Exhibit 10(a)
AMENDED AND RESTATED OPERATING AGREEMENT
This Amended and Restated Operating Agreement (the "Agreement"), originally
made and entered into as of November 1, 1980, amended and restated as of June
30, 1998, by and between XEROX CORPORATION, a New York corporation ("Xerox")
and XEROX CREDIT CORPORATION, a Delaware corporation ("Credit").
WITNESSETH:
WHEREAS, Xerox is now and will become in the future the owner of numerous
accounts receivable arising out of credit sales and leases of Xerox during the
normal course of its business; and
WHEREAS, Xerox desires to sell and Credit desires to purchase from time to
time a portion of such accounts receivable; and
WHEREAS, Credit desires to appoint Xerox as agent to xxxx and collect such
accounts receivable as Credit may from time to time purchase from Xerox;
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto agree as follows:
1. Definitions. For the purposes of this Agreement, the following
definitions are used:
(a) "Accounting Period" means one calendar month unless a different period
of time is agreed upon by the parties in writing.
(b) "Assigned Obligation" means the amount (or portion) of any Obligation
which, as of any date, Xerox sells to Credit and, unless otherwise specified
by the parties, shall be deemed to include an Obligation which arises from an
extension, explicit or implicit, of the original term of a lease which gave
rise to an Assigned Obligation.
(c) "Book Value" of any Assigned Obligation means, as of any given date, the
value of such Assigned Obligation to Credit as reflected on the books and
records of Credit on such date giving effect to all collections on such
Assigned Obligations as of such date.
(d) "Defaulted Obligation" means an Obligation any part of which has been
determined to be uncollectible in accordance with Xerox` standard credit
policies in effect on the date hereof and as such policies may be changed
hereafter.
(12)
(e) "Defaulted Reserve Obligation" means any Reserve Obligation which has
become a Defaulted Obligation.
(f) "Defaulted XBS Obligation" means any XBS Obligation which has become a
Defaulted Obligation.
(g) "Obligation" means any amount owed to Xerox for products sold or leased
to the obligor (the "Debtor") by Xerox, including products manufactured by
Xerox or by other parties.
(h) "Reserve" means the reserve account to be established under Section 5
hereof.
(i) "Reserve Obligation" means any Assigned Obligation which is not an XBS
Obligation.
(j) "Subsidiary" means a corporation more than 50% of the voting capital
stock of which is owned, directly or indirectly, by another entity.
(k) "XBS Obligation" means any Assigned Obligation which is designated as
such by Xerox at the time of purchase by Credit.
(l) "Xerox" means Xerox Corporation, a New York corporation, and includes
any of its Subsidiaries which hereafter sells Obligations to Credit hereunder
by reason of which sale such Subsidiary shall be deemed to have become a party
hereto and shall become subject to all of the obligations and have all of the
rights of Xerox hereunder with respect to such Subsidiary`s Assigned
Obligations.
2. Sale and Ownership of Obligations.
(a) Subject to the conditions of Sections 2(c) and 2(d) hereof, effective on
the date hereof and at such other times during the term of this Agreement as
may be mutually agreed upon, Xerox will sell to Credit and Credit will
purchase, as hereinafter provided, all of Xerox` right, title and interest in
and to such Assigned Obligations as shall be described in the particular
document of sale. Each sale and purchase of Assigned Obligations shall be
deemed to include the transfer by Xerox to Credit of all security interests
and all other liens which Xerox may have with respect to the equipment, the
sale or lease of which gave rise to the Assigned Obligation.
(b) Each sale to Credit of Obligations under this Agreement shall be
accomplished by the delivery to and acceptance by Credit of a document in
substantially the form of Exhibit "A-1", in the case of Obligations which will
be Reserve Obligations and Exhibit "A-2", in the case of Obligations which
will be XBS Obligations.
(13)
(c) Each group of Assigned Obligations which are sold by Xerox to Credit
from time to time shall be representative of the quality of Obligations of the
kind represented in such group then held by Xerox with respect to credit
worthiness of the Debtors and collection experience.
(d) Credit may, at any time and from time to time, elect to have any wholly-
owned Subsidiary of Credit purchase the Assigned Obligations from Xerox and
any such Subsidiary and Credit may, at any time and from time to time,
purchase and sell or otherwise transfer Assigned Obligations one to the other.
In the event that such Subsidiary shall become a holder of Assigned
Obligations, it shall concurrently with such transaction be deemed to have
become a party hereto and shall become subject to all the obligations and have
all of the rights of Credit hereunder. Credit may not sell, transfer or
assign Assigned Obligations to any other person, firm or corporation except
(i) transfers and assignments made prior to the date of this Agreement to
Preferred Receivables Funding Corporation and The First National Bank of
Chicago and (ii) further transfers or assignments made with the prior approval
of Xerox.
(e) Xerox and Credit may from time to time establish a mutually-agreed
target return on equity ("XXX") level for Credit. In recognition of the fact
that Credit's credit rating depends, in part, on maintaining such target XXX,
Xerox may, at its option, at any time and from time to time, transfer to
Credit such additional amounts as are necessary to maintain Credit's XXX at
the targeted level.
3. Documents.
(a) Whenever Obligations are sold to Credit under this Agreement, Xerox
shall make available to Credit at its request, for its inspection and copying,
the following:
(i) Documents, if any, evidencing such Assigned Obligations and any security
therefore and any evidence of filing or recording thereof.
(ii) A listing showing the original amount of the Assigned Obligations and
the amount remaining unpaid thereon if less than the face amount.
(iii) Such other financial information then possessed by Xerox regarding the
Debtor`s financial condition as Credit may from time to time request.
(b) Nothing contained in this Agreement shall require, and Xerox shall in no
event be obligated to give, notice to any Debtor that the related Obligation
has been sold to Credit. So long as Xerox shall be in substantial compliance
with its obligations under Section 10(a), Credit shall give no such notice to
any Debtor without the prior written consent of Xerox.
(14)
4. Purchase Price. The purchase price at which Credit shall at any time
acquire Assigned Obligations shall be such as the parties shall agree at the
time of the sale of the Assigned Obligations.
5. Reserve Account. Credit shall retain a portion of the purchase price of
any Reserve Obligation otherwise payable to Xerox for the sole purpose of
establishing and maintaining a Reserve account intended to cover Reserve
Obligations which subsequently become Defaulted Obligations. Such Reserve
shall be funded as follows:
(a) On the first date on which payment shall be due Xerox for Reserve
Obligations, Credit shall withhold from Xerox and credit to said Reserve a
portion of the purchase price of the stated amount of such Reserve Obligations
as agreed by the parties.
(b) On each subsequent date on which payment shall be due Xerox for Reserve
Obligations, necessary adjustments shall be made in order to maintain a total
Reserve of the stated amount of all outstanding Reserve Obligations (after
giving effect to all other accounting adjustments on such date) as agreed by
the parties.
(c) As of the last day of each Accounting Period after the first such
period, the amounts of any Defaulted Reserve Obligations shall be charged to
the Reserve and subsequent collections of any such Defaulted Obligations will
be credited to the Reserve. Property repossessed in accordance with Section
10(a)(ii) shall be credited to the Reserve in an amount as agreed to by the
parties not to exceed net realizable value. Upon termination hereof pursuant
to Section 13, Defaulted Reserve Obligations and subsequent collections on
Defaulted Reserve Obligations shall continue to be credited to the Reserve
until all Reserve Obligations have been paid in full or become Defaulted
Reserve Obligations. Thereafter, any credit balance in the Reserve shall be
paid to Xerox or any excess charges shall be paid by Xerox to Credit.
6. XBS Obligations. Notwithstanding any other provision of this Agreement to
the contrary, and as additional consideration for Credit`s agreement to
purchase the XBS Obligations in accordance with the terms and provisions of
this Agreement, Xerox hereby agrees that:
(a) On any date that payments are due to Credit from Xerox as set forth in
Section 10 hereof, Xerox shall pay to Credit the full amount of all sums then
due to Credit with respect to the XBS Obligations whether or not such sums
have been collected by Xerox from the parties obligated to pay such sums; and
(b) In the event that Xerox shall determine during any Accounting Period
that a particular XBS Obligation has become a Defaulted XBS Obligation, Xerox
shall repurchase such Defaulted XBS Obligation from Credit within
(15)
thirty (30) days after the end of such Accounting Period at a price equal to
the Book Value of such Defaulted XBS Obligation as of the date of repurchase.
Each such repurchase shall be deemed to include the transfer by Credit to
Xerox of all security interests and other liens which Credit acquired at the
time it purchased the original XBS Obligation.
7. Price Adjustments; Indemnification. To the extent that Credit is entitled
to collect less than the face value of any Assigned Obligation as the result
of any price adjustment, rebate or cash discount not contemplated in fixing
the sale price of the Assigned Obligation, or breach of product warranty
adjustment or other offset to which the Debtor(s) thereon may become entitled
in connection with the transaction giving rise to such Assigned Obligation,
Xerox will reimburse Credit in the amount of such difference. Xerox agrees to
hold Credit harmless from any and all liability, claims, losses and damages
caused by breach of product warranties made by Xerox or by other breaches of
contract by Xerox with respect to the products covered by Assigned
Obligations. To the extent that Credit suffers any monetary damage due to the
inaccuracy of any of Xerox` representations in Section 9, Xerox will reimburse
Credit in the amount of any such damage. Xerox also agrees to hold Credit
harmless from any and all liabilities, claims, losses and damages for any
sales, use, personal property or license tax arising out of the use of
ownership of any of the products covered by Assigned Obligations.
8. Settlement. Within thirty (30) days after the end of each Accounting
Period, or at such other interval as may be mutually agreed upon, Xerox will
deliver to Credit a settlement statement in substantially the form of Exhibit
"B-1", with respect to Reserve Obligations and Exhibit "B-2", with respect to
XBS Obligations, showing payments to be made as of the end of such Accounting
Period. The balance due between the parties shall thereupon be settled by
payment in appropriate funds or in such manner as may be agreed between the
parties. All adjustments as provided in Section 7 hereof with respect to any
Accounting Period shall for all purposes hereof be deemed to have been made
immediately prior to the end of such Accounting Period. Each transfer at the
time of the settlement for an Accounting Period covered by a settlement
statement shall for all purposes hereof be deemed to have been made at the end
of such Accounting Period.
9. Representations and Warranties. Xerox hereby represents and warrants to
Credit as follows:
(a) The figures set forth in each document of sale and settlement statement
delivered to Credit hereunder will be true and correct as at the time made;
(b) At the time of sale of Obligations, such Obligations will represent
valid and legally enforceable Obligations of customers in connection with the
sale or lease of products;
(16)
(c) At the time of sale of Obligations, beneficial ownership in the
Obligations will not have been conveyed or assigned to a third party;
(d) Each document of sale executed and delivered to Credit hereunder will
vest in Credit all right, title and interest in and to the Assigned
Obligations covered by such document and the proceeds of collection thereof,
free and clear from claims of any third parties;
(e) At the time of sale of Obligations, such Obligations will be free and
clear of all liens and encumbrances whatsoever and will not be subject to any
setoff, counterclaim or other defense;
(f) At the time of sale of Obligations, such Obligations will conform with
any and all applicable laws and regulations; and
(g) Xerox will at all times during the warranty period for equipment satisfy
its obligations, if any, with respect to the maintenance and service of
equipment, the sale of which gave rise to an Assigned Obligation.
10. Services.
(a) Credit hereby appoints Xerox to perform the following services for
Credit, and Credit will reimburse Xerox for the cost to Xerox of performing
such services to the extent and in such amounts as may from time to time be
agreed to between Xerox and Credit:
(i) To xxxx and collect, when due and with the same diligence and
procedures employed in the collection of Xerox` own accounts receivable, sums
payable on Assigned Obligations and upon collection to hold them for the
account of Credit, and to pay them over to Credit within thirty (30) days
after the end of the Accounting Period in which the same were received or
within such other period of time as the parties shall agree;
(ii) If it becomes advisable to Xerox to repossess any property in which
any Reserve Obligation acquired by Credit has any security interest, to
proceed with due diligence to take lawful steps to repossess said property and
to take such other lawful steps as may be necessary or appropriate to enforce
such security interest for and on behalf of Credit, and any such repossessed
property shall become the property of Xerox upon an appropriate credit to the
Reserve in accordance with Section 5(c);
(iii) To perform such other acts and provide such other services as Credit
may from time to time reasonably request and Xerox may agree to perform or
provide.
(17)
(b) Xerox agrees to indemnify Credit against, and hold Credit harmless from,
any and all claims asserted against Credit by any third party arising out of
any wrongful or negligent act or omission to act of Xerox, in performing any
of the services which Xerox shall perform or furnish for Credit pursuant to
the provisions of this Agreement, provided, however, that Credit shall
promptly notify Xerox in writing of each such claim made or suit thereon
instituted against Credit and the details thereof, and shall not pay or
compromise any such claim or suit without the written approval of Xerox, and
Xerox shall be permitted to assume and direct the defense of any such suit by
counsel of its own choosing.
(c) Nothing contained in this Agreement shall in any way restrict Xerox at
any time from exchanging, renewing, extending or in any way altering the
Assigned Obligations on behalf of and for the account of Credit, provided that
any such exchange, renewal, extension or alteration shall be consonant with
Xerox` then existing standard credit policies. Appropriate adjustment shall
be made for any such change, renewal, extension or alteration in the
settlement statement at the end of the Accounting Period in which the action
took place.
11. Records. Xerox will
(a) safely maintain such documents as may be required for the collection of
Assigned Obligations;
(b) keep such accounts and other records as will enable Credit to determine
at any time the status of the Assigned Obligations;
(c) permit Credit on reasonable notice at any time during normal business
hours to inspect, audit, check and make abstracts from Xerox` accounts,
records, correspondence and other papers pertaining to Assigned Obligations;
and
(d) deliver to Credit, upon its request and at Xerox` own cost and expense,
any of said accounts, records, correspondence and other papers as Credit may
deem reasonably essential to enable it to enforce its rights, if then being
challenged, with respect to Assigned Obligations. The books and records of
Xerox will be made to reflect the sale of the Assigned Obligations to Credit.
12. Waivers. Xerox hereby waives any failure or delay on the part of Credit
in asserting or enforcing any of its rights or in making any claims or demands
hereunder.
13. Termination; Amendment. This Agreement may not be terminated, amended or
modified except upon the written consent thereto of Credit and Xerox which
will not be unreasonably withheld. No Obligations shall be offered or
purchased hereunder after the date of termination. This Agreement shall
otherwise continue in effect after the date of termination until Credit shall
have received
(18)
payment of an amount equal to the unrecovered balance then remaining to be
paid on all Assigned Obligations owned by Credit on the date of termination
and thereupon this Agreement shall terminate for all purposes (other than
rights of indemnification provided for herein).
14. Notices. Any notice, instruction, request, consent, demand or other
communication required or contemplated by this Agreement to be in writing,
shall be given or made or communicated by United States first class mail,
addressed as follows:
If to Xerox: Xerox Corporation
P. O. Box 1600
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Treasurer
If to Credit: Xerox Credit Corporation
P. O. Box 10347
100 First Stamford Place
Stamford, Connecticut 06904-2347
Attention: Vice President, Finance
15. Successors. The covenants, representations, warranties and agreements
herein set forth shall be mutually binding upon, and inure to the mutual
benefit of, Xerox and its successors, and Credit and its successors.
16. Governing Law. This Agreement shall be governed by the laws of the State
of New York.
IN WITNESS WHEREOF, the parties hereto have set their hands and have affixed
their corporate seals as of the day and year first above written.
XEROX CORPORATION
Attest: /s/ Xxxxxx X. Xxxxxx By /s/ Xxxxxx X. Filter
Assistant Secretary Vice President, Treasurer
And Secretary
XEROX CREDIT CORPORATION
Attest: /s/ Xxxxxxx X. Xxxxxxxx By /s/ Xxxxxx X. Xxxx
Assistant Secretary Vice President and
Treasurer
Chief Financial Officer
(19)
EXHIBIT A-1
This instrument is delivered to you pursuant to the Amended and Restated
Operating Agreement dated as of November 1, 1980, amended and restated as of
June 30, 1998, by and between Xerox Corporation and Xerox Credit Corporation
("Credit").
1. The undersigned hereby sells and transfers to ___________, pursuant to
Section 2 of the Agreement, an aggregate of $________ of Reserve Obligations
outstanding as of the close of business on __________ for a purchase price
(less the Reserve) of $________. Such Reserve Obligations are set forth on
Schedule 1 hereto.
2. After giving effect to all adjustments you own as of the close of business
at ______________, Reserve Obligations in the aggregate amount of $________.
3. This instrument shall become effective as of the date hereof upon your
acceptance.
XEROX CORPORATION
By _____________________
[Title]
Accepted as of __________________.
___________________________
By: ____________________
[Title]
(20)
Schedule 1
To Instrument of Transfer
As of _____________
Pursuant To Amended and Restated Operating Agreement
Dated As Of November 1, 1980, amended and restated as of June 30, 1998
Xerox Corporation is hereby transferring as of __________ to ____________ the
Reserve Obligations set forth on the New Month Contract - Detail Report
bearing the following Division Codes and Customer Types:
(21)
EXHIBIT A-2
This instrument is delivered to you pursuant to the Amended and Restated
Operating Agreement dated as of November 1, 1980, amended and restated as of
June 30, 1998, by and between Xerox Corporation and Xerox Credit Corporation.
1. The undersigned hereby sells and transfers to ___________, pursuant to
Section 2 of the Agreement, an aggregate of $________ of XBS Obligations
outstanding as of the close of business on __________ for a purchase price of
$________. Such XBS Obligations are set forth on Schedule 1 hereto.
2. After giving effect to all adjustments you own as of the close of business
at ______________, XBS Obligations in the aggregate amount of $________.
3. This instrument shall become effective as of the date hereof upon your
acceptance.
XEROX CORPORATION
By: ______________________
[Title]
Accepted as of _____________.
____________________________
By _________________________
[Title]
(22)
Schedule 1
To Instrument of Transfer
As of _____________
Pursuant To Amended and Restated Operating Agreement
Dated As Of November 1, 1980, amended and restated as of June 30, 1998
Xerox Corporation is hereby transferring as of __________ to __________ the
following XBS Obligations:
(23)
EXHIBIT B-1
(Part 1)
SETTLEMENT STATEMENT FOR MONTH OF _____________
Between Xerox Corporation and Xerox Credit Corporation
RESERVE OBLIGATIONS AGREEMENT RESERVE ACCOUNT
1. Reserve Obligations outstanding 7. Balance in Agreement Reserve
at end of prior period (Line at end of prior period
6 of prior report) (Line 14 of prior report)
$_________ ________
2. Amount of Obligations (which 8. Amount credited to Reserve
will be designated as Reserve for the period.
Obligations) as of end of period
(Exhibit A-1) __________ _________
3. Reserve Obligations which became 9. Charge against Reserve
Defaulted Reserve Obligations
during period __________ _________
4. Collections and other adjustments 10. Collections and other
on Reserve Obligations during adjustments on Defaulted
period __________ Reserve Obligations _________
5. Net Change for the period (Line 2 11. Net change in Agreement
minus Lines 3 and 4) Reserve account during period
(Line 9 plus Line 10 minus
__________ Line 9) _________
6. Reserve Obligations at end of 12. Agreement Reserve prior to
period (Line 1 plus Line 5) adjustment (Line 7 plus
__________ Line 11 _________
13. Reserve adjustment _________
14. Balance in Agreement Reserve
at end of period _________
(24)
EXHIBIT B-1
(Part 2)
SETTLEMENT STATEMENT FOR MONTH OF _____________
Between Xerox Corporation and Xerox Credit Corporation
SETTLEMENT
Due Due
XC XCC
15. Collections and other
adjustment on
Reserve Obligations
(Line 4) XXX ______
16. Collections and other
adjustment on Defaulted
Reserve Obligations
(Line 10) XXX ______
Amount Due XCC XXX ______
17. Agreement Reserve
Balance adjustment
Line 13) XXX ______
18. Amount of Accounts
Receivable (which will be
designated as Reserve
Obligations) assigned less
amount credited to reserve
(Line 2 minus Line 8) _____ XXX
19. Unearned Interest and
Discount / (Premium)
_____ ______
Totals (Line 16 plus
Lines 17 and 18) _____
Amount Due XC _____ XXX
(25)
EXHIBIT B-2
SETTLEMENT STATEMENT FOR MONTH OF _____________
Between Xerox Corporation and Xerox Credit Corporation
XBS OBLIGATIONS SETTLEMENT
Due XC Due XCC
1. XBS Obligations outstanding 7. Sums due on XBS
at end of prior period Obligations (Line 4)
(Line 6 of Prior Report) $______ XXX _______
2. Amount of Obligations (which 8. Book Value of Defaulted
will be designated as XBS XBS Obligations (Line 3)
Obligations) assigned as of
end of period (Exhibit A) ______ XXX _______
Amount Due XCC XXX _______
(Line 7 plus Line 8)
3. Book Value of XBS Obligations 9. Amount of Accounts Receivable
which became Defaulted XBS (which will be designated as
Obligations during period XBS Obligations) assigned
______ (Line 2) ______ XXX
4. Sums due on XBS Obligations
during period 10. Unearned Interest XXX _______
5. Net change for the period (Line 2
minus Lines 3 and 4) _______ Amount Due XC _______ XXX
(Line 9 minus Line 10)
6. XBS Obligations at end of period
(Line 1 plus Line 5) $_______ Amount Due XC _______ XXX
(26)
