EX-10.21 16 d319670dex1021.htm EX-10.21 EXECUTION VERSION RECEIVABLES PURCHASE AGREEMENT
Exhibit 10.21
EXECUTION VERSION
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or modified from time to time, this “Agreement”), dated as of May 16, 2012, among SMART MODULAR TECHNOLOGIES, INC., a California corporation (together with its successors and assigns, “Smart” and in its capacity as the Seller Representative, the “Seller Representative”), SMART MODULAR TECHNOLOGIES (EUROPE) LIMITED, an England and Wales corporation (together with its successors and assigns, “Smart Europe”; and collectively with Smart, the “Sellers” and each a “Seller”) and XXXXX FARGO BANK, N.A., a national banking association (together with its successors and assigns, “Xxxxx Fargo”).
Sellers from time to time wish to sell certain of their Receivables (as defined below) to Xxxxx Fargo, and Xxxxx Fargo, at its sole discretion may from time to time purchase such Receivables upon the terms set forth in this Agreement.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions. The following terms have the respective meanings indicated below:
1.1 “Account Debtor” shall mean each Person that is a buyer of goods or services from a Seller in the ordinary course of such Seller’s business and identified by (and acting in its capacity under) its Identification Number, all as set forth on Exhibit A (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo); provided, that following written notification from Xxxxx Fargo to the Seller Representative that it will no longer purchase Receivables owing from a particular Account Debtor, from and after the Collection Date relating to all Purchased Receivables owing from such Account Debtor, such Account Debtor shall cease to be an “Account Debtor” hereunder.
1.2 “Account Debtor Group” shall mean each of the HP Account Debtor Group and Dell Account Debtor Group.
1.3 “Account Debtor Group Sublimit” shall mean each of the Dell Sublimit and the HP Sublimit.
1.4 “Advance Rate” shall mean, for each Account Debtor, the percentage listed on Exhibit A as the Advance Rate applicable to such Account Debtor (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo).
1.5 “Agreement” shall have the meaning set forth in the first paragraph hereof.
1.6 “Applicable Seller Account” shall mean:
(a) with respect to any payment in connection with (or Turnover Amount related to) any Receivable the originator of which is Smart, account number 4100063098 at Xxxxx Fargo Bank, N.A. at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX (ABA: 000-000-000, SWIFT code: XXXXXX0X), named “Smart Modular Technologies, Inc.”; and
(b) with respect to any payment in connection with (or Turnover Amount related to) any Receivable the originator of which is Smart Europe, account number 00000000 at Barclays Bank Plc in London, United Kingdon, (SWIFT: XXXXXX00 Sort Code: 20-78-98), named “Smart Modular Technologies (Europe) Limited”;
or, in each case, such other bank account identified in writing to Xxxxx Fargo by the applicable Seller from time to time as a replacement “Applicable Seller Account” for such Seller.
1.7 “Base Invoice Amount” shall mean the portion of Net Invoice Amount of any Receivable equal to (i) the Net Invoice Amount minus (ii) the VAT Invoice Amount, if any.
1.8 “Brazil Tax Dispute” shall mean that certain import tax assessment instituted by the Secretariat of Federal Revenue of Brazil against a subsidiary of Smart in February, 2012, and any case, proceeding, additional claims, levies or litigation arising directly therefrom.
1.9 “Buffer Period” shall mean for each Account Debtor the number of days listed on Exhibit A as the Buffer Period applicable to such Account Debtor (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo).
1.10 “Business Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in Xxx Xxxx, Xxx Xxxx xxx Xxxxxxxxx, Xxxxx Xxxxxxxx are authorized or required by law to be closed.
1.11 “Change of Control” shall mean, with respect to any Person (the “Relevant Person”), any of the following: (a) the sale, lease or transfer of all or substantially all of the assets of such Relevant Person or group (as such term is defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended); (b) the liquidation or dissolution of (or the adoption of a plan of liquidation by) such Relevant Person; or (c) the acquisition by any Person or group (as such term is defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of more than 40% of the voting stock of such Relevant Person by way of merger or consolidation or otherwise; provided, that none of the foregoing shall constitute a Change of Control with respect to any Relevant Person to the extent such transaction occurs with a Person who is an affiliate of such Relevant Person immediately prior to the occurrence of such transaction.
1.12 “Closing Date” shall mean May 16, 2012, being the date that Xxxxx Fargo shall have received the agreements, documents and instruments set forth on Exhibit D, each in form, substance and date reasonably satisfactory to Xxxxx Fargo.
1.13 “Collection Account” shall mean, for each Receivable, the account specified in Exhibit E (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo).
1.14 “Collection Date” means, with respect to any Purchased Receivable, the earliest to occur of (i) the date on which Collections at least equal to the sum of (x) the Purchase Price, plus (y) the Discount relating to such Purchased Receivable have been deposited in the Collection Account, (ii) the date on which the Seller makes payment of the Repurchase Price pursuant to Section 3.1, (iii) the date on which the Servicer certifies to Xxxxx Fargo that no further Collections are anticipated to be received thereon as a result of a Credit Reason of the related Account Debtor, and (iv) the date at least 90 days following the Due Date of such Receivables on which the Servicer certifies to Xxxxx Fargo that no further Collections are anticipated to be received thereon other than as a result of a Dispute or a Credit Reason of the related Account Debtor.
1.15 “Collections” shall mean all cash collections, including wire transfers and other cash proceeds, received in connection with any Receivable (including any Related Assets) and deposited in the Collection Account.
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1.16 “Contract” shall mean an agreement (which may be in the form of an electronic purchase order) between a Seller and an Account Debtor, each invoice sent by a Seller, and each purchase order completed by the Account Debtor and delivered to the Seller pursuant to which a Receivable shall arise, in each case, or which otherwise evidences a Receivable.
1.17 “Credit Reason” shall mean the non-payment of any amounts due and payable under a Purchased Receivable by an Account Debtor for either of the following reasons: (i) the occurrence of an Insolvency Event with respect to such Account Debtor, or (ii) the Account Debtor’s inability to make payment on the Purchased Receivables on or prior to the Due Date relating thereto.
1.18 “Deemed Application” shall have the meaning set forth in Section 6.4.
1.19 “Dell Account Debtor Group” shall mean the group of Account Debtors listed under the heading “The Dell Account Debtor Group” on Exhibit A (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo).
1.20 “Dell Receivables” shall mean Receivables payable by an Account Debtor in the Dell Account Debtor Group.
1.21 “Dell Sublimit” shall mean, with respect to the Dell Account Debtor Group, the amount listed on Exhibit A as the Account Debtor Sublimit applicable to such Account Debtor Group (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo.
1.22 “Discount” shall mean, with respect to any Receivable payable by any Account Debtor, the product of (i) the Discount Rate, multiplied by (ii) the product of (A) the Net Invoice Amount of such Purchased Receivable, multiplied by (B) the Advance Rate for such Account Debtor, and multiplied by (iii) the quotient of (A) the number of days in the Discount Period, divided by (B) 360.
1.23 “Discount Margin” shall mean, for each Account Debtor, the rate per annum set forth in the Fee Letter.
1.24 “Discount Period” shall mean, with respect to any Receivable, the sum of (i) the number of days from (and including) the Purchase Date of such Receivable to (but not including) its Due Date, plus (ii) the Buffer Period with respect to the Account Debtor of such Receivable.
1.25 “Discount Rate” means, with respect to any Receivable, a rate per annum equal to the sum of (i) the Discount Margin, plus, (ii) LIBOR determined as of two (2) Business Days prior to the applicable Purchase Date for such Receivable.
1.26 “Dispute” shall mean any dispute, discount (whether through the issuance of any credit note or similar adjustment or otherwise), deduction, claim, offset, defense or counterclaim of any kind relating to the Purchased Receivables (other than a Pre-Purchase Discount related to such Purchased Receivable and/or such other adjustment granted with Xxxxx Fargo’s written approval), regardless of whether the same is in an amount greater than, equal to or less than the Purchased Receivables concerned. Without limiting the generality of the foregoing, “Dispute” shall include any dispute, discount, deduction, claim, offset, defense or counterclaim of any kind relating to the bona fide nature of the payment obligations, the amount payable and due date thereunder, any claims of Liens any other claims of allowances, set-offs, counterclaims, or side agreements asserted with respect thereto; provided, the term “Dispute” shall not include any non-payment of a Purchased Receivable due to a Credit Reason applicable to the related Account Debtor.
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1.27 “Disqualified Assignee” shall mean those Persons identified by the Seller Representative to Xxxxx Fargo prior to the Closing Date in writing and acknowledged by Xxxxx Fargo.
1.28 “Due Date” shall mean the date which such Receivable is required to be paid in full in accordance with the terms of the applicable Contract; provided¸ that the period from the initial Invoice Date to the Due Date shall in no event exceed the Maximum Tenor.
1.29 “Eligible Receivable” shall mean a Receivable payable and owing by an Account Debtor that, as of the Purchase Date, satisfies all of the following requirements:
(a) the Receivable is evidenced by an invoice, electronic or otherwise, or other documentation accepted by the Account Debtor;
(b) the Receivable is denominated in, and payable solely in, United States Dollars;
(c) the number of days between the initial Invoice Date and the Due Date of such Receivable does not exceed the Maximum Tenor;
(d) the applicable Seller has good and marketable title to such Receivable and will, upon the purchase by the Seller of such Receivable hereunder, transfer such Receivable free and clear of any Lien, and upon the purchase of such Receivable in accordance with Section 2 of this Agreement, Xxxxx Fargo will acquire valid ownership of each Purchased Receivable free and clear of any Lien and prior to all other Persons;
(e) such Receivable constitutes a bona fide, unconditional, legal, valid and binding payment obligation of the related Account Debtor, enforceable against such Account Debtor with respect thereto and in accordance with its terms;
(f) the related Seller has delivered to the related Account Debtor all property or performed all services required to be so delivered or performed giving rise to such Receivable, and the related Account Debtor has accepted all such property and services and the payments due with respect to such Receivable is not contingent upon the related Seller’s fulfillment of any further obligation; neither the related Seller nor the related Account Debtor is in default in the performance of any of the provisions of the Contract applicable to such Receivable;
(g) each Contract relating to such Receivable is legal, valid and in full force and effect; all right, title and interest in and to the proceeds of the applicable Contracts are freely transferable to Xxxxx Fargo by assignment; the related Account Debtor has completed all inspection and approvals for which it is entitled and accepted all property or services performed relating to such Receivable; none of the parties to such Contract is in breach of its obligations nor is any dispute or challenge continuing in connection with the Contract;
(h) no Dispute or Repurchase Event exists on such Purchase Date with respect to such Receivable;
(i) all information with respect to the Receivable provided by the related Seller by Transmission or otherwise, including the information set forth in the invoices included in the Purchase Notice, is true and correct in all respects; Xxxxx Fargo has received true and correct copies of all documentation required or requested with respect to such Receivable;
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(j) such Receivable and the related Contract under which it arises, complies with the requirements of all applicable laws, rules, regulations or orders of any governmental authority and does not contravene any agreement binding upon the related Seller;
(k) the obligations of such Account Debtor in respect of such Receivable have not been prepaid in whole or in part or subject to a deposit, and no credit (other than any Pre-Purchase Discount) is available that may be applied by such Account Debtor;
(l) the Receivable does not represent a progress billing or a sale on a xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis, and does not relate to payments of interest and has not been invoiced more than once;
(m) such Receivable is not evidenced by or arising under any lease, chattel paper or instrument; and
(n) such Receivable is not due from (A) a Person that is a subsidiary or other affiliate of the related Seller or (B) any Person or group of Persons that owns or controls, by election of directors, appointment of managers, management contract or otherwise, more than 10% of the voting power to select the related Seller’s directors or senior management or to set the related Seller’s management policies.
1.30 “Existing Credit Agreement” shall mean that certain Credit Agreement dated as of August 26, 2011 among SMART Modular Technologies (Global Holdings), Inc. (formerly known as SMART Modular Technologies (Global Memory Holdings), Inc.), SMART Modular Technologies (Global), Inc., the Seller Representative, JPMorgan Chase Bank, N.A. as administrative agent and the other lenders party thereto.
1.31 “Fee Letter” shall mean that certain fee letter, dated the Closing Date, between the Seller Representative and Xxxxx Fargo.
1.32 “Funding Notice” shall mean an acceptance notice relating to the funding of the Purchase Price substantially in the form of Exhibit C delivered by Xxxxx Fargo to the Seller Representative by Transmission on the first Business Day of each Week with respect to any Purchase Notice delivered during the prior Week and specifying the Proposed Receivables that Xxxxx Fargo has accepted for purchase on the next following Purchase Date.
1.33 “HP Account Debtor Group” shall mean the group of Account Debtors listed under the heading “The HP Account Debtor Group” on Exhibit A (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo).
1.34 “HP Receivables” shall mean Receivables payable by an Account Debtor in the HP Account Debtor Group.
1.35 “HP Sublimit” shall mean, with respect to the HP Account Debtor Group, the amount listed on Exhibit A as the Account Debtor Sublimit applicable to such Account Debtor Group (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo.
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1.36 “Identification Number” means the identification number assigned by the Seller Representative relating to the division or group of an Account Debtor with direct responsibilities and duties under a Contract with one or more Sellers under which Receivables are arising.
1.37 “Information Certificate” shall mean, with respect to any Seller, the Information Certificate of such Seller in the form of Exhibit B.
1.38 “Insolvency Event” shall mean, with respect to any Person, any of the following: (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, court protection, reorganization or other relief in respect of such Person or its debts, or of a material part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, or (ii) the appointment of a receiver, trustee, custodian, examiner, sequestrator, conservator or similar official for such Person or for a material part of its assets, and, in any such case, such proceeding or petition shall continue undismissed or unstayed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered, or(b) such Person shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, court protection, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (a) above, (iii) apply for or consent to the appointment of a receiver, trustee, examiner, custodian, sequestrator, conservator or similar official for such Person or for a material part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) generally not pay its debts as such debts become due (as understood under the Uniform Fraudulent Conveyance Act) or shall admit in writing its inability to pay its debts generally.
1.39 “Invoice Date” shall mean, with respect to any Receivable, the date of the original invoice with respect thereto.
1.40 “LIBOR” shall mean the rate per annum equal to the offered rate for deposits in United States Dollars for a two month (60 day) interest period which appears two Business Days prior to the date of the applicable Purchase Date on the Dow Xxxxx Markets Service (formerly known as Telerate) display page 3750 (or such other page as may replace page 3750 on that service or such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Bankers’ Association Interest Settlement Rates for United States Dollar deposits).
1.41 “Lien” shall mean any lien, charge, deed of trust, mortgage, security interest (including, with respect to Receivables, any ownership interest), tax lien, pledge, hypothecation, assignment, preference, priority, claim, other charge or encumbrance, or any other type of preferential arrangement of any kind or nature whatsoever by or with any Person (including, without limitation, any conditional sale or title retention agreement), whether arising by contract, operation of law, or otherwise.
1.42 “Material Adverse Change” shall mean, an event that results or could likely result in (i) a material adverse change in (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Sellers and the Parents, taken as a whole (including as a result of a change in the status of the Brazil Tax Dispute), (b) the relationship with an Account Debtor which, as at the date of determination, is the Account Debtor of any Purchased Receivables outstanding hereunder or any Receivables being offered for purchase hereunder; provided, that for the avoidance of doubt, a reduction in the amounts of purchases made by such Account Debtor to the extent not related to Disputes claimed or Credit Reasons shall not be considered a Material Adverse Change, or (c) the ability of each Seller, as Servicer of the Purchased Receivables sold by it hereunder or otherwise, to fulfill its obligations hereunder or under any of the other Transaction Documents or of any Parent to fulfill its obligations
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under any Performance Undertaking, (ii) the impairment of the validity or enforceability of, or the rights, remedies or benefits available to, Xxxxx Fargo under this Agreement or any of the other Transaction Documents, or (iii) a Change of Control of any Seller, any Parent or any Account Debtor.
1.43 “Maximum Tenor” shall mean, for Receivables of any Account Debtor, the number of days listed on Exhibit A as the Maximum Tenor (as such exhibit may from time to time be amended or replaced with the consent of the Seller Representative and Xxxxx Fargo).
1.44 “Net Invoice Amount” shall mean, as to any Receivable, an amount equal to the face value payable by the related Account Debtor set forth in the invoices included in the Purchase Notice related to such Receivable, net of any Pre-Purchase Discount related to such Receivable, and including the related VAT Invoice Amount, if any.
1.45 “Outstanding Purchase Price” shall mean, at any time, the amount equal to the product of (A) the aggregate Net Invoice Amounts, multiplied by (B) the applicable Advance Rates, with respect to (i) the Purchased Receivables or (ii) the Purchased Receivables relating to any Account Debtor Group, as the context may require, minus the aggregate amount of all Collections with respect to such Purchased Receivables deposited in the Collection Account up to but not exceeding, for any Purchased Receivable, the Net Invoice Amount with respect thereto; provided, that the Outstanding Purchase Price shall not equal less than zero.
1.46 “Parent” shall mean SMART Modular Technologies (Global Holdings), Inc. (formerly known as SMART Modular Technologies (Global Memory Holdings), Inc.), a Cayman Islands exempted company with limited liability and SMART Modular Technologies (Global), Inc., a Cayman Islands exempted company with limited liability, jointly and severally.
1.47 “Payment Report” shall mean a reconciliation report or payment summary provided by Transmission by the Seller Representative to Xxxxx Fargo from time to time (at minimum weekly by the last day of each Week) in a format reasonably acceptable to Xxxxx Fargo for each Account Debtor Group, providing invoice, payment and collection details with respect to the Purchased Receivables of each Account Debtor Group.
1.48 “Performance Undertakings” shall mean, collectively, each Performance Undertaking, dated as of the Closing Date, by each Parent in favor of Xxxxx Fargo, as each such agreement may be amended, modified or supplemented in accordance with its terms.
1.49 “Periodic Reconciliation Report” shall have the meaning set forth in Section 5.1(j)(v).
1.50 “Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation, limited liability company, limited liability partnership, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof.
1.51 “Pre-Purchase Discount” shall mean, with respect to a Proposed Receivable, any discount, credit or other allowance set forth in the invoices included in the Purchase Notice relating thereto and deducted from the face amount of such Proposed Receivable payable by the applicable Account Debtor in the determination of the Net Invoice Amount and in the subsequent determination of both the Purchase Price therefor and the Base Invoice Amount related thereto.
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1.52 “Proposed Receivable” shall mean any Eligible Receivable that is offered for sale and set forth in a Purchase Notice pursuant to the provisions of Section 2.1 at all times prior to becoming a Purchased Receivable or being rejected by Xxxxx Fargo for purchase pursuant to Section 2.1.
1.53 “Purchase Date” shall mean, as to any Purchased Receivable, the date (which shall occur on the third Business Day of any Week) on which Xxxxx Fargo purchased such Receivable.
1.54 “Purchase Limit” shall mean the sum of the Dell Sublimit plus the HP Sublimit which, on the Closing Date, is equal to $75,000,000.
1.55 “Purchase Notice” shall mean with respect to Proposed Receivables, the aggregate of all data (whether included in a Payment Report, an invoice or other Transmission) relating to new Proposed Receivables in a form reasonably satisfactory to Xxxxx Fargo that are included in a Transmission on any Business Day during any Week received by Xxxxx Fargo from the Seller Representative during any Week.
1.56 “Purchase Price” shall mean, as to any Receivable proposed to be purchased hereunder, an amount equal to (a) the product of (i) the Advance Rate, multiplied by (ii) the Net Invoice Amount of such Receivable, minus (b) the Discount applicable to such Receivable, all as set forth in the applicable Funding Notice and as calculated in the manner set forth in this Agreement and in the Funding Notice.
1.57 “Purchased Receivable” shall mean any Receivable that is purchased by Xxxxx Fargo hereunder.
1.58 “Receivables” shall mean all accounts, instruments, documents, contract rights, general intangibles and chattel paper (as such terms are understood under the UCC), all tax refunds and proceeds of insurance, and all other forms of obligations owing to a Seller by an Account Debtor, whether now existing or hereafter created that represent bona fide obligations of an Account Debtor arising out of a Seller’s sale and delivery of goods and services, together with the Related Assets with respect thereto, and with respect to each of the foregoing, all proceeds thereof.
1.59 “Records” shall mean, with respect to any Receivable, all of the related Seller’s present and future books of account of every kind or nature, purchase and sale agreements, invoices, sales orders, credit memos, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data relating to such Receivable, including any Related Assets, or the related Account Debtor, together with the tapes, disks, diskettes, software and other data (including electronic data and information) in or on which the foregoing are stored (including any rights of such Seller with respect to the foregoing maintained with or by any other person).
1.60 “Related Assets” shall mean, with respect to any Receivable, all of the right, title and interest of the related Seller in and to: (a) all rights, but not any obligations, under all related Contracts and other Related Assets with respect to such Receivable; (b) all documents, instruments and chattel paper, if any, arising pursuant to or in connection with such Receivable; (c) all inventory and goods (including returned, repossessed or reclaimed inventory or goods), if any, the sale of which gave rise to such Receivable or otherwise representing or evidencing, such Receivable and including any rights to such inventory and goods; (d) all security deposits and property subject to security interests or Liens, and all guarantees, letters of credit, banker’s acceptances, letter-of-credit rights, supporting obligations and other agreements or arrangements of whatever character from time to time, supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise and including all rights of stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an unpaid vendor lienor or secured party; (e) all insurance policies, and all claims thereunder, related to such Receivable or other Related Assets, and including all rights against carriers of the inventory and goods related thereto; (f) all Records; (g) all Collections in respect thereof, and (h) all other proceeds of any of the foregoing.
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1.61 “Repurchase Event” shall mean, as to any Purchased Receivable, at any time: (a) any of the representations or warranties made by the related Seller herein or in any of the other Transaction Documents with respect to such Receivable is or becomes untrue or inaccurate and shall have an adverse impact on the ability to obtain Collections of such Purchased Receivable; (b) the related Seller fails to comply with any of its covenants or obligations with respect to such Purchased Receivable and such failure shall have an adverse impact on the ability to obtain Collections of such Purchased Receivable; (c) such Purchased Receivable was not an Eligible Receivable as of the Purchase Date with respect thereto; or (d) a Dispute has arisen with respect to any Purchased Receivable that impacts or impairs the ability to obtain as Collections all or any portion of the Net Invoice Amount of such Purchased Receivable in a timely manner set forth under the Contract(s) giving rise to such Receivable.
1.62 “Repurchase Price” shall mean, with respect to any Purchased Receivable or portion thereof required to be repurchased by Seller pursuant to Section 3.1, the sum of: (a) the Purchase Price then outstanding with respect to such Purchased Receivable, plus (b) from the Purchase Date for such Purchased Receivable to and including the date that Xxxxx Fargo receives payment in full of such Repurchase Price, an amount equal to (i) the applicable Repurchase Rate, multiplied by (ii) such Purchase Price for each such day.
1.63 “Repurchase Rate” shall mean, with respect to the determination of the Repurchase Price for any Purchased Receivable that the related Seller of which is required to repurchase from Xxxxx Fargo pursuant to Section 3.1, for each day, a rate per annum equal to the Discount Rate that was applicable to such Purchased Receivable in determining its original Purchase Price, divided by 360.
1.64 “Repurchased Receivable” shall have the meaning set forth in Section 3.1.
1.65 “Responsible Officer” shall mean the chief executive officer, president, vice president, chief financial officer, treasurer or assistant treasurer, or other similar officer, manager or a director of the Seller Representative or a Seller. Any document delivered hereunder that is signed by a Responsible Officer of the Seller Representative or a Seller shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.
1.66 “Seller” and “Sellers” shall have the meaning set forth in the first paragraph hereof.
1.67 “Seller Representative” shall have the meaning set forth in the first paragraph hereof.
1.68 “Servicer” shall mean initially, with respect to any Purchased Receivable, the Seller Representative , or any replacement or successor servicer designated by Xxxxx Fargo in accordance with Section 6.2(b) or Section 7.2.
1.69 “Servicing Bonus” shall have the meaning set forth in Section 6.2(b)(viii).
1.70 “Servicing Bonus Amount” shall mean, as at any time, as to each Purchased Receivable, the excess, if any, of (a) Collections received in the Collections Account attributable to such Purchased Receivable, over (b) the sum of (i) the Purchase Price of such Purchased Receivable, plus (ii) the Discount applicable to such Purchased Receivable, plus (iii) any out of pocket collections costs, fees and expenses incurred by Xxxxx Fargo in connection with the enforcement of the right to payment of such Purchased Receivable, plus (iv) for each day after the final day of the Discount Period applicable to such
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Purchased Receivable that the sum of the Collections received in the Collections Account attributable to such Purchased Receivable do not exceed the amount determined pursuant to subclauses (i) through (iii) of this clause (b) and this clause (iv) for each day prior to the day of collection, a per diem amount equal to the result of (A) such shortfall on such day, multiplied by (B) the Servicing Bonus Discount Rate divided by 360; provided, that the Servicing Bonus shall not equal less than zero.
1.71 “Servicing Bonus Discount Rate” means, with respect to the calculation of the amount set forth in clause (iv) of the definition of Servicing Bonus Amount as of any date of determination, a rate per annum equal to the sum of (i) the Discount Margin, plus, (ii) LIBOR determined as of the date on which all amounts set forth in clauses (i) through (iv) of the definition of Servicing Bonus Amount have been collected and paid to Xxxxx Fargo.
1.72 “Servicing Bonus Payment Date” shall mean the first Purchase Date of each week.
1.73 “Smart” shall have the meaning set forth in the first paragraph hereof.
1.74 “Smart Europe” shall have the meaning set forth in the first paragraph hereof.
1.75 “Solvent” shall mean with respect to such Person as at any date of determination, (a) that such Person is able to pay its debts as they become due, (b) that such Person maintains reasonably sufficient capital to carry on its business consistent with its practices as of the date hereof, and (c) the present fair sale value of such Person’s assets and properties is sufficient to pay its probable liabilities on its existing indebtedness as they become absolute and mature.
1.76 “Termination Event” shall have the meaning set forth in Section 7.1 hereof.
1.77 “Transaction Documents” shall mean, collectively, the following (as the same now or hereafter exist or may at any time be amended, modified, supplemented, extended, renewed, restated or replaced): (a) this Agreement; (b) each Transmission; (c) each Purchase Notice; (d) each Funding Notice; (e) the Performance Undertakings, and (f) all other documents to be executed and delivered in connection with any of the foregoing.
1.78 “Transmission” shall mean the electronic delivery of reports, data or information, which may include electronic transmission through a web portal established with Xxxxx Fargo, email or other electronic arrangements, all pursuant to protocols and in a format established by Xxxxx Fargo or otherwise agreed upon between the Seller Representative and Xxxxx Fargo from time to time.
1.79 “Turnover Amounts” shall mean (i) any amounts received in the Collection Account that Xxxxx Fargo identifies or the Servicer identifies to Xxxxx Fargo as not constituting Collections on a Purchased Receivable, (ii) any amounts received from the Account Debtor and identified as being applicable to a Purchased Receivable but subsequently corrected by the Servicer to be applicable to a Receivable other than a Purchased Receivable, amounts in excess of the Net Invoice Amount, or otherwise not applicable to a Purchased Receivable, and (iii) following a Deemed Application with respect to any Purchased Receivable, the amount of any payment on such Purchased Receivable in excess of the Net Invoice Amount of such Receivable (after application of such payment, any other Collections on such Purchased Receivable and the amount of such Deemed Application).
1.80 “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York, and any successor statute, as in effect from time to time.
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1.81 “VAT Invoice Amount” shall mean that portion of Net Invoice Amount of any Receivable, if any, equal to the “value added tax” (or similar tax) payable and included in the Net Invoice Amount.
1.82 “Week” means a calendar week.
Section 2. Purchase and Sale of Receivables
2.1 Purchase and Sale.
(a) Purchase Notice and Funding Notice Procedures. Subject to the terms and conditions in this Agreement, the Seller Representative, on behalf of each Seller, may from time to time offer to sell to Xxxxx Fargo, Eligible Receivables specified in a Purchase Notice. The delivery of such Purchase Notice by Transmission shall constitute (i) an offer to sell the Proposed Receivables included in such Purchase Notice on the Purchase Date to occur in next succeeding Week, and (ii) a representation by the applicable Seller that each Proposed Receivable included in such Purchase Notice would be an Eligible Receivable as of the Purchase Date. Xxxxx Fargo, in its sole and absolute discretion, may elect to accept or reject the offer set forth in a Purchase Notice in whole or in part; provided, that Xxxxx Fargo will endeavor in good faith to provide prompt notice to the Seller Representative of any intention to cease purchases of Receivables of any Account Debtor; provided, further that each Seller and the Seller Representative acknowledge and agree that the failure by Xxxxx Fargo to provide such advance notice shall not impair or limit in any manner the sole and absolute discretion of Xxxxx Fargo to make purchases hereunder or result in any breach, costs or damages resulting therefrom hereunder. If Xxxxx Fargo wishes to accept an offer, Xxxxx Fargo shall deliver by Transmission a Funding Notice to the Seller Representative by the first Business Day of the Week following receipt of a Purchase Notice and shall purchase on the next succeeding Purchase Date, and each applicable Seller shall sell, all of such Seller’s right, title and interest (but none of such Seller’s underlying obligations to the applicable Account Debtor) in the Eligible Receivables set forth in such Funding Notice on the related Purchase Date (such Receivables, once sold and purchased on a Purchase Date, “Purchased Receivables”). In no event shall Xxxxx Fargo purchase any Proposed Receivables if such purchase would result, as of the related Purchase Date (after giving effect to all Collections received as of such date), in (i) the Outstanding Purchase Price exceeding the Purchase Limit, (ii) the Outstanding Purchase Price of HP Receivables exceeding the HP Sublimit, or (iii) the Outstanding Purchase Price of Dell Receivables exceeding the Dell Sublimit. In the event that as of such Purchase Date, the Outstanding Purchase Price would exceed the Purchase Limit, the HP Sublimit or the Dell Sublimit, then such Funding Notice shall only be effective as to the amount of those Proposed Receivables (as identified by Xxxxx Fargo) that would result in the Outstanding Purchase Price not exceeding the Purchase Limit, HP Sublimit or Dell Sublimit, as applicable.
(b) Confirmation of Eligibility. Upon receipt of a Funding Notice, the Seller Representative shall promptly, and in any event no later than one Business Day after receiving the Funding Notice, notify Xxxxx Fargo in writing if any of the Proposed Receivables identified on the Funding Notice are not Eligible Receivables or as to which any of the other representations of the applicable Seller and the Seller Representative set forth herein or in the Funding Notice would not be true and accurate. The Seller Representative and each Seller hereby represents and warrants that the election by the Seller Representative to not identify any Proposed Receivable as not qualifying as an Eligible Receivable pursuant to this Section 2.1(b) shall constitute a confirmation by each relevant Seller and the Seller Representative that such Proposed Receivable constitutes an Eligible Receivable as of its Purchase Date.
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(c) General. On each Purchase Date, subject to Section 2.1(a), Xxxxx Fargo shall purchase and each applicable Seller shall sell all of such Seller’s right, title and interest (but none of such Seller’s underlying obligations to the applicable Account Debtor) in such Proposed Receivables that are Eligible Receivables set forth in such Funding Notice as accepted for purchase by Xxxxx Fargo, and by acceptance by the Seller of the Purchase Price for such Proposed Receivable, such Proposed Receivable shall be automatically sold and purchased without any further action by Seller or Xxxxx Fargo.
2.2 Purchase Price Payment. Xxxxx Fargo agrees (and each Seller hereby directs Xxxxx Fargo) to pay on each Purchase Date to the Applicable Seller Account(s) the Purchase Price for the Proposed Receivables specified in the related Funding Notice that Xxxxx Fargo has agreed to purchase pursuant to Section 2.1 on such Purchase Date.
2.3 Conditions Precedent. Prior to the delivery of the initial Purchase Notice hereunder, Xxxxx Fargo shall have received the agreements, documents and instruments set forth on Exhibit D, each in form, substance and date satisfactory to Xxxxx Fargo.
2.4 No Commitment to Purchase; No Liability. Xxxxx Fargo shall have no obligation to accept any offer to sell, or otherwise to purchase, any Receivable from any Seller and this Agreement does not constitute a commitment on the part of Xxxxx Fargo to make any such purchase. No obligation or commitment shall be implied by an act or omission of Xxxxx Fargo, or any course of dealings in connection with purchases made hereunder. Xxxxx Fargo shall not have any liability to any Seller or to any other Person for declining to accept any offer to purchase a Receivable hereunder.
2.5 No Recourse. Except as specifically provided in this Agreement, the sale and purchase of Receivables under this Agreement shall be without recourse to each Seller and the Seller Representative. The Seller Representative and each Seller shall be liable to Xxxxx Fargo for all representations, warranties, covenants and indemnities made by such Seller or by the Seller Representative on behalf of such Seller pursuant to the terms of this Agreement.
2.7 True Sales. The Sellers and Xxxxx Fargo have structured the transactions contemplated by this Agreement as a sale and intend the transfer and conveyance of Purchased Receivables hereunder to be absolute and irrevocable true sales by the applicable Seller to Xxxxx Fargo, that provide Xxxxx Fargo with the full benefits and burdens of ownership of the Purchased Receivables. None of the Sellers nor Xxxxx Fargo intends the transactions contemplated hereunder to be, or for any purpose to be characterized as, loans from Xxxxx Fargo to any Seller. Each Seller and Xxxxx Fargo shall treat the transactions hereunder as true sales for all purposes under applicable law and accounting principles, including, without limitation, in their respective books, records, computer files, tax returns (federal, state and local), regulatory and governmental filings (and shall reflect such sale in their respective financial statements). Each Seller will advise all persons inquiring about the ownership of the Receivables sold by such Seller that all such Purchased Receivables have been sold to Xxxxx Fargo. If, notwithstanding the intention of the parties expressed in this Section 2.7, the transfer and conveyance by any Seller to Xxxxx Fargo of Receivables hereunder shall be characterized by a court of competent jurisdiction as a secured loan and not a sale, then, in such event, this Agreement shall constitute a security agreement under the UCC and
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other applicable law. For this purpose, each Seller hereby grants Xxxxx Fargo a perfected, first priority security interest in all of such Seller’s right, title and interest in, to and under the Purchased Receivables sold or purportedly sold by such Seller pursuant to this Agreement, and all proceeds of any thereof, to secure the timely payment and performance by such Seller of all amounts owing to Xxxxx Fargo hereunder and any other obligations owing to Xxxxx Fargo hereunder. In the event this Agreement shall be characterized as a security agreement, Xxxxx Fargo shall have, in addition to the rights and remedies which it may have under this Agreement, all the rights and remedies provided to a secured creditor under the UCC and applicable law, which rights and remedies shall be cumulative.
(a) Upon the occurrence of a Repurchase Event with respect to any Purchased Receivable or any portion thereof, Seller Representative on behalf of the applicable Seller (or the applicable Seller directly) shall, within one Business Day of written notice from Xxxxx Fargo to the Seller Representative (which notice shall be promptly forwarded from the Seller Representative to the applicable Seller), purchase from Xxxxx Fargo such Purchased Receivable and shall pay to Xxxxx Fargo the Repurchase Price in respect of such Repurchased Receivable or portion thereof (such Purchased Receivable, once repurchased in accordance with this Section 3.1, a “Repurchased Receivable”); it being understood and agreed that the obligations of the Seller Representative and the Sellers to make such a purchase upon a Repurchase Event under this Section 3.1(a) shall be in full force and effect notwithstanding the occurrence of a Credit Reason of the applicable Account Debtor for such Purchased Receivable. Each Seller and the Servicer each hereby authorizes Xxxxx Fargo at all times, and Xxxxx Fargo may, at its option, either: (i) setoff against the Servicing Bonus or any amount at any time owing (including any Purchase Price) by Xxxxx Fargo to any Seller for any amounts at any time owing by any Seller to Xxxxx Fargo, with respect to a Repurchased Receivable, (ii) after the occurrence and during the continuation of a Termination Event, debit or deduct from any deposit account of any Seller any amounts at any time owing by any Seller to Xxxxx Fargo with respect to a Repurchased Receivable, or (iii) require that the applicable Seller make a cash payment to Xxxxx Fargo in respect of such amounts. All such payments by the applicable Seller to Xxxxx Fargo on account of the Repurchase Price shall be due and payable on the next Business Day after the date of the notice by Xxxxx Fargo to the Seller Representative requiring that the applicable Seller repurchase any such Repurchased Receivable.
(b) Effective upon receipt by Xxxxx Fargo of the Repurchase Price with respect to a Repurchased Receivable, such Repurchased Receivable shall be deemed sold by Xxxxx Fargo to the applicable Seller, without recourse, representation or warranty, except that Xxxxx Fargo represents that each Repurchased Receivable shall be transferred to the applicable Seller free and clear of any Liens imposed by or through Xxxxx Fargo.
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payment shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment had not been received by Xxxxx Fargo. Each Seller does hereby indemnify and hold Xxxxx Fargo harmless for the amount of any payments surrendered or returned, except for those payments surrendered or returned as the result of a Credit Reason. This Section 3.2 shall remain effective notwithstanding any contrary action which may be taken by Xxxxx Fargo in reliance upon such payment or proceeds. This Section 3.2 shall survive the termination of this Agreement.
Section 4. Representations and Warranties
Seller Representative and each Seller hereby represents and warrants to Xxxxx Fargo as of Closing Date and each Purchase Date:
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(a) Effective upon each purchase of a Receivable hereunder, Xxxxx Fargo shall have acquired a valid and perfected first priority ownership interest (free and clear of any Lien) in such Receivable it sold hereunder, including the Related Assets with respect thereto.
(b) There does not exist any effective financing statement or other instrument similar on file in any recording office in effect covering any Purchased Receivable it sold or purported to sell to Xxxxx Fargo hereunder, except those financing statements in favor of (i) Xxxxx Fargo filed in accordance with this Agreement, and (ii) JPMorgan Chase Bank, N.A. (for the benefit of the secured parties under the Existing Credit Agreement) in accordance with the Existing Credit Agreement (it being understood that the Seller Representative and each Seller hereby confirms the claims in the Receivables held by the parties to the Existing Credit Agreement shall have been automatically released pursuant thereto as of the Purchase Date with respect to any such Purchased Receivables).
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(a) Compliance with Laws, Etc. It will comply in all material respects with all laws, rules, regulations, licenses, approvals, orders and other permits applicable to it and duly observe all requirements of any foreign, Federal, State or local governmental authority.
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(i) as soon as available and in any event within 120 days after the end of each fiscal year of SMART Modular Technologies (Global), Inc., a copy of the audited consolidated financial statements (together with explanatory notes thereon) together with the auditor’s report letter for such year for SMART Modular Technologies (Global), Inc. and its subsidiaries, containing financial statements for such year audited by independent public accountants of recognized standing, including an audited consolidated balance sheet, an audited consolidated statement of operations and comprehensive income, stockholders’ equity and cash flows on a consolidated basis, all prepared in accordance with generally accepted accounting principles;
(ii) as soon as available and in any event within 75 days after the end of each of the first three quarters of each fiscal year of SMART Modular Technologies (Global), Inc., unaudited consolidated balance sheets of SMART Modular Technologies (Global), Inc. and its subsidiaries for such fiscal quarter (including consolidation of each Seller), and unaudited statement of operations and comprehensive consolidated statements of income, stockholders’ equity and cash flows of SMART Modular Technologies (Global), Inc. and its subsidiaries (including consolidation of each Seller) which, after the end of fiscal 2012, shall be provided in comparative form to the corresponding fiscal quarter of the previous fiscal year, all prepared in accordance with generally accepted accounting principles and certified by the chief financial officer of SMART Modular Technologies (Global), Inc.;
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(iii) as soon as available and in any event within 120 days after the beginning of each fiscal year of SMART Modular Technologies (Global), Inc., a detailed consolidated budget for SMART Modular Technologies (Global), Inc. and its subsidiaries for such fiscal year, including a projected consolidated balance sheet and consolidated statements of projections operations, comprehensive income and cash flows for the fiscal year and the material assumptions used in the preparation of such budget and such projections;
(iv) promptly after the sending or filing thereof, if any, copies of all reports and registration statements that either Parent or any Seller files with the SEC or any national securities exchange and official statements that either Parent or any Seller files with respect to the issuance of tax-exempt indebtedness;
(v) on and as of the last Business Day of each Week (in addition to, at the option of the Seller Representative and each Seller, any other additional Business Days) by Transmission, Payment Reports updating all invoice and collection information with respect to the Purchased Receivables, together with such other data as may be requested by Xxxxx Fargo from time to time to assist in the accurate and timely presentation of the invoice and payment information that Xxxxx Fargo posts on its web portal relating to the transactions under this Agreement;
(vi) promptly (and in no event later than five Business Days following actual knowledge or receipt thereof), written notice in reasonable detail, of (A) any Dispute or Lien asserted, or claim made, against a Purchased Receivable, (B) any other material dispute asserted, or material claim made, with respect to any Contract with an Account Debtor or any of the goods underlying any such Contract and (C) any material dispute asserted, or material claim made, by any entity listed as an Account Debtor under any other contract between such entity and a Seller or an affiliate of any Seller if as a matter of law or contract such material dispute or material claim could give rise to setoff or deduction on account of a Purchased Receivable of such Account Debtor;
(vii) promptly (and in no event later than three Business Day following actual knowledge or receipt thereof), written notice in reasonable detail, if any Purchased Receivable ceases to be an Eligible Receivable or if any Seller believes or has reason to believe that any Purchased Receivable sold by such Seller may no longer be an Eligible Receivable;
(viii) promptly and in any event no later than five Business Days after a Responsible Officer of any Seller has actual knowledge thereof, notice of any event of default or any other event or circumstance that may result in the acceleration of the maturity of any Indebtedness of a Seller and/or any Parent in an aggregate principal amount in excess of $15,000,000;
(ix) promptly, notice of any event, development or circumstance whereby any financial statements or other reports furnished to Xxxxx Fargo fail in any material respect to present fairly, in accordance with GAAP consistently applied, the financial condition or operating results of SMART Modular Technologies (Global), Inc. or any Seller as of the date of such statements;
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(x) promptly after the occurrence thereof, written notice in reasonable detail of any Material Adverse Change;
(xi) promptly, and in no event later than two Business Days of any Seller or Parent’s knowledge thereof, written notice of any material administrative or judicial orders, determinations, rulings, decisions or similar occurrences, in connection with the Brazil Tax Dispute;
(xii) without duplication of the notices required to be delivered pursuant to the immediately preceding clause, on the first Business Day of each fiscal quarter (or such other date requested by Xxxxx Fargo and reasonably acceptable to the Seller Representative), the Seller Representative will make available for a conference call with Xxxxx Fargo the senior officers who are directly responsible for overseeing the administration and negotiation of the Brazil Tax Dispute to provide a status update of the Brazil Tax Dispute and answer questions from Xxxxx Fargo directly relating thereto, which status update shall include a summary of any orders, determinations or decisions rendered by the applicable authorities with regard to the Brazil Tax Dispute, the assessment and of any collateral and/or interim cash payments relating to the Brazil Tax Dispute, and any change in the reporting treatment of the Brazil Tax Dispute by Smart’s outside auditors;
(xiii) promptly following request by Xxxxx Fargo, copies of Contracts pursuant to which Purchased Receivables arise; and
(xiv) such additional information as Xxxxx Fargo shall reasonably request in order to enable Xxxxx Fargo to determine whether the terms, covenants, provisions and conditions of this Agreement have been complied with by the Sellers.
(b) Change in Name; Jurisdiction of Organization. It will not: (i) change its corporate or limited liability status, (ii) change its type of organization or jurisdiction of organization, or
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(iii) change its name, unless, in connection with any such proposed change, each of the following conditions is satisfied: (A) Xxxxx Fargo shall have received not less than 30 days prior written notice from the Seller Representative of such proposed change, which notice shall accurately set forth the new information; (B) if applicable, Xxxxx Fargo shall receive a copy of the amendment to its certificate of incorporation or certificate of formation providing for the change, certified by the Secretary of State of its jurisdiction of organization as soon as it is available, (C) it provides Xxxxx Fargo with such, documents, supplements and amendments (including amendments to UCC financing statements) as it may deem necessary or advisable to maintain its first priority perfected security interest (as defined in the UCC) in the Purchased Receivables, and (D) the first priority perfected security interest (as defined in the UCC) in the Purchased Receivables of Xxxxx Fargo is maintained.
Section 6. Rights and Obligations in Respect of Purchased Receivables
6.2 Collections; Appointment of Servicer; Responsibilities of Servicer and Seller.
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acknowledges that any Collections and any remittances, checks, bills and other proceeds of Purchased Receivables are and shall be property of Xxxxx Fargo and, to the extent received by Seller Representative or any Seller, shall be deemed for all purposes to be received and held by Seller Representative or such Seller in trust for Xxxxx Fargo. Seller Representative and each Seller further agrees that it will immediately pay and deposit solely to the Collection Account any Collections or other amounts received by Seller Representative or such Seller with respect to the Purchased Receivables, and in any event within two Business Days of receipt by Seller Representative or such Seller.
(i) Xxxxx Fargo appoints the Seller Representative as the Servicer for the administration, reconciliation and servicing of all Purchased Receivables, and the Seller Representative hereby accepts such appointment in connection with Purchased Receivables sold by any Seller, and agrees to perform all necessary and appropriate commercial collection activities with the same care and policies as are applied to its own Receivables in arranging the timely payment of amounts due and owing by any Account Debtor all in accordance with applicable laws, rules and regulations, with reasonable care and diligence and shall act in the best interest of Xxxxx Fargo to maximize Collections; provided, that such appointment shall not release any Seller from any of its duties, responsibilities, liabilities and obligations as a Seller resulting from or arising hereunder.
(ii) The Servicer shall be responsible for identifying, matching and reconciling any payments received in the Collection Account with the Receivable associated with such payment. If any payment is received from an Account Debtor, and such payment is not identified or is misidentified by such Account Debtor as relating to a particular Receivable and cannot otherwise be reasonably identified (by invoice amount or otherwise) as relating to a particular Receivable or if Xxxxx Fargo determines that the reconciliation is otherwise incorrect or inaccurate within five Business Days of receipt thereof or if the Servicer defaults in its obligations as the Servicer of any Purchased Receivables as set forth under this Section 6.2, the parties hereto agree that such payment shall be applied as provided in Section 6.4. Xxxxx Fargo will retain for its own account from Collections on account of Purchased Receivables any amounts then owing to Xxxxx Fargo under this Agreement.
(iii) Based on the reconciliation information provided by the Servicer to Xxxxx Fargo as required under Section 5.1(j)(v) hereof each week and other information available to Xxxxx Fargo, Xxxxx Fargo shall promptly remit to the Applicable Seller Account(s) all Turnover Amounts in accordance with Section 2.6.
(iv) Without limiting the Servicer’s servicing obligations as agent for Xxxxx Fargo with respect to the Purchased Receivables, including its obligations set forth in this Section 6.2, (1) the Servicer shall with respect to any Purchased Receivable that has not been paid in full within 10 days following its Due Date, contact the applicable Account Debtor by phone or in person to discuss the reason for non-payment and when payment can be expected, and (2) within 10 Business Days of such contact either (x) the Servicer shall provide Xxxxx Fargo with a written report (a “Delayed Payment Report”) detailing the reason for non-payment and stating that no Dispute is outstanding with respect to such Purchased Receivables, or (y) if a Dispute exists, the applicable Seller shall have repurchased the related Purchased Receivables at the Repurchase Price related thereto pursuant to Section 3.
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(v) To the extent that the unpaid Purchased Receivables have not been paid in full within 30 days of the Due Date, unless the Seller has repurchased the Purchased Receivable pursuant to Section 3, Xxxxx Fargo may, at its option, take all actions it believes necessary and appropriate to obtain full collection of the Purchased Receivable from the Account Debtor and, in connection therewith, the Servicer shall immediately (i) advise the Account Debtor, in writing, with copy to Xxxxx Fargo, of the purchase of the particular Receivable by Xxxxx Fargo, (ii) facilitate, at Xxxxx Fargo’s request, direct contact between the Account Debtor and Xxxxx Fargo, and (iii) continue to use all efforts to assist Xxxxx Fargo in obtaining full collection of the Purchased Receivable from the Account Debtor.
(vi) To the extent that the unpaid Purchased Receivables have not been paid in full within 60 days of the Due Date, unless the Seller has repurchased the Purchased Receivable pursuant to Section 3, in addition to the rights set forth under clause (v) above, Xxxxx Fargo may, at any time by written notice to the Seller Representative, terminate the rights of the Seller Representative as Servicer hereunder in connection with such Purchased Receivable and designate a new Servicer for such Purchased Receivable, which may be any person (other than a Disqualified Assignee) as Xxxxx Fargo may select for such purpose who is qualified to perform the obligations of Servicer to administer such Purchased Receivable on the terms and conditions as set forth hereunder. The Seller Representative shall, upon receipt of such notice (but not prior thereto) cease its activities as Servicer of such Purchased Receivable and, in a manner that Xxxxx Fargo determines, shall cooperate fully and facilitate the transition of the performance of such activities to the new Servicer, and shall take such action or refrain from taking such action as Xxxxx Fargo may specify in order to assist Xxxxx Fargo (or its designee as new Servicer) in assuming and performing such obligations in connection with such Purchased Receivable.
(vii) Upon written notice to the Seller Representative following a Termination Event, and automatically and without notice to any Seller or Seller Representative upon the commencement of an Insolvency Event with respect to any Seller or any Parent, Xxxxx Fargo may terminate the rights of the Seller Representative as Servicer hereunder and designate a new Servicer, which may be any person (other than a Disqualified Assignee) as Xxxxx Fargo may select for such purpose who is qualified to perform the obligations of Servicer to administer the Purchased Receivables on the terms and conditions as set forth hereunder. The Seller Representative shall cease its activities as a Servicer in a manner that Xxxxx Fargo determines shall cooperate fully and facilitate the transition of the performance of such activities to the new Servicer, and shall take such action or refrain from taking such action as Xxxxx Fargo may specify in order to assist Xxxxx Fargo (or its designee as new Servicer) in assuming and performing such obligations. Upon the commencement of a Termination Event with respect to any Seller or any Parent, the Seller Representative agrees, at its expense, to take all actions necessary to provide the new Servicer with access, whether or not at the offices and properties of the Seller Representative or the Sellers, to all computer software (including its servicing software and its claims software), necessary or useful in collecting, billing or maintaining the records with respect to the Purchased Receivables. The provisions of this clause (vii) shall survive the termination of this Agreement for continuing collection activities of Xxxxx Fargo with respect to any Purchased Receivable.
(viii) On each Servicing Bonus Payment Date, Xxxxx Fargo shall pay to the Seller Representative, on behalf of itself and the Sellers with respect to each Purchased Receivable that was the subject of a Purchase Notice at the time the Seller Representative was acting as Servicer, a Servicing Bonus in an amount equal to the Servicing Bonus Amounts with respect to the Purchased Receivables, if any, calculated as of such Servicing Bonus Payment Date (each, a “Servicing Bonus”). Upon receipt of such Servicing Bonus, the Seller Representative agrees to promptly distribute to each applicable Seller the Servicing Bonus (other than amounts
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mutually agreed between such Seller and the Seller Representative as compensation for the services provided by the Seller Representative hereunder) with respect to the Purchased Receivables sold by such Seller. The Servicer acknowledges that each Servicing Bonus is subject to prior setoff in the manner set forth in Section 3.1(a). The parties acknowledge that the Purchase Price and the Servicing Bonus for Purchased Receivables are fair consideration and reasonably equivalent value for the sale of the Purchased Receivables and the performance by the Seller Representative, in its capacity as Servicer, of its servicing obligations under Section 6.2.
6.3 Further Action Evidencing Purchases.
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further instruments and documents, and take all further action that Xxxxx Fargo may reasonably request in order to perfect, protect or more fully evidence Xxxxx Fargo’s ownership of the Purchased Receivables, or to enable Xxxxx Fargo to exercise or enforce any of its rights hereunder or under any other Transaction Document (it being understood that the Seller Representative and each Seller hereby confirms the claims in the Receivables held by the parties to the Existing Credit Agreement shall have been automatically released pursuant thereto as of the Purchase Date with respect to any such Purchased Receivables).
(a) any Seller (i) intentionally diverts any funds from deposit into the Collection Account or (ii) fails to pay any obligations to Xxxxx Fargo within 3 Business Days of when due;
(b) any Seller fails to perform (i) the covenants contained in Section 5.1 of this Agreement (other than Section 5.1(f), Section 5.1(g) and clauses (x), (xi) and (xii) of Section 5.1(j)) and such failure continues unremedied for a period of ten Business Days, (ii) the covenants contained in Section 5.1(f), Section 5.1(g) and Section 6 of this Agreement (to the extent applicable to such Seller, including any Seller performing in the role of Servicer hereunder) and such failure continues unremedied for a period of five Business Days, or (iii) any covenant contained in this Agreement other than those specifically set forth in clause (i) or (ii) above;
(c) any representation, warranty or statement of fact made by any Seller to Xxxxx Fargo in this Agreement, or any other written agreement, schedule or otherwise shall when made or deemed made be false or misleading in any material respect;
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(d) any Seller or Parent dissolves or suspends or discontinues doing business, or an Insolvency Event occurs with respect to any Seller or such Parent; or
(e) any Parent (i) revokes or terminates or purports to revoke or terminate any provisions of the Performance Undertaking, or fails to perform any of the terms, covenants, conditions or provisions of any Performance Undertaking which require the payment of any amount, or (ii) fails to perform any of the terms, covenants, conditions or provisions of any Performance Undertaking (other than those payment related terms, covenants, conditions or provisions set forth in clause (i) of this Section 7.1(e)) and such failure shall continue unremedied for a period of five Business Days.
(a) the transfer by a Seller of an interest in any Receivable to any Person other than Xxxxx Fargo;
(b) the breach of any representation or warranty made by the Seller Representative or any Seller under or in connection with this Agreement or any other Transaction Document, or any information or report delivered by the Seller Representative or any Seller pursuant hereto or thereto which shall have been false or incorrect in any material respect when made or deemed made;
(c) the failure by the Seller Representative or any Seller to comply with any applicable law, rule or regulation with respect to any Receivable or Related Asset, or the nonconformity of any Receivable or the Related Asset with any such applicable law, rule or regulation, or resulting from an act of God, civil strife, war, currency restrictions, foreign political restrictions or regulations or any other circumstance beyond the control of the related Seller or the related Account Debtor;
(d) the failure by the Seller Representative or any Seller to remit to the appropriate tax authorities any VAT related the VAT Invoice Amount with respect to any Purchased Receivable that has not been paid in full for any reason other than the claim or existence of a Dispute or as a result of a Credit Reason with respect to the related Account Debtor;
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(e) the failure to vest and maintain vested in Xxxxx Fargo a perfected security interest (as defined in the UCC) in the Purchased Receivables and the proceeds thereof, free and clear of any Lien other than a Lien arising solely as a result of an act of Xxxxx Fargo, whether existing at the time of the purchase of such Receivables or at any time thereafter;
(f) any Dispute of an Account Debtor to the payment of any Receivable or purported Receivable generated by the Seller Representative or any Seller (including, without limitation, a defense based on such Receivables or the related Contracts not being a legal, valid and binding obligation of such Account Debtor enforceable against it in accordance with its terms), or any other claim arising from the breach, as of the Purchase Date, of the eligibility criteria set forth in the defined term “Eligible Receivable” or otherwise resulting from the goods or services related to any such Receivable or the furnishing of or failure to furnish such goods or services;
(g) any failure of the Seller Representative or any Seller to perform its duties or obligations in accordance with the provisions of the Transaction Documents;
(h) any products liability claim, personal injury or property damage suit, environmental liability claim or any other claim or action by a party of whatever sort, whether in tort, contract or any other legal theory, arising out of or in connection with the goods or services that are the subject of any Receivable with respect thereto;
excluding, however, (i) Indemnified Amounts to the extent directly resulting from gross negligence or willful misconduct on the part of such Indemnified Party, and (ii) any indemnification which has the effect of recourse to such Seller for non-payment of the Receivables to the extent any loss arises as a result of a Credit Reason of an Account Debtor. If for any reason the indemnification provided above is unavailable to an Indemnified Party or is insufficient to hold such Indemnified Party harmless, then such Seller shall contribute to the amount paid or payable by such Indemnified Party to the maximum extent permitted under applicable law.
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damages) arising out of, in connection with, or as a result of, this Agreement, any of the other Transaction Documents or any undertaking or transaction contemplated hereby. Any such direct damages of the Sellers arising out of any failure by Xxxxx Fargo to perform purchase obligations under this Agreement is further limited to an amount not to exceed, the aggregate Outstanding Purchase Price of all Purchased Receivables.
Section 9. Seller Representative
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representations and warranties were made directly by such Seller or Servicer. Each Seller and Servicer agrees that any action taken by the Seller Representative in accordance with the terms of this Agreement or the other Transaction Documents, and the exercise by the Seller Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of Sellers and Servicers.
(a) Unless otherwise provided herein, (i) all communications by Seller Representative, any Seller or any Servicer shall be made by the Seller Representative, (ii) all communications to the Seller Representative, any Seller or any Servicer shall be made to the Seller Representative at the address for the Seller Representative set forth below, and (iii) all communications or notices required under this Agreement shall be in writing (which includes an electronic writing), shall be deemed to have been given and received (1) when delivered personally to the recipient, (2) one Business Day after being sent by nationally recognized overnight courier service with instructions to deliver the next Business Day with signature required, or (3) on the date received if before 5:00 p.m. Eastern time after being sent to the recipient by Transmission or electronic mail, or, if after 5:00 p.m. Eastern time, the next Business Day at the following addresses :
If to the Seller Representative: | SMART Modular Technologies, Inc. | |
00000 Xxxxxx Xxxxx | ||
Xxxxxx, XX 00000-0000 | ||
Attention: Xxxxx Xxxxxxxx | ||
Telecopy No.: (000)-000-0000 | ||
Email Address: xxxxx.xxxxxxxx@xxxxxx.xxx | ||
If to Xxxxx Fargo: | Xxxxx Fargo Bank, N.A. | |
Supply Chain Finance Group | ||
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Floor | ||
MAC D1053-901 | ||
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 | ||
Attention: SCF Product Manager | ||
Telecopy No: 000-000-0000 | ||
Email Address: xxxxxxxxxxxx@xxxxxxxxxx.xxx |
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and to: | ||
Xxxxx Fargo Bank, X.X. | ||
Xxxxx Fargo Legal Division | ||
000 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx | ||
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 | ||
Attention: Legal Intake Paralegals | ||
Telecopy No.: 000-000-0000 | ||
with a copy to: | ||
Xxxxx Xxxxxxxx, Esq. | ||
Xxxx Xxxxxxx LLP | ||
000 Xxxx Xxxxxx | ||
Xxx Xxxx, Xxx Xxxx 00000 | ||
Telecopy No.: 000-000-0000 | ||
Email Address: xxxxxxxxx@xxxxxxxxxxx.xxx |
(b) Notices and other communications to Xxxxx Fargo and the Seller Representative hereunder may be delivered or furnished by Transmission or by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures agreed upon by Xxxxx Fargo and the Seller Representative. The Seller Representative or Xxxxx Fargo may change the address at which it is to receive notices hereunder by written notice in the foregoing manner given to the other party.
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10.5 Governing Law; Consent to Jurisdiction. This Agreement shall be interpreted in accordance with and governed by the laws of the State of New York. Each party hereto irrevocably consents and submits to the non-exclusive jurisdiction of the Supreme Court of New York in New York County and the United States District Court for the Southern District of New York and waives any objection based on venue or forum non conveniens with respect to any action instituted therein arising under or in connection with this Agreement.
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For the purposes of this Section 10.10, the following terms shall have the following meanings:
“Confidential Information” shall mean, as to Xxxxx Fargo, the Seller Information, and as to the Sellers, the Xxxxx Fargo Information.
“Seller Information” shall mean all information received by Xxxxx Fargo from the Seller Representative, any Parent, any Seller or any other subsidiary of Parent relating to the Seller Representative, any Parent, any Seller or any other subsidiary of Parent or their business, other than any such information that is available to Xxxxx Fargo on a non-confidential basis prior to disclosure by the Seller Representative, any Parent, any Seller or any other subsidiary of Parent; provided, that, in the case of information received by Xxxxx Fargo from the Seller Representative, any Parent, any Seller or any other subsidiary of Parent after the date hereof, such information relates to the Receivables or any Account Debtor or is clearly identified at the time of delivery as confidential.
“Xxxxx Fargo Information” shall mean all information received by the Seller Representative or any Seller from Xxxxx Fargo in connection with the Transaction Documents, including information as to the price offered by Xxxxx Fargo for Purchased Receivables, other than any such information that is available to the Seller Representative or any Seller on a non-confidential basis prior to disclosure by Xxxxx Fargo or was known by the Seller Representative or any Seller before entering into the relationship created by this Agreement; provided, that, in the case of information received by the Seller Representative or any Seller from Xxxxx Fargo after the date hereof, such information is clearly identified at the time of delivery as confidential.
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XXXXX FARGO BANK, N.A. | ||||
By: | /s/ Xxxxxxx Xxx Xxxxxxx | |||
Name: | Xxxxxxx Xxx Xxxxxxx | |||
Title: |
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SMART MODULAR TECHNOLOGIES, INC., as a Seller and as the Seller Representative | ||||
By: | /s/ Xxxx XxxXxxxxx | |||
Name: | Xxxx XxxXxxxxx | |||
Title: | President, CEO | |||
SMART MODULAR TECHNOLOGIES (EUROPE) LIMITED, as a Seller | ||||
By: | /s/ Xxxx XxxXxxxxx | |||
Name: | Xxxx XxxXxxxxx | |||
Title: | Director |
EXHIBIT A
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RECEIVABLES PURCHASE AGREEMENT
List of Account Debtors
Account Debtor Name and Identification Number | Account Debtor Group Sublimit | Buffer Period | Advance Rate | Maximum Tenor | ||||||||
The HP Account Debtor Group
Hewlett-Packard Company (Identification Numbers CPQ11F, CPQ20F and CPQ24F)
Hewlett-Packard Caribe B.V. (Identification Numbers HPQ30S and EDI10Z) | $ | 50,000,000 | For Hewlett-Packard Caribe B.V. (Identification Numbers HPQ30S and EDI10Z), 3 days.
Otherwise, 0 days | 95 | % | 45 days | ||||||
The Dell Account Debtor Group
Dell, Inc. (Identification Number DEL21F)
Dell Global, B.V. (Identification Numbers XXX00X, XXX00X, XXX00X and DEL16M) | $ | 25,000,000 | 0 days | 95 | % | 90 days |
EXHIBIT B
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RECEIVABLES PURCHASE AGREEMENT
Information Certificate
Reference is made to the Receivables Purchase Agreement, dated May 16, 2012 (the “Purchase Agreement”), among SMART Modular Technologies, Inc., a California corporation, SMART Modular Technologies (Europe) Limited, an England and Wales corporation and Xxxxx Fargo Bank, N.A. (“Xxxxx Fargo”). Terms not otherwise defined herein have the meaning set forth in the Purchase Agreement.
In connection with the Purchase Agreement, [ ] (the “Certifying Seller”) hereby represents and warrants to Xxxxx Fargo as follows:
1. Certifying Seller was organized on , under the laws of , and Certifying Seller is in good standing. The full and exact name of Certifying Seller as set forth in its certificate of [incorporation/formation] attached hereto.
2. Certifying Seller uses and owns the following trade name(s) in the operation of its business:
3. The organizational identification number of Certifying Seller issued by is (or if none is issued by the jurisdiction of organization indicate “none”).
4. Certifying Seller’s Federal Employer Identification Number is: .
5. Certifying Seller is duly qualified, in good standing and authorized to transact business as a foreign organization in the following states: .
6. Certifying Seller has not changed its name or corporate structure in any way within the past five years through (i) mergers, (ii) consolidations, (iii) acquisitions or (iv) any change in jurisdiction of corporate organization, except as set forth on Schedule 1.
7. The books and records of Certifying Seller pertaining to the Receivables and Contracts are located at the following addresses:
[SMART MODULAR TECHNOLOGIES, INC.][SMART MODULAR TECHNOLOGIES (EUROPE) LIMITED], as a Seller | ||||
By: |
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Name: |
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Title: |
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EXHIBIT C
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RECEIVABLES PURCHASE AGREEMENT
Funding Notice
Receivables Period: | [Date Range Mon-Sun] | |||
Purchase Date: | [Date Wed Funding Date] | |||
[Notice Creation Date] |
Purchase Price Calculation for Receivables Offered for Sale To Be Purchased by Xxxxx Fargo
I. CALCULATION OF PURCHASE PRICE FOR THE RECEIVABLES OFFERED FOR SALE | Currency: USD | |||
Aggregate Net Invoice Amount | ||||
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Multiplied by Advance Rate | 0.95 | |||
Aggregate invoice purchase value | ||||
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Less: Discount | ||||
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Purchase Price | ||||
Adjustments | ||||
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Servicing Bonus Amount | ||||
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Total Amount Due To Seller | ||||
II. CALCULATION OF USAGE OF PURCHASE LIMIT | ||||
Outstanding Purchase Price (aggregate purchase values previously purchased, not collected) | ||||
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Plus: aggregate invoice purchase value related to this Purchase Notice | ||||
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Total Outstanding Purchase Price of Purchased Receivables (not to exceed the Purchase Limit) |
EXHIBITS TO FUNDING NOTICE
FUNDING DETAILS
Funding Report | Account Debtor | Customer ID | Invoice Number | Invoice Date | Currency | Invoice Amount | Discount | |||||||||||||||||||||
ACCOUNT DEBTOR SUMMARY
Account Debtor Group | Customer ID# | Currency | Invoice Amount | Credit Note | Adjustment | Corrections | Outstanding Purchase Price | |||||||||||||||||||||
EXHIBIT D
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RECEIVABLES PURCHASE AGREEMENT
Conditions Precedent
As conditions precedent to the initial purchase by Xxxxx Fargo of Receivables from any Seller, Xxxxx Fargo shall have received the following, each in form, substance and date satisfactory to Xxxxx Fargo:
(a) the Receivables Purchase Agreement duly authorized, executed and delivered by each Seller to Xxxxx Fargo;
(b) each Performance Undertaking duly authorized, executed and delivered by each Parent to Xxxxx Fargo;
(c) a completed Information Certificate for each Seller;
(d) a good standing certificate for each Seller and each Parent issued as of a recent date by the Secretary of State of the State (or equivalent Governmental Authority) of its incorporation or formation;
(e) a certificate of the Secretary of each Seller and each Parent certifying (i) as to the names and true signatures of the officers authorized on such Seller’s or such Parent’s behalf to sign the Transaction Documents to be delivered by it on which certificate Xxxxx Fargo may conclusively rely until such time as Xxxxx Fargo shall receive from such Seller or such Parent a revised certificate meeting the requirements hereof, (ii) as to, and attaching, a copy of the resolutions of the Board of Directors of such Seller or such Parent approving the Transaction Documents to be delivered by such Seller or such Parent and the transactions contemplated thereby, (iii) as to, and attaching, the articles or certificate of incorporation or certificate of formation, as applicable, of such Seller or such Parent, duly certified by the Secretary of State of the State of its incorporation or formation as of a recent date, (iv) as to, and attaching, a copy of the by-laws or operating agreement of such Seller or such Parent, and (v) solely as to each Seller (and not as to the Parents), that such Seller has placed on the most recent summary master control data processing report, and have taken all steps reasonably necessary to ensure that there shall be placed on subsequent, summary master control data processing reports, the legend (or the substantive equivalent thereof) provided for in Section 5.1(c);
(f) UCC, tax Lien and judgment search results for the jurisdiction of incorporation or organization of each Seller, the jurisdiction of the chief executive office of each Seller, and all jurisdictions in which assets of each Seller are located, which search results shall be in form and substance satisfactory to Xxxxx Fargo;
(g) copies of the proper UCC financing statements, each naming a Seller as the assignor and Xxxxx Fargo as the assignee of the Purchased Receivables assigned by such Seller, or other similar instruments or documents, as may be necessary or, in Xxxxx Fargo’s reasonable opinion, desirable under the UCC of all appropriate jurisdictions or any comparable law of all appropriate jurisdictions to perfect Xxxxx Fargo’s ownership interest in all Purchased Receivables in which the ownership interest may be assigned to it hereunder;
(h) evidence of establishment of the Collection Account;
(i) favorable opinions of counsel to each Seller in each jurisdiction that a Seller is located (including with respect to the true sale nature of the Receivables Purchase Agreement) and Parents in form and substance reasonably satisfactory to Xxxxx Fargo;
(j) additional documentation to be executed and, if applicable, filed in each jurisdiction (other than the United States) that a Seller is located, that is necessary or advisable (i) to reflect (and record) the true sale of and security interest in the Purchased Receivables, (ii) to comply with applicable law and regulation in such jurisdiction, including any exchange control regulations relating to the transactions contemplated hereunder;
(k) completion by Xxxxx Fargo of all required due diligence matters, including completion of a field audit of the records of the Sellers related to the Receivables and the related Contracts;
(l) delivery by the Sellers and the Parents of audited and consolidated financial statements of Saleen Holdings, Inc. and SMART Modular Technologies (WWH), Inc., each as of their respective fiscal years ending 8/26/2011, together with such other financial statements requested by Xxxxx Fargo, all of which shall be reasonably acceptable in form and substance to Xxxxx Fargo;
(m) syndication of $25,000,000 of the HP Sublimit; and
(n) proof of payment of all attorneys’ fees and disbursements incurred by Xxxxx Fargo.
EXHIBIT E
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RECEIVABLES PURCHASE AGREEMENT
Collection Accounts