EXHIBIT 10.26
AMENDMENT NO. 1
This AMENDMENT NO. 1 amends each of
(i) the Pooling and Servicing Agreement dated as of February 12, 1993 (the
"Pooling and Servicing Agreement"), as supplemented by the Variable
Funding Supplement dated as of February 12, 1993, the Series 1993-1
Supplement dated as of July 23, 1993 (the "Series 1993-1 Supplement")
and the Series 1993-2 Supplement dated as of July 23, 1993 (the
"Series 1993-2 Supplement"), each among Xxxxxx Funding Inc.
("Funding"), Xxxxxx Industries Inc. ("Ingram") and Chemical Bank,
as Trustee (the "Trustee"),
(ii) the Asset Purchase and Sale Agreement dated as of February 12, 1993
(the "Micro Purchase Agreement") between Xxxxxx Micro Inc. ("Micro")
and Ingram,
(iii) the Asset Purchase and Sale Agreement dated as of February 12, 1993
(the "Commtron Purchase Agreement") between Commtron Corp.
("Commtron) and Ingram,
(iv) the Asset Purchase and Sale Agreement dated as of February 12, 1993
(the "Purchase Agreement") between Funding and Ingram, and
(v) the Liquidity Agreement dated as of February 12, 1993 (the "Liquidity
Agreement") among Distribution Funding Corporation (the "CP
Issuer"), Funding, Ingram, Chemical Bank ("Chemical"), NationsBank
of North Carolina, N.A. ("NationsBank"), The Bank of Nova Scotia
("BNS" and, together with Chemical and NationsBank, the "Banks"),
Chemical, as agent for the Banks, with BNS, NationsBank and the
Industrial Bank of Japan, Limited, Atlanta Agency, as Lead Managers,
and is entered into as of January 31, 1994 by and among each of the above-
named parties to the Pooling and Servicing Agreement, the Micro Purchase
Agreement, the Commtron Purchase Agreement, the Purchase Agreement and the
Liquidity Agreement (collectively, the "Agreements").
WHEREAS, the parties to each of the Agreements desire to enter into
certain amendments thereto and to consent to all such amendments to all such
Agreements,
NOW, THEREFORE, in consideration of the foregcing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned thereto in, or for purposes of, the
Agreement(s) in which such term is used.
2. Amendments to Pooling and Servicing Agreement. The Pooling and
Servicing Agreement shall be amended as follows:
(a) Consents.
(i) Sections 2.06(i), 2.06(q) and 3.03(k) thereof are hereby
amended by deleting from each such Section the provision which requires the
consent of the Required Banks ("Bank Consent") to certain actions described
therein, and by substituting in lieu thereof a provision requiring consent
("Aggregate Consent") from the holders of not less than 65% of the Third-
Party Interests in the Trust. The "Third Party Interests" in the Trust
shall mean the sum of (1) the aggregate Invested Amount of all Series of
Investor Certificates (subject to paragraph (ii) below) and (2) the
Applicable Liquidity Commitment of the Banks. The "Applicable Liquidity
Commitment" of the Banks will mean the Liquidity Commitment then in effect,
provided, that if at any time pursuant to the Liquidity Agreement the CP
Issuer is not permitted to effect an additional Credit Utilization either
through issuance of additional Commercial Paper or incurrence of additional
Revolving Loans, whether by reason of Section 2.01 or Section 6.02 of the
Liquidity Agreement or otherwise, then for so long as such Credit
Utilization remains unavailable to the CP Issuer, the Applicable Liquidity
Commitment shall mean the amount of the Liquidity Commitment corresponding
to the Aggregate CP Matured Value of Outstanding Commercial Paper and the
principal amount of outstanding Loans and LOC Disbursements under the LOC,
if any, as to which the Banks remain at risk. In determining whether at
least 65% of the holders of Third-Party Interests have consented,
each Holder of an Investor Certificate may vote its Invested Amount
relative to the aggregate Third-Party Interests, and each Bank may vote its
allocable share of the Applicable Liquidity Commitment relative to the
aggregate Third-Party Interests.
(ii) For purposes of all provisions requiring the vote of
Holders of Investor Certificates (whether in respect of obtaining Series
Consent under either the Series 1993-1 Supplement or the Series 1993-2
Supplement or Aggregate Consent or with respect to any other provision of
the Pooling and Servicing Agreement or otherwise), for so long as Class B
Certificates of Series 1993-1, Class B Certificates of Series 1993-2 or
Investor Certificates of any other Series are held by the Transferor,
Ingram or any Affiliate thereof, such Certificates shall not be voted in
connection with any such vote, and the Invested Amount thereof shall be
deducted from the aggregate Invested Amount of the Series 1993-1
Certificates, the Series 1993-2 Certificates and any other Series of
Investor Certificates for purposes of calculating such aggregate Invested
Amount entitled to vote.
(b) Successor Servicer; Servicing Fee.
(i) The Trustee and Ingram hereby confirm that the intention
of Sections 3.02 and 10.02 of the Pooling and Servicing Agreement with
respect to the selection of a Successor Servicer and responsibility for
payment of the Servicing Fee thereto, and the agreement of the Trustee and
Ingram with respect to such matters, is as follows:
Qualifications. Section 10.02(a) provides that the Trustee shall as
promptly as possible after the giving of a Termination Notice appoint
an Eligible Servicer as a Successor Servicer. Accordingly, any such
Successor Servicer initially must satisfy the definition of "Eligible
Servicer". Section 10.02(a) further provides that such Successor
Servicer must have obtained confirmation from each Rating Agency that
the then outstanding rating on the Commercial Paper or any outstanding
Series will not be reduced or withdrawn.
Selection. Section 10.02(c) contemplates that the Trustee would
obtain bids from Eligible Servicers connection with selecting a
Successor Servicer. The Transferor and Ingram could participate in
obtaining such bids. The Trustee could select among any Eligible
Servicers providing bids not greater than the "Trust Servicing Fee"
described below and, if only one Eligible Servicer submitted such a
bid, the Trustee would select such Eligible Servicer. If no Eligible
Servicer submits a bid for less than or equal to the Trust Servicing
Fee, then the Trustee shall select the Eligible Servicer submitting
the bid that least exceeds the Trust Servicing Fee. Notwithstanding
the foregoing, Ingram could direct the Trustee to select an Eligible
Servicer that would otherwise not be selected by reason of submitting
a higher bid so long as Ingram agreed to be responsible for the
Servicing Fee in excess of the Trust Servicing Fee.
Servicing Fee. Section 3.02 provides that unless otherwise agreed,
the Servicing Fee with respect to a Successor Servicer shall be at
least 0.25% per annum of the daily average Unpaid Balances of the
Receivables (the "Trust Servicing Fee"). Pursuant to Section
10.02(c), the Trust Servicing Fee is the highest Servicing Fee that
can be paid to a Successor Servicer from Imputed Yield Collection
allocable to either the Variable Funding Certificate or any Series
unless otherwise provided in the related Supplement or subsequently
agreed to by all Certificateholders affected thereby. As described
above, an Eligible Servicer could submit a bid for less than the
Trust Servicing Fee. If all bids from Eligible Servicers exceed the
Trust Servicing Fee, then (1) a Successor Servicer shall be selected
based on the bids received as described above, (2) the consent of
Ingram is not required in order to select a Successor Servicer
charging a Servicing Fee in excess of the Trust Servicing Fee, and
(3) pursuant to Section 10.02(c) Ingram will be responsible for the
payment to such Successor Servicer of the portion of its Servicing
Fee in excess of the Trust Servicing Fee.
(ii) The Trustee and Ingram agree that any Successor Servicer
selected as described above must be ratified by Aggregate Consent.
(c) Consent to Successor Trustee.
Ingram agrees that any Successor Trustee selected by Ingram in
accordance with Section 11.07 of the Pooling and Servicing Agreement must
be ratified by Aggregate Consent.
(d) Certain Technical Corrections.
Funding, Ingram and the Trustee agree that the following provisions of
the Pooling and Servicing Agreement, including Annex X thereto, are hereby
modified and shall be construed as indicated:
(i) The cross-reference to "Section 2.02(c)" in line 6 on page
11 of the Agreement shall be changed to "Section 2.01(d)";
(ii) In Sections 12.01 and 12.02 of the Agreement, interest
shall be required to be deposited to but excluding the next Payment Date
rather than through the last day of the month and the Record Date,
respectively, preceding the Payment Date;
(iii) The rating of "F-1" in clause (ii) of the definition of
"Permitted Investments" shall be changed to "F-1+";
(iv) Section 4.02(a) shall be amended to provide that the
Collection Account shall not be a subaccount or otherwise part of the
Collateral Account;
(v) For purposes of Section 2.10, the reference therein to
"Adjusted Eligible Principal Receivables" shall be changed to read "the sum
of (i) the Adjusted Eligible Principal Receivables as of the end of the
preceding Business Day and (ii) the product of (x) the amount, if any, held
in the Transferor Account as of the end of the preceding Business Day
multiplied by (y) 100% minus the Discount Factor as of the most recent
Determination Date"; and
(vi) For purposes of the definition of "Transferor Account
Deposit Amount", each reference therein to "Adjusted Eligible Principal
Receivables" shall be changed to read "the sum of (i) the Adjusted Eligible
Principal Receivables and (ii) the product of (x) the amount, if any, held
in the Transferor Account multiplied by (y) 100% minus the Discount Factor
as of the most recent Determination Date"
3. Amendments to Purchase Agreements. The Micro Purchase Agreement, the
Commtron Purchase Agreement and the Purchase Agreement shall be amended as
follows:
(a) Each such Purchase Agreement is hereby amended by deleting clause
(a) of Section 8.1 of each thereof, and by substituting in lieu thereof the
following new clause (a):
(a) December 15, 2001, subject to automatic extensions of one year
periods unless otherwise agreed to in writing by the Seller and
the Buyer;
(b) Section 3.2 of each of the Micro Purchase and the Commtron Purchase
Agreement is hereby amended to read as follows:
The Purchase Price for the Receivables and related property shall be
paid on the Initial Closing Date with respect to the Receivables
existing on the Cut-Off Date and on each Business Day thereafter on
which Receivables are transferred hereunder, at the Buyer's election,
either by payment in cash in immediately available funds, creation
of a receivable due from the Buyer to the Seller on demand, or by
reduction of amounts owed by the Seller to the Buyer unrelated to
this Agreement.
4. Amendments to Liquidity Agreement. The Liquidity Agreement shall be
amended as follows:
(a) Section 7.02(g)(iv) is hereby amended to read as follows:
Consolidated Working Capital at any Lime to be less than or
equal to one hundred and ten per cent (110%) of the sum of loans
and face amount of any letters of credit outstanding in excess
of $80,000,000 under the Credit Agreement, dated December 15,
1992 among the Obligated Parties, Lenders and Agents named
therein, as such Agreement may be amended, supplemented,
modified and replaced from time to time."
(b) Section 8.01(b) is hereby amended to read as follows:
The CP Issuer shall fail to perform or observe in any material
respect any of the covenants or agreements set forth in this
Agreement, the Security Agreement or the CP Dealer Agreement or
Ingram shall fail to perform or observe in any material respect any
of the covenants or agreements set forth in this Agreement if such
breach shall remain unremedied for 30 days after the date on which
written notice of such breach shall have been given to the CP Issuer
and Ingram by the Liquidity Agent, the Collateral Agent or the CP
Dealer.
(c) Section 8.01(i) is hereby amended to read as follows:
The Servicer, the Transferor or Ingram shall fail to perform or
observe any other term, covenant or agreement in any Facilities
Document or Purchase Agreement to which it is a party and such
failure to perform or observe shall continue unremedied for 30 days
after the date on which written notice of such breach shall have been
given to such Person by the Liquidity Agent or the Collateral Agent.
5. Consent to Amendments. Each party hereto hereby consents to each
amendment to each Agreement provided for in this Amendment No. 1.
6. Ratification of Agreements. As amended by this Amendment No. 1, each
Agreement is in all respects ratified and confirmed.
7. Counterparts. This Amendment No. 1 may be executed in any number
of counterparts, which may include facsimile counterparts, each of which so
executed shall be deemed to be an original, but all of such counterparts
shall together constitute but one and the same instrument.
8. Governing Law. THIS AMENDMENT NO. 1 SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
9. Confirmation of Ratings. This Amendment No. 1 shall not become
effective unless and until the Trustee shall have received written
confirmation from each Rating Agency that the effectiveness hereof will
not result in either the reduction or withdrawal of the ratings currently
assigned by such Rating Agency to both the Commercial Paper and the Class A
Certificates of both Series 1993-1 and Series 1993-2.
IN WITNESS WHEREOF, each of the parties to the Agreements has caused
this Amendment No. 1 to be executed by its duly authorized officer as of
the date set forth above.
XXXXXX FUNDING INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------
Name: Xxxxxx X. Xxxx
Title: Asst. Treasurer
XXXXXX INDUSTRIES INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------
Name: Xxxxxx X. Xxxx
Title: V.P. and Treasurer
CHEMICAL BANK, as Trustee
By: /s/ X. X. Xxxxxxx
-------------------------
Name: X. X. Xxxxxxx
Title: Asst. Vice President
XXXXXX MICRO INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------
Name: Xxxxxx X. Xxxx
Title: Asst. Treasurer
XXXXXX ENTERTAINMENT INC.,
as successor to
COMMTRON CORP.
By: /s/ Xxxxxx X. Xxxx
-------------------------
Name: Xxxxxx X. Xxxx
Title: Treasurer
DISTRIBUTION FUNDING
CORPORATION
By: /s/ Hans Bald
-------------------------
Name: Hans Bald
Title: Vice President
CHEMICAL BANK,
as the Liquidity Agent
and as a Bank
By: /s/ Xxxx X. Xxxxxxxx
-------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
NATIONSBANK OF
NORTH CAROLINA, N.A.
By: /s/ Xxxx X. Xxxx
-------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
THE BANK OF NOVA SCOTIA
By: /s/ P. M. Xxxxx
-------------------------
Name: P. M. Xxxxx
Title: Representative
