EXHIBIT 10YY
--------------------------------------------------------------------------------
SECOND AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
among
ENTERPRISE FUNDING CORPORATION,
ATLANTIC ASSET SECURITIZATION CORP.,
LIBERTY STREET FUNDING CORP.,
TECH DATA FINANCE, INC.
as Transferor
and
TECH DATA CORPORATION,
as Collection Agent and Guarantor
CREDIT LYONNAIS NEW YORK BRANCH,
as an Atlantic Bank Investor
THE BANK OF NOVA SCOTIA,
as a Liberty Bank Investor
and
NATIONSBANK, N.A.,
as Agent and an Enterprise Bank Investor
Dated as of February 10, 1999
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms............................................2
SECTION 1.2. Other Terms.....................................................34
SECTION 1.3. Computation of Time Periods.....................................34
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility........................................................36
SECTION 2.2. Transfers; Certificates; Eligible Receivables...................36
SECTION 2.3. Selection of Tranche Periods and Tranche Rates..................41
SECTION 2.4. Discount, Fees and Other Costs and Expenses.....................48
SECTION 2.5. Non-Liquidation Settlement and
Reinvestment Procedures....................................48
SECTION 2.6. Liquidation Settlement Procedures...............................49
SECTION 2.7. Fees............................................................51
SECTION 2.8. Protection of Ownership Interest of Enterprise,
Atlantic, Liberty, the Enterprise Bank Investors,
the Atlantic Bank Investors and the Liberty Bank
Investors..................................................51
SECTION 2.9. Deemed Collections; Application of Payments.....................52
SECTION 2.10. Payments and Computations, Etc.................................53
SECTION 2.11. Reports........................................................53
SECTION 2.12. Collection Account.............................................53
SECTION 2.13. Sharing of Payments, Etc.......................................54
SECTION 2.14. Rights of Set-off..............................................54
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Transferor................55
SECTION 3.2. Reaffirmation of Representations and
Warranties by the Transferor...............................58
i
SECTION 3.3. Representations and Warranties of Tech Data,
as Collection Agent and Guarantor..........................58
SECTION 3.4. Reaffirmation of Representations and Warranties by Tech Data,
as Collection Agent and Guarantor..........................60
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing...........................................61
SECTION 4.2. Additional Conditions to Closing ...............................63
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Transferor.............................64
SECTION 5.2. Negative Covenants of Transferor................................66
SECTION 5.3. Affirmative Covenants of Tech Data..............................68
SECTION 5.4. Negative Covenants of Tech Data.................................70
SECTION 5.5. Financial Covenants.............................................71
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent.................................73
SECTION 6.2. Duties of Collection Agent......................................73
SECTION 6.3. Rights After Designation of New Collection Agent................75
SECTION 6.4. Responsibilities of the Transferor and Tech Data................75
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events..............................................76
SECTION 7.2. Termination.....................................................78
ii
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor...................................79
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses......................80
SECTION 8.3. Other Costs, Expenses and Related Matters.......................82
SECTION 8.4. Reconveyance Under Certain Circumstances........................83
ARTICLE IX
GUARANTEE
SECTION 9.1. Guaranty of Obligations.........................................84
SECTION 9.2. Validity of Obligations; Irrevocability.........................84
SECTION 9.3. Rights of Set-Off...............................................84
ARTICLE X
THE AGENT; BANK COMMITMENT
SECTION 10.1. Authorization and Action.......................................86
SECTION 10.2. Agent's Reliance, Etc..........................................87
SECTION 10.3. Credit Decision................................................87
SECTION 10.4. Indemnification of the Agent...................................87
SECTION 10.5. Successor Agent................................................88
SECTION 10.6. Payments by the Agent..........................................88
SECTION 10.7. Bank Commitment; Assignment to Bank Investors..................89
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Term of Agreement..............................................95
SECTION 11.2. Waivers; Amendments............................................95
SECTION 11.3. Notices........................................................96
SECTION 11.4. Governing Law; Submission to Jurisdiction; Integration.........99
SECTION 11.5. Severability; Counterparts.....................................99
SECTION 11.6. Successors and Assigns........................................100
SECTION 11.7. Waiver of Confidentiality.....................................101
SECTION 11.8. Confidentiality Agreement.....................................101
SECTION 11.9. No Bankruptcy Petition Against Enterprise.....................101
SECTION 11.10. No Recourse Against Stockholders, Officers or Directors.......101
iii
SECTION 11.11. Characterization of the Transactions Contemplated
by the Agreement..........................................102
SECTION 11.12. Optional Reconveyance of All Receivables.....................102
SECTION 11.13. Mandatory Reconveyance of Certain Receivables................103
EXHIBITS
EXHIBIT A Form of Contract
EXHIBIT B Credit and Collection Policies and Practices
EXHIBIT C List of Lock-Box Accounts and Location of Lock-Box Banks and
Collection Agent Account Bank
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Investor Report
EXHIBIT F Form of Transfer Certificate
EXHIBIT G Form of Assignment and Assumption Agreement
EXHIBIT H List of Actions and Suits
EXHIBIT I Location of Records
EXHIBIT J List of Subsidiaries, Divisions and Trademames
EXHIBIT K Form of Tech Data's and Transferor's Counsel Opinion
EXHIBIT L-1 Form of Responsible Officer's Certificate of the Transferor
EXHIBIT L-2 Form of Responsible Officer's Certificate of Tech Data
EXHIBIT M Form of Certificate
EXHIBIT N Definitions for Financial Covenants
iv
SECOND AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
SECOND AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (this
"AGREEMENT"), dated as of February 10, 1999 among TECH DATA CORPORATION, a
Florida corporation ("TECH DATA"), as collection agent and guarantor (in such
capacities, the "COLLECTION AGENT" and the "GUARANTOR", respectively), TECH DATA
FINANCE, INC., a California corporation, as transferor (in such capacity, the
"TRANSFEROR"), ENTERPRISE FUNDING CORPORATION, a Delaware corporation (the
"ENTERPRISE"), ATLANTIC ASSET SECURITIZATION CORP. ("ATLANTIC"), a Delaware
corporation, LIBERTY STREET FUNDING CORP. ("LIBERTY"), a Delaware corporation,
CREDIT LYONNAIS NEW YORK BRANCH, a branch duly licensed under the laws of the
State of New York of a banking corporation organized and existing under the laws
of the Republic of France ("CREDIT LYONNAIS"), as an Atlantic Bank Investor and
as agent for Atlantic and the Atlantic Bank Investors (in such capacity, the
"ATLANTIC AGENT"), THE BANK OF NOVA SCOTIA, a banking corporation organized and
existing under the laws of Canada, acting through its New York Agency, ("SCOTIA
BANK"), as a Liberty Bank Investor and as agent for Liberty and the Liberty Bank
Investors (in such capacity, the "LIBERTY AGENT") and NATIONSBANK, N.A., a
national banking association ("NATIONSBANK"), as agent for Enterprise, Atlantic,
Liberty, the Enterprise Bank Investors, the Atlantic Bank Investors and the
Liberty Bank Investors (in such capacity, the "AGENT"), as an Enterprise Bank
Investor and as agent for Enterprise and the Enterprise Bank Investors (in such
capacity, the "THE ENTERPRISE AGENT"), amending and restating that certain
Amended and Restated Transfer and Administration Agreement among Tech Data, as
collection agent and guarantor, the Transferor and Enterprise dated as of
January 21, 1997, and as amended to the date hereof (the "Existing Agreement").
PRELIMINARY STATEMENTS
WHEREAS, the Transferor, the Collection Agent, Enterprise and NationsBank,
as agent and bank investor, entered into the Existing Agreement;
WHEREAS, the Transferor has requested that the Existing Agreement be
amended and restated, among other things, to provide for the addition of
Atlantic and Liberty as purchasers and Credit Lyonnais and Scotia Bank as bank
investors;
WHEREAS, the Transferor may desire to convey, transfer and assign, from
time to time, undivided percentage interests in certain accounts receivable, and
Enterprise, Atlantic and Liberty may desire to, and each of the Enterprise Bank
Investors, the Atlantic Bank Investors and the Liberty Bank Investors, if
requested shall, accept such conveyance, transfer and assignment of such
undivided percentage interests, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.1. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"ADMINISTRATIVE AGENT" means NationsBank, N.A., as administrative agent.
"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 (including any UCC financing statement or any similar
instrument filed against such Person's assets or properties).
"AFFECTED ASSETS" means, collectively, the Receivables and the Related
Security, Collections and Proceeds relating thereto.
"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. A Person shall be deemed to control another Person if
the controlling Person 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 voting stock, by contract or otherwise.
"AFFILIATED OBLIGOR" means any Obligor which is an Affiliate of another
Obligor.
"AGENT" means NationsBank, N.A., in its capacity as agent for the
Investors, and any successor thereto appointed pursuant to Article X.
"AGGREGATE UNPAIDS" means, with respect to each Investor, as applicable, at
any time, an amount equal to the sum of (i) the aggregate accrued and unpaid
Enterprise Discount, Atlantic Discount or Liberty Discount, respectively, with
respect to all Enterprise Tranche Periods, Atlantic Tranche Periods or Liberty
Tranche Periods, as applicable, at such time, (ii) the Enterprise Net
Investment, Atlantic Net Investment or Liberty Net Investment, as applicable, at
such time, and (iii) all other amounts owed (whether due or accrued) hereunder
by the Transferor to the Investors, as applicable, at such time.
"APPLICABLE MARGIN" means the percent per annum set forth below in the case
of an Enterprise Eurodollar Tranche, Atlantic Eurodollar Tranche or Liberty
Eurodollar Tranche or an Enterprise CD Tranche, an Atlantic CD Tranche or a
Liberty CD Tranche which percent shall be the Applicable Margin effective with
respect to the Enterprise Tranche Periods, Atlantic Tranche Periods and Liberty
Tranche Periods commencing after the first day next following the delivery by
the Transferor of the quarterly certificate referred to in Section 5.3(a)(iii)
hereof demonstrating that (i) the ratio of Consolidated Total Funded
Indebtedness to Consolidated Total Capital (each as defined
2
in Exhibit N attached hereto) is less than or equal to or more than, as the case
may be, or (ii) the ratio of Consolidated EBIT to Consolidated Interest Expense
(each as defined in Exhibit N attached hereto) is greater than or equal to or
less than, as the case may be, the applicable ratio set forth opposite such
Applicable Margin (provided that if such determination shall result in more than
one Applicable Margin, the lower Applicable Margin shall apply):
======================================================================================================
RATIO OF EBIT TO OR RATIO OF DEBT TO EURODOLLAR CD TRANCHE
INTEREST CAPITAL TRANCHE APPLICABLE MARGIN
APPLICABLE MARGIN
------------------------------------------------------------------------------------------------------
Less than 3.0 to Less than .60 to .600% .725%
1.00 1.00 but equal to
or greater than
.55 to 1.00
------------------------------------------------------------------------------------------------------
Greater than or Less than .55 to .500% .625%
equal to 3.0 to 1.00 but equal to
1.00 but less than or greater than
4.0 to 1.00 .50 to 1.00
------------------------------------------------------------------------------------------------------
Greater than or Less than .50 to .450% .575%
equal to 4.0 but 1.00 but equal to
less than 5.0 to or greater than
1.00 .45 to 1.00
------------------------------------------------------------------------------------------------------
Greater than or Less than 0.45 to .425% .550%
equal to 5.0 to 1.00 1.00
======================================================================================================
Notwithstanding the foregoing, if Tech Data fails to deliver any such quarterly
certificate when required pursuant to Section 5.3(a)(iii) hereof, then the
Applicable Margin for any Enterprise Eurodollar Tranche, Atlantic Eurodollar
Tranche or Liberty Eurodollar Tranche or Enterprise CD Tranche, Atlantic CD
Tranche or Liberty CD Tranche shall be the highest Applicable Margin for such
type of tranche set forth above until such quarterly certificate is so
delivered. From the Closing Date to the first date such quarterly certificate is
required to be delivered, the Applicable Margin shall be .575% for Enterprise CD
Tranches, Atlantic CD Tranches and Liberty CD Tranches and .45% for Enterprise
Eurodollar Tranches, Atlantic Eurodollar Tranches and Liberty Eurodollar
Tranches.
3
"ASSIGNMENT AMOUNT" with respect to (A) an Enterprise Bank Investor shall
mean at any time an amount equal to the least of (i) such Enterprise Bank
Investor's Pro Rata Share of the Enterprise Net Investment at such time, (ii)
such Enterprise Bank Investor's unused Commitment, and (iii) such Enterprise
Bank Investor's Pro Rata Share of the Outstanding Balance of Receivables
(excluding Defaulted Receivables), (B) an Atlantic Bank Investor shall mean at
any time an amount equal to the least of (i) such Atlantic Bank Investor's Pro
Rata Share of the Atlantic Net Investment at such time, (ii) such Atlantic Bank
Investor's unused Commitment, and (iii) such Atlantic Bank Investor's Pro Rata
Share of the Outstanding Balance of Receivables (excluding Defaulted
Receivables), and (C) a Liberty Bank Investor shall mean at any time an amount
equal to the least of (i) such Liberty Bank Investor's Pro Rata Share of the
Liberty Net Investment at such time, (ii) such Liberty Bank Investor's unused
Commitment, and (iii) such Liberty Bank Investor's Pro Rata Share of the
Outstanding Balance of Receivables (excluding Defaulted Receivables)
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means an Assignment and Assumption
Agreement substantially in the form of Exhibit G attached hereto.
"ATLANTIC AGENT" means Credit Lyonnais New York Branch, in its capacity as
agent for Atlantic and the Atlantic Bank Investors, and any successor thereto
appointed pursuant to Article IX.
"ATLANTIC BANK INVESTORS" shall mean Credit Lyonnais New York Branch and
its successors and assigns who are or become parties to this Agreement pursuant
to an Assignment and Assumption Agreement.
"ATLANTIC BR TRANCHE" means an Atlantic Tranche as to which Atlantic
Discount is calculated at the Base Rate.
"ATLANTIC BR TRANCHE PERIOD" means, with respect to an Atlantic BR Tranche,
either (i) prior to the Atlantic Termination Date, a period of up to 30 days
requested by the Transferor and agreed to by the Atlantic Agent commencing on a
Business Day requested by the Transferor and agreed to by the Atlantic Agent, or
(ii) after the Atlantic Termination Date, a period of one day. If such Atlantic
BR Tranche Period would end on a day which is not a Business Day, such Atlantic
BR Tranche Period shall end on the next succeeding Business Day.
"ATLANTIC CD TRANCHE" means an Atlantic Tranche as to which Atlantic
Discount is calculated at the CD Rate.
"ATLANTIC CD TRANCHE PERIOD" means, with respect to an Atlantic CD Tranche,
either (i) prior to the Termination Date, a period of up to one month requested
by the Transferor and agreed to by the Atlantic Agent, commencing on a Business
Day requested by the Transferor and agreed to by the Atlantic Agent, or (ii)
after the Atlantic Termination Date, a period of one day. If such Atlantic CD
Tranche Period would end on a day which is not a Business Day, such Atlantic CD
Tranche Period shall end on the next succeeding Business Day.
4
"ATLANTIC COMMITMENT TERMINATION DATE" means February 9, 2000, or such
later date to which the Atlantic Commitment Termination Date may be extended by
Transferor, the Atlantic Agent and the Atlantic Bank Investors not later than 60
days prior to the then current Atlantic Commitment Termination Date.
"ATLANTIC CP RATE" means, with respect to any Atlantic CP Tranche Period,
the rate equivalent to the rate (or if more than one rate, the weighted average
of the rates) at which Commercial Paper having a term equal to such Atlantic CP
Tranche Period may be sold by any placement agent or commercial paper dealer
selected by the Atlantic Agent; PROVIDED, HOWEVER, that if the rate (or rates)
as agreed between any such agent or dealer and the Atlantic Agent is a discount
rate, then the rate (or if more than one rate, the weighted average of the
rates) resulting from Atlantic 's converting such discount rate (or rates) to an
interest-bearing equivalent rate per annum.
"ATLANTIC CP TRANCHE" means an Atlantic Tranche as to which Atlantic
Discount is calculated at the Atlantic CP Rate.
"ATLANTIC CP TRANCHE PERIOD" means, with respect to an Atlantic CP Tranche,
a period of days not to exceed 90 days commencing on a Business Day requested by
the Transferor and agreed to by the Atlantic Agent pursuant to Section 2.3. If
an Atlantic CP Tranche Period would end on a day which is not a Business Day,
such Atlantic CP Tranche Period shall end on the next succeeding Business Day.
"ATLANTIC DEALER FEE" means the fee payable by the Transferor to the
Atlantic Agent, on behalf of Atlantic pursuant to Section 2.4 hereof, the terms
of which are set forth in the Fee Letter.
"ATLANTIC DILUTION RESERVE" means, at any time, an amount equal to the
product of (i) the highest Dilution Ratio as of the preceding six (6) months and
(ii) the Atlantic Net Investment at such time.
"ATLANTIC DISCOUNT" means, with respect to any Atlantic Tranche Period:
(TR x TNI x AD)
--
360
Where:
TR = the Atlantic Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Atlantic Net Investment allocated to such Atlantic
Tranche Period.
AD = the actual number of days during such Atlantic Tranche Period.
5
PROVIDED, HOWEVER, that no provision of this Agreement shall require the payment
or permit the collection of Atlantic Discount in excess of the maximum amount
permitted by applicable law; and PROVIDED, FURTHER, that Atlantic Discount shall
not be considered paid by any distribution if at any time such distribution is
rescinded or must be returned for any reason.
"ATLANTIC DISCOUNT RESERVE" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Atlantic Discount for all Atlantic
Tranche Periods.
LY = the Atlantic Liquidation Yield
"ATLANTIC EARLY COLLECTION FEE" means, for any Tranche Period (such
Atlantic Tranche Period to be determined without regard to the last sentence in
Section 2.3(a)(ii) hereof) during which the portion of the Atlantic Net
Investment that was allocated to such Atlantic Tranche Period is reduced for any
reason whatsoever, the excess, if any, of (i) the additional Atlantic Discount
that would have accrued during such Atlantic Tranche Period if such reductions
had not occurred, minus (ii) the income, if any, received by the recipients of
such reductions from investing the proceeds of such reductions.
"ATLANTIC EURODOLLAR TRANCHE" means an Atlantic Tranche as to which
Atlantic Discount is calculated at the Eurodollar Rate.
"ATLANTIC EURODOLLAR TRANCHE PERIOD" means, with respect to an Atlantic
Eurodollar Tranche, prior to the Atlantic Termination Date, a period of up to
one month requested by the Transferor and agreed to by the Atlantic Agent,
commencing on a Business Day requested by the Transferor and agreed to by the
Atlantic Agent; PROVIDED, HOWEVER, that if such Atlantic Eurodollar Tranche
Period would expire on a day which is not a Business Day, such Atlantic
Eurodollar Tranche Period shall expire on the next succeeding Business Day;
PROVIDED, FURTHER, that if such Atlantic Eurodollar Tranche Period would expire
on (a) a day which is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Atlantic Eurodollar Tranche
Period shall expire on the next preceding Business Day or (b) a Business Day for
which there is no numerically corresponding day in the applicable subsequent
calendar month, such Atlantic Eurodollar Tranche Period shall expire on the last
Business Day of such month.
"ATLANTIC FACILITY LIMIT" means $102,000,000 provided that such amount may
not at any time exceed the aggregate Commitments with respect to the Atlantic
Bank Investors at any time in effect.
6
"ATLANTIC LIQUIDATION YIELD" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EM + CD)
---------
360
Where:
RVF = the Atlantic Rate Variance Factor;
LBR = the Base Rate which is applicable to the liquidation period of
the Atlantic Net Investment at such time;
NI = the Atlantic Net Investment;
EM = the Estimated Maturity Period of the Receivables; and
CD = the Collection Delay.
"ATLANTIC LOSS RESERVE" means, on any day, an amount equal to:
LP x (NI + DLR + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the Collection
Agent on such day;
NI = the Atlantic Net Investment at the close of business of the
Collection Agent on such day;
DLR = the Atlantic Dilution Reserve at the close of business of the
Collection Agent on such day;
DR = the Atlantic Discount Reserve at the close of business of the
Collection Agent on such day; and
SFR = the Atlantic Servicing Fee Reserve at the close of business of
the Collection Agent on such day.
Notwithstanding the foregoing, the Atlantic Loss Reserve shall at all times be
at least equal to $8,000,000.
"ATLANTIC MAXIMUM NET INVESTMENT" means $100,000,000.
7
"ATLANTIC NET INVESTMENT" means the sum of the cash amounts paid to the
Transferor by or on behalf of Atlantic and/or the Atlantic Bank Investors for
each Incremental Transfer less the aggregate amount of Collections received and
applied by the Agent to reduce such Atlantic Net Investment pursuant to Sections
2.5, 2.6 or 2.9 hereof; PROVIDED that the Atlantic Net Investment shall be
restored and reinstated in the amount of any Collections so received and applied
if at any time the distribution of such Collections is rescinded or must
otherwise be returned for any reason; and PROVIDED FURTHER that the Atlantic Net
Investment may be increased by the amount described in Section 10.7(d) as
described therein.
"ATLANTIC PERCENTAGE FACTOR" shall mean the fraction (expressed as a
percentage) computed at any time of determination as follows:
NI + LR + DLR + DR + SFR
------------------------
NRB
Where:
NI = the Atlantic Net Investment at the time of such computation;
LR = the Atlantic Loss Reserve at the time of such computation;
DLR = the Atlantic Dilution Reserve at the time of such computation;
DR = the Atlantic Discount Reserve at the time of such computation;
SFR = the Atlantic Servicing Fee Reserve at the time of such
computation; and
NRB = the Net Receivables Balance at the time of such computation
as reduced by the amount of all Deemed Collections which have
been received by the Agent.
"ATLANTIC PROGRAM FEE" means the fee payable by the Transferor to the
Atlantic Agent pursuant to Section 2.7 hereof, the terms of which are set forth
in the Fee Letter.
"ATLANTIC RATE VARIANCE FACTOR" means the number, computed from time to
time in good faith by the Atlantic Agent, that reflects the largest potential
variance (from minimum to maximum) in selected interest rates over a period of
time selected by the Atlantic Agent from time to time, set forth in a written
notice by the Atlantic Agent to the Agent, the Transferor and the Collection
Agent.
"ATLANTIC REINVESTMENT TERMINATION DATE" means the second Business Day
after the delivery by the Atlantic Agent to the Transferor of written notice
that Atlantic elects to commence the amortization of its interest in the
Atlantic Net Investment or otherwise liquidate its interest in the Transferred
Interest.
8
"ATLANTIC SERVICING FEE RESERVE" means at any time the sum of (i) the
Servicing Fee with respect to Atlantic or the Atlantic Bank Investors, as
applicable, for all Atlantic Tranches and (ii) an amount equal to the product of
(A) the Atlantic Net Investment at such time, and (B) the Servicing Fee
percentage and (C) a fraction having as the numerator, the sum of the Estimated
Maturity Period and the Collection Delay and as the denominator, 360.
"ATLANTIC TERMINATION DATE" means the earliest of (i) that Business Day
designated by the Transferor to the Agent and the Atlantic Agent as the Atlantic
Termination Date at any time following 60 days' written notice to the Agent and
the Atlantic Agent, (ii) the date of termination of the commitment of the
related Liquidity Provider under the related Liquidity Provider Agreement
applicable to Atlantic, (iii) the date of termination of the commitment of the
related Credit Support Provider under the related Credit Support Agreement
applicable to Atlantic, (iv) the day upon which an Atlantic Termination Date is
declared or automatically occurs pursuant to Section 7.2(a) hereof, (v) two
Business Days prior to the Atlantic Commitment Termination Date, (vi) the day on
which an Atlantic Reinvestment Termination Date shall occur, or (vii) the
Purchase Termination Date.
"ATLANTIC TRANCHE" means a portion of the Atlantic Net Investment allocated
to an Atlantic Tranche Period pursuant to Section 2.3 hereof.
"ATLANTIC TRANCHE PERIOD" means an Atlantic CP Tranche Period, an Atlantic
BR Tranche Period, an Atlantic CD Tranche Period or an Atlantic Eurodollar
Tranche Period.
"ATLANTIC TRANCHE RATE" means the Atlantic CP Rate, the Base Rate, the CD
Rate or the Eurodollar Rate.
"ATLANTIC FACILITY FEE" means the fee payable by the Transferor to the
Atlantic Agent pursuant to Section 2.7 hereof, the terms of which are set forth
in the Fee Letter.
"AVERAGE COLLECTION PERIOD" means at any time a period of days equal to the
product of (i) a fraction the numerator of which shall be the amount set forth
in the most recent Investor Report as the "Beginning Balance" of the Receivables
and the denominator of which shall be the Collections as set forth in the most
recent Investor Report and (ii) thirty (30).
"BASE RATE" or "BR" means, a rate per annum equal to the greater of (i) the
prime rate of interest announced by the Agent from time to time, changing when
and as said prime rate changes (such rate not necessarily being the lowest or
best rate charged by the Agent) and (ii) sum of (a) 1.50% and (b) the rate equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
9
"BENEFIT PLAN" means any employee benefit plan as defined in Section 3(3)
of ERISA in respect of which the Transferor or any ERISA Affiliate of the
Transferor, is or at any time during the immediately preceding six years was, an
"employer" as defined in Section 3(5) of ERISA.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day on
which banks in Xxx Xxxx, Xxx Xxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxxx,
California or Clearwater, Florida are authorized or required by law to close,
and, when used with respect to the determination of any Eurodollar Rate or any
notice with respect thereto, any such day which is also a day for trading by and
between banks in United States dollar deposits in the London interbank market.
"CAPITALIZED LEASE" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with generally accepted accounting principles.
"CD RATE" shall mean, with respect to any Enterprise CD Tranche Period,
Atlantic CD Tranche Period or Liberty CD Tranche, as applicable, a rate which is
the Applicable Margin in excess of a rate per annum equal to the sum (rounded
upward to the nearest 1/100 of 1%) of (A) the rate obtained by dividing (x) the
Certificate of Deposit Rate for such Enterprise CD Tranche Period, Atlantic CD
Tranche Period or Liberty CD Tranche by (y) a percentage equal to 100% minus the
stated maximum rate for all reserve requirements as specified in Regulation D
(including without limitation any marginal, emergency, supplemental, special or
other reserves) that would be applicable during such Enterprise CD Tranche
Period, Atlantic CD Tranche Period or Liberty CD Tranche to a negotiable
certificate of deposit in excess of $100,000, with a maturity approximately
equal to such Enterprise CD Tranche Period, Atlantic CD Tranche Period or
Liberty CD Tranche, of any member bank of the Federal Reserve System plus (B)
the then daily net annual assessment rate (rounded upward, if necessary, to the
nearest 1/100 of 1%) as estimated by the Agent for determining the current
annual assessment payable by the Agent to the Federal Deposit Insurance
Corporation for insuring such certificates of deposit.
"CERTIFICATE" means the certificate issued to the Agent for the benefit of
the Investors pursuant to Section 2.2(d) hereof.
"CERTIFICATE OF DEPOSIT RATE" means, with respect to any Enterprise CD
Tranche Period, Atlantic CD Tranche Period or Liberty CD Tranche Period, as
applicable, the average of the bid rates determined by the Agent to be bid rates
per annum, at approximately 10:00 a.m. (New York City time) on the Business Day
before the first day of such Enterprise CD Tranche Period, Atlantic CD Tranche
Period or Liberty CD Tranche Period for which such CD Rate is to be applicable,
of two or more New York certificate of deposit dealers of recognized standing
selected by the Agent for the purchase in New York from the Agent at face value
of certificates of deposit of the Agent in an aggregate amount approximately
comparable to the amount of Enterprise CD Tranche, Atlantic CD Tranche or
Liberty CD Tranche to which such CD Rate is to be applicable and with a maturity
approximately equal to the applicable Enterprise CD Tranche Period, Atlantic CD
Tranche Period or Liberty CD Tranche Period.
10
"CLOSING DATE" means February 10, 1999
"COLLATERAL AGENT" means (A) with respect to Enterprise, NationsBank N.A.,
as collateral agent for any Liquidity Provider, any Credit Support Provider, the
holders of Commercial Paper and certain other parties, (B) with respect to
Atlantic, Credit Lyonnais New York Branch, as collateral agent for any Liquidity
Provider, any Credit Support Provider, the holders of Commercial Paper and
certain other parties, and (C) with respect to Liberty, The Bank of Nova Scotia,
as collateral agent for any Liquidity Provider, any Credit Support Provider, the
holders of Commercial Paper and certain other parties.
"COLLECTION ACCOUNT" means the account, established by the Agent, for the
benefit of Enterprise Atlantic, Liberty, the Enterprise Bank Investors, the
Atlantic Bank Investors and the Liberty Bank Investors pursuant to Section 2.12.
"COLLECTION AGENT" means at any time the Person then authorized pursuant to
Section 6.1 to service, administer and collect Receivables.
"COLLECTION AGENT ACCOUNT" means the account, established by the Collection
Agent, for the benefit of the Investors pursuant to Section 2.8(b).
"COLLECTION DELAY" means 30 days.
"COLLECTIONS" means, with respect to any Receivable, all cash collections
and other cash proceeds of such Receivable, including, without limitation, all
Finance Charges, if any, and cash proceeds of Related Security with respect to
such Receivable and any Deemed Collections of such Receivable.
"COMMERCIAL PAPER" means the promissory notes issued by Enterprise,
Atlantic or Liberty, as applicable, in the commercial paper market.
"COMMITMENT" means (i) with respect to each Enterprise Bank Investor,
Atlantic Bank Investor and Liberty Bank Investor party hereto, the commitment of
such Enterprise Bank Investor, Atlantic Bank Investor or Liberty Bank Investor
to make acquisitions from the Transferor or Enterprise (in the case of the
Enterprise Bank Investors), Atlantic (in the case of the Atlantic Bank
Investors) or Liberty (in the case of the Liberty Bank Investors) in accordance
herewith in an amount not to exceed the dollar amount set forth opposite such
Enterprise Bank Investor's, Atlantic Bank Investor's or Liberty Bank Investor's
signature on the signature page hereto under the heading "COMMITMENT", MINUS the
dollar amount of any Commitment or portion thereof assigned pursuant to an
Assignment and Assumption Agreement PLUS the dollar amount of any increase to
such the Enterprise Bank Investor's, Atlantic Bank Investor's or Liberty Bank
Investor's Commitment consented to by such Enterprise Bank Investor, Atlantic
Bank Investor or Liberty Bank Investor prior to the time of determination, (ii)
with respect to any assignee of an Enterprise Bank Investor, Atlantic Bank
Investor or Liberty Bank Investor party hereto taking pursuant to an Assignment
and
11
Assumption Agreement, the commitment of such assignee to make acquisitions from
the Transferor or Enterprise, Atlantic or Liberty, as applicable, not to exceed
the amount set forth in such Assignment and Assumption Agreement MINUS the
dollar amount of any Commitment or portion thereof assigned pursuant to an
Assignment and Assumption Agreement prior to such time of determination and
(iii) with respect to any assignee of an assignee referred to in clause (ii),
the commitment of such assignee to make acquisitions from the Transferor or
Enterprise, Atlantic or Liberty, as applicable, not to exceed the amount set
forth in an Assignment and Assumption Agreement between such assignee and its
assign.
"CONCENTRATION FACTOR" means for any Designated Obligor (a) 2% of the
Outstanding Balance of all Eligible Receivables; provided however, that for up
to three (3) Designated Obligors at any one time, 2.5% of the Outstanding
Balance of all Eligible Receivables at such time; PROVIDED FURTHER, HOWEVER,
that with respect to any Designated Obligor and its affiliates whose long term
unsecured debt obligations are rated at xxxxx "X0" by Moody's and at least "A+"
by Standard & Poor's and with respect to which rating neither Moody's nor
Standard & Poor's shall have made a public announcement anticipating a
downgrading of such Designated Obligor's long term unsecured debt obligations to
a rating less than the aforementioned ratings ("A1/A+ RATED OBLIGORS") 5% of the
Outstanding Balance of all Eligible Receivables at such time, or (b) such other
greater amount determined by the Agent in the reasonable exercise of its good
faith judgment and with the consent of the Majority Investors and disclosed in a
written notice delivered to the Transferor.
"CONSOLIDATED FIXED CHARGE RATIO" has the meaning specified in Exhibit N
hereto.
"CONSOLIDATED TANGIBLE NET WORTH" has the meaning specified in Exhibit N
hereto.
"CONSOLIDATED TOTAL LIABILITIES" has the meaning specified in Exhibit N
hereto.
"CONTRACT" means an agreement or invoice in substantially the form of one
of the forms set forth in Exhibit A attached hereto or otherwise approved by the
Agent, pursuant to or under which an Obligor shall be obligated to pay for
merchandise purchased or services rendered.
"CREDIT AND COLLECTION POLICY" shall mean Tech Data's and the Transferor's
credit and collection policy or policies and practices, relating to Contracts
and Receivables existing on the date hereof and referred to in Exhibit B
attached hereto, as modified from time to time in compliance with Section
5.2(c).
"CREDIT SUPPORT AGREEMENT" means with respect to Enterprise, Atlantic and
Liberty, respectively, the agreement between Enterprise, Atlantic or Liberty, as
applicable, and the related Credit Support Provider evidencing the obligation of
such Credit Support Provider to provide credit support to Enterprise, Atlantic
or Liberty, as applicable, in connection with the issuance by Enterprise,
Atlantic or Liberty, respectively, of its Commercial Paper.
12
"CREDIT SUPPORT PROVIDER" means the Person or Persons who provides credit
support to Enterprise, Atlantic or Liberty, respectively, in connection with the
issuance by Enterprise, Atlantic or Liberty, respectively, of Commercial Paper.
"CURRENT RECEIVABLE" means any Receivable with respect to which no payment
is outstanding beyond the date on which such payment was due.
"DEEMED COLLECTIONS" means any Collections on any Receivable deemed to have
been received pursuant to Section 2.9(a) or (b) hereof.
"DEFAULTED RECEIVABLE" means a Receivable: (i) as to which any payment, or
part thereof, remains unpaid for 91 days or more from the original due date for
such Receivable; (ii) as to which an Event of Bankruptcy has occurred with
respect to the Obligor thereof; (iii) which has been identified by the
Collection Agent as uncollectible; or (iv) which, consistent with the Credit and
Collection Policy, should be written off the Transferor's books as
uncollectible.
"DELINQUENCY RATIO" means, the ratio (expressed as a percentage) computed
as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all outstanding Receivables as to which on the date of
determination, any payment or part thereof, remains unpaid for more than 30 days
from the original due date for such Receivable and which is not a Defaulted
Receivable, by (ii) the aggregate Outstanding Balance of all Receivables as of
such date less Defaulted Receivables as of such date.
"DELINQUENT RECEIVABLE" means a Receivable: (i) as to which any payment, or
part thereof, remains unpaid for more than 60 days from the original due date
for such Receivable and (ii) which is not a Defaulted Receivable.
"DESIGNATED OBLIGOR" means, at any time, each Obligor; PROVIDED, HOWEVER,
that any Obligor shall cease to be a Designated Obligor upon notice from the
Agent to the Transferor and the Collection Agent, delivered at any time in good
faith and based upon reasonable criteria.
"DILUTION RATIO" means, the ratio (expressed as a percentage) computed as
of the last day of each calendar month by dividing (i) the aggregate amount of
credits, rebates, discounts, disputes, warranty claims, repossessed or returned
goods, charge back allowances and other dilutive factors, and any other billing
or other adjustment by the Transferor or the Collection Agent, provided to
Obligors in respect of Receivables during the preceding three months (including
such month) by (ii) the aggregate Outstanding Balance of all Receivables which
arose during the three month period commencing with the first day of the fourth
preceding month and ending with the last day of the second preceding month.
"ELIGIBLE INVESTMENTS" means any of the following: (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) time deposits in, or bankers
13
acceptances issued by, any depositary institution or trust company incorporated
under the laws of the United States of America or any state thereof and subject
to supervision and examination by Federal or state banking or depositary
institution authorities; PROVIDED, HOWEVER, that at the time of investment or
contractual commitment to invest therein, the certificates of deposit or
short-term deposits, if any, or long-term unsecured debt obligations (other than
such obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company) of such depositary institution or
trust company shall have a credit rating from Moody's and S&P of at least "P-1"
and "A-1", respectively, in the case of the certificates of deposit or
short-term deposits, or a rating not lower than one of the two highest
investment categories granted by Moody's and by S&P; (iii) certificates of
deposit having, at the time of investment or contractual commitment to invest
therein, a rating from Moody's and S&P of at least "P-1" and "A-1",
respectively; or (iv) investments in money market funds rated in the highest
investment category or otherwise approved in writing by the applicable rating
agencies, (b) demand deposits in any depositary institution or trust company
referred to in (a)(ii) above; (c) commercial paper (having original or remaining
maturities of no more than 30 days) having, at the time of investment or
contractual commitment to invest therein, a credit rating from Moody's and S&P
of at least "P-1" and "A-1", respectively; (d) Eurodollar time deposits having a
credit rating from Moody's and S&P of at least "P-1" and "A-1", respectively;
and (e) repurchase agreements involving any of the Eligible Investments
described in clauses (a)(i), (a)(iii) and (d) hereof so long as the other party
to the repurchase agreement has at the time of investment therein, a rating from
Moody's and S&P of at least "P-1" and "A-1", respectively.
"ELIGIBLE RECEIVABLE" means, at any time, any Receivable:
(i) which has been transferred by Tech Data to the Transferor and to
which the Transferor has good title thereto, free and clear of all Adverse
Claims;
(ii) the Obligor of which is a United States resident, is a Designated
Obligor at the time of the initial creation of an interest therein
hereunder, is not an Affiliate of any of the parties hereto, and is not a
government or a governmental subdivision or agency;
(iii) which is not a Defaulted Receivable at the time of the initial
creation of an interest of the Agent therein hereunder;
(iv) which is not a Delinquent Receivable at the time of the initial
creation of an interest of the Agent therein;
(v) which, (A) arises pursuant to a Contract with respect to which each
of the Seller and the Transferor has performed all obligations required to
be performed by it thereunder, including without limitation shipment of the
merchandise and/or the performance of the services purchased thereunder;
(B) has
14
been billed; and (C) according to the Contract related thereto, is
required to be paid in full within 60 days of the original billing date
therefor;
(vi) which is an "eligible asset" as defined in Rule 3a-7 under the
Investment Company Act of 1940, as amended;
(vii) a purchase of which with the proceeds of Commercial Paper would
constitute a "current transaction" within the meaning of Section 3(a)(3) of
the Securities Act of 1933, as amended;
(viii) which is an "account" within the meaning of Article 9 of the UCC
of all applicable jurisdictions;
(ix) which is denominated and payable only in United States dollars in
the United States;
(x) which, arises under a Contract that together with the Receivable
related thereto, 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 and, to the best knowledge of the
Collection Agent or the Transferor is not subject to any litigation,
dispute, offset, counterclaim or other defense at such time;
(xi) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract related thereto
is in violation of any such law, rule or regulation in any material
respect;
(xii) which (A) satisfies, in all material respects, all applicable
requirements of the applicable Credit and Collection Policy and (B) is
assignable;
(xiii) which was generated in the ordinary course of Tech Data's
business; and
(xiv) the Obligor of which has been directed to make all payments to a
specified account of the Collection Agent with respect to which there shall
be a Lock-Box Agreement in effect.
"ENTERPRISE" means Enterprise Funding Corporation, and its successors and
assigns.
15
"ENTERPRISE AGENT" means NationsBank, N.A., in its capacity as agent for
Enterprise and the Enterprise Bank Investors, and any successor thereto
appointed pursuant to Article IX.
"ENTERPRISE BANK INVESTORS" shall mean NationsBank, N.A. and its successors
and assigns who are or become parties to this Agreement pursuant to an
Assignment and Assumption Agreement.
"ENTERPRISE BR TRANCHE" means an Enterprise Tranche as to which Enterprise
Discount is calculated at the Base Rate.
"ENTERPRISE BR TRANCHE PERIOD" means, with respect to an Enterprise BR
Tranche, either (i) prior to the Enterprise Termination Date, a period of up to
30 days requested by the Transferor and agreed to by Enterprise or NationsBank
on behalf of the Liquidity Provider, as the case may be, commencing on a
Business Day requested by the Transferor and agreed to by Enterprise or
NationsBank, as the case may be, or (ii) after the Enterprise Termination Date,
a period of one day. If such Enterprise BR Tranche Period would end on a day
which is not a Business Day, such Enterprise BR Tranche Period shall end on the
next succeeding Business Day.
"ENTERPRISE CD TRANCHE" means an Enterprise Tranche as to which Enterprise
Discount is calculated at the CD Rate.
"ENTERPRISE CD TRANCHE PERIOD" means, with respect to an Enterprise CD
Tranche, either (i) prior to the Enterprise Termination Date, a period of up to
one month requested by the Transferor and agreed to by Enterprise or
NationsBank, or the Agent, as the case may be, commencing on a Business Day
requested by the Transferor and agreed to by Enterprise or NationsBank, as the
case may be, or (ii) after the Enterprise Termination Date, a period of one day.
If such Enterprise CD Tranche Period would end on a day which is not a Business
Day, such Enterprise CD Tranche Period shall end on the next succeeding Business
Day.
"ENTERPRISE COMMITMENT TERMINATION DATE" means February 9, 2000, or such
later date to which the Enterprise Commitment Termination Date may be extended
by Transferor, the Enterprise Agent and the Enterprise Bank Investors not later
than 60 days prior to the then current Enterprise Commitment Termination Date.
"ENTERPRISE CP RATE" means, with respect to any Enterprise CP Tranche
Period, the rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper having a term equal to such
Enterprise CP Tranche Period may be sold by any placement agent or commercial
paper dealer selected by Enterprise, PROVIDED, HOWEVER, that if the rate (or
rates) as agreed between any such agent or dealer and Enterprise is a discount
rate, then the rate (or if more than one rate, the weighted average of the
rates) resulting from Enterprise's converting such discount rate (or rates) to
an interest-bearing equivalent rate per annum.
16
"ENTERPRISE CP TRANCHE" means an Enterprise Tranche as to which Enterprise
Discount is calculated at an Enterprise CP Rate.
"ENTERPRISE CP TRANCHE PERIOD" means, with respect to an Enterprise CP
Tranche, a period of days not to exceed 90 days commencing on a Business Day
requested by the Transferor and agreed to by Enterprise pursuant to Section 2.3.
If an Enterprise CP Tranche Period would end on a day which is not a Business
Day, such Enterprise CP Tranche Period shall end on the next succeeding Business
Day.
"ENTERPRISE DEALER FEE" means the fee payable by the Transferor to
Enterprise Agent, on behalf of Enterprise, pursuant to Section 2.4 hereof, the
terms of which are set forth in the Fee Letter.
"ENTERPRISE DILUTION RESERVE" means, at any time, an amount equal to the
product of (i) the highest Dilution Ratio as of the preceding six (6) months and
(ii) the Enterprise Net Investment at such time.
"ENTERPRISE DISCOUNT" means, with respect to any Enterprise Tranche Period:
(TR x TNI x AD)
--
360
Where:
TR = the Enterprise Tranche Rate applicable to such Enterprise Tranche Period.
TNI = the portion of the Enterprise Net Investment allocated to such Enterprise
Tranche Period.
AD = the actual number of days during such Enterprise Tranche Period.
PROVIDED, HOWEVER, that no provision of this Agreement shall require the payment
or permit the collection of Enterprise Discount in excess of the maximum amount
permitted by applicable law; and PROVIDED, FURTHER, that Enterprise Discount
shall not be considered paid by any distribution if at any time such
distribution is rescinded or must be returned for any reason.
"ENTERPRISE DISCOUNT RESERVE" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Enterprise Discount for all Enterprise
Tranche Periods.
17
LY = the Enterprise Liquidation Yield
"ENTERPRISE EARLY COLLECTION FEE" means, for any Enterprise Tranche Period
(such Enterprise Tranche Period to be determined without regard to the last
sentence in Section 2.3(a) hereof) during which the portion of the Enterprise
Net Investment that was allocated to such Enterprise Tranche Period is reduced
for any reason whatsoever, the excess, if any, of (i) the additional Enterprise
Discount that would have accrued during such Enterprise Tranche Period if such
reductions had not occurred, minus (ii) the income, if any, received by the
recipients of such reductions from investing the proceeds of such reductions.
"ENTERPRISE EURODOLLAR TRANCHE" means the Enterprise Tranche as to which
the Enterprise Discount is calculated at the Eurodollar Rate.
"ENTERPRISE EURODOLLAR TRANCHE PERIOD" means, with respect to an Enterprise
Eurodollar Tranche, prior to the Enterprise Termination Date, a period of up to
one month requested by the Transferor and agreed to by Enterprise or
NationsBank, on behalf of the Liquidity Provider, as the case may be, commencing
on a Business Day requested by the Transferor and agreed to by Enterprise or
NationsBank, as applicable; PROVIDED, HOWEVER, that if such Enterprise
Eurodollar Tranche Period would expire on a day which is not a Business Day,
such Enterprise Eurodollar Tranche Period shall expire on the next succeeding
Business Day; PROVIDED, FURTHER, that if such Enterprise Eurodollar Tranche
Period would expire on (a) a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Enterprise
Eurodollar Tranche Period shall expire on the next preceding Business Day or (b)
a Business Day for which there is no numerically corresponding day in the
applicable subsequent calendar month, such Enterprise Eurodollar Tranche Period
shall expire on the last Business Day of such month.
"ENTERPRISE FACILITY LIMIT" means $255,000,000 provided that such amount
may not at any time exceed the aggregate Commitments with respect to the
Enterprise Bank Investors at any time in effect.
"ENTERPRISE LIQUIDATION YIELD" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EM + CD)
-------
360
Where:
RVF = the Enterprise Rate Variance Factor;
LBR = the Base Rate which is applicable to the liquidation period of
the Enterprise Net Investment at such time;
18
NI = the Enterprise Net Investment;
EM = the Estimated Maturity Period of the Receivables; and
CD = the Collection Delay.
"ENTERPRISE LOSS RESERVE" means, on any day, an amount equal to:
LP x (NI + DLR + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the Collection
Agent on such day;
NI = the Enterprise Net Investment at the close of business of the
Collection Agent on such day;
DLR = the Enterprise Dilution Reserve at the close of business of
the Collection Agent on such day;
DR = the Enterprise Discount Reserve at the close of business of
the Collection Agent on such day; and
SFR = the Enterprise Servicing Fee Reserve at the close of business
of the Collection Agent on such day.
Notwithstanding the foregoing, the Enterprise Loss Reserve shall at all times be
at least equal to $20,000,000.
"ENTERPRISE MAXIMUM NET INVESTMENT" means $250,000,000.
"ENTERPRISE NET INVESTMENT" means the sum of the cash amounts paid to the
Transferor by or on behalf of Enterprise and/or the Enterprise Bank Investors
for each Incremental Transfer less the aggregate amount of Collections received
and applied by the Agent to reduce such Net Investment pursuant to Section 2.5,
2.6 or 2.9 hereof; PROVIDED that the Enterprise Net Investment shall be restored
and reinstated in the amount of any Collections so received and applied if at
any time the distribution of such Collections is rescinded or must otherwise be
returned for any reason; and PROVIDED FURTHER that the Enterprise Net Investment
may be increased by the amount described in Section 10.7(d) as described
therein.
"ENTERPRISE PERCENTAGE FACTOR" shall mean the fraction (expressed as a
percentage) computed at any time of determination as follows:
19
NI + LR + DLR + DR + SFR
------------------------
NRB
Where:
NI = the Enterprise Net Investment at the time of such computation;
LR = the Enterprise Loss Reserve at the time of such computation;
DLR = the Enterprise Dilution Reserve at the time of such
computation;
DR = the Enterprise Discount Reserve at the time of such
computation;
SFR = the Enterprise Servicing Fee Reserve at the time of such
computation; and
NRB = the Net Receivables Balance at the time of such computation
as reduced by the amount of all Deemed Collections.
"ENTERPRISE PROGRAM FEE" means the fee payable by the Transferor to
Enterprise pursuant to Section 2.7 hereof, the terms of which are set forth in
the Fee Letter.
"ENTERPRISE RATE VARIANCE FACTOR" means the number, computed from time to
time in good faith by the Enterprise Agent, that reflects the largest potential
variance (from minimum to maximum) in selected interest rates over a period of
time selected by the Enterprise Agent from time to time, set forth in a written
notice by the Enterprise Agent to the Agent, the Transferor and the Collection
Agent.
"ENTERPRISE REINVESTMENT TERMINATION DATE" means the second Business Day
after the delivery by Enterprise to the Transferor of written notice that
Enterprise elects to commence the amortization of its interest in the Enterprise
Net Investment or otherwise liquidate its interest in the Transferred Interest.
"ENTERPRISE SERVICING FEE RESERVE" means at any time the sum of (i) the
Servicing Fee with respect to Enterprise or the Enterprise Bank Investors, as
applicable, for all Enterprise Tranches and (ii) an amount equal to the product
of (A) the Enterprise Net Investment at such time, and (B) the Servicing Fee
percentage and (C) a fraction having as the numerator, the sum of the Estimated
Maturity Period and the Collection Delay and as the denominator, 360.
"ENTERPRISE TERMINATION DATE" means the earliest of (i) that Business Day
designated by the Transferor to the Agent and Enterprise as the Enterprise
Termination Date at any time following 60 days' written notice to the Agent,
Enterprise and the Enterprise Agent (ii) the date of termination of the
commitment of the Liquidity Provider under the Liquidity Provider Agreement
applicable to Enterprise, (iii) the date of termination of the commitment of the
Credit Support Provider under the Credit Support Agreement applicable to
Enterprise, (iv) the day upon which the
20
Enterprise Termination Date is declared or automatically occurs pursuant to
Section 7.2(a) hereof, (v) two Business Days prior to the Enterprise Commitment
Termination Date, (vi) the day on which an Enterprise Reinvestment Termination
Date shall occur, or (vii) the Purchase Termination Date.
"ENTERPRISE TRANCHE" means a portion of the Enterprise Net Investment
allocated to an Enterprise Tranche Period pursuant to Section 2.3 hereof.
"ENTERPRISE TRANCHE PERIOD" means an Enterprise CP Tranche Period, an
Enterprise BR Tranche Period, a CD Tranche Period or a Eurodollar Tranche
Period.
"ENTERPRISE FACILITY FEE" means the fee payable by the Transferor to
Enterprise pursuant to Section 2.7 hereof, the terms of which are set forth in
the Fee Letter.
"ENTERPRISE TRANCHE RATE" means the Enterprise CP Rate, the Base Rate, the
CD Rate or the Eurodollar Rate, as applicable.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means, with respect to any Person, (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code (as in effect from time to time, the
"Code")) as such Person; (ii) a trade or business (whether or not incorporated)
under common control (within the meaning of Section 414(c) of the Code) with
such Person; or (iii) a member of the same affiliated service group (within the
meaning of Section 414(n) of the Code) as such Person, any corporation described
in clause (i) above or any trade or business described in clause (ii) above.
"ESTIMATED MATURITY PERIOD" means, at any time, the period, rounded upward
to the nearest whole number of days, equal to the weighted average number of
days until due of the Receivables as calculated by the Collection Agent in good
faith and set forth in the most recent Investor Report, such calculation to be
based on the assumptions that (a) each Receivable within a particular aging
category, (as set forth in the Investor Report) will be paid on the last day of
such aging category and (b) the last day of the last such aging category
coincides with the last date on which any Outstanding Balance of any Receivables
would be written off as uncollectible or charged against any applicable reserve
or similar account in accordance with the objective requirements of the Credit
and Collection Policy and the Transferor's normal accounting practices applied
on a basis consistent with those reflected in the Transferor's financial
statements, PROVIDED, HOWEVER, that if any of the Investors shall reasonably
disagree with any such calculation, the Agent may recalculate the Estimated
Maturity Period on the basis of such calculation at such time, and such
recalculation, in the absence of manifest error, shall be conclusive.
"EURODOLLAR RATE" means, with respect to any Enterprise Eurodollar Tranche
Period, Atlantic Eurodollar Tranche Period or Liberty Eurodollar Tranche Period,
a rate which is the
21
Applicable Margin in excess of a rate per annum equal to the sum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) of (A) the rate obtained
by dividing (i) the applicable LIBOR Rate by (ii) a percentage equal to 100%
minus the reserve percentage used for determining the maximum reserve
requirement as specified in Regulation D (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) that is applicable
to the Agent during such Enterprise Eurodollar Tranche Period, Atlantic
Eurodollar Tranche Period or Liberty Eurodollar Tranche Period in respect of
eurocurrency or eurodollar funding, lending or liabilities (or, if more than one
percentage shall be so applicable, the daily average of such percentage for
those days in such Enterprise Eurodollar Tranche Period, Atlantic Eurodollar
Tranche Period or Liberty Eurodollar Tranche Period during which any such
percentage shall be applicable) plus (B) the then daily net annual assessment
rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) as estimated by
the Agent for determining the current annual assessment payable by the Agent to
the Federal Deposit Insurance Corporation in respect of eurocurrency or
eurodollar funding, lending or liabilities.
"EVENT OF BANKRUPTCY", means, with respect to any Person, (i) that such
Person (a) shall generally not pay its debts as such debts become due or (b)
shall admit in writing its inability to pay its debts generally or (c) shall
make a general assignment for the benefit of creditors; (ii) any proceeding
shall be instituted by or against such Person seeking to adjudicate it as
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) if such Person is a corporation, such Person or any
Subsidiary shall take any corporate action to authorize any of the actions set
forth in the preceding clauses (i) or (ii).
"FACILITY LIMIT" means the sum of the Enterprise Facility Limit, the
Atlantic Facility Limit and the Liberty Facility Limit.
"FEE LETTER" means the letter agreement dated the date hereof between the
Transferor, the Collection Agent, Enterprise, Atlantic, Liberty, the Agent, the
Enterprise Agent, the Atlantic Agent and the Liberty Agent with respect to the
fees to be paid by the Transferor hereunder, as amended, modified or
supplemented from time to time.
"FINANCE CHARGES" means, with respect to a Contract, any finance, interest,
late or similar charges owing by an Obligor pursuant to such Contract.
"GUARANTY" means the agreement of guarantee of the Guarantor set forth in
Article IX hereof.
"INCREMENTAL TRANSFER" means a Transfer which is made pursuant to Section
2.2(a) hereof.
22
"INDEBTEDNESS" means, with respect to any Person, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business 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 and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
"INDEMNIFIED AMOUNTS" has the meaning specified in Section 8.1 hereof.
"INDEMNIFIED PARTIES" has the meaning specified in Section 8.1 hereof.
"INTEREST COMPONENT" shall mean, (i) with respect to any Commercial Paper
issued on an interest-bearing basis, the interest payable on such Commercial
Paper at its maturity (including any dealer commissions) and (ii) with respect
to any Commercial Paper issued on a discount basis, the portion of the face
amount of such Commercial Paper representing the discount incurred in respect
thereof (including any dealer commissions).
"INVESTORS" means Enterprise, Atlantic, Liberty, the Enterprise Bank
Investors, the Atlantic Bank Investors and/or the Liberty Bank Investors, as the
context requires.
"INVESTOR REPORT" means a report, in substantially the form attached hereto
as Exhibit E or in such other form as is mutually agreed to by the Transferor
and the Agent, furnished by the Collection Agent pursuant to Section 2.11.
"LAW" means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Official Body.
"LIBERTY AGENT" means The Bank of Nova Scotia, a banking corporation
organized and existing under the laws of Canada, acting through its New York
Agency, in its capacity as agent for Liberty and the Liberty Bank Investors, and
any successor thereto appointed pursuant to Article IX.
"LIBERTY BANK INVESTORS" shall mean The Bank of Nova Scotia, and its
successors and assigns who are or become parties to this Agreement pursuant to
an Assignment and Assumption Agreement.
"LIBERTY BR TRANCHE" means a Liberty Tranche as to which Liberty Discount
is calculated at the Base Rate.
"LIBERTY BR TRANCHE PERIOD" means, with respect to a Liberty BR Tranche,
either (i) prior to the Liberty Termination Date, a period of up to 30 days
requested by the Transferor and agreed to by the Liberty Agent commencing on a
Business Day requested by the Transferor and
23
agreed to by the Liberty Agent or (ii) after the Liberty Termination Date, a
period of one day. If such Liberty BR Tranche Period would end on a day which is
not a Business Day, such Liberty BR Tranche Period shall end on the next
succeeding Business Day.
"LIBERTY CD TRANCHE" means a Liberty Tranche as to which Liberty Discount
is calculated at the CD Rate.
"LIBERTY CD TRANCHE PERIOD" means, with respect to a Liberty CD Tranche,
either (i) prior to the Liberty Termination Date, a period of up to one month
requested by the Transferor and agreed to by the Liberty Agent commencing on a
Business Day requested by the Transferor and agreed to by the Liberty Agent or
(ii) after the Termination Date, a period of one day. If such Liberty CD Tranche
Period would end on a day which is not a Business Day, such Liberty CD Tranche
Period shall end on the next succeeding Business Day.
"LIBERTY COMMITMENT TERMINATION DATE" means February 9, 2000, or such later
date to which the Liberty Commitment Termination Date may be extended by
Transferor, the Liberty Agent and the Liberty Bank Investors not later than 60
days prior to the then current Liberty Commitment Termination Date.
"LIBERTY CP RATE" means, with respect to any Liberty CP Tranche Period, the
rate equivalent to the rate (or if more than one rate, the weighted average of
the rates) at which Liberty's Commercial Paper having a term equal to such
Liberty CP Tranche Period may be sold by any placement agent or commercial paper
dealer selected by Liberty, PROVIDED, HOWEVER, that if the rate (or rates) as
agreed between any such agent or dealer and Liberty is a discount rate, then the
rate (or if more than one rate, the weighted average of the rates) resulting
from Liberty's converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.
"LIBERTY CP TRANCHE" means a Liberty Tranche as to which Liberty Discount
is calculated at a Liberty CP Rate.
"LIBERTY CP TRANCHE PERIOD" means, with respect to a Liberty CP Tranche, a
period of days not to exceed 90 days commencing on a Business Day requested by
the Transferor and agreed to by the Liberty Agent pursuant to Section 2.3. If a
Liberty CP Tranche Period would end on a day which is not a Business Day, such
Liberty CP Tranche Period shall end on the next succeeding Business Day.
"LIBERTY DEALER FEE" means the fee payable by the Transferor to the Liberty
Agent, on behalf of Liberty pursuant to Section 2.4 hereof, the terms of which
are set forth in the Fee Letter.
"LIBERTY DILUTION RESERVE" means, at any time, an amount equal to the
product of (i) the highest Dilution Ratio as of the preceding six (6) months and
(ii) the Liberty Net Investment at such time.
24
"LIBERTY DISCOUNT" means, with respect to any Liberty Tranche Period:
(TR x TNI x AD)
--
360
Where:
TR = the Liberty Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Liberty Net Investment allocated to such Liberty
Tranche Period.
AD = the actual number of days during such Liberty Tranche Period.
PROVIDED, HOWEVER, that no provision of this Agreement shall require the payment
or permit the collection of Discount in excess of the maximum amount permitted
by applicable law; and PROVIDED, FURTHER, that Liberty Discount shall not be
considered paid by any distribution if at any time such distribution is
rescinded or must be returned for any reason, with respect to a Liberty CP
Tranche, a period of days not to exceed 90 days commencing on a Business Day
requested by the Transferor and agreed to by Liberty pursuant to Section 2.3. If
a Liberty CP Tranche Period and on a day which is not a Business Day, such
Liberty CP Tranche Period shall and on the next succeeding Business Day.
"LIBERTY DISCOUNT RESERVE" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Liberty Discount for all Liberty Tranche
Periods
LY = the Liberty Liquidation Yield
"LIBERTY EARLY COLLECTION FEE" means, for any Liberty Tranche Period (such
Liberty Tranche Period to be determined without regard to the last sentence in
Section 2.3(a) hereof) during which the portion of the Liberty Net Investment
that was allocated to such Liberty Tranche Period is reduced for any reason
whatsoever, the excess, if any, of (i) the additional Liberty Discount that
would have accrued during such Liberty Tranche Period if such reductions had not
occurred, minus (ii) the income, if any, received by the recipients of such
reductions from investing the proceeds of such reductions in investments
permissible for Liberty.
"LIBERTY EURODOLLAR TRANCHE" means a Tranche as to which Liberty Discount
is calculated at the Eurodollar Rate.
25
"LIBERTY EURODOLLAR TRANCHE PERIOD" means, with respect to a Liberty
Eurodollar Tranche, prior to the Liberty Termination Date, a period of up to one
month requested by the Transferor and agreed to by the Liberty Agent commencing
on a Business Day requested by the Transferor and agreed to by the Liberty
Agent; PROVIDED, HOWEVER, that if such Liberty Eurodollar Tranche Period would
expire on a day which is not a Business Day, such Liberty Eurodollar Tranche
Period shall expire on the next succeeding Business Day; PROVIDED, FURTHER, that
if such Liberty Eurodollar Tranche Period would expire on (a) a day which is not
a Business Day but is a day of the month after which no further Business Day
occurs in such month, such Liberty Eurodollar Tranche Period shall expire on the
next preceding Business Day or (b) a Business Day for which there is no
numerically corresponding day in the applicable subsequent calendar month, such
Liberty Eurodollar Tranche Period shall expire on the last Business Day of such
month.
"LIBERTY FACILITY LIMIT" means $153,000,000 provided that such amount may
not at any time exceed the aggregate Commitments with respect to the Liberty
Bank Investors at any time in effect.
"LIBERTY LIQUIDATION YIELD" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EM + CD)
-------
360
Where:
RVF = the Liberty Rate Variance Factor;
LBR = the Base Rate which is applicable to the liquidation period of
the Liberty Net Investment at such time;
NI = the Liberty Net Investment;
EM = the Estimated Maturity Period of the Receivables; and
CD = the Collection Delay.
"LIBERTY LOSS RESERVE" means, on any day, an amount equal to:
LP x (NI + DLR + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the Collection
Agent on such day;
26
NI = the Liberty Net Investment at the close of business of the
Collection Agent on such day;
DLR = the Liberty Dilution Reserve at the close of business of the
Collection Agent on such day;
DR = the Liberty Discount Reserve at the close of business of the
Collection Agent on such day; and
SFR = the Liberty Servicing Fee Reserve at the close of business of
the Collection Agent on such day.
Notwithstanding the foregoing, the Liberty Loss Reserve shall at all times be at
least equal to $12,000,000.
"LIBERTY MAXIMUM NET INVESTMENT" means $150,000,000.
"LIBERTY NET INVESTMENT" means the sum of the cash amounts paid to the
Transferor by or on behalf of Liberty and/or the Liberty Bank Investors for each
Incremental Transfer less the aggregate amount of Collections received and
applied by the Agent to reduce such Liberty Net Investment pursuant to Section
2.5, 2.6 or 2.9 hereof; PROVIDED that the Liberty Net Investment shall be
restored and reinstated in the amount of any Collections so received and applied
if at any time the distribution of such Collections is rescinded or must
otherwise be returned for any reason; and PROVIDED FURTHER that the Net
Investment may be increased by the amount described in Section 10.7(d) as
described therein.
"LIBERTY PERCENTAGE FACTOR" shall mean the fraction (expressed as a
percentage) computed at any time of determination as follows:
NI + LR + DLR + DR + SFR
------------------------
NRB
Where:
NI = the Liberty Net Investment at the time of such computation;
LR = the Liberty Loss Reserve at the time of such computation;
DLR = the Liberty Dilution Reserve at the time of such computation;
DR = the Liberty Discount Reserve at the time of such computation;
SFR = the Liberty Servicing Fee Reserve at the time of such
computation; and
27
NRB = the Net Receivables Balance at the time of such computation
as reduced by the amount of all Deemed Collections.
"LIBERTY PROGRAM FEE" means the fee payable by the Transferor to Liberty
pursuant to Section 2.7 hereof, the terms of which are set forth in the Fee
Letter.
"LIBERTY RATE VARIANCE FACTOR" means the number, computed from time to time
in good faith by the Liberty Agent, that reflects the largest potential variance
(from minimum to maximum) in selected interest rates over a period of time
selected by the Liberty Agent from time to time, set forth in a written notice
by the Liberty Agent to the Agent, the Transferor and the Collection Agent.
"LIBERTY REINVESTMENT TERMINATION DATE" means the second Business Day after
the delivery by Liberty to the Transferor of written notice that Liberty elects
to commence the amortization of its interest in the Liberty Net Investment or
otherwise liquidate its interest in the Transferred Interest.
"LIBERTY SERVICING FEE RESERVE" means at any time the sum of (i) the
Servicing Fee with respect to Liberty or the Liberty Bank Investors, as
applicable, for all Liberty Tranches and (ii) an amount equal to the product of
(A) the Liberty Net Investment at such time, and (B) the Servicing Fee
percentage and (C) a fraction having as the numerator, the sum of the Estimated
Maturity Period and the Collection Delay and as the denominator, 360.
"LIBERTY TERMINATION DATE" means the earliest of (i) that Business Day
designated by the Transferor to the Agent and Liberty as the Liberty Termination
Date at any time following 60 days' written notice to the Agent, Liberty and the
Liberty Agent, (ii) the date of termination of the commitment of the Liquidity
Provider under the Liquidity Provider Agreement applicable to Liberty, (iii) the
date of termination of the commitment of the Credit Support Provider under the
Credit Support Agreement applicable to Liberty, (iv) the day upon which a
Liberty Termination Date is declared or automatically occurs pursuant to Section
7.2(a) hereof, (v) two Business Days prior to the Liberty Commitment Termination
Date, (vi) the day on which a Liberty Reinvestment Termination Date shall occur,
or (vii) the Purchase Termination Date.
"LIBERTY TRANCHE" means a portion of the Liberty Net Investment allocated
to a Liberty Tranche Period pursuant to Section 2.3 hereof.
"LIBERTY TRANCHE PERIOD" means a Liberty CP Tranche Period, a Liberty BR
Tranche Period, a CD Tranche Period or a Eurodollar Tranche Period.
"LIBERTY TRANCHE RATE" means the Liberty CP Rate, the Base Rate, the CD
Rate or the Eurodollar Rate, as applicable.
28
"LIBERTY FACILITY FEE" means the fee payable by the Transferor to Liberty
pursuant to Section 2.7 hereof, the terms of which are set forth in the Fee
Letter.
"LIBOR RATE" means, with respect to any Enterprise Eurodollar Tranche
Period, Atlantic Eurodollar Tranche Period or Liberty Eurodollar Tranche Period,
the rate at which deposits in dollars are offered to the Agent in the London
interbank market at approximately 11:00 a.m. (London time) two Business Days
before the first day of such Enterprise Eurodollar Tranche Period, Atlantic
Eurodollar Tranche Period or Liberty Eurodollar Tranche Period in an amount
approximately equal to the Enterprise Eurodollar Tranche, Atlantic Eurodollar
Tranche or Liberty Eurodollar Tranche to which the Eurodollar Rate is to apply
and for a period of time approximately equal to the Enterprise Eurodollar
Tranche Period, the Atlantic Eurodollar Tranche Period or the Liberty Eurodollar
Tranche Period, as applicable.
"LIQUIDITY PROVIDER" means the Person or Persons who will provide liquidity
support to Enterprise, Atlantic or Liberty, as applicable, in connection with
the issuance by Enterprise, Atlantic or Liberty, as applicable, of its
Commercial Paper.
"LIQUIDITY PROVIDER AGREEMENT" means the agreement between Enterprise,
Atlantic or Liberty, as applicable, and the Liquidity Provider(s) evidencing the
obligation of such Liquidity Provider(s) to provide liquidity support to
Enterprise, Atlantic or Liberty, as applicable, in connection with the issuance
by Enterprise, Atlantic or Liberty, as applicable, of its Commercial Paper.
"LOCK-BOX ACCOUNT" means an account maintained by the Collection Agent at a
Lock-Box Bank for the purpose of receiving Collections from Receivables.
"LOCK-BOX AGREEMENT" means an agreement between the Collection Agent and a
Lock-Box Bank in substantially the form of Exhibit D hereto.
"LOCK-BOX BANK" means each of the banks set forth in Exhibit C hereto and
such banks as may be added thereto or deleted therefrom pursuant to Section 2.8
hereof.
"LOSS PERCENTAGE" means on any day the greater of (i) 5 times the highest
Loss-to-Liquidation Ratio as of the last day of the 12 months preceding the then
current month, or (ii) 10 percent, or, if within 90 days from the Closing Date
each of the Agent, the Enterprise Agent, the Atlantic Agent and the Liberty
Agent has not received information regarding credit balance aging in
substantially the same form as information currently provided to the Agent
regarding the aging of Receivables, 15%.
"LOSS-TO-LIQUIDATION RATIO" means, for any period of determination, the
ratio (expressed as a percentage) computed as of the last day of each calendar
month by dividing (i) the aggregate Outstanding Balance of all Receivables which
became Defaulted Receivables during such
29
period, by (ii) the aggregate amount of Collections received by the Collection
Agent during such period less Deemed Collections received and applied by the
Agent for the period.
"MAJORITY INVESTORS" shall have the meaning specified in Section 10.1(a)
hereof.
"MAXIMUM NET INVESTMENT" means the sum of the Enterprise Maximum Net
Investment, the Atlantic Maximum Net Investment and the Liberty Maximum Net
Investment.
"MAXIMUM PERCENTAGE FACTOR" means 98%.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "Multi employer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by the Transferor, or any ERISA
Affiliate of the Transferor on behalf of its employees.
"NET INVESTMENT" means the sum of the Enterprise Net Investment, the
Atlantic Net Investment and the Liberty Net Investment.
"NET RECEIVABLES BALANCE" means at any time the Outstanding Balance of the
Eligible Receivables at such time reduced by the sum of (i) the aggregate amount
by which the Outstanding Balance of all Eligible Receivables of each Designated
Obligor exceeds the Concentration Factor for such Designated Obligor, PLUS (ii)
the aggregate Outstanding Balance of all Eligible Receivables which are
Defaulted Receivables, PLUS (iii) the aggregate Outstanding Balance of all
Eligible Receivables which are Delinquent Receivables.
"OBLIGATIONS" shall have the meaning specified in Section 9.1.
"OBLIGOR" means a Person obligated to make payments for the provision of
goods and services pursuant to a Contract.
"OFFICIAL BODY" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"OTHER TRANSFEROR" means any Person other than the Transferor that has
entered into a receivables purchase agreement or transfer and administration
agreement with Enterprise.
"OUTSTANDING BALANCE" means, with respect to any Receivable at any time,
the then outstanding principal amount thereof including any accrued and
outstanding Finance Charges related thereto.
30
"PERCENTAGE FACTOR" means the sum of the Enterprise Percentage Factor, the
Atlantic Percentage Factor and the Liberty Percentage Factor.
"PERSON" means any corporation, limited liability company, natural person,
firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"POTENTIAL TERMINATION EVENT" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Termination Event.
"PRO RATA SHARE" means, (A) for the Enterprise Bank Investor, the
Commitment of such Enterprise Bank Investor divided by the sum of the
Commitments of all the Enterprise Bank Investors, (B) for an Atlantic Bank
Investor, the Commitment of such Atlantic Bank Investor divided by the sum of
the Commitments of all Atlantic Bank Investors, and (C) for an Liberty Bank
Investor, the Commitment of such Liberty Bank Investor divided by the sum of the
Commitments of all Liberty Bank Investors.
"PROCEEDS" means "proceeds" as defined in Section 9.306(1) of the UCC.
"PURCHASE AGREEMENT" means the Receivables Purchase Agreement dated as of
December 21, 1993, between Tech Data and the Transferor, as the same may be
amended, supplemented or otherwise modified.
"PURCHASE TERMINATION DATE" means the date upon which the Transferor shall
cease, for any reason whatsoever, to make purchases of Receivables from Tech
Data under the Purchase Agreement or the Purchase Agreement shall terminate for
any reason whatsoever.
"PURCHASED INTEREST" means the interest in the Receivables acquired by a
Liquidity Provider through purchase pursuant to the terms of a Liquidity
Provider Agreement.
"RECEIVABLE" means the indebtedness owed to the Transferor by any Obligor
(without giving effect to any purchase hereunder by any Investor at any time)
under a Contract whether constituting an account, chattel paper, instrument or
general intangible, arising in connection with the sale of merchandise or
services by Tech Data and thereafter transferred to the Transferor by Tech Data,
and includes the right to payment of any Finance Charges and other obligations
of such Obligor with respect thereto. Notwithstanding the foregoing, once a
Receivable has been deemed collected pursuant to Section 2.9 hereof, it shall no
longer constitute a Receivable hereunder.
"RECEIVABLES SYSTEMS" means the computer applications involved in the
origination, collection, management or servicing of the Receivables.
"RECORDS" means all Contracts and other documents, books, records and other
information (including, without limitation, computer programs, tapes, discs,
punch cards, data
31
processing software and related property and rights) maintained with respect to
Receivables and the related Obligors.
"RELATED COMMERCIAL PAPER" shall mean, with respect to Commercial Paper
issued by Enterprise, Atlantic or Liberty, Commercial Paper issued by
Enterprise, Atlantic or Liberty, respectively, the proceeds of which were used
to acquire, or refinance the acquisition of, an interest in Receivables with
respect to the Transferor.
"RELATED SECURITY" means with respect to any Receivable, all of the
Transferor's rights, title and interest in, to and under:
(i) all of the Transferor's interest, if any, in the merchandise
(including returned or repossessed merchandise), if any, the sale of which
by the Transferor gave rise to such Receivable;
(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 signed by an Obligor describing any
collateral securing such Receivable;
(iii) all guarantees, indemnities, warranties, insurance (and proceeds
and premium refunds thereof) or other agreements or arrangements of any
kind from time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or otherwise;
(iv) all Records related to such Receivable; and
(v) all rights and remedies of the Transferor under the Purchase
Agreement, together with all financing statements filed by the Transferor
against the Seller in connection therewith; and
(vi) all Proceeds of any of the foregoing.
"SECTION 8.2 COSTS" has the meaning specified in Section 8.2(d) hereof.
"SELLER" means Tech Data Corporation, a Florida corporation.
"SERVICING FEE" means the fees payable by Enterprise or the Enterprise Bank
Investors, Atlantic or the Atlantic Bank Investors and/or Liberty or the Liberty
Bank Investors to the Collection Agent, with respect to an Enterprise Tranche,
an Atlantic Tranche or a Liberty Tranche, as applicable, in an amount equal to
.75% per annum on the amount of the Enterprise Net Investment, the Atlantic Net
Investment or the Liberty Net Investment, as applicable, allocated to
32
such Enterprise Tranche, Atlantic Tranche or Liberty Tranche pursuant to Section
2.3. Such fee shall accrue from the date of the initial purchase of an interest
in the Receivables to the later of the Enterprise Termination Date (in the case
of Enterprise and the Enterprise Bank Investors), the Atlantic Termination Date
(in the case of Atlantic and the Atlantic Bank Investors) or the Liberty
Termination Date (in the case of Liberty and the Liberty Bank Investors) or the
date on which the Enterprise Net Investment, the Atlantic Net Investment or the
Liberty Net Investment, as applicable, is reduced to zero. On or prior to the
Enterprise Termination Date, the Atlantic Termination Date or the Liberty
Termination Date, as applicable, such fee shall be payable only from Collections
pursuant to, and subject to the priority of payments set forth in, Section 2.5
hereof. After the Enterprise Termination Date, the Atlantic Termination Date or
the Liberty Termination Date, as applicable, such fee shall be payable only from
Collections pursuant to, and subject to the priority of payments set forth in,
Section 2.6 hereof.
"STANDARD & POOR'S" or "S&P" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
"SUBSIDIARY" of a Person means any corporation more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"SUPPLEMENTAL FEE LETTER" means that certain fee letter, dated as of
February 10, 1999, between the Collection Agent, the Transferor and the Agent.
"TERMINATION EVENT" means an event described in Section 7.1 hereof.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, the Purchase
Agreement, the Fee Letter, the Lock-Box Agreements, the Certificates, the
Transfer Certificates and all of the other instruments, documents and other
agreements executed and delivered by Tech Data or the Transferor in connection
with any of the foregoing, in each case, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"TRANSFER" means a conveyance, transfer and assignment by the Transferor to
the Investors, as applicable, of an undivided percentage ownership interest in
Receivables hereunder (including, without limitation, as a result of any
reinvestment of Collections in the Transferred Interest pursuant to Section
2.2(b) and 2.5 hereof).
"TRANSFER CERTIFICATE" has the meaning specified in Section 2.2(a) hereof.
"TRANSFER DATE" means, with respect to each Transfer, the Business Day on
which such Transfer is made.
33
"TRANSFER PRICE" means with respect to any Incremental Transfer, the amount
paid to the Transferor by the applicable Investors as described in the
applicable Transfer Certificate.
"TRANSFEROR" means Tech Data Finance, Inc., a California corporation, and
its successors and permitted assigns.
"TRANSFERRED INTEREST" means, at any time of determination, an undivided
percentage ownership interest in (i) each and every then outstanding Receivable,
(ii) all Related Security with respect to each such Receivable, (iii) all
Collections with respect thereto, and (iv) other Proceeds of the foregoing,
which undivided ownership interest shall be equal to the Percentage Factor at
such time, and only at such time (without regard to prior calculations). The
Transferred Interest in each Receivable, together with Related Security,
Collections and Proceeds with respect thereto, shall at all times be equal to
the Transferred Interest in each other Receivable, together with Related
Security, Collections and Proceeds with respect thereto. To the extent that the
Transferred Interest shall decrease as a result of a recalculation of the
Percentage Factor, the applicable Investors shall be considered to have
reconveyed to the Transferor an undivided percentage ownership interest in each
Receivable, together with Related Security, Collections and Proceeds with
respect thereto, in an amount equal to such decrease such that in each case the
Transferred Interest in each Receivable shall be equal to the Transferred
Interest in each other Receivable.
"UCC" means, with respect to any state, the Uniform Commercial Code as from
time to time in effect in such state.
"UNPAID BALANCE" means, at any time, with respect to any Receivable, the
outstanding principal amount of the indebtedness of the related Obligor incurred
in connection with a particular purchase under or evidenced by such Receivable,
exclusive of any sales or other tax, if any, included in or payable with respect
to such purchase.
"YEAR 2000 COMPLIANT" means, with respect to any Person, the ability of the
computer applications of such Person to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000.
"YEAR 2000 PROBLEM" means, with respect to any Person, the risk that such
Person's computer applications may be unable to recognize and properly perform
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999.
SECTION 1.2. OTHER TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of New York, and
not specifically defined herein, are used herein as defined in such Article 9.
SECTION 1.3. COMPUTATION OF TIME PERIODS. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the
34
word "from" means "from and including", the words "to" and "until" each means
"to but excluding" and the word "within" means "from and excluding a specified
date and to and including a later specified date".
35
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. FACILITY. Upon the terms and subject to the conditions herein
set forth and provided that the Enterprise Termination Date (with respect to
Enterprise and the Enterprise Bank Investors), the Atlantic Termination Date
(with respect to Atlantic and the Atlantic Bank Investors) or the Liberty
Termination Date (with respect to Liberty and the Liberty Bank Investors) shall
not have occurred, (x) the Transferor may, at its option, convey, transfer and
assign to the Agent, on behalf of Enterprise or the Enterprise Bank Investors,
Atlantic or the Atlantic Bank Investors, and/or Liberty or the Liberty Bank
Investors, as applicable, and (y) the Agent, on behalf of Enterprise, Atlantic
and/or Liberty, as applicable, may, at its option, or the Agent on behalf of the
Enterprise Bank Investors, the Atlantic Bank Investors and/or the Liberty Bank
Investors, as applicable, provided that the Enterprise Bank Investors, the
Atlantic Bank Investors and the Liberty Bank Investors shall have previously
accepted the assignment by Enterprise (in the case of the Enterprise Bank
Investors), Atlantic (in the case of the Atlantic Bank Investors) or Liberty (in
the case of the Liberty Bank Investors), as applicable, of all of its interest
in the Affected Assets, shall, if so requested, accept such conveyance, transfer
and assignment from the Transferor of, without recourse except as provided
herein, undivided percentage ownership interests in the Receivables, together
with Related Security, Collections and Proceeds with respect thereto, from time
to time. By accepting any conveyance, transfer and assignment hereunder, neither
any Investor nor the Agent assumes or shall have any obligations or liability
under any of the Contracts, all of which shall remain the obligations and
liabilities of the Transferor and the Seller.
SECTION 2.2. TRANSFERS; CERTIFICATES; ELIGIBLE RECEIVABLES.
(a) INCREMENTAL TRANSFERS. Upon the terms and subject to the conditions
herein set forth and provided that the Enterprise Termination Date (with respect
to Enterprise and the Enterprise Bank Investors), the Atlantic Termination Date
(with respect to Atlantic and the Atlantic Bank Investors) or the Liberty
Termination Date (with respect to Liberty and the Liberty Bank Investors) shall
not have occurred, the Transferor may, at its option, convey, transfer and
assign to the Agent on behalf of Enterprise or the Enterprise Bank Investors,
Atlantic or the Atlantic Bank Investors, and Liberty or the Liberty Bank
Investors, as applicable, and the Agent, on behalf of Enterprise, Atlantic
and/or Liberty, as applicable, may, at its option, or the Agent on behalf of the
Enterprise Bank Investors, the Atlantic Bank Investors and/or the Liberty Bank
Investors, as applicable, provided that the Enterprise Bank Investors, the
Atlantic Bank Investors and/or the Liberty Bank Investors, as applicable, shall
have previously accepted the assignment by Enterprise (in the case of the
Enterprise Bank Investors), Atlantic (in the case of the Atlantic Bank
Investors) and/or Liberty (in the case of the Liberty Bank Investors) of all of
its interest in the Affected Assets, shall, if so requested by the Transferor,
accept such conveyance, transfer and assignment from the Transferor, without
recourse except as provided herein, undivided percentage ownership interests in
the Receivables, together with Related Security, Collections and Proceeds with
respect thereto
36
(each, an "INCREMENTAL TRANSFER"); PROVIDED that after giving effect to the
payment to the Transferor of such Transfer Price (i) the Enterprise Net
Investment shall not exceed the Enterprise Maximum Net Investment, (ii) the
Atlantic Net Investment shall not exceed the Atlantic Maximum Net Investment,
(iii) the Liberty Net Investment shall not exceed the Liberty Maximum Net
Investment, (iv) the sum of the Enterprise Net Investment PLUS, in the case
where Enterprise holds a portion of the Transferred Interest, the Interest
Component of all outstanding Related Commercial Paper issued by Enterprise would
not exceed the Enterprise Facility Limit, (v) the sum of the Atlantic Net
Investment PLUS, in the case where Atlantic holds a portion of the Transferred
Interest, the Interest Component of all outstanding Related Commercial Paper
issued by Atlantic would not exceed the Atlantic Facility Limit, (vi) the sum of
the Liberty Net Investment PLUS, in the case where Liberty holds a portion of
the Transferred Interest, the Interest Component of all outstanding Related
Commercial Paper issued by Liberty would not exceed the Liberty Facility Limit,
and (vii) the Percentage Factor shall not exceed the Maximum Percentage Factor;
and, PROVIDED FURTHER, that the representations and warranties set forth in
Section 3.1 shall be true and correct both immediately before and immediately
after giving effect to any such Incremental Transfer and the payment to the
Transferor of the Transfer Price related thereto and an Investor Report shall
have been delivered with respect to such Incremental Transfer as required by
Section 3.2 hereof. All Incremental Transfers shall be made on a PRO RATA basis
to Atlantic or the Atlantic Bank Investors and/or Liberty or the Liberty Bank
Investors (based upon the relation of the Atlantic Maximum Net Investment or the
Liberty Maximum Net Investment, as applicable, to the sum of the Atlantic
Maximum Net Investment and the Liberty Maximum Net Investment) until such time
as each of the Enterprise Net Investment, the Atlantic Net Investment and the
Liberty Net Investment each represents its PRO RATA share of the Net Investment
(based upon the relation of the Enterprise Maximum Net Investment, the Atlantic
Maximum Net Investment and the Liberty Maximum Net Investment, as applicable, to
the Maximum Net Investment), after giving effect to any such Incremental
Transfer; thereafter, all Incremental Transfers shall be made on a PRO RATA
basis to Enterprise or the Enterprise Bank Investors, Atlantic or the Atlantic
Bank Investors and Liberty or the Liberty Bank Investors (based upon the
relation of the Enterprise Net Investment, the Atlantic Maximum Net Investment
or the Liberty Maximum Net Investment, as applicable, to the Maximum Net
Investment).
The Transferor shall, by notice to the Agent given by telecopy, offer to
convey, transfer and assign to the Agent, on behalf of any of Enterprise or the
Enterprise Bank Investors, Atlantic or the Atlantic Bank Investors, and/or
Liberty or the Liberty Bank Investors, as applicable, undivided percentage
ownership interests in the Receivables and the other Affected Assets relating
thereto at least three (3) Business Days prior to the proposed date of any
Incremental Transfer. Each such notice shall specify (w) whether such request is
made to the Agent on behalf of Enterprise or the Enterprise Bank Investors,
Atlantic or the Atlantic Bank Investors, and/or Liberty or the Liberty Bank
Investors, as applicable (it being understood and agreed that once any of the
Enterprise Bank Investors, the Atlantic Bank Investors or the Liberty Bank
Investors acquire any interest in the Transferred Interest hereunder, such
Persons shall be required to purchase all of the portion of the Transferred
Interest held by Enterprise (in the case of the Enterprise Bank Investors),
Atlantic (in the case of the Atlantic Bank Investors) or Liberty (in the case of
the Liberty Bank Investors) in accordance with Section 10.7 and thereafter
Enterprise, Atlantic or Liberty, as applicable, shall no
37
longer accept any additional Incremental Transfers hereunder), (x) the desired
Transfer Price (which shall be at least $5,000,000 or integral multiples of
$1,000,000 in excess thereof) or, to the extent that the then available unused
portion of the Maximum Net Investment is less than such amount, such lesser
amount equal to such available portion of such Maximum Net Investment), (y) the
desired date of such Incremental Transfer and (z) the desired Enterprise Tranche
Period(s), Atlantic Tranche Period(s) and Liberty Tranche Periods and
allocations of the Enterprise Net Investment, the Atlantic Net Investment and
the Liberty Net Investment of such Incremental Transfer thereto as required by
Section 2.3. The Agent will promptly notify Enterprise or each of the Enterprise
Bank Investors, Atlantic or each of the Atlantic Bank Investors and Liberty or
each of the Liberty Bank Investors, as the case may be, of the Agent's receipt
of any request for an Incremental Transfer to be made to such Person. To the
extent that any such Incremental Transfer is requested of Enterprise, Atlantic
or Liberty, Enterprise, Atlantic or Liberty, as applicable, shall accept or
reject such offer by notice given to the Transferor and the Agent by telephone
or telecopy by no later than the close of its business on the Business Day
following its receipt of any such request. Each notice of proposed Transfer
shall be irrevocable and binding on the Transferor and the Transferor shall
indemnify each Investor against any loss or expense incurred by such Investor,
either directly or through a Liquidity Provider Agreement, as a result of any
failure by the Transferor to complete such Incremental Transfer including,
without limitation, any loss (including loss of anticipated profits) or expense
incurred by such Investor, either directly or pursuant to a Liquidity Provider
Agreement by reason of the liquidation or reemployment of funds acquired by such
Investor (or a related Liquidity Provider) (including, without limitation, funds
obtained by issuing commercial paper or promissory notes or obtaining deposits
as loans from third parties) for Enterprise or any Enterprise Bank Investor,
Atlantic or any Atlantic Bank Investor and Liberty or any Liberty Bank Investor,
as applicable, to fund such Incremental Transfer.
On the date of the initial Incremental Transfer to Atlantic or the Atlantic
Bank Investors and Liberty or the Liberty Bank Investors, the Enterprise Agent,
the Atlantic Agent or the Liberty Agent, as applicable, on behalf of the
applicable Investors, shall deliver written confirmation to the Transferor of
the Transfer Price, the Enterprise Tranche Period(s), the Atlantic Tranche
Period(s) and the Liberty Tranche Period(s) and the Enterprise Tranche Rate(s),
the Atlantic Tranche Rate(s) and the Liberty Tranche Rate(s) relating to such
Transfer and the Transferor shall deliver to the Agent the Transfer Certificate
in the form of Exhibit F hereto (the "TRANSFER CERTIFICATE"). The Agent shall
indicate the amount of the initial Incremental Transfer together with the date
thereof on the grid attached to the Transfer Certificate. On the date of each
subsequent Incremental Transfer, the Enterprise Agent, the Atlantic Agent and
the Liberty Agent, as applicable shall send written confirmation to the
Transferor of the Transfer Price, the Enterprise Tranche Period(s), the Atlantic
Tranche Period(s) and the Liberty Tranche Period(s), the Transfer Date and the
Enterprise Tranche Rate(s), the Atlantic Tranche Rate(s) and the Liberty Tranche
Rate(s) applicable to such Incremental Transfer. The Agent shall indicate the
amount of the Incremental Transfer together with the date thereof as well as any
decrease in the Enterprise Net Investment, the Atlantic Net Investment and the
Liberty Net Investment on the grid attached to the Transfer Certificate. The
Transfer Certificate shall evidence the Incremental Transfers.
38
By no later than 11:00 a.m. (New York time) on any Transfer Date, each
Investor, as the case may be, shall remit its share (which, in the case of an
Incremental Transfer to the Enterprise Bank Investors, the Atlantic Bank
Investors or the Liberty Bank Investors shall be equal to such Person's Pro Rata
Share) of the aggregate Transfer Price for such Transfer to the account of the
Agent specified therefor from time to time by the Agent by notice to such
Persons. The obligation of each Enterprise Bank Investor, each Atlantic Bank
Investor and each Liberty Bank Investor to remit its Pro Rata Share of any such
Transfer Price shall be several from that of each other Enterprise Bank
Investor, Atlantic Bank Investor or Liberty Bank Investor, respectively, and the
failure of any Enterprise Bank Investor, any Atlantic Bank Investor or any
Liberty Bank Investor to so make such amount available to the Agent shall not
relieve any other Enterprise Bank Investor, Atlantic Bank Investor or Liberty
Bank Investor of its respective obligation hereunder. Following each Incremental
Transfer and the Agent's receipt of funds from the Investors, as applicable, as
aforesaid, the Agent shall remit the Transfer Price to the Transferor's account
at the location indicated in Section 11.3 hereof, in immediately available
funds, an amount equal to the Transfer Price for such Incremental Transfer.
Unless the Agent shall have received notice from Enterprise or any Enterprise
Bank Investor, Atlantic or any Atlantic Bank Investor or Liberty or any Liberty
Bank Investor, as applicable, that such Person will not make its share of any
Transfer Price relating to any Incremental Transfer available on the applicable
Transfer Date therefor, the Agent may (but shall have no obligation to) make
such Person's share of any such Transfer Price available to the Transferor in
anticipation of the receipt by the Agent of such amount from such Person. To the
extent any Investor fails to remit any such amount to the Agent after any such
advance by the Agent on such Transfer Date, such Investor, on the one hand, and
the Transferor, on the other hand, shall be required to pay such amount,
together with interest thereon at a per annum rate equal to the Federal funds
rate (as determined in accordance with clause (ii) of the definition of "Base
Rate"), in the case of such Investor, or the Base Rate, in the case of the
Transferor, to the Agent upon its demand therefor (provided that Enterprise,
Atlantic or Liberty shall have no obligation to pay such interest amounts except
to the extent that it shall have sufficient funds to pay the face amount of its
Commercial Paper in full). Until such amount shall be repaid, such amount shall
be deemed to be Net Investment paid by the Agent and the Agent shall be deemed
to be the owner of a Transferred Interest hereunder. Upon the payment of such
amount to the Agent (x) by the Transferor, the amount of the aggregate Net
Investment shall be reduced by such amount or (y) by such Investor, such payment
shall constitute such Investor's payment of its share of the applicable Transfer
Price for such Transfer.
(b) REINVESTMENT TRANSFERS. On each Business Day occurring after the
initial Incremental Transfer hereunder and prior to the Enterprise Termination
Date, the Atlantic Termination Date or the Liberty Termination Date, as
applicable, the Transferor hereby agrees to convey, transfer and assign to the
Agent, on behalf of Enterprise or the Enterprise Bank Investors, Atlantic or the
Atlantic Bank Investors and/or Liberty or the Liberty Bank Investors then owning
any portion of the Transferred Interest, and in consideration of Transferor's
agreement to maintain at all times prior to the Enterprise Termination Date, the
Atlantic Termination Date or the Liberty Termination Date, as applicable, a Net
Receivables Balance in an amount at least sufficient to maintain the Percentage
Factor at an amount not greater than the Maximum Percentage Factor, the
39
Agent on behalf of Enterprise, Atlantic and Liberty, as applicable, may, and the
Agent on behalf of the Enterprise Bank Investors, the Atlantic Bank Investors
and the Liberty Bank Investors, as applicable, shall (in either case, to the
extent such Persons then own any portion of the Transferred Interest), agrees to
purchase from the Transferor undivided percentage ownership interests in each
and every Receivable, together with Related Security, Collections and Proceeds
with respect thereto, to the extent that Collections are available for such
Transfer in accordance with Section 2.5 hereof, such that after giving effect to
such Transfer, (i) the amount of each of the Enterprise Net Investment, the
Atlantic Net Investment and the Liberty Net Investment at the close of business
on such Business Day shall be equal to the amount of the Enterprise Net
Investment, the Atlantic Net Investment, and the Liberty Net Investment,
respectively, at the close of the business on the Business Day immediately
preceding such Business Day plus the Transfer Price of any Incremental Transfer
made to the Investors, as applicable, on such day, if any, and (ii) the
Transferred Interest in each Receivable, together with Related Security,
Collections and Proceeds with respect thereto, shall be equal to the Transferred
Interest in each other Receivable, together with Related Security, Collections
and Proceeds with respect thereto.
(c) ALL TRANSFERS. Each Transfer shall constitute a purchase by the
Agent on behalf of Enterprise or the Enterprise Bank Investors, Atlantic or the
Atlantic Bank Investors and/or Liberty or the Liberty Bank Investors, as
applicable, of undivided percentage ownership interests in each and every
Receivable, together with Related Security, Collections and Proceeds with
respect thereto, then existing, as well as in each and every Receivable,
together with Related Security, Collections and Proceeds with respect thereto,
which arises at any time after the date of such Transfer. The Agent's aggregate
undivided percentage ownership interest in the Receivables, together with the
Related Security, Collections and Proceeds with respect thereto, held on behalf
of Enterprise or the Enterprise Bank Investors, Atlantic or the Atlantic Bank
Investors and/or Liberty or the Liberty Bank Investors, as applicable, shall
equal the Percentage Factor in effect from time to time. So long as the Agent on
behalf of either Enterprise, on the one hand, or the Enterprise Bank Investors,
on the other hand, owns all of the Transferred Interest related to the
Enterprise Net Investment at such time, each of Enterprise's and each Enterprise
Bank Investor's undivided percentage ownership interest in the Affected Assets
shall equal such Person's ratable share (determined on the basis of the
relationship that such
40
Person's portion of Enterprise Net Investment bears to the aggregate Enterprise
Net Investment at such time) of the Enterprise Percentage Factor at such time.
So long as the Agent on behalf of either Atlantic, on the one hand, or the
Atlantic Bank Investors, on the other hand, owns all of the Transferred Interest
related to the Atlantic Net Investment at such time, each of Atlantic's and each
Atlantic Bank Investor's undivided percentage ownership interest in the Affected
Assets shall equal such Person's ratable share (determined on the basis of the
relationship that such Person's portion of Atlantic Net Investment bears to the
aggregate Atlantic Net Investment at such time) of the Atlantic Percentage
Factor at such time. So long as the Agent on behalf of either Liberty, on the
one hand, or the Liberty Bank Investors, on the other hand, owns all of the
Transferred Interest related to the Liberty Net Investment at such time, each of
Liberty's and each Liberty Bank Investor's undivided percentage ownership
interest in the Affected Assets shall equal such Person's ratable share
(determined on the basis of the relationship that such Person's portion of
Liberty Net Investment bears to the aggregate Liberty Net Investment at such
time) of the Liberty Percentage Factor at such time.
(d) CERTIFICATE. The Transferor shall issue to the Agent the
Certificate, in the form of Exhibit M, on or prior to the date hereof.
(e) PERCENTAGE FACTOR. The Percentage Factor shall be initially
computed as of the opening of business on February 10, 1999. Thereafter until
the Enterprise Termination Date, the Atlantic Termination Date or the Liberty
Termination Date, as applicable, the Enterprise Percentage Factor, the Atlantic
Percentage Factor and the Liberty Percentage Factor, respectively, shall be
automatically recomputed as of the close of business of the Collection Agent on
each day (other than a day after the Enterprise Termination Date, the Atlantic
Termination Date or the Liberty Termination Date, as applicable). Each of the
Enterprise Percentage Factor, the Atlantic Percentage Factor and the Liberty
Percentage Factor shall remain constant from the time as of which any such
computation or recomputation is made until the time as of which the next such
recomputation, if any, shall be made. Each of the Enterprise Percentage Factor,
the Atlantic Percentage Factor and the Liberty Percentage Factor, as computed as
of the day immediately preceding the Enterprise Termination Date, the Atlantic
Termination Date or the Liberty Termination Date, as applicable, shall remain
constant at all times on and after the Enterprise Termination Date, the Atlantic
Termination Date or the Liberty Termination Date, as applicable, until the date
on which the Enterprise Net Investment, the Atlantic Net Investment or the
Liberty Net Investment, as applicable, has been reduced to zero, and all accrued
Enterprise Discount, Atlantic Discount, Liberty Discount and Servicing Fees have
been paid in full and all other Aggregate Unpaids owing to Enterprise and the
Enterprise Bank Investors, Atlantic and the Atlantic Bank Investors and Liberty
and the Liberty Bank Investors, as applicable, have been paid in full to
Enterprise and the Enterprise Bank Investors, Atlantic and the Atlantic Bank
Investors or Liberty and the Liberty Bank Investors, as applicable.
At no time shall the Percentage Factor exceed one hundred percent (100%).
Notwithstanding anything to the contrary contained herein, should the Percentage
Factor exceed one hundred percent (100%) at any time, the Enterprise Percentage
Factor, the Atlantic Percentage Factor and the Liberty Percentage Factor shall
be calculated PRO RATA, based upon the relationship of the Enterprise Net
Investment, the Atlantic Net Investment and the Liberty Net Investment,
respectively, to the Net Investment.
SECTION 2.3. SELECTION OF TRANCHE PERIODS AND TRANCHE RATES.
(a) PRIOR TO A TERMINATION EVENT.
(i) TRANSFERRED INTEREST HELD BY ENTERPRISE. At all times
hereafter, but prior to the occurrence of a Termination Event and not
with respect to any portion of the Transferred Interest held by the
Enterprise Bank Investors, (or any of them), the Transferor may,
subject to Enterprise's approval and the limitations
41
described below, request Enterprise Tranche Periods and allocate a
portion of the Enterprise Net Investment to each selected Enterprise
Tranche Period, so that the aggregate amounts allocated to outstanding
Enterprise Tranche Periods at all times shall equal the Enterprise Net
Investment held by Enterprise. The Transferor shall give Enterprise
irrevocable notice by telephone of the new requested Enterprise Tranche
Period(s) and whether the requested Enterprise Tranche Rate applicable
thereto shall be the Enterprise CP Rate, the Base Rate, the CD Rate or
the Eurodollar Rate at least (i) three (3) Business Days prior to the
expiration of any then existing Enterprise Tranche Period if the
Enterprise Tranche Rate to be applicable to the new requested
Enterprise Tranche Period shall be the Enterprise Eurodollar Rate, (ii)
two (2) Business Days prior to the expiration of any then existing
Enterprise Tranche Period if the Enterprise Tranche Rate to be
applicable to the new requested Enterprise Tranche Period shall be the
Base Rate or the CD Rate, and (iii) one (1) Business Day prior to the
expiration of any then existing Enterprise Tranche Period if the
Enterprise Tranche Rate to be applicable to the new requested
Enterprise Tranche Period shall be the Enterprise CP Rate; PROVIDED,
HOWEVER, that Enterprise may select, in its reasonable discretion, any
such new Enterprise Tranche Period and the Enterprise Tranche Rate if
(i) the Transferor fails to provide such notice on a timely basis or
(ii) Enterprise determines, in its reasonable discretion, that the
Enterprise Tranche Rate or the Enterprise Tranche Period requested by
the Transferor is unavailable or for any reason commercially
undesirable. Enterprise confirms that it is its intention to allocate
all or substantially all of the Enterprise Net Investment held by it to
one or more Enterprise CP Tranche Periods; provided that Enterprise may
determine from time to time, in its sole discretion, that funding such
Enterprise Net Investment by means of one or more Enterprise CP Tranche
Periods is not desirable for any reason. If a Liquidity Provider
acquires from Enterprise a Purchased Interest with respect to the
Receivables pursuant to the terms of the applicable Liquidity Provider
Agreement, NationsBank, on behalf of such Liquidity Provider, may
exercise the right of selection granted to Enterprise hereby. The
initial Enterprise Tranche Period applicable to any such Purchased
Interest shall be a period of not greater than 14 days. In the case of
any Enterprise Tranche Period outstanding upon the occurrence of a
Termination Event, such Enterprise Tranche Period shall end on such
date.
(ii) TRANSFERRED INTEREST HELD BY ATLANTIC. At all times
hereafter, but prior to the occurrence of a Termination Event and not
with respect to any portion of the Transferred Interest held by the
Atlantic Bank Investors (or any of them), the Transferor may, subject
to Atlantic's approval and the limitations described below, request
Atlantic Tranche Periods and allocate a portion of the Atlantic Net
Investment to each selected Atlantic Tranche Period, so that the
aggregate amounts allocated to outstanding Atlantic Tranche Periods at
all times shall equal the Atlantic Net Investment held by Atlantic. The
Transferor shall give Atlantic irrevocable notice by telephone of the
new requested Atlantic Tranche
42
Period(s) and whether the requested Atlantic Tranche Rate applicable
thereto shall be the Atlantic CP Rate, the Base Rate, the CD Rate or
the Eurodollar Rate at least (i) three (3) Business Days prior to the
expiration of any then existing Atlantic Tranche Period if the Atlantic
Tranche Rate to be applicable to the new requested Atlantic Tranche
Period shall be the Atlantic Eurodollar Rate, (ii) two (2) Business
Days prior to the expiration of any then existing Atlantic Tranche
Period if the Atlantic Tranche Rate to be applicable to the new
requested Atlantic Tranche Period shall be the Base Rate or the CD
Rate, and (iii) one (1) Business Day prior to the expiration of any
then existing Atlantic Tranche Period if the Atlantic Tranche Rate to
be applicable to the new requested Atlantic Tranche Period shall be the
Atlantic CP Rate; PROVIDED, HOWEVER, that Atlantic may select, in its
reasonable discretion, any such new Atlantic Tranche Period and
Atlantic Tranche Rate if (i) the Transferor fails to provide such
notice on a timely basis or (ii) Atlantic determines, in its reasonable
discretion, that the Atlantic Tranche Rate or Atlantic Tranche Period
requested by the Transferor is unavailable or for any reason
commercially undesirable. Atlantic confirms that it is its intention to
allocate all or substantially all of the Atlantic Net Investment held
by it to one or more Atlantic CP Tranche Periods; provided that
Atlantic may determine from time to time, in its sole discretion, that
funding such Atlantic Net Investment by means of one or more Atlantic
CP Tranche Periods is not desirable for any reason. If a Liquidity
Provider acquires from Atlantic a Purchased Interest with respect to
the Receivables pursuant to the terms of the applicable Liquidity
Provider Agreement, the Atlantic Agent, on behalf of such Liquidity
Provider, may exercise the right of selection granted to Atlantic
hereby. The initial Atlantic Tranche Period applicable to any such
Purchased Interest shall be a period of not greater than 14 days. In
the case of any Atlantic Tranche Period outstanding upon the occurrence
of a Termination Event, such Atlantic Tranche Period shall end on such
date.
(iii) TRANSFERRED INTEREST HELD BY LIBERTY. At all times
hereafter, but prior to the occurrence of a Termination Event and not
with respect to any portion of the Transferred Interest held by the
Liberty Bank Investors (or any of them), the Transferor may, subject to
Liberty's approval and the limitations described below, request Liberty
Tranche Periods and allocate a portion of the Liberty Net Investment to
each selected Liberty Tranche Period, so that the aggregate amounts
allocated to outstanding Liberty Tranche Periods at all times shall
equal the Liberty Net Investment held by Liberty. The Transferor shall
give Liberty irrevocable notice by telephone of the new requested
Liberty Tranche Period(s) and whether the requested Liberty Tranche
Rate applicable thereto shall be the Liberty CP Rate, the Base Rate,
the CD Rate or the Eurodollar Rate at least (i) three (3) Business Days
prior to the expiration of any then existing Liberty Tranche Period if
the Liberty Tranche Rate to be applicable to the new requested Liberty
Tranche Period shall be the Liberty Eurodollar Rate, (ii) two (2)
Business Days prior to the expiration of any then existing Liberty
Tranche Period if the Liberty Tranche Rate to be applicable to
43
the new requested Liberty Tranche Period shall be the Base Rate or the
CD Rate, and (iii) one (1) Business Day prior to the expiration of any
then existing Liberty Tranche Period if the Liberty Tranche Rate to be
applicable to the new requested Liberty Tranche Period shall be the
Liberty CP Rate; PROVIDED, HOWEVER, that Liberty may select, in its
reasonable discretion, any such new Liberty Tranche Period and Liberty
Tranche Rate if (i) the Transferor fails to provide such notice on a
timely basis or (ii) Liberty determines, in its reasonable discretion,
that the Liberty Tranche Rate or Liberty Tranche Period requested by
the Transferor is unavailable or for any reason commercially
undesirable. Liberty confirms that it is its intention to allocate all
or substantially all of the Liberty Net Investment held by it to one or
more Liberty CP Tranche Periods; provided that Liberty may determine
from time to time, in its sole discretion, that funding such Liberty
Net Investment by means of one or more Liberty CP Tranche Periods is
not desirable for any reason. If a Liquidity Provider acquires from
Liberty a Purchased Interest with respect to the Receivables pursuant
to the terms of the applicable Liquidity Provider Agreement, the
Liberty Agent, on behalf of such Liquidity Provider, may exercise the
right of selection granted to Liberty hereby. The initial Liberty
Tranche Period applicable to any such Purchased Interest shall be a
period of not greater than 14 days. In the case of any Liberty Tranche
Period outstanding upon the occurrence of a Termination Event, such
Liberty Tranche Period shall end on such date.
(b) AFTER A TERMINATION EVENT.
(i) TRANSFERRED INTEREST HELD BY ENTERPRISE. At all times on and
after the occurrence of a Termination Event, with respect to any
portion of the Transferred Interest held by Enterprise which shall not
have been transferred to the Enterprise Bank Investors (or any of
them), Enterprise or NationsBank, as applicable, shall select all
Enterprise Tranche Periods and Enterprise Tranche Rates applicable
thereto.
(ii) TRANSFERRED INTEREST HELD BY ATLANTIC. At all times on and
after the occurrence of a Termination Event, with respect to any
portion of the Transferred Interest held by Atlantic which shall not
have been transferred to the Atlantic Bank Investors (or any of them),
the Atlantic Agent shall select all Atlantic Tranche Periods and
Atlantic Tranche Rates applicable thereto.
(iii) TRANSFERRED INTEREST HELD BY LIBERTY. At all times on and
after the occurrence of a Termination Event, with respect to any
portion of the Transferred Interest held by Liberty which shall not
have been transferred to the Liberty Bank Investors (or any of them),
the Liberty Agent shall select all Liberty Tranche Periods and Liberty
Tranche Rates applicable thereto.
(c) PRIOR TO A TERMINATION EVENT.
44
(i) TRANSFERRED INTEREST HELD BY THE ENTERPRISE BANK INVESTORS. At
all times with respect to any portion of the Transferred Interest held
by the Enterprise transferred to the Enterprise Bank Investors (or any
of them) pursuant to Section 10.7, but prior to the occurrence of a
Termination Event, the initial Enterprise Tranche Period applicable to
such portion of the Enterprise Net Investment allocable thereto shall
be a period of not greater than 14 days and such Enterprise Tranche
shall be an Enterprise BR Tranche. Thereafter, with respect to such
portion, and with respect to any other portion of the Transferred
Interest held by the Enterprise Bank Investors (or any of them),
provided that the Enterprise Termination Date shall not have occurred,
the Enterprise Tranche Period applicable thereto shall be, at the
Transferor's option, either an Enterprise BR Tranche Period, an
Enterprise CD Tranche Period or an Enterprise Eurodollar Tranche
Period. The Transferor shall give the Agent irrevocable notice by
telephone of the new requested Enterprise Tranche Period at least three
(3) Business Days prior to the expiration of any then existing
Enterprise Tranche. In the case of any Enterprise Tranche Period
outstanding upon the occurrence of a Termination Event, the related
Enterprise Tranche Period shall end on the date of such occurrence.
(ii) TRANSFERRED INTEREST HELD BY THE ATLANTIC BANK INVESTORS. At
all times with respect to any portion of the Transferred Interest held
by Atlantic transferred to the Atlantic Bank Investors (or any of them)
pursuant to Section 10.7, but prior to the occurrence of a Termination
Event, the initial Atlantic Tranche Period applicable to such portion
of the Atlantic Net Investment allocable thereto shall be a period of
not greater than 14 days and such Atlantic Tranche shall be an Atlantic
BR Tranche. Thereafter, with respect to such portion, and with respect
to any other portion of the Transferred Interest held by the Atlantic
Bank Investors (or any of them), provided that the Atlantic Termination
Date shall not have occurred, the Atlantic Tranche Period applicable
thereto shall be, at the Transferor's option, either an Atlantic BR
Tranche Period, an Atlantic CD Tranche Period or an Atlantic Eurodollar
Tranche Period. The Transferor shall give the Agent irrevocable notice
by telephone of the new requested Atlantic Tranche Period at least
three (3) Business Days prior to the expiration of any then existing
Atlantic Tranche Period. In the case of any Atlantic Tranche
outstanding upon the occurrence of a Termination Event, the related
Atlantic Tranche Period shall end on the date of such occurrence.
(iii) TRANSFERRED INTEREST HELD BY THE LIBERTY BANK INVESTORS. At
all times with respect to any portion of the Transferred Interest held
by Liberty transferred to the Liberty Bank Investors (or any of them)
pursuant to Section 10.7, but prior to the occurrence of a Termination
Event, the initial Liberty Tranche Period applicable to such portion of
the Liberty Net Investment allocable thereto shall be a period of not
greater than 14 days and such Liberty Tranche shall be a Liberty BR
Tranche. Thereafter, with respect to such portion, and with respect to
any other portion of the Transferred Interest held by the Liberty Bank
Investors (or any of
45
them), provided that the Liberty Termination Date shall not have
occurred, the Liberty Tranche Period applicable thereto shall be, at
the Transferor's option, either a Liberty BR Tranche Period, a Liberty
CD Tranche Period or a Liberty Eurodollar Tranche Period. The
Transferor shall give the Agent irrevocable notice by telephone of the
new requested Liberty Tranche Period at least three (3) Business Days
prior to the expiration of any then existing Liberty Tranche Period. In
the case of any Liberty Tranche outstanding upon the occurrence of a
Termination Event, the related Liberty Tranche Period shall end on the
date of such occurrence.
(d) AFTER A TERMINATION EVENT.
(i) TRANSFERRED INTEREST HELD BY THE ENTERPRISE BANK INVESTORS. At
all times on and after the occurrence of a Termination Event, with
respect to any portion of the Transferred Interest held by Enterprise
which shall have been owned or transferred to the Enterprise Bank
Investors (or any of them), the Enterprise Agent shall select all
Enterprise Tranche Periods and Enterprise Tranche Rates applicable
thereto.
(ii) TRANSFERRED INTEREST HELD BY THE ATLANTIC BANK INVESTORS. At
all times on and after the occurrence of a Termination Event, with
respect to any portion of the Transferred Interest held by Atlantic
which shall have been owned or transferred to the Atlantic Bank
Investors (or any of them), the Atlantic Agent shall select all
Atlantic Tranche Periods and Atlantic Tranche Rates applicable thereto.
(iii) TRANSFERRED INTEREST HELD BY THE LIBERTY BANK INVESTORS. At
all times on and after the occurrence of a Termination Event, with
respect to any portion of the Transferred Interest held by Liberty
which shall have been owned or transferred to the Liberty Bank
Investors (or any of them), the Liberty Agent shall select all Liberty
Tranche Periods and Liberty Tranche Rates applicable thereto.
(e) EURODOLLAR RATE PROTECTION; ILLEGALITY. (i) If the Agent is unable
to obtain on a timely basis the information necessary to determine the
Eurodollar Rate for any proposed Enterprise Eurodollar Tranche, Atlantic
Eurodollar Tranche or Liberty Eurodollar Tranche, then:
(A) the Agent shall forthwith notify the applicable Investors and
the Transferor that the Eurodollar Rate cannot be determined for such
Enterprise Eurodollar Tranche, Atlantic Eurodollar Tranche or Liberty
Eurodollar Tranche, as applicable; and
(B) while such circumstances exist, neither any Investor nor the
Agent shall allocate any portion of the Enterprise Net Investment, the
Atlantic Net Investment or the Liberty Net Investment purchased by such
Person during such period or reallocate the
46
Enterprise Net Investment, the Atlantic Net Investment or the
Liberty Net Investment allocated to any then existing Enterprise
Tranche, Atlantic Tranche or Liberty Tranche ending during such period,
to an Enterprise Eurodollar Tranche, an Atlantic Eurodollar Tranche or
a Liberty Eurodollar Tranche.
(ii) If, with respect to any outstanding Enterprise
Eurodollar Tranche, Atlantic Eurodollar Tranche or Liberty
Eurodollar Tranche, any Investor owning any portion of the
Transferred Interest therein notifies the Agent that it is unable
to obtain matching deposits in the London interbank market to fund
its purchase or maintenance of such portion of the Transferred
Interest or that the Eurodollar Rate applicable to such portion of
the Transferred Interest will not adequately reflect the cost to
such Investor of funding or maintaining its respective portion of
the Transferred Interest for such Tranche Period then the Agent
shall forthwith so notify the Transferor, whereupon neither the
Agent nor any of the Investors, as applicable, shall, while such
circumstances exist, allocate any Enterprise Net Investment,
Atlantic Net Investment or Liberty Net Investment, as applicable,
of any additional Transferred Interest purchased during such
period or reallocate the Enterprise Net Investment, the Atlantic
Net Investment or the Liberty Net Investment, as applicable,
allocated to any Tranche Period ending during such period, to an
Enterprise Eurodollar Tranche, an Atlantic Eurodollar Tranche or a
Liberty Eurodollar Tranche, as applicable.
(iii) Notwithstanding any other provision of this Agreement,
if any Investor, as applicable, shall notify the Agent that such
Investor has determined (or has been notified by any related
Liquidity Provider) that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful
(for such Investor or such related Liquidity Provider, as
applicable), or any central bank or other governmental authority
asserts that it is unlawful, for such Investor, as applicable, to
fund the purchases or maintenance of the Transferred Interest at
the Eurodollar Rate, then (x) as of the effective date of such
notice from such Person to the Agent, the obligation or ability of
Enterprise or such Enterprise Bank Investor, Atlantic or such
Atlantic Bank Investor, and Liberty and such Liberty Bank
Investor, as applicable, to fund its purchase or maintenance of
the Transferred Interest at the Eurodollar Rate shall be suspended
until such Person notifies the Agent that the circumstances
causing such suspension no longer exist and (y) the Enterprise Net
Investment, Atlantic Net Investment or Liberty Net Investment of
each the Enterprise Eurodollar Tranche, Atlantic Eurodollar
Tranche or Liberty Eurodollar Tranche in which such Person owns an
interest shall either (1) if such Person may lawfully continue to
maintain such Transferred Interest at the Eurodollar Rate until
the last day of the applicable Enterprise Tranche Period, Atlantic
Tranche Period or Liberty Tranche Period be reallocated on the
last day of such Enterprise Tranche Period, Atlantic Tranche
Period or Liberty Tranche Period
47
to another Enterprise Tranche Period, Atlantic Tranche Period or
Liberty Tranche Period in respect of which the Enterprise Net
Investment, Atlantic Net Investment or Liberty Net Investment
allocated thereto accrues Enterprise Discount, Atlantic Discount
or Liberty Discount at the Enterprise Tranche Rate, Atlantic
Tranche Rate or Liberty Tranche Rate other than the Eurodollar
Rate or (2) if such Person shall determine that it may not
lawfully continue to maintain such Transferred Interest at the
Eurodollar Rate until the end of the applicable Enterprise Tranche
Period, Atlantic Tranche Period or Liberty Tranche Period such
Person's share of the Enterprise Net Investment, the Atlantic Net
Investment or the Liberty Net Investment allocated to such
Eurodollar Tranche shall be deemed to accrue Discount at the Base
Rate from the effective date of such notice until the end of such
Enterprise Tranche Period, Atlantic Tranche Period or Liberty
Tranche Period.
SECTION 2.4. DISCOUNT, FEES AND OTHER COSTS AND EXPENSES. The Transferor
shall pay, as and when due in accordance with this Agreement, all fees
hereunder, all amounts payable pursuant to Article VIII hereof, if any, and the
Servicing Fees. On the last day of each Enterprise Tranche Period, each Atlantic
Tranche Period and each Liberty Tranche Period, the Transferor shall pay to the
Enterprise Agent, the Atlantic Agent or the Liberty Agent, as applicable, on
behalf of Enterprise, Atlantic or Liberty, as applicable, in the event any
portion of the Transferred Interest is held by Enterprise, Atlantic or Liberty,
an amount equal to the discount accrued on Enterprise's, Atlantic's, or
Liberty's Commercial Paper to the extent such Commercial Paper was issued in
order to fund such portion of the Transferred Interest in an amount in excess of
the Transfer Price of an Incremental Transfer, which excess amount shall not
exceed $5,000. The Transferor shall pay to the Enterprise Agent, the Atlantic
Agent or the Liberty Agent, as applicable, on behalf of Enterprise, Atlantic or
Liberty, as applicable, each day on which Commercial Paper is issued by
Enterprise, Atlantic or Liberty, the Enterprise Dealer Fee, the Atlantic Dealer
Fee or the Liberty Dealer Fee, as applicable. Enterprise Discount shall accrue
with respect to each Enterprise Tranche on each day occurring during the
Enterprise Tranche Period related thereto. Atlantic Discount shall accrue with
respect to each Atlantic Tranche on each day occurring during the Atlantic
Tranche Period related thereto. Liberty Discount shall accrue with respect to
each Liberty Tranche on each day occurring during the Liberty Tranche Period
related thereto. Nothing in this Agreement shall limit in any way the
obligations of the Transferor to pay the amounts set forth in this Section 2.4.
SECTION 2.5. NON-LIQUIDATION SETTLEMENT AND REINVESTMENT PROCEDURES. On
each day after the date of any Incremental Transfer but prior to the Enterprise
Termination Date (with respect to Enterprise and the Enterprise Bank Investors),
the Atlantic Termination Date (with respect to Atlantic and the Atlantic Bank
Investors) and the Liberty Termination Date (with respect to Liberty and the
Liberty Bank Investors) and provided in each case that no Potential Termination
Event for which there is no grace period shall have occurred and be continuing,
the Collection Agent shall out of the Enterprise Percentage Factor, the Atlantic
Percentage Factor and the Liberty Percentage Factor of Collections received on
or prior to such day and not previously applied or accounted for: (i) set aside
and hold in trust for the Investors, as applicable (or deposit into the
Collection Account if so required pursuant to Section 2.12 hereof), an amount
equal to all Enterprise
48
Discount, Atlantic Discount and Liberty Discount and the Servicing Fee accrued
through such day and not so previously set aside or paid and (ii) apply the
balance of the Enterprise Percentage Factor, the Atlantic Percentage Factor and
the Liberty Percentage Factor of Collections remaining after application of
Collections as provided in clause (i) of this Section 2.5 to the Transferor, for
the benefit of the Investors, as applicable, to the purchase of additional
undivided percentage interests in each Receivable pursuant to Section 2.2(b)
hereof. On the last day of each Enterprise Tranche Period, Atlantic Tranche
Period or Liberty Tranche Period, as applicable, from the amounts set aside as
described in clause (i) of the first sentence of this Section 2.5, the
Collection Agent shall deposit to the Agent's account, for the benefit of the
Investors, as applicable, an amount equal to the accrued and unpaid Enterprise
Discount, Atlantic Discount and Liberty Discount, as applicable, for such
Enterprise Tranche Period, Atlantic Tranche Period or Liberty Tranche Period and
shall deposit to its own account an amount equal to the accrued and unpaid
Servicing Fee for such Enterprise Tranche Period, Atlantic Tranche Period or
Liberty Tranche Period. The Agent, upon its receipt of such amounts in the
Agent's account, shall distribute such amounts to the Investors entitled thereto
as set forth above; PROVIDED that if the Agent shall have insufficient funds to
pay all of the above amounts in full on any such date, the Agent shall pay such
amounts ratably (based on the amounts owing to each such Investor) to all such
Investors entitled to payment thereof. In addition, the Collection Agent shall
remit to the Transferor at the end of each Enterprise Tranche Period, Atlantic
Tranche Period and Liberty Tranche Period, as provided in Section 6.2(b), such
portion of Collections not allocated to the Investors.
SECTION 2.6. LIQUIDATION SETTLEMENT PROCEDURES. If at any time on or prior
to the Enterprise Termination Date (in the case of Enterprise or the Enterprise
Bank Investors), the Atlantic Termination Date (in the case of Atlantic and the
Atlantic Bank Investors) and the Liberty Termination Date (in the case of
Liberty and the Liberty Bank Investors) the Percentage Factor is greater than
the Maximum Percentage Factor, then the Transferor shall immediately pay to the
Agent, for the benefit of the Investors, as applicable, from previously received
Collections, an amount equal to the amount such that, when applied in reduction
of the Net Investment, will result in a Percentage Factor less than or equal to
the Maximum Percentage Factor. Such amounts shall be applied pro rata to the
reduction of the Enterprise Net Investment of the Enterprise Tranche Periods
selected by the Enterprise Agent, the Atlantic Net Investment of Atlantic
Tranche Periods selected by the Atlantic Agent and the Liberty Net Investment of
Liberty Tranche Periods selected by the Liberty Agent. On the Enterprise
Termination Date (with respect to Enterprise or the Enterprise Bank Investors),
the Atlantic Termination Date (with respect to Atlantic and the Atlantic Bank
Investors) and the Liberty Termination Date (with respect to Liberty and the
Liberty Bank Investors) and on each day thereafter, and on each day on which a
Potential Termination Event has occurred and is continuing, the Collection Agent
shall set aside and hold in trust for Enterprise or the Enterprise Bank
Investors, Atlantic or the Atlantic Bank Investors and Liberty or the Liberty
Bank Investors, as applicable (or deposit into the Collection Account if so
required pursuant to Section 2.12 hereof) the Enterprise Percentage Factor, the
Atlantic Percentage Factor and the Liberty Percentage Factor, respectively, of
all Collections received on such day and shall set aside and hold in trust for
the Transferor such portion of Collections not allocated to the Investors, as
applicable. On the Enterprise Termination Date (with respect to Enterprise or
the Enterprise Bank Investors),
49
the Atlantic Termination Date (with respect to Atlantic and the Atlantic Bank
Investors) and the Liberty Termination Date (with respect to Liberty and the
Liberty Bank Investors) or the day on which a Potential Termination Event for
which there is no grace period occurs, the Collection Agent shall deposit to the
Agent's account, for the benefit of the Investors, as applicable, any amounts
set aside pursuant to Section 2.5 above. On the last day of each Enterprise
Tranche Period to occur on or after the Enterprise Termination Date, the last
day of each Atlantic Tranche Period to occur on or after the Atlantic
Termination Date and the last day of each Liberty Tranche Period to occur on or
after the Liberty Termination Date or during the continuance of a Potential
Termination Event, the Collection Agent shall deposit to the Agent's account to
the extent not already so deposited, for the benefit of the Investors, as
applicable, the amounts so set aside for the Investors, as applicable, pursuant
to the second preceding sentence, but not to exceed the sum of (i) the accrued
Enterprise Discount, Atlantic Discount or Liberty Discount for such Enterprise
Tranche Period, Atlantic Tranche Period or Liberty Tranche Period, as
applicable, (ii) the portion of the Enterprise Net Investment, Atlantic Net
Investment or Liberty Net Investment allocated to such Enterprise Tranche
Period, Atlantic Tranche Period or Liberty Tranche Period, as applicable, and
(iii) all other Aggregate Unpaids owing to the Investors, as applicable. On such
day, the Collection Agent shall deposit to its account, from the amounts set
aside for the Investors, as applicable, pursuant to the preceding sentence which
remain after payment in full of the aforementioned amounts, the accrued
Servicing Fee for such Enterprise Tranche Period, Atlantic Tranche Period or
Liberty Tranche Period. If there shall be insufficient funds on deposit for the
Collection Agent to distribute funds in payment in full of the aforementioned
amounts, the Collection Agent shall distribute funds FIRST, in payment of the
accrued Enterprise Discount, Atlantic Discount and Liberty Discount, as
applicable, SECOND, in payment of all fees payable by the Transferor to the
Agent or any of the Investors, THIRD, if the Transferor, Tech Data or any
Affiliate of the Transferor or Tech Data is not then the Collection Agent, to
the Collection Agent's account, in payment of the Servicing Fee payable to the
Collection Agent, FOURTH, in reduction of Enterprise Net Investment, Atlantic
Net Investment and Liberty Net Investment allocated to any Enterprise Tranche
Period, Atlantic Tranche Period or Liberty Tranche Period ending on such date,
FIFTH, in payment of all other Aggregate Unpaids owing to the Investors, as
applicable, and SIXTH, if the Transferor, Tech Data or any Affiliate of the
Transferor or Tech Data is the Collection Agent, to its account as Collection
Agent, in payment of the Servicing Fee payable to such Person as Collection
Agent. The Agent, upon its receipt of such amounts in the Agent's account, shall
distribute such amounts to the Investors, each as entitled thereto as set forth
above; provided that if the Agent shall have insufficient funds to pay all of
the above amounts in full on any such date, the Agent shall pay such amounts in
the order of priority set forth above and, with respect to any such category
above for which the Agent shall have insufficient funds to pay all amounts owing
on such date, ratably (based on the amounts in such categories owing to such
Persons) among all such Persons entitled to payment thereof.
Following the date on which the Net Investment has been reduced to zero,
all accrued Enterprise Discount, Atlantic Discount and Liberty Discount and
Servicing Fees have been paid in full and all other Aggregate Unpaids have been
paid in full, (i) the Collection Agent shall recompute the Enterprise Percentage
Factor, the Atlantic Percentage Factor and the Liberty Percentage Factor, (ii)
the Agent, on behalf of the Investors, shall be considered to have reconveyed to
the Transferor
50
all of the Investors' right, title and interest in and to the Affected Assets
(including the Transferred Interest), (iii) the Collection Agent shall pay to
the Transferor any remaining Collections set aside and held by the Collection
Agent pursuant to the third sentence of this Section 2.6 and (iv) the Agent, on
behalf of the Investors, shall execute and deliver to the Transferor, at the
Transferor's expense, such documents or instruments as are necessary to
terminate the Investors' respective interests in the Affected Assets. Any such
documents shall be prepared by or on behalf of the Transferor. On the last day
of each Tranche Period, the Collection Agent shall remit to the Transferor such
portion of Collections set aside for the Transferor pursuant to this Section
2.6.
SECTION 2.7. FEES. Notwithstanding any limitation on recourse contained in
this Agreement, the Transferor shall pay, on the last day of each month, to the
Agent, for distribution to the Investors, in each case as agreed between
themselves, the Enterprise Program Fee, the Atlantic Program Fee and the Liberty
Program Fee, respectively, and the Enterprise Facility Fee, the Atlantic
Facility Fee and the Liberty Facility Fee, respectively. In addition, the
Transferor shall pay to the Agent an administrative fee as set forth in the
Supplemental Fee Letter. The Transferor acknowledges that the foregoing fees are
non-refundable.
SECTION 2.8. PROTECTION OF OWNERSHIP INTEREST OF THE INVESTORS. (a) The
Transferor agrees that it will, and will cause the Seller to, from time to time,
at its expense, it will promptly execute and deliver all instruments and
documents and take all actions as may be necessary or as the Agent may
reasonably request in order to perfect or protect the Transferred Interest or to
enable the Agent or any of the Investors to exercise or enforce any of their
respective rights hereunder. Without limiting the foregoing, the Transferor
will, and will cause the Seller to, upon the reasonable request of the Agent or
any of the Investors, in order to accurately reflect this purchase and sale
transaction, (x) execute and file such financing or continuation statements or
amendments thereto or assignments thereof (as permitted pursuant to Section 11.6
hereof) as may be requested by the Agent or any of the Investors and (y) xxxx
its and the Seller's respective master data processing records and other
documents with a legend describing (i) in the case of the Seller, the conveyance
to the Transferor and (ii) in the case of the Transferor, the conveyance to the
Agent, for the benefit of the Investors, of the Transferred Interest. The
Transferor shall, and will cause the Seller to, upon the reasonable request of
the Agent or any of the Investors, obtain such additional search reports as the
Agent or any of the Investors shall request. To the fullest extent permitted by
applicable law, the Agent shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without the
Transferor's or the Seller's signature. Carbon, photographic or other
reproduction of this Agreement or any financing statement shall be sufficient as
a financing statement. The Transferor shall not, and shall not permit the Seller
to, change its respective name, identity or corporate structure (within the
meaning of Section 9-402(7) of the UCC as in effect in the States of New York
and California) nor relocate its respective chief executive office or any office
where Records are kept unless it shall have: (i) given the Agent at least thirty
(30) days prior notice thereof and (ii) prepared at Transferor's expense and
delivered to the Agent all financing statements, instruments and other documents
necessary to preserve and protect the Transferred Interest or requested by the
Agent in connection with such change or relocation. Any filings under the UCC
51
or otherwise that are occasioned by such change in name or location shall be
made at the expense of Transferor.
(b) The Collection Agent shall instruct all Obligors to cause all
Collections to be deposited directly with a Lock-Box Bank. Any Lock-Box Account
maintained by a Lock-Box Bank pursuant to the related Lock-Box Agreement shall
be under the exclusive ownership and control of the Agent which is hereby
granted to the Agent by the Seller and the Transferor. The Collection Agent
shall be permitted to give instructions to the Lock-Box Banks for so long as
neither a Collection Agent default nor any other Termination Event has occurred
hereunder. The Collection Agent shall not add any bank as a Lock-Box Bank to
those listed on Exhibit C attached hereto unless such bank has entered into a
Lock-Box Agreement. The Collection Agent shall not terminate any bank as a
Lock-Box Bank unless the Agent shall have received fifteen (15) days' prior
notice of such termination. If the Transferor receives any Collections or is
deemed to receive any Collections pursuant to Section 2.9, the Transferor shall
immediately remit such Collections to a Lock-Box Account. Any Collections that
are received by the Seller or the Collection Agent shall be immediately, but in
any event within forty-eight (48) hours of receipt, be deposited by into a
Lock-Box Account or a bank account (the "COLLECTION AGENT ACCOUNT") established
by the Collection Agent pursuant to an agreement between the Collection Agent,
the Agent and a bank consented to by the Agent, which shall be substantially in
the form of a Lock-Box Agreement.
SECTION 2.9. DEEMED COLLECTIONS; APPLICATION OF PAYMENTS. (a) If on any day
the Outstanding Balance of a Receivable is either (x) reduced as a result of any
defective, rejected or returned merchandise or services, any discount, credit,
rebate, dispute, warranty claim, repossessed or returned goods, chargeback,
allowance, any billing adjustment, dilutive factor or other adjustment, or (y)
reduced or canceled as a result of a setoff or offset in respect of any claim by
any Person (whether such claim arises out of the same or a related transaction
or an unrelated transaction), the Transferor shall be deemed to have received on
such day a Collection of such Receivable (each, a "DEEMED COLLECTION") in the
amount of such reduction or cancellation and the Transferor shall pay to the
Collection Agent an amount equal to such reduction or cancellation and such
amount shall be applied by the Collection Agent as a Collection in accordance
with Section 2.5 or 2.6 hereof, as applicable. The Enterprise Net Investment,
the Atlantic Net Investment and the Liberty Net Investment shall be reduced by
the amount of such payment applied to the reduction of the Enterprise Net
Investment, the Atlantic Net Investment or the Liberty Net Investment, as
applicable, and actually received by the Agent.
(b) If on any day any of the representations or warranties in Article
III was or becomes untrue with respect to a Receivable (whether on or after the
date of any transfer of an interest therein to the Agent or any of the Investors
as contemplated hereunder), the Transferor shall be deemed to have received on
such day a Collection of such Receivable (each, a "DEEMED COLLECTION") in full
and the Transferor shall on such day pay to the Collection Agent an amount equal
to the Outstanding Balance of such Receivable and such amount shall be allocated
and applied by the Collection Agent as a Collection allocable to the Transferred
Interest in accordance with Section 2.5 or 2.6 hereof, as applicable. The
Enterprise Net Investment, the Atlantic Net Investment and the
52
Liberty Net Investment shall be reduced by the amount of such payment applied to
the reduction of the Enterprise Net Investment, the Atlantic Net Investment or
the Liberty Net Investment, as applicable, and actually received by the Agent.
(c) Any payment by an Obligor in respect of any indebtedness owed by it
to the Transferor shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise instructed by
Enterprise, be applied as a Collection of any Receivable of such Obligor
included in the Transferred Interest (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 indebtedness of such Obligor.
SECTION 2.10. PAYMENTS AND COMPUTATIONS, ETC. All amounts to be
paid or deposited by the Transferor or the Collection Agent hereunder shall be
paid or deposited in accordance with the terms hereof no later than 11:00 a.m.
(New York City time) on the day when due in immediately available funds; if such
amounts are payable to any Investor they shall be paid or deposited in the
account notified by the Agent. The Transferor shall, to the extent permitted by
law, pay to the Agent, for the benefit of the Investors, upon demand, interest
on all amounts not paid or deposited when due hereunder at a rate equal to 1%
per annum plus the Base Rate. All computations of Enterprise Discount, Atlantic
Discount, and Liberty Discount, interest and all per annum fees hereunder shall
be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed. Any computations by
the Agent of amounts payable by the Transferor hereunder shall be binding upon
the Transferor absent manifest error.
SECTION 2.11. REPORTS. Prior to the 15th day of each month, the
Collection Agent shall prepare and forward to the Agent and the Administrative
Agent (i) an Investor Report (including without limitation, a settlement
statement and a certification as to the Net Receivables Balance) together with
an aging of all Receivables, as of the close of business of the Collection Agent
on the last day of the immediately preceding month, (ii) if requested by
Enterprise, Atlantic or Liberty, a listing by Obligor of all Receivables
together with an aging of such Receivables and (iii) such other information as
the Agent or the Administrative Agent may reasonably request.
SECTION 2.12. COLLECTION ACCOUNT. There shall be established on
the day of the initial Incremental Transfer hereunder and maintained, for the
benefit of the Investors, with the Agent, a segregated account (the "COLLECTION
ACCOUNT"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Investors. On and after the occurrence
of a Collection Agent default or a Termination Event, the Collection Agent shall
remit daily within forty-eight hours of receipt to the Collection Account all
Collections received with respect to any Receivables. Funds on deposit in the
Collection Account (other than investment earnings) shall be invested by the
Agent in Eligible Investments that will mature so that such funds will be
available prior to the last day of each successive Tranche Period following such
investment. On the last day of each calendar month, all interest and earnings
(net of losses and investment expenses) on funds on deposit in the Collection
Account shall be retained in the Collection Account and be available to make any
payments required to be made hereunder (including Enterprise Discount, Atlantic
53
Discount or Liberty Discount) to the Agent or the applicable Investors. On the
date on which the Net Investment is zero, all accrued Enterprise Discount,
Atlantic Discount, Liberty Discount and Servicing Fees have been paid in full
and all other Aggregate Unpaids have been paid in full, any funds remaining on
deposit in the Collection Account shall be paid to the Transferor.
SECTION 2.13. SHARING OF PAYMENTS, ETC. If any Investor (for
purposes of this Section only, being a "Recipient") shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of any portion of the Transferred Interest owned by it
(other than pursuant to Section 2.7, or Article VIII and other than as a result
of the differences in the timing of the applications of Collections pursuant to
Section 2.5 or 2.6) in excess of its ratable share of payments on account of any
portion of the Transferred Interest obtained by such Investor, each as entitled
thereto, such Recipient shall forthwith purchase from the other Investors
entitled to a share of such amount participations in the portion of the
Transferred Interest owned by such Investors as shall be necessary to cause such
Recipient to share the excess payment ratably with each such other Person
entitled thereto; PROVIDED, HOWEVER, that if all or any portion of such excess
payment is thereafter recovered from such Recipient, such purchase from each
such other Investor shall be rescinded and each such other Investor shall repay
to the Recipient the purchase price paid by such Recipient for such
participation to the extent of such recovery, together with an amount equal to
such other Investor's ratable share (according to the proportion of (a) the
amount of such other Person's required payment to (b) the total amount so
recovered from the Recipient) of any interest or other amount paid or payable by
the Recipient in respect of the total amount so recovered.
SECTION 2.14. RIGHTS OF SET-OFF. Without in any way limiting the
provisions of Section 2.13, each Investor is hereby authorized (in addition to
any other rights it may have) at any time after the occurrence of the Enterprise
Termination Date (in the case of Enterprise or the Enterprise Bank Investors),
the Atlantic Termination Date (in the case of Atlantic and the Atlantic Bank
Investors) and the Liberty Termination Date (in the case of Liberty and the
Liberty Bank Investors) or during the continuance of a Potential Termination
Event to set-off, appropriate and apply (without presentment, demand, protest or
other notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by such Investor to, or for the account of, the
Transferor against the amount of the Aggregate Unpaids owing by the Transferor
to such Investor (even if contingent or unmatured).
54
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR. The
Transferor represents and warrants to the Investors and the Agent:
(a) CORPORATE EXISTENCE AND POWER. The Transferor is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted.
(b) CORPORATE AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION. The
execution, delivery and performance by the Transferor of this Agreement, the
Purchase Agreement, the Fee Letter, the Certificate and the Transfer Certificate
are within the Transferor's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, Official Body or official thereof (except as contemplated by Section 2.8
hereof), and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the Certificate of Incorporation or Bylaws of
the Transferor or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Transferor or result in the creation or imposition
of any Adverse Claim on the assets of the Transferor or any of its Subsidiaries
(except as contemplated by Section 2.8 hereof).
(c) BINDING EFFECT. Each of this Agreement, the Purchase Agreement, the
Fee Letter and the Certificate constitutes and the Transfer Certificate upon
payment of the Transfer Price set forth therein will constitute, the legal,
valid and binding obligation of the Transferor, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of creditors generally.
(d) PERFECTION. Immediately preceding each Transfer hereunder, the
Transferor shall be the owner of all of the Receivables, free and clear of all
Adverse Claims. On or prior to each Transfer and each recomputation of the
Transferred Interest, all financing statements and other documents required to
be recorded or filed in order to perfect and protect the Transferred Interest
against all creditors of and purchasers from the Transferor and Tech Data will
have been duly filed in each filing office necessary for such purpose and all
filing fees and taxes, if any, payable in connection with such filings shall
have been paid in full.
(e) ACCURACY OF INFORMATION. All information heretofore furnished by
the Transferor (including without limitation, the Investor Report furnished on a
monthly basis and the Transferor's financial statements) to any Investor, the
Agent or the Administrative Agent for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all
55
such information hereafter furnished by the Transferor to any Investor, the
Agent or the Administrative Agent will be, true and accurate in every material
respect, on the date such information is stated or certified.
(f) TAX STATUS. The Transferor has filed all tax returns (federal,
state and local) required to be filed and has paid or made adequate provision
for the payment of all taxes, assessments and other governmental charges.
(g) ACTION, SUITS. Except as set forth in Exhibit H, there are no
actions, suits or proceedings pending, or to the knowledge of the Transferor
threatened, against or affecting the Transferor or any Affiliate of the
Transferor or their respective properties, in or before any court, arbitrator or
other body, which may materially adversely affect the financial condition of the
Transferor and the Subsidiaries taken as a whole or materially adversely affect
the ability of Transferor to perform its obligations under this Agreement.
(h) USE OF PROCEEDS. No proceeds of any Transfer will be used by the
Transferor to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) PLACE OF BUSINESS. The principal place of business and chief
executive office of the Transferor are located at the address of the Transferor
indicated in Section 11.3 hereof and the offices where the Transferor keeps all
its Records, are located at the address(es) described on Exhibit I or such other
locations notified to the Agent in accordance with Section 2.8 hereof in
jurisdictions where all action required by Section 2.8 hereof has been taken and
completed.
(j) GOOD TITLE. Upon each Transfer and each recomputation of the
Transferred Interest, the Agent, on behalf of the Investors, shall acquire a
valid and perfected first priority undivided percentage ownership interest to
the extent of the Transferred Interest or a first priority perfected security
interest in each Receivable that exists on the date of such Transfer and
recomputation and in the Related Security and Collections with respect thereto
free and clear of any Adverse Claim.
(k) TRADENAMES, ETC. As of the date hereof: (i) the Transferor's chief
executive office is located at the address for notices set forth in Section 11.3
hereof; (ii) the Transferor has only the subsidiaries and divisions listed on
Exhibit J hereto; and (iii) the Transferor has, within the last five (5) years,
operated only under the tradenames identified in Exhibit J hereto, and, within
the last five (5) years, has not changed its name, merged with or into or
consolidated with any other corporation or been the subject of any proceeding
under Xxxxx 00, Xxxxxx Xxxxxx Code (Bankruptcy), except as disclosed in Exhibit
J hereto.
(l) NATURE OF RECEIVABLES. Each Receivable (x) represented by the
Transferor or the Collection Agent to be an Eligible Receivable (including in
any Investor Report or other report delivered pursuant to Section 2.11 hereof)
or (y) included in the calculation of the Net Receivables
56
Balance in fact satisfies at such time the definition of "Eligible
Receivable" set forth herein and is an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act of 1940, as amended and, in the case of clause
(y) above, is not a Receivable of the type described in clauses (i) through
(iii) of the definition of "Net Receivables Balance."
(m) COVERAGE REQUIREMENT; AMOUNT OF RECEIVABLES. The Percentage Factor
does not exceed the Maximum Percentage Factor. As of December 31, 1998, the
aggregate Outstanding Balance of the Receivables in existence was $738,842,073
and the Net Receivables Balance was $644,771,137.
(n) NO TERMINATION EVENT. No event has occurred and is continuing and
no condition exists which constitutes a Termination Event or a Potential
Termination Event or if either such event has occurred, the Transferor has
notified the Agent in writing of either such event immediately upon learning of
the occurrence thereof, describing the same and if applicable, the steps being
taken by the Person(s) affected with respect thereto.
(o) NOT AN INVESTMENT COMPANY. The Transferor is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or is exempt from all provisions of such Act.
(p) ERISA. The Transferor and each of its ERISA Affiliates is in
compliance in all material respects with ERISA and no ERISA lien exists on any
of the Receivables.
(q) LOCK-BOX ACCOUNTS. The name and address of the Bank where the
Collection Agent Account is maintained, together with the account number of such
account, and the names and addresses of all the Lock-Box Banks, together with
the account numbers of the Lock-Box Accounts of Tech Data at such Lock-Box
Banks, are specified in Exhibit C hereto (or at such other Lock-Box Banks and/or
with such other Lock-Box Accounts as have been notified to the Agent and for
which Lock-Box Agreements have been executed in accordance with Section 2.8(b)
hereof and delivered to the Collection Agent). All Obligors have been instructed
to make payment to a Lock-Box Account and only Collections are deposited into
the Lock-Box Accounts.
(r) YEAR 2000 COMPLIANCE. The Transferor has (i) initiated a review and
assessment of all areas within its business and operations (including those
affected by suppliers, customers and vendors) that could be adversely affected
by the Year 2000 Problem, (ii) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan
substantially in accordance with that timetable. Based on the foregoing, the
Transferor believes that all computer applications (including those of its
suppliers, customers and vendors) that are material to its business and
operations (including the Receivables Systems and also including the ability of
its customers to make timely payments on obligations owed to the Transferor) are
reasonably expected to be Year 2000 Compliant, except to the extent that failure
to do so could not reasonably be expected (a) to have a material adverse effect
on the Transferor or on the transactions contemplated under this Agreement, or
(b) to result in a Termination Event.
57
The costs of all assessment, remediation, testing and integration related
to the Transferor's plan for becoming Year 2000 Compliant will not have a
material adverse effect on the financial condition or operations of the
Transferor.
SECTION 3.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES BY THE
TRANSFEROR. On each day that a Transfer is made hereunder, the Transferor, by
accepting the proceeds of such Transfer, whether delivered to the Transferor
pursuant to Section 2.2(a) or Section 2.5 hereof, shall be deemed to have
certified that all representations and warranties described in Section 3.1
hereof are correct on and as of such day as though made on and as of such day.
Each Incremental Transfer shall be subject to the further condition precedent
that prior to the date of such Transfer, the Collection Agent shall have
delivered to the Enterprise Agent, the Atlantic Agent, the Liberty Agent and the
Administrative Agent, in form and substance satisfactory to the Agent and the
Administrative Agent, a completed Investor Report dated within 14 days prior to
the date of such Transfer, together with a listing by Obligor, if requested, and
such additional information as may be reasonably requested by the Agent or the
Administrative Agent; and the Transferor shall be deemed to have represented and
warranted that such conditions precedent have been satisfied.
Any document, instrument, certificate or notice delivered to any Investor
hereunder shall be deemed a representation and warranty by the Transferor to the
extent that such document, instrument, certificate or notice contains any
statement of fact, which shall not include forward-looking statements.
SECTION 3.3. REPRESENTATIONS AND WARRANTIES OF TECH DATA, AS COLLECTION
AGENT AND Guarantor. Tech Data, as Collection Agent and Guarantor represents and
warrants to the Investors that:
(a) CORPORATE EXISTENCE AND POWER. Tech Data is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted.
(b) CORPORATE AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION. The
execution, delivery and performance by Tech Data of this Agreement and the
Purchase Agreement are within Tech Data's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any Official Body or official thereof (except for the filing
of UCC financing statements in connection with the Purchase Agreement), and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the Certificate of Incorporation or Bylaws of Tech Data or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon Tech Data or result in the creation or imposition of any Adverse
Claim on the assets of Tech Data or any of its Subsidiaries except as
contemplated by this Agreement and the Purchase Agreement.
58
(c) BINDING EFFECT. Each of this Agreement and the Purchase Agreement
constitute the legal, valid and binding obligation of Tech Data, enforceable in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of creditors.
(d) ACCURACY OF INFORMATION. All information heretofore furnished by
Tech Data to the Transferor, the Agent, any Investor or the Administrative Agent
for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by Tech
Data to the Transferor, the Agent, any Investor or the Administrative Agent will
be, true and accurate in every material respect, on the date such information is
stated or certified.
(e) TAX STATUS. Tech Data has filed all tax returns (federal, state and
local) required to be filed and has paid or made adequate provision for the
payment of all taxes, assessments and other governmental charges.
(f) ACTION, SUITS. Except as set forth in Exhibit H hereto, there are
no actions, suits or proceedings pending, or to the knowledge of Tech Data
threatened, against or affecting Tech Data or any Affiliate of Tech Data or
their respective properties, in or before any court, arbitrator or other body,
which may materially adversely affect the financial condition of Tech Data and
its Subsidiaries taken as a whole or materially adversely affect the ability of
Tech Data to perform its obligations under this Agreement.
(g) CREDIT AND COLLECTION POLICY. Since the Closing Date, there have
been no material changes in Tech Data's Credit and Collection Policy; since such
date, no material adverse change has occurred in the overall rate of collection
of the Receivables.
(h) COLLECTIONS AND SERVICING. Since December 31, 1998, there has been
no material adverse change in the ability of Tech Data to service and collect
the Receivables.
(i) PLACE OF BUSINESS. The principal place of business and chief
executive office of Tech Data are located at the address of Tech Data indicated
in Section 11.3 hereof and the offices where Tech Data keeps all its Records,
are located at the address(es) described on Exhibit I or such other locations
notified to Enterprise in accordance with Section 2.8 hereof in jurisdictions
where all action required by Section 2.8 hereof has been taken and completed.
(j) TRADENAMES, ETC. As of the date hereof: (i) Tech Data has only the
Subsidiaries incorporated in the United States listed on Exhibit J hereto; and
(ii) Tech Data has, within the last five (5) years, operated only under the
tradenames identified in Exhibit J hereto, and, within the last five (5) years,
has not changed its name, merged with or into or consolidated with any other
corporation or been the subject of any proceeding under Xxxxx 00, Xxxxxx Xxxxxx
Code (Bankruptcy), except as disclosed in Exhibit J hereto.
59
(k) NATURE OF RECEIVABLES. Each Receivable is an "eligible asset" as
defined in Rule 3a-7 under the Investment Company Act of 1940, as amended.
(l) NO TERMINATION EVENT. No event has occurred and is continuing and
no condition exists which constitutes a Termination Event or a Potential
Termination Event or if either such event has occurred, Tech Data has notified
Enterprise in writing of either such event immediately upon learning of the
occurrence thereof, describing the same and if applicable, the steps being taken
by the Person(s) affected with respect thereto.
(m) NOT AN INVESTMENT COMPANY. Tech Data is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or is
exempt from all provisions of such Act.
(n) ERISA. Tech Data is in compliance in all material respects with
ERISA and no lien exists in favor of the Pension Benefit Guaranty Corporation on
any of the Receivables.
(o) YEAR 2000 COMPLIANCE. Tech Data has (i) initiated a review and
assessment of all areas within its business and operations (including those
affected by suppliers, customers and vendors) that could be adversely affected
by the Year 2000 Problem, (ii) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan
substantially in accordance with that timetable. Based on the foregoing, Tech
Data believes that all computer applications (including those of its suppliers,
customers and vendors) that are material to its business and operations
(including the Receivables Systems and also including the ability of its
customers to make timely payments on obligations owed to Tech Data) are
reasonably expected to be Year 2000 Compliant, except to the extent that failure
to do so could not reasonably be expected (a) to have a material adverse effect
on Tech Data or on the transactions contemplated under this Agreement, or (b) to
result in a Termination Event.
The costs of all assessment, remediation, testing and integration related
to Tech Data's plan for becoming Year 2000 Compliant will not have a material
adverse effect on the financial condition or operations of Tech Data.
SECTION 3.4. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES BY TECH DATA,
AS COLLECTION AGENT AND GUARANTOR. On each day that a Transfer is made
hereunder, Tech Data shall be deemed to have certified that all representations
and warranties described in Section 3.3 are correct on and as of such day as
though made on and as of such day.
Any document, instrument, certificate or notice delivered to the Agent or
any Investor hereunder shall be deemed a representation and warranty by Tech
Data.
60
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. CONDITIONS TO CLOSING. On or prior to the date of execution
hereof, the Transferor shall deliver to the Agent the following documents,
instruments and fees all of which shall be in a form and substance acceptable to
the Agent:
(a) A copy of the resolutions of the Board of Directors of the
Transferor and Tech Data certified by its Secretary approving the execution,
delivery and performance by the Transferor and Tech Data of this Agreement, the
Purchase Agreement and the other Transaction Documents to be delivered by the
Transferor and Tech Data hereunder or thereunder.
(b) The Articles of Incorporation of the Transferor and of Tech Data
certified by the Secretary of State or other similar official of the
Transferor's and Tech Data's respective jurisdictions of incorporation, each
dated a date reasonably prior to the Closing Date.
(c) A Good Standing Certificate for the Transferor and a Certificate of
Status for Tech Data issued by the Secretary of State or a similar official of
the Transferor's and Tech Data's respective jurisdictions of incorporation and
certificates of qualification as a foreign corporation issued by the Secretaries
of State or other similar officials of each jurisdiction where such
qualification is material to the transactions contemplated by this Agreement and
the other Transaction Documents, in each case, dated a date reasonably prior to
the Closing Date.
(d) A Certificate of the Secretary of the Transferor and Tech Data
substantially in the form of Exhibit L attached hereto certifying (i) the names
and signatures of the officers authorized on its behalf to execute this
Agreement, the Purchase Agreement, the Certificate, the Fee Letter and any other
documents to be delivered by it hereunder (on which Secretary's Certificates
each Investor may conclusively rely until such time as the Agent shall receive
from the Transferor and Tech Data a revised Certificate meeting the requirements
of this clause (d)(i)) and (ii) a copy of the Transferor's and Tech Data's
By-Laws.
(e) Copies of proper financing statements (Form UCC-1), dated a date
reasonably near to the date of the initial Incremental Transfer naming the
Transferor as the debtor in favor of the Agent, as secured party for the benefit
of the Investors, or other similar instruments or documents as may be necessary
or in the reasonable opinion of the Agent desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the Agent's undivided
percentage interest in all Receivables and the Related Security and Collections
relating thereto.
(f) Copies of proper financing statements (Form UCC-1), dated a date
reasonably near to the date of the initial Incremental Transfer naming Tech Data
as the debtor in favor of the Transferor as secured party and the Agent, for the
benefit of the Investors, as assignee of the secured party or other similar
instruments or documents as may be necessary or in the
61
reasonable opinion of the Agent desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the Transferor's ownership
interest in all Receivables.
(g) Copies of proper financing statements (Form UCC-3), if any,
necessary to terminate all security interests and other rights of any person in
Receivables previously granted by Tech Data and the Transferor.
(h) Certified copies of requests for information or copies (Form
UCC-11) (or a similar search report certified by parties acceptable to the
Agent) dated a date reasonably near the date of the initial Incremental Transfer
listing all effective financing statements which name the Transferor or the
Seller (under their respective present names and any previous names) as debtor
and which are filed in jurisdictions in which the filings were made pursuant to
items (e) or (f) above together with copies of such financing statements (none
of which shall cover any Receivables or Contracts).
(i) Executed copies of the Lock-Box Agreements, relating to each of the
Lock-Boxes and the Lock-Box Accounts, and an executed copy of the agreement
referred to in Section 2.8(b).
(j) An opinion of Xxxxx Xxxxxx, counsel to Tech Data, addressing
certain corporate matters relating to Tech Data, covering the appropriate
matters set forth in Exhibit K hereto.
(k) An opinion of Heller, Ehrman, White & XxXxxxxxx, special California
counsel to the Transferor, addressing certain corporate matters relating to the
Transferor, covering the appropriate matters set forth in Exhibit K hereto.
(l) A certificate of the Transferor and Tech Data in the form of
Exhibit L-1 and Exhibit L-2 hereto executed by Xxxxxx X. Xxxxxxxxx, Secretary of
the Transferor and Tech Data, respectively.
(m) A hard copy, microfiche or computer tape setting forth all
Receivables and the Outstanding Balances thereon and such other information as
the Agent may reasonably request.
(n) An executed copy of this Agreement, the Purchase Agreement and the
Fee Letter.
(o) The Transfer Certificate, duly executed by the Transferor.
(p) The Certificate, duly executed by the Transferor and appropriately
completed.
62
(q) An Investor Report for December 31, 1998.
(r) Such other documents, instruments, certificates and opinions as the
Agent or the Administrative Agent, shall reasonably request.
SECTION 4.2. ADDITIONAL CONDITIONS TO CLOSING. On or prior to the date of
execution hereof, the Agent shall be in receipt of the following documents, each
of which shall be in a form and substance acceptable to the Agent:
(a) Enterprise shall deliver the Transfer Certificate delivered
pursuant to the Existing Agreement for cancellation.
(b) An assignment by NationsBank, N.A., as collateral agent under
Enterprise's commercial paper program, of its interest in certain of the
Lock-Box Agreements to the Agent.
(c) An assignment from NationsBank, as Agent under the Existing
Agreement, to NationsBank, as Agent under this Agreement.
63
ARTICLE V
COVENANTS
SECTION 5.1. AFFIRMATIVE COVENANTS OF TRANSFEROR. At all times from the
date hereof to the later to occur of (i) the Enterprise Termination Date, (ii)
the Atlantic Termination Date, (iii) the Liberty Termination Date, or (iv) the
date on which the Net Investment has been reduced to zero, all accrued
Enterprise Discount, Atlantic Discount and Liberty Discount and Servicing Fees
shall have been paid in full and all other Aggregate Unpaids shall have been
paid in full, in cash, unless the Agent shall otherwise consent in writing:
(a) REPORTS. The Transferor shall deliver to the Agent, the Enterprise
Agent, the Atlantic Agent and the Liberty Agent:
(i) COMPLIANCE CERTIFICATE. Within one hundred and twenty (120)
days of the close of each of its fiscal years and within sixty (60)
days of the close of each of the first three fiscal quarters of each of
its fiscal years, a compliance certificate signed by its chief
financial officer stating that no Termination Event or Potential
Termination Event exists, or if any Termination Event or Potential
Termination Event exists, stating the nature and status thereof.
(ii) NOTICE OF TERMINATION EVENTS OR POTENTIAL TERMINATION EVENTS.
As soon as possible and in any event within two days after the
occurrence of each Termination Event or each Potential Termination
Event, a statement of the chief financial officer or chief accounting
officer of the Transferor setting forth details of such Termination
Event or Potential Termination Event and the action which the
Transferor proposes to take with respect thereto.
(iii) CHANGE IN CREDIT AND COLLECTION POLICY. Within 15 days after
the date any material change in or amendment to the Credit and
Collection Policy is made, a copy of the Credit and Collection Policy
then in effect indicating such change or amendment.
(iv) ERISA. Promptly after the filing or receiving thereof, copies
of all reports and notices with respect to any "reportable event" (as
defined in Article IV of ERISA) which the Transferor, Tech Data or any
Affiliate of the Transferor files under ERISA with the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which the Transferor, Tech Data or any
Affiliates of the Transferor receives from the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor.
64
(v) OTHER INFORMATION. Such other information (including
non-financial information) as the Agent, or the Administrative Agent,
may from time to time reasonably request.
(b) CONDUCT OF BUSINESS. The Transferor will carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted and do all things necessary to remain
duly incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
(c) COMPLIANCE WITH LAWS. The Transferor will comply in all material
respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject.
(d) FURNISHING OF INFORMATION AND INSPECTION OF RECORDS. The Transferor
will furnish to the Agent from time to time such information with respect to the
Receivables as the Agent may reasonably request, including, without limitation,
listings identifying the Obligor and the Outstanding Balance for each
Receivable. The Transferor will at any time and from time to time during regular
business hours upon forty-eight (48) hours prior written notice, permit the
Agent, or its agents or representatives, (i) to examine and make copies of and
abstracts from all Records and (ii) to visit the offices and properties of the
Transferor or Tech Data, as applicable, for the purpose of examining such
Records, and to discuss matters relating to Receivables or the Transferor's
performance hereunder with any of the officers, directors, employees or
independent public accountants of the Transferor having knowledge of such
matters.
(e) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Transferor will
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 information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable); PROVIDED, that
the Transferor shall not be required to keep and maintain such records with
respect to any Receivables for a period of more than sixty (60) days after such
Receivables shall have been paid in full by the Obligors thereof. The Transferor
will give the Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(f) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. The
Transferor will at its expense timely and fully perform and comply with all
material provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables.
65
(g) CREDIT AND COLLECTION POLICIES. The Transferor will comply in all
material respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
(h) COLLECTIONS. The Transferor shall instruct all Obligors to cause
all Collections to be deposited directly to a Lock-Box Account.
(i) COLLECTIONS RECEIVED BY TRANSFEROR. The Transferor shall hold in
trust, and deposit, immediately, but in any event not later than forty-eight
(48) hours of its receipt thereof, to a Lock-Box Account all Collections
received from time to time by the Transferor (including without limitation, in
the case of the Transferor, all Collections deemed to have been received by the
Transferor under Section 2.9(a)).
(j) YEAR 2000 COMPLIANCE. The Transferor will promptly notify the Agent
in the event it discovers or determines that any computer application (including
those of its suppliers, customers, vendors or any third party servicers) (i)
that is necessary for the origination, collection, management, or servicing of
the Receivables will not be Year 2000 Compliant, or (ii) that is otherwise
material to its business and operations will not be Year 2000 Compliant on a
timely basis, except to the extent that, in the case of (ii) above, such failure
could not reasonably be expected (a) to have a material adverse effect, or (b)
to result in a Termination Event.
SECTION 5.2. NEGATIVE COVENANTS OF TRANSFEROR. At all times from the date
hereof to the later to occur of (i) the Termination Date or (ii) the date on
which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) NO SALES, LIENS, ETC. Except as otherwise provided herein, the
Transferor will not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Adverse Claim upon (or the filing
of any financing statement) or with respect to (x) any of the Affected Assets,
(y) any inventory or goods, the sale of which may give rise to a Receivable or
any Receivable or related Contract, or (z) any account which concentrates in a
Lock-Box Bank to which any Collections of any Receivable are sent, or assign any
right to receive income in respect thereof.
(b) NO EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in Section 6.2 hereof, the Transferor will not extend, amend or
otherwise modify the terms of any Receivable, or amend, modify or waive any term
or condition of any Contract related thereto.
(c) NO CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. The
Transferor will not engage in any business other than acquiring accounts
receivable from Tech Data pursuant to the Purchase Agreement, financing such
acquisition pursuant hereto, making loans to Tech Data and Subsidiaries of Tech
Data and other activities incidental thereto. The Transferor will not make
66
any change in the Credit and Collection Policy, which change would impair the
collectibility of the Receivables in a material respect.
(d) NO MERGERS, ETC. The Transferor will not (i) consolidate or merge
with or into any other Person, or (ii) sell, lease or transfer all or
substantially all of its assets to any other person; PROVIDED, HOWEVER, that so
long as the Transferor remains wholly owned by Tech Data, the foregoing
prohibitions will not apply.
(e) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. The Transferor will not
add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box
Account to or from those listed in Exhibit C hereto or make any change in its
instructions to Obligors regarding payments to be made to any Lock-Box Account,
unless (i) such instructions are to deposit such payments to another existing
Lock-Box Account or (ii) the Agent shall have received written notice of such
addition, termination or change at least 30 days prior thereto and the Agent
shall have received a Lock-Box Agreement executed by each new Lock-Box Bank or
an existing Lock-Box Bank with respect to each new Lock-Box Account, as
applicable.
(f) DEPOSITS TO LOCK-BOX ACCOUNTS. The Transferor will not deposit or
otherwise credit, or cause or permit to be so deposited or credited, to any
Lock-Box Account cash or cash proceeds other than Collections of Receivables or
cash proceeds of other receivables that were originally Receivables but were not
Eligible Receivables on the date of the initial Transfer hereunder and so were
subsequently repurchased by the Transferor pursuant to Section 2.9 and, upon any
deposit of any proceeds of such other receivables to any Lock-Box Account,
remove such proceeds within two Business Days following such deposit.
(g) CHANGE OF NAME, ETC. The Transferor will not change its name,
identity or structure or the location of its chief executive office, unless at
least 10 days prior to the effective date of any such change the Transferor
delivers to the Agent (i) such documents, instruments or agreements, executed by
the Transferor, necessary to reflect such change and to continue the perfection
of the Agent's ownership interests or security interests in the Affected Assets
and (ii) new or revised Lock-Box Agreements executed by the Lock-Box Banks which
reflect such change and enable the Agent to continue to exercise its rights
contained in Section 2.8 hereof.
(h) AMENDMENT TO PURCHASE AGREEMENT. The Transferor will not amend,
modify, supplement, waive any provision of, or enter into any consent with
respect to, the Purchase Agreement, except that the Transferor may, upon 15 days
prior written notice to the Agent and the Administrative Agent, enter into an
amendment, modification or supplement to, waive any provision of, or enter into
a consent with respect to, the Purchase Agreement, provided the same shall not
materially adversely affect the interests of the Agent or any Investor; nor
shall the Transferor take any other action under the Purchase Agreement that
shall have the same such effect upon the interests of the Agent or any Investor.
67
SECTION 5.3. AFFIRMATIVE COVENANTS OF TECH DATA. At all times from the date
hereof to the later to occur of (i) the Termination Date or (ii) the date on
which the Transferred Interest shall be equal to zero, unless the Agent shall
otherwise consent in writing:
(a) FINANCIAL REPORTING. Tech Data will maintain, for itself, a system
of accounting established and administered in accordance with generally accepted
accounting principles, and furnish to the Agent, the Enterprise Agent, the
Atlantic Agent and the Liberty Agent:
(i) ANNUAL REPORTING. Within one hundred and twenty (120) days
after the close of each of its fiscal years, an unqualified audit
report certified by independent certified public accountants,
acceptable to the Agent, prepared in accordance with generally accepted
accounting principles on a consolidated and consolidating basis
(consolidating statements need not be certified by such accountants)
for itself including balance sheets as of the end of such period,
related profit and loss and reconciliation of surplus statements, and a
statement of cash flows, accompanied by any management letter prepared
by said accountants and by a certificate of said accountants that, in
the course of the foregoing, they have obtained no knowledge of any
Termination Event or Potential Termination Event, or if, in the opinion
of such accountants, any Termination Event or Potential Termination
Event shall exist, stating the nature and status thereof.
(ii) QUARTERLY REPORTING. Within sixty (60) days after the close
of the first three quarterly periods of each of its fiscal years, for
itself consolidated and consolidating unaudited balance sheets as at
the close of each such period and consolidated and consolidating profit
and loss and reconciliation of surplus statements and a statement of
cash flows for the period from the beginning of such fiscal year to the
end of such quarter, all certified by its chief financial officer.
(iii) COMPLIANCE CERTIFICATE. Together with the financial
statements required hereunder, a compliance certificate signed by its
chief financial officer stating that no Termination Event or Potential
Termination Event exists, or if any Termination Event or Potential
Termination Event exists, stating the nature and status thereof and
containing a computation of, and showing compliance with, each of the
financial ratios and restrictions contained in this Agreement and
showing all information necessary in order to determine the Applicable
Margin.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly upon the
furnishing thereof to the shareholders of Tech Data, 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 annual, quarterly, monthly or other
regular reports
68
which Tech Data or any subsidiary files with the Securities and
Exchange Commission.
(vi) OTHER INFORMATION. Such other information (including
non-financial information) as the Agent may from time to time
reasonably request.
(b) CONDUCT OF BUSINESS. Tech Data will, and will cause each of its
Subsidiaries to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted, except to the extent that
any failure with respect to the foregoing does not have a material adverse
effect on the business or operations of Tech Data or the performance by Tech
Data under any of the Transaction Documents.
(c) COMPLIANCE WITH LAWS. Tech Data will, and will cause each of its
Subsidiaries to, comply in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it or its properties may be subject.
(d) FURNISHING OF INFORMATION AND INSPECTION OF RECORDS. Tech Data will
furnish to the Transferor and the Agent from time to time such information with
respect to the Receivables as the Transferor or the Agent may reasonably
request, including, without limitation, listings identifying the Obligor and the
Outstanding Balance for each Receivable. Tech Data will at any time and from
time to time during regular business hours upon forty-eight (48) hours prior
written notice, permit the Agent, or its agents or representatives, (i) to
examine and make copies of and abstracts from all Records and (ii) to visit the
offices and properties of Tech Data for the purpose of examining such Records,
and to discuss matters relating to Receivables or Tech Data's performance
hereunder with any of the officers, directors, employees or independent public
accountants of Tech Data having knowledge of such matters.
(e) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Tech Data will 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 information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable); PROVIDED, that
Tech Data shall not be required to keep and maintain such records with respect
to any Receivables for a period of more than sixty (60) days after such
Receivables shall have been paid in full by the Obligors thereof. Tech Data will
give the Agent notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
69
(f) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. Tech
Data, at its expense, will timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Receivables.
(g) CREDIT AND COLLECTION POLICIES. Tech Data will comply in all
material respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
(h) COLLECTIONS. Tech Data shall instruct all Obligors to cause all
Collections to be deposited directly to a Lock-Box Account.
(i) COLLECTIONS RECEIVED BY TECH DATA. Tech Data shall hold in trust,
and deposit, immediately, but in any event not later than forty-eight (48) hours
of its receipt thereof, to a Lock-Box Account or the Collection Agent Account
all Collections received from time to time by Tech Data.
(j) TRANSFER OF RECEIVABLES. Tech Data shall sell or contribute
Receivables (as defined in the Purchase Agreement) to the Transferor at such
time or times as necessary in order to cause the Percentage Factor not to exceed
the Maximum Percentage Factor.
(k) YEAR 2000 COMPLIANCE. Tech Data will promptly notify the Agent in
the event it discovers or determines that any computer application (including
those of its suppliers, customers, vendors and any third party servicers) (i)
that is necessary for the origination, collection, management, or servicing of
the Receivables will not be Year 2000 Compliant, or (ii) that is otherwise
material to its business and operations will not be Year 2000 Compliant on a
timely basis, except to the extent that, in the case of (ii) above, such failure
could not reasonably be expected (a) to have a material adverse effect on Tech
Data, or (b) to result in a Termination Event.
SECTION 5.4. NEGATIVE COVENANTS OF TECH DATA. At all times from the date
hereof to the later to occur of (i) the Termination Date or (ii) the date on
which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) NO SALES, LIENS, ETC. Except as otherwise provided herein and in
the Purchase Agreement, Tech Data will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon (or the filing of any financing statement) or with respect to (x) any
of the Affected Assets, (y) any inventory or goods, the sale of which may give
rise to a Receivable or any Receivable or related Contract, or (z) any account
which concentrates in a Lock-Box Bank to which any Collections of any Receivable
are sent, or assign any right to receive income in respect thereof.
70
(b) NO EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in Section 6.2 hereof, Tech Data will not extend, amend or otherwise
modify the terms of any Receivable, or amend, modify or waive any term or
condition of any Contract related thereto.
(c) NO CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Tech Data
will not make any change in the character of its business or in the Credit and
Collection Policy, which change would, in either case, impair the collectibility
of the Receivables in a material respect.
(d) NO MERGERS, ETC. Tech Data will not (i) consolidate or merge with
or into any other Person if such action shall result in a Potential Termination
Event or a Termination Event and Tech Data shall not be the surviving entity or
(ii) sell, lease or transfer all or substantially all of its assets to any other
person.
(e) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Tech Data will not add
or terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account to
or from those listed in Exhibit C hereto or make any change in its instructions
to Obligors regarding payments to be made to any Lock-Box Account, unless (i)
such instructions are to deposit such payments to another existing Lock-Box
Account or (ii) the Agent shall have received written notice of such addition,
termination or change at least 30 days prior thereto and the Agent shall have
received a Lock-Box Agreement executed by each new Lock-Box Bank or an existing
Lock-Box Bank with respect to each new Lock-Box Account, as applicable.
(f) DEPOSITS TO LOCK-BOX ACCOUNTS. Tech Data will not deposit or
otherwise credit, or cause or permit to be so deposited or credited, to any
Lock-Box Account cash or cash proceeds other than Collections of Receivables or
cash proceeds or other receivables that were originally Receivables but were not
Eligible Receivables on the date of the initial Transfer hereunder and so were
subsequently repurchased by the Transferor pursuant to Section 2.9 and, upon any
deposit of any proceeds of such other receivables to any Lock-Box Account,
remove such proceeds within two Business Days following such deposit.
(g) CHANGE OF NAME, ETC. Tech Data will not change its name, identity
or structure or location of its chief executive office, unless at least 10 days
prior to the effective date of any such change Tech Data delivers to the
Transferor and the Agent (i) such documents, instruments or agreements, executed
by the Transferor, as are necessary to reflect such change and to continue the
perfection of the Transferor's ownership interest in the Receivables and (ii)
new or revised Lock-Box Agreements executed by the Lock-Box Banks which reflect
such change and enable the Agent to continue to exercise its rights contained in
Section 2.8 hereof.
SECTION V.5. FINANCIAL COVENANTS.
(a) INDEBTEDNESS TO TOTAL CAPITAL. Tech Data shall not permit the ratio
of Consolidated Funded Indebtedness to Consolidated Total Capital to exceed .60
to 1.00 at any time.
71
(b) EBIT TO INTEREST EXPENSE. Tech Data shall not permit the ratio of
Consolidated EBIT to Consolidated Interest Expense to be less than 2.50 to 1.00
at any time.
Capitalized terms used in this Section 5.5 and not defined herein shall
have those meanings assigned in Exhibit N.
72
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. APPOINTMENT OF COLLECTION AGENT. The servicing, administering
and collection of the Receivables shall be conducted by such Person (the
"COLLECTION AGENT") so designated from time to time in accordance with this
Section 6.1. Until the Agent gives notice to Tech Data of the designation of a
new Collection Agent, Tech Data is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Collection Agent pursuant to the
terms hereof. The Collection Agent may not delegate any of its rights, duties or
obligations hereunder, or designate a substitute Collection Agent, without the
prior written consent of the Agent, and provided that the Collection Agent shall
continue to remain solely liable for the performance of the duties as Collection
Agent hereunder. The Agent may, and upon the direction of the Majority
Investors, shall, after the occurrence of a Collection Agent Default or any
other Termination Event designate as Collection Agent any Person (including
itself) to succeed Tech Data or any successor Collection Agent, on the condition
in each case that any such Person so designated shall agree to perform the
duties and obligations of the Collection Agent pursuant to the terms hereof. The
Agent, at any time following the occurrence of a Termination Event, may notify
any Obligor of the Transferred Interest.
SECTION 6.2. DUTIES OF COLLECTION AGENT.
(a) Subject to the limitations contained herein, the Collection Agent
shall take or cause to be taken all such action 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. Each of the Transferor, the
Agent and the Investors hereby appoints as its agent the Collection Agent, from
time to time designated pursuant to Section 6.1 hereof, to enforce its
respective rights and interests in and under the Affected Assets. To the extent
permitted by applicable law, each of the Transferor and the Seller (to the
extent not then acting as Collection Agent hereunder) hereby grants to any
Collection Agent appointed hereunder an irrevocable power of attorney to take
any and all steps in the Transferor's and/or the Seller's name and on behalf of
the Transferor or the Seller necessary or desirable, in the reasonable
determination of the Collection Agent, to collect all amounts due under any and
all Receivables, including, without limitation, endorsing the Transferor's
and/or the Seller's name on checks and other instruments representing
Collections and enforcing such Receivables and the related Contracts. The
Collection Agent shall set aside for the account of the Transferor and the
Investors, as applicable, their respective allocable shares of the Collections
of Receivables in accordance with Sections 2.5 and 2.6 hereof. The Collection
Agent shall segregate and deposit to the Agent's account each Investor's
allocable share of Collections of Receivables when required pursuant to Article
II hereof. So long as no Termination Event shall have occurred and be
continuing, the Collection Agent may, in accordance with the Credit and
Collection Policy, extend the maturity of Receivables, but not beyond 60 days,
and extend the maturity or adjust the Outstanding Balance as the Collection
Agent may determine to be appropriate to maximize Collections thereof; PROVIDED,
HOWEVER, that such extension or adjustment shall not alter the status
73
of such Receivable as a Delinquent Receivable or a Defaulted Receivable. The
Transferor shall deliver to the Collection Agent and the Collection Agent shall
hold in trust for the Transferor and the Investors, in accordance with their
respective interests, all Records which evidence or relate to Receivables or
Related Security. Notwithstanding anything to the contrary contained herein, the
Agent shall have the absolute and unlimited right to direct the Transferor, if
Tech Data is the Collection Agent, or if Tech Data is not the Collection Agent,
the Collection Agent to commence or settle any legal action to enforce
collection of any Receivable or to foreclose upon or repossess any Related
Security. The Collection Agent shall not make the Agent or any of the Investors
a party to any litigation without the prior written consent of such Person.
(b) The Collection Agent shall, as soon as practicable following
receipt of any Collections, turn over to the Transferor an amount equal to such
Collections MINUS the Percentage Factor of such Collections. In addition, the
Collection Agent shall, as soon as practicable following receipt thereof, turn
over to the Transferor any collections of any indebtedness of any Obligor which
is not a Receivable. If the Collection Agent is not Tech Data or the Transferor
or any Affiliate of the Transferor or Tech Data, the Collection Agent, by giving
three Business Days' prior written notice to the Agent, may revise the
percentage used to calculate the Servicing Fee so long as the revised percentage
will not result in a Servicing Fee that exceeds 110% of the reasonable and
appropriate out-of-pocket costs and expenses of such Collection Agent incurred
in connection with the performance of its obligations hereunder as documented to
the reasonable satisfaction of the Agent. The Collection Agent, if other than
Tech Data, shall as soon as practicable upon demand, deliver to the Transferor
all Records in its possession which evidence or relate to indebtedness of an
Obligor which is not a Receivable, and copies of Records in its possession which
evidence or relate to Receivables.
(c) On or before 120 days after the end of each fiscal year of the
Collection Agent, beginning with the fiscal year ending January 31, 1999, the
Collection Agent shall cause a firm of independent public accountants (who may
also render other services to the Collection Agent or the Transferor) to furnish
a report to the Agent to the effect that they have (i) confirmed the Net
Receivables Balance as of the end of each Tranche Period during such fiscal
year, and (ii) confirmed that the Receivables treated by the Collection Agent as
Eligible Receivables in fact satisfied the requirements of the definition
thereof contained herein, except, in each case for (a) such exceptions as such
firm shall believe to be immaterial (which exceptions need not be enumerated)
and (b) such other exceptions as shall be set forth in such statement.
(d) Notwithstanding anything to the contrary contained in this Article
VI, the Collection Agent, if not Tech Data, the Transferor, or any Affiliate of
the Transferor or Tech Data, shall have no obligation to collect, enforce or
take any other action described in this Article VI with respect to any
indebtedness that is not included in the Transferred Interest other than to
deliver to the Transferor the collections and documents with respect to any such
Receivable as described in Section 6.2(b) hereof.
74
SECTION 6.3. RIGHTS AFTER DESIGNATION OF NEW COLLECTION AGENT. At any time
following the designation of a Collection Agent (other than Tech Data, the
Transferor, or any Affiliate of Tech Data or the Transferor) pursuant to Section
6.1 hereof:
(i) The Agent may direct that paymentof all amounts payable under any
Receivable be made directly to the Agent or its designee.
(ii) Tech Data shall, at the Agent's request and at Tech Data's expense,
give notice of the Agent's, the Transferor's, Enterprise's and/or the
Enterprise Bank Investor's, Atlantic's and/or the Atlantic Bank
Investor's and/or Liberty's and/or the Liberty Bank Investor's
ownership of Receivables to each Obligor and direct that payments be
made directly to the Agent or its designee.
(iii) Tech Data shall, at the Agent's request, (A) assemble all of the
Records, and shall make the same available to the Agent at a place
selected by the Agent or its designee, and (B) segregate all cash,
checks and other instruments received by it from time to time
constituting Collections of Receivables in a manner acceptable to the
Agent and shall, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of
transfer, to the Agent or its designee.
(iv) The Transferor and Tech Data hereby authorize the Agent to take any
and all steps in the Transferor's or Tech Data's name and on behalf of
the Transferor or Tech Data necessary or desirable, in the
determination of the Agent, to collect all amounts due under any and
all Receivables, including, without limitation, endorsing the
Transferor's or Tech Data's name on checks and other instruments
representing Collections and enforcing such Receivables and the related
Contracts.
SECTION 6.4. RESPONSIBILITIES OF THE TRANSFEROR AND TECH DATA. Anything
herein to the contrary notwithstanding, the Transferor and Tech Data, as seller
under the Purchase Agreement, shall (i) perform all of their respective
obligations under the Contracts related to the Receivables to the same extent as
if interests in such Receivables had not been sold hereunder and the exercise by
the Agent of its rights hereunder shall not relieve the Transferor or Tech Data,
as seller under the Purchase Agreement, from such obligations and (ii) pay when
due any taxes, including without limitation, any sales taxes payable in
connection with the Receivables and their creation and satisfaction. Neither the
Agent nor Enterprise nor any of the Bank Investors shall have any obligation or
liability with respect to any Receivable or related Contracts, nor shall it be
obligated to perform any of the obligations of the Transferor or Tech Data
thereunder.
75
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. TERMINATION EVENTS. The occurrence of any one or more of the
following events shall constitute a Termination Event:
(a) (i) the Collection Agent shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (ii) of
this Section 7.1(a)) and such failure shall remain unremedied for 15 days, or
(ii) either the Collection Agent, the Transferor, or the Guarantor shall fail to
make any payment or deposit to be made by it hereunder when due or the
Collection Agent shall fail to observe or perform any term, covenant or
agreement on the Collection Agent's part to be performed under Section 2.8(b)
hereof; or
(b) any representation, warranty, certification or statement made by
Tech Data or the Transferor in this Agreement or in any other document delivered
pursuant hereto shall prove to have been incorrect in any material respect when
made or deemed made; or
(c) (i) the Transferor shall default in the observance or performance
of the terms, covenants, conditions or agreements on the Transferor's part to be
performed or observed under Section 5.1(a)(ii), Section 5.1(h), Section 5.1(i),
Section 5.1(j), Section 5.2(a), Section 5.2(c), Section 5.2(d), Section 5.2(e),
Section 5.2(f), Section 5.2(g) or Section 5.2(h) hereof or (ii) the Transferor
shall default in the observance or performance of the terms, covenants,
conditions or agreements on the Transferor's part to be performed or observed
under Section 5.1(a)(i), Section 5.1(a)(iii), Section 5.1(a)(iv), Section
5.1(a)(v), Section 5.1(b), Section 5.1(c), Section 5.1(d), Section 5.1(e),
Section 5.1(f), Section 5.1(g) or Section 5.2(b) hereof and such failure shall
remain unremedied for 15 days; or
(d) (i) Tech Data shall default in the observance or performance of the
terms, covenants, conditions or agreements on Tech Data's part to be performed
or observed under Section 5.3(h), Section 5.3(i), Section 5.3(k), Section
5.4(a), Section 5.4(c), Section 5.4(d), Section 5.4(e), Section 5.4(f), Section
5.4(g) or Section 5.5 or (ii) Tech Data shall default in the observance or
performance of the terms, covenants, conditions or agreements on Tech Data's
part to be performed under Section 5.3(a), Section 5.3(b), Section 5.3(c),
Section 5.3(d), Section 5.3(e), Section 5.3(f), Section 5.3(g) or Section 5.4(b)
hereof and such failure shall remain unremedied for 15 days; or
(e) the Transferor or Tech Data shall default in the observance or
performance of any other term, covenant, condition or agreement on the
Transferor's or Tech Data's part to be performed or observed under this
Agreement and such default shall continue for 30 days after the earlier of (i)
the date that such written notice thereof is given to the Transferor or Tech
Data, as applicable, by the Agent or (ii) the date the Transferor or Tech Data,
as applicable, becomes aware of such default; or
76
(f) failure of Tech Data or any Subsidiary of Tech Data to pay any
Indebtedness greater than $5,000,000 when due; or the default by Tech Data or
any Subsidiary of Tech Data in the performance of any term, provision or
condition contained in any agreement under which any Indebtedness greater than
$5,000,000 was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness greater than $5,000,000 to
cause, such Indebtedness to become due prior to its stated maturity; or any
Indebtedness greater than $5,000,000 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; or
(g) any Event of Bankruptcy shall occur with respect to the Transferor,
the Collection Agent, Tech Data or any Subsidiary of either the Transferor or
Tech Data; or
(h) the Agent, on behalf of the Investors shall, for any reason, fail
or cease to have a valid and perfected first priority ownership or security
interest in the Affected Assets free and clear of any Adverse Claims; or
(i) Tech Data shall enter into any transaction or merger whereby it is
not the surviving entity; or the Transferor shall no longer be wholly owned by
Tech Data; or
(j) there shall have occurred any material adverse change in the
operations of Tech Data since October 31, 1998, or any other event shall have
occurred which materially affects Tech Data's ability to either collect the
Receivables or to perform under this Agreement or under the Purchase Agreement;
or
(k) any Liquidity Provider or any Credit Support Provider shall have
given notice that an event of default has occurred and is continuing under any
of its respective agreements with Enterprise, Atlantic or Liberty, as
applicable; or
(l) the Commercial Paper issued by Enterprise, Atlantic or Liberty,
respectively, shall not be rated at least "A-2" by Standard & Poor's and at
least "P-2" by Moody's, unless such downgrading is the result of the Credit
Support Provider being downgraded; or
(m) the Percentage Factor exceeds the Maximum Percentage Factor unless
the Transferor reduces, on a PRO RATA basis, the Enterprise Net Investment, the
Atlantic Net Investment and/or the Liberty Net Investment on the next day or
increases the balance of the Affected Assets on the next Business Day so as to
reduce the Percentage Factor to less than or equal to 98%; or
(n) the Percentage Factor equals or exceeds 100% for a period of one
full Business Day (provided that in such case the Termination Event caused
thereby shall be deemed to have occurred at the start of such one full Business
Day period) or (i) the sum of the Enterprise Net Investment PLUS, in the case
where Enterprise holds a portion of the Transferred Interest, the Interest
Component of all outstanding Related Commercial Paper issued by Enterprise
exceeds the Enterprise
77
Facility Limit, (ii) the sum of the Atlantic Net Investment PLUS, in the case
where Atlantic holds a portion of the Transferred Interest, the Interest
Component of all outstanding Related Commercial Paper issued by Atlantic exceeds
the Atlantic Facility Limit, or (iii) the sum of the Liberty Net Investment
PLUS, in the case where Liberty holds a portion of the Transferred Interest, the
Interest Component of all outstanding Related Commercial Paper issued by Liberty
exceeds the Liberty Facility Limit; or
(o) the Dilution Ratio equals or exceeds 15%; or
(p) the average of the Loss to Liquidation Ratios for any three
consecutive months exceeds 2.25%; or
(q) the Delinquency Ratio exceeds 11%.
SECTION 7.2. TERMINATION. (a) Upon the occurrence of any Termination Event,
the Agent may, or at the direction of the Majority Investors shall, by notice to
the Transferor and the Collection Agent declare the Termination Date to have
occurred; PROVIDED, HOWEVER, that in the case of any event described in Section
7.1(g), 7.1(h), 7.1(i) or 7.1(n) above, the Termination Date shall be deemed to
have occurred automatically upon the occurrence of such event. Upon any such
declaration or automatic occurrence, the Agent shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of the applicable jurisdiction and other
applicable laws, all of which rights shall be cumulative.
(b) At all times after the declaration or automatic occurrence of the
Termination Date pursuant to Section 7.2(a) (other than a declaration following
the occurrence of a Termination Event set forth in Section 7.1(k) or Section
7.1(l)), the Base Rate plus 2.00% shall be the Tranche Rate applicable to the
Net Investment for all existing and future Tranches.
78
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. INDEMNITIES BY THE TRANSFEROR. Without limiting any other
rights which the Agent or any of the Investors may have hereunder or under
applicable law, the Transferor hereby agrees to indemnify the Agent, each
Investor, the Administrative Agent, the Collateral Agent, any Liquidity Provider
and any Credit Support Provider and any successors and any permitted assigns and
their respective officers, directors and employees (collectively, "INDEMNIFIED
PARTIES") from and against any and all damages, losses, claims, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
(which such attorneys may be employees of any Liquidity Provider, any Credit
Support Provider, the Agent, the Administrative Agent or the Collateral Agent,
as applicable) 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 ownership, either
directly or indirectly, by the Agent or any Investor of the Transferred Interest
excluding, however, (i) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of an Indemnified Party or (ii)
recourse (except as otherwise specifically provided in this Agreement) for
uncollectible Receivables or (iii) claims arising from credit losses. Without
limiting the generality of the foregoing, the Transferor shall indemnify each
Indemnified Party for Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made by the Transferor
(or any officers of the Transferor) under or in connection with this
Agreement, any Investor Report or any other information or report delivered
by the Transferor pursuant hereto, which shall have been false or incorrect
in any material respect when made or deemed made;
(ii) the failure by the Transferor to comply with any applicable law,
rule or regulation with respect to any Receivable or the related Contract,
or the nonconformity of any Receivable or the related Contract with any
such applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in the Agent on behalf of
the Investors an undivided percentage ownership or security interest, to
the extent of the Transferred Interest, in the Receivables included in the
Transferred Interest, free and clear of any Adverse Claim;
(iv) the failure to file, or any delay in filing, financing statements,
continuation statements, or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any of the Affected Assets;
79
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable included in the
Transferred Interest (including, without limitation, a defense based on
such Receivable or the related Contract not being 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 merchandise or
services related to such Receivable or the furnishing or failure to furnish
such merchandise or services;
(vi) any failure of the Transferor, as Collection Agent or otherwise,
to perform its duties or obligations in accordance with the provisions of
Article VI; or
(vii) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort
arising out of or in connection with merchandise or services which are the
subject of any Receivable;
PROVIDED, HOWEVER, that if Enterprise, Atlantic or Liberty enters into
agreements for the purchase of interests in receivables from one or more Other
Transferors, Enterprise, Atlantic or Liberty, as applicable, shall allocate such
Indemnified Amounts which are in connection with a Liquidity Provider Agreement,
a Credit Support Agreement or the credit support furnished by a Credit Support
Provider to the Transferor and each Other Transferor.
SECTION 8.2. INDEMNITY FOR TAXES, RESERVES AND EXPENSES. (a) If after the
date hereof, the adoption of any Law or bank regulatory guideline or any
amendment or change in the interpretation of any existing or future Law or bank
regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law):
(i) shall subject any Indemnified Party to any tax, duty or other
charge with respect to this Agreement, the Transferred Interest, the
Receivables or payments of amounts due hereunder, or shall change the
basis of taxation of payments to any Indemnified Party of amounts
payable in respect of this Agreement, the Transferred Interest, the
Receivables or payments of amounts due hereunder or its obligation to
advance funds under a Liquidity Provider Agreement or the credit
support furnished by a Credit Support Provider or otherwise in respect
of this Agreement, the Transferred Interest or the Receivables (except
for changes in the rate of general corporate, franchise, net income or
other income tax imposed on such Indemnified Party by the jurisdiction
in which such Indemnified Party's principal executive office is
located);
80
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System) against assets of, deposits with or for the account of, or
credit extended by, any Indemnified Party or shall impose on any
Indemnified Party or on the United States market for certificates of
deposit or the London interbank market any other condition affecting
this Agreement, the Transferred Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds under a
Liquidity Provider Agreement or the credit support provided by a Credit
Support Provider or otherwise in respect of this Agreement, the
Transferred Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other expense
(including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement, the
Transferred Interest, the Receivables or payments of amounts due
hereunder or its obligation to advance funds under a Liquidity Provider
Agreement or the credit support furnished by a Credit Support Provider
or otherwise in respect of this Agreement, the Transferred Interest or
the Receivables, and the result of any of the foregoing is to increase
the cost to such Indemnified Party with respect to this Agreement, any
portion of the Transferred Interest, the Receivables, the obligations
hereunder, the funding of any purchases hereunder, a Liquidity Provider
Agreement or a Credit Support Agreement, by an amount deemed by such
Indemnified Party to be material, then, within ten (10) days after
demand by such Indemnified Party through the Agent, the Transferor
shall pay to the Agent, for the benefit of such Indemnified Party such
additional amount or amounts as will compensate such Indemnified Party
for such increased cost.
(b) If any Indemnified Party shall have determined that after the date
hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or any change therein, or any change in the
interpretation thereof by any Official Body, or any directive regarding capital
adequacy (in the case of any bank regulatory guideline, whether or not having
the force of law) of any such Official Body, has or would have the effect of
reducing the rate of return on capital of such Indemnified Party (or its parent)
as a consequence of such Indemnified Party's obligations hereunder or with
respect hereto to a level below that which such Indemnified Party (or its
parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Indemnified Party to be material, then from time to time,
within ten (10) days after demand by such Indemnified Party through the Agent,
the Transferor shall pay to the Agent, for the benefit of such Indemnified Party
such additional amount or amounts as will compensate such Indemnified Party (or
its parent) for such reduction.
(c) The Agent will promptly notify the Transferor of any event of which
it has knowledge, occurring after the date hereof, which will entitle an
Indemnified Party to
81
compensation pursuant to this Section. A notice by the Agent or the applicable
Indemnified Party claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Agent or any
applicable Indemnified Party may use any reasonable averaging and attributing
methods.
(d) Anything in this Section 8.2 to the contrary notwithstanding, if
Enterprise, Atlantic or Liberty enters into agreements for the acquisition of
interests in receivables from one or more Other Transferors, Enterprise,
Atlantic or Liberty, as applicable, shall allocate the liability for any amounts
under this Section 8.2 ("SECTION 8.2 COSTS") to the Transferor and each Other
Transferor; and PROVIDED, FURTHER, that if such Section 8.2 Costs are
attributable to the Transferor and not attributable to any Other Transferor, the
Transferor shall be solely liable for such Section 8.2 Costs or if such Section
8.2 Costs are attributable to Other Transferors and not attributable to the
Transferor, such Other Transferors shall be solely liable for such Section 8.2
Costs.
SECTION 8.3. OTHER COSTS, EXPENSES AND RELATED MATTERS. (a) The Transferor
agrees, upon receipt of a written invoice, to pay or cause to be paid, and to
save Enterprise, Atlantic, Liberty and the Agent harmless against liability for
the payment of, all reasonable out-of-pocket expenses (including, without
limitation, attorneys', accountants' and other third parties' fees and expenses,
any filing fees and expenses incurred by officers or employees of Enterprise,
Atlantic, Liberty and the Agent) incurred by or on behalf of Enterprise,
Atlantic, Liberty or the Agent (i) in connection with the negotiation,
execution, delivery and preparation of this Agreement and any documents or
instruments delivered pursuant hereto and thereto and the transactions
contemplated hereby or thereby (including, without limitation, the perfection or
protection of the Transferred Interest) and (ii) from time to time relating to
any amendments, waivers or consents under this Agreement.
(b) The Transferor agrees, upon receipt of a written invoice, to pay or
cause to be paid, and to save each Investor and the Agent harmless against
liability for the payment of, all reasonable out-of-pocket expenses (including,
without limitation, attorneys', accountants' and other third parties' fees and
expenses, any filing fees and expenses incurred by officers or employees of any
Investor, as applicable, and/or the Agent) incurred by or on behalf of any of
the Investors or the Agent from time to time (i) arising in connection with any
Investor's, the Agent's or the Collateral Agent's enforcement or preservation of
rights (including, without limitation, the perfection and protection of the
Transferred Interest under this Agreement), or (ii) arising in connection with
any audit, dispute, disagreement, litigation or preparation for litigation
involving this Agreement.
(c) The Transferor shall pay the Agent, for the account of the
Investors, as applicable, on demand any Enterprise Early Collection Fee,
Atlantic Early Collection Fee or Liberty Early Collection Fee, as applicable,
due on account of the reduction of a Tranche on a day prior to the last day of
its Tranche Period.
82
SECTION 8.4. RECONVEYANCE UNDER CERTAIN CIRCUMSTANCES. The Transferor
agrees to accept the reconveyance from the Agent, on behalf of the Investors of
the Transferred Interest if the Agent notifies Transferor of a material breach
of any representation or warranty made or deemed made pursuant to Article III of
this Agreement and Transferor shall fail to cure such breach within 15 days (or,
in the case of the representations and warranties in Sections 3.1(d) and 3.1(j),
3 days) of such notice. The reconveyance price shall be paid by the Transferor
to the Agent, for the account of the Investors, as applicable, in immediately
available funds on such 15th day (or 3rd day, if applicable) in an amount equal
to the Aggregate Unpaids.
83
ARTICLE IX
GUARANTEE
SECTION 9.1. GUARANTY OF OBLIGATIONS. Tech Data unconditionally guarantees
the full and prompt payment when due of all of the payment obligations and
timely performance of all of the payment and performance obligations
("OBLIGATIONS") of the Transferor of every kind and nature now or hereafter
existing, or due or to become due, under this Agreement, to the Transferor, the
Agent or any Investor. Tech Data shall pay all reasonable costs and expenses
including, without limitation, all court costs and attorneys' fees and expenses
paid or incurred by the Transferor, the Agent or any Investor in connection with
the collection of all or any part of the Obligations from Tech Data.
SECTION 9.2. VALIDITY OF OBLIGATIONS; IRREVOCABILITY. Tech Data agrees that
its obligations under this guaranty shall be unconditional, irrespective of (i)
the validity, enforceability, discharge or disaffirmance (by any Person,
including a trustee in bankruptcy) of the Obligations or of this Agreement, (ii)
the absence of any attempt to collect the Obligations from the Transferor or any
guarantor, (iii) the waiver or consent by the Transferor, the Agent or any
Investor with respect to any provision of any instrument evidencing the
Obligations, (iv) any change of the time, manner or place of payment or
performance, or any other term of any of the Obligations, (v) any law,
regulation or order of any jurisdiction affecting any term of any of the
Obligations or rights of the Transferor, the Agent or any Investor with respect
thereto, (vi) the failure by the Transferor, the Agent or any Investor to take
any steps to perfect and maintain perfected its respective interest in the
Receivables or other property acquired by Enterprise, Atlantic or Liberty from
the Transferor, or by the Transferor from Tech Data or any security or
collateral related to the Obligations or (vii) any other circumstances which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Tech Data agrees that none of the Transferor, the Agent or any
Investor shall be under any obligation to xxxxxxxx any assets in favor of or
against or in payment of any or all of the Obligations. Tech Data further agrees
that, to the extent that the Transferor makes a payment or payments to the Agent
or any Investor, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to the Transferor its estate, trustee, receiver or any
other party, including without limitation, Tech Data, under any bankruptcy,
insolvency or similar state or federal law, common law or equitable cause, then
to the extent of such payment or repayment, the Obligation or part thereof which
has been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the date such initial payment,
reduction or satisfaction occurred. Tech Data waives all set-offs and
counterclaims and all presentments, demands for performance, notices of dishonor
and notices of acceptance of this guaranty. Tech Data agrees that its
obligations under this guaranty shall be irrevocable.
SECTION 9.3. RIGHTS OF SET-OFF. Tech Data hereby authorizes the Transferor,
the Agent and any Investor at any time and from time to time, to the fullest
extent permitted by law, to set-off and apply any and all deposits (whether
general or special, time or demand, provisional or
84
final) at any time held and other indebtedness at any time owing by the
Transferor, the Agent or any Investor to or for the credit or the account of
Tech Data against any and all of the obligations of Tech Data now or hereafter
existing under this Agreement to the Transferor or any Investor. Tech Data
acknowledges that each Investor's rights described in this Section 9.3 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) such Person may have.
85
ARTICLE X
THE AGENT; BANK COMMITMENT
SECTION 10.1. AUTHORIZATION AND ACTION.
(a) Each Investor hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Transaction Documents as are delegated to the Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. Enterprise, Atlantic, and Liberty and/or the Majority Investors may
direct the Agent to take any such incidental action hereunder, however, with
respect to such actions which are incidental to the actions specifically
delegated to the Agent hereunder, the Agent shall not be required to take any
such incidental action hereunder, but shall be required to act or to refrain
from acting (and shall be fully protected in acting or refraining from acting)
upon the direction of the Majority Investors; PROVIDED, HOWEVER, that Agent
shall not be required to take any action hereunder if the taking of such action,
in the reasonable determination of the Agent, shall be in violation of any
applicable law, rule or regulation or contrary to any provision of this
Agreement or shall expose the Agent to liability hereunder or otherwise. In
furtherance, and without limiting the generality, of the foregoing, each
Investor hereby appoints the Agent as its agent to execute and deliver all
further instruments and documents, and take all further action that the Agent
may deem necessary or appropriate or that an Investor may reasonably request in
order to perfect, protect or more fully evidence the interests transferred or to
be transferred from time to time by the Transferor hereunder, or to enable any
of them to exercise or enforce any of their respective rights hereunder,
including, without limitation, the execution by the Agent as secured
party/assignee of such financing or continuation statements, or amendments
thereto or assignments thereof, relative to all or any of the Receivables now
existing or hereafter arising, and such other instruments or notices, as may be
necessary or appropriate for the purposes stated herein above. Upon the
occurrence and during the continuance of any Termination Event or Potential
Termination Event, the Agent shall take no action hereunder (other than
ministerial actions or such actions as are specifically provided for herein)
without the prior consent of the Majority Investors (which consent shall not be
unreasonably withheld or delayed). "Majority Investors" shall mean, at any time,
the Agent and the Enterprise Bank Investors, Atlantic Bank Investors and Liberty
Bank Investors which hold Commitments aggregating in excess of 66 and 2/3% of
the Facility Limit as of such date. In the event the Agent requests an
Investor's consent pursuant to the foregoing provisions and the Agent does not
receive a consent (either positive or negative) from such Investor within 10
Business Days of such Investor's receipt of such request, then such Investor
(and its percentage interest hereunder) shall be disregarded in determining
whether the Agent shall have obtained sufficient consent hereunder.
(b) The Agent shall exercise such rights and powers vested in it by
this Agreement and the other Transaction Documents, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
86
SECTION 10.2. AGENT'S RELIANCE, ETC. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them as Agent under or in connection with this
Agreement or any of the other Transaction Documents, except for its or their own
gross negligence or willful misconduct. Without limiting the foregoing, the
Agent: (i) may consult with legal counsel (including counsel for the Transferor
or the Seller), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (ii) makes no warranty or representation to any Investor and shall not
be responsible to any Investor for any statements, warranties or representations
made in or in connection with this Agreement; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or any of the other Transaction
Documents on the part of the Transferor, the Collection Agent or Tech Data or to
inspect the property (including the books and records) of the Transferor, the
Collection Agent or Tech Data (iv) shall not be responsible to any Investor for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, any of the other Transaction Documents or any other
instrument or document furnished pursuant hereto or thereto; and (v) shall incur
no liability under or in respect of this Agreement or any of the other
Transaction Documents by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 10.3. CREDIT DECISION. Each Investor acknowledges that it has,
independently and without reliance upon the Agent, any of the Agent's
Affiliates, any other Enterprise Bank Investor, any other Atlantic Bank
Investor, any other Liberty Bank Investor or Enterprise (in the case of any
Enterprise Bank Investor), Atlantic (in the case of any Atlantic Bank Investor)
or Liberty (in the case of any Liberty Bank Investor) and based upon such
documents and information as it has deemed appropriate, made its own evaluation
and decision to enter into this Agreement and the other Transaction Documents to
which it is a party and, if it so determines, to accept the transfer of any
undivided ownership interest in the Affected Assets hereunder. Each Investor
also acknowledges that it will, independently and without reliance upon the
Agent, any of the Agent's Affiliates, any other Enterprise Bank Investor, any
other Atlantic Bank Investor, any other Liberty Bank Investor or Enterprise (in
the case of any Enterprise Bank Investor), Atlantic (in the case of any Atlantic
Bank Investor) or Liberty (in the case of any Liberty Bank Investor) and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own decisions in taking or not taking action under this
Agreement and the other Transaction Documents to which it is a party.
SECTION 10.4. INDEMNIFICATION OF THE AGENT. The Enterprise Bank Investors,
the Atlantic Bank Investors and the Liberty Bank Investors each agree to
indemnify the Agent (to the extent not reimbursed by the Transferor), ratably in
accordance with their Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action
87
taken or omitted by the Agent, any of the other Transaction Documents hereunder
or thereunder, PROVIDED that the Enterprise Bank Investors, the Atlantic Bank
Investors and the Liberty Bank Investors shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, the
Enterprise Bank Investors, the Atlantic Bank Investors and the Liberty Bank
Investors each agree to reimburse the Agent, ratably in accordance with their
Pro Rata Shares, promptly upon demand for any out-of-pocket expenses (including
counsel fees) incurred by the Agent in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and the other Transaction Documents, to
the extent that such expenses are incurred in the interests of or otherwise in
respect of the Enterprise Bank Investors, the Atlantic Bank Investors or the
Liberty Bank Investors hereunder and/or thereunder and to the extent that the
Agent is not reimbursed for such expenses by the Transferor.
SECTION 10.5. SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof to each Investor and the Transferor and may be removed at
any time with cause by agreement of Enterprise Bank Investors, Atlantic Bank
Investors and Liberty Bank Investors which hold Commitments aggregating in
excess of 66 and 2/3% of the Facility Limit as of such date. Upon any such
resignation or removal, (i) if no Termination Event shall have occurred, the
Transferor, with the consent of the Majority Investors, shall appoint a
successor Agent and (ii) if a Termination Event shall have occurred, Enterprise,
Atlantic, Liberty and the Enterprise Bank Investors, Atlantic Bank Investors and
Liberty Bank Investors which hold Commitments aggregating in excess of 66 and
2/3% of the Facility Limit as of such date shall appoint a successor Agent. The
Transferor and each of the Investors, as applicable, each agrees that it shall
not unreasonably withhold or delay its approval of the appointment of a
successor Agent. If no such successor Agent shall have been so appointed, and
shall have accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation or the Majority Investors' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Investors, appoint
a successor Agent which successor Agent shall be either (i) a commercial bank
organized under the laws of the United States or of any state thereof and have a
combined capital and surplus of at least $50,000,000 or (ii) an Affiliate of
such a bank. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article IX shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
SECTION 10.6. PAYMENTS BY THE AGENT. Unless specifically allocated to an
Enterprise Bank Investor, an Atlantic Bank Investor or a Liberty Bank Investor
pursuant to the terms of this Agreement, all amounts received by the Agent on
behalf of the Enterprise Bank Investors, the Atlantic Bank Investors or the
Liberty Bank Investors, as applicable, shall be paid by the Agent to the
Enterprise Bank Investors, the Atlantic Bank Investors or the Liberty Bank
Investors (at their
88
respective accounts specified in their respective Assignment and Assumption
Agreements) in accordance with their respective related pro rata interests in
the Enterprise Net Investment, the Atlantic Net Investment or the Liberty Net
Investment, as applicable, on the Business Day received by the Agent, unless
such amounts are received after 12:00 noon on such Business Day, in which case
the Agent shall use its reasonable efforts to pay such amounts to the Enterprise
Bank Investors, the Atlantic Bank Investors or the Liberty Bank Investors, as
applicable, on such Business Day, but, in any event, shall pay such amounts to
the Enterprise Bank Investors, the Atlantic Bank Investors or the Liberty Bank
Investors, as applicable, in accordance with their respective related pro rata
interests in the Enterprise Net Investment, the Atlantic Net Investment or the
Liberty Net Investment, as applicable, not later than the following Business
Day.
SECTION 10.7. BANK COMMITMENT; ASSIGNMENT TO BANK INVESTORS.
(a) BANK COMMITMENT. At any time on or prior to the Enterprise
Commitment Termination Date (in the case of the Enterprise Bank Investors), the
Atlantic Commitment Termination Date (in the case of the Atlantic Bank
Investors) or the Liberty Commitment Termination Date (in the case of the
Liberty Bank Investors), in the event that Enterprise, Atlantic or Liberty, as
applicable, does not effect an Incremental Transfer as requested under Section
2.2(a), then at any time, the Transferor shall have the right to require
Enterprise, Atlantic or Liberty, as applicable, to assign its interest in the
Enterprise Net Investment, the Atlantic Net Investment or the Liberty Net
Investment, as applicable, in whole to the Enterprise Bank Investors (in the
case of Enterprise), the Atlantic Bank Investors (in the case of Atlantic) or
the Liberty Bank Investors (in the case of Liberty) pursuant to this Section
10.7. In addition, at any time on or prior to the Enterprise Commitment
Termination Date (in the case of the Enterprise Bank Investors), the Atlantic
Commitment Termination Date (in the case of the Atlantic Bank Investors) or the
Liberty Commitment Termination Date (in the case of the Liberty Bank Investors)
(i) upon the occurrence of a Termination Event that results in an Enterprise
Termination Date, an Atlantic Termination Date or a Liberty Termination Date, as
applicable, or (ii) Enterprise, Atlantic or Liberty elects to give notice to the
Transferor of an Enterprise Reinvestment Termination Date, an Atlantic
Reinvestment Termination Date or a Liberty Reinvestment Termination Date, as
applicable, the Transferor hereby requests and directs that Enterprise (in the
case of an Enterprise Reinvestment Termination Date), Atlantic (in the case of
an Atlantic Reinvestment Termination Date), or Liberty (in the case of a Liberty
Reinvestment Termination Date), assign its interest in the Enterprise Net
Investment, the Atlantic Net Investment or the Liberty Net Investment, as
applicable, in whole to the Enterprise Bank Investors (in the case of
Enterprise), the Atlantic Bank Investors (in the case of Atlantic) or the
Liberty Bank Investors (in the case of Liberty) pursuant to this Section 10.7
and the Transferor hereby agrees to pay the amounts described in Section 10.7(d)
below. Upon any such election by Enterprise, Atlantic or Liberty, as applicable,
or any such request by the Transferor, Enterprise, Atlantic or Liberty, as
applicable, shall make such assignment and the Enterprise Bank Investors, the
Atlantic Bank Investors or the Liberty Bank Investors, as applicable, shall
accept such assignment on such day (or the next day if such notice was received
after 11:00 A.M.(New York time)) and shall assume all of Enterprise's,
Atlantic's or Liberty's, as applicable, obligations hereunder. In connection
with any assignment from Enterprise to the Enterprise Bank Investors,
89
Atlantic to the Atlantic Bank Investors or Liberty to the Liberty Bank
Investors, as applicable, pursuant to this Section 10.7, each Enterprise Bank
Investor, Atlantic Bank Investor and Liberty Bank Investor, as applicable,
shall, by 2:00 P.M. (New York time) on the date of such assignment, pay to
Enterprise, Atlantic or Liberty, as applicable, an amount (in immediately
available funds) equal to its Assignment Amount. Upon any assignment by
Enterprise to the Enterprise Bank Investors, Atlantic to the Atlantic Bank
Investors or Liberty to the Liberty Bank Investors, as applicable, contemplated
hereunder, Enterprise, Atlantic or Liberty, as applicable, shall cease to make
any additional Incremental Transfers hereunder (it being understood that the
Enterprise Bank Investors, the Atlantic Bank Investors and the Liberty Bank
Investors, as assignees, shall (x) be obligated to effect Incremental Transfers
under Section 2.2(a) in accordance with the terms thereof, notwithstanding that
Enterprise, Atlantic or Liberty, as applicable, was not so obligated and (y) not
have the right to elect the commencement of the amortization of the Enterprise
Net Investment, the Atlantic Net Investment, or the Liberty Net Investment, as
applicable, pursuant to the definition of "Enterprise Reinvestment Termination
Date", "Atlantic Reinvestment Termination Date", or "Liberty Reinvestment
Termination Date", as applicable, notwithstanding that Enterprise, Atlantic or
Liberty, as applicable, had such right).
(b) ASSIGNMENT. No Enterprise Bank Investor, Atlantic Bank Investor or
Liberty Bank Investor may assign all or a portion of its interests in the
Enterprise Net Investment, the Atlantic Net Investment or the Liberty Net
Investment, as applicable, or in the Receivables, and Collections, Related
Security and Proceeds with respect thereto and its rights and obligations
hereunder to any Person unless approved in writing by the Agent. In the case of
an assignment by an Enterprise Bank Investor, an Atlantic Bank Investor or a
Liberty Bank Investor to another Person, the assignor shall deliver to the
assignee(s) an Assignment and Assumption Agreement in substantially the form of
Exhibit G attached hereto, duly executed, assigning to the assignee a pro rata
interest in the Enterprise Net Investment, the Atlantic Net Investment or the
Liberty Net Investment, as applicable, and also in the Receivables, and
Collections, Related Security and Proceeds with respect thereto and the
assignor's rights and obligations hereunder and the assignor shall promptly
execute and deliver all further instruments and documents, and take all further
action, that the assignee may reasonably request, in order to protect, or more
fully evidence the assignee's right, title and interest in and to such interest
and to enable the Agent, on behalf of such assignee, to exercise or enforce any
rights hereunder and under the other Transaction Documents to which such
assignor is or, immediately prior to such assignment, was a party. Upon any such
assignment, (i) the assignee shall have all of the rights and obligations of the
assignor hereunder and under the other Transaction Documents to which such
assignor is or, immediately prior to such assignment, was a party with respect
to such interest for all purposes of this Agreement and under the other
Transaction Documents to which such assignor is or, immediately prior to such
assignment, was a party, and (ii) the assignor shall relinquish its rights with
respect to such interest for all purposes of this Agreement and under the other
Transaction Documents to which such assignor is or, immediately prior to such
assignment, was a party. No such assignment shall be effective unless the Agent,
on behalf of Enterprise, Atlantic or Liberty, and the Transferor shall have
consented thereto and a fully executed copy of the related Assignment and
Assumption Agreement shall be delivered to the Agent. All costs and expenses of
the Agent and the initial Enterprise Bank Investor, the initial
90
Atlantic Bank Investor or the initial Liberty Bank Investor, as assignor,
incurred in connection with any assignment hereunder shall be borne by the
Transferor and not by the Agent or the initial Enterprise Bank Investor, the
initial Atlantic Bank Investor or Liberty Bank Investor. No Enterprise Bank
Investor, Atlantic Bank Investor or Liberty Bank Investor, as applicable, shall
assign any portion of its Commitment hereunder without also simultaneously
assigning an equal portion of its interest in a Liquidity Provider Agreement.
Notwithstanding the foregoing, the agreements set forth in Section 11.9 herein
shall be continuing and shall survive any assignment pursuant to this Section
10.7(b).
(c) EFFECTS OF ASSIGNMENT. By executing and delivering an Assignment
and Assumption Agreement, the assignor and assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Assumption Agreement, the assignor makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, the other Transaction Documents or any other instrument or document
furnished pursuant hereto or thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value or this Agreement, the other
Transaction Documents or any such other instrument or document; (ii) the
assignor makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Transferor, the Seller or the
Collection Agent or the performance or observance by the Transferor, the Seller
or the Collection Agent of any of their respective obligations under this
Agreement, the Purchase Agreement, the other Transaction Documents or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, the Purchase Agreement and such
other instruments, documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Assumption Agreement and to purchase such interest; (iv) such assignee will,
independently and without reliance upon the Agent, or any of its Affiliates, or
the assignor and based on such agreements, documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Transaction
Documents; (v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement,
the other Transaction Documents and any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto and to
enforce its respective rights and interests in and under this Agreement, the
other Transaction Documents, the Receivables, the Contracts and the Related
Security; (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
other Transaction Documents are required to be performed by it as the assignee
of the assignor; and (vii) such assignee agrees that it will not institute
against Enterprise, Atlantic or Liberty any proceeding of the type referred to
in Section 11.9 prior to the date which is one year and one day after the
payment in full of all of such Person's Commercial Paper issued by such Person.
(d) TRANSFEROR'S OBLIGATION TO PAY CERTAIN AMOUNTS; ADDITIONAL
ASSIGNMENT AMOUNT. The Transferor shall pay to the Agent, for the account of
Enterprise, Atlantic or Liberty,
91
in connection with any assignment by Enterprise to the Enterprise Bank
Investors, Atlantic to the Atlantic Bank Investors or Liberty to the Liberty
Bank Investors, as applicable, pursuant to this Section 10.7, an aggregate
amount equal to all Enterprise Discount, Atlantic Discount or Liberty Discount,
as applicable, to accrue through the end of each outstanding Enterprise Tranche
Period, Atlantic Tranche Period or Liberty Tranche Period, as applicable, plus
all other Aggregate Unpaids owing to such Person(other than the Enterprise Net
Investment, the Atlantic Net Investment or the Liberty Net Investment, as
applicable). To the extent that such Enterprise Discount, Atlantic Discount or
Liberty Discount relates to interest or discount on Related Commercial Paper, if
the Transferor fails to make payment of such amounts at or prior to the time of
assignment by Enterprise to the Enterprise Bank Investors, Atlantic to the
Atlantic Bank Investors, or Liberty to the Liberty Bank Investors, as
applicable, such amount shall be paid by the Enterprise Bank Investors, the
Atlantic Bank Investors or the Liberty Bank Investors, as applicable, (in
accordance with their respective Pro Rata Shares) to Enterprise, Atlantic or
Liberty, as applicable, as additional consideration for the interests assigned
to the Enterprise Bank Investors, the Atlantic Bank Investors and the Liberty
Bank Investors, as applicable, and the amount of the "Enterprise Net
Investment", "Atlantic Net Investment" or "Liberty Net Investment", as
applicable, hereunder held by the Enterprise Bank Investors, Atlantic Bank
Investors or Liberty Bank Investors shall be increased by an amount equal to the
additional amount so paid by the Enterprise Bank Investors, Atlantic Bank
Investors or Liberty Bank Investors.
(e) PAYMENTS. After any assignment by Enterprise to the Enterprise Bank
Investors, Atlantic to the Atlantic Bank Investors or Liberty to the Liberty
Bank Investors pursuant to this Section 10.7, all payments to be made hereunder
by the Transferor or the Collection Agent to the Enterprise Bank Investors, the
Atlantic Bank Investors or the Liberty Bank Investors, as applicable, shall be
made to the Enterprise Agent's, the Atlantic Agent's or the Liberty Agent's, as
applicable, account as such account shall have been notified to the Transferor
and the Collection Agent. In the event that the related Assignment Amount paid
by the Enterprise Bank Investors, the Atlantic Bank Investors or the Liberty
Bank Investors, as applicable, pursuant to Section 10.7(a) is less than the sum
of the Enterprise Net Investment, the Atlantic Net Investment or the Liberty Net
Investment, as applicable, PLUS the Interest Component of all outstanding
Related Commercial Paper of Enterprise, Atlantic or Liberty, as applicable, then
to the extent payments made hereunder in respect of the Enterprise Net
Investment, the Atlantic Net Investment or the Liberty Net Investment, as
applicable, exceed the related Assignment Amount, such excess amounts shall be
remitted by the Enterprise Bank Investors to Enterprise, by the Atlantic Bank
Investors to Atlantic and by the Liberty Bank Investors to Liberty, as
applicable.
(f) DOWNGRADE OF BANK INVESTOR. If at any time prior to any assignment
by Enterprise to the Enterprise Bank Investors, by Atlantic to the Atlantic Bank
Investors or by Liberty to the Liberty Bank Investors as contemplated pursuant
to this Section 10.7, the short term debt rating of any Enterprise Bank
Investor, Atlantic Bank Investor or Liberty Bank Investor shall be "A-2" or
"P-2" from Standard & Poor's or Xxxxx'x, respectively, with negative credit
implications (and there is no fronting arrangement or other arrangement in place
which is acceptable to the Transferor and the Agent), such Enterprise Bank
Investor, Atlantic Bank Investor or Liberty Bank Investor, as applicable, upon
request of the Enterprise Agent, Atlantic Agent or Liberty Agent, as
92
applicable, shall, within 30 days of such request, assign its rights and
obligations hereunder to another financial institution (which institution's
short term debt shall be rated at least "A-2" and "P-2" from Standard & Poor's
and Xxxxx'x, respectively, and which shall not be so rated with negative credit
implications). If the short term debt rating of an Enterprise Bank Investor, an
Atlantic Bank Investor or a Liberty Bank Investor shall be "A-3" or "P-3", or
lower, from Standard & Poor's or Xxxxx'x, respectively (or such rating shall
have been withdrawn by Standard & Poor's or Xxxxx'x), such Enterprise Bank
Investor, Atlantic Bank Investor or Liberty Bank Investor, as applicable, upon
request of the Enterprise Agent, Atlantic Agent or Liberty Agent, as applicable,
shall, within five (5) Business Days of such request, assign its rights and
obligations hereunder to another financial institution (which institution's
short term debt shall be rated at least "A-2" and "P-2" from Standard & Poor's
and Xxxxx'x, respectively, and which shall not be so rated with negative credit
implications). In either such case, if any such Enterprise Bank Investor,
Atlantic Bank Investor or Liberty Bank Investor shall not have assigned its
rights and obligations under this Agreement within the applicable time period
described above, Enterprise, Atlantic or Liberty, as applicable, shall have the
right to require such Enterprise Bank Investor, Atlantic Bank Investor or
Liberty Bank Investor, as applicable, to accept the assignment of such
Enterprise Bank Investor's, Atlantic Bank Investor's or Liberty Bank Investor's
Pro Rata Share of the Enterprise Net Investment, the Atlantic Net Investment or
the Liberty Net Investment, as applicable; such assignment shall occur in
accordance with the applicable provisions of this Section 10.7. Such Enterprise
Bank Investor, Atlantic Bank Investor or Liberty Bank Investor, as applicable
shall be obligated to pay to Enterprise, Atlantic or Liberty, as applicable, in
connection with such assignment, in addition to the Pro Rata Share of the
Enterprise Net Investment, Atlantic Net Investment or Liberty Net Investment, as
applicable, an amount equal to the interest component of the outstanding
Commercial Paper issued to fund the portion of the Enterprise Net Investment,
Atlantic Net Investment or Liberty Net Investment, as applicable, being assigned
to such Enterprise Bank Investor, Atlantic Bank Investor or Liberty Bank
Investor, as applicable, as reasonably determined by the Enterprise Agent, the
Atlantic Agent or the Liberty Agent, as applicable. In addition, such Enterprise
Bank Investor, Atlantic Bank Investor or Liberty Bank Investor, as applicable,
shall pay to the Enterprise Agent, the Atlantic Agent or the Liberty Agent, as
applicable, the amount (the "Unused Commitment Fee") of any unused Commitment of
such downgraded Enterprise Bank Investor, Atlantic Bank Investor or Liberty Bank
Investor, as applicable. The Enterprise Agent, Atlantic Agent or Liberty Agent,
as applicable, shall deposit such Unused Commitment Amount in an account of the
Enterprise Agent's, Atlantic Agent's or Liberty Agent's, as applicable, name,
and shall apply such amounts to fund such Enterprise Bank Investor's, Atlantic
Bank Investor's or Liberty Bank Investor's Pro Rata Share of any Incremental
Transfer required to be funded by such the Enterprise Bank Investors, Atlantic
Bank Investors or Liberty Bank Investors, as applicable, subject to the terms
and conditions hereof. The proceeds of such account shall be invested in
Eligible Investments and any investment income with respect thereto shall be
paid to such Enterprise Bank Investor, Atlantic Bank Investor or Liberty Bank
Investor, as applicable, on a monthly basis. All amounts remaining in such
account shall be released to such Enterprise Bank Investor, Atlantic Bank
Investor or Liberty Bank Investor, as applicable, on the Business Day
immediately following the earliest of: (x) the effective date of any replacement
of such Enterprise Bank Investor, Atlantic Bank Investor or Liberty Bank
Investor, as applicable,
93
or removal thereof as a party to this Agreement, (y) the date on which such
Enterprise Bank Investor, Atlantic Bank Investor or Liberty Bank Investor, as
applicable, shall furnish the Enterprise Agent, Atlantic Agent or Liberty Agent
with evidence that its short term debt rating is higher than "A-2" or "P-2" from
Standard & Poor's and Moody's, respectively, and (z) the Enterprise Termination
Date (except for an Enterprise Reinvestment Termination Date), the Atlantic
Termination Date (except for an Atlantic Reinvestment Termination Date), or the
Liberty Termination Date (except for a Liberty Reinvestment Termination Date),
as applicable. Notwithstanding anything contained herein to the contrary, upon
any such assignment to a downgraded Enterprise Bank Investor, Atlantic Bank
Investor or Liberty Bank Investor as contemplated pursuant to the immediately
preceding sentence, the aggregate available amount of the Facility Limit, solely
as it relates to new Incremental Transfers by Enterprise, Atlantic or Liberty,
shall be reduced by the amount of unused Commitment of such downgraded
Enterprise Bank Investor, Atlantic Bank Investor or Liberty Bank Investor; it
being understood and agreed, that nothing in this sentence or the two preceding
sentences shall affect or diminish in any way any such downgraded Enterprise
Bank Investor's, Atlantic Bank Investor's or Liberty Bank Investor's Commitment
to the Transferor or such downgraded Enterprise Bank Investor's, Atlantic Bank
Investor's or Liberty Bank Investor's other obligations and liabilities
hereunder and under the other Transaction Documents.
94
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. TERM OF AGREEMENT. This Agreement shall terminate on the
date following the Enterprise Termination Date, Atlantic Termination Date and
Liberty Termination Date upon which the Net Investment has been reduced to zero,
all accrued Enterprise Discount, Atlantic Discount and Liberty Discount and all
Servicing Fees have been paid in full, and all other Aggregate Unpaids have been
paid in full, in each case, in cash; PROVIDED, HOWEVER, that (i) the rights and
remedies of the Agent, the Investors and the Administrative Agent with respect
to any representation and warranty made or deemed to be made by the Transferor
pursuant to this Agreement, (ii) the indemnification and payment provisions of
Article VIII, (iii) Tech Data's obligations under Article IX and (iv) the
agreements set forth in Section 11.8 and 11.9 hereof, shall be continuing and
shall survive any termination of this Agreement.
SECTION 11.2. WAIVERS; AMENDMENTS. (a) No failure or delay on the part
of the Agent, the Administrative Agent or any Investor 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.
(b) Any provision of this Agreement may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Transferor, the Agent, Enterprise (so long as Enterprise holds any portion of
the Transferred Interest), Atlantic (so long as Atlantic holds any portion of
the Transferred Interest), Liberty (so long as Liberty holds any portion of the
Transferred Interest), the Enterprise Agent, the Atlantic Agent, the Liberty
Agent and the Majority Investors; PROVIDED, that no such amendment or waiver
shall (i) without the prior written consent of all Enterprise Bank Investors,
amend, modify or waive any provision of this Agreement in any way which would
reduce or impair Collections or the payment of the Enterprise Net Investment,
Enterprise Discount or fees payable hereunder to the Enterprise Bank Investors,
(ii) without the prior written consent of all Atlantic Bank Investors, amend,
modify or waive any provision of this Agreement in any way which would reduce or
impair Collections or the payment of the Atlantic Net Investment, Atlantic
Discount or fees payable hereunder to the Atlantic Bank Investors, or (iii)
without the prior written consent of all Liberty Bank Investors, amend, modify
or waive any provision of this Agreement in any way which would reduce or impair
Collections or the payment of the Liberty Net Investment, Liberty Discount or
fees payable hereunder to the Liberty Bank Investors; PROVIDED FURTHER, that no
such amendment or waiver shall, without the prior written consent of each
Enterprise Bank Investor, each Atlantic Bank Investor and each Liberty Bank
Investor directly affected thereby, amend, modify or waive any provision of this
Agreement in any way which would (A) increase the Servicing Fee (other than as
permitted pursuant to Section 6.2(b)), (B) modify any provision of this
Agreement or the Purchase Agreement relating to the timing of payments required
to be made by the Transferor,
95
the Seller or the Guarantor or the application of the proceeds of such payments,
(C) permit the appointment of any Person (other than the Agent) as successor
Collection Agent, (D) release any property from the lien provided by this
Agreement (other than as expressly contemplated herein), or (E) release Tech
Data from any of its obligations under the Guaranty. Notwithstanding the
foregoing, the Agent, the Transferor, Tech Data and Enterprise, Atlantic or
Liberty, as applicable, and the applicable Enterprise Bank Investor(s), Atlantic
Bank Investor(s) or Liberty Bank Investor(s) may amend this Agreement to (A)
increase the dollar amount of an Enterprise Bank Investor's, Atlantic Bank
Investor's or Liberty Bank Investor's Commitment (and similarly increase the
Enterprise Facility Limit, Atlantic Facility Limit or Liberty Facility Limit and
the Enterprise Maximum Net Investment, the Atlantic Maximum Net Investment or
the Liberty Maximum Net Investment) or (B) increase the Enterprise Facility
Limit, Atlantic Facility Limit or Liberty Facility Limit (and similarly increase
the Enterprise Maximum Net Investment, the Atlantic Maximum Net Investment or
the Liberty Maximum Net Investment) by adding a financial institution as an
Enterprise Bank Investor, an Atlantic Bank Investor or a Liberty Bank Investor
party hereto; PROVIDED, that in each case after giving effect to any such
amendment the aggregate Enterprise Bank Investors', Atlantic Bank Investors' or
Liberty Bank Investors' Commitment at least equals the Enterprise Facility
Limit, the Atlantic Facility Limit or the Liberty Facility Limit, as applicable.
SECTION 11.3. NOTICES. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including bank wire, telex,
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other party at its address or telecopy number set forth below or at
such other address or telecopy number as such party may hereafter specify for
the purposes of notice to such party. Each such notice or other communication
shall be effective (i) if given by telecopy, when such telecopy is transmitted
to the telecopy number specified in this Section 11.3 and confirmation is
received, (ii) if given by mail 3 Business Days following such posting, postage
prepaid, U.S. certified or registered, (iii) if given by overnight courier, one
(1) Business Day after deposit thereof with a national overnight courier
service, or (iv) if given by any other means, when received at the address
specified in this Section 11.3. However, anything in this Section 11.3 to the
contrary notwithstanding, the Transferor hereby authorizes Enterprise, Atlantic
and Liberty to effect Transfers, the Enterprise Tranche Period, Atlantic Tranche
Period and Liberty Tranche Period and the Enterprise Tranche Rate, Atlantic
Tranche Rate and Liberty Tranche Rate selections based on telephonic notices
made by any Person which Enterprise, Atlantic or Liberty in good faith believes
to be acting on behalf of the Transferor. The Transferor agrees to deliver
promptly to Enterprise, Atlantic or Liberty, as applicable, a written
confirmation of each telephonic notice signed by an authorized officer of
Transferor. However, the absence of such confirmation shall not affect the
validity of such notice. If the written confirmation differs in any material
respect from the action taken by Enterprise, Atlantic or Liberty, the records of
Enterprise, Atlantic or Liberty, as applicable, shall govern absent manifest
error.
96
If to Enterprise:
Enterprise Funding Corporation
c/o Global Securitization Services
00 Xxxx 00xx Xx., Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(with a copy to the Administrative Agent)
If to Atlantic:
Atlantic Asset Securitization Corp.
c/o Credit Lyonnais New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Credit Lyonnais New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Liberty:
Liberty Street Funding Corp.
c/o Global Securitization Services
00 Xxxx 00xx Xx., Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
97
with a copy to:
The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Transferor:
Tech Data Finance, Inc.
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Tech Data:
Tech Data Corporation
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(with a copy to General Counsel)
If to the Agent:
NationsBank, N.A.
NationsBank Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Global Asset-Backed Securitization
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
98
If to the Administrative Agent:
NationsBank, N.A.
NationsBank Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Global Asset-Backed Securitization
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Enterprise Bank Investors, the Atlantic Bank Investors or the Liberty
Bank Investors, at their respective addresses set forth on the signature pages
hereto or of the Assignment and Assumption Agreement pursuant to which it became
a party hereto.
SECTION 11.4. GOVERNING LAW; SUBMISSION TO JURISDICTION; INTEGRATION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE TRANSFEROR HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE
CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The
Transferor hereby irrevocably waives, to the fullest extent it may effectively
do so, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
Nothing in this Section 11.4 shall affect the right of Enterprise, Atlantic or
Liberty to bring any action or proceeding against the Transferor or its property
in the courts of other jurisdictions.
(b) This Agreement contains 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.
SECTION 11.5. SEVERABILITY; COUNTERPARTS. 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. Execution and delivery of this Agreement may be made by facsimile.
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.
99
SECTION 11.6. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding on the parties hereto and
their respective successors and assigns; PROVIDED, HOWEVER, that the Transferor
may not assign any of its rights or delegate any of its duties hereunder without
the prior written consent of the Agent and the Majority Investors. No provision
of this Agreement shall in any manner restrict the ability of Enterprise,
Atlantic or Liberty to assign, participate, grant security interests in, or
otherwise transfer any portion of the Transferred Interest held by it.
(b) The Transferor hereby agrees and consents to the assignment by
Enterprise, Atlantic or Liberty from time to time of all or any part of its
rights under, interest in and title to this Agreement and the Transferred
Interest held by it to any related Liquidity Provider. In addition, the
Transferor hereby consents to and acknowledges the assignment by Enterprise,
Atlantic or Liberty, as applicable, of all of its rights under, interest in and
title to this Agreement and the Transferred Interest held by it to the related
Collateral Agent.
(c) Without limiting the foregoing, Enterprise may, from time to
time, with prior or concurrent notice to Transferor and Collection Agent, in one
transaction or a series of transactions, assign all or a portion of the
Enterprise Net Investment and its rights and obligations under this Agreement
and any other Transaction Documents to which it is a party to a Conduit
Assignee. Upon and to the extent of such assignment by Enterprise to a Conduit
Assignee, (i) such Conduit Assignee shall be the owner of the assigned portion
of the Enterprise Net Investment, (ii) the related administrative or managing
agent for such Conduit Assignee will act as the Enterprise Agent for such
Conduit Assignee, with all corresponding rights and powers, express or implied,
granted to the Enterprise Agent hereunder or under the other Transaction
Documents, (iii) such Conduit Assignee and its liquidity support provider(s) and
credit support provider(s) and other related parties shall have the benefit of
all the rights and protections provided to Enterprise and its Liquidity Support
Provider(s) and Credit Support Provider(s), respectively, herein and in the
other Transaction Documents (including, without limitation, any limitation on
recourse against such Conduit Assignee or related parties, any agreement not to
file or join in the filing of a petition to commence an insolvency proceeding
against such Conduit Assignee, and the right to assign to another Conduit
Assignee as provided in this paragraph), (iv) such Conduit Assignee shall assume
all (or the assigned or assumed portion) of Enterprise's obligations, if any,
hereunder or any other Transaction Document, and Enterprise shall be released
from such obligations, in each case to the extent of such assignment, and the
obligations of Enterprise and such Conduit Assignee shall be several and not
joint, (v) all distributions in respect of the Enterprise Net Investment shall
be made to the applicable agent or administrative agent, as applicable, on
behalf of Enterprise and such Conduit Assignee on a pro rata basis according to
their respective interests, (vi) the definition of the term "Enterprise CP Rate"
with respect to the portion of the Enterprise Net Investment funded with
commercial paper issued by Enterprise from time to time shall be determined in
the manner set forth in the definition of "Enterprise CP Rate" applicable to
Enterprise on the basis of the interest rate or discount applicable to
commercial paper issued by such Conduit Assignee (rather than Enterprise), (vii)
100
the defined terms and other terms and provisions of this Agreement and the other
Transaction Documents shall be interpreted in accordance with the foregoing, and
(viii) if requested by the Agent or the agent or administrative agent with
respect to the Conduit Assignee, the parties will execute and deliver such
further agreements and documents and take such other actions as the Agent or
such agent or administrative agent may reasonably request to evidence and give
effect to the foregoing. No Assignment by Enterprise to a Conduit Assignee of
all or any portion of the Enterprise Net Investment shall in any way diminish
the related Enterprise Bank Investors' obligation under Section 10.7 to fund any
Incremental Transfer not funded by Enterprise or such Conduit Assignee or to
acquire from Enterprise or such Conduit Assignee all or any portion of the
Enterprise Net Investment.
SECTION 11.7. WAIVER OF CONFIDENTIALITY. The Transferor and Tech Data
hereby consent to the disclosure of any non-public information with respect to
it received by the Agent, any Investor or the Administrative Agent to any of the
Agent, any Investor, any nationally recognized rating agency rating
Enterprise's, Atlantic's or Liberty's, as applicable, Commercial Paper, the
Administrative Agent, the Collateral Agent, any Enterprise Bank Investor,
Atlantic Bank Investor, Liberty Bank Investor or potential Enterprise Bank
Investor, Atlantic Bank Investor, Liberty Bank Investor, any related Liquidity
Provider or any related Credit Support Provider in relation to this Agreement.
SECTION 11.8. CONFIDENTIALITY AGREEMENT. The Transferor and Tech Data
hereby agree that they will not disclose the contents of this Agreement or any
other proprietary or confidential information of the Agent, Enterprise,
Atlantic, Liberty, the Administrative Agent, any Enterprise Bank Investor, any
Atlantic Bank Investor, any Liberty Bank Investor, the Collateral Agent, any
related Liquidity Provider or any related Credit Support Provider to any other
Person except (i) its auditors and attorneys, employees or financial advisors
(other than any commercial bank) and any nationally recognized rating agency,
PROVIDED such auditors, attorneys, employees, financial advisors or rating
agencies are informed of the highly confidential nature of such information or
(ii) as otherwise required by applicable law or order of a court of competent
jurisdiction.
SECTION 11.9. NO BANKRUPTCY PETITION AGAINST ENTERPRISE, ATLANTIC OR
LIBERTY. Each party hereto hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all outstanding
Commercial Paper or other indebtedness of Enterprise, Atlantic and Liberty,
respectively, it will not institute against, or join any other Person in
instituting against, Enterprise, Atlantic or Liberty 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 11.10. NO RECOURSE AGAINST STOCKHOLDERS, OFFICERS OR DIRECTORS.
Notwithstanding anything to the contrary contained in this Agreement, the
obligations of Enterprise, Atlantic and Liberty under this Agreement and all
other Transaction Documents are solely the corporate obligations of Enterprise,
Atlantic and Liberty, respectively, and shall be
101
payable solely to the extent of funds received from the Transferor in accordance
herewith or from any party to any Transaction Document in accordance with the
terms thereof in excess of funds necessary to pay matured and maturing
Commercial Paper of Enterprise, Atlantic or Liberty, as applicable.
No recourse under any obligation, covenant or agreement of Enterprise,
Atlantic or Liberty contained in this Agreement shall be had against Global
Securitization LLC (or any affiliate thereof), Lord Securities Corporation (or
any affiliate thereof), or any stockholder, officer or director of Enterprise,
Atlantic or Liberty as such, by the enforcement of any assessment or by any
legal or equitable proceeding, by virtue of any statute or otherwise; it being
expressly agreed and understood that this Agreement is solely a corporate
obligation of each of Enterprise, Atlantic and Liberty, respectively, and that
no personal liability whatsoever shall attach to or be incurred by Global
Securitization LLC (or any affiliate thereof), Lord Securities Corporation (or
any affiliate thereof), or the stockholders, officers or directors of
Enterprise, Atlantic or Liberty as such, or any of them, under or by reason of
any of the obligations, covenants or agreements of Enterprise, Atlantic or
Liberty contained in this Agreement, or implied therefrom, and that any and all
personal liability for breaches by Enterprise, Atlantic or Liberty of any of
such obligations, covenants or agreements, either at common law or at equity, or
by statute or constitution, of Global Securitization LLC (or any affiliate
thereof), Lord Securities Corporation (or any affiliate thereof) and every such
stockholder, officer or director of Enterprise, Atlantic and Liberty is hereby
expressly waived as a condition of and consideration for the execution of this
Agreement.
SECTION 11.11. CHARACTERIZATION OF THE TRANSACTIONS CONTEMPLATED BY THE
AGREEMENT. It is the intention of the parties that the transactions contemplated
hereby constitute the sale of the Transferred Interest, conveying good title
thereto free and clear of any Adverse Claims to the Agent, on behalf of the
Investors, and that the Transferred Interest not be part of the Transferor's
estate in the event of an insolvency. If, notwithstanding the foregoing, the
transactions contemplated hereby should be deemed a financing, the parties
intend that the Transferor shall be deemed to have granted to the Agent, on
behalf of the Investors, and the Transferor hereby grants to the Agent, on
behalf of the Investors, a first priority perfected security interest in all of
the Transferor's right, title and interest in, to and under the Receivables,
together with Related Security and Collections with respect thereto, and that
this Agreement shall constitute a security agreement under applicable law. The
Transferor hereby grants a security interest in and assigns to the Agent, on
behalf of the Investors, all of its rights and remedies under the Purchase
Agreement with respect to the Receivables and with respect to any obligations
thereunder of Tech Data with respect to the Receivables.
SECTION 11.12. OPTIONAL RECONVEYANCE OF ALL RECEIVABLES. The Transferor
shall have the option at any time to require the Agent, on behalf of the
Investors, as applicable, to reconvey all of it's interest in the Receivables to
the Transferor subject to the following terms and conditions: (a) the Transferor
shall give the Agent not less than 10 Business Days notice of the Transferor's
exercise of this option and (b) simultaneously with the reconveyance by the
Agent to
102
the Transferor of the Agent's interest in the Receivables, the Transferor shall
pay to the Agent, for the benefit of the applicable Investors, an amount equal
to the Net Investment plus all discount accrued and to accrue on Enterprise's,
Atlantic's and Liberty's Related Commercial Paper to maturity, together with any
other costs associated with the receipt by Enterprise of the Enterprise Net
Investment, Atlantic of the Atlantic Net Investment and Liberty of the Liberty
Net Investment on a day other than the last day of an Enterprise Tranche Period,
an Atlantic Tranche Period or a Liberty Tranche Period, as applicable, along
with any other amounts owing hereunder to the Investors by the Transferor.
SECTION 11.13. MANDATORY RECONVEYANCE OF CERTAIN RECEIVABLES. The
Agent, on behalf of the Investors, as applicable, upon each occasion on which
the Transferor shall be required to reconvey any Receivables to Tech Data
pursuant to Section 7.2(a) of the Purchase Agreement, shall be considered to
have reconveyed and does hereby reconvey to the Transferor such Receivables
(including the Transferred Interest therein) and upon such reconveyance, hereby
terminates its interest in any such Receivables; PROVIDED THAT no such
reconveyance by the Agent shall occur or be deemed to have occurred if (a) any
Event of Termination shall have occurred and be continuing hereunder or (b) Tech
Data shall not have contemporaneously with such reconveyance sold to the
Transferor a substitute receivable as described in Section 7.2(b) of the
Purchase Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
103
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Second Amended and Restated Transfer and Administration Agreement as of the day
first written above.
ENTERPRISE FUNDING CORPORATION,
By: /s/ XXXXX X.XXXXX
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
ATLANTIC ASSET SECURITIZATION CORP.
By: CREDIT LYONNAIS NEW YORK BRANCH,
as attorney-in-fact
By: /s/ XXXXXXXXXXX XXXXXXXXXX
------------------------------------------
Name: Xxxxxxxxxxx Xxxxxxxxxx
Title: Vice President
LIBERTY STREET FUNDING CORP.
By: /s/ XXXXXX X. XXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
TECH DATA FINANCE, INC.,
as Transferor
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
TECH DATA CORPORATION,
as Collection Agent and Guarantor
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
COMMITMENT NATIONSBANK, N.A., as Agent, Enterprise Agent
$205,000,000 and as an Enterprise Bank Investor
By: /s/ XXXXXXXX XXXXX
------------------------------------------
Name: Xxxxxxxx Xxxxx
Title:
COMMITMENT CREDIT LYONNAIS NEW YORK BRANCH,
$102,000,000 as Atlantic Agent and as an Atlantic Bank
Investor
By: /s/ XXXXXXXXXXX XXXXXXXXXX
------------------------------------------
Name: Xxxxxxxxxxx Xxxxxxxxxx
Title: Vice President
COMMITMENT THE BANK OF NOVA SCOTIA, as Liberty
$153,000,000 Agent and as a Liberty Bank Investor
By: /s/ ILLEGIBLE
------------------------------------------
Name:
Title:
COMMITMENT THE ROYAL BANK OF CANADA, as an
$50,000,000 Enterprise Bank Investor
By: /s/ XXXXXX X. XXXX
------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Manager
By: /s/ XXXXXXXX XXXXXX
------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Marketing Asst.
