessions thereto, trust receipts and similar
documents covering the same products, all whether now owned or hereafter
acquired by such Person, all as determined in accordance with GAAP. For the sole
purpose of testing the financial covenant set forth in Section 7.04(c) hereof,
any A-12 Program Financial Statements Adjustments relating to Inventory
previously recognized in accordance with GAAP shall be added to the amount of
Inventory in order to determine the Adjusted Working Capital of Guarantor and
its consolidated Subsidiaries, except as otherwise set forth in Section 7.04(c).
"Lien" means a lien, security interest, charge or encumbrance.
"Liquidations" means all funds described in clause (a) of the definition of
Collections.
"Liquidity Agreement" means the Liquidity Asset Purchase Agreement, dated as of
June 30, 1995, among Purchaser, BofA, as Liquidity Agent, and the Liquidity
Banks, as amended, supplemented or otherwise modified from time to time.
"Liquidity Banks" means the purchasers from time to time parties to the
Liquidity Agreement.
"Lock-Box Agreement" means a letter agreement, in substantially the form of
Exhibit 5.01(i), between Seller 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.
"Losses to Liquidations Ratio" means the percentage that (x) the write-offs (net
of recoveries) recognized during the six month period ending on the most recent
Month End Date on all Receivables owned by Seller was of (y) Collections of such
Receivables during such period.
"Material Adverse Effect" means a material adverse effect on:
(i) the financial condition, business, assets, prospects or operations of
Guarantor and its Subsidiaries, taken as a whole;
(ii) the ability of Seller, Servicer or Guarantor to perform its obligations
under this Agreement or the other Agreement Documents to which it is a party;
(iii) the validity, enforceability, status, perfection or priority of
Purchaser's interest in the Pool; or
(iv) the collectability or enforceability of a significant portion of the Pool
Receivables.
"Month End Date" means the last day of each fiscal month.
"Moody's" means Xxxxx'x Investors Service, Inc., and any successor thereto.
"Negative Spread Fee" has the meaning set forth in Appendix B.
"Net Income" means, as applied to any Person for any fiscal period, the
aggregate amount of net income (or net loss) of such Person, after taxes, for
such period as determined in accordance with GAAP.
"Net Pool Balance" has the meaning set forth in Section 2.04(a).
"Non-Use Fee" has the meaning set forth in the Fee Letter.
"Non-Use Fee Rate" has the meaning set forth in the Fee Letter.
"Note Fee" has the meaning set forth in the Fee Letter.
"Obligor" means a Person obligated to make payments with respect to a
Receivable.
"Originators" means SCI Systems (Canada), Inc., a Canadian corporation formed
under the laws of the Province of Quebec, and Adelantos De Tecnologia S.A. de
C.V., a corporation formed under the laws of the Republic of Mexico, and their
successors and permitted assigns.
"Owner" means, for each Undivided Interest upon its purchase, the Purchaser as
the purchaser thereof; provided, however, that, upon any assignment of the
Certificate of Assignments related to any Undivided Interest made in accordance
with Article XII, the assignee thereof shall be the Owner of such Undivided
Interest.
"Periodic Report" means a report in substantially the form of Exhibit 3.04(a).
"Permitted Subordinated Debentures" means debentures contemplated to be issued
from time to time by Guarantor after the date of this Agreement that (i) are
subordinated in writing to all obligations of Guarantor and Seller hereunder,
such subordination provisions to be on terms and conditions reasonably
satisfactory in all respects to the Administrative Agent and (ii) do not exceed
$150,000,000 in the aggregate at any time, but such term shall specifically
exclude the Debentures of 1987.
"Person" means an individual, partnership, corporation (including a business
trust), joint stock company, limited liability company, trust, unincorporated
association, joint venture, government or any agency or political subdivision
thereof or any other entity.
"Pool" has the meaning set forth in Section 2.01.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Program Fee Rate" has the meaning set forth in the Fee Letter.
"Program Support Agreement" means and includes the Liquidity Agreement and any
other agreement hereafter entered into by any Program Support Provider providing
for the issuance of one or more letters of credit for the account of the
Purchaser, the issuance of one or more surety bonds for which the Purchaser is
obligated to reimburse the applicable Program Support Provider
for any drawings thereunder, the sale by the Purchaser to any Program Support
Provider of Undivided Interests (or portions thereof) and/or the making of loans
and/or other extensions of credit to the Purchaser in connection with the
Purchaser's securitization program, together with any letter of credit, surety
bond or other instrument issued thereunder (but excluding any discretionary
advance facility provided by the Administrative Agent).
"Program Support Provider" means and includes BofA, the Liquidity Banks and any
other or additional Person (other than any customer of the Purchaser) now or
hereafter extending credit or having a commitment to extend credit to or for the
account of the Purchaser or issuing a letter of credit, surety bond or other
instrument to support any obligations arising under or in connection with the
Purchaser's securitization program.
"Purchase" has the meaning set forth in Section 1.01(a).
"Purchase and Sale Agreement" means a Purchase and Sale Agreement between Seller
and an Originator, as it may be amended, supplemented or otherwise modified from
time to time.
"Purchase Limit" has the meaning set forth in Section 1.02(a).
"Purchase Termination Date" has the meaning set forth in Section 1.06.
"Purchaser" has the meaning set forth in the preamble.
"Purchaser Rate" has the meaning set forth in Appendix B.
"Purchaser's Investment" has the meaning set forth in Section 2.03.
"Purchaser's Share" has the meaning set forth in Section 2.05.
"Rate Variance Factor" has the meaning set forth in Appendix B.
"Receivable" means any right to payment from a Person, whether constituting an
account, chattel paper, instrument or general intangible, arising from the sale
by Seller or any Originator of merchandise or services rendered by Seller or
such Originator, as the case may be, and includes the right to payment of any
interest or finance charges and other obligations of such Person with respect
thereto.
"Receivables Pool" means at any time all then outstanding Receivables as to
which the Obligors thereunder are Designated Obligors. If a Receivable is a Pool
Receivable on the day immediately preceding the Commitment Termination Date,
such Receivable shall continue to be considered a Pool Receivable at all times
thereafter.
"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
currently 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, phase-in or commencement of
effectiveness of)
any
(i)United States federal or state law or foreign law applicable to such Affected
Party;
(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)generally accepted accounting principles 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 1.01(b).
"Related Security" means, with respect to any Pool Receivable: (a) all of
Seller's right, title and interest in, under and to all security agreements or
other agreements that relate to such Pool Receivable; (b) all of Seller's
interest in the merchandise (including returned merchandise), if any, relating
to the sale which gave rise to such Pool Receivable; (c) all other 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; (d) all UCC financing statements covering
any collateral securing payment of such Pool Receivable; (e) 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 (f) all of Seller's
rights and claims under the Purchase and Sale Agreement. The interest of
Purchaser in any Related Security is only to the extent of Purchaser's Undivided
interest, as more fully described in the definition of an Undivided Interest.
"Remaining Collections" has the meaning set forth in Section 3.01(a)(ii).
"Required Allocations" with respect to any Undivided Interest at any time means
the sum of Purchaser's Investment, Discount Factor, Servicer's Fee Reserve,
Credit Reserve and Dilution Reserve
with respect to such Undivided Interest at such time.
"Required Allocations Limit" has the meaning set forth in Section 1.02(b).
"Requirement of Law" for any Person shall mean the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation, or determination of an arbitrator or a
court or other governmental authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"Run Off Day" for any Undivided Interest means any of (a) each day which occurs
on or after the date designated by the Administrative Agent to Seller to be the
"Run Off Commencement Date" during a time when any of the conditions precedent
set forth in Section 5.02 are not satisfied, (b) each day which occurs on or
after the Termination Date for such Undivided Interest or (c) each day which
occurs on or after the Seller shall have given written notice to the
Administrative Agent that it no longer wishes to sell Undivided Interests in the
Receivables Pool to Purchaser.
"Run Off Discount" has the meaning set forth in Appendix B.
"Run Off Period" means one or more successive Run Off Days.
"Run Off Servicer's Fee" has the meaning set forth in Appendix B.
"S&P" means Standard and Poor's Ratings Group, a division of McGraw Hill, Inc.,
and any successor thereto.
"Scheduled Commitment Termination Date" has the meaning set forth in Section
1.05(a).
"SEC" means the Securities and Exchange Commission.
"Seller" has the meaning set forth in the preamble.
"Servicer" has the meaning set forth in Section 8.01(a).
"Servicer Transfer Event" has the meaning set forth in Section 8.01(b).
"Servicer's Fee" has the meaning set forth in Appendix B.
"Servicer's Fee Reserve" has the meaning set forth in Appendix B.
"Settlement Date" means the last day of each Settlement Period.
"Settlement Period" for any Undivided Interest means
(a)each period commencing on the first day of each Yield Period for such
Undivided Interest and ending on the last day of such Yield Period; and
(b)on and after the Termination Date for such Undivided Interest, such period
(including, without limitation, a daily period) as shall be selected from time
to time by the Administrative Agent or, in absence of any such selection, each
period of thirty (30) days from the next preceding Settlement Date;
provided, however, that
(i) with respect to any Yield Period of one day (as described in clause (ii) of
the proviso of the definition of "Yield Period"), the related Settlement Period
shall be the first day following such Yield Period;
(ii) any Settlement Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day; and
(iii) the last Settlement Period shall end on the End Date.
"Special Concentration Limit" has the meaning set forth in Section 2.04(c).
"Subordinated Debt" means (i) the Debentures of 1987, (ii) the Permitted
Subordinated Debentures and (iii) any other Indebtedness of Guarantor or any
Subsidiary of Guarantor which is subordinated in writing to all obligations of
Guarantor or such Subsidiary on terms and conditions satisfactory in all
respects to the Administrative Agent and approved in writing by the
Administrative Agent (which approval shall not be unreasonably withheld or
delayed) including, without limitation, with respect to interest rates, payment
terms, maturities, amortization schedules, covenants, defaults, remedies and
subordination provisions.
"Subsidiary" of any Person shall mean a corporation or other entity of which
shares of stock or other ownership interests having ordinary voting power (other
than stock or other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, including through other Subsidiaries, by such
Person.
"Successor Notice" has the meaning set forth in Section 8.01(b).
"Termination Date" for any Undivided Interest means the Commitment Termination
Date.
"Termination Event" has the meaning set forth in Section 10.01.
"Total Capital" means, as to any Person at a particular date, the sum of (i) all
items which would, in accordance with GAAP, be properly classified on the
balance sheet of such Person as (a) total shareholders' equity plus (b)
long-term deferred income taxes, plus (ii) Total Debt.
"Total Debt" means, as to any Person at a particular date, the sum of all items
which would, in accordance with GAAP, be properly classified on such Person's
balance sheet as (i) short-term debt for money borrowed, plus (ii) current
maturities of long-term debt, plus (iii) long-term debt, including, without
limitation, with respect to Guarantor, the Subordinated Debt and to the extent
issued, the Permitted Subordinated Debentures.
"Trigger Event" means that either (i) at the end of any fiscal quarter, the
ratio of EBIT to Interest Expense is less than 3.0 to 1.0 or (ii) the ratio of
Total Debt to Total Capital is more than fifty-five percent (55%).
"UCC" means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction or jurisdictions.
"Undivided Interest" has the meaning set forth in Section 2.01.
"Unmatured Termination Event" means any event which, with the giving of notice
or lapse of time, or both, would become a Termination Event.
"Unpaid Balance" of any Receivable means at any time the sum of (x) the unpaid
principal amount thereof, minus (y) any amounts representing any sales or other
similar tax.
"Unused Commitment" means, on any day, the excess of the Purchase Limit for such
day over the Aggregate Purchaser's Investments on such day.
"Wholly Owned Subsidiary" means a Subsidiary all of whose issued and outstanding
capital stock (other than directors' qualifying shares) is owned by Guarantor or
another Wholly Owned Subsidiary.
"Yield Period" means with respect to any Undivided Interest (or portion
thereof):
(a)the period commencing on the date of the initial Purchase of such Undivided
Interest (or such portion) and ending such number of days (not to exceed
seventy-five (75) days) thereafter as the Administrative Agent shall select,
after consultation with the Seller, pursuant to, and in compliance with, Section
1.03 or 3.06; and
(b)thereafter, each period commencing on the last day of the immediately
preceding Yield Period for such Undivided Interest (or such portion) and ending
such number of days (not to exceed seventy-five (75) days) thereafter as the
Administrative Agent shall select, after consultation with the Seller;
provided, however, that
(i) any such Yield Period (other than a Yield Period consisting of one day)
which would otherwise end on a day that is not a Business Day shall be extended
to the next succeeding Business Day (unless the related Undivided Interest shall
be accruing Earned Discount at a rate determined by reference to the Eurodollar
Rate (Reserve Adjusted), in which case if such succeeding Business Day is in a
different calendar month, such Yield Period shall instead be shortened to the
next preceding Business Day);
(ii) in the case of Yield Periods of one day for any Undivided Interest, (a) the
initial Yield Period shall be the day of the related Purchase; (b) any
subsequently occurring Yield Period which is one day shall, if the immediately
preceding Yield Period is more than one day, be the last day of such immediately
preceding Yield Period, and if the immediately preceding Yield Period is one
day, shall be the next day following such immediately preceding Yield Period,
and (c) any Yield Period for any Undivided Interest which commences before the
Termination Date for such Undivided Interest and would otherwise end on a date
occurring after such Termination Date, such Yield Period shall end on such
Termination Date and the duration of each such Yield Period which commences on
or after the Termination Date for such Undivided Interest shall be of such
duration as shall be selected by the Administrative Agent.
The "related" Yield Period for any Undivided Interest at any time means the
Yield Period pursuant to which Earned Discount is then accruing for such
Undivided Interest.
B. Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP as in effect on the date hereof. All terms
used in Article 9 of the UCC in the State of Illinois, 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".
APPENDIX B
CALCULATION OF DISCOUNT AND RESERVE
This is Appendix B to the Receivables Purchase Agreement dated as of June 30,
1995 among SCI Technology, Inc., as Seller, SCI Systems, Inc., as Guarantor,
Receivables Capital Corporation, as Purchaser, and Bank of America National
Trust and Savings Association, as Administrative Agent (as amended, supplemented
or otherwise modified from time to time, the "Agreement"). Capitalized terms
used in this Appendix B without definition have the meanings assigned to such
terms in Appendix A to the Agreement. Each reference in this Appendix B to any
Section refers to such Section of the Agreement. Each reference in this Appendix
B to any Part refers to the part of this Appendix B so designated.
INDEX
PART I
DISCOUNT FACTOR
Sub-
Part Term Page No.
X.Xxxxxxxx Factor B-2
B.Earned Discount B-3
C.Negative Spread Fee B-3
X.Xxx Off Discount B-4
E.Rate Definitions B-4
Alternate Reference Rate B-4
Bank Rate B-5
Bank Rate Spread B-5
Commercial Paper Rate B-5
Domestic CD Rate (Adjusted) B-6
Eurodollar Rate (Reserve Adjusted) B-7
Pricing Grid Margin B-8
Purchaser Rate X-0
X.Xxxx Xxxxxxxx Xxxxxx X-0
PART II
CREDIT RESERVE
Sub-
Part Term Page No.
X.Xxxxxx Reserve B-9
PART III
DILUTION RESERVE
A.Dilution Reserve B-9
PART IV
SERVICER'S FEE RESERVE
A.Servicer's Fee Reserve B-9
B.Servicer's Fee B-10
X.Xxx Off Servicer's Fee B-10
PART V
ADJUSTED AVERAGE MATURITY
A.Adjusted Average Maturity B-10
B.Average Maturity B-10
PART I
DISCOUNT FACTOR
A. Discount Factor. The "Discount Factor" for a related Undivided Interest at
any time in a Yield Period means an amount determined as follows:
DF = ED + ROD
where:
DF =the Discount Factor of such Undivided Interest at such time;
ED =Earned Discount of such Undivided Interest accrued and unpaid at such time,
as determined pursuant to Part I.B;
ROD =Run Off Discount of such Undivided Interest at such time, as determined
pursuant to Part I.D.
B. Earned Discount. The "Earned Discount" for any Undivided Interest for each
day in a related Yield Period means an amount determined as follows:
ED =PI x PR x 1/360 + NSF (if any);
provided, however, that if, pursuant to the definition of "Purchaser Rate" in
Part I.E., different Purchaser Rates would apply to different portions of an
Undivided Interest, then Earned Discount shall be calculated separately with
respect to each such portion, and the Earned Discount shall be the sum of the
Earned Discount so calculated for such portions;
where:
ED = Earned Discount of such Undivided Interest (or such portion) accrued on
such day;
PI = the Purchaser's Investment of such Undivided Interest (or such portion) on
such day, as determined pursuant to Section 2.03; and
PR = the Purchaser Rate for such Undivided Interest (or such portion) on such
day, as defined in Part I.E.
NSF =the Negative Spread Fee for such Undivided Interest (or such portion
thereof) on such day, as defined in Part C.
No provision of the Agreement shall require the payment or permit the collection
of Earned Discount in excess of the maximum permitted by applicable law. Earned
Discount for any Undivided Interest shall not be considered paid by any
distribution if at any time such distribution is rescinded or must otherwise be
returned for any reason.
C. Negative Spread Fee. The "Negative Spread Fee" means, for each Undivided
Interest (or portion thereof) for each day in any Yield Period during which any
Run Off Day or Termination Date for such Undivided Interest occurs, the amount,
if any, by which;
(i) the additional Earned Discount (calculated without taking into account any
Negative Spread Fee) which would have accrued on the reductions of the related
Purchaser's Investment of such Undivided Interest (or such portion) during such
Yield Period (as so computed) if such reductions had remained as Purchaser's
Investment exceeds,
(ii) the income, if any, received by the owner of such Undivided Interest (or
such portion) from such owner's investing the proceeds of such reductions of
Purchaser's Investment.
D. Run Off Discount. The "Run Off Discount" for the related Undivided Interest
at any time means an amount determined as follows:
ROD =PI x (PR + RVF) x AAM
360
where:
ROD =the Run Off Discount for such Undivided Interest at such time;
PI =the Purchaser's Investment of such Undivided Interest at such time;
PR =the Purchaser Rate for such Undivided Interest for a Yield Period deemed to
commence at such time pursuant to Part I.E;
AAM =the Adjusted Average Maturity of the Receivables Pool related to such
Undivided Interest, as determined pursuant to Part V; and
RVF =the Rate Variance Factor deemed to be in effect at such time, as determined
pursuant to Part I.F.
E.Rate Definitions. The "Alternate Reference 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 BofA at its principal office
as its reference rate; and
(b)the Federal Funds Rate (as defined below) most recently determined by BofA
plus 1.0% per annum.
For purposes of this definition, "Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal (for each day during such period) to
the rate set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Bank of New York
(including any such successor, "H.15(519)") on the preceding Business Day
opposite the caption "Federal Funds (Effective)"; or, if for any relevant day
such rate is not so published on any such preceding Business Day, the rate for
such day will be the arithmetic mean as determined by the Administrative Agent
of the rates for the last transaction in overnight Federal funds arranged prior
to 9:00 a.m. (New York City time) on that day by each of three leading brokers
of Federal funds transactions in New York City selected by the Administrative
Agent.
The Alternate Reference Rate is not necessarily intended to be the lowest rate
of interest determined by BofA in connection with extensions of credit.
"Bank Rate" for any Yield Period for the related Undivided Interest means an
interest rate per annum equal to the sum of (a) the Bank Rate Spread, plus (b)
the Eurodollar Rate (Reserve Adjusted) for such Yield Period; provided, however,
that if (i) it shall become unlawful for the Administrative Agent or any Program
Support Provider to obtain funds in the offshore dollar interbank market in
order to fund any Purchase or to maintain any Undivided Interest, or if such
funds shall not be reasonably available to the Administrative Agent or any
Program Support Provider, or (ii) there shall not be time prior to the
commencement of an applicable Yield Period to determine a Eurodollar Rate in
accordance with its terms, then the "Bank Rate" for any Yield Period for such
Undivided Interest shall be equal to a rate of (x) the Bank Rate Spread, plus
(y) the Domestic CD Rate (Adjusted) for such Yield Period.
"Bank Rate Spread" means (i) 0.50% for the first thirty (30) days that the
related Undivided Interest is funded pursuant to a Program Support Agreement or
by a Funding and (ii) 0.25% plus the Pricing Grid Margin applicable from time to
time thereafter.
"Commercial Paper Rate" for any Yield Period for the related Undivided Interest
means a rate per annum equal to the sum of (i) the rate or, if more than one
rate, the weighted average of the rates, determined by converting to an
interest-bearing equivalent rate per annum the discount rate (or rates) at which
Commercial Paper Notes having a term equal to such Yield Period and to be issued
to fund the Purchase of or to maintain such Undivided Interest by Purchaser
(including, without limitation, Purchaser's Investment and accrued and unpaid
Earned Discount) may be sold by any placement agent or commercial paper dealer
selected by the Administrative Agent, as agreed between each such agent or
dealer and the Administrative Agent, plus (ii) 0.05% per annum, representing the
commissions and charges charged by such placement agent or commercial paper
dealer with respect to such Commercial Paper Notes, expressed as a percentage of
such face amount and converted to an interest-bearing equivalent rate per annum.
"Domestic CD Rate (Adjusted)" means, with respect to any Yield Period, a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined
pursuant to the following formula:
Domestic CD Rate = Domestic CD Rate + Assessment
(Adjusted) 1-Reserve Rate
Requirement
where:
"Domestic CD Rate" means, with respect to any Yield Period for any related
Undivided Interest (or portion thereof), a rate of interest equal to the average
of the secondary market morning offering rates in the United States for time
certificates of deposit of major United States money market banks for a period
approximately equal to such Yield Period in an amount substantially equal to the
Purchaser's Investment of the related Undivided Interest (or such portion), as
such offering rate is quoted to the Administrative Agent by the Federal Reserve
Bank of New York during the morning of the first day of such Yield Period;
provided, however, that if the Administrative Agent shall not receive any such
quote by the Federal Reserve Bank of New York by 10:00 a.m., Chicago time, on
the morning of the first day of any Yield Period, then "Domestic CD Rate" shall
mean, with respect to such Yield Period, the rate of interest determined by the
Administrative Agent to be the average (rounded upwards, if necessary, to the
nearest 1/100 of 1%) of the bid rates quoted to the Administrative Agent in the
secondary market at approximately 10:00 a.m., Chicago time (or as soon
thereafter as practicable), on the first day of such Yield Period by two
certificate of deposit dealers in New York or Chicago of recognized standing
selected by the Administrative Agent in its sole discretion for the purchase
from the Administrative Agent at face value of certificates of deposit issued by
the Administrative Agent in an amount approximately equal or comparable to the
amount of the related Purchaser's Investment and having a maturity equal to such
Yield Period.
"Assessment Rate" for any Yield Period means the annual assessment rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) applicable to
the Administrative Agent on its insured deposits, on the Business Day
immediately preceding the first day of such Yield Period, under the Federal
Deposit Insurance Act, determined by annualizing the most recent assessment
levied on the Administrative Agent by the Federal Deposit Insurance Corporation
(together with any successor, the "FDIC") with respect to such deposits after
giving effect to the most recent rebate granted to the Administrative Agent by
the FDIC with respect to deposit insurance as well as the loss to the
Administrative Agent (determined in the good faith judgment of the
Administrative Agent) of the use of such rebate prior to the date a credit is
taken by the Administrative Agent with respect to such rebate. The Assessment
Rate as of the date hereof is zero.
"Reserve Requirement" means, with respect to any Yield Period, a percentage
(expressed as a decimal) equal to the daily average during such Yield Period of
the aggregate reserve requirement (including all basic, supplemental, marginal
and other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements during such period) specified under
Regulation D, as applicable to the class of banks of which the Administrative
Agent is a member, on deposits of the types used as a reference in determining
the Domestic CD Rate and having a maturity approximately equal to such Yield
Period.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any Yield Period for
any related Undivided Interest (or portion thereof), 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 Yield Period for any related
Undivided Interest (or portion thereof), the rate per annum at which Dollar
deposits in immediately available funds are offered to the Eurodollar Office of
the Administrative Agent two Eurodollar Business Days prior to the beginning of
such period by prime banks in the offshore dollar interbank market at or about
the relevant local time of such Eurodollar Office, for delivery on the first day
of such Yield Period, for the number of days comprised therein and in an amount
equal or comparable to the amount of the related Purchaser's Investment of such
Undivided Interest (or such portion) for such Yield Period.
"Relevant local time" as to any Eurodollar Office shall mean 11:00 a.m., London
time when such Eurodollar Office is located in Europe or the Middle East, or
10:00 a.m., Chicago time, when such Eurodollar Office is located in North
America or the Caribbean.
"Eurodollar Business Day" means a day of the year on which dealings are carried
on in the offshore dollar interbank market of the Administrative Agent's
Eurodollar Office and banks are open for business in the location of the
Administrative Agent's Eurodollar Office and are not required or authorized to
close in New York City.
"Eurodollar Office" shall mean the office of the Administrative Agent located in
the Cayman Islands, Grand Cayman B.W.I. or such other office or offices through
which the Administrative Agent determines the Eurodollar Rate. A Eurodollar
Office of the Administrative Agent may be, at the option of the Administrative
Agent, either a domestic or foreign office.
"Eurodollar Reserve Percentage" means, with respect to any Yield Period, the
reserve percentage (expressed as a decimal and rounded upward to the nearest
1/100th of 1%) equal to the maximum aggregate reserve requirements (including
all basic, emergency, supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements) specified under regulations issued from time to time by the
Federal Reserve Board and then applicable to assets or liabilities consisting of
and including "Eurocurrency Liabilities", as currently defined in Regulation D
of the Federal Reserve Board, having a term approximately equal or comparable to
such Yield Period.
"Pricing Grid Margin" at any time means the percentage then applicable as set
forth on the grid attached hereto as Schedule B-1.
"Purchaser Rate" for any Yield Period for any related Undivided Interest (or
portion thereof) means:
(a)in the case of an Undivided Interest (or portion thereof) other than one
referred to in clause (b) or (c) of this definition, the sum of (i) the
Commercial Paper Rate for such Undivided Interest (or such portion) for such
Yield Period plus (ii) the Program Fee Rate;
(b)in the case of an Undivided Interest (or portion thereof) (i) owned by any
Program Support Provider or any other assignee (other than Purchaser), or
otherwise funded pursuant to a Program Support Agreement, or (ii) funded by a
Funding, and funded at a time when a Termination Event has not occurred and is
continuing, the Bank Rate for such Undivided Interest (or such portion) for such
Yield Period; and
(c)in the case of an Undivided Interest (or portion thereof) funded at a time
when a Termination Event has occurred and is continuing, a rate per annum equal
for each day during such Yield Period to the Alternate Reference Rate in effect
on such day plus 2% per annum.
F. Rate Variance Factor. The "Rate Variance Factor" means such percentage per
annum not exceeding 2% as the Administrative Agent may designate from time to
time in its sole discretion.
PART II
CREDIT RESERVE
X.Xxxxxx Reserve. The "Credit Reserve" of any Undivided Interest on any day
means an amount determined in accordance with the definition of Credit Reserve
in Appendix A.
PART III
DILUTION RESERVE
A. Dilution Reserve. The "Dilution Reserve" of any Undivided Interest on any day
means an amount determined in accordance with the definition of Dilution Reserve
in Appendix A.
PART IV
SERVICER'S FEE RESERVE
A. Servicer's Fee Reserve. The "Servicer's Fee Reserve" for the related
Undivided Interest at any time means an amount determined as follows:
SFR =SF + ROSF
where:
SFR =the Servicer's Fee Reserve for such Undivided Interest at any time;
SF =the unpaid Servicer's Fee relating to such Undivided Interest accrued to
such time and unpaid as determined pursuant to Part II.B; and
ROSF =the Run Off Servicer's Fee for such Undivided Interest at such time, as
determined pursuant to Part II.C.
B. Servicer's Fee. The "Servicer's Fee" relating to any Undivided Interest
accrued for any day
means
(i) an amount equal to (x) 0.50% per annum, times (y) the amount of the related
Purchaser's Investment at the close of business on such day, times (z) 1/360; or
(ii) on and after Servicer's reasonable request made at any time when Seller or
any of its Affiliates shall no longer be Servicer, an alternative amount
specified by Servicer not exceeding (x) 110% of Servicer's cost and expenses of
performing its obligations under the Agreement during the Yield Period when such
day occurs, divided by (y) the number of days in such Yield Period.
C. Run Off Servicer's Fee. The "Run Off Servicer's Fee" for any Undivided
Interest at any time means an amount equal to
(x) the related Purchaser's Investment at such time, times
(y) (a) the percentage per annum set forth in clause (i)(x) of the definition of
"Servicer's Fee", or (b) if Servicer's Fee is calculated pursuant to clause (ii)
of such definition, the percentage per annum determined for each day by dividing
the amount of the Servicer's Fee accrued for such day by the related Purchaser's
Investment at the close of business on such day, multiplying the quotient by 360
and expressing the product as a percentage, times
(z) a fraction, the numerator of which is the number of days equal to the then
Adjusted Average Maturity, and the denominator of which is 360 days.
PART V
ADJUSTED AVERAGE MATURITY
"Adjusted Average Maturity" means, on any day, the product of (i) three (3)
times (ii) the Average Maturity for such day.
"Average Maturity" means, on any day, that time period (expressed in days) equal
to the weighted average maturity of the Pool Receivables as shall be calculated
by Servicer, as set forth in the most recent Periodic Report in accordance with
the provisions thereof. If the Administrative Agent shall disagree with any such
calculation, the Administrative Agent may recalculate the Average Maturity for
such day, which calculation shall, absent manifest error, be binding upon
Servicer, Seller and Purchaser.
SCHEDULE B-1
PRICING GRID MARGINS
If the ratio of Guarantor's Total Debt to Total Capital as of the end of any
fiscal quarter is within a particular range described in the left column below,
and if Guarantor's ratio of EBIT to Interest Expense as of the end of such
fiscal year is within a particular range described in the top row below, then
the Pricing Grid Margin shall be 1.25%, as adjusted by the amount specified
where such ranges intersect below:
| EBIT to Interest Expense Ratio
|
Total Debt to | >.8:1; >1.25:1;
Total Capital | <1.25;1 <2.5:1 >2.5:1
Ratio |
------------------------------------------------------------------------
>.65:1 | +1/2% per annum +1/8% per annum -1/4% per annum
>.45:1; | +3/8% per annum 0% per annum -3/8 per annum
<.65:1 |
<.45:1 | +1/4% per annum -1/8% per annum -1/2% per annum
For example, if Guarantor's ratio of Total Debt to Total Capital as of the end
of one fiscal quarter is .75:1.0 and Guarantor's ratio of EBIT to Interest
Expense as of the end of such quarter is 1.5:1.0, then the Pricing Grid Margin
for the immediately succeeding quarterly computation period will be increased by
1/8% per annum.
SCHEDULE 2.04(c)
SPECIAL CONCENTRATION LIMITS
Special
Short-Term Concentration
Obligor NameDebt Rating* Limit
Hewlett-Packard
CompanyA1/P1 or better 30%
A2/P2 12%
below A2/P2 3%
Apple Computer, Inc.A2/P2 or better 12%
below A2/P2 3%
IBMA2/P2 or better 12%
below A2/P2 3%
CompaqA2/P2 or better 12%
below A2/P2 3%
*The ratings from each rating agency must be maintained; if the two ratings are
different, the Special Concentration Limit shall be determined by reference to
the lowest rating.
[END OF EXHIBIT 10 (b) (1)]
