EXHIBIT 10.4
PROGRAM FOR ACCOUNTS RECEIVABLE TRANSFER AGREEMENT
THIS PROGRAM FOR ACCOUNTS RECEIVABLE TRANSFER AGREEMENT is made this 9th day of
April, 2003 between BANK OF AMERICA, N.A. (together with any successor, "BofA")
and APPLIED MATERIALS, INC., a Delaware corporation ("Client").
Recitals
Client from time to time will own accounts receivable resulting from Client's,
or Client's wholly-owned subsidiaries', sale of products or services. Client
wishes to sell certain accounts receivable to BofA in accordance with the terms
hereof. For purposes hereof, terms defined in Annex I hereto shall have the
respective meanings assigned therein.
Therefore, for good and valuable consideration, the parties agree as follows:
1. Purchase of Receivables.
(a) In connection with the execution and delivery of this
Agreement, Client shall sell to BofA Receivables owned by Client, and
BofA shall purchase such Receivables from Client, on the terms set
forth herein and on the initial Schedule A hereto (such Schedule A and
each other Schedule A hereto being incorporated herein by reference).
After the date hereof, Client may from time to time (x) seek the right
to sell to BofA other Receivables owned by Client and (y) submit a
proposed related Schedule A, in form and substance satisfactory to
BofA, executed by Client. Within 5 days after the initial tender of
Receivables in connection with any proposed Schedule A, BofA shall
notify Client if BofA wishes to accept the proposed Schedule A and
purchase any or all of such Receivables. The purchase of any such
Receivables by BofA shall be made pursuant to the terms hereof.
All Purchased Receivables shall be evidenced by invoices (in
electronic or paper form), which invoices shall comport with the
following as specified on the relevant Schedule A: (i) the tenors of
the Minimum Invoice Tenor Period and Maximum Invoice Tenor Period, (ii)
the Minimum Invoice Amount, and (iii) no grace period related thereto
shall exceed the Past Due Grace Period. Without limiting the other
terms of this Agreement, BofA's purchase of Receivables of an Approved
Account Debtor shall be subject to the following conditions: (A) Client
shall submit an executed Schedule A relating to such Receivables, which
shall contain the relevant terms and conditions with respect thereto,
(B) BofA shall sign such Schedule A and return it to Client, (C) the
aggregate amount of such Receivables being purchased shall be equal to
the relevant Required Amount, (D) the relevant Schedule A shall contain
the Effective Date. All Receivables purchased by BofA shall be
purchased on a non-recourse basis (other than with respect to the
limited repurchase obligations provided herein). It is the express
intention of the parties to this Agreement that the purchase of
Receivables hereunder shall be, and shall be construed as, a true sale
of such Receivables by Client to BofA. Client acknowledges that the
representations and warranties made herein (including without
limitation in Section 4) are a material inducement of BofA's purchase
of the Receivables to be purchased hereunder.
On or prior to the date hereof, Client shall have furnished to
BofA such authorizing corporate resolutions, corporate organizational
documents and legal opinions (covering, at a minimum, (x) due
authorization, execution and delivery, (y) enforceability and
perfection and (z) true sale) as BofA may request.
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(b) The parties agree as follows with respect to
Receivables that are being purchased by BofA pursuant to Schedule A-1
and that BofA elects to purchase in connection with any other executed
Schedule A submitted by Client to BofA:
(1) The purchase price (the "Purchase Price")
for each Receivable purchased shall be the percentage of the
face value thereof as set forth on the relevant Schedule A
with respect to such Receivable.
(2) The parties shall consummate Client's sale
of the subject Receivables as promptly as practicable after
BofA's election to purchase such Receivables. The parties
shall take the following actions to effect each such purchase
and sale:
(i) On each Effective Date, BofA shall
pay Client an amount equal to the aggregate Purchase
Price for the Receivables to be purchased on such
date, which shall be wired to the following account:
Bank: Mellon Bank N.A.; ABA: 000000000; Acct. No.:
020-8830; For: Applied Materials, Inc..
(ii) With respect to all Remittances of
cash required to be paid over to BofA pursuant to
Section 1(b)(4), Client shall make such payment in
the form of a wire transfer to the following account:
Bank: Bank of America, N.A., New York, NY; ABA: 026
009 593; Account No.: 6550-219386; For: Rate
Derivative Settlements - Attn: Xxxxx Xxxxxx.
(iii) Client shall execute and deliver to
BofA an assignment of or schedule of accounts with
respect to (or both) each Receivable to be purchased
in such form as BofA may require. In addition, Client
shall deliver to BofA with respect to the Receivables
to be purchased: (aa) if requested by BofA, a copy of
the purchase order signed by the applicable Account
Debtor; (bb) if requested by BofA, a valid invoice in
the form currently used by Client with regard to the
subject Receivables with evidence of shipment of
goods in accordance with any applicable purchase
order; and (cc) such other documents and certificates
as BofA may reasonably request.
(3) From and after Client's sale and BofA's
purchase of any Receivable, BofA shall (i) have exclusive
control and shall be entitled to collect and receive all
amounts payable under the Purchased Receivable and (ii) have a
first claim to any rights under a policy of insurance relating
to the Purchased Receivable. BofA shall from and after such
time be vested with all of Client's rights in the Purchased
Receivable including without limitation: (i) Client's right of
replevin and reclamation with respect to the merchandise
underlying the Purchased Receivable; and (ii) subject only to
the rights assigned to Servicer under Section 6, Client's
right to extend the time for payment under, or make any
compromise, adjustment or modification with respect to, the
Purchased Receivable. Without limiting the foregoing, Client
hereby assigns to BofA all rights of Client under each
Contract underlying a Purchased Receivable relating to the
collectibility of payments thereunder, security interests and
other liens created in connection therewith and the
enforcement thereof, but BofA does not and shall not thereby
assume any obligations of Client under any such Contract.
Notwithstanding the foregoing, (i) Client shall perform all of
its obligations (if any) pursuant to any contract or agreement
relating to any Purchased Receivables to the same extent as if
such Purchased Receivables had not been transferred hereunder
(and the exercise by BofA of its rights hereunder shall not
relieve Client from such obligations), (ii) Client shall pay
when due any taxes payable by Client under applicable law,
including any sales taxes payable in connection with Purchased
Receivables and their creation and satisfaction, and (iii)
BofA shall not have any obligation or liability with respect
to any Purchased Receivable or any security or document or
agreement related thereto, nor shall BofA be obligated to
perform any of the obligations of Client or any Account Debtor
under any of the foregoing.
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(4) All amounts received by Client with respect
to Purchased Receivables shall be tracked (separately from
amounts received by Client on Receivables of the same Account
Debtor that do not constitute Purchased Receivables) and held
in trust by Client for BofA, and Client (or Servicer, if
different from Client) will deliver to BofA all amounts
received with respect to Purchased Receivables (collectively,
"Remittances"). BofA assumes no responsibility in the
acceptance of checks or other forms of exchange in payment of
the Purchased Receivables. Irrespective of whether or not a
Termination Date has occurred, Client and/or Servicer will use
commercially reasonable efforts to remit promptly to BofA all
Remittances received on, or on account of, Purchased
Receivables, but in no event later than 10 days after receipt.
(5) BofA shall not be obligated to purchase any
Receivable hereunder unless and until: (i) BofA accepts the
Receivable for sale in accordance with the terms hereof; and
(ii) all other terms and conditions set forth herein with
respect to such purchase shall have been satisfied. BofA's
purchase of any Receivable or Receivables on one occasion
shall not obligate BofA to purchase any other Receivable on
any future occasion.
(6) All invoices relating to the Receivables to
be purchased shall be in a form substantially similar to the
form of invoice with respect to such Receivables initially
reviewed and approved by BofA prior to the relevant Effective
Date (or in such other form as BofA may from time to time
approve).
(7) If an Approved Account Debtor, after
receiving and accepting goods or services rendered (subject to
all representations and warranties herein), has failed to pay
a Purchased Receivable solely because of such Account Debtor's
Financial Inability To Pay, BofA shall bear any loss thereon.
If nonpayment is due to any other reason, however, each
affected Purchased Receivable shall be subject to repurchase
as provided in Section 9(a). Specifically, a Receivable shall
be required to be repurchased by Client (i) if nonpayment is
because of the assertion of any claim or dispute by an Account
Debtor based on or arising out of its commercial dealings or
transactions with Client, including without limitation,
disputes, denial of a claim, lack of adequate delivery,
quantity, quality, or other deficiency relating to the goods
and services, or the exercise of any counterclaim or offset
(whether or not such claim, dispute, counterclaim or offset
relates to the specific Purchased Receivable), which claim,
dispute, counterclaim or offset has resulted or in Client's
good faith opinion is reasonably likely to result in a
reduction of the amount receivable in respect of such
Purchased Receivable, or (ii) if any representation or
warranty made by Client to BofA with respect to such Purchased
Receivable has been breached.
(c) The sale or other transfer or conveyance of Purchased
Receivables do not create, nor are they intended to create, an
assumption by BofA of any of Client's obligations in connection with
such Receivables or any agreement or instrument relating thereto,
including, without limitation, any obligation to any Account Debtor.
Notwithstanding the foregoing, it is the further intention of the
parties to this Agreement that, if a court of competent jurisdiction
were to determine that such transfer of Purchased Receivables is not a
sale, such transfer shall be deemed a grant of a first priority
security interest in such Purchased Receivables to secure a debt
(Client's return to BofA of the Purchase Price paid by BofA for the
Purchased Receivables) or any of Client's obligations to BofA under
this Agreement.
2. Term.
(a) The Client may, upon 60 days written notice to BofA,
terminate this Agreement whereupon BofA shall have no further
obligation to purchase, and Client shall have no further
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obligation to sell any Receivable hereunder (but this Agreement shall
remain effective as to Receivables purchased prior to such termination
date).
(b) With respect to any Purchased Receivable, all
Remittances in respect thereof shall be paid to BofA in accordance with
the terms of Section 1(b)(4).
3. [INTENTIONALLY OMITTED.]
4. Representations and Warranties.
(a) Each Client and Servicer represents and warrants to
BofA on the date hereof, on each applicable Effective Date and at each
time Client submits to BofA a request that BofA purchase any Receivable
that: (i) it is duly organized and validly existing and in good
standing under the laws of the jurisdiction of its organization with
the corporate power and authority to carry on its activities as now
conducted and as contemplated under this Agreement, and to execute,
deliver, perform and secure its obligations under this Agreement in
accordance with its terms; (ii) the execution, delivery and performance
by it of this Agreement (aa) have been duly authorized by all necessary
action, and (bb) do not and will not conflict with, or result in a
violation of, any applicable provision of existing law, rule or
regulation applicable to it, any judgment, order or decree applicable
to or binding on it, its charter or bylaws or any indenture, contract,
agreement, mortgage, deed of trust or other instruments to which Client
is a party or by which it or its property is bound; (iii) this
Agreement has been duly authorized, executed and delivered by it, and
is a legal, valid and binding obligation of it enforceable against it
in accordance with its terms, except to the extent, if any, that the
enforceability thereof may be limited by (aa) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, debt
adjustment or other similar law or enactment now or hereafter enacted
affecting the enforcement of creditors' rights generally and (bb)
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law); (iv) all
authorizations, permits, consents, approvals, licenses or exemptions
from, registrations or filings with, or reports to, any governmental or
regulatory unit or other party or entity necessary for it to enter into
this Agreement and to perform its obligations hereunder have been
obtained and remain in full force and effect, and no other such
authorizations, permits, consents, approvals, licenses, exemptions,
registrations, filings or reports are necessary for the due execution,
delivery and performance by it of this Agreement; (v) no agreement
exists between Client and any Account Debtor that could interfere with
such Account Debtor's payment of and performance under the Receivables
in accordance with the relevant invoices; (vi) each Contract underlying
a Purchased Receivable, by its terms, is freely transferable; (vii)
each Contract underlying a Purchased Receivable is governed according
to the laws of a state of the United States of America; and (viii) each
Contract underlying a Purchased Receivable contains (Y) no material
restrictions or limitations on Client's (or its assignee's) ability to
pursue collection of such Receivables and enforcement of such Contract
and (Z) no mandatory arbitration provisions.
(b) Client acknowledges that as to each Receivable sold
hereunder that it expressly represents, warrants, agrees (and
furthermore acknowledges that BofA is expressly relying thereon) that
immediately prior to the purchase of such Receivable by BofA pursuant
to Section 1 hereof: (i) Client is the lawful owner of each such
Receivable; (ii) each such Receivable shall be sold and assigned to
BofA as absolute owner free and clear of all liens, claims and security
interests; (iii) each such Receivable is for a certain, definite,
undisputed and liquidated amount and represents an amount owed to
Client as a result of a bona fide sale in the ordinary course of
business of a product or service to an Approved Account Debtor who is
not affiliated with Client; (iv) complete deliveries have been made
under any agreement, representation or understanding with the
applicable Account Debtor with respect to each such Receivable, and any
contracts or agreements relating to each such Receivable have been
delivered to BofA ; (v) no such Receivable is past due (i.e., unpaid
beyond the applicable Maximum Invoice Tenor Period) or for a face value
less than the applicable Minimum Invoice Amount; (vi) the applicable
Account Debtor is not, and will not be, entitled to any offset,
deduction, counterclaim, contra account and/or other
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credit with respect to such Receivable or will be subject to any
dispute or claim by an Account Debtor including, but not limited to,
with respect to price, terms, quality, quantity or delay in shipment;
(vii) no such Receivable is or shall otherwise be subject to, any
offset, counterclaim, contra account or any defense of any kind or
character with respect to any such Receivable; (viii) Client does not
have any knowledge of any fact that could reasonably be expected to
affect the validity or collectibility of any such Receivable; (ix) no
such Receivable represents a delivery of merchandise upon
"consignment," "guaranteed sale," "sale or return," "payment on
reorder" or similar terms; (x) the names of the Account Debtors and the
amounts owing on the due dates of each such Receivable are correctly
stated in all instruments of assignment, schedules, invoices or other
documentation furnished by Client to BofA; (xi) no such Receivable has
a due date that is more than the Maximum Invoice Tenor Period unless
otherwise approved by BofA; (xii) no other sale, assignment or grant of
a security interest or lien of any kind whatsoever presently exists or
will thereafter be created in favor of any person or entity with
respect to any such Receivable; (xiii) any and all information
furnished by Client to BofA in connection with the sale of each such
Receivable is and will be true and correct in all material respects at
the time that such information is furnished to BofA; (xiv) Client has
strictly complied with all applicable laws and regulations in
connection with Client's sale of products or services giving rise to
each such Receivable; (xv) all proceeds from the sale of such
Receivables will be used by Client in accordance with requirements of
law, and will not be used, directly or indirectly, to purchase or carry
margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System) or to extend credit to others
for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose; (xvi) each such
Receivable is and will be payable in United States dollars; (xvii) each
such Receivable constitutes an "account" as defined in Section 9-106 of
the Uniform Commercial Code as in effect in the state of Client's
formation and in the state of Client's principal place of business; and
(xviii) the payment terms for each such Receivable require the relevant
Account Debtor to pay such Receivable on or prior to the Stated
Termination Date. Client acknowledges that the representations and
warranties made herein are a material inducement to BofA's purchase of
the Receivables to be purchased hereunder.
(c) Client authorizes BofA to represent and warrant to
any subsequent transferee or assignee of any Receivable that at the
date of purchase of the Receivable by BofA the Receivable represented a
legally valid indebtedness of the applicable Account Debtor for the
amount of such Receivable and that there were no known defaults, or
counterclaims with respect to such Receivable. Client shall indemnify
BofA from and against any liability incurred by BofA, or any claims
made against BofA, as a result of any such representation or warranty
by BofA.
5. Covenants of Client. Client and, to the extent applicable,
Servicer shall comply with each of the following covenants during the term of
this Agreement:
(a) Client shall deliver to BofA in form and detail
satisfactory to BofA (but only to the extent Client is no longer
subject to the public filing requirements of the Securities and
Exchange Commission):
(i) as soon as available, but not later than 95
days after the end of each fiscal year, a copy of the audited
consolidated balance sheet of Client as at the end of such
year and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such
fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, and accompanied by
the opinion of a nationally-recognized independent public
accounting firm, which opinion shall state that such
consolidated financial statements present fairly, in all
material respects, the financial position for the periods
indicated in conformity with Generally Accepted Accounting
Principles applied on a basis consistent with prior years
(except for changes agreed upon by Client and such auditors
which are disclosed and described in such statements). Such
opinion shall not be qualified or limited because of a
restricted or limited examination by such accountant of any
material portion of the records of Client; and
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(ii) as soon as available, but not later than 50
days after the end of each of the first three fiscal quarters
of each fiscal year, a copy of the unaudited consolidated
balance sheet of Client as of the end of such quarter and the
related consolidated statements of income and cash flows for
the period commencing on the first day and ending on the last
day of such quarter, and certified by any responsible
financial officer of Client as being complete and correct and
fairly presenting in all material respects, in accordance with
Generally Accepted Accounting Principles, the financial
position and the results of the operations of Client.
(b) Client and Servicer each shall do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights and privileges as a corporation or partnership, as
the case may be, under the laws of its state of organization.
(c) Neither Client nor Servicer will create, incur,
assume or suffer to exist any lien or other encumbrance (other than
those arising hereunder and except for such non-consensual encumbrances
as may arise in the ordinary course of Client's business) on: (i) the
Purchased Receivables (whether now existing or hereafter arising) or
(ii) any proceeds of the Purchased Receivables.
(d) [INTENTIONALLY OMITTED.]
(e) In connection with each Purchased Receivable and at
its own expense, Client and Servicer each shall (i) on the applicable
date of sale to BofA, indicate or cause to be indicated clearly and
unambiguously in its accounting records and xxxx or cause to be marked
on any paper invoice or the electronic ledger for any electronic
invoice that such Receivable has been sold to BofA pursuant to this
Agreement; (ii) ensure that its balance sheet indicates that the
Purchased Receivables have been sold to BofA; (iii) not mislead any
creditor with respect to BofA's ownership of the Purchased Receivables;
(iv) inform any person or entity that may inquire that the Purchased
Receivables have been sold to BofA without recourse; (v) not hold out
the Purchased Receivables as being able to satisfy any obligation owed
or that may be owed to any creditor or potential creditor of Client;
and (vi) promptly (and in any event within five (5) days) upon the
request of BofA, provide BofA with a list of, an accounts receivable
aging report for and any other similar financial or accounting document
relating to all Purchased Receivables.
(f) Client and Servicer each shall notify BofA in the
event any of the following events occur as promptly as practical (but
in any event within five (5) days) after a Responsible Officer of
Client or Servicer, as applicable, becomes aware that such event has
occurred or is reasonably likely to occur, and, with respect to clause
(ii) below, deliver to BofA any related written correspondence:
(i) a Bankruptcy has occurred with respect to
any Approved Account Debtor; or
(ii) the assertion of any dispute with respect to
any Purchased Receivable by any Approved Account Debtor which
dispute has resulted in or in Client's good faith opinion is
reasonably likely to result in a reduction of the amount
receivable in respect of such Purchased Receivable; or
(iii) a Servicer Default.
(g) Client and Servicer each shall do or cause to be done
all things necessary or reasonably requested by BofA under any foreign
laws applicable to an Approved Account Debtor to (i) ensure that BofA
has and continues to have good title to the Purchased Receivables, and
(ii) ensure that BofA has and continues to have the ability to enforce
all rights purported to be transferred to BofA hereunder with respect
to the Purchased Receivables.
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(h) Client shall make no material change in its credit
and collections procedures that would adversely affect the validity,
enforceability or collectibility of the Purchased Receivables or
materially adversely affect the ability of Client to perform its
obligations hereunder without the prior written consent of BofA.
(i) Without the prior written consent of BofA, Client
will not amend, modify or waive any term or condition of any Contract
underlying any Purchased Receivable, which amendment, modification or
waiver would adversely affect the validity, enforceability or
collectibility of such Receivable or adversely affect BofA's right to
collect any Purchased Receivable.
6. Servicing.
(a) Until BofA gives notice to Client of the designation
of a new Servicer as provided herein, Client is hereby designated as,
and hereby agrees to perform the duties and obligations of, the
servicer pursuant to the terms hereof (the "Servicer") with respect to
the Purchased Receivables; provided that, with respect to any group of
Purchased Receivables, Client (solely in its capacity as Servicer) may,
at any time, upon prior written notice to BofA, designate any affiliate
of Client as sub-servicer hereunder; provided, however, that such
affiliate shall not become Servicer and, notwithstanding any such
delegation, Client shall remain liable for the performance of the
duties and obligations of Servicer in accordance with the terms of this
Agreement without diminution of such liability by virtue of such
delegation and to the same extent and under the same terms and
conditions as if Client alone were performing such duties and
obligations. Client acknowledges that BofA has relied on the agreement
of Client to act as Servicer hereunder in making its decision to
execute and deliver this Agreement. Accordingly, Client agrees that it
shall not voluntarily resign as Servicer. If an Event of Default or
Servicer Default occurs hereunder, BofA may designate as Servicer with
respect to all or any portion of the Purchased Receivables any person
(including BofA or any of its affiliates) to succeed Client or any
successor Servicer, on the condition in each case that any such person
so designated shall agree to perform the duties and obligations of
Servicer pursuant to the terms hereof, and Client agrees that it shall
reimburse BofA for all costs, expenses or fees incurred by it as a
result of, or in connection with, such designation; provided that the
maximum amount of such costs, expenses or fees reimbursable by Client
shall not exceed an amount, determined and payable monthly, **********
being serviced by the designated person on the first day of each month.
(b) Servicer shall take or cause to be taken all such
action as may be necessary or advisable to administer, service and
collect each Purchased Receivable from time to time, all at the
Servicer's expense and in accordance with this Agreement and all
applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with any credit and collection policy
agreed to by Client and BofA with respect to a Purchased Receivable;
provided, however, that Servicer shall not extend the maturity of any
Purchased Receivable without BofA's prior consent, which consent shall
not be unreasonably withheld. In addition, Servicer shall remit any and
all Remittances received with respect to any Purchased Receivables to
BofA in accordance with the terms of Section 1(b)(4), and shall
likewise forward all other payments and fees owed to BofA pursuant to
the terms hereof. Without BofA's consent, Client, in its capacity as
Servicer, shall not take any action (or omit to take any action that it
would customarily take in servicing Receivables) where such action (or
inaction) with respect to any Purchased Receivable is reasonably likely
to impair BofA's rights therein or the enforceability, value or
collectibility thereof. Without limiting the foregoing, Client, in its
capacity as Servicer, shall not take any action (or omit to take any
action that it would customarily take in servicing Receivables) that
results in preferential treatment for Receivables of an Approved
Account Debtor that do not constitute Purchased Receivables. Servicer
shall have the right to directly communicate with any Account Debtor
with respect to Purchased Receivables (and, in the case of clause (ii),
to commence collection proceedings with BofA's consent on BofA's
behalf): (i) to obtain current information not already provided on such
Account Debtor's financial condition and creditworthiness, and (ii) to
determine if any portion of any Purchased Receivable is past due.
Notwithstanding anything to
*** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
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the contrary contained herein, upon the occurrence and continuance of
an Event of Default or to the extent any Purchased Receivable is
Overdue, BofA may direct Servicer to commence or settle any legal
action to enforce collection of any Purchased Receivable or to
foreclose upon or repossess any underlying security related thereto.
(c) If Client is not Servicer, then Client shall deliver
to Servicer and Servicer shall hold for the benefit of Client and BofA
in accordance with their respective interests, all records and
documents (including computer tapes or disks) with respect to each
Purchased Receivable. Servicer shall hold (and shall cause each
sub-servicer to hold) in trust (and, during the continuance of an Event
of Default, at the request of BofA, segregate) for BofA's benefit, any
Remittances received by Servicer (or any sub-servicer) with respect to
the Purchased Receivables, and distribute the same to BofA in
accordance with Section 1(b)(4) or otherwise upon BofA's direction.
Servicer agrees to make its records, files and books of account
available to BofA on request, and to allow BofA and its agents and
representatives to visit Servicer's premises upon reasonable notice and
during normal business hours to examine such records, files and books
of account, to make copies or extracts thereof, and to conduct such
examinations as BofA deems necessary. In addition, on the first
business day of each month, Servicer shall deliver to BofA a statement
of its account showing all accountings relating to all Purchased
Receivables that were within 7 days of becoming Overdue during the
immediately preceding month.
(d) For all Purchased Receivables which are within 7 days
of becoming Overdue for any reason, including but not limited to those
Purchased Receivables which are past due solely and exclusively as a
result of an Account Debtor's Financial Inability To Pay, Servicer
shall immediately notify BofA and provide to BofA, promptly (and in any
event within one Business Day), each of the following: (i) a copy of
the applicable Account Debtor's purchase order and/or a signed
confirmation thereof; (ii) a copy of each outstanding invoice (in
electronic or paper form) and all credit memoranda; (iii) a notarized
statement of account; (iv) [reserved]; (v) a copy of Servicer's
complete collection file on the applicable Account Debtor; (vi) all
guarantees, collateral documents and security agreements relating to
such Receivables, (vii) proof of delivery of goods or rendering of
services relating to such Receivables, and (viii) such other documents
and information that BofA may request relating to such Receivables.
Further, with respect to any Purchased Receivable that is within 7 days
of becoming Overdue, Servicer shall provide to BofA upon request
(promptly, and in any event within one Business Day) (x) a true and
complete copy of the Contract relating to such Receivable, together
with any modifications or side letters related thereto, each written in
English, and (y) any other evidence of nonpayment of such Receivable as
may reasonably be requested by BofA. Upon any such Purchased Receivable
becoming Overdue, Servicer shall immediately, on the date such
Receivable becomes Overdue, provide to BofA (via telecopy, with an
original to follow via overnight courier) a notarized certificate
stating that such Receivable is in fact Overdue.
(e) The occurrence of any one or more of the following
events shall constitute a "Servicer Default" hereunder:
(1) (a) Servicer shall fail to perform or
observe any term, covenant or agreement hereunder and such
failure shall remain unremedied for ten (10) days after notice
or discovery thereof or (b) Servicer shall fail to make any
payment or deposit to be made by it hereunder when due; or
(2) any representation, warranty, certification
or statement made by the Servicer in this Agreement or in any
other document shall prove to have been incorrect in any
material respect when made or deemed made; or
(3) an Event of Default.
8
(f) Notwithstanding any other provision of this
Agreement, during the continuance of Servicer Default, BofA may, by
written notice to Client and/or Servicer (as applicable):
(1) direct the applicable Account Debtor(s) that
payment of all amounts payable under any Purchased Receivable
be made directly to BofA or its designee;
(2) instruct Client or Servicer (as applicable)
to give notice of the applicable Account Debtor(s), which
notice shall be given at Client's/Servicer's expense,
directing that payment of all amounts payable under any
Purchased Receivable be made directly to BofA or its designee;
and/or
(3) terminate and replace Servicer.
(g) Client shall provide to Servicer on a timely basis
all information needed for the servicing, administration and collection
obligations of Servicer, including notice of the occurrence of any
Event of Default or any event specified in Section 5(f) hereof as
promptly as practicable (but in any event within five (5) days) after
Client becomes aware, such event has occurred or will likely occur.
(h) If at any time (i) an Account Debtor remits payment
to Client, in its capacity as Servicer hereunder, on account of
Purchased Receivables prior to the applicable Grace Period Due Date of
such Purchased Receivables, and Servicer in turn delivers such
Remittances to BofA for receipt prior to such Grace Period Due Date, or
(ii) Client remits to BofA the repurchase price in respect of any
repurchased Receivable (such Receivable as repurchased pursuant to
Section 1(b)(7) or Section 9(a)) prior to the applicable Grace Period
Due Date for such repurchased Receivable, then in each case Servicer
may deduct from such amount to be remitted an Incentive Servicing
Credit as determined and provided by BofA. BofA shall calculate such
Incentive Servicing Credit by multiplying (a) the dollar amount of the
remittances to be received on such day times (b) a fraction, the
numerator of which shall be determined by multiplying (x) BofA's
referenced LIBOR rate then in effect, times (y) the number of days
after such remittance day (on which such remittance will be received by
BofA) until but not including the Grace Period Due Date, and the
denominator of which shall be 360.
7. Attorney-in-Fact. Client hereby grants and conveys to BofA an
irrevocable power of attorney (coupled with an interest) authorizing and
permitting BofA, at its option, with or without notice to Client, to do any one
of the following: (a) endorsing the name of Client upon any checks or other
instruments that may come into BofA's possession in payment of Purchased
Receivables; (b) endorsing the name of Client on any freight or express xxxx or
xxxx of lading relating to any Purchased Receivables; (c) taking all action as
BofA deems appropriate, including without limitation the execution and filing of
financing statements, in the name of and on behalf of Client to perfect any of
the security interests granted to BofA herein; provided, however, that BofA
shall not exercise any such power until the occurrence and during the
continuance of an Event of Default. Client agrees that neither BofA nor the
attorney-in-fact will be liable for any acts of commission or omission nor for
any error of judgment or mistake of fact or law except to the extent the same
constitutes gross negligence or willful misconduct.
8. Waiver. The waiver by BofA of any particular breach by Client
of a provision of this Agreement, or BofA's failure to exercise a right granted
to it herein, shall not constitute a waiver of any subsequent breach or any
other right.
9. Indemnity and Repurchase Obligations.
(a) BofA's purchase of a Receivable shall not relieve
Client from any liability that might arise out of Client's breach of
any representation, warranty, covenant or agreement hereunder, or out
of any unauthorized or fraudulent acts of Client, its officers,
employees or agents. In the event of (i) any breach of any
representation and warranty set forth in Section 4
9
with respect to a Purchased Receivable or any such unauthorized or
fraudulent act with respect to a Purchased Receivable which remains
uncured for ten (10) days after notice thereof or (ii) an Account
Debtor's failure to pay a Purchased Receivable for any reason other
than a Financial Inability To Pay, Client agrees upon BofA's request,
to repurchase such Receivable at a price equal to the outstanding
balance thereof.
(b) If Client at any time becomes aware of any fact or
occurrence that in and of itself or with the passage of time would be
grounds for requiring Client to repurchase any Purchased Receivable
under (a) above, Client will as promptly as practicable (but in any
event within five (5) days) after Client becomes aware of such fact or
occurrence notify BofA and either cure the cause for repurchase within
ten (10) days (to the extent capable of being cured) or repurchase the
Purchased Receivable at the price specified in (a) above.
(c) BofA will, upon payment by Client of all amounts due
to BofA on account of any repurchased Purchased Receivable, transfer
the Purchased Receivable and the rights thereto to Client. In the event
Client repays BofA fully all amounts equating to the repurchase price
plus any sum due BofA with respect to the Purchased Receivable, then
any further payments received by BofA thereafter on such Receivable
shall be remitted to Client.
(d) Client agrees to indemnify BofA from and against all
losses, damages, liabilities and costs, including attorneys fees and
expenses (whether incurred in connection with trial or appellate
proceedings or otherwise), incurred by BofA as a result of or in
connection with: (i) any claim or defense which any Account Debtor or
other person may have or assert against Client or BofA in connection
with Purchased Receivables or this Agreement; or (ii) any breach of any
of Client's representations, warranties, covenants or agreements
contained herein, in each case except to the extent (A) resulting from
BofA's gross negligence or willful misconduct or (B) arising solely out
of BofA's hedging activities with respect to or assignment of Purchased
Receivables unless otherwise expressly provided herein.
(e) [INTENTIONALLY OMITTED.]
(f) The remedies set forth in this Agreement or otherwise
available under applicable law shall be cumulative, and no election by
BofA to exercise any remedy shall preclude it from thereafter
exercising any other remedy.
10. Default and Remedies. An event of default ("Event of Default")
shall be deemed to have occurred hereunder upon the occurrence of one or more of
the following:
(a) Client shall fail to pay, (i) when and as required to
be paid herein, any amount on account of repurchasing any Purchased
Receivable, or (ii) within ten (10) days after the same shall become
due, any other amount payable hereunder; or
(b) Servicer (i) commences any insolvency proceeding with
respect to itself; or (ii) takes any action to effectuate or authorize
the foregoing; or
(c) Any involuntary lien, garnishment, attachment or the
like shall be issued against or shall attach to the Purchased
Receivables, the Collateral or any portion thereof and the same is not
released or Client fails to repurchase such Purchased Receivables
within ten (10) days;
(d) (i) Any involuntary insolvency proceeding is
commenced or filed against Servicer; or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied against a
substantial part of Servicer's properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated
or fully bonded within 60 days after commencement, filing or levy; (ii)
Servicer admits the material allegations of a petition against it in
any insolvency proceeding, or an order for relief (or similar order
under non-U.S. law) is ordered in any insolvency proceeding; or
10
(iii) Servicer acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar person for itself or a substantial portion
of its property or business; or
(e) Client, including in its role as Servicer hereunder,
shall breach any covenant or agreement set forth herein, or any
warranty or representation set forth herein shall be untrue when made,
and the same is not cured to BofA's reasonable satisfaction within ten
(10) days after such breach or occurrence;
(f) Any report, certificate, schedule, financial
statement, profit and loss statement or other statement furnished by
Servicer, or by any other person on behalf of Client, to BofA is not
true and correct in any material respect as of the date given.
(g) A material adverse change shall have occurred in
Servicer's financial conditions, business or operations that would
materially impair Servicer's ability to perform its obligations
hereunder.
Upon the occurrence and during the continuance of any such Event of Default,
BofA (i) shall have no further obligation to take any action after Client's
tender of Receivables for purchase and (ii) may immediately exercise its rights
and remedies hereunder or pursuant to applicable law with respect to the
Purchased Receivables, including giving notice to each Approved Account Debtor
to remit payment of all amounts payable under any Purchased Receivable directly
to BofA or to an account identified by BofA; provided, however, that BofA will
hold all collections that are not Remittances in trust for Client and, subject
to the provisions of Section 5(d) hereof, will deliver such collections to
Client promptly.
11. Cumulative Rights; Waivers. All rights, remedies and powers
granted to BofA in this Agreement, or in any other instrument or agreement
between Client and BofA are cumulative and may be exercised singularly or
concurrently with such other rights as BofA may have. These rights may be
exercised from time to time as to all or any part of the Purchased Receivables
as BofA in its reasonable discretion may determine. In the event BofA deems it
necessary to seek equitable relief, including, but not limited to, injunctive or
receivership remedies, as a result of Client's default, Client waives any
requirement that BofA post or otherwise obtain or procure any bond.
Alternatively, in the event BofA, in its sole and exclusive discretion, desires
to procure and post a bond, BofA may procure and file with the court a bond in
an amount up to and not greater than $10,000,000.00 notwithstanding any common
or statutory law requirement to the contrary. Upon BofA's posting of such bond
it shall be entitled to all benefits as if such bond was posted in compliance
with state law. Client also waives any right it may be entitled to, including an
award of attorney's fees or costs, in the event any equitable relief sought by
and awarded to BofA is thereafter, for whatever reason(s), vacated, dissolved or
reversed.
12. Termination. No termination or cancellation (regardless of
cause or procedure) of the transactions or relationship contemplated under this
Agreement shall in any way affect or impair the obligations, duties and
liabilities of Client or the rights of BofA relating to any transaction or event
occurring prior to such termination or cancellation. All undertakings,
agreements, indemnifications, covenants, warranties and representations
contained herein shall survive such termination or cancellation.
13. Security Interest. It is the intention of the parties hereto
that Client's transfer of Receivables to BofA shall constitute a sale and
assignment, which sale and assignment shall be absolute, irrevocable and without
recourse (other than with respect to the limited repurchase obligations provided
herein) and shall provide BofA with the full benefits of ownership of the
Purchased Receivables. Notwithstanding the foregoing, to protect BofA in the
event that any transfer of Purchased Receivables is deemed by a court, contrary
to the express intent of the parties, to constitute a pledge rather than a sale
and assignment of such Purchased Receivables, Client does hereby grant to BofA a
security interest in and lien upon all of Client's right, title and interest in
and to the Purchased Receivables and all proceeds thereon (the "Collateral") to
secure a debt (Client's return to BofA of the Purchase Price paid by BofA for
the Purchased Receivables) or any of Client's obligations to BofA under this
Agreement. Client agrees to
11
comply with all appropriate laws in order to perfect BofA's security interest in
and to the Collateral, to execute any financing statements, continuations
thereof, amendment thereto or additional documents as BofA may require. Client
hereby authorizes BofA to prepare and file such financing statements (including
renewal statements) or amendments thereof or supplements thereto or other
instruments as BofA may from time to time deem necessary or appropriate in order
to perfect and maintain the security interests granted hereunder in accordance
with the UCC. Client shall not (a) alter its corporate existence or, in one
transaction or in a series of transactions, merge into or consolidate with any
other entity, or sell all or substantially all of its assets, (b) change its
state of incorporation or formation or (c) change its registered corporate name,
without, in each case, (i) providing 30 days prior written notice to BofA, (ii)
providing such information as BofA may reasonably require in order to allow BofA
to file appropriate amendments to any previously filed financing statements and
(iii) executing any such additional documents as BofA may reasonably require in
order to protect its rights and remedies hereunder. The occurrence and
continuation of any Event of Default shall entitle BofA to all of the default
rights and remedies (without limiting the other rights and remedies exercisable
by BofA either prior or subsequent to an Event of Default) as available to a
secured party under the Uniform Commercial Code in effect in any applicable
jurisdiction.
14. Agreement of Client. During the continuation of an Event of
Default, BofA is authorized to apply all funds received by it hereunder to
Client's obligations hereunder in such order as BofA may elect.
15. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered by (a) personal
delivery; (b) courier; (c) telecopy, or (d) certified or registered mail,
postage prepaid to the address set forth below and shall be deemed given at the
time of personal delivery or, if by mail, as of the date of first attempted
delivery:
If to BofA, at: Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
With a copy to: Bank of America, N.A.
0 X. 00xx Xxxxxx
XX0-000-00-00
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
If to Client, at: Applied Materials, Inc.
0000 Xxxxx Xxxxxxxxx
X/X 0000
Xxxxx Xxxxx, XX 00000
Attn: Treasury Department
Telephone: 000-000-0000
Telecopy: 000-000-0000
With a copy to: Applied Materials, Inc.
0000 Xxxxx Xxxxxxxxx
X/X 0000
Xxxxx Xxxxx, XX 00000
Attn: Legal Department
Telephone: 000.000.0000
12
Telecopy: 000.000.0000 (fax)
16. Account Statements. Absent manifest error, BofA's books and
records shall be admissible in evidence without objection as prima facie
evidence of the status of the accounts between BofA and Client.
17. Confidential Information.
(a) The parties agree that the negotiation, existence and
terms of this Agreement shall constitute confidential information and
each party shall keep the existence and terms of this Agreement
confidential. Without limiting the foregoing, Client understands and
acknowledges that the form and terms of this Agreement are proprietary
trade products of BofA that BofA desires to keep confidential and
Client agrees that except for disclosure on a confidential basis to
Client's accountants, attorneys and other professional advisors
retained by in connection with this Agreement or as may be required by
law, the form and terms of this Agreement shall not be disclosed by
Client in whole or in part to any other person or entity without BofA's
prior written consent.
(b) The parties further agree that the information
furnished by Client to BofA regarding any Account Debtor, Client's
relationship with such Account Debtor and the goods and services
furnished by Client to such Account Debtor shall constitute
confidential information. BofA agrees not to disclose such information
in whole or in part to any other person or entity without Client's
prior written consent, except for disclosure (i) on a confidential
basis to BofA's accountants, attorneys and other professional advisors
retained by BofA in connection with this Agreement or in any way
related to the Purchased Receivables; (ii) as may be required by law;
or (iii) of the name of such Account Debtor, the amount of the related
Purchased Receivable, the Minimum and Maximum Invoice Tenor Period for
such Purchased Receivable and the quantity of goods purchased as
specified in the Contract underlying such Purchased Receivable (which
disclosure may include delivery of the invoice underlying such
Purchased Receivable as required by the relevant hedge counterparty, in
such redacted form as approved by BofA and Client, such approvals not
to be unreasonably withheld) to the extent necessary to carry out any
hedging activity by BofA related to the Purchased Receivables or
assignment by BofA of its rights under this Agreement or in respect of
the Purchased Receivables.
18. Miscellaneous.
(a) This Agreement shall be governed and construed in
accordance with the laws of the State of New York without reference to
the conflict of laws provisions thereof.
(b) Client shall not assign this Agreement without the
prior written consent of BofA. This Agreement shall be deemed to be one
of financial accommodation and not assumable by any debtor, trustee or
debtor-in-possession in any bankruptcy proceeding without BofA's
express written consent and may be suspended in the event a petition in
bankruptcy is filed by or against Client.
(c) This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
(d) This Agreement contains the entire agreement between
the parties hereto regarding the subject matter hereof, excepting only
assignments and schedules thereto that may be executed from time to
time. This Agreement shall not be modified except by written instrument
signed by all of the parties hereto.
13
(e) Client agrees to execute such further instruments as
may be required by BofA to evidence the transactions contemplated
herein. If any provision of this Agreement is found invalid, the
remaining provisions of this Agreement shall not be affected thereby.
(f) Nothing set forth herein or otherwise shall render
the parties partners of one another.
(g) Client acknowledges that there is no, and it will not
seek or attempt to establish any, fiduciary relationship between BofA
and Client on Client's behalf, and Client waives any right to assert,
now or in the future, the existence or creation of any such fiduciary
relationship between BofA and Client in any action or proceeding
(whether by way of claim, counterclaim, crossclaim or otherwise) for
damages.
(h) BofA agrees that notwithstanding anything to the
contrary set forth herein, unless and until such time as an Event of
Default shall have occurred and be continuing or any Purchased
Receivable shall be Overdue, BofA shall not, and shall not cause
Servicer to, contact any Account Debtor directly for any reason with
respect to any Purchased Receivable.
(i) This Agreement may be executed in a number of
identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement.
19. Jury Trial Waiver; Jurisdiction. BOFA AND CLIENT HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON THIS AGREEMENT OR ANY
TRANSACTIONS CONTEMPLATED HEREIN, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY RELATED DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO,
OR TO ANY RELATED DOCUMENT. THE PARTIES CONSENT TO JURISDICTION AND VENUE IN THE
STATE OR FEDERAL COURTS IN ANY CITY, COUNTY AND STATE OF NEW YORK. CLIENT
FURTHER AGREES TO WAIVE ANY RIGHT IT MAY HAVE TO SEEK A CHANGE OF VENUE BASED ON
INCONVENIENCE OF THE FORUM OR OTHERWISE. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE PARTIES ENTERING INTO THE SUBJECT TRANSACTION.
14
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first above written.
Bank of America, N.A.. Applied Materials, Inc.
By:/s/ XXXXXXX X. XXXXX By: /s/ XXXXXX X. XXXXXX
--------------------------- -----------------------------------
Printed Name: Xxxxxxx X. Xxxxx Printed Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President Title: Executive Vice President,
Global Executive Committee and Chief
Financial Officer
By: /s/ XXXXXX X. XXXXX
-----------------------------------
Printed Name: Xxxxxx X. Xxxxx
Title: Corporate Vice President and
Treasurer
1
DEFINITIONS
Account Debtor: Each person or entity obligated to pay any
Receivable.
Agreement: The Program for Accounts Receivable Transfer
Agreement to which this Annex I is attached
(together with any applicable Schedule A), as
amended, restated, extended, supplemented or
otherwise modified in writing from time to
time.
Approved Account Debtor: Any Account Debtor listed on a Schedule A
that has been executed by BofA.
Bankruptcy: An Account Debtor (a) is dissolved (other
than pursuant to a consolidation,
amalgamation or merger); (b) becomes
insolvent or is unable to pay its debts or
fails or admits in writing its inability
generally to pay its debts as they become
due; (c) makes a general assignment,
arrangement or composition with or for the
benefit of its creditors; (d) institutes or
has instituted against it a proceeding
seeking a judgment of insolvency or
bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar
law affecting creditors' rights, or a
petition is presented for its winding-up or
liquidation, and, in the case of any such
proceeding or petition instituted or
presented against it, such proceeding or
petition (i) results in a judgment of
insolvency or bankruptcy or the entry of an
order for relief or the making of an order
for its winding-up or liquidation or (ii) is
not dismissed, discharged, stayed or
restrained in each case within 30 days of the
institution or presentation thereof; (e) has
a resolution passed for its winding-up,
official management or liquidation (other
than pursuant to a consolidation,
amalgamation or merger); (f) seeks or becomes
subject to the appointment of an
administrator, provisional liquidator,
conservator, receiver, trustee, custodian or
other similar official for it or for all or
substantially all its assets; (g) has a
secured party take possession of all or
substantially all its assets or has a
distress, execution, attachment,
sequestration or other legal process levied,
enforced or sued on or against all or
substantially all its assets and such secured
party maintains possession, or any such
process is not dismissed, discharged, stayed
or restrained, in each case within 30 days
thereafter; or (h) causes or is subject to
any event with respect to it which, under the
applicable laws of any jurisdiction, has an
analogous effect to any of the events
specified in clauses (a) to (g) (inclusive).
BofA: As defined in the introductory paragraph of
the Agreement.
Client: As defined in the introductory paragraph of
the Agreement.
Collateral: As defined in Section 13 of the Agreement.
Contract: An agreement pursuant to which an Approved
Account Debtor agrees to pay money to Client
for products sold or services rendered by
Client in the ordinary course of its
business.
1
Credit Rating: With respect to Client or any Account Debtor,
such person's issuer or counterparty credit
rating as assigned by S&P, Moody's or any
other nationally recognized ratings agency.
To the extent applicable, the respective
Credit Ratings of Client and the relevant
Account Debtor as of the Effective Date are
set forth on the applicable Schedule A.
Effective Date: The date set forth after such term on the
applicable Schedule A, which represents the
effective date of BofA's initial purchase of
the subject Receivables.
Event of Default: As defined in Section 10 of the Agreement.
Financial Inability To Pay: An Account Debtor's failure to pay a
Purchased Receivable for any reason other
than one of the circumstances enumerated in
Section 1(b)(7)(i) or such Account Debtor (A)
(i) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (ii)
becomes insolvent or is unable to pay its
debts or fails or admits in writing its
inability generally to pay its debts as they
become due; (iii) makes a general assignment,
arrangement or composition with or for the
benefit or its creditors; (iv) institutes or
has instituted against it a proceeding
seeking judgment of insolvency or bankruptcy
or any other relief under any bankruptcy or
insolvency law or other similar law affecting
creditor's rights, or a petition is presented
for its winding-up or liquidation, and, in
the case of any such proceeding or petition
instituted or presented against it, such
proceeding or petition (aa) results in a
judgment of insolvency or bankruptcy or the
entry of an order for relief or the making of
an order for its winding-up or liquidation or
(bb) is not dismissed, discharged, stayed or
restrained in each case within thirty (30)
days of the institution or presentation
thereof; (v) has a resolution passed for its
winding-up, official management or
liquidation; (vi) seeks or becomes subject to
the appointment of an administrator,
provisional liquidation, conservator,
receiver, trustee, custodian or other similar
official for it or for all or substantially
all its assets; (vii) has a secured party
take possession of all or substantially all
its assets or has a distress, execution,
attachment, sequestration or other legal
process levied, enforced or sued on or
against all or substantially all its assets
and such secured party maintains possession,
or any such process is not dismissed,
discharged, stayed or restrained, in each
case within 30 days thereafter; (viii) causes
or is subject to any event with respect to it
which, under the applicable laws of any
jurisdiction, has an analogous effect to any
of the events specified in clauses (i) to
(vii) (inclusive); or (ix) takes any action
in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of
the foregoing acts; or (B) also fails, after
giving effect to any applicable grace period
of the relevant obligation(s) of an Account
Debtor (other than such Purchased
Receivable), to make, when due, any payments
equal to or exceeding $10,000,000.00 under
such obligations.
Grace Period Due Date: The last day of the applicable Past Due Grace
Period, and the last day on which BofA shall
receive payment of the Required Amount in
respect of a Purchased Receivable, as set
forth in the applicable Schedule A.
Incentive Servicing Credit: The credit given to Servicer, as determined
by BofA, pursuant to Section 9(h) of the
Agreement.
2
Maximum Invoice Tenor Period: The time period set forth after such term on
the applicable Schedule A, which represents,
in connection with Receivables that BofA has
approved for purchase with respect to a
specific Approved Account Debtor, the maximum
payment terms (i.e., the time period
following the invoice date within which the
Account Debtor must pay the relevant invoice)
afforded such Account Debtor in any invoice
evidencing such Receivables.
Minimum Invoice Amount: The amount set forth after such term on the
applicable Schedule A, which represents, in
connection with Receivables that BofA has
approved for purchase with respect to a
specific Approved Account Debtor, the minimum
payment amount specified in any invoice
evidencing such Receivables.
Minimum Invoice Tenor Period: The time period set forth after such term on
the applicable Schedule A, which represents,
in connection with Receivables that BofA has
approved for purchase with respect to a
specific Approved Account Debtor, the minimum
payment terms (i.e., the time period
following the invoice date within which the
Account Debtor must pay the relevant invoice)
afforded such Account Debtor in any invoice
evidencing such Receivables.
Moody's: Xxxxx'x Investors Service, Inc. or any
successor.
Overdue: The status of any Purchased Receivable that
remains unpaid following its Grace Period Due
Date.
Past Due Grace Period: The time period set forth after such term on
the applicable Schedule A, which represents,
in connection with Receivables that BofA has
approved for purchase with respect to a
specific Approved Account Debtor, the maximum
past due grace period (i.e., the time period
following the invoice due date within which
Client will accept payment on the relevant
invoice without affording Client the ability
to charge the Account Debtor a late fee,
interest or other penalties) afforded such
Account Debtor in any invoice evidencing such
Receivables.
Purchase Price: As defined in Section 1(b)(1) of the
Agreement.
Purchased Receivable: Any Receivable purchased by BofA pursuant to
the Agreement.
Receivables: All receivables, instruments, accounts,
chattel paper, payment intangibles, notes,
contract rights and general intangibles
resulting from Client's sale of products or
services before, on or after the date hereof.
Remittances: As defined in Section 1(b)(4) of the
Agreement.
Required Amount: The amount set forth after such term on the
applicable Schedule A, which represents the
stated value of Receivables that BofA has
approved for purchase with respect to a
specific Approved Account Debtor.
Responsible Officer: The assistant treasurer in charge of Client's
Global Credit and Collections Department, or
any equivalent officer with credit and
collection responsibilities.
S&P: Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.,
or any successor.
3
Schedule A: Any applicable Schedule A (which may be
denoted Schedule A-1, etc.), in substantially
the form of Annex II to the Agreement,
attached and/or executed in connection with
the Agreement, as such schedule is amended,
restated, extended, supplemented or otherwise
modified in writing from time to time.
Servicer: As defined in Section 6(a) of the Agreement.
Servicer Default: As defined in Section 6(e) of the Agreement.
Termination Date: With respect to Purchased Receivables under a
particular Schedule A, the earlier of (a) the
applicable Stated Termination Date and (b)
the date specified in a writing from BofA to
Client (which date may be the date of such
writing).
4
FORM OF SCHEDULE A-__
Subject to Program for Accounts Receivable Transfer Agreement executed or to be
executed by Client and Bank of America, N.A., the terms of which are hereby
incorporated by reference
Subject to credit approval and satisfactory documentation
Client signature below mandates Bank of America to initiate Due Diligence
Effective Date: [_________]
Stated Termination Date: [_________]
Grace Period Due Date: [_________]
Client/Initial Servicer: [_________]
Client's Credit Rating: [_________]
Account Debtor: [_________]
Account Debtor's Credit Rating: [_________]
Account Debtor's Country
of Organization: [_________]
Receivables:
Required Amount: [__]
Minimum Invoice Tenor Period: [__] days
Maximum Invoice Tenor Period: [__] days
Minimum Invoice Amount: $[__]
Past Due Grace Period: [__] days
Purchase Price: [_________]%
Due Diligence Expenses: For the account of Client/Initial Servicer
ACCEPTED AND AGREED:
Bank of America, N.A. Applied Materials, Inc.
By: ____________________ By: ______________________
Name: __________________ Name: ____________________
Title: _________________ Title: ___________________
Prospective counterparties should conduct a thorough and independent review of
the legal, tax and accounting aspects of any proposed transaction to determine
its suitability in light of their particular circumstances. Although the
indicative information set forth above is reflective of the terms, as of the
specified date, under which Bank of America believes a contract might be
structured, no assurance can be given that such a contract will in fact be
executed.
