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Exhibit 10.16
RECEIVABLES PURCHASE AGREEMENT
dated as of August 10, 2000
Among
JABIL CIRCUIT FINANCIAL, INC.,
as Seller and as Servicer,
JABIL CIRCUIT, INC.,
as Sub-Servicer,
FALCON ASSET SECURITIZATION CORPORATION
and
BANK ONE, NA (MAIN OFFICE CHICAGO)
as Agent
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TABLE OF CONTENTS
Page
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ARTICLE I
PURCHASE ARRANGEMENTS.................................................................1
Section 1.1 Purchase Facility............................................................1
Section 1.2 Increases....................................................................2
Section 1.3 Decreases....................................................................2
Section 1.4 Payment Requirements.........................................................2
ARTICLE II
PAYMENTS AND COLLECTIONS..............................................................4
Section 2.1 Payments.....................................................................4
Section 2.2 Collections Prior to Amortization............................................5
Section 2.3 Collections Following Amortization...........................................5
Section 2.4 Application of Collections...................................................6
Section 2.5 Payment Recission............................................................6
Section 2.6 Maximum Purchaser Interests..................................................6
Section 2.7 Clean Up Call................................................................7
ARTICLE III
FALCON FUNDING........................................................................7
Section 3.1 CP Costs.....................................................................7
Section 3.2 CP Costs Payments............................................................7
Section 3.3 Calculation of CP Costs......................................................7
ARTICLE IV
FINANCIAL INSTITUTION FUNDING.........................................................7
Section 4.1 Financial Institution Funding................................................7
Section 4.2 Yield Payments...............................................................8
Section 4.3 Selection and Continuation of Tranche Periods................................8
Section 4.4 Financial Institution Discount Rates.........................................8
Section 4.5 Suspension of the LIBO Rate..................................................8
ARTICLE V
REPRESENTATIONS AND WARRANTIES........................................................9
Section 5.1 Representations and Warranties of Seller.....................................9
Section 5.2 Representations and Warranties of Sub-Servicer..............................13
Section 5.3 Financial Institution Representations and Warranties........................14
ARTICLE VI
CONDITIONS OF PURCHASES..............................................................15
Section 6.1 Conditions Precedent to Initial Incremental Purchase........................15
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TABLE OF CONTENTS
(continued)
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.....................15
ARTICLE VII
COVENANTS............................................................................16
Section 7.1 Affirmative Covenants of the Seller Parties.................................16
Section 7.2 Negative Covenants of the Seller Parties....................................23
ARTICLE VIII
ADMINISTRATION AND COLLECTION........................................................24
Section 8.1 Designation of Servicer and Sub-Servicer....................................24
Section 8.2 Duties of Servicer..........................................................25
Section 8.3 Collection Notices..........................................................26
Section 8.4 Responsibilities of Seller..................................................27
Section 8.5 Reports.....................................................................27
Section 8.6 Servicing Fees..............................................................27
ARTICLE IX
AMORTIZATION EVENTS..................................................................27
Section 9.1 Amortization Events.........................................................27
Section 9.2 Remedies....................................................................29
ARTICLE X
INDEMNIFICATION......................................................................30
Section 10.1 Indemnities by The Seller Parties...........................................30
Section 10.2 Increased Cost and Reduced Return...........................................33
Section 10.3 Other Costs and Expenses....................................................33
Section 10.4 Allocations.................................................................34
ARTICLE XI
THE AGENT............................................................................34
Section 11.1 Authorization and Action....................................................34
Section 11.2 Delegation of Duties........................................................34
Section 11.3 Exculpatory Provisions......................................................35
Section 11.4 Reliance by Agent...........................................................35
Section 11.5 Non-Reliance on Agent and Other Purchasers..................................35
Section 11.6 Reimbursement and Indemnification...........................................36
Section 11.7 Agent in its Individual Capacity............................................36
Section 11.8 Successor Agent.............................................................36
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS..........................................................36
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TABLE OF CONTENTS
(continued)
Section 12.1 Assignments.................................................................36
Section 12.2 Participations..............................................................37
ARTICLE XIII
LIQUIDITY FACILITY...................................................................38
Section 13.1 Transfer to Financial Institutions..........................................38
Section 13.2 Transfer Price Reduction Yield..............................................38
Section 13.3 Payments to Falcon..........................................................38
Section 13.4 Limitation on Commitment to Purchase from Falcon............................38
Section 13.5 Defaulting Financial Institutions...........................................39
Section 13.6 Terminating Financial Institutions..........................................39
ARTICLE XIV
MISCELLANEOUS........................................................................40
Section 14.1 Waivers and Amendments......................................................40
Section 14.2 Notices.....................................................................41
Section 14.3 Ratable Payments............................................................42
Section 14.4 Protection of Ownership Interests of the Purchasers.........................42
Section 14.5 Confidentiality.............................................................43
Section 14.6 Bankruptcy Petition.........................................................43
Section 14.7 Limitation of Liability.....................................................43
Section 14.8 CHOICE OF LAW...............................................................44
Section 14.9 CONSENT TO JURISDICTION.....................................................44
Section 14.10 WAIVER OF JURY TRIAL........................................................44
Section 14.11 Integration; Binding Effect; Survival of Terms..............................44
Section 14.12 Counterparts; Severability; Section References..............................45
Section 14.13 Bank One Roles..............................................................45
Section 14.14 Characterization............................................................45
EXHIBITS AND SCHEDULES
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Places of Business of the Seller Parties; Locations of Records;
Federal Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Invoice(s)
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TABLE OF CONTENTS
(continued)
Exhibit X Form of Monthly Report
Exhibit XI Form of Performance Undertaking
Schedule A Commitments of Financial Institutions
Schedule B Closing Documents
Schedule C Pending Litigation
Schedule D Excluded Receivables
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JABIL CIRCUIT FINANCIAL, INC.
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement dated as of August 10, 2000 is
among Jabil Circuit Financial, Inc., a Delaware corporation ("JCFI"), as seller
("Seller") and as initial servicer ("Servicer"), Jabil Circuit, Inc., a Delaware
corporation, as sub-servicer ("Sub-Servicer", Sub-Servicer, Servicer and Seller
are referred to herein as the "Seller Parties" and each a "Seller Party"), the
entities listed on Schedule A to this Agreement (together with any of their
respective successors and assigns hereunder, the "Financial Institutions"),
Falcon Asset Securitization Corporation ("Falcon") and Bank One, NA (Main Office
Chicago), as agent for the Purchasers hereunder or any successor agent hereunder
(together with its successors and assigns hereunder, the "Agent"). Unless
defined elsewhere herein, capitalized terms used in this Agreement shall have
the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the
Purchasers from time to time.
Falcon may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
In the event that Falcon declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Falcon in accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is willing to
act as Agent on behalf of Falcon and the Financial Institutions in accordance
with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof,
Seller may, at its option, sell and assign Purchaser Interests to the Agent for
the benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Falcon may, at its option, instruct the Agent to
purchase on behalf of Falcon, or if Falcon shall decline to purchase, the Agent
shall purchase, on behalf of the Financial Institutions, Purchaser Interests
from time to time in an aggregate amount not to exceed at such time the lesser
of (i) the Purchase Limit and (ii) the aggregate amount of the Commitments
during the period from the date hereof to but not including the Facility
Termination Date.
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(b) Seller may, upon at least 10 Business Days' notice to
the Agent, terminate in whole or reduce in part, ratably among the Financial
Institutions, the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
Section 1.2 Increases. Seller shall provide the Agent
with at least two (2) Business Days' prior notice in a form set forth as Exhibit
II hereto of each Incremental Purchase (a "Purchase Notice"). Each Purchase
Notice shall be subject to Section 6.2 hereof and, except as set forth below,
shall be irrevocable and shall specify the requested Purchase Price (which shall
not be less than $1,000,000) and date of purchase (which, in the case of any
Incremental Purchase (after the initial Incremental Purchase hereunder), shall
only be on a Settlement Date unless otherwise consented to by the Agent) and, in
the case of an Incremental Purchase to be funded by the Financial Institutions,
the requested Discount Rate and Tranche Period. Following receipt of a Purchase
Notice, the Agent will determine whether Falcon agrees to make the purchase. If
Falcon declines to make a proposed purchase, Seller may cancel the Purchase
Notice or, in the absence of such a cancellation, the Incremental Purchase of
the Purchaser Interest will be made by the Financial Institutions. On the date
of each Incremental Purchase, upon satisfaction of the applicable conditions
precedent set forth in Article VI, Falcon or the Financial Institutions, as
applicable, shall deposit to the Facility Account, in immediately available
funds, no later than 12:00 noon (Chicago time), an amount equal to (i) in the
case of Falcon, the aggregate Purchase Price of the Purchaser Interests Falcon
is then purchasing or (ii) in the case of a Financial Institution, such
Financial Institution's Pro Rata Share of the aggregate Purchase Price of the
Purchaser Interests the Financial Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent
with prior written notice in conformity with the Required Notice Period (a
"Reduction Notice") of any proposed reduction of Aggregate Capital from
Collections. Such Reduction Notice shall designate (i) the date (the "Proposed
Reduction Date") upon which any such reduction of Aggregate Capital shall occur
(which date shall give effect to the applicable Required Notice Period), and
(ii) the amount of Aggregate Capital to be reduced which shall be applied
ratably to the Purchaser Interests of Falcon and the Financial Institutions in
accordance with the amount of Capital (if any) owing to Falcon, on the one hand,
and the amount of Capital (if any) owing to the Financial Institutions (ratably,
based on their respective Pro Rata Shares), on the other hand (the "Aggregate
Reduction"). Only one (1) Reduction Notice shall be outstanding at any time. No
Aggregate Reduction will be made following the occurrence of the Amortization
Date without the consent of the Agent.
Section 1.4 Payment Requirements. All amounts to be paid
or deposited by any Seller Party pursuant to any provision of this Agreement
shall be paid or deposited in accordance with the terms hereof no later than
11:00 a.m. (Chicago time) on the day when due in immediately available funds,
and if not received before 11:00 a.m. (Chicago time) shall be deemed to be
received on the next succeeding Business Day. If such amounts are payable to a
Purchaser they shall be paid to the Agent, for the account of such Purchaser, at
1 Bank Xxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 until otherwise notified by the Agent.
Upon notice to Seller, the Agent may debit the Facility Account for all amounts
due and payable hereunder. All computations of Yield, per annum fees calculated
as part of any CP Costs, per annum fees
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hereunder and per annum fees under the Fee Letter shall be made on the basis of
a year of 360 days for the actual number of days elapsed. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.
Section 1.5 Pledged Collateral. (a) As security for the
obligations and liabilities hereunder of Seller now or hereafter existing or
arising, including, without limitation, the obligations of Seller under Section
2.1 and Article X, Seller hereby pledges and makes a collateral assignment, and
grants a security interest, to the Agent for the benefit of the Purchasers in
all of Seller's right, title and interest in and to (i) the Demand Note, (ii)
all additional indebtedness from time to time owed to Seller by Jabil and
related to the Demand Note, and the instruments evidencing such indebtedness,
(iii) all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
the Demand Note or such other indebtedness, and (iv) all proceeds of any and all
of the foregoing collateral (the items described in clauses (i) through (iv)
being, collectively, the "Pledged Collateral").
(b) All instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by or on behalf of the Agent
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Agent. Seller shall not at any
time after the occurrence of a Potential Amortization Event or an Amortization
Event ask for, xxx or receive any payment on the Pledged Collateral (whether in
cash or other assets, by exercise of any right of set-off or otherwise) without
the prior written consent of the Agent. In any event, Seller shall not receive
any payment on the Pledged Collateral by allowing Jabil to exercise a right of
set-off if (i) after giving effect to such payment: (A) a Potential Amortization
Event or an Amortization Event would occur or (B) the Required Capital Amount
(as such term is defined in the Receivables Sale Agreement) would not be
maintained by the Seller or (ii) such payment would violate the terms of the
Subordinated Note (as such term is defined in the Receivables Sale Agreement )
issued by the Seller to Jabil. In the event that Seller shall at any time after
the occurrence of a Potential Amortization Event or an Amortization Event
receive any payment on or with respect to any Pledged Collateral, Seller shall
immediately so notify the Agent and shall forthwith deliver the same to the
Agent in the form received to be held by the Agent as additional Pledged
Collateral or to be applied in accordance with the terms of this Agreement.
Seller agrees that it shall not, at any time, without the prior written consent
of the Agent, (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral,
(ii) create or permit to exist any Adverse Claim upon or with respect to any of
the Pledged Collateral, except for the security interest under this Agreement,
or (iii) amend, waive, forgive, terminate or otherwise modify any of the Pledged
Collateral.
(c) Seller represents and warrants as follows: (i) the
Demand Note has been duly authorized, issued and delivered by Jabil, and the
Demand Note (and each other instrument comprising a part of the Pledged
Collateral that shall have been issued by Jabil) is the legal, valid and binding
obligation of Jabil thereof, and Jabil is not in default thereunder; (ii) Seller
is the legal and beneficial owner of the Pledged Collateral free and clear of
any Adverse Claim except for the security interest created by this Agreement;
(iii) the pledge of the Pledged Collateral pursuant to this Agreement creates a
valid and perfected first priority security interest in the
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Pledged Collateral, securing the payment of the obligations and liabilities of
Seller hereunder, and (iv) no consent of any other Person and no authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required (A) for the pledge by Seller of the
Pledged Collateral pursuant to this Agreement, (B) for the perfection or
maintenance of the security interest created hereby (including the first
priority nature of such security interest) or (C) for the exercise by the Agent
of the rights provided for in this Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Agreement.
(d) Seller agrees that at any time and from time to time,
at the expense of Seller, Seller will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Agent to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral.
(e) Upon the occurrence and during the continuance of an
Amortization Event or Potential Amortization Event, (i) the Agent shall have all
rights and remedies of a secured creditor under the UCC and other applicable law
in respect of the Pledged Collateral and (ii) the Agent may at any time make
demand on Jabil or any other obligor in respect of any of the Pledged Collateral
for payment of the Pledged Collateral. Any amounts received by the Agent in the
exercise of its rights under this Section 1.5(e) may, at the option of the
Agent, be applied to any obligations or liabilities of Seller then due and
payable or be held by the Agent as additional Pledged Collateral hereunder.
(f) This Agreement shall create a continuing security
interest in the Pledged Collateral and shall remain in full force and effect
until the later of (i) the reduction to zero of the Aggregate Unpaids and all
other amounts payable under this Agreement and (ii) the termination of this
Agreement.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on
recourse contained in this Agreement, Seller shall promptly pay to the Agent
when due, for the account of the relevant Purchaser or Purchasers on a full
recourse basis, (i) such fees as set forth in the Fee Letter (which fees shall
be sufficient to pay all fees owing to the Financial Institutions), (ii) all CP
Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as Deemed
Collections (which shall be immediately due and payable by Seller and applied to
reduce outstanding Aggregate Capital hereunder in accordance with Sections 2.2
and 2.3 hereof), (v) all amounts payable to reduce the Seller Interest, if
required, pursuant to Section 2.6, (vi) all amounts payable pursuant to Article
X, if any, (vii) all Servicer costs and expenses, including the Servicing Fee,
in connection with servicing, administering and collecting the Receivables,
(viii) all Broken Funding Costs and (ix) all Default Fees (collectively, the
"Obligations"). If any Person fails to pay any of the Obligations when due, such
Person agrees to pay, on demand, the Default Fee in respect thereof until paid.
Notwithstanding the foregoing, no provision of this Agreement or the Fee Letter
shall require the payment or permit the collection of any amounts hereunder in
excess
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of the maximum permitted by applicable law. If at any xxxx Xxxxxx receives any
Collections or is deemed to receive any Collections, Seller shall immediately
pay such Collections or Deemed Collections to the Servicer for application in
accordance with the terms and conditions hereof and, at all times prior to such
payment, such Collections or Deemed Collections shall be held in trust by Seller
for the exclusive benefit of the Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization. Prior to
the Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in
this Section 2.2. If at any time any Collections are received by the Servicer
prior to the Amortization Date, (i) the Servicer shall set aside the Termination
Percentage of Collections evidenced by the Purchaser Interests of each
Terminating Financial Institution and (ii) Seller hereby requests and the
Purchasers (other than any Terminating Financial Institutions) hereby agree to
make, simultaneously with such receipt, a reinvestment (each a "Reinvestment")
with that portion of the balance of each and every Collection received by the
Servicer that is part of any Purchaser Interest (other than any Purchaser
Interests of Terminating Financial Institutions), such that after giving effect
to such Reinvestment, the amount of Capital of such Purchaser Interest
immediately after such receipt and corresponding Reinvestment shall be equal to
the amount of Capital immediately prior to such receipt. On each Settlement Date
prior to the occurrence of the Amortization Date, the Servicer shall remit to
the Agent's account the amounts set aside during the preceding Settlement Period
that have not been subject to a Reinvestment and apply such amounts (if not
previously paid in accordance with Section 2.1) first, to reduce unpaid
Obligations and second, to reduce the Capital of all Purchaser Interests of
Terminating Financial Institutions, applied ratably to each Terminating
Financial Institution according to its respective Termination Percentage. If
such Capital and Obligations shall be reduced to zero, any additional
Collections received by the Servicer (i) if applicable, shall be remitted to the
Agent's account no later than 11:00 a.m. (Chicago time) to the extent required
to fund any Aggregate Reduction on such Settlement Date and (ii) any balance
remaining thereafter shall be remitted from the Servicer to Seller on such
Settlement Date. Each Terminating Financial Institution shall be allocated a
ratable portion of Collections from the date of any assignment by Falcon
pursuant to Section 13.6 (the "Termination Date") until such Terminating
Financing Institution's Capital shall be paid in full. This ratable portion
shall be calculated on the Termination Date of each Terminating Financial
Institution as a percentage equal to (i) Capital of such Terminating Financial
Institution outstanding on its Termination Date, divided by (ii) the Aggregate
Capital outstanding on such Termination Date (the "Termination Percentage").
Each Terminating Financial Institution's Termination Percentage shall remain
constant prior to the Amortization Date. On and after the Amortization Date,
each Termination Percentage shall be disregarded, and each Terminating Financial
Institution's Capital shall be reduced ratably with all Financial Institutions
in accordance with Section 2.3.
Section 2.3 Collections Following Amortization. On the
Amortization Date and on each day thereafter, the Servicer shall set aside and
hold in trust, for the holder of each Purchaser Interest, all Collections
received on such day and an additional amount for the payment of any accrued and
unpaid Obligations owed by Seller and not previously paid by Seller in
accordance with Section 2.1. On and after the Amortization Date, the Servicer
shall, at any time upon the request from time to time by (or pursuant to
standing instructions from) the Agent
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(i) remit to the Agent's account the amounts set aside pursuant to the preceding
sentence, and (ii) apply such amounts to reduce the Capital associated with each
such Purchaser Interest and any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall
be insufficient funds on deposit for the Servicer to distribute funds in payment
in full of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as
applicable), the Servicer shall distribute funds:
first, to the payment of the Servicer's reasonable
out-of-pocket costs and expenses in connection with servicing,
administering and collecting the Receivables, including the Servicing
Fee, if Seller or one of its Affiliates is not then acting as the
Servicer,
second, to the reimbursement of the Agent's costs of
collection and enforcement of this Agreement,
third, to the Agent for the benefit of the Purchasers for the
ratable payment of all accrued CP Costs, Yield and fees payable
pursuant to the Fee Letter,
fourth, (to the extent applicable) to the ratable reduction of
the Aggregate Capital (without regard to any Termination Percentage),
fifth, for the ratable payment of all other unpaid
Obligations, provided that to the extent such Obligations relate to the
payment of Servicer costs and expenses, including the Servicing Fee,
when Seller or one of its Affiliates is acting as the Servicer, such
costs and expenses will not be paid until after the payment in full of
all other Obligations, and
sixth, after the Aggregate Unpaids have been indefeasibly
reduced to zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall
be distributed in accordance with the aforementioned provisions, and, giving
effect to each of the priorities set forth in this Section 2.4, shall be shared
ratably (within each priority) among the Agent and the Purchasers in accordance
with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.
Section 2.5 Payment Recission. No payment of any of the
Aggregate Unpaids shall be considered paid or applied hereunder to the extent
that, at any time, all or any portion of such payment or application is
rescinded by application of law or judicial authority, or must otherwise be
returned or refunded for any reason. Seller shall remain obligated for the
amount of any payment or application so rescinded, returned or refunded, and
shall promptly pay to the Agent (for application to the Person or Persons who
suffered such recission, return or refund) the full amount thereof, plus the
Default Fee from the date of any such recission, return or refunding.
Section 2.6 Maximum Purchaser Interests. Seller shall
ensure that the Purchaser Interests of the Purchasers shall at no time exceed in
the aggregate 100%. If the aggregate of the Purchaser Interests of the
Purchasers exceeds 100%, Seller shall pay to the Agent within one (1) Business
Day an amount to be applied to reduce the Aggregate Capital (as
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allocated by the Agent), such that after giving effect to such payment the
aggregate of the Purchaser Interests equals or is less than 100%.
Section 2.7 Clean Up Call. In addition to Seller's
rights pursuant to Section 1.3, Seller shall have the right (after providing
written notice to the Agent in accordance with the Required Notice Period), at
any time following the reduction of the Aggregate Capital to a level that is
less than 10.0% of the original Purchase Limit, to repurchase from the
Purchasers all, but not less than all, of the then outstanding Purchaser
Interests. The purchase price in respect thereof shall be an amount equal to the
Aggregate Unpaids through the date of such repurchase, payable in immediately
available funds. Such repurchase shall be without representation, warranty or
recourse of any kind by, on the part of, or against any Purchaser or the Agent.
ARTICLE III
FALCON FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with
respect to the Capital associated with each Purchaser Interest of Falcon for
each day that any Capital in respect of such Purchaser Interest is outstanding.
Each Purchaser Interest funded substantially with Pooled Commercial Paper will
accrue CP Costs each day on a pro rata basis, based upon the percentage share
the Capital in respect of such Purchaser Interest represents in relation to all
assets held by Falcon and funded substantially with Pooled Commercial Paper.
Section 3.2 CP Costs Payments. On each Settlement Date,
Seller shall pay to the Agent (for the benefit of Falcon) an aggregate amount
equal to all accrued and unpaid CP Costs in respect of the Capital associated
with all Purchaser Interests of Falcon for the immediately preceding Accrual
Period in accordance with Article II.
Section 3.3 Calculation of CP Costs. On the third
Business Day immediately preceding each Settlement Date, Falcon shall calculate
the aggregate amount of CP Costs for the applicable Accrual Period and shall
notify Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each
Purchaser Interest of the Financial Institutions shall accrue Yield for each day
during its Tranche Period at either the LIBO Rate or the Base Rate in accordance
with the terms and conditions hereof. Until Seller gives notice to the Agent of
another Discount Rate in accordance with Section 4.4, the initial Discount Rate
for any Purchaser Interest transferred to the Financial Institutions pursuant to
the terms and conditions hereof shall be the Base Rate. If the Financial
Institutions acquire by assignment from Falcon any Purchaser Interest pursuant
to Article XIII, each Purchaser Interest so assigned shall each be deemed to
have a new Tranche Period commencing on the date of any such assignment.
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Section 4.2 Yield Payments. On the Settlement Date for
each Purchaser Interest of the Financial Institutions, Seller shall pay to the
Agent (for the benefit of the Financial Institutions) an aggregate amount equal
to the accrued and unpaid Yield for the entire Tranche Period of each such
Purchaser Interest in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche
Periods.
(a) With consultation from (and approval by) the Agent,
Seller shall from time to time request Tranche Periods for the Purchaser
Interests of the Financial Institutions, provided that, if at any time the
Financial Institutions shall have a Purchaser Interest, Seller shall always
request Tranche Periods such that at least one Tranche Period shall end on the
date specified in clause (A) of the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by
the other received at least three (3) Business Days prior to the end of a
Tranche Period (the "Terminating Tranche") for any Purchaser Interest, may,
effective on the last day of the Terminating Tranche: (i) divide any such
Purchaser Interest into multiple Purchaser Interests, (ii) combine any such
Purchaser Interest with one or more other Purchaser Interests that have a
Terminating Tranche ending on the same day as such Terminating Tranche or (iii)
combine any such Purchaser Interest with a new Purchaser Interests to be
purchased on the day such Terminating Tranche ends, provided, that in no event
may a Purchaser Interest of Falcon be combined with a Purchaser Interest of the
Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller
may select the LIBO Rate or the Base Rate for each Purchaser Interest of the
Financial Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least
three (3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as a new Discount Rate and
(ii) at least one (1) Business Day prior to the expiration of any Terminating
Tranche with respect to which the Base Rate is being requested as a new Discount
Rate, give the Agent irrevocable notice of the new Discount Rate for the
Purchaser Interest associated with such Terminating Tranche. Until Seller gives
notice to the Agent of another Discount Rate, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Base Rate.
Section 4.5 Suspension of the LIBO Rate. (a) If any
Financial Institution notifies the Agent that it has determined that funding its
Pro Rata Share of the Purchaser Interests of the Financial Institutions at a
LIBO Rate would violate any applicable law, rule, regulation, or directive of
any governmental or regulatory authority, whether or not having the force of
law, or that (i) deposits of a type and maturity appropriate to match fund its
Purchaser Interests at such LIBO Rate are not available or (ii) such LIBO Rate
does not accurately reflect the cost of acquiring or maintaining a Purchaser
Interest at such LIBO Rate, then the Agent shall suspend the availability of
such LIBO Rate and require Seller to select the Base Rate for any Purchaser
Interest accruing Yield at such LIBO Rate.
(b) If less than all of the Financial Institutions give a
notice to the Agent pursuant to Section 4.5(a), each Financial Institution which
gave such a notice shall be obliged, at the
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request of Seller, Falcon or the Agent, to assign all of its rights and
obligations hereunder to (i) another Financial Institution or (ii) another
funding entity nominated by Seller or the Agent that is acceptable to Falcon and
willing to participate in this Agreement through the Liquidity Termination Date
in the place of such notifying Financial Institution; provided that (i) the
notifying Financial Institution receives payment in full, pursuant to an
Assignment Agreement, of an amount equal to such notifying Financial
Institution's Pro Rata Share of the Capital and Yield owing to all of the
Financial Institutions and all accrued but unpaid fees and other costs and
expenses payable in respect of its Pro Rata Share of the Purchaser Interests of
the Financial Institutions, and (ii) the replacement Financial Institution
otherwise satisfies the requirements of Section 12.1(b).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Seller.
Seller hereby represents and warrants to the Agent and the Purchasers as of the
date hereof and as of the date of each Incremental Purchase and the date of each
Reinvestment that:
(a) Corporate Existence and Power. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation. Seller is duly qualified to do business and is in
good standing as a foreign corporation, and has and holds all corporate power
and all governmental licenses, authorizations, consents and approvals required
to carry on its business in each jurisdiction in which its business is
conducted.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by Seller of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and Seller's use of the proceeds of
purchases made hereunder, are within its corporate powers and authority and have
been duly authorized by all necessary corporate action on its part. This
Agreement and each other Transaction Document to which Seller is a party have
been duly executed and delivered by Seller.
(c) No Conflict. The execution and delivery by Seller of
this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on any assets of Seller or its
Subsidiaries (except as created hereunder) and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of
the financing statements required hereunder, 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
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and delivery by Seller of this Agreement and each other Transaction Document to
which it is a party and the performance of its obligations hereunder and
thereunder.
(e) Actions, Suits. There are no actions, suits or
proceedings pending, or to the best of Seller's knowledge, threatened, against
or affecting Seller, or any of its properties, in or before any court,
arbitrator or other body. Seller is not in default with respect to any order of
any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other
Transaction Document to which Seller is a party constitute the legal, valid and
binding obligations of Seller enforceable against Seller in accordance with
their respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) Accuracy of Information. All information heretofore
furnished by Seller or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by Seller or any of its Affiliates to the Agent
or the Purchasers (including all Monthly Reports) will be, true and accurate in
every material respect on the date such information is stated or certified and
does not and will not contain any material misstatement of fact or omit to state
a material fact or any fact necessary to make the statements contained therein
not misleading.
(h) Use of Proceeds. No proceeds of any purchase
hereunder will be used (i) for a purpose that violates, or would be inconsistent
with, Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(i) Good Title. Immediately prior to each purchase
hereunder, Seller shall be the legal and beneficial owner of the Receivables and
Related Security with respect thereto, free and clear of any Adverse Claim,
except as created by the Transaction Documents. There have been duly filed all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect
Seller's ownership interest in each Receivable, its Collections and the Related
Security. Each Contract which is "chattel paper" within the meaning of Section
9-105 of the UCC of all applicable jurisdictions has been stamped to reflect the
fact that such Contract has been assigned to the Seller.
(j) Perfection. This Agreement, together with the filing
of the financing statements contemplated hereby, is effective to, and shall,
upon each purchase hereunder, transfer to the Agent for the benefit of the
relevant Purchaser or Purchasers (and the Agent for the benefit of such
Purchaser or Purchasers shall acquire from Seller) a valid and perfected first
priority undivided percentage ownership or security interest in each Receivable
existing or hereafter arising and in the Related Security and Collections with
respect thereto, free and clear
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of any Adverse Claim, except as created by the Transactions Documents. There
have been duly filed all financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect the Agent's (on behalf of the Purchasers) ownership or
security interest in the Receivables, the Related Security and the Collections.
Each Contract which is "chattel paper" within the meaning of Section 9-105 of
the UCC of all applicable jurisdictions has been stamped to reflect the fact
that such Contract has been assigned to the Agent for the benefit of the
Purchasers.
(k) Places of Business and Locations of Records. The
principal places of business and chief executive office of Seller and the
offices where it keeps all of its Records are located at the address(es) listed
on Exhibit III or such other locations of which the Agent has been notified in
accordance with Section 7.2(a) in jurisdictions where all action required by
Section 14.4(a) has been taken and completed. Seller's Federal Employer
Identification Number is correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set
forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and
duly performed. The names and addresses of all Collection Banks, together with
the account numbers of the Collection Accounts of Seller at each Collection Bank
and the post office box number of each Lock-Box, are listed on Exhibit IV.
Seller has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account at
a future time or upon the occurrence of a future event.
(m) Material Adverse Effect. Since the date of this
Agreement, no event has occurred that would have a Material Adverse Effect.
(n) Names. In the past five (5) years, Seller has not
used any corporate names, trade names or assumed names other than the name in
which it has executed this Agreement.
(o) Ownership of Seller. Jabil owns, directly or
indirectly, 100% of the issued and outstanding capital stock of Seller, free and
clear of any Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
(p) Not a Holding Company or an Investment Company.
Seller is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Seller is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Seller has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject. Each Receivable,
together with the Contract and Invoice related thereto, does not contravene any
laws, rules or regulations applicable thereto (including, without
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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), and no part of such Contract or Invoice is in
violation of any such law, rule or regulation.
(r) Compliance with Credit and Collection Policy. Seller
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract and Invoice, and has not made
any change to such Credit and Collection Policy, other than as permitted under
Section 7.2(c), and in compliance with the notification requirements in Section
7.1(a)(vii).
(s) Payments to Originators. With respect to each
Receivable transferred to Seller under the Receivables Sale Agreement, Seller
has given reasonably equivalent value to the applicable Originator in
consideration therefor and such transfer was not made for or on account of an
antecedent debt. No transfer by either Originator of any Receivable under the
Receivables Sale Agreement is or may be voidable under any section of the
Bankruptcy Reform Act of 1978 (11 U.S.C. xx.xx. 101 et seq.), as amended.
(t) Enforceability of Invoice. Each Invoice with respect
to each Receivable is effective to create, and has created, a legal, valid and
binding obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included in the
Net Receivables Balance as an Eligible Receivable on the date of its purchase
under the Receivables Sale Agreement was an Eligible Receivable on such purchase
date.
(v) Net Receivables Balance. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Aggregate Reserves.
(w) Accounting. The manner in which Seller accounts for
the transactions contemplated by this Agreement and the Receivables Sale
Agreement does not jeopardize the true sale analysis.
(x) Purpose. Seller has determined that, from a business
viewpoint, the purchase of the Receivables and related interests thereto from
the Originators under the Receivables Sale Agreement, and the sale of Purchaser
Interests to the Purchasers and the other transactions contemplated herein, are
in the best interests of Seller.
(y) Other Representations and Warranties. Seller has
determined that this Agreement is effective to transfer to the Agent and the
Purchasers, as assignees of Seller, the full benefit of and a direct claim
against each of Jabil and each Originator in respect of each representation or
warranty made by the Jabil and each Originator under any Transaction Document.
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Section 5.2 Representations and Warranties of
Sub-Servicer. Sub-Servicer hereby represents and warrants to the Agent and the
Purchasers as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:
(a) Corporate Existence and Power. Sub-Servicer is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation. Sub-Servicer is duly qualified to do business and
is in good standing as a foreign corporation, and has and holds all corporate
power and all governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its business is
conducted.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by Sub-Servicer of this Agreement and each
other Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder are within its corporate powers and
authority and have been duly authorized by all necessary corporate action on its
part. This Agreement and each other Transaction Document to which Sub-Servicer
is a party has been duly executed and delivered by Sub-Servicer.
(c) No Conflict. The execution and delivery by
Sub-Servicer of this Agreement and each other Transaction Document to which it
is a party, and the performance of its obligations hereunder and thereunder do
not contravene or violate (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on any assets of Sub-Servicer or its Subsidiaries (except as created hereunder)
and no transaction contemplated hereby requires compliance with any bulk sales
act or similar law.
(d) Governmental Authorization. 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 and delivery by
Sub-Servicer of this Agreement and each other Transaction Document to which it
is a party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. Other than as disclosed on Schedule
C, there are no actions, suits or proceedings pending, or to the best of
Sub-Servicer's knowledge, threatened, against or affecting Sub-Servicer, or any
of its properties, in or before any court, arbitrator or other body that could
reasonably be expected to have a Material Adverse Effect. Sub-Servicer is not in
default with respect to any order of any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other
Transaction Document to which Sub-Servicer is a party constitute the legal,
valid and binding obligations of Sub-Servicer enforceable against Sub-Servicer
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
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(g) Accuracy of Information. All information heretofore
furnished by Sub-Servicer or any of its Affiliates to the Agent or the
Purchasers for purposes of or in connection with this Agreement, any of the
other Transaction Documents or any transaction contemplated hereby or thereby
is, and all such information hereafter furnished by Sub-Servicer or any of its
Affiliates to the Agent or the Purchasers (including all Monthly Reports) will
be, true and accurate in every material respect on the date such information is
stated or certified and does not and will not contain any material misstatement
of fact or omit to state a material fact or any fact necessary to make the
statements contained therein not misleading.
(h) Collections. The conditions and requirements set
forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and
duly performed. The names and addresses of all Collection Banks, together with
the account numbers of the Collection Accounts at each Collection Bank and the
post office box number of each Lock-Box, are listed on Exhibit IV.
(i) Material Adverse Effect. Since August 31, 1999, no
event has occurred that would have a Material Adverse Effect.
(j) Compliance with Law. Sub-Servicer has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject. Each Receivable,
together with the Contract and Invoice related thereto, does not contravene any
laws, rules or regulations applicable to the collection and servicing thereof
(including, without limitation, laws, rules and regulations relating to fair
credit billing, fair credit reporting, fair debt collection practices and
privacy), and no part of such Contract or Invoice is in violation of any such
law, rule or regulation.
(k) Compliance with Credit and Collection Policy.
Sub-Servicer has complied in all material respects with the Credit and
Collection Policy with regard to each Receivable and the related Contract and
Invoice, and has not made any change to such Credit and Collection Policy, other
than as permitted under Section 7.2(c), and in compliance with the notification
requirements in Section 7.1(a)(vii).
Section 5.3 Financial Institution Representations and
Warranties. Each of the Agent and each Financial Institution hereby represents
and warrants, as to itself, to the Seller, the Agent and Falcon that:
(a) Existence and Power. Such Person is a corporation or
a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has all
corporate power to perform its obligations hereunder.
(b) No Conflict. The execution and delivery by such
Person of this Agreement and the performance of its obligations hereunder are
within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or
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decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on its assets. This Agreement has
been duly authorized, executed and delivered by such Person.
(c) Governmental Authorization. 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 and delivery by
such Person of this Agreement and the performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of such Person enforceable against such Person in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally and by general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental
Purchase. The initial Incremental Purchase of a Purchaser Interest under this
Agreement is subject to the conditions precedent that the Agent shall have
received on or before the date of such purchase those documents listed on
Schedule B and the Agent shall have received all fees and expenses required to
be paid on such date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and
Reinvestments. Each purchase of a Purchaser Interest (other than pursuant to
Section 13.1) and each Reinvestment shall be subject to the further conditions
precedent that in the case of each such purchase or Reinvestment: (a) the
Servicer or the Sub-Servicer shall have delivered to the Agent on or prior to
the date of such purchase, in form and substance satisfactory to the Agent, all
Monthly Reports as and when due under Section 8.5 and upon the Agent's request,
the Servicer or the Sub-Servicer shall have delivered to the Agent at least
three (3) days prior to such purchase or Reinvestment an interim Monthly Report
showing the amount of Eligible Receivables; (b) the Facility Termination Date
shall not have occurred; (c) the Agent shall have received such other approvals,
opinions or documents as it may reasonably request and (d) on the date of each
such Incremental Purchase or Reinvestment, the following statements shall be
true (and acceptance of the proceeds of such Incremental Purchase or
Reinvestment shall be deemed a representation and warranty by Seller that such
statements are then true):
(i) the representations and warranties set forth in
Section 5.1 are true and correct on and as of the date of such
Incremental Purchase or Reinvestment as though made on and as of such
date;
(ii) no event has occurred and is continuing, or would
result from such Incremental Purchase or Reinvestment, that will
constitute an Amortization Event, and no event has occurred and is
continuing, or would result from such Incremental Purchase or
Reinvestment, that would constitute a Potential Amortization Event; and
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(iii) the Aggregate Capital does not exceed the Purchase
Limit and the aggregate Purchaser Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of the Seller Parties.
Until the date on which the Aggregate Unpaids have been indefeasibly paid in
full and this Agreement terminates in accordance with its terms, each of Seller
and the Sub-Servicer hereby covenants, as to itself, as set forth below:
(a) Reporting. Such Seller Party will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(i) Annual Reporting. Within 90 days after the close of
each of its respective fiscal years, (A) in the case of the
Sub-Servicer audited, unqualified financial statements (which shall
include balance sheets, statements of income and retained earnings and
a statement of cash flows) for such fiscal year certified in a manner
acceptable to the Agent by independent public accountants acceptable to
the Agent and (B) in the case of the Seller, financial statements
(which shall include balance sheets, statements of income and retained
earnings and a statement of cash flows) for such fiscal year.
(ii) Quarterly Reporting. Within 45 days after the close
of the first three (3) quarterly periods of each of its respective
fiscal years, balance sheets of each such Person as at the close of
each such period and statements of income and retained earnings and a
statement of cash flows for each such Person for the period from the
beginning of such fiscal year to the end of such quarter, all certified
by its respective chief financial officer.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by such Person's Authorized
Officer, as applicable, and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be.
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(iv) Shareholders Statements and Reports. Promptly upon
the furnishing thereof to the shareholders of Jabil copies of all
financial statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and reports which Jabil or any of
its Subsidiaries files with the Securities and Exchange Commission and
which are delivered to the "Banks" and the "Agent" under (and as
defined in) the Jabil Loan Agreement.
(vi) Copies of Notices. Promptly upon its receipt of any
notice, request for consent, financial statements, certification,
report or other communication under or in connection with any
Transaction Document from any Person other than the Agent or Falcon,
copies of the same.
(vii) Change in Credit and Collection Policy. At least
thirty (30) days prior to the effectiveness of any material change in
or material amendment to the Credit and Collection Policy, a copy of
the Credit and Collection Policy then in effect and a notice (A)
indicating such change or amendment, and (B) if such proposed change or
amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any
newly created Receivables, requesting the Agent's consent thereto.
(viii) Other Information. Promptly, from time to time, such
other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of
such Seller Party as the Agent may from time to time reasonably request
in order to protect the interests of the Agent and the Purchasers under
or as contemplated by this Agreement.
(b) Notices. Such Seller Party will notify the Agent in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) Amortization Events or Potential Amortization Events.
The occurrence of each Amortization Event and each Potential
Amortization Event, by a statement of an Authorized Officer of such
Seller Party.
(ii) Judgment and Proceedings. (1) The entry of any
judgment or decree against the Sub-Servicer or any of its respective
Subsidiaries if the aggregate amount of all judgments and decrees then
outstanding against the Sub-Servicer and its Subsidiaries exceeds
$5,000,000 and (2) the institution of any litigation, arbitration
proceeding or governmental proceeding against the Sub-Servicer which
could reasonably be expected to have a Material Adverse Effect; and (B)
the entry of any judgment or decree or the institution of any
litigation, arbitration proceeding or governmental proceeding against
Seller.
(iii) Material Adverse Effect. The occurrence of any event
or condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
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(iv) Termination Date. The occurrence of the "Termination
Date" under and as defined in the Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other material financing
arrangement pursuant to which such Seller Party is a debtor or an
obligor.
(vi) Downgrade of Jabil. Any downgrade in the rating of
any Indebtedness of Jabil by Standard & Poor's Ratings Group or by
Xxxxx'x Investors Service, Inc., setting forth the Indebtedness
affected and the nature of such change.
(vii) Jabil Mexico. As soon as the Seller becomes aware
thereof, notice of any action taken by Jabil Mexico or any other Person
to assert any claim against any property of Jabil or Jabil Mexico
located in Mexico.
(c) Compliance with Laws and Preservation of Corporate
Existence. Such Seller Party will comply in all respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject. Such Seller Party will preserve and maintain
its corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where its business is conducted.
(d) Audits. Such Seller Party will (and will cause the
Originators to) furnish to the Agent from time to time such information with
respect to it and the Receivables as the Agent may reasonably request. Such
Seller Party will, from time to time during regular business hours as requested
by the Agent upon reasonable notice and at the sole cost of such Seller Party,
permit the Agent, or its agents or representatives (and will cause the
Originators to permit the Agent or its agents or representatives), (i) to
examine and make copies of and abstracts from all Records in the possession or
under the control of such Person relating to the Receivables and the Related
Security, including, without limitation, the related Contracts and Invoices, and
(ii) to visit the offices and properties of such Person for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to such Person's financial condition or the Receivables and the Related
Security or any Person's performance under any of the Transaction Documents or
any Person's performance under the Contracts and Invoices and, in each case,
with any of the officers or employees of such Person having knowledge of such
matters; provided that such Seller Party shall not be required to pay for the
costs of such audit if (i) collectively, the Seller Parties have paid the costs
of at least three other audits occurring during the nine month period
immediately preceding such audit, (ii) no Amortization Event has occurred and
(iii) the results of the Agent's previous audits were acceptable to the Agent.
(e) Keeping and Marking of Records and Books.
(i) The Sub-Servicer will (and will cause the Originators
to) maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
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information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit
the immediate identification of each new Receivable and all Collections
of and adjustments to each existing Receivable). The Sub-Servicer will
(and will cause the Originators to) give the Agent notice of any
material change in the administrative and operating procedures referred
to in the previous sentence.
(ii) Such Seller Party will (and will cause the
Originators to) (A) on or prior to the date hereof, xxxx its master
data processing records and other books and records relating to the
Purchaser Interests with a legend, acceptable to the Agent, describing
the Purchaser Interests and (B) upon the request of the Agent at any
time following the occurrence of an Amortization Event, (x) xxxx each
Contract and Invoice with a legend describing the Purchaser Interests
and (y) deliver to the Agent all Contracts and Invoices (including,
without limitation, all multiple originals of any such Contract and
Invoice) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection
Policy. Such Seller Party will (and will cause the Originators to) timely and
fully (i) perform and comply with all provisions, covenants and other promises
required to be observed by it under the Contracts related to the Receivables,
and (ii) comply in all respects with the Credit and Collection Policy in regard
to each Receivable and the related Contract and Invoice.
(g) Performance and Enforcement of Receivables Sale
Agreement. Seller will, and will require the Originators to, perform each of
their respective obligations and undertakings under and pursuant to the
Receivables Sale Agreement, will purchase Receivables thereunder in strict
compliance with the terms thereof and will vigorously enforce the rights and
remedies accorded to Seller under the Receivables Sale Agreement. Seller will
take all actions to perfect and enforce its rights and interests (and the rights
and interests of the Agent and the Purchasers as assignees of Seller) under the
Receivables Sale Agreement as the Agent may from time to time reasonably
request, including, without limitation, making claims to which it may be
entitled under any indemnity, reimbursement or similar provision contained in
the Receivables Sale Agreement.
(h) Ownership. Seller will (or will cause the Originators
to) take all necessary action to (i) vest legal and equitable title to the
Receivables, the Related Security and the Collections purchased under the
Receivables Sale Agreement irrevocably in Seller, free and clear of any Adverse
Claims other than Adverse Claims in favor of the Agent and the Purchasers
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect Seller's interest in such
Receivables, Related Security and Collections and such other action, including
the stamping of all Contracts constituting "chattel paper" within the meaning of
Section 9-105 of the UCC with a notation describing such assignment, to perfect,
protect or more fully evidence the interest of Seller therein as the Agent may
reasonably request), and (ii) establish and maintain, in favor of the Agent, for
the benefit of the Purchasers, a valid and perfected first priority undivided
percentage ownership interest (and/or a valid and perfected first priority
security interest) in all Receivables, Related Security and Collections to the
full extent
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contemplated herein, free and clear of any Adverse Claims other than Adverse
Claims in favor of the Agent for the benefit of the Purchasers (including,
without limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect the Agent's (for the benefit of the
Purchasers) interest in such Receivables, Related Security and Collections and
such other action, including the stamping of all Contracts constituting "chattel
paper" within the meaning of Section 9-105 of the UCC with a notation describing
such assignment, to perfect, protect or more fully evidence the interest of the
Agent for the benefit of the Purchasers as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon Seller's identity as a legal entity that is separate from Jabil
and any of its Affiliates (collectively, the "Jabil Entities"). Therefore, from
and after the date of execution and delivery of this Agreement, Seller shall
take all reasonable steps, including, without limitation, all steps that the
Agent or any Purchaser may from time to time reasonably request, to maintain
Seller's identity as a separate legal entity and to make it manifest to third
parties that Seller is an entity with assets and liabilities distinct from those
of any Jabil Entity and not just a division of any Jabil Entity. Without
limiting the generality of the foregoing and in addition to the other covenants
set forth herein, Seller will:
(i) conduct its own business in its own name and require
that all full-time employees of Seller, if any, identify themselves as
such and not as employees of any Jabil Entity (including, without
limitation, by means of providing appropriate employees with business
or identification cards identifying such employees as Seller's
employees);
(ii) compensate all employees, consultants and agents
directly, from Seller's own funds, for services provided to Seller by
such employees, consultants and agents and, to the extent any employee,
consultant or agent of Seller is also an employee, consultant or agent
of any Jabil Entity, allocate the compensation of such employee,
consultant or agent between Seller and such Jabil Entity, as
applicable, on a basis that reflects the services rendered to Seller
and such Jabil Entity, as applicable;
(iii) clearly identify its offices (by signage or
otherwise) as its offices and, if such office is located in the offices
of a Jabil Entity, Seller shall lease such office at a fair market
rent;
(iv) have a separate telephone number, which will be
answered only in its name and separate stationery, invoices and checks
in its own name;
(v) conduct all transactions with each Originator and the
Sub-Servicer (including, without limitation, any delegation of its
obligations hereunder as Servicer) strictly on an arm's-length basis,
allocate all overhead expenses (including, without limitation,
telephone and other utility charges) for items shared between Seller
and such Originator or the Sub-Servicer on the basis of actual use to
the extent practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use;
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(vi) at all times have a Board of Directors consisting of
three members, at least one member of which is an Independent Director;
(vii) observe all corporate formalities as a distinct
entity, and ensure that all corporate actions relating to (A) the
selection, maintenance or replacement of the Independent Director, (B)
the dissolution or liquidation of Seller or (C) the initiation of,
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller, are
duly authorized by unanimous vote of its Board of Directors (including
the Independent Director);
(viii) maintain Seller's books and records separate from
those of any Jabil Entity and otherwise readily identifiable as its own
assets rather than assets of any Jabil Entity;
(ix) prepare its financial statements separately from
those of any Jabil Entity and insure that any consolidated financial
statements of any Jabil Entity that include Seller and that are filed
with the Securities and Exchange Commission or any other governmental
agency have notes clearly stating that Seller is a separate corporate
entity and that its assets will be available first and foremost to
satisfy the claims of the creditors of Seller;
(x) except as herein specifically otherwise provided,
maintain the funds or other assets of Seller separate from, and not
commingled with, those of any Jabil Entity and only maintain bank
accounts or other depository accounts to which Seller alone is the
account party, into which Seller alone makes deposits and from which
Seller alone (or the Agent hereunder) has the power to make
withdrawals;
(xi) pay all of Seller's operating expenses from Seller's
own assets (except for certain payments by a Jabil Entity or other
Persons pursuant to allocation arrangements that comply with the
requirements of this Section 7.1(i));
(xii) operate its business and activities such that: it
does not engage in any business or activity of any kind, or enter into
any transaction or indenture, mortgage, instrument, agreement,
contract, lease or other undertaking, other than the transactions
contemplated and authorized by this Agreement and the Receivables Sale
Agreement; and does not create, incur, guarantee, assume or suffer to
exist any indebtedness or other liabilities, whether direct or
contingent, other than (1) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business, (2) the incurrence of obligations under
this Agreement, (3) the incurrence of obligations, as expressly
contemplated in the Receivables Sale Agreement, to make payment to the
Originators thereunder for the purchase of Receivables from the
Originators under the Receivables Sale Agreement, and (4) the
incurrence of operating expenses in the ordinary course of business of
the type otherwise contemplated by this Agreement;
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(xiii) maintain its corporate charter in conformity with
this Agreement, such that it does not amend, restate, supplement or
otherwise modify its Certificate of Incorporation or By-Laws in any
respect that would impair its ability to comply with the terms or
provisions of any of the Transaction Documents, including, without
limitation, Section 7.1(i) of this Agreement;
(xiv) maintain the effectiveness of, and continue to
perform under the Receivables Sale Agreement and the Performance
Undertaking, such that it does not amend, restate, supplement, cancel,
terminate or otherwise modify the Receivables Sale Agreement or the
Performance Undertaking, or give any consent, waiver, directive or
approval thereunder or waive any default, action, omission or breach
under the Receivables Sale Agreement or the Performance Undertaking or
otherwise grant any indulgence thereunder, without (in each case) the
prior written consent of the Agent;
(xv) maintain its corporate separateness such that it does
not merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions, and except as otherwise contemplated herein) all or
substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of, any
Person, nor at any time create, have, acquire, maintain or hold any
interest in any Subsidiary.
(xvi) maintain at all times the Required Capital Amount (as
defined in the Receivables Sale Agreement) and refrain from making any
dividend, distribution, redemption of capital stock or payment of any
subordinated indebtedness which would cause the Required Capital Amount
to cease to be so maintained; and
(xvii) take such other actions as are necessary on its part
to ensure that the facts and assumptions set forth in the opinion
issued by Holland & Knight LLP, as counsel for Seller, in connection
with the closing or initial Incremental Purchase under this Agreement
and relating to substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all
material respects at all times.
(j) Collections. Such Seller Party will cause (1) all
proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into
a Collection Account and (2) each Lock-Box and Collection Account to be subject
at all times to a Collection Account Agreement that is in full force and effect.
In the event any payments relating to Receivables are remitted directly to
Seller or any Affiliate of Seller, Seller will remit (or will cause all such
payments to be remitted) directly to a Collection Bank and deposited into a
Collection Account within two (2) Business Days following receipt thereof, and,
at all times prior to such remittance, Seller will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of the Agent and the Purchasers. Seller will maintain exclusive
ownership, dominion and control (subject to the terms of this Agreement) of each
Lock-Box and Collection Account and shall not grant the right to take dominion
and control of any Lock-Box or Collection Account at a future time or upon the
occurrence of a future event to any Person, except to the Agent as contemplated
by this Agreement.
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(k) Taxes. Such Seller Party will file all tax returns
and reports required by law to be filed by it and will promptly pay all taxes
and governmental charges at any time owing. Seller will pay when due any taxes
payable in connection with the Receivables, exclusive of taxes on or measured by
income or gross receipts of Falcon, the Agent or any Financial Institution.
(l) Insurance. Seller will maintain in effect, or cause
to be maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
The Agent, for the benefit of the Purchasers, shall be named as an additional
insured with respect to all such liability insurance maintained by Seller.
Seller will pay or cause to be paid, the premiums therefor and deliver to the
Agent evidence satisfactory to the Agent of such insurance coverage. Copies of
each policy shall be furnished to the Agent and any Purchaser in certificated
form upon the Agent's or such Purchaser's request. The foregoing requirements
shall not be construed to negate, reduce or modify, and are in addition to,
Seller's obligations hereunder.
(m) Payment to Originators. With respect to any
Receivable purchased by Seller from either Originator, such sale shall be
effected under, and in strict compliance with the terms of, the Receivables Sale
Agreement, including, without limitation, the terms relating to the amount and
timing of payments to be made to the applicable Originator in respect of the
purchase price for such Receivable.
Section 7.2 Negative Covenants of the Seller Parties.
Until the date on which the Aggregate Unpaids have been indefeasibly paid in
full and this Agreement terminates in accordance with its terms, each of Seller
and Sub-Servicer hereby covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller Party
will not change its name, identity or corporate structure (within the meaning of
Section 9-402(7) of any applicable enactment of the UCC) or relocate its chief
executive office or any office where Records are kept unless it shall have: (i)
given the Agent at least forty-five (45) days' prior written notice thereof and
(ii) delivered to the Agent all financing statements, instruments and other
documents requested by the Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as
may be required by the Agent pursuant to Section 8.2(b), such Seller Party will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Sub-Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts, Invoices and Credit and
Collection Policy. Such Seller Party will not, and will not permit either
Originator to, amend, modify or otherwise
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make any change to the Credit and Collection Policy or any Contract or Invoice
that could adversely affect the collectibility of the Receivables or decrease
the credit quality of any newly created Receivables. Except as provided in
Section 8.2(d), the Sub-Servicer will not, and will not permit either Originator
to, extend, amend or otherwise modify the terms of any Receivable or any Invoice
related thereto other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable, Related Security or Collections, or upon or with respect to any
Contract or Invoice under which any Receivable arises, or any Lock-Box or
Collection Account, or assign any right to receive income with respect thereto
(other than, in each case, the creation of the interests therein in favor of the
Agent and the Purchasers provided for herein), and Seller will defend the right,
title and interest of the Agent and the Purchasers in, to and under any of the
foregoing property, against all claims of third parties claiming through or
under Seller or either Originator. Seller will not create or suffer to exist any
mortgage, pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory, the financing or lease of which gives rise
to any Receivable. The provisions of this Section 7.2(d) shall not become
effective until Section 5.2(l) of the Jabil Loan Agreement is amended (or
otherwise modified or waived in writing) to permit such provisions.
(e) Net Receivables Balance. At no time prior to the
Amortization Date shall Seller permit the Net Receivables Balance to be less
than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the
Aggregate Reserves.
(f) Termination Date Determination. Seller will not
designate the Termination Date (as defined in the Receivables Sale Agreement),
or send any written notice to either Originator in respect thereof, without the
prior written consent of the Agent, except with respect to the occurrence of
such Termination Date arising pursuant to Section 6.1(d) of the Receivables Sale
Agreement.
(g) Restricted Junior Payments. From and after the
occurrence of any Amortization Event, Seller will not make any Restricted Junior
Payment if, after giving effect thereto, Seller would fail to meet its
obligations set forth in Section 7.2(e).
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer and Sub-Servicer.
(a) The servicing, administration and collection of the
Receivables shall be conducted by such Person (the "Servicer") so designated
from time to time in accordance with this Section 8.1. JCFI is hereby designated
as, and hereby agrees to perform the duties and obligations of, the Servicer
pursuant to the terms of this Agreement. At any time following the occurrence of
an Amortization Event, the Agent may at any time designate as Servicer any
Person to succeed JCFI or any successor Servicer.
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(b) JCFI may delegate, and JCFI hereby delegates to
Jabil, as sub-servicer of the Servicer (the "Sub-Servicer"), all of its duties
and responsibilities as Servicer and Jabil hereby agrees to perform all of the
duties and obligations of the Servicer hereunder in respect of the Receivables
in its capacity as Sub-Servicer in accordance with the terms hereof. In its
capacity as Sub-Servicer, Jabil shall be an independent contractor of JCFI.
Without the prior written consent of the Agent and the Required Financial
Institutions, JCFI shall not be permitted to delegate any of its duties or
responsibilities as Servicer to any Person other than (i) Jabil and (ii) with
respect to certain Charged-Off Receivables, outside collection agencies in
accordance with its customary practices. Jabil shall not be permitted to further
delegate to any other Person (other than Jabil Mexico with respect to those
Receivables arising from the sale of products manufactured by Jabil Mexico) any
of its duties or responsibilities as Sub-Servicer delegated to it by JCFI. If
pursuant to the last sentence of Section 8.1(a) the Agent shall designate as
Servicer any Person other than JCFI, all duties and responsibilities theretofore
delegated by JCFI to Jabil as Sub-Servicer may, at the discretion of the Agent,
be terminated forthwith on notice given by the Agent to JCFI and to Jabil. Jabil
further agrees that it shall be directly liable to the Agent and the Purchasers
for the full and prompt performance of all duties and responsibilities of the
Servicer.
(c) Notwithstanding the foregoing subsection (b), (i)
JCFI shall be and remain primarily liable to the Agent and the Purchasers for
the full and prompt performance of all duties and responsibilities of the
Servicer hereunder and (ii) the Agent and the Purchasers shall be entitled to
deal exclusively with JCFI in matters relating to the discharge by the Servicer
of its duties and responsibilities hereunder. The Agent and the Purchasers shall
not be required to give notice, demand or other communication to any Person
other than JCFI in order for communication to the Servicer and its sub-servicer
or other delegate with respect thereto to be accomplished. JCFI, at all times
that it is the Servicer, shall be responsible for providing any sub-servicer or
other delegate of the Servicer with any notice given to the Servicer under this
Agreement.
Section 8.2 Duties of Servicer. The Servicer shall take
or cause to be taken all such actions as may be necessary or advisable to
collect each 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 Policy.
(a) The Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account. The Servicer shall
effect a Collection Account Agreement substantially in the form of Exhibit VI
with each bank party to a Collection Account at any time. In the case of any
remittances received in any Lock-Box or Collection Account that shall have been
identified, to the satisfaction of the Servicer, to not constitute Collections
or other proceeds of the Receivables or the Related Security, the Servicer shall
promptly remit such items to the Person identified to it as being the owner of
such remittances. From and after the date the Agent delivers to any Collection
Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the
Servicer, and the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new depositary
account specified by the Agent and, at all times thereafter, Seller the Servicer
and the Sub-Servicer shall not
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deposit or otherwise credit, and shall not permit any other Person to deposit or
otherwise credit to such new depositary account any cash or payment item other
than Collections.
(b) The Servicer shall administer the Collections in
accordance with the procedures described herein and in Article II. The Servicer
shall set aside and hold in trust for the account of Seller and the Purchasers
their respective shares of the Collections in accordance with Article II. The
Servicer shall, upon the request of the Agent, segregate, in a manner acceptable
to the Agent, all cash, checks and other instruments received by it from time to
time constituting Collections from the general funds of the Servicer, the
Sub-Servicer or Seller prior to the remittance thereof in accordance with
Article II. If the Servicer shall be required to segregate Collections pursuant
to the preceding sentence, the Servicer shall segregate and deposit with a bank
designated by the Agent such allocable share of Collections of Receivables set
aside for the Purchasers on the first Business Day following receipt by the
Servicer of such Collections, duly endorsed or with duly executed instruments of
transfer.
(c) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Charged-Off Receivable or limit the rights of the Agent
or the Purchasers under this Agreement. Notwithstanding anything to the contrary
contained herein, the Agent shall have the absolute and unlimited right to
direct the Servicer or the Sub-Servicer to commence or settle any legal action
with respect to any Receivable or to foreclose upon or repossess any Related
Security, provided that the Agent has given the Seller seven (7) days' prior
notice and during such notice period the outstanding Balance of such Receivable
has not been reduced to zero.
(d) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts, Invoices and Related Security or (ii) are otherwise necessary
or desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place selected by the Agent. The Servicer shall, as soon as practicable
following receipt thereof turn over to Seller any cash collections or other cash
proceeds received with respect to Indebtedness not constituting Receivables. The
Servicer shall, from time to time at the request of any Purchaser, furnish to
the Purchasers (promptly after any such request) a calculation of the amounts
set aside for the Purchasers pursuant to Article II.
(e) Any payment by an Obligor in respect of any
indebtedness owed by it to an Originator or Seller shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
otherwise instructed by the Agent, be applied as a Collection of any Receivable
of such Obligor (starting with the oldest such Receivable) to the extent of any
amounts then due and payable thereunder before being applied to any other
receivable or other obligation of such Obligor.
Section 8.3 Collection Notices. The Agent is authorized
at any time to date and to deliver to the Collection Banks the Collection
Notices. Seller hereby transfers to the Agent for the benefit of the Purchasers,
effective when the Agent delivers such notice, the
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exclusive ownership and control of each Lock-Box and the Collection Accounts. In
case any authorized signatory of Seller whose signature appears on a Collection
Account Agreement shall cease to have such authority before the delivery of such
notice, such Collection Notice shall nevertheless be valid as if such authority
had remained in force. Seller hereby authorizes the Agent, and agrees that the
Agent shall be entitled to (i) endorse Seller's name on checks and other
instruments representing Collections, (ii) enforce the Receivables, the related
Contracts, Invoices and the Related Security and (iii) take such action as shall
be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the Agent
rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein
to the contrary notwithstanding, the exercise by the Agent and the Purchasers of
their rights hereunder shall not release the Servicer, the Sub-Servicer, the
Originators or Seller from any of their duties or obligations with respect to
any Receivables or under the related Contracts or Invoices. The Purchasers shall
have no obligation or liability with respect to any Receivables or related
Contracts or Invoices, nor shall any of them be obligated to perform the
obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and
forward to the Agent (i) on the fifteenth (15th) day of each month and at such
times as the Agent shall request, a Monthly Report and (ii) at such times as the
Agent shall request, a listing by Obligor of all Receivables together with an
aging of such Receivables.
Section 8.6 Servicing Fees. In consideration of JCFI's
agreement to act as Servicer hereunder, the Purchasers hereby agree that, so
long as JCFI shall continue to perform as Servicer hereunder, Seller shall pay
over to JCFI a fee (the "Servicing Fee") on the first calendar day of each
month, in arrears for the immediately preceding month, equal to 1% per annum of
the Net Receivables Balance during such period, as compensation for its
servicing activities.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any
one or more of the following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment
or deposit required hereunder when due, (ii) to observe or perform any covenant
set forth in Section 7.2 and such failure shall continue for three (3)
consecutive Business Days or (iii) to perform or observe any term, covenant or
agreement hereunder (other than as referred to in clauses (i) and (ii) of this
paragraph (a) and paragraph 9.1(e)) and such failure shall continue for five (5)
consecutive Business Days.
(b) Any representation or warranty made by any Seller
Party in this Agreement, any other Transaction Document or in any other document
delivered pursuant hereto or thereto shall prove to have been incorrect when
made or deemed made or any certification or
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statement made by any Seller Party in connection with the foregoing shall prove
to have been incorrect in any material respect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due,
or the failure of Jabil to pay any Indebtedness when due, which individually or
together with other such Indebtedness as to which any such failures exists has
an aggregate outstanding principal amount in excess of $5,000,000; or the
default by any Seller Party or Originator in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of any Seller
Party or Originator shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the date of
maturity thereof.
(d) (i) Any Seller Party, either Originator or any of
their respective Subsidiaries shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts generally or
shall make a general assignment for the benefit of creditors; or (ii) any
proceeding shall be instituted by or against any Seller Party, either Originator
or any of their respective Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
or (iii) any Seller Party, either Originator or any of their respective
Subsidiaries shall take any corporate or partnership action to authorize any of
the actions set forth in clauses (i) or (ii) above in this subsection (d). For
purposes of this Section 9.1(d), "Subsidiary" shall exclude a Subsidiary which
(i) is not engaged in any business activity, (ii) has no Subsidiaries engaged in
any business activity, and (iii) has no Indebtedness outstanding in excess of
$10,000.
(e) Seller shall fail to comply with the terms of Section
2.6 hereof and such failure is not cured on the following Business Day.
(f) As at the end of any calendar month:
(i) the average of the Delinquency Ratios as at the
end of such month and the two preceding months shall
exceed 12.0% and the Delinquency Ratio as at the end
of such month shall exceed 15.0%;
(ii) the average of the Dilution Ratios as at the end
of such month and the two preceding months shall
exceed 5.75% and the Dilution Ratio as at the end of
such month shall exceed 10.0%; or
(iii) the average of the Default Ratios as at the end
of such month and the two preceding months shall
exceed 4.25% and the Default Ratio as at the end of
such month shall exceed 4.75%.
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(g) A Change of Control shall occur.
(h) (i) One or more final judgments for the payment of
money shall be entered against Seller or (ii) one or more final judgments for
the payment of money in an amount of $10,000,000 or more individually or in the
aggregate, shall be entered against the Sub-Servicer on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for fifteen (15)
consecutive days without a stay of execution.
(i) (i) The "Termination Date" under and as defined in
the Receivables Sale Agreement shall occur under the Receivables Sale Agreement,
or (ii) the Seller or either Originator shall cease to perform any of their
respective material obligations and undertakings under and pursuant to the
Receivables Sale Agreement or shall fail to vigorously enforce the rights and
remedies accorded under the Receivables Purchase Agreement after the occurrence
of such failure, or (iii) the Originators shall for any reason cease to
transfer, or cease to have the legal capacity to transfer, or otherwise be
incapable of transferring Receivables to Seller under the Receivables Sale
Agreement.
(j) This Agreement shall terminate in whole or in part
(except in accordance with its terms), or shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, provided, that such occurrence is a direct or
indirect result of an action or inaction on the part of a Seller Party or one of
their respective Affiliates or the Agent for the benefit of the Purchasers shall
cease to have a valid and perfected first priority security interest in the
Receivables, the Related Security and the Collections with respect thereto and
the Collection Accounts.
(k) Jabil shall fail to perform any of its covenants
described in Sections 5.2(a), (b) or (c) of the Jabil Loan Agreement, as in
effect on the date hereof.
(l) Jabil shall fail to perform or observe any term,
covenant or agreement required to be performed by it under the Performance
Undertaking, or the Performance Undertaking shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Jabil, or Jabil shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability.
Section 9.2 Remedies. Upon the occurrence and during the
continuation of an Amortization Event, the Agent may, or upon the direction of
the Required Financial Institutions shall, take any of the following actions:
(i) replace the Person then acting as Servicer or Sub-Servicer, (ii) declare the
Amortization Date to have occurred, whereupon the Amortization Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by each Seller Party; provided, however, that
upon the occurrence of an Amortization Event described in Section 9.1(d), or of
an actual or deemed entry of an order for relief with respect to any Seller
Party under the Federal Bankruptcy Code, the Amortization Date shall
automatically occur, without demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Seller Party, (iii) to the fullest
extent permitted by applicable
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law, declare that the Default Fee shall accrue with respect to any of the
Aggregate Unpaids outstanding at such time, (iv) deliver the Collection Notices
to the Collection Banks, and (v) notify Obligors of the Purchasers' interest in
the Receivables. The aforementioned rights and remedies shall be without
limitation, and shall be in addition to all other rights and remedies of the
Agent and the Purchasers otherwise available under any other provision of this
Agreement, by operation of law, at equity or otherwise, all of which are hereby
expressly preserved, including, without limitation, all rights and remedies
provided under the UCC, all of which rights shall be cumulative.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by The Seller Parties. Without
limiting any other rights that the Agent or any Purchaser may have hereunder or
under applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand
to) the Agent and each Purchaser and their respective assigns, officers,
directors, agents and employees (each an "Indemnified Party") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be employees of the Agent or such Purchaser) 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 as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser of
an interest in the Receivables, and (B) each of the Servicer and the
Sub-Servicer hereby agrees to indemnify (and pay upon demand to) each
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of its activities as Servicer or Sub-Servicer (as applicable)
hereunder excluding, however, in all of the foregoing instances under the
preceding clauses (A) and (B):
(i) Indemnified Amounts to the extent a final judgment of
a court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;
(ii) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that are uncollectible on account of
the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
(iii) taxes imposed by the United States, by the
jurisdiction in which such Indemnified Party's principal executive
office is located, or by any other jurisdiction in the United States
where such Indemnified Party has established a taxable nexus other than
in connection with the transactions contemplated by this Agreement, on
or measured by the overall net income of such Indemnified Party to the
extent that the computation of such taxes is consistent with the
characterization for income tax purposes of the acquisition by the
Purchasers of Purchaser Interests as a loan or loans by the Purchasers
to Seller secured by the Receivables, the Related Security, the
Collection Accounts and
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the Collections, but not including any such taxes resulting from the
adoption after the date hereof of any law or any amendment or change in
the interpretation of any existing or future law that subjects such
Indemnified Party to taxes that would not be imposed by any law or the
interpretation thereof existing on the date hereof (except for changes
in the rate of such taxes);
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Seller shall indemnify the Agent and the
Purchasers for Indemnified Amounts (including, without limitation, losses in
respect of uncollectible receivables, regardless of whether reimbursement
therefor would constitute recourse to Seller, the Servicer or the Sub-Servicer)
relating to or resulting from:
(i) any representation or warranty made by any Seller
Party or either Originator (or any officers of any such Person) under
or in connection with this Agreement, any other Transaction Document or
any other information or report delivered by any such Person pursuant
hereto or thereto, which shall have been false or incorrect when made
or deemed made;
(ii) the failure by Seller, the Servicer, the Sub-Servicer
or either Originator to comply with any applicable law, rule or
regulation with respect to any Receivable, Contract or Invoice related
thereto, or the nonconformity of any Receivable, Contract or Invoice
included therein with any such applicable law, rule or regulation or
any failure of either Originator to keep or perform any of its
obligations, express or implied, with respect to any Contract or
Invoice;
(iii) any failure of Seller, the Servicer, the Sub-Servicer
or either Originator to perform its duties, covenants or other
obligations in accordance with the provisions of this Agreement or any
other Transaction Document;
(iv) any products liability, personal injury or damage
suit, or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any
Contract, Invoice or any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable (including, without limitation, a defense based on
such Receivable or the related Invoice or Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale
of the merchandise or service related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any
time with other funds;
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(vii) any investigation, litigation or proceeding related
to or arising from this Agreement or any other Transaction Document,
the transactions contemplated hereby, the use of the proceeds of an
Incremental Purchase or a Reinvestment, the ownership of the Purchaser
Interests or any other investigation, litigation or proceeding relating
to Seller, the Servicer, the Sub-Servicer or either Originator in which
any Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;
(viii) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Seller to acquire and maintain legal
and equitable title to, and ownership of any Receivable and the Related
Security and Collections with respect thereto from the applicable
Originator, free and clear of any Adverse Claim (other than as created
hereunder); or any failure of Seller to give reasonably equivalent
value to either Originator under the Receivables Sale Agreement in
consideration of the transfer by either Originator of any Receivable,
or any attempt by any Person to void such transfer under statutory
provisions or common law or equitable action;
(xi) any failure to vest and maintain vested in the Agent
for the benefit of the Purchasers, or to transfer to the Agent for the
benefit of the Purchasers, legal and equitable title to, and ownership
of, a first priority perfected undivided percentage ownership interest
(to the extent of the Purchaser Interests contemplated hereunder) or
security interest in the Receivables, the Related Security and the
Collections, free and clear of any Adverse Claim (except as created by
the Transaction Documents);
(xii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws or the
failure to stamp each Contract constituting "chattel paper" within the
meaning of Section 9-105 of the UCC with a notation describing the
assignments to the Seller and the Agent with respect to any Receivable,
the Related Security and Collections with respect thereto, and the
proceeds of any thereof, whether at the time of any Incremental
Purchase or Reinvestment or at any subsequent time;
(xiii) any action or omission by any Seller Party which
reduces or impairs the rights of the Agent or the Purchasers with
respect to any Receivable or the value of any such Receivable;
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(xiv) any attempt by any Person to void any Incremental
Purchase or Reinvestment hereunder under statutory provisions or common
law or equitable action;
(xv) the operations of Jabil Mexico and the enforcement of
the Agent's and the Purchasers' rights under the Estoppel Letter; and
(xvi) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to
be an Eligible Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return. If after
the date hereof, any Funding Source shall be charged any fee, expense or
increased cost on account of the adoption of any applicable law, rule or
regulation (including any applicable law, rule or regulation regarding capital
adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency (a "Regulatory Change"): (i)
that subjects any Funding Source to any charge or withholding on or with respect
to any Funding Agreement or a Funding Source's obligations under a Funding
Agreement, or on or with respect to the Receivables, or changes the basis of
taxation of payments to any Funding Source of any amounts payable under any
Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or taxes excluded by Section 10.1) or (ii) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (iii) that imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its obligations
under a Funding Agreement, or to reduce the rate of return on a Funding Source's
capital as a consequence of its obligations under a Funding Agreement, or to
reduce the amount of any sum received or receivable by a Funding Source under a
Funding Agreement or to require any payment calculated by reference to the
amount of interests or loans held or interest received by it, then, upon demand
by the Agent, Seller shall pay to the Agent, for the benefit of the relevant
Funding Source, such amounts charged to such Funding Source or such amounts to
otherwise compensate such Funding Source for such increased cost or such
reduction.
Section 10.3 Other Costs and Expenses. Seller shall pay
to the Agent and Falcon on demand all costs and out-of-pocket expenses in
connection with the preparation, execution, delivery and administration of this
Agreement, the transactions contemplated hereby and the other documents to be
delivered hereunder, including without limitation, the cost of Falcon's auditors
auditing the books, records and procedures of Seller, reasonable fees and
out-of-pocket expenses of legal counsel for Falcon and the Agent (which such
counsel may be employees of Falcon or the Agent) with respect thereto and with
respect to advising Falcon and the Agent as to their respective rights and
remedies under this Agreement. Seller shall pay to the Agent on demand any and
all costs and expenses of the Agent and the Purchasers, if any, including
reasonable counsel fees and expenses in connection with the enforcement of this
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Agreement and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following an Amortization Event. Seller shall
reimburse Falcon on demand for all other costs and expenses incurred by Falcon
("Other Costs"), including, without limitation, the cost of auditing Falcon's
books by certified public accountants, the cost of rating the Commercial Paper
by independent financial rating agencies, and the reasonable fees and
out-of-pocket expenses of counsel for Falcon or any counsel for any shareholder
of Falcon with respect to advising Falcon or such shareholder as to matters
relating to Falcon's operations.
Section 10.4 Allocations. Falcon shall allocate the
liability for Other Costs among Seller and other Persons with whom Falcon has
entered into agreements to purchase interests in receivables ("Other Sellers").
If any Other Costs are attributable to Seller and not attributable to any Other
Seller, Seller shall be solely liable for such Other Costs. However, if Other
Costs are attributable to Other Sellers and not attributable to Seller, such
Other Sellers shall be solely liable for such Other Costs. All allocations to be
made pursuant to the foregoing provisions of this Article X shall be made by
Falcon in its sole discretion and shall be binding on Seller, the Servicer and
the Sub-Servicer.
ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser
hereby designates and appoints Bank One to act as its agent hereunder and under
each other Transaction Document, and authorizes the Agent to take such actions
as agent on its behalf and to exercise such powers as are delegated to the Agent
by the terms of this Agreement and the other Transaction Documents together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing statements, the Collection Account Agreements, the
Estoppel Letter, the Demand Note Pledge Agreement and the Concentration Limit
Letter Agreement on behalf of such Purchaser (the terms of which shall be
binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute
any of its duties under this Agreement and each other Transaction Document by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.
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The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent
nor any of its directors, officers, agents or employees shall be (i) liable for
any action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Transaction Document (except for
its, their or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Purchasers for any recitals, statements,
representations or warranties made by any Seller Party contained in this
Agreement, any other Transaction Document or any certificate, report, statement
or other document referred to or provided for in, or received under or in
connection with, this Agreement, or any other Transaction Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, or any other Transaction Document or any other document
furnished in connection herewith or therewith, or for any failure of any Seller
Party to perform its obligations hereunder or thereunder, or for the
satisfaction of any condition specified in Article VI, or for the perfection,
priority, condition, value or sufficiency of any collateral pledged in
connection herewith. The Agent shall not be under any obligation to any
Purchaser to ascertain or to inquire as to the observance or performance of any
of the agreements or covenants contained in, or conditions of, this Agreement or
any other Transaction Document, or to inspect the properties, books or records
of the Seller Parties. The Agent shall not be deemed to have knowledge of any
Amortization Event or Potential Amortization Event unless the Agent has received
notice from Seller or a Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all
cases be entitled to rely, and shall be fully protected in relying, upon any
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to Seller),
independent accountants and other experts selected by the Agent. The Agent shall
in all cases be fully justified in failing or refusing to take any action under
this Agreement or any other Transaction Document unless it shall first receive
such advice or concurrence of Falcon or the Required Financial Institutions or
all of the Purchasers, as applicable, as it deems appropriate and it shall first
be indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Falcon or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers.
Each Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Seller
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as
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it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, prospects, financial and other conditions and
creditworthiness of Seller and made its own decision to enter into this
Agreement, the other Transaction Documents and all other documents related
hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The
Financial Institutions agree to reimburse and indemnify the Agent and its
officers, directors, employees, representatives and agents ratably according to
their Pro Rata Shares, to the extent not paid or reimbursed by the Seller
Parties (i) for any amounts for which the Agent, acting in its capacity as
Agent, is entitled to reimbursement by the Seller Parties hereunder and (ii) for
any other expenses incurred by the Agent, in its capacity as Agent and acting on
behalf of the Purchasers, in connection with the administration and enforcement
of this Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent
and its Affiliates may make loans to, accept deposits from and generally engage
in any kind of business with Seller or any Affiliate of Seller as though the
Agent were not the Agent hereunder. With respect to the acquisition of Purchaser
Interests pursuant to this Agreement, the Agent shall have the same rights and
powers under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Purchaser," "Financial Institutions" and "Purchasers" shall
include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five
days' notice to Seller and the Purchasers, and the Agent will, upon the
direction of all of the Purchasers (other than the Agent, in its individual
capacity) resign as Agent. If the Agent shall resign, then the Required
Financial Institutions during such five-day period shall appoint from among the
Purchasers a successor agent. If for any reason no successor Agent is appointed
by the Required Financial Institutions during such five-day period, then
effective upon the termination of such five day period, the Purchasers shall
perform all of the duties of the Agent hereunder and under the other Transaction
Documents and Seller and the Servicer (as applicable) shall make all payments in
respect of the Aggregate Unpaids directly to the applicable Purchasers and for
all purposes shall deal directly with the Purchasers. After the effectiveness of
any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other
Transaction Documents and the provisions of this Article XI and Article X shall
continue in effect for its benefit with respect to any actions taken or omitted
to be taken by it while it was Agent under this Agreement and under the other
Transaction Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments.
(a) Seller and each Financial Institution hereby agree
and consent to the complete or partial assignment by Falcon of all or any
portion of its rights under, interest in, title
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to and obligations under this Agreement to the Financial Institutions pursuant
to Section 13.1 or to any other Person, and upon such assignment, Falcon shall
be released from its obligations so assigned. Further, Seller and each Financial
Institution hereby agree that any assignee of Falcon of this Agreement or all or
any of the Purchaser Interests of Falcon shall have all of the rights and
benefits under this Agreement as if the term "Falcon" explicitly referred to
such party, and no such assignment shall in any way impair the rights and
benefits of Falcon hereunder. None of the Seller, the Servicer or the
Sub-Servicer shall have the right to assign its rights or obligations under this
Agreement.
(b) Any Financial Institution may at any time and from
time to time assign to one or more Persons ("Purchasing Financial Institutions")
all or any part of its rights and obligations under this Agreement pursuant to
an assignment agreement, substantially in the form set forth in Exhibit VII
hereto (the "Assignment Agreement") executed by such Purchasing Financial
Institution and such selling Financial Institution. The consent of Falcon shall
be required prior to the effectiveness of any such assignment. Each assignee of
a Financial Institution must (i) have a short-term debt rating of A-1 or better
by Standard & Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. and
(ii) agree to deliver to the Agent, promptly following any request therefor by
the Agent or Falcon, an enforceability opinion in form and substance
satisfactory to the Agent and Falcon. Upon delivery of the executed Assignment
Agreement to the Agent, such selling Financial Institution shall be released
from its obligations hereunder to the extent of such assignment. Thereafter the
Purchasing Financial Institution shall for all purposes be a Financial
Institution party to this Agreement and shall have all the rights and
obligations of a Financial Institution under this Agreement to the same extent
as if it were an original party hereto and no further consent or action by
Seller, the Purchasers or the Agent shall be required.
(c) Each of the Financial Institutions agrees that in the
event that it shall cease to have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. (an
"Affected Financial Institution"), such Affected Financial Institution shall be
obliged, at the request of Falcon or the Agent, to assign all of its rights and
obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Falcon, and willing to
participate in this Agreement through the Liquidity Termination Date in the
place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Yield owing to the Financial Institutions and all
accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution
may, in the ordinary course of its business at any time sell to one or more
Persons (each a "Participant") participating interests in its Pro Rata Share of
the Purchaser Interests of the Financial Institutions, its obligation to pay
Falcon its Acquisition Amounts or any other interest of such Financial
Institution hereunder. Notwithstanding any such sale by a Financial Institution
of a participating interest to a Participant, such Financial Institution's
rights and obligations under this Agreement shall remain unchanged, such
Financial Institution shall remain solely responsible for the
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performance of its obligations hereunder, and Seller, Falcon and the Agent shall
continue to deal solely and directly with such Financial Institution in
connection with such Financial Institution's rights and obligations under this
Agreement. Each Financial Institution agrees that any agreement between such
Financial Institution and any such Participant in respect of such participating
interest shall not restrict such Financial Institution's right to agree to any
amendment, supplement, waiver or modification to this Agreement, except for any
amendment, supplement, waiver or modification described in Section 14.1(b)(i).
ARTICLE XIII
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each
Financial Institution hereby agrees, subject to Section 13.4, that immediately
upon written notice from Falcon delivered on or prior to the Liquidity
Termination Date, it shall acquire by assignment from Falcon, without recourse
or warranty, its Pro Rata Share of one or more of the Purchaser Interests of
Falcon as specified by Falcon. Each such assignment by Falcon shall be made pro
rata among all of the Financial Institutions, except for pro rata assignments to
one or more Terminating Financial Institutions pursuant to Section 13.6. Each
such Financial Institution shall, no later than 1:00 p.m. (Chicago time) on the
date of such assignment, pay in immediately available funds (unless another form
of payment is otherwise agreed between Falcon and any Financial Institution) to
the Agent at an account designated by the Agent, for the benefit of Falcon, its
Acquisition Amount. Unless a Financial Institution has notified the Agent that
it does not intend to pay its Acquisition Amount, the Agent may assume that such
payment has been made and may, but shall not be obligated to, make the amount of
such payment available to Falcon in reliance upon such assumption. Falcon hereby
sells and assigns to the Agent for the ratable benefit of the Financial
Institutions, and the Agent hereby purchases and assumes from Falcon, effective
upon the receipt by Falcon of the Falcon Transfer Price, the Purchaser Interests
of Falcon which are the subject of any transfer pursuant to this Article XIII.
Section 13.2 Transfer Price Reduction Yield. If the
Adjusted Funded Amount is included in the calculation of the Falcon Transfer
Price for any Purchaser Interest, each Financial Institution agrees that the
Agent shall pay to Falcon the Reduction Percentage of any Yield received by the
Agent with respect to such Purchaser Interest.
Section 13.3 Payments to Falcon. In consideration for the
reduction of the Falcon Transfer Prices by the Falcon Transfer Price Reductions,
effective only at such time as the aggregate amount of the Capital of the
Purchaser Interests of the Financial Institutions equals the Falcon Residual,
each Financial Institution hereby agrees that the Agent shall not distribute to
the Financial Institutions and shall immediately remit to Falcon any Yield,
Collections or other payments received by it to be applied pursuant to the terms
hereof or otherwise to reduce the Capital of the Purchaser Interests of the
Financial Institutions.
Section 13.4 Limitation on Commitment to Purchase from
Falcon. Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have
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any obligation to purchase any Purchaser Interest from Falcon, pursuant to
Section 13.1 or otherwise, if:
(i) Falcon shall have voluntarily commenced any
proceeding or filed any petition under any bankruptcy, insolvency or
similar law seeking the dissolution, liquidation or reorganization of
Falcon or taken any corporate action for the purpose of effectuating
any of the foregoing; or
(ii) involuntary proceedings or an involuntary petition
shall have been commenced or filed against Falcon by any Person under
any bankruptcy, insolvency or similar law seeking the dissolution,
liquidation or reorganization of Falcon and such proceeding or petition
shall have not been dismissed.
Section 13.5 Defaulting Financial Institutions. If one or
more Financial Institutions defaults in its obligation to pay its Acquisition
Amount pursuant to Section 13.1 (each such Financial Institution shall be called
a "Defaulting Financial Institution" and the aggregate amount of such defaulted
obligations being herein called the "Falcon Transfer Price Deficit"), then upon
notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "Non-Defaulting Financial Institution") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting Financial Institutions,
after excluding the Commitment of any Approved Unconditional Liquidity
Providers) of the Falcon Transfer Price Deficit and (y) the unused portion of
such Non-Defaulting Financial Institution's Commitment; provided, however, that
if an Approved Unconditional Liquidity Provider is the Defaulting Financial
Institution, the Non-Defaulting Financial Institutions shall have no obligation
to pay any amount to the Agent pursuant to this Section 13.5 as a result of a
default by such Approved Unconditional Liquidity Provider; provided, further,
that in no event shall any Approved Unconditional Liquidity Provider be required
to make any payment as a Non-Defaulting Financial Institution pursuant to this
Section 13.5. A Defaulting Financial Institution shall forthwith upon demand pay
to the Agent for the account of the Non-Defaulting Financial Institutions all
amounts paid by each Non-Defaulting Financial Institution on behalf of such
Defaulting Financial Institution, together with interest thereon, for each day
from the date a payment was made by a Non-Defaulting Financial Institution until
the date such Non-Defaulting Financial Institution has been paid such amounts in
full, at a rate per annum equal to the Federal Funds Effective Rate plus two
percent (2%). In addition, without prejudice to any other rights that Falcon may
have under applicable law, each Defaulting Financial Institution shall pay to
Falcon forthwith upon demand, the difference between such Defaulting Financial
Institution's unpaid Acquisition Amount and the amount paid with respect thereto
by the Non-Defaulting Financial Institutions, together with interest thereon,
for each day from the date of the Agent's request for such Defaulting Financial
Institution's Acquisition Amount pursuant to Section 13.1 until the date the
requisite amount is paid to Falcon in full, at a rate per annum equal to the
Federal Funds Effective Rate plus two percent (2%).
Section 13.6 Terminating Financial Institutions.
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(a) Each Financial Institution hereby agrees to deliver
written notice to the Agent not more than 30 Business Days and not less than 5
Business Days prior to the Liquidity Termination Date indicating whether such
Financial Institution intends to renew its Commitment hereunder. If any
Financial Institution fails to deliver such notice on or prior to the date that
is 5 Business Days prior to the Liquidity Termination Date, such Financial
Institution will be deemed to have declined to renew its Commitment (each
Financial Institution which has declined or has been deemed to have declined to
renew its Commitment hereunder, a "Non-Renewing Financial Institution"). The
Agent shall promptly notify Falcon of each Non-Renewing Financial Institution
and Falcon, in its sole discretion, may (A) to the extent of Commitment
Availability, declare that such Non-Renewing Financial Institution's Commitment
shall, to such extent, automatically terminate on a date specified by Falcon on
or before the Liquidity Termination Date or (B) upon one (1) Business Days'
notice to such Non-Renewing Financial Institution assign to such Non-Renewing
Financial Institution on a date specified by Falcon its Pro Rata Share of the
aggregate Purchaser Interests then held by Falcon, subject to, and in accordance
with, Section 13.1. In addition, Falcon may, in its sole discretion, at any time
(x) to the extent of Commitment Availability, declare that any Affected
Financial Institution's Commitment shall automatically terminate on a date
specified by Falcon or (y) assign to any Affected Financial Institution on a
date specified by Falcon its Pro Rata Share of the aggregate Purchaser Interests
then held by Falcon, subject to, and in accordance with, Section 13.1 (each
Affected Financial Institution or each Non-Renewing Financial Institution is
hereinafter referred to as a "Terminating Financial Institution"). The parties
hereto expressly acknowledge that any declaration of the termination of any
Commitment, any assignment pursuant to this Section 13.6 and the order of
priority of any such termination or assignment among Terminating Financial
Institutions shall be made by Falcon in its sole and absolute discretion.
(b) Upon any assignment to a Terminating Financial
Institution as provided in this Section 13.6, any remaining Commitment of such
Terminating Financial Institution shall automatically terminate. Upon reduction
to zero of the Capital of all of the Purchaser Interests of a Terminating
Financial Institution (after application of Collections thereto pursuant to
Sections 2.2 and 2.3) all rights and obligations of such Terminating Financial
Institution hereunder shall be terminated and such Terminating Financial
Institution shall no longer be a "Financial Institution" hereunder; provided,
however, that the provisions of Article X shall continue in effect for its
benefit with respect to Purchaser Interests held by such Terminating Financial
Institution prior to its termination as a Financial Institution.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments. (a) No failure or
delay on the part of the Agent or any Purchaser in exercising any power, right
or remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other
further exercise thereof or the exercise of any other power, right or remedy.
The rights and remedies herein provided shall be cumulative and nonexclusive of
any rights or remedies provided by law. Any waiver of this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given.
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(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this Section 14.1(b). Falcon, Seller and the Agent, (at the
direction or with the consent of the Required Financial Institutions), may enter
into written modifications or waivers of any provisions of this Agreement,
provided, however, that no such modification or waiver shall:
(i) without the consent of each affected Purchaser, (A)
extend the Liquidity Termination Date or the date of any payment or
deposit of Collections by Seller or the Servicer, (B) reduce the rate
or extend the time of payment of Yield or any CP Costs (or any
component of Yield or CP Costs), (C) reduce any fee payable to the
Agent for the benefit of the Purchasers, (D) except pursuant to Article
XII hereof, change the amount of the Capital of any Purchaser, any
Financial Institution's Pro Rata Share (except pursuant to Sections
13.1 or 13.5) or any Financial Institution's Commitment, (E) amend,
modify or waive any provision of the definition of Required Financial
Institutions or this Section 14.1(b), (F) consent to or permit the
assignment or transfer by Seller of any of its rights and obligations
under this Agreement, (G) change the definition of "Eligible
Receivable," "Concentration Limit," "Aggregate Reserve," "Yield and
Servicer Reserve," "Dilution Reserve," "Loss Reserve," "Loss
Percentage," "Delinquency Ratio," "Dilution Ratio," or "Default Ratio"
or amend the Concentration Limit Letter Agreement or (H) amend or
modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (G) above
in a manner that would circumvent the intention of the restrictions set
forth in such clauses; or
(ii) without the written consent of the then Agent, amend,
modify or waive any provision of this Agreement if the effect thereof
is to affect the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Falcon may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
Seller, provided that such amendment has no negative impact upon Seller. Any
modification or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers equally and shall be binding upon Seller, the Purchasers
and the Agent.
Section 14.2 Notices. Except as provided in this Section
14.2, all communications and notices provided for hereunder shall be in writing
(including bank wire, telecopy or electronic facsimile transmission or similar
writing) and shall be given to the other parties hereto at their respective
addresses or telecopy numbers set forth on the signature pages hereof or at such
other address or telecopy number as such Person may hereafter specify for the
purpose of notice to each of the other parties hereto. Each such notice or other
communication shall be effective if given by telecopy, upon the receipt thereof,
if given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid or if given by any other
means, when received at the address specified in this Section 14.2. Seller
hereby authorizes the Agent to effect purchases and Tranche Period and Discount
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Rate selections based on telephonic notices made by any Person whom the Agent in
good faith believes to be acting on behalf of Seller. Seller agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice signed by
an authorized officer of Seller; provided, however, the absence of such
confirmation shall not affect the validity of such notice. If the written
confirmation differs from the action taken by the Agent, the records of the
Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether
by setoff or otherwise, has payment made to it with respect to any portion of
the Aggregate Unpaids owing to such Purchaser (other than payments received
pursuant to Section 10.2 or 10.3) in a greater proportion than that received by
any other Purchaser entitled to receive a ratable share of such Aggregate
Unpaids, such Purchaser agrees, promptly upon demand, to purchase for cash
without recourse or warranty a portion of such Aggregate Unpaids held by the
other Purchasers so that after such purchase each Purchaser will hold its
ratable proportion of such Aggregate Unpaids; provided that if all or any
portion of such excess amount is thereafter recovered from such Purchaser, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
Section 14.4 Protection of Ownership Interests of the
Purchasers.
(a) Seller agrees that from time to time, at its expense,
it will promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request, to
perfect, protect or more fully evidence the Purchaser Interests, or to enable
the Agent or the Purchasers to exercise and enforce their rights and remedies
hereunder. At any time, the Agent may, or the Agent may direct Seller, the
Servicer or the Sub-Servicer to, notify the Obligors of Receivables, at Seller's
expense, of the ownership or security interests of the Purchasers under this
Agreement and may also direct that payments of all amounts due or that become
due under any or all Receivables be made directly to the Agent or its designee.
Seller, the Servicer or the Sub-Servicer (as applicable) shall, at any
Purchaser's request, withhold the identity of such Purchaser in any such
notification.
(b) If any Seller Party fails to perform any of its
obligations hereunder, the Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole discretion of the Agent,
and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller
Party (i) to execute on behalf of Seller as debtor and to file financing
statements necessary or desirable in the Agent's sole discretion to perfect and
to maintain the perfection and priority of the interest of the Purchasers in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the interests of the Purchasers in the Receivables. This appointment is coupled
with an interest and is irrevocable.
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Section 14.5 Confidentiality. (a) Each Seller Party and
each Purchaser shall maintain and shall cause each of its employees and officers
to maintain the confidentiality of this Agreement and the other confidential or
proprietary information with respect to the Agent and Falcon and their
respective businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
(i) such Seller Party and such Purchaser and its officers and employees may
disclose such information to such Seller Party's and such Purchaser's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding and (ii) such Seller Party and its
officers and employees may disclose the Transaction Documents, other than the
Fee Letter and the Concentration Limit Letter Agreement (or any information
contained in the Fee Letter or the Concentration Limit Letter Agreement that may
also be contained in any other Transaction Document), to any institution
providing financial services to such Seller Party, pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to
the Agent.
(b) Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or Falcon by each
other, (ii) by the Agent or the Purchasers to any prospective or actual assignee
or participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Falcon or any entity organized for the purpose of purchasing, or
making loans secured by, financial assets for which Bank One acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided each such Person is
informed of the confidential nature of such information. In addition, the
Purchasers and the Agent may disclose any such nonpublic information pursuant to
any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
Section 14.6 Bankruptcy Petition. Seller, the Servicer,
the Sub-Servicer, the Agent and each Financial Institution hereby covenants and
agrees that, prior to the date that is one year and one day after the payment in
full of all outstanding senior indebtedness of Falcon or any Unconditional
Liquidity Provider, it will not institute against, or join any other Person in
instituting against, Falcon or any such entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
Section 14.7 Limitation of Liability. Except with respect
to any claim arising out of the willful misconduct or gross negligence of
Falcon, the Agent or any Financial Institution, no claim may be made by any
Seller Party or any other Person against Falcon, the Agent or any Financial
Institution or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and each Seller
Party hereby waives, releases, and agrees not to xxx upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
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Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW
OF CONFLICTS) OF THE STATE OF ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER
PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE
AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of
Terms.
(a) This Agreement and each other Transaction Document
contain the 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.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). 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 terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii)
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the indemnification and payment provisions of Article X, and Sections 14.5 and
14.6 shall be continuing and shall survive any termination of this Agreement.
Section 14.12 Counterparts; Severability; Section
References. This Agreement may be executed in any number of counterparts and by
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. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.
Section 14.13 Bank One Roles. Each of the Financial
Institutions acknowledges that Bank One acts, or may in the future act, (i) as
administrative agent for Falcon or any Financial Institution, (ii) as issuing
and paying agent for the Commercial Paper, (iii) to provide credit or liquidity
enhancement for the timely payment for the Commercial Paper and (iv) to provide
other services from time to time for Falcon or any Financial Institution
(collectively, the "Bank One Roles"). Without limiting the generality of this
Section 14.13, each Financial Institution hereby acknowledges and consents to
any and all Bank One Roles and agrees that in connection with any Bank One Role,
Bank One may take, or refrain from taking, any action that it, in its
discretion, deems appropriate, including, without limitation, in its role as
administrative agent for Falcon, and the giving of notice to the Agent of a
mandatory purchase pursuant to Section 13.1.
Section 14.14 Characterization. It is the intention of the
parties hereto that each purchase hereunder shall constitute and be treated as
an absolute and irrevocable sale, which purchase shall provide the applicable
Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to Seller; provided,
however, that (i) Seller shall be liable to each Purchaser and the Agent for all
representations, warranties, covenants and indemnities made by Seller pursuant
to the terms of this Agreement, and (ii) such sale does not constitute and is
not intended to result in an assumption by any Purchaser or the Agent or any
assignee thereof of any obligation of Seller or either Originator or any other
person arising in connection with the Receivables, the Related Security, or the
related Contracts or Invoices, or any other obligations of Seller or either
Originator.
(a) In addition to any ownership interest which the Agent
may from time to time acquire pursuant hereto, Seller hereby grants to the Agent
for the ratable benefit of the Purchasers a valid and perfected security
interest in all of Seller's right, title and interest in, to and under the
following assets, now existing or hereafter arising: (i) all Receivables, (ii)
the Collections, (iii) each Lock-Box, (iv) each Collection Account, (v) all
Related Security, (vi) all other rights and payments relating to such
Receivables, (vii) all proceeds of any of the foregoing, and (viii) all other
assets in which the Agent has acquired, may hereafter acquire and/or purports to
have acquired an interest hereunder prior to all other liens on and security
interests therein to
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secure the prompt and complete payment of the Aggregate Unpaids. The Agent and
the Purchasers shall have, in addition to the rights and remedies that they may
have under this Agreement, all other rights and remedies provided to a secured
creditor under the UCC and other applicable law, which rights and remedies shall
be cumulative.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
JABIL CIRCUIT FINANCIAL, INC.,
as Seller and as Servicer
By:
--------------------------------------------------
Name:
Title:
Address: 000 Xxxxxxxx Xxxxxx
Xxxxx 00000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Assistant Treasurer
Fax: (000)000-0000
with a copy to:
JABIL CIRCUIT, INC.,
as Sub-Servicer
By:
--------------------------------------------------
Name:
Title:
Address: 00000 0xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
cc: General Counsel
Fax: (000) 000-0000
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FALCON ASSET SECURITIZATION CORPORATION
By:
--------------------------------------------------
Authorized Signatory
Address: c/o Bank One, NA (Main Office Chicago),
as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
BANK ONE, NA (MAIN OFFICE CHICAGO),
as a Financial Institution and as Agent
By:
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
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EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Accrual Period" means each calendar month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the calendar month
thereafter.
"Acquisition Amount" means, on the date of any purchase from Falcon of
one or more Purchaser Interests pursuant to Section 13.1, (a) with respect to
each Financial Institution (other than any Unconditional Liquidity Provider),
the lesser of (i) such Financial Institution's Pro Rata Share of the sum of (A)
the lesser of (1) the Adjusted Liquidity Price of each such Purchaser Interest
and (2) the Capital of each such Purchaser Interest and (B) all accrued and
unpaid CP Costs for each such Purchaser Interest and (ii) such Financial
Institution's unused Commitment and (b) with respect to each Unconditional
Liquidity Provider, the lesser of (x) such Unconditional Liquidity Provider's
Pro Rata Share of the sum of (1) the Capital of each such Purchaser Interest and
(2) all accrued and unpaid CP Costs for each such Purchaser Interest and (y)
such Unconditional Liquidity Provider's unused Commitment.
"Adjusted Funded Amount" means, in determining the Falcon Transfer
Price for any Purchaser Interest, an amount equal to the sum of (a) the Adjusted
Liquidity Price of each such Purchaser Interest and (b) an amount equal to each
Unconditional Liquidity Provider's Pro Rata Share of the difference between (i)
the Adjusted Liquidity Price of each such Purchaser Interest and (ii) the
Capital of each such Purchaser Interest.
"Adjusted Liquidity Price" means an amount equal to:
RI * [(i) DC + (ii) (NDR / 1.075)]
where:
RI = the undivided percentage interest
evidenced by such Purchaser Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all
Receivables as to which any payment,
or part thereof, has not remained
unpaid for 121 days or more from the
original invoice date for such
payment.
Each of the foregoing shall be determined from the most recent
Monthly Report received by the Agent.
Exh. I-1
55
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any other Person.
"Affected Financial Institution" has the meaning specified in Section
12.1(c).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Aggregate Capital" means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.
"Aggregate Reduction" has the meaning specified in Section 1.3.
"Aggregate Reserves" means, on any date of determination, the sum of
the Loss Reserve, the Yield and Servicer Reserve and the Dilution Reserve.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
Aggregate Capital and all other unpaid Obligations (whether due or accrued) at
such time.
"Agreement" means this Receivables Purchase Agreement, as it may be
amended or modified and in effect from time to time.
"Amortization Date" means the earliest to occur of (i) the day on which
any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii)
the Business Day immediately prior to the occurrence of an Amortization Event
set forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written
notice from the Agent following the occurrence of any other Amortization Event,
and (iv) the date which is fifteen (15) Business Days after the Agent's receipt
of written notice from Seller that it wishes to terminate the facility evidenced
by this Agreement.
"Amortization Event" has the meaning specified in Article IX.
"Approved Unconditional Liquidity Provider" means an Unconditional
Liquidity Provider which has received approval from Standard & Poor's Ratings
Group and Xxxxx'x Investors Service, Inc. to be relieved from any obligation to
pay amounts as a Non-Defaulting Financial Institution pursuant to Section 13.5
hereof.
"Assignment Agreement" has the meaning set forth in Section 12.1(b).
"Authorized Officer" means, with respect to any Person, its president,
corporate controller, treasurer or chief financial officer.
Exh. I-2
56
"Bank One" means Bank One, NA (Main Office Chicago) in its individual
capacity and its successors.
"Base Rate" means a rate per annum equal to the corporate base rate,
prime rate or base rate of interest, as applicable, announced by Bank One or
Bank One Corporation from time to time, changing when and as such rate changes.
"Broken Funding Costs" means for any Purchaser Interest which: (i) has
its Capital reduced without compliance by Seller with the notice requirements
hereunder or (ii) does not become subject to an Aggregate Reduction following
the delivery of any Reduction Notice or (iii) is assigned under Article XIII or
terminated prior to the date on which it was originally scheduled to end; an
amount equal to the excess, if any, of (A) the CP Costs or Yield (as applicable)
that would have accrued during the remainder of the Tranche Periods or the
tranche periods for Commercial Paper determined by the Agent to relate to such
Purchaser Interest (as applicable) subsequent to the date of such reduction,
assignment or termination (or in respect of clause (ii) above, the date such
Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of
the Capital of such Purchaser Interest if such reduction, assignment or
termination had not occurred or such Reduction Notice had not been delivered,
over (B) the sum of (x) to the extent all or a portion of such Capital is
allocated to another Purchaser Interest, the amount of CP Costs or Yield
actually accrued during the remainder of such period on such Capital for the new
Purchaser Interest, and (y) to the extent such Capital is not allocated to
another Purchaser Interest, the income, if any, actually received during the
remainder of such period by the holder of such Purchaser Interest from investing
the portion of such Capital not so allocated. In the event that the amount
referred to in clause (B) exceeds the amount referred to in clause (A), the
relevant Purchaser or Purchasers agree to pay to Seller the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York or Chicago, Illinois and The Depository
Trust Company of New York is open for business, and, if the applicable Business
Day relates to any computation or payment to be made with respect to the LIBO
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.
"Capital" of any Purchaser Interest means, at any time, (A) the
Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Agent which in each
case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.5) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.
"Change of Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock
of Jabil, (ii) Jabil shall cease to own, free and clear of all Adverse Claims,
directly or indirectly, all of the outstanding partnership interests in Jabil
Texas
Exh. I-3
57
or (iii) Jabil shall cease to own directly, free and clear of all Adverse
Claims, all of the outstanding shares of voting stock of the Seller.
"Charged-Off Receivable" means a Receivable: (i) as to which the
Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, (iv) which has been identified
by Seller as uncollectible or (v) which is a Defaulted Receivable.
"Collection Account" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited and which is listed on Exhibit IV.
"Collection Account Agreement" means an agreement substantially in the
form of Exhibit VI among an Originator, Seller, the Agent and a Collection Bank.
"Collection Bank" means, at any time, any of the banks holding one or
more Collection Accounts.
"Collection Notice" means a notice, in substantially the form of Annex
A to Exhibit VI, from the Agent to a Collection Bank.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts accruing
in respect thereof and all cash proceeds of Related Security with respect to
such Receivable.
"Commercial Paper" means promissory notes of Falcon issued by Falcon in
the commercial paper market.
"Commitment" means, for each Financial Institution, the commitment of
such Financial Institution to purchase Purchaser Interests from (i) Seller and
(ii) Falcon, in an amount not to exceed (i) in the aggregate, the amount set
forth opposite such Financial Institution's name on Schedule A to this
Agreement, as such amount may be modified in accordance with the terms hereof
(including, without limitation, any termination of Commitments pursuant to
Section 13.6 hereof) and (ii) with respect to any individual purchase hereunder,
its Pro Rata Share of the Purchase Price therefor.
"Commitment Availability" means at any time the positive difference (if
any) between (a) an amount equal to the aggregate amount of the Commitments
minus an amount equal to 2% of such aggregate Commitments at such time minus (b)
the Aggregate Capital at such time.
"Concentration Limit" means, at any time, for any Obligor, the limit
set forth in the Concentration Limit Letter Agreement, or such other amount (a
"Special Concentration Limit") for such Obligor as set forth in the
Concentration Limit Letter Agreement or as otherwise designated by the Agent;
provided, that in the case of an Obligor and any Affiliate of such
Exh. I-4
58
Obligor, the Concentration Limit shall be calculated as if such Obligor and such
Affiliate are one Obligor; and provided, further, that the Agent may (and shall
upon the direction of Falcon or the Required Financial Institutions), upon not
less than five Business Days' notice to Seller, cancel any Special Concentration
Limit.
"Concentration Limit Letter Agreement" means that certain letter
agreement dated as of the date hereof, between the Seller and the Agent,
regarding the Concentration Limit and designating certain Special Concentration
Limits, as it may be amended or modified and in effect from time to time.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements or other writings (other than the related Invoice)
pursuant to which such Receivable arises or which evidences such Receivable.
"CP Costs" means, for each day, the sum of (i) discount or yield
accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued
commissions in respect of placement agents and Commercial Paper dealers, and
issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase facilities which are
funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income
net of expenses received on such day from investment of collections received
under all receivable purchase facilities funded substantially with Pooled
Commercial Paper, minus (v) any payment received on such day net of expenses in
respect of Broken Funding Costs related to the prepayment of any Purchaser
Interest of Falcon pursuant to the terms of any receivable purchase facilities
funded substantially with Pooled Commercial Paper. In addition to the foregoing
costs, if Seller shall request any Incremental Purchase during any period of
time determined by the Agent in its sole discretion to result in incrementally
higher CP Costs applicable to such Incremental Purchase, the Capital associated
with any such Incremental Purchase shall, during such period, be deemed to be
funded by Falcon in a special pool (which may include capital associated with
other receivable purchase facilities) for purposes of determining such
additional CP Costs applicable only to such special pool and charged each day
during such period against such Capital.
"Credit and Collection Policy" means Seller's credit and collection
policies and practices relating to Contracts, Invoices and Receivables existing
on the date hereof and summarized in Exhibit VIII hereto, as modified from time
to time in accordance with this Agreement.
Exh. I-5
59
"Deemed Collections" means the aggregate of all amounts Seller shall
have been deemed to have received as a Collection of a Receivable. Seller shall
be deemed to have received a Collection in full of a Receivable if at any time
(i) the Outstanding Balance of any such Receivable is either (x) reduced as a
result of any defective or rejected goods or services, any discount or any
adjustment or otherwise by Seller (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction) or (ii) any of the representations or
warranties in Article V are no longer true with respect to any Receivable.
"Default Fee" means with respect to any amount due and payable by
Seller in respect of any Aggregate Unpaids, an amount equal to the interest on
any such unpaid Aggregate Unpaids at a rate per annum equal to 2% above the Base
Rate.
"Default Proxy Ratio" means, as of the last day of any calendar month,
a percentage equal to (i) the sum of (A) the positive increase in the aggregate
Outstanding Balance of all Defaulted Receivables as of the last day of such
month from the aggregate Outstanding Balance of all Defaulted Receivables as of
the last day of the immediately preceding calendar month plus (B) the aggregate
Outstanding Balance of all Receivables (other than Defaulted Receivables) which
became Charged-Off Receivables during such month, divided by (ii) the Originator
Sales during the month ending three (3) months prior to such date; provided,
that if there has been no such positive increase in the aggregate Outstanding
Balance of all Defaulted Receivables as of the last day of such month, the
amount to be used in clause (i) (A) for purposes of calculating the Default
Proxy Ratio for such month shall equal the most recently occurring positive
increase in the aggregate Outstanding Balance of all Defaulted Receivables as of
the end of a calendar month from the immediately preceding calendar month.
"Default Ratio" means, as at the last day of any calendar month, a
percentage equal to (i) the sum of (A) the aggregate Outstanding Balance of all
Defaulted Receivables as of such day plus (B) the aggregate Outstanding Balance
of all Receivables (other than Defaulted Receivables) that became Charged-Off
Receivables during such month, divided by (ii) the aggregate Outstanding Balance
of all Receivables as of such day.
"Defaulted Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 90 days or more from the original invoice date
for such payment.
"Defaulting Financial Institution" has the meaning set forth in Section
13.5.
"Delinquency Ratio" means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Delinquent Receivables as of such day
divided by (ii) the Originator Sales during the month ending two (2) months
prior to such date.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 61 days or more, but less than 90 days, from
the original invoice date for such payment.
Exh. I-6
60
"Demand Note" means that certain Demand Promissory Note and Loan
Agreement, dated as of the date hereof, by Jabil in favor of Seller, as the same
may be amended, restated or otherwise modified from time to time.
"Designated Obligor" means an Obligor indicated by the Agent to Seller
in writing.
"Dilution Horizon Ratio" means, as of the last day of any calendar
month, a percentage equal to (i) the Originator Sales during the two (2) most
recently ended calendar months divided by (ii) the aggregate Outstanding Balance
of all Eligible Receivables as of such date.
"Dilution Percentage" means, as of the last day of any calendar month,
a percentage equal to the greater of (i) 8% and (ii) the following calculation:
[(2 x ED) + ((DS - ED) x DS / ED)] x DHR
where:
ED = the Expected Dilution Ratio at such time.
DS = the Dilution Spike Ratio at such time.
DHR = the Dilution Horizon Ratio at such time.
"Dilution Ratio" means, at any time, a percentage equal to (i) the
aggregate amount of Dilutions which accrued during the calendar month then most
recently ended, divided by (ii) the Originator Sales during the month ending two
(2) calendar months prior to such date.
"Dilution Reserve" means, on any date, an amount equal to the Dilution
Percentage multiplied by the Net Receivables Balance at such time.
"Dilution Spike Ratio" means, as of the last day of any calendar month,
a percentage equal to the highest two-month rolling average Dilution Ratio as of
the last day of any of the twelve (12) months then most recently ended;
provided, that $8,000,000 shall be deducted from the Dilutions for the month of
February 2000 in calculating the Dilution Ratio for such month for purposes of
this definition.
"Dilutions" means, at any time, the aggregate amount of reductions or
cancellations described in clause (i) of the definition of "Deemed Collections".
"Discount Rate" means, the LIBO Rate or the Base Rate, as applicable,
with respect to each Purchaser Interest of the Financial Institutions.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a
resident of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any
political subdivision thereof and has its chief executive office in
Xxx. X-0
00
xxx Xxxxxx Xxxxxx; (b) is not an Affiliate of any of the parties
hereto; (c) is not a Designated Obligor; and (d) is not a government or
a governmental subdivision or agency,
(ii) the Obligor of which is not the Obligor of any
Charged-Off Receivable which in the aggregate constitute more than 25%
of all Receivables of such Obligor,
(iii) which is not a Charged-Off Receivable,
(iv) which by its terms is due and payable within 45 days
of the original billing date therefor, has not had its payment terms
extended, and has not had its original billing date changed for any
portion thereof,
(v) which is either (A) an "account" within the meaning
of Section 9-106 of the UCC of all applicable jurisdictions or (B)
"chattel paper" within the meaning of Section 9-105 of the UCC of all
applicable jurisdictions and the fact that such chattel paper has been
assigned to the Seller and the Agent has been stamped on the Contract
under which such Receivable arises,
(vi) which arises under an Invoice which represents all or
part of the sale price of merchandise, insurance and services within
the meaning of the Investment Company Act of 1940, Section 3(c)5, as
amended,
(vii) which is denominated and payable only in United
States dollars in the United States,
(viii) which arises under an Invoice which, together with
such Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor enforceable against
such Obligor in accordance with its terms subject to no offset,
counterclaim or other defense,
(ix) which arises under a Contract which (A) either does
not require the Obligor under such Contract to consent to the transfer,
sale or assignment of the rights and duties of the applicable
Originator or any of its assignees under such Contract or requires such
consent and such consent has been obtained within 60 days of the date
hereof and (B) does not contain a confidentiality provision that
purports to restrict the ability of any Purchaser to exercise its
rights under this Agreement, including, without limitation, its right
to review the Contract and Invoices,
(x) which arises under a Invoice that contains an
obligation to pay a specified sum of money, contingent only upon the
sale of goods or the provision of services by the applicable
Originator,
(xi) which, together with the Contract and Invoice related
thereto, does not contravene any law, rule or regulation applicable
thereto (including, without limitation, any law, rule and regulation
relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) and with
Exh. I-8
62
respect to which no part of the Contract or Invoice related thereto is
in violation of any such law, rule or regulation,
(xii) which satisfies all applicable requirements of the
Credit and Collection Policy,
(xiii) which was generated in the ordinary course of the
applicable Originator's business,
(xiv) which arises solely from the sale of goods or the
provision of services to the related Obligor by the applicable
Originator, and not by any other Person (in whole or in part),
(xv) as to which the Agent has not notified Seller that
the Agent has determined that such Receivable or class of Receivables
is not acceptable as an Eligible Receivable, including, without
limitation, because such Receivable arises under a Contract or an
Invoice that is not acceptable to the Agent,
(xvi) which is not subject to any right of rescission,
set-off, counterclaim, any other defense (including defenses arising
out of violations of usury laws) of the applicable Obligor against the
applicable Originator or any other Adverse Claim, and the Obligor
thereon holds no right as against the applicable Originator to cause
such Originator to repurchase the goods or merchandise the sale of
which shall have given rise to such Receivable (except with respect to
sale discounts effected pursuant to the Contract, or defective goods
returned in accordance with the terms of the Contract); provided, that
in the case of a Receivable which may be subject to set-off due to the
fact that an Originator has a payable outstanding to the related
Obligor, that portion, if any, of such Receivable which is in excess of
such payable, shall be an "Eligible Receivable",
(xvii) as to which (A) the applicable Originator has
satisfied and fully performed all obligations on its part with respect
to such Receivable required to be fulfilled by it, (B) no further
action is required to be performed by any Person with respect thereto
other than payment thereon by the applicable Obligor and (C) no "xxxx
and hold" arrangement applies,
(xviii) which, if it arises out of or is generated by a New
Business Line, the Outstanding Balance of which, when added to the
Outstanding Balance of all other Receivables arising out of or
generated by a New Business Line, does not exceed 10% of the aggregate
Outstanding Balance of all Receivables as of the close of business on
the applicable New Business Line Determination Date,
(xix) all right, title and interest to and in which has
been validly transferred by the applicable Originator directly to
Seller under and in accordance with the Receivables Sale Agreement, and
Seller has good and marketable title thereto free and clear of any
Adverse Claim, and
Exh. I-9
63
(xx) which, if it arises from the sale of any product
manufactured outside of the United States (other than a product
manufactured by Jabil Mexico in Guadalajara, Mexico and, provided that
the appropriate Subsidiary of Jabil located in Chihuahua, Mexico has
executed an estoppel letter in substantially the form of the Estoppel
Letter and the Agent has received such certificates and legal opinions
as it may reasonably request in connection with the execution of such
estoppel letter, in Chihuahua, Mexico) such Receivable has been
approved in writing by the Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Estoppel Letter" means that certain estoppel letter agreement executed
by Jabil Mexico for the benefit of the Agent, on behalf of the Purchasers.
"Excluded Receivable" means a Receivable described on Schedule D, as
such schedule may be modified from time to time by the Seller with the consent
of the Agent.
"Expected Dilution Ratio" means, as of any date, the average of the
Dilution Ratios in respect of the twelve (12) immediately preceding months.
"Facility Account" means Seller's Account No. 10-63833 at Bank One.
"Facility Termination Date" means the earliest of (i) the Liquidity
Termination Date and (ii) the Amortization Date.
"Falcon" has the meaning set forth in the preamble to this Agreement.
"Falcon Residual" means the sum of the Falcon Transfer Price
Reductions.
"Falcon Transfer Price" means, with respect to the assignment by Falcon
of one or more Purchaser Interests to the Agent for the benefit of one or more
of the Financial Institutions pursuant to Section 13.1, the sum of (i) the
lesser of (a) the Capital of each such Purchaser Interest and (b) the Adjusted
Funded Amount of each such Purchaser Interest and (ii) all accrued and unpaid CP
Costs for each such Purchaser Interest.
"Falcon Transfer Price Deficit" has the meaning set forth in Section
13.5.
"Falcon Transfer Price Reduction" means in connection with the
assignment of a Purchaser Interest by Falcon to the Agent for the benefit of the
Financial Institutions, the positive difference (if any) between (i) the Capital
of such Purchaser Interest and (ii) the Adjusted Funded Amount for such
Purchaser Interest.
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on
Exh. I-10
64
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the preceding Business Day) by the Federal Reserve Bank
of New York in the Composite Closing Quotations for U.S. Government Securities;
or (b) if such rate is not so published for any day which is a Business Day, the
average of the quotations at approximately 10:30 a.m. (Chicago time) for such
day on such transactions received by the Agent from three federal funds brokers
of recognized standing selected by it.
"Fee Letter" means that certain letter agreement dated as of the date
hereof among Seller, Falcon and the Agent regarding certain fees payable to
Falcon, as it may be amended or modified and in effect from time to time.
"Finance Charges" means, with respect to a Receivable, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to the related Contract and Invoice.
"Financial Institutions" has the meaning set forth in the preamble in
this Agreement.
"Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Falcon.
"Funding Source" means (i) any Financial Institution or (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Falcon.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"Incremental Purchase" means a purchase of one or more Purchaser
Interests which increases the total outstanding Aggregate Capital hereunder.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"Independent Director" shall mean a member of the Board of Directors of
Seller who is not at such time, and has not been at any time during the
preceding five (5) years, (A) a director, officer, employee or affiliate of
Seller, either Originator, or any of their respective Subsidiaries or
Affiliates, or (B) the beneficial owner (at the time of such individual's
appointment as an Independent Director or at any time thereafter while serving
as an Independent Director) of any
Exh. I-11
65
of the outstanding common shares of Seller, either Originator, or any of their
respective Subsidiaries or Affiliates, having general voting rights.
"Invoice" means, with respect to any Receivable, an invoice in
substantially the form of one of the form invoices set forth on Exhibit IX
hereto or otherwise approved by the Agent in writing.
"Jabil" means Jabil Circuit, Inc., a Delaware corporation, together
with its successors and permitted assigns.
"Jabil Entity" has the meaning set forth in Section 7.1(i).
"Jabil Loan Agreement" means that certain Amended and Restated Loan
Agreement dated as of April 7, 2000 among Jabil, certain borrowing subsidiaries,
the banks named therein, Bank One, NA, as Administrative Agent thereunder, and
SunTrust Bank, as Syndication Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Jabil Mexico" means Jabil Circuit de Mexico, S.A. de C.V., a
corporation organized under the laws of Mexico as a Sociedad Anonima de Capital
Variable.
"Jabil Texas" means Jabil Circuit of Texas, LP, a Florida limited
partnership, together with its successors and permitted assigns.
"JCFI" means Jabil Circuit Financial, Inc., a Delaware corporation,
together with its successors and permitted assigns.
"LIBO Rate" means the rate per annum equal to the sum of (i) (a) the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two
Business Days prior to the first day of the relevant Tranche Period, and having
a maturity equal to such Tranche Period, provided that, (i) if Reuters Screen
FRBD is not available to the Agent for any reason, the applicable LIBO Rate for
the relevant Tranche Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any other generally recognized financial information service as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Tranche Period,
and having a maturity equal to such Tranche Period, and (ii) if no such British
Bankers' Association Interest Settlement Rate is available to the Agent, the
applicable LIBO Rate for the relevant Tranche Period shall instead be the rate
determined by the Agent to be the rate at which Bank One offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Tranche Period, in the approximate amount to be funded at the LIBO
Rate and having a maturity equal to such Tranche Period, divided by (b) one
minus the maximum aggregate reserve requirement (including all basic,
supplemental, marginal or other reserves) which is imposed against the Agent in
respect of Eurocurrency liabilities, as defined in Regulation D of the Board of
Governors of the Federal Reserve System as in effect from time to time
(expressed as a decimal), applicable to such Tranche Period plus (ii) 1.25% per
annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of
1%.
Exh. I-12
66
"Liquidity Termination Date" means August 9, 2001.
"Lock-Box" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and which is listed on Exhibit IV.
"Loss Horizon Ratio" means, as of the last day of any calendar month, a
percentage equal to (i) the Originator Sales during the three-month period ended
on such date, divided by (ii) the aggregate Outstanding Balance of all Eligible
Receivables as of such date.
"Loss Percentage" means, at any time, the greater of (i) 15% and (ii)
(A) two (2), times (B) the Loss Ratio, times (C) the Loss Horizon Ratio (in each
case as determined as of the last day of the calendar month then most recently
ended).
"Loss Ratio" means, as of the last day of any calendar month, a
percentage equal to the highest three-month rolling average Default Ratio as of
the last day of any of the twelve (12) months then most recently ended.
"Loss Reserve" means, on any date, an amount equal to the Loss
Percentage multiplied by the Net Receivables Balance at such time.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Seller Party or Jabil and its
Subsidiaries, (ii) the ability of any Seller Party or any Jabil Entity to
perform its obligations under any Transaction Document, (iii) the legality,
validity or enforceability of this Agreement or any other Transaction Document,
(iv) any Purchaser's interest in the Receivables generally or in any significant
portion of the Receivables, the Related Security or the Collections with respect
thereto, or (v) the collectibility of the Receivables generally or of any
material portion of the Receivables.
"Monthly Report" means a report, in substantially the form of Exhibit X
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5.
"Net Receivables Balance" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by the aggregate amount
by which the Outstanding Balance of all Eligible Receivables of each Obligor and
its Affiliates exceeds the Concentration Limit for such Obligor.
"New Business Line" means an operating unit, operating location,
reporting entity, area of business, division, subdivision, department, line of
business, product line or other similar component part which becomes a part of
an Originator as a result of such Originator's merger with or acquisition of
another entity after the date hereof.
"New Business Line Determination Date" means (i) at any time during the
calendar year 2000, December 31, 1999 and (ii) at any time during any calendar
year after 2000, December 31 of the immediately preceding calendar year.
"Non-Defaulting Financial Institution" has the meaning set forth in
Section 13.5.
Exh. I-13
67
"Non-Renewing Financial Institution" has the meaning set forth in
Section 13.6(a).
"Obligations" shall have the meaning set forth in Section 2.1.
"Obligor" means a Person obligated to make payments pursuant to a
Contract and/or Invoice.
"Originator" means each of Jabil and Jabil Texas, in their capacities
as sellers under the Receivables Sale Agreement.
"Originator Sales" means, in respect of any period, aggregate sales by
the Originators that shall have given rise to Receivables in accordance with
generally accepted accounting principles.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Participant" has the meaning set forth in Section 12.2.
"Performance Undertaking" means that certain Performance Undertaking,
dated as of the date hereof, executed by Jabil, substantially in the form of
Exhibit XI, as the same may be amended, restated or otherwise modified from time
to time.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Pledged Collateral" has the meaning set forth in Section 1.5.
"Pooled Commercial Paper" means Commercial Paper notes of Falcon
subject to any particular pooling arrangement by Falcon, but excluding
Commercial Paper issued by Falcon for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Falcon.
"Potential Amortization Event" means an event which, with the passage
of time or the giving of notice, or both, would constitute an Amortization
Event.
"Proposed Reduction Date" has the meaning set forth in Section 1.3.
"Pro Rata Share" means, for each Financial Institution, a percentage
equal to (i) the Commitment of such Financial Institution, divided by (ii) the
aggregate amount of all Commitments of all Financial Institutions hereunder,
adjusted as necessary to give effect to the application of the terms of Sections
13.5 or 13.6.
"Purchase Limit" means $225,000,000.
"Purchase Notice" has the meaning set forth in Section 1.2.
Exh. I-14
68
"Purchase Price" means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest which
shall not exceed the least of the amount requested by Seller in the applicable
Purchase Notice, the unused portion of the Purchase Limit on the applicable
purchase date and the excess, if any, of the Net Receivables Balance (less the
Aggregate Reserves) on the applicable purchase date over the aggregate
outstanding amount of Aggregate Capital determined as of the date of the most
recent Monthly Report, taking into account such proposed Incremental Purchase.
"Purchasers" means Falcon and each Financial Institution.
"Purchaser Interest" means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Capital, selected pursuant to the terms and conditions hereof in (i)
each Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
C
--------
NRB - AR
where:
C = the Capital of such Purchaser Interest.
AR = the Aggregate Reserves.
NRB = the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
"Purchasing Financial Institution" has the meaning set forth in Section
12.1(b).
"Receivable" means all indebtedness and other obligations owed to
Seller or the applicable Originator (at the time it arises, and before giving
effect to any transfer or conveyance under the Receivables Sale Agreement or
hereunder) or in which Seller or the applicable Originator has a security
interest or other interest, including, without limitation, any indebtedness,
obligation or interest constituting an account, chattel paper, instrument or
general intangible, arising in connection with the sale of goods or the
rendering of services by the applicable Originator and further includes, without
limitation, the obligation to pay any Finance Charges with respect thereto. The
Term "Receivable" shall not include any Excluded Receivable. Indebtedness and
other rights and obligations arising from any one transaction,
Exh. I-15
69
including, without limitation, indebtedness and other rights and obligations
represented by an individual Invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided further, that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be a Receivable regardless of whether the account debtor or
Seller treats such indebtedness, rights or obligations as a separate payment
obligation.
Receivables Sale Agreement" means that certain Receivables Sale
Agreement, dated as of the date hereof, among the Originators and Seller, as the
same may be amended, restated or otherwise modified from time to time.
"Records" means, with respect to any Receivable, all Contracts,
Invoices and other documents, books, records and other information (including,
without limitation, computer programs, tapes, disks, punch cards, data
processing software and related property and rights) relating to such
Receivable, any Related Security therefor and the related Obligor.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Reduction Percentage" means, for any Purchaser Interest acquired by
the Financial Institutions from Falcon for less than the Capital of such
Purchaser Interest, a percentage equal to a fraction the numerator of which is
the Falcon Transfer Price Reduction for such Purchaser Interest and the
denominator of which is the Capital of such Purchaser Interest.
"Regulatory Change" has the meaning set forth in Section 10.2.
"Reinvestment" has the meaning set forth in Section 2.2.
"Related Security" means, with respect to any Receivable:
(i) all of Seller's interest in the inventory and goods
(including returned or repossessed inventory or goods), if any, the
sale, financing or lease of which by the applicable Originator gave
rise to such Receivable, and all insurance contracts with respect
thereto,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all financing statements and
security agreements describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and
other agreements or arrangements of whatever character from time to
time supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and
agreements associated with such Receivable,
Exh. I-16
70
(v) all Records (other than Contracts) related to such
Receivable and all rights (with respect to enforcement or otherwise)
under the Contracts related to such Receivable,
(vi) all of Seller's right, title and interest in, to and
under the Receivables Sale Agreement in respect of such Receivable,
(vii) all of Seller's right, title and interest in, to and
under the Performance Undertaking and the Demand Note,
(viii) all of Seller's rights and claims against Jabil in
its capacity as Sub-Servicer, and
(ix) all proceeds of any of the foregoing.
"Required Financial Institutions" means, at any time, Financial
Institutions with Commitments in excess of 66-2/3% of the Purchase Limit.
"Required Notice Period" means the number of days required notice set
forth below applicable to the Aggregate Reduction indicated below:
Aggregate Reduction Required Notice Period
------------------- ----------------------
<=$100,000,000 two Business Days
>$100,000,000 five Business Days
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Seller now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of stock of
Seller, (ii) any loan made to Jabil under the Demand Note, (iii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of capital stock of Seller
now or hereafter outstanding, (iv) any payment or prepayment of principal of,
premium, if any, or interest, fees or other charges on or with respect to, and
any redemption, purchase, retirement, defeasance, sinking fund or similar
payment and any claim for rescission with respect to the Subordinated Loans (as
defined in the Receivables Sale Agreement), (v) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of capital
stock of Seller now or hereafter outstanding, and (vi) any payment of management
fees by Seller (except for reasonable management fees to the Originators or
their respective Affiliates in reimbursement of actual management services
performed).
"Seller" has the meaning set forth in the preamble to this Agreement.
"Seller Interest" means, at any time, an undivided percentage ownership
interest of Seller in the Receivables, Related Security and all Collections with
respect thereto equal to (i) one, minus (ii) the aggregate of the Purchaser
Interests.
Exh. I-17
71
"Seller Parties" has the meaning set forth in the preamble to this
Agreement.
"Servicer" means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.
"Servicing Fee" has the meaning set forth in Section 8.6.
"Settlement Date" means (A) the fifth (5th) Business Day of each month
(or such other day as agreed to by the Seller and the Agent in writing), and (B)
the last day of the relevant Tranche Period in respect of each Purchaser
Interest of the Financial Institutions.
"Settlement Period" means (A) in respect of each Purchaser Interest of
Falcon, the immediately preceding Accrual Period, and (B) in respect of each
Purchaser Interest of the Financial Institutions, the entire Tranche Period of
such Purchaser Interest.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Seller.
"Sub-Servicer" has the meaning set forth in the preamble to this
Agreement.
"Termination Date" has the meaning set forth in Section 2.2.
"Termination Percentage" has the meaning set forth in Section 2.2.
"Terminating Financial Institution" has the meaning set forth in
Section 13.6(a).
"Terminating Tranche" has the meaning set forth in Section 4.3(b).
"Tranche Period" means, with respect to any Purchaser Interest held by
a Financial Institution:
(a) if Yield for such Purchaser Interest is calculated on
the basis of the LIBO Rate, a period of one, two, three or six months, or such
other period as may be mutually agreeable to the Agent and Seller, commencing on
a Business Day selected by Seller or the Agent pursuant to this Agreement. Such
Tranche Period shall end on the day in the applicable succeeding calendar month
which corresponds numerically to the beginning day of such Tranche Period,
provided, however, that if there is no such numerically corresponding day in
such succeeding month, such Tranche Period shall end on the last Business Day of
such succeeding month; or
Exh. I-18
72
(b) if Yield for such Purchaser Interest is calculated on
the basis of the Base Rate, a period commencing on a Business Day selected by
Seller and agreed to by the Agent, provided no such period shall exceed one
month.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Agent.
"Transaction Documents" means, collectively, this Agreement, each
Purchase Notice, the Receivables Sale Agreement, each Collection Account
Agreement, the Demand Note, the Fee Letter, the Concentration Limit Letter
Agreement, the Subordinated Notes (as defined in the Receivables Sale Agreement,
the Performance Undertaking, the Estoppel Letter and all other instruments,
documents and agreements executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"Unconditional Liquidity Provider" means a Financial Institution that
is identified by the Agent or by Bank One as an entity which will not under any
circumstance receive any Falcon Transfer Price Reduction hereunder.
"Yield" means for each respective Tranche Period relating to Purchaser
Interests of the Financial Institutions, an amount equal to the product of the
applicable Discount Rate for each Purchaser Interest multiplied by the Capital
of such Purchaser Interest for each day elapsed during such Tranche Period,
annualized on a 360 day basis.
"Yield and Servicer Reserve" means, on any date, an amount equal to
2.5% of the Net Receivables Balance at such time.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
Illinois, and not specifically defined herein, are used herein as defined in
such Article 9.
Exh. I-19
