_________________________________________________________________
_________________________________________________________________
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of August 21, 1995
Among
INACOM FINANCE CORP.
as Seller
and
INACOM CORP.
as initial Servicer
and
CLIPPER RECEIVABLES CORPORATION
as Purchaser
and
STATE STREET BOSTON CAPITAL CORPORATION
as Administrator
and
NORWEST BANK MINNESOTA, N.A.
as Relationship Bank
_________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. Commitments to Purchase; Limits on
Purchaser's Obligations. . . . . . . . . . . 3
SECTION 1.02. Purchase Procedures; Assignment of
Purchaser's Interests. . . . . . . . . . . . 3
SECTION 1.03. Reinvestments of Certain Collections;
Payment of Remaining Collections . . . . . . 3
SECTION 1.04. Asset Interest . . . . . . . . . . . . . . . . 6
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. Selection of Asset Tranches. . . . . . . . . . 7
SECTION 2.02. Computation of Purchaser's Total
Investment and Purchaser's Tranche
Investment . . . . . . . . . . . . . . . . . 8
SECTION 2.03. Computation of Concentration Limits
and Unpaid Balance . . . . . . . . . . . . . 8
SECTION 2.04. Computation of Earned Discount . . . . . . . . 8
SECTION 2.05. Estimates of Earned Discount Rate, Fees, etc . 9
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures. . . . . . . . . . . . . 10
SECTION 3.02. Deemed Collections; Reduction of
Purchaser's Total Investment, Etc. . . . . . 13
SECTION 3.03. Payments and Computations, Etc.. . . . . . . . 14
SECTION 3.04. Treatment of Collections and Deemed Collections 15
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.02. Yield Protection . . . . . . . . . . . . . . . 16
SECTION 4.03. Funding Losses . . . . . . . . . . . . . . . . 18
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. Conditions Precedent to Effectiveness. . . . . 18
SECTION 5.02. Conditions Precedent to All Purchases
and Reinvestments. . . . . . . . . . . . . . 20
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Seller
Parties. . . . . . . . . . . . . . . . . . . 21
ARTICLE VII
GENERAL COVENANTS OF SELLER PARTIES
SECTION 7.01. Affirmative Covenants of Seller Parties. . . . 26
SECTION 7.02. Reporting Requirements of Seller Parties . . . 28
SECTION 7.03. Negative Covenants of Seller Parties . . . . . 30
SECTION 7.04. Separate Corporate Existence of Seller . . . . 32
SECTION 7.05. Financial Covenants. . . . . . . . . . . . . . 35
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer. . . . . . . . . . . . 36
SECTION 8.02. Duties of Servicer . . . . . . . . . . . . . . 37
SECTION 8.03. Rights of the Administrator. . . . . . . . . . 39
SECTION 8.04. Responsibilities of Seller Parties . . . . . . 40
SECTION 8.05. Further Action Evidencing Purchases
and Reinvestments. . . . . . . . . . . . . . 40
SECTION 8.06. Application of Collections . . . . . . . . . . 42
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest . . . . . . . . . . 42
SECTION 9.02. Further Assurances . . . . . . . . . . . . . . 42
SECTION 9.03. Remedies . . . . . . . . . . . . . . . . . . . 42
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. Liquidation Events . . . . . . . . . . . . . . 43
SECTION 10.02. Remedies . . . . . . . . . . . . . . . . . . . 45
ARTICLE XI
THE ADMINISTRATOR; RELATIONSHIP BANK
SECTION 11.01. Authorization and Action . . . . . . . . . . . 46
SECTION 11.02. Administrator's and Relationship Bank's
Reliance, Etc. . . . . . . . . . . . . . . . 46
SECTION 11.03. State Street Capital and Norwest and
Affiliates . . . . . . . . . . . . . . . . . 47
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments. . . . . . . . . . 47
SECTION 12.02. Rights of Assignee . . . . . . . . . . . . . . 48
SECTION 12.03. Terms and Evidence of Assignment . . . . . . . 48
SECTION 12.04. Rights of Collateral Agent . . . . . . . . . . 48
SECTION 12.05. Liquidity Banks. . . . . . . . . . . . . . . . 49
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by Seller. . . . . . . . . . . . . 49
SECTION 13.02. Indemnities by Servicer. . . . . . . . . . . . 52
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. . . . . . . . . . . . . . . . 52
SECTION 14.02. Notices, Etc.. . . . . . . . . . . . . . . . . 53
SECTION 14.03. No Waiver; Remedies. . . . . . . . . . . . . . 53
SECTION 14.04. Binding Effect; Survival . . . . . . . . . . . 53
SECTION 14.05. Costs, Expenses and Taxes. . . . . . . . . . . 54
SECTION 14.06. No Proceedings . . . . . . . . . . . . . . . . 55
SECTION 14.07. Confidentiality of Seller Information. . . . . 55
SECTION 14.08. Confidentiality of Program Information . . . . 57
SECTION 14.09. Captions and Cross References. . . . . . . . . 59
SECTION 14.10. Integration. . . . . . . . . . . . . . . . . . 60
SECTION 14.11. Governing Law. . . . . . . . . . . . . . . . . 60
SECTION 14.12. Waiver Of Jury Trial . . . . . . . . . . . . . 60
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities. 60
SECTION 14.14. Execution in Counterparts. . . . . . . . . . . 61
SECTION 14.15. No Recourse Against Other Parties. . . . . . . 61
APPENDICES
APPENDIX A Definitions
SCHEDULES
SCHEDULE 6.01(i) Description of Material Adverse Changes
SCHEDULE 6.01(j) Description of Litigation
SCHEDULE 6.01(n) List of Offices of Servicer and Seller where
Records Are Kept
SCHEDULE 6.01(o) List of Lock-Box Banks
SCHEDULE 6.01(p)-1 Forms of Contracts
SCHEDULE 6.01(p)-2 Description of Credit and Collection Policy
EXHIBITS
EXHIBIT 1.02(a) Form of Notice of Purchase
EXHIBIT 3.01(a)-1 Form of Receivables Report
EXHIBIT 3.01(a)-2 Form of Settlement Report
EXHIBIT 5.01(f) Form of Lock-Box Agreement
EXHIBIT 5.01(f)-2 Form of Lock-Box Notice
EXHIBIT 5.01(g) Form of Opinion of Special Counsel for Seller
Parties
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of August 21, 1995
THIS IS AN AMENDED AND RESTATED RECEIVABLES PURCHASE
AGREEMENT, among:
(1) INACOM FINANCE CORP., a Delaware corporation (together
with its successors and permitted assigns, "Seller"),
(2) INACOM CORP., a Delaware corporation (together with its
successors, "Inacom"), as initial servicer hereunder (in such
capacity, together with any successor servicer appointed pursuant
to Section 8.01, "Servicer"; Inacom, in its capacity as Servicer,
together with Seller, each a "Seller Party" and collectively the
"Seller Parties"),
(3) CLIPPER RECEIVABLES CORPORATION, a Delaware corporation
(together with its successors and assigns, "Purchaser"),
(4) STATE STREET BOSTON CAPITAL CORPORATION, a
Massachusetts corporation ("State Street Capital"), as
administrator for Purchaser under the Program Administration
Agreement (in such capacity, together with any successors thereto
in such capacity, the "Administrator"), and
(5) NORWEST BANK MINNESOTA, N.A., a national banking
association ("Norwest"), as a referral agent for Purchaser under
the Relationship Bank Agreement (in such capacity, together with
any successors thereto in such capacity, the "Relationship
Bank").
Unless otherwise indicated, capitalized terms used in this
Agreement are defined in Appendix A.
Background
1. Seller, Inacom, Norwest and IBM Credit Corporation
("IBM"), as purchasers, and Norwest, as agent, entered into a
Receivables Purchase Agreement, dated as of June 28, 1995 (the
"Original Purchase Agreement"). Norwest and IBM are assigning
all of their rights and obligations under the Original Purchase
Agreement to Purchaser pursuant to an Assignment and Acceptance,
dated as of August 21, 1995 (the "Assignment Agreement"). In
connection with such assignment, the parties hereto desire to
amend and restate the Original Purchase Agreement in its
entirety.
2. Seller is a wholly-owned direct subsidiary of Inacom.
3. Inacom and certain of its Subsidiaries are engaged in
the business of assembling and selling various types of computers
and other information technology products and services.
4. The Originators and Seller have entered into the Sale
Agreement pursuant to which the Originators, have transferred and
hereafter will transfer, to Seller all of their right, title and
interest in and to the Pool Receivables and certain related
property.
5. Seller has requested Purchaser, and Purchaser agreed,
subject to the terms and conditions contained in this Agreement,
to purchase from Seller from time to time an undivided percentage
interest, referred to herein as the Asset Interest, in Pool
Receivables and related property.
6. Seller and Purchaser also desire that, subject to the
terms and conditions of this Agreement, certain of the daily
Collections in respect of the Asset Interest be reinvested in
Pool Receivables, which reinvestment shall constitute part of the
Asset Interest.
7. State Street Capital has been requested, and is
willing, to act as the Administrator under this Agreement.
8. Norwest has been requested, and is willing, to act as
the Relationship Bank under this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto hereby
amend and restate the Original Purchase Agreement as follows:
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. Commitments to Purchase; Limits on
Purchaser's Obligations. Upon the terms and subject to the
conditions of this Agreement (including, without limitation,
Article V), from time to time prior to the Termination Date,
Seller may request that Purchaser purchase from Seller ownership
interests in Pool Receivables and Related Assets, and Purchaser
shall make such purchase (each being a "Purchase"); provided that
no Purchase shall be made by Purchaser if, after giving effect
thereto, either (a) the then Purchaser's Total Investment would
exceed the lesser of (1) $100,000,000 and (2) 85% times the Net
Pool Balance, (the "Purchase Limit"), or (b) the Asset Interest,
expressed as a percentage of Net Pool Balance, would exceed 100%
(the "Allocation Limit"); and provided, further that each
Purchase made pursuant to this Section 1.01 shall have a purchase
price equal to at least $1,000,000 and shall be an integral
multiple of $100,000.
SECTION 1.02. Purchase Procedures; Assignment of
Purchaser's Interests.
(a) Notice of Purchase. Each Purchase from Seller
by Purchaser shall be made on notice from Seller to the
Administrator and the Relationship Bank received by the
Administrator and the Relationship Bank not later than 11:00 a.m.
(New York City time) on the Business Day next preceding the date
of such proposed Purchase. Each such notice of a proposed
Purchase shall be substantially in the form of Exhibit 1.02(a)
and shall specify the desired amount and date of such Purchase.
(b) Funding of Purchase. On the date of each Purchase,
Purchaser shall, upon satisfaction of the applicable conditions
set forth in Article V, make available to the Administrator at
the Administrator's Office the amount of its Purchase in same day
funds, and after receipt by the Administrator of such funds, the
Administrator will make such funds immediately available by wire
transfer to an account designated in writing by Seller.
(c) Assignment of Asset Interests. Seller hereby sells,
assigns and transfers to Purchaser, effective on and as of the
date of each Purchase by the Purchaser hereunder, the Asset
Interest in the Pool Receivables and Related Assets.
SECTION 1.03. Reinvestments of Certain Collections; Payment
of Remaining Collections. (a) On the close of business on each
day during the period from the date of the first Purchase to the
Termination Date, Servicer will, out of all Collections received
on such day from Pool Receivables and Related Assets:
(i) determine the portion of the Collections
attributable to the Asset Interest by multiplying (A) the
amount of such Collections times (B) the lesser of (x) the
Asset Interest and (y) 100%;
(ii) out of the portion of such Collections allocated
to the Asset Interest pursuant to clause (i), set aside and
hold in trust for Purchaser (but, unless otherwise requested
by the Administrator or the Relationship Bank, shall not be
required to segregate) an amount equal to the sum of the
estimated amount of Earned Discount accrued in respect of
each Asset Tranche (based on rate information provided by
the Administrator pursuant to Section 2.05), all other
amounts due to Purchaser, the Administrator, or the
Relationship Bank hereunder and the Servicer's Fee (in each
case, accrued through such day) and not so previously set
aside;
(iii) apply the Collections allocated to the Asset
Interest pursuant to clause (i) and not required to be set
aside pursuant to clause (ii) to the purchase from Seller of
ownership interests in Pool Receivables and Related Assets
(each such purchase being a "Reinvestment"); provided that:
(A) if (I) the then Asset Interest would exceed
the Allocation Limit or (II) the then Purchaser's Total
Investment would exceed the Purchase Limit, then
Servicer shall not reinvest, but shall set aside and
hold for the benefit of Purchaser, a portion of such
Collections which, together with other Collections
previously set aside and then so held, shall equal the
amount necessary to reduce the Purchaser's Total
Investment to the Purchase Limit and the Asset Interest
to the Allocation Limit; and
(B) if any of the conditions precedent to
Reinvestment in clause (a), (b) and (d) of Section 5.02
are not satisfied, then Servicer shall not reinvest any
of such remaining Collections, but shall set them aside
and hold them in trust for the benefit of Purchaser;
and
(iv) pay to Seller (A) the portion of Collections not
allocated to the Asset Interest pursuant to clause (i) and
(B) the Collections applied to Reinvestment pursuant to
clause (iii).
(b) Unreinvested Collections. Servicer shall set aside and
hold in trust for the benefit of Purchaser all Collections which,
pursuant to clause (iii) of Section 1.03(a), may not be
reinvested in the Pool Receivables and Related Assets, provided
that unless otherwise requested by the Administrator or the
Relationship Bank, such Collections need not be held in a
segregated account. If the Administrator or the Relationship
Bank shall so request in writing, then, within five (5) (or three
(3), if a Liquidation Event or Back-up Servicer Event has
occurred and is continuing) Business Days after receipt of each
request, Servicer shall apply such funds to reduce the
Purchaser's Total Investment in accordance with
Section 1.03(c)(iii). If, prior to the date when such
Collections are required to be paid to the Administrator for the
benefit of Purchaser pursuant to Section 1.03(c)(iii), the amount
of Collections so set aside exceeds the amount, if any, necessary
to reduce the Purchaser's Total Investment to the Purchase Limit
and the Asset Interest to the Allocation Limit, and the
conditions precedent to Reinvestment set forth in clauses (a),
(b) and (d) of Section 5.02 are satisfied, then the Servicer
shall apply such Collections (or, if less, a portion of such
Collections equal to the amount of such excess) to the making of
a Reinvestment.
(c) Payment of Amounts Set Aside.
(i) Servicer shall pay all amounts set aside pursuant
to Section 1.03(a)(ii) in respect of Earned Discount on an
Asset Tranche funded by a Liquidity Funding or a Credit Draw
to the Administrator on the last day of the then current
Yield Period for such Asset Tranche.
(ii) Servicer shall pay all amounts of Collections set
aside pursuant to Section 1.03(a)(ii) and not applied
pursuant to clause (i) next above to the Administrator on
the Settlement Date for each Settlement Period, as provided
in Section 3.01, or on such earlier date or dates as the
Administrator shall require on at least one Business Day's
written notice to Servicer.
(iii) Servicer shall pay all amounts set aside
pursuant to Section 1.03(b) to the Administrator for the
account of Purchaser (A) on the last day of the then current
Yield Period for any Asset Tranche funded by a Liquidity
Funding or a Credit Draw, in an amount not exceeding the
Purchaser's Tranche Investment of such Asset Tranche, and
(B) on the Settlement Date for each Settlement Period, as
provided in Section 3.01, in an amount not exceeding the
Purchaser's Tranche Investment of the Asset Tranche funded
by Commercial Paper Notes, or, in the case of either clause
(A) or clause (B) above, on such earlier date or dates as
the Administrator shall require on at least one Business
Day's prior written notice to Servicer; provided, however,
(1) no such payment shall be made under
clause (B) above with respect to an Asset Tranche
funded by a Credit Draw unless the Purchaser's Tranche
Investments of all Asset Tranches, if any, funded by
Commercial Paper Notes or Liquidity Fundings shall have
been reduced to zero; and
(2) no payment shall be made under clause (B)
above unless the Purchaser's Tranche Investments of all
Asset Tranches, if any, funded by Liquidity Fundings
shall have been reduced to zero.
(d) Funds Under Sale Agreement. Upon the written request
of the Administrator or the Relationship Bank given at any time
when (A) based on the most recent Information Package, the Asset
Interest would exceed the Allocation Limit or the Purchaser's
Total Investment would exceed the Purchase Limit, or (B) a
Liquidation Event or Unmatured Liquidation Event shall have
occurred and be continuing, Seller shall set aside all funds that
under the Sale Agreement would be applied to repay principal of
any Initial Purchaser Note (as defined in the Sale Agreement)
owing to any Originator and/or to make loans to any Originator
evidenced by an Originator Note (as defined in the Sale
Agreement). Seller may make withdrawals of such funds only for
the purposes of (i) at any time, purchasing Receivables from the
Originators in accordance with the Sale Agreement; (ii) on the
Settlement Date for any Settlement Period, making payments in
accordance with the last sentence of Section 3.01(c)(ii), and
(iii) on the Settlement Date for any Settlement Period, if, on
the basis of the most recent Information Package, and after
giving effect to any payment made to Servicer on such date
pursuant to the last sentence of Section 3.01(c)(ii), the
Purchaser's Total Investment does not exceed the Purchase Limit
and the Asset Interest does not exceed the Allocation Limit, and
provided that no Liquidation Event or Unmatured Liquidation Event
shall have occurred and be continuing, (x) repaying principal of
the Initial Purchaser Notes and/or (y) making loans to the
Originators evidenced by the Originator Notes, in each case in
accordance with this Agreement and the Sale Agreement.
SECTION 1.04. Asset Interest. (a) Components of Asset
Interest. On any date the Asset Interest will represent
Purchaser's undivided percentage ownership interest in all then
outstanding Pool Receivables and all Related Assets with respect
to such Pool Receivables as at such date.
(b) Computation of Asset Interest. On any date, the Asset
Interest will be equal to a percentage, expressed as the
following fraction:
PTI + ACR + LCR + LR + DR
NPB
where:
PTI = the then Purchaser's Total Investment;
ACR = the then Accrued Cost Reserve;
LCR = the then Liquidation Cost Reserve;
LR = the then Loss Reserve;
DR = the then Dilution Reserve; and
NPB = the then Net Pool Balance;
provided, however, that the Asset Interest during the Liquidation
Period shall equal 100%.
(c) Frequency of Computation. The Asset Interest shall be
computed (i) as provided in Section 3.01, as of the Cut-Off Date
for each Settlement Period, and (ii) on the Settlement Date
following such Reporting Date, after giving effect to the
payments made pursuant to Section 3.01. In addition, at any
time, the Administrator or the Relationship Bank may require
Servicer to provide a Receivables Report or a Settlement Report,
based on the information then available to Servicer, for purposes
of computing the Asset Interest or the Purchase Limit as of any
other date, and Servicer agrees to do so within five (5) (or
three (3), if a Liquidation Event or Back-up Servicer Event has
occurred and is continuing) Business Days of its receipt of the
Administrator's or the Relationship Bank's request.
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. Selection of Asset Tranches. The
Administrator shall, from time to time for purposes of computing
Earned Discount, divide the Asset Interest into Asset Tranches,
and the applicable Earned Discount Rate may be different for each
Asset Tranche. Purchaser's Total Investment shall be allocated
to each Asset Tranche by the Administrator to reflect the funding
sources for the Asset Interest, so that:
(a) there will be an Asset Tranche equal to the
excess of Purchaser's Total Investment over the
aggregate amounts allocated at such time pursuant to
clauses (b) and (c) below, which Asset Tranche shall
reflect the portion of the Asset Interest funded by
Commercial Paper Notes;
(b) there will be one or more Asset Tranches,
selected by the Administrator, reflecting the portion
of the Asset Interest funded by outstanding Liquidity
Fundings; and
(c) there will be one or more Asset Tranches,
selected by the Administrator, reflecting the portion
of the Asset Interest funded by Credit Draws.
SECTION 2.02. Computation of Purchaser's Total Investment
and Purchaser's Tranche Investment. In making any determination
of Purchaser's Total Investment and any Purchaser's Tranche
Investment, the following rules shall apply:
(a) Purchaser's Total Investment shall not be
considered reduced by any allocation, setting aside or
distribution of any portion of Collections unless such
Collections shall have been actually delivered to the
Administrator pursuant hereto;
(b) Purchaser's Total Investment shall not be
considered reduced by any distribution of any portion of
Collections if at any time such distribution is rescinded or
must otherwise be returned for any reason; and
(c) if there is any reduction in Purchaser's Total
Investment, there shall be a corresponding reduction in a
Purchaser's Tranche Investment with respect to one or more
Asset Tranches selected by the Administrator in its
reasonable discretion.
SECTION 2.03. Computation of Concentration Limits and
Unpaid Balance. The Obligor Concentration Limits and the
aggregate Unpaid Balance of Pool Receivables of any Obligor and
its Affiliated Obligors (if any) shall be calculated as if such
Obligor and its Affiliated Obligors were one Obligor.
SECTION 2.04. Computation of Earned Discount. In making
any determination of Earned Discount, the following rules shall
apply:
(a) the Administrator shall determine the Earned
Discount accruing with respect to each Asset Tranche, and
each Settlement Period therefor (or, in the case of the
Asset Tranche funded by Liquidity Fundings or Credit Draws,
each Yield Period), in accordance with the definition of
Earned Discount;
(b) no provision of this Agreement shall require the
payment or permit the collection of Earned Discount in
excess of the maximum permitted by applicable law; and
(c) Earned Discount for any Asset Tranche shall not be
considered paid by any distribution if at any time such
distribution is rescinded or must otherwise be returned for
any reason.
It is the intent of Purchaser to fund the Asset Interest by the
issuance of Commercial Paper Notes. If Purchaser is unable to
issue Commercial Paper Notes to fund the Asset Interest, or is
unable to repay such Commercial Paper Notes upon the maturity
thereof, Purchaser will first, draw on Liquidity Fundings to fund
the Asset Interest to the extent available, and second, make
Credit Draws, to fund the Asset Interest.
SECTION 2.05. Estimates of Earned Discount Rate, Fees, etc.
For purposes of determining the amounts required to be set aside
by Servicer pursuant to Section 1.03, the Administrator shall
notify Servicer from time to time of the Purchaser's Tranche
Investment of each Asset Tranche, the Earned Discount Rate
applicable to each Asset Tranche and the rates at which fees and
other amounts are accruing hereunder. It is understood and
agreed that (i) the Earned Discount Rate for any Asset Tranche
may change from one applicable Yield Period or Settlement Period
to the next, and the Alternate Base Rate or CP Rate used to
calculate the Earned Discount Rate may change from time to time
during an applicable Yield Period or Settlement Period, (ii)
certain rate information provided by the Administrator to
Servicer shall be based upon the Administrator's good faith
estimate, (iii) the amount of Earned Discount actually accrued
with respect to an Asset Tranche during any Settlement Period
(or, in the case of the Asset Tranche funded by Liquidity
Fundings or Credit Draws, any Yield Period) may exceed, or be
less than, the amount set aside with respect thereto by Servicer,
and (iv) the amount of fees or other payables accrued hereunder
with respect to any Settlement Period may exceed, or be less
than, the amount set aside with respect thereto by Servicer.
Failure to set aside any amount so accrued shall not relieve
Servicer of its obligation to remit Collections to the
Administrator with respect to such accrued amount, as and to the
extent provided in Section 3.01.
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures.
The parties hereto will take the following actions with
respect to each Settlement Period:
(a) Information Package. On the Reporting Date for
each Fiscal Month, Servicer shall deliver to the
Relationship Bank and the Administrator a report in the form
of Exhibit 3.01(a)-1 (each a "Receivables Report"); on the
eighth Business Day following each Cut-Off Date, Servicer
shall deliver to the Relationship Bank and the Administrator
a diskette containing the information described in Exhibit
3.01(a)-2 and a report in the form of Exhibit 3.01(a)-2
(each, a "Settlement Report").
(b) Earned Discount; Other Amounts Due. On or before
10:00 a.m., Boston, Massachusetts time, on the Business Day
before each Reporting Date, the Administrator shall notify
Servicer of (i) the amount of Earned Discount accrued during
the prior calendar month, and (ii) all fees and other
amounts accrued and payable by Seller under this Agreement
(other than amounts described in clause (c) below).
Servicer shall pay to the Administrator the amount of such
Earned Discount, fees and other amounts (to the extent of
Collections attributable to the Asset Interest during such
Settlement Period and not previously paid to the
Administrator or reinvested pursuant to Section 1.03) on the
Settlement Date for such month. Such payment shall be made
(A) out of amounts set aside pursuant to Section 1.03 for
such payment, (B) in the case of amounts other than Earned
Discount, to the extent that amounts were not set aside
pursuant to Section 1.03 for such payment, out of funds paid
by Servicer to Seller (which amounts Seller hereby agrees to
pay to Servicer), and (C) in the case of Earned Discount, to
the extent that funds were not set aside pursuant to Section
1.03 for such payment (because the actual Earned Discount
for such month was greater than the estimated Earned
Discount used in calculating the Asset Interest during such
month), out of funds paid by Servicer to Seller (which
amounts Seller hereby agrees to pay to Servicer), up to the
aggregate amount of Collections applied to Reinvestment
under Section 1.03(a) or (b) during such month.
(c) Asset Interest Computations.
(i) On the Reporting Date for each Settlement Period,
the Servicer shall compute, as of the related Cut-Off Date
and based upon the assumptions in the next sentence, (A) the
Asset Interest, (B) the amount of the reduction or increase
(if any) in the Asset Interest since the next preceding Cut-
Off Date, (C) the excess (if any) of the Asset Interest over
the Allocation Limit, and (D) the excess (if any) of the
Purchaser's Total Investment over the Purchase Limit. Such
calculation shall be based upon the assumptions that (x) the
information in the Information Package is correct, and (y)
Collections set aside pursuant to Section 1.03(b) will be
paid to the Administrator on the Settlement Date for such
Settlement Period.
(ii) If, according to the computations made pursuant
to clause (i) above, the Asset Interest exceeds the
Allocation Limit or the Purchaser's Total Investment exceeds
the Purchase Limit, then on the Settlement Date for such
Settlement Period, Servicer shall pay to the Administrator
(to the extent of Collections during the related Settlement
Period attributable to all Asset Tranches and not previously
paid to the Administrator) the amount necessary to reduce
the Purchaser's Total Investment to the Purchase Limit and
the Asset Interest to the Allocation Limit, subject,
however, to the proviso to Section 1.03(c)(iii). Such
payment shall be made out of amounts set aside pursuant to
Section 1.03 for such purpose and, to the extent such
amounts were not so set aside, the Seller hereby agrees to
pay such amounts to the Servicer to the extent of
Collections applied to Reinvestment under Section 1.03
during the relevant Settlement Period.
(iii) In addition to the payments described in clause
(ii) above, during the Liquidation Period, Servicer shall
pay to the Administrator all amounts set aside pursuant to
Section 1.03 (A) on the last day of the current Yield Period
for any Asset Tranche funded by a Liquidity Funding, in an
amount not exceeding the Purchaser's Tranche Investment of
such Asset Tranche, (B) after reduction to zero of the
Purchaser's Tranche Investments of the Asset Tranches, if
any, funded by Liquidity Fundings, on the Settlement Date
for each Settlement Period, in an amount not exceeding the
Purchaser's Tranche Investment of the Asset Tranche funded
by Commercial Paper Notes, and (C) after reduction to zero
of the Purchaser's Tranche Investment of all Asset Tranches
funded by Liquidity Fundings or Commercial Paper Notes, on
the last day of the current Yield Period for any Asset
Tranche funded by Credit Draws, in an amount not exceeding
the remaining Purchaser's Total Investment.
(d) Order of Application. Upon receipt by the
Administrator of funds distributed pursuant to this Section
3.01 on the Settlement Date with respect to any Settlement
Period, the Administrator shall apply them to the items
specified in the subclauses below, in the order of priority
of such subclauses:
(i) to Earned Discount accrued during such
Settlement Period, plus any previously accrued Earned
Discount not paid on a prior Settlement Date;
(ii) to accrued and unpaid Servicer's Fee (if
Servicer is not Seller or its Affiliate);
(iii) to the Program Fee, the Liquidity Fee and
the Administrative Fee accrued during such Settlement
Period, plus any previously accrued Program Fee, the
Liquidity Fee and the Administrative Fee not paid on a
prior Settlement Date;
(iv) to the reduction of Purchaser's Total
Investment, to the extent such reduction is required
under Section 3.01(c);
(v) to other accrued and unpaid amounts owing to
Purchaser, the Administrator or the Relationship Bank
hereunder (except Earned Discount on any Asset Tranche
funded by a Liquidity Funding which has accrued but is
not yet overdue under Section 1.03(c)); and
(vi) to accrued and unpaid Servicer's Fee (if
Servicer is Seller or its Affiliate).
(e) Non-Distribution of Servicer's Fee. If the
Administrator consents (which consent may be revoked at any
time after the occurrence and during the continuance of a
Liquidation Event or Back-up Servicer Event), the amounts
(if any) set aside pursuant to Section 1.03 in respect of
Servicer's Fee may be retained by Servicer, in which case no
distribution shall be made in respect of Servicer's Fee
pursuant to clause (d) above.
(f) Delayed Payment. If on any day described in this
Section 3.01 (or in Section 1.03(c) in respect of accrued
Earned Discount on Asset Tranches funded by Liquidity
Fundings or Credit Draws), because Collections during the
relevant Settlement Period or Yield Period were less than
the aggregate amounts payable, Servicer shall not make any
payment otherwise required, the next available Collections
in respect of the Asset Interest shall be applied to such
payment, and no Reinvestment shall be permitted hereunder
until such amount payable has been paid in full.
SECTION 3.02. Deemed Collections; Reduction of Purchaser's
Total Investment, Etc.
(a) Deemed Collections. If on any day
(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective,
rejected or returned merchandise or services, any cash
discount, or any other adjustment by any Seller Party
or any Affiliate of any thereof,
(B) reduced or cancelled as a result of a setoff
in respect of any claim by the Obligor thereof (whether
such claim arises out of the same or a related or an
unrelated transaction), or
(C) reduced on account of the obligation of any
Seller Party or any Affiliate thereof to pay to the
related Obligor any rebate or refund, or
(D) less than the amount included in calculating
the Net Pool Balance for purposes of any Information
Package (for any reason other than such Receivable
becoming a Defaulted Receivable), or
(ii) any of the representations or warranties of
Seller set forth in Section 6.01(l) or (p) were not true
when made with respect to any Pool Receivable, or any of the
representations or warranties of Seller set forth in
Section 6.01(l) are no longer true with respect to any Pool
Receivable, or any Pool Receivable is repurchased by an
Originator pursuant to the Sale Agreement,
then, on such day, Seller shall be deemed to have received a
Collection of such Pool Receivable
(I) in the case of clause (i) above, in the
amount of such reduction or cancellation or the
difference between the actual Unpaid Balance and the
amount included in calculating such Net Pool Balance,
as applicable; and
(II) in the case of clause (ii) above, in the
amount of the Unpaid Balance of such Pool Receivable.
Collections deemed received by Seller under this Section 3.02(a)
are herein referred to as "Deemed Collections".
(b) Seller's Optional Reduction of Purchaser's Total
Investment. Seller may at any time elect to reduce the
Purchaser's Total Investment as follows:
(i) Seller shall give the Administrator at least five
(5) Business Days' prior written notice of such reduction
(including the amount of such proposed reduction and the
proposed date on which such reduction will commence),
(ii) on the proposed date of commencement of such
reduction and on each day thereafter, Servicer shall refrain
from reinvesting Collections pursuant to Section 1.03 until
the amount thereof not so reinvested shall equal the desired
amount of reduction, and
(iii) Servicer shall hold such Collections in trust
for Purchaser, pending payment to the Administrator, as
provided in Section 1.03;
provided that:
(A) the amount of any such reduction shall be not
less than $5,000,000 and shall be an integral multiple
of $1,000,000, and
(B) Seller shall use reasonable efforts to
attempt to choose a reduction amount, and the date of
commencement thereof, so that such reduction shall
commence and conclude in the same Settlement Period.
SECTION 3.03. Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by
Seller or Servicer to the Administrator or any other Person
hereunder (other than amounts payable under Section 4.02) shall
be paid or deposited in accordance with the terms hereof no later
than 10:00 a.m. (New York City time) on the day when due in
lawful money of the United States of America in same day funds
(i) in the case of amounts to be paid or deposited in respect of
accrued and unpaid Earned Discount or in reduction of Purchaser's
Total Investment, to the Collateral Agent at The First National
Bank of Chicago, Chicago, Illinois (clearing account
no. 4811-5377, "Clipper Receivables Corporation", attention:
Xxxxxxx Xxxxx), ABA # 000000000, and (ii) in the case of all
fees, expenses and other amounts (other than amounts payable
under Section 4.02), to the Administrator in care of State Street
Bank and Trust Company, Boston, Massachusetts (account
no. 00000000, attention: Xxxxxxx X. Xxxxxxxxx (Ext. 4940), Route
Code 5, Function 5), ABA #000000000, or, in the case of clause
(i) or (ii) above, to such other account at the bank named
therein or at such other bank as the Collateral Agent or the
Administrator, as applicable, may designate by written notice to
the Person making such payment.
(b) Late Payments. Seller or Servicer, as applicable,
shall, to the extent permitted by law, pay to Purchaser interest
on all amounts not paid or deposited when due hereunder at 1% per
annum above the Alternate Base Rate, payable on demand, provided,
however, that such interest rate shall not at any time exceed the
maximum rate permitted by applicable law.
(c) Method of Computation. All computations of interest,
Earned Discount, Liquidation Discount, any fees payable under
Section 4.01 and any other fees payable by Seller to Purchaser,
the Administrator or the Relationship Bank hereunder shall be
made on the basis of a year of 360 days for the actual number of
days (including the first day but excluding the last day)
elapsed.
SECTION 3.04. Treatment of Collections and Deemed
Collections. Seller shall forthwith deliver to Servicer all
Deemed Collections, and Servicer shall hold or distribute such
Deemed Collections as Earned Discount, accrued Servicer's Fee,
repayment of Purchaser's Total Investment, and to other accrued
amounts owing hereunder to the same extent as if such Deemed
Collections had actually been received on the date of such
delivery to Servicer. If Collections are then being paid to the
Administrator or its designee, or lock boxes or accounts directly
or indirectly owned or controlled by the Administrator, Servicer
shall forthwith cause such Deemed Collections to be paid to the
Administrator or its designee or to such lock boxes or accounts,
as applicable, or as the Administrator shall request. So long as
Seller shall hold any Collections (including Deemed Collections)
required to be paid to Servicer, the Administrator or Collateral
Agent, it shall hold such Collections in trust and shall clearly
mark its records to reflect such trust; provided that unless the
Administrator or the Relationship Bank shall have requested it in
writing to do so, Seller shall not be required to hold such
Collections in a separate deposit account containing only such
Collections.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees. Seller shall pay to Purchaser and the
Relationship Bank certain fees from time to time in amounts and
payable on such dates as are set forth in a separate letter dated
June 28, 1995, as amended and restated pursuant to the letter
dated on or about the date hereof (as further amended from time
to time, the "Fee Letter") among Seller, Purchaser, the
Relationship Bank and the Administrator.
SECTION 4.02. Yield Protection.
(a) If (i) Regulation D or (ii) any Regulatory Change
occurring after the date of the Original Purchase Agreement
(A) shall subject an Affected Party to any tax, duty
or other charge with respect to any Asset Interest owned by
or funded by it, or any obligations or right to make
Purchases or Reinvestments or to provide funding therefor,
or shall change the basis of taxation of payments to the
Affected Party of any Purchaser's Total Investments or
Earned Discount owned by, owed to or funded in whole or in
part by it or any other amounts due under this Agreement in
respect of the Asset Interest owned by or funded by it or
its obligations or rights, if any, to make Purchases or
Reinvestments or to provide funding therefor (except for
changes in the rate of tax on or determined by reference to
the overall net income of such Affected Party imposed by the
United States of America, by the jurisdiction in which such
Affected Party's principal executive office is located and,
if such Affected Party's principal executive office is not
in the United States of America, by the jurisdiction where
such Affected Party's principal office in the United States
is located); or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed
by the Federal Reserve Board, but excluding any reserve
included in the determination of Earned Discount), special
deposit or similar requirement against assets of any
Affected Party, deposits or obligations with or for the
account of any Affected Party or with or for the account of
any affiliate (or entity deemed by the Federal Reserve Board
to be an affiliate) of any Affected Party, or credit
extended by any Affected Party; or
(C) shall change the amount of capital maintained or
required or requested or directed to be maintained by any
Affected Party; or
(D) shall impose any other condition affecting any
Asset Interest owned or funded in whole or in part by any
Affected Party, or its obligations or rights, if any, to
make Purchases or Reinvestments or to provide funding
therefor; or
(E) shall change the rate for, or the manner in which
the Federal Deposit Insurance Corporation (or a successor
thereto) assesses, deposit insurance premiums or similar
charges;
and the result of any of the foregoing is or would be
(x) to increase the cost to (or in the case of
Regulation D referred to above, to impose a cost on) (I) an
Affected Party funding or making or maintaining any
Purchases or Reinvestments, any purchases, reinvestments, or
loans or other extensions of credit under the Liquidity
Agreement, or any Credit Draw, or any commitment of such
Affected Party with respect to any of the foregoing, or (II)
the Administrator for continuing its or Seller's
relationship with Purchaser,
(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement, or
under the Liquidity Agreement or the Credit Agreement with
respect thereto, or
(z) in the reasonable determination of such Affected
Party, to reduce the rate of return on the capital of an
Affected Party as a consequence of its obligations hereunder
or arising in connection herewith to a level below that
which such Affected Party could otherwise have achieved,
then, within thirty days after demand by such Affected Party
(which demand shall be accompanied by a certificate setting forth
the basis of such demand and a calculation of the amounts claimed
by the Affected Party), Seller shall pay directly to such
Affected Party such additional amount or amounts as will
compensate such Affected Party for such additional or increased
cost or such reduction.
(b) Each Affected Party will promptly notify Seller and the
Administrator of any event of which it has knowledge (including
any future event that, in the judgment of such Affected Party, is
reasonably certain to occur) which will entitle such Affected
Party to compensation pursuant to this Section 4.02; provided,
however, no failure to give or delay in giving such notification
shall adversely affect the rights of any Affected Party to such
compensation.
(c) In determining any amount provided for or referred to
in this Section 4.02, an Affected Party may use any reasonable
averaging and attribution methods (consistent with its ordinary
business practices) that it (in its reasonable discretion) shall
deem applicable. Any Affected Party when making a claim under
this Section 4.02 shall submit to Seller a certificate as to such
increased cost or reduced return (including calculation thereof
in reasonable detail), which statement shall, in the absence of
demonstrable error, be conclusive and binding upon Seller.
(d) If at any time, the Seller is required to pay any
material amount to an Affected Party pursuant to this Section
4.02, then upon request by Seller, such Affected Party shall make
all reasonable efforts to transfer (pursuant to documentation
reasonably satisfactory to the Administrator and the Relationship
Bank) its rights and obligations under this Agreement and the
other Transaction Documents to another branch or office of such
Affected Party satisfactory to the Administrator and the
Relationship Bank, and to take such other steps as may be
available, so that the payment under this Section 4.02 would no
longer by required or the amount of such payment would be
reduced; provided, however, no Affected Party shall be required
under this paragraph (d) to take any action which (A) would be
inconsistent with applicable law or regulations or with such
Affected Party's internal policies or (b) in the judgment of such
Affected Party, would be materially disadvantageous to such
Affected Party.
SECTION 4.03. Funding Losses. In the event that any
Liquidity Bank shall incur any loss or expense (including any
loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such
Liquidity Bank to make any Liquidity Funding or maintain any
Liquidity Funding) as a result of (i) any settlement with respect
to Purchaser's Tranche Investment of any Asset Tranche funded by
a Liquidity Funding being made on any day other than the
scheduled last day of an applicable Yield Period with respect
thereto, or (ii) any Purchase not being made in accordance with a
request therefor under Section 1.02, then, upon written notice
from the Administrator to Seller and Servicer, Seller shall pay
to Servicer, and Servicer shall pay to the Administrator for the
Account of such Liquidity Bank, the amount of such loss or
expense. Such written notice (which shall include calculations
in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding upon the Seller and Servicer.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. Conditions Precedent to Effectiveness. The
effectiveness of this Amended and Restated Receivables Purchase
Agreement is subject to the condition precedent that the
Administrator shall have received, on or before the date of such
effectiveness, the following each (unless otherwise indicated)
dated such date in the form and substance reasonably satisfactory
to the Administrator:
(a) The Assignment Agreement, duly executed by the
parties thereto;
(b) A certificate of the Secretary or Assistant
Secretary of each Seller Party certifying the names and true
signatures of the officers authorized on its behalf to sign
this Agreement and the other Transaction Documents to be
delivered by it hereunder (on which certificate the
Administrator and Purchaser may conclusively rely until such
time as the Administrator shall receive from such Seller
Party a revised certificate meeting the requirements of this
subsection (b));
(c) The Articles or Certificate of Incorporation of
each Seller Party, duly certified by the Secretary of State
of Delaware, as of a recent date acceptable to
Administrator, in each case together with a copy of the by-
laws of such Seller Party, duly certified by the Secretary
or an Assistant Secretary of such Seller Party;
(d) Copies of good standing certificates for each
Seller Party, issued by the Secretaries of State of the
state of incorporation of such Seller Party and the state
where such Seller Party's principal place of business is
located;
(e) Acknowledgment copies (or other evidence of filing
reasonably acceptable to the Administrator) of assignments
of, and amendments to the financing statements (Form UCC-1)
filed in connection with the Original Purchase Agreement;
(f) Xxxx executed copies of Lock-Box Notices to each
Lock-Box Bank;
(g) Favorable opinions of XxXxxxx, North, Xxxxxx &
Xxxxx, P.C., special counsel to the Originators and the
Seller Parties, in substantially the form of Exhibit
5.01(g);
(h) A favorable opinion of Xxxxx, Xxxxx & Xxxxx,
special counsel to Purchaser, as to
(i) the existence of a "true sale" of the
Receivables from the Originators to Seller under the
Sale Agreement; and
(ii) the inapplicability of the doctrine of
substantive consolidation to Seller and the other
Seller Parties in connection with any bankruptcy
proceeding involving any Seller Party;
(i) A pro forma Information Package, prepared as of
the Cut-Off Date of July 29, 1995;
(j) A report in form and substance satisfactory to the
Administrator from the Relationship Bank as to a pre-closing
due diligence audit by the Relationship Bank;
(k) Letter executed by IBM Credit Corporation waiving
certain set-off claims;
(l) The Liquidity Agreement, in form and substance
satisfactory to the Administrator, duly executed by
Purchaser, the Liquidity Agent and each Liquidity Bank;
(m) Written approval by the Credit Bank of this
Agreement and the transactions contemplated hereby;
(n) Letters from the rating agencies then rating the
Commercial Paper Notes, confirming in effect that the
existing ratings of the Commercial Paper Notes will remain
in effect after giving effect to the transactions
contemplated hereby;
(o) The Amended and Restated Purchase and Sale
Agreement duly executed by the parties thereto; and
(p) Such other agreements, instruments, certificates,
opinions and other documents as the Administrator or the
Relationship Bank may reasonably request.
SECTION 5.02. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase and each Reinvestment shall be
subject to the further conditions precedent that on the date of
such Purchase or Reinvestment the following statements shall be
true (and Seller, by accepting the amount of such Purchase or by
receiving the proceeds of such Reinvestment, and each other
Seller Party, upon such acceptance or receipt by Seller, shall be
deemed to have certified that):
(a) the representations and warranties contained in
Section 6.01 are correct in all material respects on and as
of such day as though made on and as of such day and shall
be deemed to have been made on such day,
(b) no event has occurred and is continuing, or would
result from such Purchase or Reinvestment, that constitutes
a Liquidation Event or Unmatured Liquidation Event,
(c) after giving effect to each proposed Purchase or
Reinvestment, Purchaser's Total Investment will not exceed
the Purchase Limit and the Asset Interest will not exceed
the Allocation Limit,
(d) the Termination Date shall not have occurred, and
(e) in the case of a Purchase, the Administrator shall
have timely received an appropriate notice of the proposed
Purchase in accordance with Section 1.02(a);
provided, however, the absence of the occurrence and continuance
of an Unmatured Liquidation Event shall not be a condition
precedent to any Reinvestment or any Purchase on any day which
does not cause the Purchaser's Total Investment, after giving
effect to such Reinvestment or Purchase, to exceed the
Purchaser's Total Investment as of the opening of business on
such day.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Seller
Parties. Each Seller Party jointly and severally represents and
warrants as follows:
(a) Organization and Good Standing; Ownership. Each
Seller Party has been duly organized and is validly existing
as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its
properties and to conduct its business as such properties
are presently owned and such business is presently
conducted. Seller had at all relevant times, and now has,
all necessary power, authority, and legal right to acquire
and own the Pool Receivables. Inacom owns directly all the
issued and outstanding capital stock of Seller.
(b) Due Qualification. Each Seller Party is duly
qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires
such qualification, licenses or approvals.
(c) Power and Authority; Due Authorization. Each
Seller Party (i) has all necessary power, authority and
legal right (A) to execute and deliver this Agreement and
the other Transaction Documents to which it is a party, (B)
to carry out the terms of the Transaction Documents to which
it is a party, (C) in the case of Servicer, to service the
Receivables and the Related Assets in accordance with this
Agreement and the Sale Agreement, and (D) in the case of
Seller, sell and assign the Asset Interest on the terms and
conditions herein provided, and (ii) has duly authorized by
all necessary corporate action the execution, delivery and
performance of this Agreement and the other Transaction
Documents and, in the case of Seller, the sales and
assignments described in clause (i)(D) above.
(d) Valid Sale; Binding Obligations. (i) This
Agreement constitutes a valid sale, transfer, and assignment
of the Asset Interest to Purchaser, enforceable against
creditors of, and purchasers from, Seller, and (ii) this
Agreement constitutes, and each other Transaction Document
to be signed by any Seller Party when duly executed and
delivered will constitute, a legal, valid and binding
obligation of such Seller Party, enforceable in accordance
with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar
laws from time to time in effect affecting the enforcement
of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(e) No Violation. The consummation of the
transactions contemplated by this Agreement and the other
Transaction Documents and the fulfillment of the terms
hereof will not (i) conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under,
the articles or certificate of incorporation or by-laws of
any Seller Party, or any indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or
other agreement or instrument to which any Seller Party is a
party or by which it or any of its properties is bound,
(ii) result in the creation or imposition of any Lien upon
any of Seller Party's properties pursuant to the terms of
any such indenture, loan agreement, receivables purchase
agreement, mortgage, deed of trust, or other agreement or
instrument, other than this Agreement and the other
Transaction Documents, or (iii) violate any law or any
order, rule, or regulation applicable to any Seller Party of
any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality
having jurisdiction over such Seller Party or any of its
properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to any Seller Party's knowledge,
threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this
Agreement or any other Transaction Document, (ii) seeking to
prevent the sale and assignment of the Receivables under the
Sale Agreement or of the Asset Interest under this Agreement
or the consummation of any of the other transactions
contemplated by this Agreement or any other Transaction
Document, or (iii) seeking any determination or ruling that
is reasonably likely to have a Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated
hereby requires compliance with any bulk sales act or
similar law.
(h) Government Approvals. No authorization or
approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by
each Seller Party of this Agreement and each other
Transaction Document to which it is a party, except for (i)
the filing of the UCC financing statements referred to in
Article V, and (ii) the filing of any UCC continuation
statements and amendments from time to time required in
relation to any UCC financing statements filed in connection
with this Agreement, as provided in Section 8.05, all of
which, at the time required in Article V or Section 8.05, as
applicable, shall have been duly made and shall be in full
force and effect.
(i) Financial Condition. (w) The consolidated balance
sheets of Inacom and its consolidated subsidiaries as at
December 31, 1994, and the related statements of income and
shareholders' equity of Inacom and its consolidated
subsidiaries for the fiscal year then ended, certified by
KPMG Peat Marwick, independent certified public accountants,
copies of which have been furnished to the Administrator and
the Relationship Bank, fairly present in all material
respects the consolidated financial condition of Inacom and
its consolidated subsidiaries as at such date and the
consolidated results of the operations of Inacom and its
consolidated subsidiaries for the period ended on such date,
all in accordance with GAAP consistently applied, (x) since
December 31, 1994 through the date hereof there has been no
material adverse change in any such financial condition,
business or operations except as described in Schedule
6.01(i), (y) the balance sheets of Seller as at the date
hereof, certified by an authorized officer of the Seller,
copies of which have been furnished to the Administrator and
the Relationship Bank, fairly present in all material
respects the financial condition, assets and liabilities of
Seller as at such date, all in accordance with GAAP
consistently applied, and (z) since the date of Seller's
formation, there has been no material adverse change in
Seller's financial condition, business or operations.
(j) Litigation. No injunction, decree or other
decision has been issued or made by any court, governmental
agency or instrumentality thereof that prevents, and to the
knowledge of any Seller Party, no threat by any person has
been made to attempt to obtain any decision that is
reasonably likely to prevent, any Seller Party from
conducting a material part of its business operations,
except as described in Schedule 6.01(j).
(k) Margin Regulations. The use of all funds obtained
by any Seller Party under this Agreement or any other
Transaction Document will not conflict with or contravene
any of Regulations G, T, U and X promulgated by the Board of
Governors of the Federal Reserve System from time to time.
(l) Quality of Title. (i) Each Pool Receivable,
together with the Related Assets, is owned by Seller free
and clear of any Lien (other than any Lien arising solely as
the result of any action taken by Purchaser (or any assignee
thereof) or by the Administrator); (ii) when Purchaser makes
a Purchase or Reinvestment, it shall have acquired and shall
at all times thereafter continuously maintain a valid and
perfected first priority undivided percentage ownership
interest to the extent of the Asset Interest in each Pool
Receivable, each Related Asset and Collections with respect
thereto, free and clear of any Lien (other than any Lien
arising as the result of any action taken by Purchaser (or
any assignee thereof) or by the Administrator; and (iii) no
financing statement or other instrument similar in effect
covering any Pool Receivable, any interest therein, the
Related Assets or Collections with respect thereto is on
file in any recording office except such as may be filed (1)
in favor of an Originator in accordance with the Contracts,
(2) in favor of Seller in connection with the Sale
Agreement, (3) in favor of Purchaser or the Administrator in
accordance with this Agreement or in connection with any
Lien arising solely as the result of any action taken by
Purchaser (or any assignee thereof) or by the Administrator,
or (4) in favor of the Collateral Agent.
(m) Accurate Reports. No Receivables Report or
Settlement Report (if prepared by any Seller Party or its
Affiliate, or to the extent information therein was supplied
by any Seller Party or its Affiliate) or other information,
exhibit, financial statement, document, book, record or
report furnished or to be furnished, in each case in
writing, by or on behalf of any Seller Party or its
Affiliates to the Administrator, Purchaser or the
Relationship Bank pursuant to this Agreement was or will be
inaccurate in any material respect as of the date it was or
will be dated or (except as otherwise disclosed to the
Administrator, Purchaser, and the Relationship Bank at such
time) as of the date so furnished, or contained or (in the
case of information or other materials to be furnished in
the future) will contain any material misstatement of fact
or omitted or (in the case of information or other materials
to be furnished in the future) will omit to state a material
fact or any fact necessary to make the statements contained
therein not materially misleading in light of the
circumstances made or presented.
(n) Offices. The principal places of business and
chief executive offices of Servicer and Seller are located
at the respective addresses set forth under its name on the
signature pages hereof, and the offices where Servicer and
Seller keep all their books, records and documents
evidencing Pool Receivables, the related Contracts and all
purchase orders and other agreements related to such Pool
Receivables are located at the addresses specified in
Schedule 6.01(n) (or at such other locations, notified to
the Administrator in accordance with Section 7.01(f), in
jurisdictions where all action required by Section 8.05 has
been taken and completed).
(o) Lock-Box Accounts. The names and addresses of all
the Lock-Box Banks, together with the account numbers of the
lock-box accounts of any Originator or Seller at such Lock-
Box Banks, are specified in Schedule 6.01(o) (or have been
notified to and approved by the Administrator and the
Relationship Bank in accordance with Section 7.03(d)).
(p) Eligible Receivables. Each Receivable included in
the Net Pool Balance as an Eligible Receivable on the date
of any Purchase, Reinvestment or computation of Net Pool
Balance shall be an Eligible Receivable on such date.
(q) Servicing Programs. No license or approval is
required for the Administrator's use of any program used by
Servicer in the servicing of the Receivables, other than
those which have been obtained and are in full force and
effect.
(r) Nature of Receivables. Each Receivable
constitutes an "account" as such term is defined in the UCC.
ARTICLE VII
GENERAL COVENANTS OF SELLER PARTIES
SECTION 7.01. Affirmative Covenants of Seller Parties.
From the date hereof until the Final Payout Date, each Seller
Party will, unless the Administrator and the Relationship Bank
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material
respects with all applicable laws, rules, regulations and
orders, including those with respect to the Pool Receivables
and related Contracts, except where the failure to so comply
would not individually or in the aggregate have a reasonable
possibility of having a Material Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises,
privileges and qualification might reasonably be expected to
have a Material Adverse Effect.
(c) Audits. (i) At any time and from time to time
upon not less than five (5) Business Days' notice (unless a
Liquidation Event has occurred and is continuing (or the
Relationship Bank or the Administrator believes in good
faith that a Liquidation Event has occurred and is
continuing), in which case no such notice shall be required)
during regular business hours, permit the Administrator, the
Relationship Bank or any of their agents or representatives,
(A) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation,
computer tapes and disks) in the possession or under the
control of such Seller Party relating to Pool Receivables,
including, without limitation, the related Contracts and
purchase orders and other agreements, and (B) to visit the
offices and properties of any Seller Party for the purpose
of examining such materials described in clause (i)(A) next
above, and to discuss matters relating to Pool Receivables
or any Seller Party's performance hereunder with any of the
officers or employees of any Seller Party having knowledge
of such matters; (ii) permit the Administrator, the
Relationship Bank or any of their agents or representatives,
upon not less than five (5) Business Days' notice from the
Administrator or the Relationship Bank (unless a Liquidation
Event has occurred and is continuing (or the Relationship
Bank or the Administrator believes in good faith that a
Liquidation Event has occurred and is continuing) in which
case no such notice shall be required), to meet with the
independent auditors of the Seller Parties, to the extent
permitted by such auditors, to review such auditors' work
papers and otherwise to review with such auditors the books
and records of the Seller Parties with respect to the Pool
Receivables and Related Assets; and (iii) without limiting
the provisions of clause (i) next above, from time to time,
at the expense of such Seller Party, permit certified public
accountants or other auditors acceptable to the
Administrator and the Relationship Bank to conduct a review
of any Seller Party's books and records with respect to the
Pool Receivables and Related Assets; provided, that, so long
as no Liquidation Event has occurred and is continuing, (x)
such reviews shall not be done more than four (4) times in
any one calendar year and (y) the Seller Parties shall only
be responsible for the costs and expenses of one such review
in any one calendar year.
(d) Keeping of Records and Books of Account. In the
case of Servicer, maintain and implement administrative and
operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables in
the event of the destruction of the originals thereof), and
keep and maintain, all documents, books, records and other
information reasonably necessary or advisable for the
collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily
identification of outstanding Unpaid Balances by Obligor and
related debit and credit details of the Pool Receivables).
(e) Performance and Compliance with Receivables and
Contracts. At its expense, timely and fully perform and
comply with all material provisions, covenants and other
promises, if any, required to be observed by it under the
Contracts related to the Pool Receivables and all purchase
orders and other agreements related to such Pool
Receivables, unless such requirement is being disputed in
good faith (it being understood that such dispute shall not
affect each Seller Party's obligations under Sections 3.04,
13.01 and 13.02).
(f) Location of Records. Keep its chief place of
business and chief executive office, and the offices where
it keeps its records concerning the Pool Receivables, all
related Contracts and all purchase orders and other
agreements related to such Pool Receivables (and all
original documents relating thereto), at the address(es) of
Servicer and Seller referred to in Section 6.01(n) or, upon
30 days' prior written notice to the Administrator, at such
other locations in jurisdictions where all action required
by Section 8.05 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all
material respects with the Credit and Collection Policy in
regard to each Pool Receivable and the related Contract.
(h) Collections. In the case of Servicer, instruct
all Obligors to cause all Collections of Pool Receivables to
be deposited directly with a Lock-Box Bank, and in the case
of each other Seller Party, not give any contrary or
conflicting instructions, and, upon the request of Servicer
or the Administrator, confirm such instructions by Servicer
or take such other action as may be reasonably required to
give effect to such instructions.
(i) Sale Agreement. Perform and comply in all
material respects with all of its covenants and agreements
set forth in the Sale Agreement.
(j) Lock-Box Agreements. Promptly after the date
hereof but in any event within thirty (30) days after the
date hereof, execute and deliver, and cause NBD Bank and
Bank of America Illinois, respectively, to execute and
deliver a Lock-Box Agreement.
SECTION 7.02. Reporting Requirements of Seller Parties.
From the date hereof until the Final Payout Date, unless the
Administrator and the Relationship Bank shall otherwise consent
in writing, Seller Parties will furnish to the Administrator and
the Relationship Bank:
(a) Quarterly Financial Statements. As soon as
available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of
Inacom, copies of the quarterly financial reports, on Form
10-Q, as filed with the SEC (or if Inacom is no longer
required to file such Form 10-Q, Inacom shall furnish
financial reports containing the information typically found
on Form 10-Q), duly certified by the chief financial officer
or treasurer of Inacom, together with a certificate from
such officer containing a computation of, and showing
compliance with, the financial restrictions contained in
Section 7.05;
(b) Annual Financial Statements. As soon as available
and in any event within 90 days after the end of each fiscal
year of Inacom, copies of the annual report, on Form 10-K,
as filed with the SEC (or if Inacom is no longer required to
file such Form 10-K, Inacom shall furnish such financial
reports containing information typically found on Form 10-
K), together with an audit opinion with respect thereto by
KPMG Peat Marwick or other independent certified public
accountants of nationally recognized standing selected by
Inacom, together with a certificate from such accountants
containing a computation of, and showing compliance with,
the financial restrictions contained in Section 7.05;
(c) Reports to Holders and Exchanges. In addition to
the reports required by subsections (a) and (b) next above,
promptly upon the Administrator's or Relationship Bank's
request, copies of any reports specified in such request
which any Seller Party sends to any of its securityholders,
and any reports or registration statements that any Seller
Party files with the Securities and Exchange Commission or
any national securities exchange other than registration
statements relating to employee benefit plans and to
registrations of securities for selling securities;
(d) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to
any Reportable Event defined in Article IV of ERISA which
any Seller Party files under ERISA with the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or which such Seller Party receives
from the Pension Benefit Guaranty Corporation;
(e) Liquidation Events, etc. As soon as possible and
in any event within five Business Days after obtaining
knowledge of the occurrence of each Liquidation Event and
each Unmatured Liquidation Event or any "Purchase and Sale
Termination Event" under the Sale Agreement, a written
statement of the chief financial officer, treasurer or chief
accounting officer of a Seller Party setting forth details
of such event and the action that such Seller Party take
with respect thereto;
(f) Litigation. As soon as possible and in any event
within ten Business Days of any Seller Party's knowledge
thereof, notice of (i) any litigation, investigation or
proceeding which may exist at any time which could
reasonably be expected to have a Material Adverse Effect and
(ii) any development in previously disclosed litigation
which development could reasonably be expected to have a
Material Adverse Effect;
(g) Audit of Pool Receivables. As soon as available
and in any event by the end of each fiscal year of Seller,
an audit report, prepared by the Relationship Bank or other
Person reasonably acceptable to the Administrator and the
Relationship Bank, as of the end of such fiscal year,
substantially in the form of the report delivered pursuant
to Section 5.01(l) and covering such other matters as the
Administrator or the Relationship Bank may reasonably
request in order to protect the interests of the
Administrator, the Relationship Bank or Purchaser under or
as contemplated by this Agreement;
(h) Change in Credit and Collection Policy. Prior to
its effective date, notice of (i) any material change in the
character of any Seller Party's business, and (ii) any
material change in the Credit and Collection Policy; and
(i) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the
Receivables or the condition or operations, financial or
otherwise, of any Seller Party as the Administrator or the
Relationship Bank may from time to time reasonably request
in order to protect the interests of the Administrator, the
Relationship Bank or Purchaser under or as contemplated by
this Agreement.
SECTION 7.03. Negative Covenants of Seller Parties. From
the date hereof until the Final Payout Date, no Seller Party
will, without the prior written consent of the Administrator and
the Relationship Bank:
(a) Sales, Liens, Etc. (i) Except as otherwise
provided herein and in the other Transaction Documents,
sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Lien upon or
with respect to, any Pool Receivable or any Related Asset,
or any interest therein, or any lock-box account to which
any Collections of any Pool Receivable are sent, or any
right to receive income or proceeds from or in respect of
any of the foregoing, and (ii) in the case of Servicer, not
assert any interest in the Receivables, except as Servicer.
(b) Extension or Amendment of Receivables. Except as
otherwise permitted in Section 8.02(c), extend, amend or
otherwise modify the terms of any Pool Receivable, or amend,
modify or waive any material term or condition of any
Contract related thereto.
(c) Change in Business or Credit and Collection
Policy. Make or permit to be made any change in the
character of its business or in the Credit and Collection
Policy, which change would, in either case, impair the
collectibility of any significant portion of the Pool
Receivables or otherwise adversely affect the interests or
remedies of Purchaser under this Agreement or any other
Transaction Document.
(d) Change in Payment Instructions to Obligors. Add
or terminate any bank as a Lock-Box Bank from those listed
in Schedule 6.01(o) or make any change in its instructions
to Obligors regarding payments to be made to Seller or
Servicer or payments to be made to any Lock-Box Bank (except
for a change in instructions solely for the purpose of
directing Obligors to make such payments to another existing
Lock-Box Bank), unless (i) the Administrator and the
Relationship Bank shall have received prior written notice
of such addition, termination or change and (ii) the
Administrator shall have received duly executed copies of
Lock-Box Agreements with each new Lock-Box Bank.
(e) Deposits to Lock-Box Accounts. Deposit or
otherwise credit, or cause or permit to be so deposited or
credited, to any lock-box account or other account covered
by any Lock-Box Agreement, or any other account maintained
by Seller or Servicer for the purpose of receiving
Collections on Pool Receivables, any cash or cash proceeds
other than Collections of Pool Receivables.
(f) Changes to Other Documents. Enter into any
amendment or modification of, or supplement to, the Sale
Agreement or Seller's Certificate of Incorporation.
(g) Fundamental Changes. Wind up, liquidate or
dissolve its affairs or enter into any transaction or series
of related transactions of merger or consolidation, acquire
all or substantially all of the assets or any stock of any
class of, or any partnership or joint venture interest in,
any other Person, or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any
future time) its property or assets in one transaction or a
series of related transactions in an aggregate amount equal
to or greater than 10% of the total consolidated assets of
Inacom (whether now owned or hereafter acquired), or in any
amount in the case of Seller, except that (i) any Subsidiary
(other than Seller) of Inacom may merge into Inacom;
provided that Inacom shall at all times be the continuing
corporation; (ii) any Subsidiary of Inacom, other than
Seller, may merge into or consolidate with another wholly-
owned Subsidiary of Inacom; (iii) Inacom may merge or
consolidate with any Person other than Seller; provided that
(A) Inacom shall at all times be the continuing or surviving
corporation and (B) no Liquidation Event or Unmatured
Liquidation Event shall have occurred and be continuing or
shall occur as a result of such merger or consolidation;
(iv) Seller Parties may enter into and perform the
transactions contemplated by this Agreement; and (v) Inacom
may acquire all or substantially all of the assets or any
stock of any class of, or any partnership or joint venture
interest in, any other Person, provided that (A) Inacom has
given not less than five (5) Business Days' prior notice of
such transaction to the Administrator and the Relationship
Bank and (B) no Liquidation Event or Unmatured Liquidation
Event shall have occurred and be continuing or shall occur
as a result of such transaction.
(h) Restricted Payments by Seller. In the case of
Seller, purchase or redeem any shares of the capital stock
of Seller, (A) declare or pay any dividends thereon (other
than stock dividends), make any distribution to stockholders
or set aside any funds for any such purpose, or (B) pay any
principal amount of any Initial Purchaser Note (as defined
in the Sale Agreement), except that Seller may pay all or a
portion of such principal amount on the Settlement Date for
any Settlement Period, after making any payment required to
be made by Seller on such Settlement Date in accordance with
the last sentence of Section 3.01(c)(ii) if after giving
effect to such payment the Purchaser's Total Investment does
not exceed the Purchase Limit and the Asset Interest does
not exceed the Allocation Limit and Seller's net worth
(determined in accordance with GAAP) is not less than
$2,000,000.
(i) Seller Indebtedness. In the case of Seller, incur
or permit to exist any indebtedness or liability on account
of deposits or advances or for borrowed money or for the
deferred purchase price of any property or services, except
(A) indebtedness of Seller to the Originators incurred in
accordance with the Sale Agreement, (B) current accounts
payable arising under the Transaction Documents and not
overdue and (C) other current accounts payable arising in
the ordinary course of business and not overdue, in an
aggregate amount at any time outstanding not to exceed
$1,000.
(j) Negative Pledges. Enter into or assume any
agreement (other than this Agreement and the other
Transaction Documents) prohibiting the creation or
assumption of any Lien upon any Receivables or Related
Assets, whether now owned or hereafter acquired, except as
contemplated by the Transaction Documents, or otherwise
prohibiting or restricting any transaction contemplated
hereby or by the other Transaction Documents.
SECTION 7.04. Separate Corporate Existence of Seller. Each
Seller Party hereby acknowledges that Purchaser, the
Administrator and the Relationship Bank are entering into the
transactions contemplated hereby in reliance upon Seller's
identity as a legal entity separate from Servicer and its other
Affiliates. Therefore, each Seller Party shall take all steps
specifically required by this Agreement or reasonably required by
the Administrator or the Relationship Bank to continue Seller's
identity as a separate legal entity and to make it apparent to
third Persons that Seller is an entity with assets and
liabilities distinct from those of its Affiliates, and is not a
division of Inacom or any other Person. Without limiting the
foregoing, each Seller Party will take such actions as shall be
required in order that:
(i) Seller will be a limited purpose corporation
whose primary activities are restricted in its
Certificate of Incorporation to purchasing or otherwise
acquiring from the Originators, owning, holding,
granting security interests, or selling interests, in
Pool Assets, entering into agreements for the selling
and servicing of the Receivables Pool, and conducting
such other activities as it deems necessary or
appropriate to carry out its primary activities;
(ii) Not less than one member of Seller's Board
of Directors (the "Independent Director") shall be an
individual who is not, and never has been, a direct,
indirect or beneficial stockholder, officer, director,
employee, affiliate, associate, material supplier or
material customer of Inacom or any of its Affiliates.
The certificate of incorporation of Seller shall
provide that (i) Seller's Board of Directors shall not
approve, or take any other action to cause the filing
of, a voluntary bankruptcy petition with respect to
Seller unless the Independent Director shall approve
the taking of such action in writing prior to the
taking of such action and (ii) such provisions cannot
be amended without the prior written consent of the
Independent Director;
(iii) The Independent Director shall not at any
time serve as a trustee in bankruptcy for Seller or any
Affiliate thereof;
(iv) Any employee, consultant or agent of Seller
will be compensated from Seller's funds for services
provided to Seller. Seller will not engage any agents
other than its attorneys, auditors and other
professionals, and a servicer and any other agent
contemplated by the Transaction Documents for the
Receivables Pool, which servicer will be fully
compensated for its services by payment of the
Servicer's Fee;
(v) Seller will contract with Servicer to perform
for Seller all operations required on a daily basis to
service the Receivables Pool. Seller will pay Servicer
the Servicer's Fee pursuant hereto. Seller will not
incur any material indirect or overhead expenses for
items shared with Inacom (or any other Affiliate
thereof) which are not reflected in the Servicer's Fee.
To the extent, if any, that Seller (or any other
Affiliate thereof) share items of expenses not
reflected in the Servicer's Fee, for legal, auditing
and other professional services and directors' fees,
such expenses will be allocated to the extent practical
on the basis of actual use or the value of services
rendered, and otherwise on a basis reasonably related
to the actual use or the value of services rendered, it
being understood that Inacom shall pay all expenses
relating to the preparation, negotiation, execution and
delivery of the Transaction Documents, including,
without limitation, legal, agency and other fees;
(vi) Seller's operating expenses will not be paid
by any other Seller Party or other Affiliate of Seller;
(vii) Seller will have its own stationery;
(viii) The books of account, financial reports and
corporate records of Seller will be maintained
separately from those of Servicer and any other
Affiliate of Seller;
(ix) Any financial statements of any Seller Party
or Affiliate thereof which are consolidated to include
Seller will contain detailed notes clearly stating that
(A) all of Seller's assets are owned by Seller, and
(B) Seller is a separate corporate entity with its own
separate creditors that will be entitled to be
satisfied out of Seller's assets prior to any value in
Seller becoming available to Seller's equity holders;
and the accounting records and the published financial
statements of the Originators will clearly show that,
for accounting purposes, the Pool Assets have been sold
by the Originators to the Seller;
(x) Seller's assets will be maintained in a
manner that facilitates their identification and
segregation from those of Servicer and the other
Affiliates;
(xi) Each Affiliate of Seller will strictly
observe corporate formalities in its dealings with
Seller, and funds or other assets of Seller will not be
commingled with those of any of its Affiliates;
(xii) No Affiliate of Seller will maintain joint
bank accounts with Seller or other depository accounts
with Seller to which any such Affiliate (other than in
its capacity as the Servicer hereunder or under the
Sale Agreement) has independent access;
(xiii) No Affiliate of Seller shall, directly or
indirectly, name Seller or enter into any agreement to
name Seller as a direct or contingent beneficiary or
loss payee on any insurance policy covering the
property of any Affiliate of Seller;
(xiv) No Affiliate of Seller will at any time pool
any of its funds with any funds of Seller;
(xv) Each Affiliate of Seller will maintain arm's-
length relationships with Seller, and each Affiliate of
Seller that renders or otherwise furnishes services or
merchandise to Seller will be compensated by Seller at
market rates for such services or merchandise;
(xvi) No Affiliate of Seller will be, nor will it
hold itself out to be, responsible for the debts of
Seller or the decisions or actions in respect of the
daily business and affairs of Seller. Inacom and
Seller will immediately correct any known
misrepresentation with respect to the foregoing and
they will not operate or purport to operate as an
integrated single economic unit with respect to each
other or in their dealing with any other entity;
(xvii) Seller will keep correct and complete
books and records of account and minutes of the
meetings and other proceedings of its stockholder and
board of directors, as applicable, and the resolutions,
agreements and other instruments of Seller will be
continuously maintained as official records by Seller;
and
(xviii) Each of Seller, on the one hand, and the
Originators, on the other hand, will conduct its
business solely in its own corporate name and in such a
separate manner so as not to mislead others with whom
they are dealing.
SECTION 7.05. Financial Covenants. From the date hereof
until the Final Payout Date, Inacom will:
(a) Tangible Net Worth. Maintain a Tangible Net Worth
of not less than $90,000,000.
(b) Liabilities to Tangible Net Worth. Not permit the
ratio of Total Liabilities to Tangible Net Worth to exceed
6.0 to 1.0.
(c) Losses. Not incur losses greater than 8% of
Tangible Net Worth in any fiscal quarter.
(d) Consecutive Losses. Not incur losses in any three
(3) consecutive fiscal quarters.
(e) Receivables Outstanding Ratio. Not permit the
Receivables Outstanding Ratio to exceed 45 days.
For purposes of all calculations with respect to the
foregoing financial covenants, Inacom will include the
Receivables as assets and the Purchaser's Total Investment as
short term debt.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer.
(a) Inacom as Initial Servicer. The servicing,
administering and collection of the Pool Receivables shall be
conducted by the Person designated as Servicer hereunder from
time to time in accordance with this Section 8.01. Until the
Administrator or the Relationship Bank gives to Inacom a
Successor Notice (as defined in Section 8.01(b)), Inacom is
hereby designated as, and hereby agrees to perform the duties and
obligations of, Servicer pursuant to the terms hereof.
(b) Successor Notice; Servicer Transfer Events. Upon
Inacom's receipt of a notice from the Administrator or
Relationship Bank of the Administrator's or Relationship Bank's
designation of a new Servicer (a "Successor Notice"), Inacom
agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrator believes will
facilitate the transition of the performance of such activities
to the new Servicer, and the Administrator (or its designee)
shall assume each and all of Inacom's obligations to service and
administer such Receivables, on the terms and subject to the
conditions herein set forth, and Inacom shall use its best
efforts to assist the Administrator (or its designee) in assuming
such obligations. The Administrator and Relationship Bank agree
not to give Inacom a Successor Notice until after the occurrence
and during the continuance of any Liquidation Event (any such
Liquidation Event being herein called a "Servicer Transfer
Event"), in which case such Successor Notice may be given at any
time in the Administrator's or the Relationship Bank's
discretion. If Inacom disputes the occurrence of a Servicer
Transfer Event, Inacom may take appropriate action to resolve
such dispute; provided that Inacom must terminate its activities
hereunder as Servicer and allow the newly designated Servicer to
perform such activities on the date provided by the Administrator
or Relationship Bank as described above, notwithstanding the
commencement or continuation of any proceeding to resolve the
aforementioned dispute, if the Administrator or the Relationship
Bank reasonably determines, in good faith, that such termination
is necessary or advisable to protect Xxxxxxxxx's interests
hereunder.
(c) Subcontracts. Servicer may, with the prior consent of
the Administrator, subcontract with any other Person for
servicing, administering or collecting the Pool Receivables,
provided that Servicer shall remain liable for the performance of
the duties and obligations of Servicer pursuant to the terms
hereof and such subservicing arrangement may be terminated at the
Administrator's request at anytime after a Successor Notice has
been given.
(d) Back-up Servicer. Within thirty (30) days after the
request of the Administrator or the Relationship Bank made after
the occurrence of a Back-up Servicer Event, Inacom shall enter
into a back-up servicing agreement, in form and substance
satisfactory to the Administrator and the Relationship Bank, with
a back-up servicer experienced in servicing portfolios similar to
the Pool Receivables who is acceptable to the Administrator and
the Relationship Bank.
SECTION 8.02. Duties of Servicer.
(a) Appointment; Duties in General. Each of Seller,
Purchaser and the Administrator hereby appoints as its agent
Servicer, as from time to time designated pursuant to Section
8.01, to enforce its rights and interests in and under the Pool
Receivables, the Related Security and the related Contracts.
Servicer shall take or cause to be taken all such actions as may
be necessary or advisable to collect each Pool Receivable from
time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy.
(b) Allocation of Collections; Segregation. Servicer shall
set aside for the account of Seller and Purchaser their
respective allocable shares of the Collections of Pool
Receivables in accordance with Section 1.03 but shall not be
required (unless otherwise requested by the Administrator or the
Relationship Bank) to segregate the funds constituting such
portions of such Collections prior to the remittance thereof in
accordance with said Sections. If instructed by the
Administrator or the Relationship Bank, within five (5) (or three
(3), if a Liquidation Event or Back-up Servicer Event has
occurred and is continuing) Business Days of receipt by Servicer
of such instruction, Servicer shall segregate and deposit with a
bank designated by the Relationship Bank, with the approval of
the Administrator, Purchaser's share of Collections of Pool
Receivables, on the first Business Day following receipt by
Servicer of such Collections in immediately available funds.
(c) Modification of Receivables. So long as no Liquidation
Event and no Unmatured Liquidation Event shall have occurred and
be continuing, Inacom, while it is Servicer, may, in accordance
with the Credit and Collection Policy, (i) extend the maturity or
adjust the Unpaid Balance of any Defaulted Receivable as Inacom
may reasonably determine to be appropriate to maximize
Collections thereof, provided that no Receivable may be extended
for more than 150 days, and (ii) adjust the Unpaid Balance of any
Receivable to reflect the reductions or cancellations described
in the first sentence of Section 3.02(a).
(d) Documents and Records. Each Seller Party shall deliver
to Servicer, and Servicer shall hold in trust for Seller and
Purchaser in accordance with their respective interests, all
documents, instruments and records (including, without
limitation, computer tapes or disks) that evidence or relate to
Pool Receivables.
(e) Certain Duties to Seller. Servicer shall, as soon as
practicable following receipt, turn over to Seller (i) that
portion of Collections of Pool Receivables representing its
undivided percentage interest therein, less, in the event that
neither Inacom nor any other Seller Party or Affiliate thereof is
Servicer, all reasonable and appropriate out-of-pocket costs and
expenses of Servicer of servicing, collecting and administering
the Pool Receivables to the extent not covered by the Servicer's
Fee received by it, and (ii) the Collections of any Receivable
which is not a Pool Receivable. Servicer, if other than Inacom
or any other Seller Party or Affiliate thereof, shall, as soon as
practicable upon demand, deliver to Seller all documents,
instruments and records in its possession that evidence or relate
to Receivables of Seller other than Pool Receivables, and copies
of documents, instruments and records in its possession that
evidence or relate to Pool Receivables.
(f) Termination. Servicer's authorization under this
Agreement shall terminate upon the Final Payout Date.
(g) Power of Attorney. Seller hereby grants to Servicer an
irrevocable power of attorney, with full power of substitution,
coupled with an interest, to take in the name of Seller all steps
which are necessary or advisable to endorse, negotiate or
otherwise realize on any writing or other right of any kind held
or transmitted by Seller or transmitted or received by Purchaser
(whether or not from Seller) in connection with any Receivable.
SECTION 8.03. Rights of the Administrator.
(a) Notice to Obligors. At any time when a Liquidation
Event has occurred and is continuing, the Administrator may
notify the Obligors of Pool Receivables, or any of them, of the
ownership of the Asset Interest by Purchaser.
(b) Notice to Lock-Box Banks. At any time following the
earlier to occur of (i) the occurrence of a Liquidation Event and
(ii) the warranty in Section 6.01(i)(x) shall no longer be true,
the Administrator is hereby authorized to give notice to the
Lock-Box Banks, as provided in the Lock-Box Agreements and the
Lock-Box Notices, of the transfer to the Administrator of
dominion and control over the lock-boxes and related accounts to
which the Obligors of Pool Receivables make payments. Seller and
Servicer hereby transfer to the Administrator, effective when the
Administrator shall give notice to the Lock-Box Banks as provided
in the Lock-Box Agreements and Lock-Box Notices, the exclusive
dominion and control over such lock-boxes and accounts, and shall
take any further action that the Administrator may reasonably
request to effect such transfer.
(c) Rights on Servicer Transfer Event. At any time
following the designation of a Servicer other than Inacom
pursuant to Section 8.01:
(i) The Administrator may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable
under any Pool Receivable directly to the Administrator or
its designee.
(ii) Any Seller Party shall, at the Administrator's or
Relationship Bank's request and at such Seller Party's
expense, give notice of Purchaser's ownership and security
interests in the Pool Receivables to each said Obligor and
direct that payments be made directly to the Administrator
or its designee.
(iii) Each Seller Party shall, at the Administrator's
or Relationship Bank's request, (A) assemble all of the
documents, instruments and other records (including, without
limitation, computer programs, tapes and disks) which
evidence the Pool Receivables, and the related Contracts and
Related Security, or which are otherwise necessary or
desirable to collect such Pool Receivables, and make the
same available to the successor Servicer at a place selected
by the Administrator or the Relationship Bank, and (B)
segregate all cash, checks and other instruments received by
it from time to time constituting Collections of Pool
Receivables in a manner acceptable to the Administrator and
the Relationship Bank and promptly upon receipt, remit all
such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to the successor
Servicer.
(iv) Each Seller Party and Purchaser hereby authorizes
the Administrator, and grants to the Administrator an
irrevocable power of attorney (which shall terminate on the
Final Payout Date), to take any and all steps in such Seller
Party's name and on behalf of Seller Parties and Purchaser
which are necessary or desirable, in the determination of
the Administrator, to collect all amounts due under any and
all Pool Receivables, including, without limitation,
endorsing any Seller Party's name on checks and other
instruments representing Collections and enforcing such Pool
Receivables and the related Contracts.
SECTION 8.04. Responsibilities of Seller Parties. Anything
herein to the contrary notwithstanding:
(a) Contracts. Each Seller Party shall perform all of its
obligations (if any) under the Contracts related to the Pool
Receivables and under the related purchase orders and other
agreements to the same extent as if the Asset Interest had not
been sold hereunder, and the exercise by the Administrator or its
designee of its rights hereunder shall not relieve any Seller
Party from such obligations.
(b) Limitation of Liability. The Administrator, the
Relationship Bank and Purchaser shall not have any obligation or
liability with respect to any Pool Receivables, Contracts related
thereto or any other related purchase orders or other agreements
(other than liability resulting from their gross negligence or
willful misconduct), nor shall any of them be obligated to
perform any of the obligations of any Seller Party or any
Originator thereunder.
SECTION 8.05. Further Action Evidencing Purchases and
Reinvestments.
(a) Further Assurances. Each Seller Party agrees that from
time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all
further action that the Administrator or its designee may
reasonably request in order to perfect, protect or more fully
evidence the Purchases hereunder and the resulting Asset
Interest, or to enable Purchaser or the Administrator or its
designee to exercise or enforce any of their respective rights
hereunder or under any Transaction Document in respect thereof.
Without limiting the generality of the foregoing, each Seller
Party will:
(i) upon the request of the Administrator, execute and
file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate,
in accordance with the terms of this Agreement;
(ii) upon the request of the Administrator after the
occurrence and during the continuance of a Liquidation
Event, mark conspicuously each Contract evidencing each Pool
Receivable with a legend, acceptable to the Administrator,
evidencing that the Asset Interest has been sold in
accordance with this Agreement; and
(iii) mark its master data processing records
evidencing such Pool Receivables and related Contracts with
a legend, acceptable to the Administrator, evidencing that
the Asset Interest has been sold in accordance with this
Agreement.
(b) Additional Financing Statements; Performance by
Administrator. Each Seller Party hereby authorizes the
Administrator or its designee to file one or more financing or
continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Pool Receivables and the
Related Assets now existing or hereafter arising in the name of
any Seller Party. If any Seller Party fails to promptly execute
and deliver to the Administrator any financing statement or
continuation statement or amendment thereto or assignment thereof
requested by the Administrator, each Seller Party hereby
authorizes the Administrator to execute such statement on behalf
of such Seller Party. If any Seller Party fails to perform any
of its agreements or obligations under this Agreement, the
Administrator or its designee may (but shall not be required to)
itself perform, or cause performance of, such agreement or
obligation, and the reasonable expenses of the Administrator or
its designee incurred in connection therewith shall be payable by
the Seller Parties as provided in Section 14.05.
(c) Continuation Statements; Opinion. Without limiting the
generality of subsection (a), Seller will, not earlier than six
(6) months and not later than three (3) months prior to the fifth
anniversary of the date of filing of the financing statements
referred to in Section 5.01(f) or any other financing statement
filed pursuant to this Agreement or in connection with any
Purchase hereunder, if the Final Payout Date shall not have
occurred:
(i) execute and deliver and file or cause to be filed
an appropriate continuation statement with respect to such
financing statement; and
(ii) deliver or cause to be delivered to the
Administrator an opinion of the counsel for Seller Parties,
in form and substance reasonably satisfactory to the
Administrator, confirming and updating the opinion delivered
pursuant to Section 5.01(i)(i) to the effect that the Asset
Interest hereunder continues to be a valid and perfected
ownership or security interest, subject to no other Liens of
record except as provided herein or otherwise permitted
hereunder.
SECTION 8.06. Application of Collections. Any payment by
an Obligor in respect of any indebtedness owed by it to any
Originator or Seller shall, except as otherwise specified by such
Obligor or required by the underlying Contract or law, be
applied, first, as a Collection of any Pool Receivable or
Receivables then outstanding of such Obligor in the order of the
age of such Pool Receivables, starting with the oldest of such
Pool Receivables and, second, to any other indebtedness of such
Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all
obligations of Seller arising in connection with this Agreement
and each other Transaction Document, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute
or contingent, including, without limitation, all Indemnified
Amounts, payments on account of Collections received or deemed to
be received and fees, in each case pro rata according to the
respective amounts thereof, Seller hereby assigns and pledges to
Purchaser and its successors and assigns, for the benefit of the
Secured Parties, and hereby grants to Purchaser, for the benefit
of the Secured Parties, a security interest in, all of Seller's
right, title and interest now or hereafter existing in, to and
under (a) all the Pool Receivables and Related Assets (including
specifically any undivided interest therein retained by Seller
hereunder), (b) the Originator Notes, and (c) all proceeds of any
of the foregoing.
SECTION 9.02. Further Assurances. The provisions of
Section 8.05 shall apply to the security interest granted under
Section 9.01 as well as to the Purchases, Reinvestments and all
the Asset Interests hereunder.
SECTION 9.03. Remedies. Upon the occurrence of a
Liquidation Event, Purchaser shall have, with respect to the
collateral granted pursuant to Section 9.01, and in addition to
all other rights and remedies available to Purchaser or the
Administrator under this Agreement and the other Transaction
Documents or other applicable law, all the rights and remedies of
a secured party upon default under the UCC.
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. Liquidation Events. The following events
shall be "Liquidation Events" hereunder:
(a) Servicer (if any Seller Party or Affiliate thereof
is Servicer) or Seller (in the case of clause (iii) below)
(i) shall fail to perform or observe any term, covenant or
agreement that is an obligation of Servicer hereunder (other
than as referred to in clause (ii) below) and such failure
shall remain unremedied for three (3) Business Days, or (ii)
shall fail to make any payment or deposit to be made by it
hereunder when due; or
(b) Any representation or warranty made or deemed to
be made by any Seller Party (or any of its officers) under
or in connection with this Agreement or any Information
Package or other information or report delivered pursuant
hereto shall prove to have been false or incorrect in any
material respect when made; or
(c) (i) Inacom shall fail to perform its obligations
pursuant to Section 8.01(d), or (ii) any Seller Party shall
fail to perform or observe any other term, covenant or
agreement contained in this Agreement or any of the other
Transaction Documents on its part to be performed or
observed and any such failure shall remain unremedied for
thirty (30) Business Days after (A) written notice thereof
shall have been given by the Administrator or the
Relationship Bank to any Seller Party or (B) any Seller
Party has actual knowledge thereof; or
(d) (i) A default shall have occurred and be
continuing under any instrument or agreement evidencing,
securing or providing for the issuance of indebtedness for
borrowed money in excess of $500,000 of, or guaranteed by,
any Seller Party or any Material Subsidiary, which default
either (A) if unremedied, uncured, or unwaived (with or
without the passage of time or the giving of notice or both)
would permit acceleration of the maturity of such
indebtedness and such default shall have continued
unremedied, uncured or unwaived for a period of 45 days
after the related Seller Party or Material Subsidiary has
knowledge thereof or (B) is a failure to pay such
indebtedness at maturity or results in the acceleration of
such indebtedness; (ii) a "Purchase and Sale Termination
Event" shall have occurred and be continuing under the Sale
Agreement; (iii) any default under any other agreement or
instrument relating to the purchase of receivables of any
Seller Party or any Material Subsidiary, or any other event,
shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument,
if the effect of such default (A) is to permit the
termination of, the commitment of any party to such
agreement or instrument to purchase receivables or the right
of such Seller Party or such Material Subsidiary to reinvest
in receivables the principal amount paid by any party to
such agreement or instrument for its interest in receivables
and such default continues unremedied, uncured or unwaived
for a period of 45 days after the related Seller Party or
Material Subsidiary has knowledge thereof or (B) is to
terminate such commitment or right; or (iv) a default or
trigger event shall occur under any asset securitization
agreement or arrangement entered into by any Seller Party or
Material Subsidiary and such default or trigger event
continues unremedied, uncured or unwaived for a period of 45
days after the related Seller Party or Material Subsidiary
has knowledge thereof; or
(e) An Event of Bankruptcy shall have occurred and
remain continuing with respect to Servicer, any Seller
Party, or any Material Subsidiary of any Seller Party; or
(f) (i) Any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental
proceedings not disclosed in writing by Seller Parties to
the Administrator and Purchaser prior to the date of
execution and delivery of this Agreement is pending against
any Seller Parties or any Material Subsidiary and known to a
Seller Party on the date hereof, or (ii) any material
development not so disclosed has occurred in any litigation
(including, without limitation, derivative actions),
arbitration proceedings or governmental proceedings so
disclosed, which, in the case of clause (i) or (ii), in the
opinion of the Administrator or the Relationship Bank, has a
reasonable likelihood of having a Material Adverse Effect;
or
(g) (i) The Dilution Ratio at any Cut-Off Date
exceeds 6% or (ii) the average of the Dilution Ratios for
any three consecutive Cut-Off Dates exceeds 5%; or
(h) (i) The Default Ratio at any Cut-Off Date exceeds
2% or (ii) the average of the Default Ratios at any three
consecutive Cut-Off Dates exceeds 1.75%; or
(i) Servicer (if any Seller Party or Affiliate thereof
is Servicer) shall make any material change in the policies
as to origination of Receivables or in the Credit and
Collection Policy without the prior written consent of the
Administrator and the Relationship Bank; or
(j) On any Settlement Date, after giving effect to the
payments made under Section 3.01(c), (i) the Asset Interest
exceeds the Allocation Limit or (ii) the Purchaser's Total
Investment exceeds the Purchase Limit; or
(k) Either (i) the Default to Liquidation Ratio at any
Cut-Off Date is greater than 2% or (ii) the average of the
Default to Liquidation Ratios at any three consecutive Cut-
Off Dates is greater than 1.75%; or
(l) There shall have occurred any event which
materially adversely impairs the ability of Inacom to
originate Receivables of a credit quality which are at least
of the credit quality of the Receivables included in the
first Purchase; or
(m) Any Seller Party is subject to a Change-in-
Control; or
(n) The Internal Revenue Service shall file notice of
a lien pursuant to Section 6323 of the Internal Revenue Code
with regard to any of the Receivables or Related Assets and
such lien shall not have been released within seven (7)
days, or the Pension Benefit Guaranty Corporation shall, or
shall indicate its intention to, file notice of a lien
pursuant to Section 4068 of the Employee Retirement Income
Security Act of 1974 with regard to any of the Receivables
or Related Assets; or
(o) (i) The 31-60 Delinquency Ratio at any Cut-Off
Date exceeds 10%, (ii) the 61-90 Delinquency Ratio at any
Cut-Off Date exceeds 3.5% or (iii) the 91-120 Delinquency
Ratio at any Cut-Off Date exceeds 2.5%.
SECTION 10.02. Remedies.
(a) Optional Liquidation. Upon the occurrence of a
Liquidation Event (other than a Liquidation Event described in
subsection (e) of Section 10.01), the Administrator shall, at the
request, or may with the consent, of Purchaser, by notice to
Seller declare the Purchase Termination Date to have occurred and
the Liquidation Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a
Liquidation Event described in subsection (e) of Section 10.01,
the Purchase Termination Date shall occur and the Liquidation
Period shall commence automatically.
(c) Additional Remedies. Upon any Purchase Termination
Date pursuant to this Section 10.02, no Purchases or
Reinvestments thereafter will be made, and the Administrator,
Purchaser and the Relationship Bank shall have, in addition to
all other rights and remedies under this Agreement or otherwise,
all other rights and remedies provided under the UCC of each
applicable jurisdiction and other applicable laws, which rights
shall be cumulative.
ARTICLE XI
THE ADMINISTRATOR; RELATIONSHIP BANK
SECTION 11.01. Authorization and Action. Pursuant to
agreements entered into with the Administrator and the
Relationship Bank, Xxxxxxxxx has appointed and authorized the
Administrator and the Relationship Bank (or their respective
designees) to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrator or the Relationship Bank by the terms hereof,
together with such powers as are reasonably incidental thereto.
SECTION 11.02. Administrator's and Relationship Bank's
Reliance, Etc. The Administrator, the Relationship Bank and
their directors, officers, agents or employees shall not be
liable for any action taken or omitted to be taken by it or them
in good faith under or in connection with the Transaction
Documents (including, without limitation, the servicing,
administering or collecting Pool Receivables as Servicer pursuant
to Section 8.01), except for its or their own breach of the terms
of the applicable terms of the Transaction Documents or its or
their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, each of the
Administrator and the Relationship Bank: (a) may consult with
legal counsel (including counsel for Seller), independent
certified public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken
in good faith by it in accordance with the advice of such
counsel, accountants or experts; (b) makes no warranty or
representation to Purchaser or any other holder of any interest
in Pool Receivables and shall not be responsible to Purchaser or
any such other holder for any statements, warranties or
representations made by any Seller Party in or in connection with
any Transaction Document; (c) shall not have any duty to
ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Transaction
Document on the part of any Seller Party or to inspect the
property (including the books and records) of any Seller Party;
(d) shall not be responsible to Purchaser or any other holder of
any interest in Pool Receivables for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of
any Transaction Document (except by and against the Administrator
and the Relationship Bank); and (e) shall incur no liability
under or in respect of this Agreement by acting upon any notice
(including notice by telephone where permitted herein), consent,
certificate or other instrument or writing (which may be by
facsimile or telex) in good faith believed by it to be genuine
and signed or sent by the proper party or parties.
SECTION 11.03. State Street Capital and Norwest and
Affiliates. State Street Capital and Norwest and any of their
respective Affiliates may generally engage in any kind of
business with any Seller Party or any Obligor, any of their
respective Affiliates and any Person who may do business with or
own securities of any Seller Party or any Obligor or any of their
respective Affiliates, all as if State Street Capital and Norwest
were not the Administrator and the Relationship Bank,
respectively, and without any duty to account therefor to
Purchaser or any other holder of an interest in Pool Receivables,
but in any event subject to Section 14.07.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments.
(a) Neither any Seller Party nor Norwest, individually or
as the Relationship Bank (except, in the case of the Relationship
Bank, as otherwise agreed among Purchaser, the Administrator,
Inacom and the Relationship Bank), may assign its rights, or
delegate its duties hereunder or any interest herein without the
prior written consent of the Administrator. Purchaser may not
assign its rights hereunder (although it may delegate its duties
hereunder as expressly indicated herein) or the Asset Interest
(or any portion thereof) to any Person without the prior written
consent of Seller, which consent shall not be unreasonably
withheld; provided, however, that
(i) Purchaser may assign all of its rights and
interests in the Transaction Documents, together with all
its interest in the Asset Interest, to any Liquidity Bank,
State Street Capital or Norwest, or both, or any Affiliate
of either of them, or to any "bankruptcy remote" special
purpose entity, the business of which is administered by
State Street Capital or any Affiliate of State Street
Capital or Norwest or any Affiliate of Norwest (which
assignee shall then be subject to this Article XII); and
(ii) Purchaser may assign and grant a security
interest in all of its rights in the Transaction Documents,
together with all of its rights and interest in the Asset
Interest, to the Collateral Agent, to secure Purchaser's
obligations under or in connection with the Commercial Paper
Notes, the Liquidity Agreement, the Credit Agreement and any
letter of credit issued thereunder, and certain other
obligations of Purchaser incurred in connection with the
funding of the Purchases and Reinvestments hereunder, which
assignment and grant of a security interest (and any
subsequent assignment by the Collateral Agent) shall not be
considered an "assignment" for purposes of Section 12.01(b)
or, prior to the enforcement of such security interest, for
purposes of any other provision of this Agreement (other
than Section 12.03).
(b) Xxxxxx agrees to advise the Administrator within five
Business Days after notice to Seller of any proposed assignment
by Purchaser of the Asset Interest (or any portion thereof), not
otherwise permitted under subsection (a), of Seller's consent or
non-consent to such assignment, and if it does not consent, the
reasons therefor. If Seller does not consent to such assignment,
Purchaser may immediately or at any time thereafter assign such
Asset Interest (or portion thereof) to any Person or Persons
permitted under clause (i) of Section 12.01(a).
SECTION 12.02. Rights of Assignee. Upon the assignment by
Purchaser in accordance with this Article XII, the assignee
receiving such assignment shall have all of the rights of
Purchaser with respect to the Transaction Documents and the Asset
Interest (or such portion thereof as has been assigned).
SECTION 12.03. Terms and Evidence of Assignment. Any
assignment of the Asset Interest (or any portion thereof) to any
Person which is otherwise permitted under this Article XII shall
be upon such terms and conditions as Purchaser and the assignee
may mutually agree, and may be evidenced by such instrument(s) or
document(s) as may be satisfactory to Purchaser, the
Administrator and the assignee.
SECTION 12.04. Rights of Collateral Agent. Seller hereby
agrees that, upon notice to Seller, the Collateral Agent or the
Liquidity Banks may exercise all the rights of the Administrator
and Purchaser hereunder, with respect to the Asset Interest (or
any portions thereof), and Collections with respect thereto,
which are owned by Purchaser, and all other rights and interests
of Purchaser in, to or under this Agreement or any other
Transaction Document. Without limiting the foregoing, upon such
notice or at any time thereafter (but subject to any conditions
applicable to the exercise of such rights by the Administrator),
the Collateral Agent or the Liquidity Banks may request Servicer
to segregate Purchaser's allocable shares of Collections from
Seller's allocable share, may give a Successor Notice pursuant to
and in accordance with Section 8.01(b), may give or require the
Administrator or Relationship Bank to give notice to the Lock-Box
Banks as referred to in Section 8.03(b) and may direct the
Obligors of Pool Receivables to make payments in respect thereof
directly to an account designated by them, in each case, to the
same extent as the Administrator might have done.
SECTION 12.05. Liquidity Banks. So long as no Liquidation
Event has occurred and is continuing, Purchaser shall not add any
Person as a Liquidity Bank, or permit any Liquidity Bank to
assign its rights and obligations to any Person, other than an
Affiliate of such Liquidity Bank or another Liquidity Bank
without the prior written consent of Seller, which consent shall
not be unreasonably withheld.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by Seller.
(a) General Indemnity. Without limiting any other rights
which any such Person may have hereunder or under applicable law,
Seller hereby agrees to indemnify each of the Administrator,
Purchaser, the Liquidity Banks, the Credit Bank, the Relationship
Bank, the Liquidity Agent, each of their respective Affiliates,
and all successors, transferees, participants and assigns and all
officers, directors, shareholders, controlling persons, employees
and agents of any of the foregoing (each an "Indemnified Party"),
forthwith on demand, from and against any and all damages,
losses, claims, liabilities and related costs and expenses,
including attorneys' fees and disbursements (all of the foregoing
being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or relating to
the Transaction Documents or the ownership or funding of the
Asset Interest or in respect of any Receivable or any Contract,
excluding, however, (a) Indemnified Amounts to the extent
determined by a court of competent jurisdiction to have resulted
from gross negligence or willful misconduct on the part of such
Indemnified Party or (b) recourse (except as otherwise
specifically provided in this Agreement) for Defaulted
Receivables. Without limiting the foregoing, Seller shall
indemnify each Indemnified Party for Indemnified Amounts arising
out of or relating to:
(i) the transfer by any Seller Party of any interest
in any Receivable other than the transfer of Receivables and
related property by the Originators to Seller pursuant to
the Sale Agreement, the transfer of an Asset Interest to
Purchaser pursuant to this Agreement and the grant of a
security interest to Purchaser pursuant to Section 9.01;
(ii) any representation or warranty made by any Seller
Party (or any of its officers or Affiliates) under or in
connection with any Transaction Document, any Information
Package or any other information or report delivered by or
on behalf of any Seller Party pursuant hereto, which shall
have been false, incorrect or misleading in any material
respect when made or deemed made or delivered, as the case
may be;
(iii) the failure by any Seller Party to comply with
any applicable law, rule or regulation with respect to any
Pool Receivable or the related Contract, or the
nonconformity of any Pool Receivable or the related Contract
with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in
Purchaser an undivided percentage ownership interest, to the
extent of the Asset Interest, in the Receivables in, or
purporting to be in, the Receivables Pool, free and clear of
any Lien, other than a Lien arising solely as a result of an
act of Purchaser, the Administrator or the Relationship
Bank, whether existing at the time of any Purchase or
Reinvestment of such Asset Interest or at any time
thereafter;
(v) the failure to file, or any delay in filing,
financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool, whether at the
time of any Purchase or Reinvestment or at any time
thereafter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of
any Receivable in, or purporting to be in, the Receivables
Pool (including, without limitation, a defense based on such
Receivables or the related Contract not being a legal, valid
and binding obligation of such Obligor enforceable against
it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or services
related to such Receivable or the furnishing or failure to
furnish such merchandise or services;
(vii) any matter described in clause (i) or (ii) of
Section 3.02(a);
(viii) any failure of any Seller Party, as Servicer or
otherwise, to perform its duties or obligations in
accordance with the provisions of Article III or Article
VIII;
(ix) any products liability claim arising out of or in
connection with merchandise or services that are the subject
of any Pool Receivable (it being understood that no Seller
Party is waiving its rights against any manufacturers);
(x) any claim of breach by any Seller Party of any
related Contract with respect to any Pool Receivable; or
(xi) any tax or governmental fee or charge (but not
including taxes upon or measured by net income), all
interest and penalties thereon or with respect thereto, and
all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against
the same, which may arise by reason of the purchase or
ownership of any Asset Interest, or any other interest in
the Pool Receivables or in any goods which secure any such
Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any
Indemnified Party shall have notice of any attempt to impose or
collect any tax or governmental fee or charge for which
indemnification will be sought from any Seller Party under
Section 13.01(a)(xi), such Indemnified Party shall give prompt
and timely notice of such attempt to Seller and Seller shall have
the right, at its expense, to participate in any proceedings
resisting or objecting to the imposition or collection of any
such tax, governmental fee or charge. Indemnification hereunder
shall be in an amount necessary to make the Indemnified Party
whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes
(including any deduction) and the receipt of the indemnity
provided hereunder or of any refund of any such tax previously
indemnified hereunder, including the effect of such tax,
deduction or refund on the amount of tax measured by net income
or profits which is or was payable by the Indemnified Party.
(c) Contribution. If for any reason the indemnification
provided above in this Section 13.01 (and subject to the
exceptions set forth therein) is unavailable to an Indemnified
Party or is insufficient to hold an Indemnified Party harmless,
then Seller shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not
only the relative benefits received by such Indemnified Party on
the one hand and Seller on the other hand but also the relative
fault of such Indemnified Party as well as any other relevant
equitable considerations.
SECTION 13.02. Indemnities by Servicer. Without limiting
any other rights which any Indemnified Party may have hereunder
or under applicable law, the Servicer hereby agrees to indemnify
each of the Indemnified Parties forthwith on demand, from and
against any and all Indemnified Amounts awarded against or
incurred by any of them arising out of or relating to the
Servicer's performance of, or failure to perform, any of its
obligations under or in connection with any Transaction Document,
or any representation or warranty made by Servicer (or any of its
officers) under or in connection with any Transaction Document,
any Information Package or any other information or report
delivered by or on behalf of Servicer, which shall have been
false, incorrect or misleading in any material respect when made
or deemed made or delivered, as the case may be. Notwithstanding
the foregoing, in no event shall any Indemnified Party be awarded
any Indemnified Amounts (a) to the extent determined by a court
of competent jurisdiction to have resulted from gross negligence
or willful misconduct on the part of such Indemnified Party or
(b) recourse for Defaulted Receivables.
If for any reason the indemnification provided above in this
Section 13.02 (and subject to the exceptions set forth therein)
is unavailable to an Indemnified Party or is insufficient to hold
an Indemnified Party harmless, then the Servicer shall contribute
to the amount paid or payable by such Indemnified Party as a
result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Party on the one hand and
the Servicer on the other hand but also the relative fault of
such Indemnified Party as well as any other relevant equitable
considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment or waiver of
any provision of this Agreement nor consent to any departure by
any Seller Party therefrom shall in any event be effective unless
the same shall be in writing and signed by (a) each Seller Party,
the Administrator, the Relationship Bank and Purchaser (with
respect to an amendment), provided that no amendment to this
Section 14.01 shall become effective without the consent of all
the parties hereto, or (b) the Administrator, the Relationship
Bank and Purchaser (with respect to a waiver or consent by them)
or any Seller Party (with respect to a waiver or consent by it),
as the case may be, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given. The parties acknowledge that, before
entering into such an amendment or granting such a waiver or
consent, Purchaser may also be required to obtain the approval of
some or all of the Liquidity Banks or the Credit Bank or to
obtain confirmation from certain rating agencies that such
amendment, waiver or consent will not result in a withdrawal or
reduction of the ratings of the Commercial Paper Notes.
SECTION 14.02. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including facsimile communication)
and shall be personally delivered or sent by express mail or
courier or by certified mail, postage prepaid, or by facsimile,
to the intended party at the address or facsimile number of such
party set forth under its name on the signature pages hereof or
at such other address or facsimile number as shall be designated
by such party in a written notice to the other parties hereto.
All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or if
sent by certified mail, when received, and (b) if transmitted by
facsimile, when sent, receipt confirmed by telephone or
electronic means.
SECTION 14.03. No Waiver; Remedies. No failure on the part
of the Administrator, the Relationship Bank, any Affected Party,
any Indemnified Party, Purchaser or any other holder of the Asset
Interest (or any portion thereof) to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, each of State Street Capital,
individually and as Administrator, Norwest, individually and as
Relationship Bank, the Collateral Agent, the Credit Bank and each
Liquidity Bank is hereby authorized by Seller at any time and
from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other
indebtedness at any time owing by State Street Capital, the
Collateral Agent and such Liquidity Bank to or for the credit or
the account of Seller, now or hereafter existing under this
Agreement, to the Administrator, the Relationship Bank, any
Affected Party, any Indemnified Party or Purchaser, or their
respective successors and assigns.
SECTION 14.04. Binding Effect; Survival. This Agreement
shall be binding upon and inure to the benefit of each Seller
Party, the Administrator, the Relationship Bank, Purchaser and
their respective successors and assigns, and the provisions of
Section 4.02 and Article XIII shall inure to the benefit of the
Affected Parties and the Indemnified Parties, respectively, and
their respective successors and assigns; provided, however,
nothing in the foregoing shall be deemed to authorize any
assignment not permitted by Section 12.01. This Agreement shall
create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full
force and effect until the Final Payout Date. The rights and
remedies with respect to any breach of any representation and
warranty made by Seller pursuant to Article VI and the
indemnification and payment provisions of Article XIII and
Sections 4.02, 14.05, 14.06, 14.07, 14.08 and 14.15 shall be
continuing and shall survive any termination of this Agreement.
SECTION 14.05. Costs, Expenses and Taxes. In addition to
its obligations under Article XIII, Seller Parties jointly and
severally agree to pay on demand:
(a) all costs and expenses incurred by the
Administrator, the Relationship Bank, the Credit Bank, the
Collateral Agent, any Liquidity Bank and the Purchaser and
their respective Affiliates in connection with
(i) the negotiation, preparation, execution and
delivery of this Agreement, the other Transaction
Documents or the Liquidity Agreement, any amendment of
or consent or waiver under any of the Transaction
Documents which is requested or proposed by any Seller
Party (whether or not consummated), or the enforcement
of, or any actual or claimed breach of, this Agreement
or any of the other Transaction Documents, including,
without limitation, the reasonable fees and expenses of
counsel to any of such Persons incurred in connection
with any of the foregoing or in advising such Persons
as to their respective rights and remedies under any of
the Transaction Documents in connection with any of the
foregoing, and
(ii) the administration (including periodic
auditing as provided for herein) of this Agreement and
the other Transaction Documents, including, without
limitation, all reasonable out-of-pocket expenses
(including reasonable fees and expenses of independent
accountants), incurred in connection with any review of
any Seller Party's books and records either prior to
the execution and delivery hereof or pursuant to
Section 7.02(g) or 7.01(c)(iii); and
(b) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement or the
other Transaction Documents (and Seller Parties, jointly and
severally agree to indemnify each Indemnified Party against
any liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes and fees).
SECTION 14.06. No Proceedings. Servicer hereby agrees that
it will not institute against Seller, or join any Person in
instituting against Seller, and each Seller Party, Servicer,
State Street Capital (individually and as Administrator) and
Norwest (individually and as Relationship Bank) each hereby
agrees that it will not institute against Purchaser, or join any
other Person in instituting against Purchaser, any insolvency
proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Commercial
Paper Notes issued by Purchaser shall be outstanding or there
shall not have elapsed one year plus one day since the last day
on which any such Commercial Paper Notes shall have been
outstanding.
SECTION 14.07. Confidentiality of Seller Information.
(a) Confidential Seller Information. Each party hereto
(other than Seller Parties) acknowledges that certain of the
information provided to such party by or on behalf of Seller
Parties in connection with this Agreement and the transactions
contemplated hereby is or may be confidential, and each such
party severally agrees that, unless Inacom shall otherwise agree
in writing, and except as provided in subsection (b), such party
will not disclose to any other person or entity:
(i) any information regarding, or copies of, any non-
public financial statements, reports, schedules and other
information furnished by any Seller Party to Purchaser, the
Administrator or the Relationship Bank (A) prior to the date
hereof in connection with such party's due diligence
relating to the Seller Parties and the transactions
contemplated hereby, or (B) pursuant to Section 3.01, 5.01,
6.01(i), 6.01(j), 7.01(c) or 7.02, or
(ii) any other information regarding any Seller Party
which is designated by any Seller Party to such party in
writing as confidential
(the information referred to in clauses (i) and (ii) above,
whether furnished by any Seller Party or any attorney for or
other representative thereof (each a "Seller Information
Provider"), is collectively referred to as the "Seller
Information"); provided, however, "Seller Information" shall not
include any information which is or becomes generally available
to the general public or to such party on a nonconfidential basis
from a source other than any Seller Information Provider, or
which was known to such party on a nonconfidential basis prior to
its disclosure by any Seller Information Provider.
(b) Disclosure. Notwithstanding subsection (a), each party
may disclose any Seller Information:
(i) to any of such party's independent attorneys,
consultants and auditors, and to any dealer or placement
agent for Purchaser's commercial paper, who (A) in the good
faith belief of such party, have a need to know such Seller
Information, and (B) are informed by such party of the
confidential nature of the Seller Information and the terms
of this Section 14.07 and has agreed, verbally or otherwise,
to be bound by the provisions of this Section 14.07,
(ii) to any Liquidity Bank, the Credit Bank, any
actual or potential assignees of, or participants in, any
rights or obligations of Purchaser, any Liquidity Bank, the
Credit Bank, the Administrator or the Relationship Bank
under or in connection with this Agreement who (A) has been
identified to Inacom and (B) has agreed to be bound by the
provisions of this Section 14.07,
(iii) to any rating agency that maintains a rating for
Purchaser's commercial paper or is considering the issuance
of such a rating, for the purposes of reviewing the credit
of Purchaser in connection with such rating,
(iv) to any other party to this Agreement (and any
independent attorneys, consultants and auditors of such
party), for the purposes contemplated hereby,
(v) as may be required by any municipal, state,
federal or other regulatory body having or claiming to have
jurisdiction over such party, in order to comply with any
law, order, regulation, regulatory request or ruling
applicable to such party,
(vi) subject to subsection (c), in the event such
party is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand
or similar process) to disclose such Seller Information, or
(vii) in connection with the enforcement of this
Agreement or any other Transaction Document.
In addition, Purchaser and the Administrator may disclose on a
"no name" basis to any actual or potential investor in
Purchaser's Commercial Paper Notes information regarding the
nature of this Agreement, the basic terms hereof (including
without limitation the amount and nature of Purchaser's
commitment and Purchaser's Total Investment with respect to the
Asset Interest and any other credit enhancement provided by any
Seller Party hereunder), the nature, amount and status of the
Pool Receivables, and the current and/or historical ratios of
losses to liquidations and/or outstandings with respect to the
Receivables Pool.
(c) Legal Compulsion. In the event that any party hereto
(other than any Seller Party) or any of its representatives is
requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any of the
Seller Information, such party will (or will cause its
representative to)
(i) provide Inacom with prompt written notice so that
(A) Inacom may seek a protective order or other appropriate
remedy, or (B) Inacom may, if it so chooses, agree that such
party (or its representatives) may disclose such Seller
Information pursuant to such request or legal compulsion;
and
(ii) unless Inacom agrees that such Seller Information
may be disclosed, make a timely objection to the request or
compulsion to provide such Seller Information on the basis
that such Seller Information is confidential and subject to
the agreements contained in this Section 14.07.
In the event such protective order or remedy is not obtained, or
Inacom agrees that such Seller Information may be disclosed, such
party will furnish only that portion of the Seller Information
which (in such party's good faith judgment) is legally required
to be furnished and will exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be afforded
the Seller Information.
(d) This Section 14.07 shall survive termination of this
Agreement.
SECTION 14.08. Confidentiality of Program Information.
(a) Confidential Information. Each party hereto
acknowledges that State Street Capital and Norwest regard the
structure of the transactions contemplated by this Agreement to
be proprietary, and each such party agrees that:
(i) it will not disclose without the prior consent of
State Street Capital and Norwest (other than to the
directors, employees, auditors, counsel or affiliates
(collectively, "representatives") of such party, each of
whom shall be informed by such party of the confidential
nature of the Program Information (as defined below) and of
the terms of this Section 14.08), (A) any information
regarding the pricing in, or copies of, this Agreement any
other Transaction Document or any transaction contemplated
hereby or thereby, (B) any information regarding the
organization, business or operations of Purchaser generally
or the services performed by the Administrator or the
Relationship Bank for Purchaser, or (C) any information
which is furnished by State Street Capital and Norwest to
such party and which is designated by State Street Capital
and Norwest to such party in writing or otherwise as
confidential or not otherwise available to the general
public (the information referred to in clauses (A), (B) and
(C) is collectively referred to as the "Program
Information"); provided, however, that such party may
disclose any such Program Information (I) to any other party
to this Agreement (and any independent attorneys,
consultants and auditors of any such party) for the purposes
contemplated hereby, (II) as may be required by any
municipal, state, federal or other regulatory body having or
claiming to have jurisdiction over such party, (III) in
order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party, or (IV) subject
to subsection (c), in the event such party is legally
compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar
process) to disclose any such Program Information;
(ii) it will use the Program Information solely for
the purposes of evaluating, administering and enforcing the
transactions contemplated by this Agreement and making any
necessary business judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of
its representatives to return) to State Street Capital or
Norwest, all documents or other written material received
from State Street Capital or Norwest, as the case may be, in
connection with (a)(i)(B) or (C) above and all copies
thereof made by such party which contain the Program
Information.
(b) Availability of Confidential Information. This Section
14.08 shall be inoperative as to such portions of the Program
Information which are or become generally available to the public
or such party on a nonconfidential basis from a source other than
State Street Capital or Norwest or were known to such party on a
nonconfidential basis prior to its disclosure by State Street
Capital or Norwest.
(c) Legal Compulsion to Disclose. In the event that any
party or anyone to whom such party or its representatives
transmits the Program Information is requested or becomes legally
compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar
process) to disclose any of the Program Information, such party
will
(i) provide State Street Capital and Norwest with
prompt written notice so that State Street Capital and
Norwest may seek a protective order or other appropriate
remedy and/or, if it so chooses, agree that such party may
disclose such Program Information pursuant to such request
or legal compulsion; and
(ii) unless State Street Capital and Norwest agree
that such Program Information may be disclosed, make a
timely objection to the request or confirmation to provide
such Program Information on the basis that such Program
Information is confidential and subject to the agreements
contained in this Section 14.08.
In the event that such protective order or other remedy is not
obtained, or State Street Capital and Norwest agree that such
Program Information may be disclosed, such party will furnish
only that portion of the Program Information which (in such
party's good faith judgment) is legally required to be furnished
and will exercise reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded the Program
Information. In the event any Seller Party is required to file a
copy of this Agreement with the SEC or any other governmental
authority, it will (A) provide State Street Capital and Norwest
with prompt written notice of such requirement and (B) exercise
reasonable efforts to obtain reliable assurance that such
governmental authority will give confidential treatment to this
Agreement.
(d) Survival. This Section 14.08 shall survive termination
of this Agreement.
SECTION 14.09. Captions and Cross References. The various
captions (including, without limitation, the table of contents)
in this Agreement are provided solely for convenience of
reference and shall not affect the meaning or interpretation of
any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule
or Exhibit are to such Section of or Appendix, Schedule or
Exhibit to this Agreement, as the case may be, and references in
any Section, subsection, or clause to any subsection, clause or
subclause are to such subsection, clause or subclause of such
Section, subsection or clause.
SECTION 14.10. Integration. This Agreement, together with
the letter referenced in Section 4.01, contains a final and
complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall
constitute the entire understanding among the parties hereto with
respect to the subject matter hereof, superseding all prior oral
or written understandings.
SECTION 14.11. Governing Law. THIS AGREEMENT, INCLUDING
THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF
PURCHASER IN THE RECEIVABLES OR RELATED PROPERTY IS GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14.12. Waiver Of Jury Trial. EACH PARTY HERETO
HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL NOT BE TRIED BEFORE A JURY.
SECTION 14.13. Consent To Jurisdiction; Waiver Of
Immunities. EACH SELLER PARTY HEREBY ACKNOWLEDGES AND AGREES
THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION,
FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF
FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE
COURT, IN EITHER CASE SITTING IN NEW YORK COUNTY, NEW YORK
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY
IN SUCH NEW YORK STATE OR FEDERAL COURT AND NOT IN ANY OTHER
COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 14.14. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same
Agreement.
SECTION 14.15. No Recourse Against Other Parties. No
recourse under any obligation, covenant or agreement of Purchaser
contained in this Agreement shall be had against any stockholder,
employee, officer, director, or incorporator of Purchaser,
provided, however, that nothing in this Section 14.15 shall
relieve any of the foregoing Persons from any liability which
such Person may otherwise have for his/her or its gross
negligence or willful misconduct.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
INACOM FINANCE CORP., as Seller
By /s/ Xxxx Xxxxxxxxxx
_________________________________
Treasurer
00000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile No.: 402/330-9609
Attention: Treasurer
INACOM CORP., as initial Servicer
By /s/ Xxxx Xxxxxxxxxx
_________________________________
Treasurer
00000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile No.: 402/330-9609
Attention: Treasurer
CLIPPER RECEIVABLES CORPORATION,
as Purchaser
By /s/ Xxxxx X. Xxxxxxx
_________________________________
Vice President
P.O. Box 4024
Boston, Massachusetts 02101
or
Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: X. Xxxxxxx Xxxxxxxxx
STATE STREET BOSTON CAPITAL
CORPORATION, as Administrator
By /s/ Xxxxxxx X. Xxxxxxxxx
_________________________________
Title: Associate
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Clipper Products
NORWEST BANK MINNESOTA, N.A.,
as Relationship Bank
By /s/
_________________________________
Vice President
Norwest Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479-0089
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
APPENDIX A
DEFINITIONS
This is Appendix A to the Amended and Restated Receivables
Purchase Agreement dated as of August 21, 1995 among InaCom
Finance Corp., as Seller, InaCom Corp., as initial Servicer,
Clipper Receivables Corporation, as Purchaser, State Street
Boston Capital Corporation, as Administrator, and Norwest Bank
Minnesota, N.A., as Relationship Bank (as further amended,
supplemented or otherwise modified from time to time, and
including the Original Purchase Agreement for as long as it was
in effect, this "Agreement"). Each reference in this Appendix A
to any Section, Appendix or Exhibit refers to such Section of or
Appendix or Exhibit to this Agreement.
A. Defined Terms. As used in this Agreement, unless the
context requires a different meaning, the following terms have
the meanings indicated hereinbelow:
"Accrued Cost Reserve" means, at any time, the sum of
(a) the aggregate accrued and unpaid Earned Discount
with respect to all Asset Tranches;
(b) the accrued and unpaid Servicer's Fee; and
(c) the accrued and unpaid Program Fee, Liquidity Fee
and Administrative Fee.
"Administrative Fee" has the meaning set forth in the Fee
Letter.
"Administrator" has the meaning set forth in the preamble.
"Administrator's Office" means the office of the
Administrator at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention: Clipper Products, or such other address as
shall be designated by the Administrator in writing to Seller and
Purchaser.
"Affected Party" means each of Purchaser, each Liquidity
Bank, any assignee or participant of Purchaser or any Liquidity
Bank, the Credit Bank, any assignee or participant of the Credit
Bank, State Street Capital, any successor to State Street Capital
as Administrator, Norwest, any successor to Norwest as
Relationship Bank, any sub-agent of the Administrator, the
Collateral Agent and any co-agent or sub-agent of the Collateral
Agent.
"Affiliate" when used with respect to a Person means any
other Person controlling, controlled by, or under common control
with, such Person.
"Affiliated Obligor" in relation to any Obligor means an
Obligor that is an Affiliate of such Obligor.
"Allocation Limit" has the meaning set forth in Section
1.01.
"Alternate Base Rate" means, on any date, a fluctuating rate
of interest per annum equal to the higher of
(a) the rate of interest most recently announced by
Norwest in Minneapolis, Minnesota, as its base rate for
prime loans to corporate borrowers; and
(b) the Federal Funds Rate (as defined below) most
recently determined by Norwest plus 1.5% per annum.
The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by Norwest in connection with
extensions of credit.
"Asset Interest" means an undivided percentage ownership
interest, determined from time to time as provided in Section
1.04(b), in (i) all then outstanding Pool Receivables and (ii)
all Related Assets.
"Asset Tranche" means at any time a portion of the Asset
Interest selected by the Administrator pursuant to Section 2.01.
"Back-up Servicer Event" means any of the following events:
(i) Inacom's Tangible Net Worth is less than $95,000,000; (ii)
the ratio of Total Liabilities to Tangible Net Worth exceeds 5.0
to 1.0 or (iii) Inacom's Current Ratio is less than 1.0 to 1.0.
"Bank Rate" for any Yield Period with respect to any Asset
Tranche means
(a) in the case of any Yield Period other than a Yield
Period described in clause (b) or (c), an interest rate per
annum equal to the sum of (x) 1.85% per annum, plus
(y) Eurodollar Rate (Reserve Adjusted) for such Yield
Period;
(b) in the case of
(i) any Yield Period on or prior to the first day
of which Purchaser or any Liquidity Bank shall have
notified the Administrator that (A) the introduction of
or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or
other governmental authority asserts that it is
unlawful, for such Person to fund such Asset Tranche at
the rate described in clause (a), or (B) due to market
conditions affecting the interbank eurodollar market,
funds are not reasonably available to such Person in
such market in order to enable it to fund such Asset
Tranche at the rate described in clause (a) (and in the
case of subclause (A) or (B), such Person shall not
have subsequently notified the Administrator that such
circumstances no longer exist),
(ii) any Yield Period as to which the
Administrator does not receive notice or determine, by
no later than 12:00 noon (New York City time) on the
third Business Day preceding the first day of such
Yield Period, that the related Asset Tranche will be
funded by Liquidity Fundings and not by the issuance of
Commercial Paper Notes, or
(iii) any Yield Period with respect to any Asset
Tranche funded by a Liquidity Funding and commencing
more than 60 days after the making of such Liquidity
Funding,
an interest rate per annum equal to (x) 1.0% per annum, plus
(y) the Alternate Base Rate in effect from time to time
during such Yield Period; it being understood that, in the
case of paragraph (b)(i) above, such rate shall only apply
to the Person affected by the circumstances described in
such paragraph (b)(i).
"Business Day" means a day on which both (a) the
Administrator at its principal office in Boston, Massachusetts is
open for business and (b) commercial banks in New York City,
Minneapolis, Minnesota and Chicago, Illinois, are not authorized
or required to be closed.
"Change in Control" means:
(a) in relation to Inacom the acquisition by any
person or group of persons (within the meaning of Section 13
or 14 of the Exchange Act), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Exchange Act) of issued and
outstanding shares of the capital stock of Inacom entitled
(without regard to the occurrence of any contingency) to
vote for the election of members of the board of directors
of Inacom and having a then present right to exercise 50% or
more of the voting power for the election of members of the
board of directors of Inacom attached to all such
outstanding shares of capital stock of Inacom, unless
otherwise agreed in writing by the Relationship Bank and the
Administrator;
(b) in relation to Seller, the failure of Inacom to
own (directly or through wholly-owned Subsidiaries of
Inacom) 100% of the issued and outstanding shares of the
capital stock (including all warrants, options, conversion
rights, and other rights to purchase or convert into such
stock) of Seller on a fully diluted basis;
"Collateral Agent" means The First National Bank of Chicago
in its capacity as collateral agent under the Security Agreement,
and any successor to The First National Bank of Chicago in such
capacity.
"Collections" means, with respect to any Receivable, all
funds which either (a) are received by Seller, an Originator or
Servicer from or on behalf of the related Obligors in payment of
any amounts owed (including, without limitation, purchase prices,
finance charges, interest and all other charges) in respect of
such Receivable, or applied to such amounts owed by such Obligors
(including, without limitation, insurance payments that Seller,
any Originator or Servicer applies in the ordinary course of its
business to amounts owed in respect of such Receivable and net
proceeds of sale or other disposition of repossessed goods or
other collateral or property of the Obligor or any other party
directly or indirectly liable for payment of such Receivable and
available to be applied thereon), or (b) are Deemed Collections;
provided that, prior to such time as Inacom shall cease to be
Servicer, late payment charges, collection fees and extension
fees shall not be deemed to be Collections.
"Commercial Paper Notes" means short-term promissory notes
issued or to be issued by Purchaser to fund its investments in
accounts receivable or other financial assets.
"Contract" means a contract between Seller or any Originator
and any Person, or an invoice sent by Seller or any Originator,
pursuant to or under which such Person shall be obligated to make
payments to Seller or such Originator with respect to the sale of
goods or provision of services by such Originator from time to
time or, in the case of Dealer Financed Receivables, with respect
to the sale or assignment by such Originator of Receivables
described in clause (i) of the definition thereof. A "related"
Contract with respect to the Receivables means a Contract under
which Receivables in the Receivables Pool arise or which is
relevant to the collection or enforcement of such Receivables.
"CP Rate" for any period means a rate per annum calculated
by the Administrator equal to the sum of (i) the rate or, if more
than one rate, the weighted average of the rates, determined by
converting to an interest-bearing equivalent rate per annum the
discount rate (or rates) at which Commercial Paper Notes on each
day during such period have been sold by the commercial paper
placement agents selected by the Administrator, plus (ii) the
commissions and charges charged by such commercial paper
placement agents with respect to such Commercial Paper Notes,
expressed as a percentage of such face amount and converted to an
interest-bearing equivalent rate per annum.
"Credit Agreement" means and includes (a) the Credit
Agreement dated as of September 24, 1992, among Purchaser, the
Administrator and the Credit Bank and (b) any other agreement
(other than the Liquidity Agreement) hereafter entered into by
Purchaser providing for the issuance of one or more letters of
credit for the account of Purchaser, the making of loans to
Purchaser or any other extensions of credit to or for the account
of Purchaser to support all or any part of Purchaser's payment
obligations under its Commercial Paper Notes or to provide an
alternate means of funding Purchaser's investments in accounts
receivable or other financial assets, in each case as amended,
supplemented or otherwise modified from time to time.
"Credit and Collection Policy" means those credit and
collection policies and practices of Inacom relating to Contracts
and Receivables described in Schedule 6.01(p)-2, as modified
without violating Section 7.03(c).
"Credit Bank" means and includes State Street Bank, as
lender to Purchaser and as issuer of a letter of credit for
Purchaser's account under the Credit Agreement, and any other or
additional bank or other financial institution now or hereafter
extending credit or having a commitment to extend credit to or
for the account of Purchaser under the Credit Agreement.
"Credit Draw" means a loan made by the Credit Bank pursuant
to the Credit Agreement or a disbursement made by the Credit Bank
under a letter of credit issued pursuant to the Credit Agreement.
"Current Assets" means, as of any date all assets which, in
accordance with GAAP, should be classified as current assets on a
consolidated balance sheet of Inacom and its consolidated
Subsidiaries.
"Current Liabilities" means, as of any date, all liabilities
which, in accordance with GAAP, should be classified as current
liabilities on a consolidated balance sheet of Inacom and its
consolidated Subsidiaries; provided, that all liabilities to IBM
Credit shall be considered current liabilities.
"Current Ratio" means, as of any date, the ratio of Current
Assets divided by Current Liabilities.
"Cut-Off Date" means the last day of each Settlement Period.
"Dealer Financed Receivable" means the right to payment from
a Person, whether constituting an account, chattel paper,
instrument or general intangible, arising from the transfer by an
Originator of Receivables, as defined in clause (i) of the
definition thereof, to a Person other than Purchaser, and
includes the right to payment of any interest or finance charges
and other obligations of such Person with respect thereto.
"Deemed Collections" has the meaning set forth in Section
3.02(a).
"Defaulted Receivable" means a Receivable: (a) as to which
any payment, or part thereof, remains unpaid for 150 days from
the original due date for such payment; (b) as to which an Event
of Bankruptcy has occurred and remains continuing with respect to
the Obligor thereof; (c) as to which payments have been extended,
or the terms of payment thereof rewritten, other than as
permitted by Section 8.02(c); (d) which has been, or, consistent
with the Credit and Collection Policy would be, written off
Seller's, any Originator's or Servicer's books as uncollectible;
or (e) 10% or more of the aggregate Unpaid Balance of all
Receivables of the related Obligor are Defaulted Receivables.
"Default Ratio" at any time during a Fiscal Month means the
ratio (expressed as a percentage) computed as of the Cut-Off Date
for the next preceding Fiscal Month by dividing (x) the aggregate
Unpaid Balance of all Pool Receivables that are Defaulted
Receivables on such Cut-Off Date by (y) the aggregate Unpaid
Balance of Pool Receivables on such Cut-Off Date.
"Default to Liquidation Ratio" at any time during a Fiscal
Month means the ratio (expressed as a percentage) computed as of
the Cut-Off Date for the next preceding Fiscal Month by dividing
(x) the aggregate Unpaid Balance of all Pool Receivables that are
Defaulted Receivables on such Cut-Off Date by (y) all Collections
received during the Fiscal Month ending on such Cut-Off Date.
"Delinquent Receivable" means a Pool Receivable (a) that is
not a Defaulted Receivable and (b) as to which any payment, or
part thereof, remains unpaid for 61 days or more from the
original due date for such payment.
"Dilution" means the amount of any reduction or cancellation
of the Unpaid Balance of a Pool Receivable as described in
Section 3.02(a).
"Dilution Ratio" means the ratio (expressed as of
percentage) computed as of each Cut-Off Date by dividing (x) the
aggregate Dilutions incurred or granted during the Fiscal Month
ending on such Cut-Off Date by (y) the aggregate Unpaid Balance
of all Pool Receivables as of such Cut-Off Date.
"Dilution Reserve" means, on any day in a Settlement Period,
an amount equal to the product of (i) 5% times (ii) the
Purchaser's Total Investment on such day.
"Dollars" means dollars in lawful money of the United States
of America.
"Downgraded Liquidity Bank" means a Liquidity Bank which has
been the subject of a Downgrading Event.
"Downgrading Event" with respect to any Person means the
lowering of the rating with regard to the short-term securities
of such Person to below (i) A-1 by Standard & Poor's Ratings
Group, or (ii) P-1 by Xxxxx'x Investors Service, Inc.
"Earned Discount" means, for any Yield Period or Settlement
Period, as applicable, for any Asset Tranche:
PTI x ER x ED + LF
360
where:
PTI = the daily average (calculated at the close of business
each day) of the Purchaser's Tranche Investment in
such Asset Tranche during such Yield Period or
Settlement Period, as applicable,
ER = the Earned Discount Rate for such Yield Period or
Settlement Period,
ED = the actual number of days elapsed during such Yield
Period or Settlement Period, and
LF = the Liquidation Fee, if any, during such Yield Period
or Settlement Period.
"Earned Discount Rate" means for any Yield Period or any
Settlement Period, as applicable, for any Asset Tranche:
(a) in the case of an Asset Tranche funded by a
Liquidity Funding, the Bank Rate for such Asset Tranche and
such Yield Period;
(b) in the case of an Asset Tranche funded by a Credit
Draw, a rate per annum equal for each day during such Yield
Period to the Alternate Base Rate in effect on such day plus
1% per annum; and
(c) for the Asset Tranche funded by Commercial Paper
Notes, the CP Rate for such Settlement Period;
provided, however, that on any day when any Liquidation Event or
Unmatured Liquidation Event shall have occurred and be
continuing, the Earned Discount Rate for each Asset Tranche shall
mean a rate per annum equal to the Alternate Base Rate plus 1%
per annum.
"Eligible Contract" means a Contract which conforms in all
material respects to one of the forms set forth in Schedule
6.01(p)-1 or otherwise approved by the Administrator.
"Eligible Receivable" means, at any time, a Receivable:
(a) which is a Pool Receivable arising out of the sale
by an Originator in the ordinary course of its business of
computer or information technology goods owned by such
Originator free and clear of any Lien or other claim or
right of any Person (and, without limiting the foregoing,
not out of a sale on consignment) or out of the provision of
services by an Originator or, in the case of Dealer Financed
Receivables, out of the sale or assignment of Receivables
described in clause (i) of the definition thereof;
(b) as to which the perfection of Purchaser's
undivided ownership interest therein is governed by the
laws of a jurisdiction where the Uniform Commercial Code --
Secured Transactions is in force, and which constitutes an
"account" as defined in the Uniform Commercial Code as in
effect in such jurisdiction;
(c) the Obligor of which is resident of the United
States, or any of its possessions or territories, is not an
Affiliate of any of the parties hereto, and is not a
government or a governmental subdivision or agency;
(d) which is not a Defaulted Receivable or a
Delinquent Receivable at such time;
(e) with regard to which the warranty of Seller in
Section 6.01(l) is true and correct;
(f) the sale of an undivided interest in which does
not contravene or conflict with any law;
(g) which is denominated and payable only in Dollars
in the United States;
(h) which arises under an Eligible Contract that has
been duly authorized and that, together with such
Receivable, is in full force and effect and constitutes the
legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance
with its terms and is not subject to any dispute, offset,
counterclaim or defense whatsoever;
(i) which, together with the Contract related thereto,
does not contravene in any material respect any laws, rules
or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party
to the Contract related thereto is in violation of any such
law, rule or regulation in any material respect if such
violation would impair the collectibility of such
Receivable;
(j) which satisfies in all material respects all
applicable requirements of the Credit and Collection Policy;
(k) which, according to the Contract related thereto,
is due and payable within 60 days from the invoice date of
such Receivable; and
(l) which has been fully earned by performance on the
part of the related Originator and is not subject to any
holdback or contingency.
"ERISA" means the U.S. Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to
any Yield Period and any Asset Tranche, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined
pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1 = Eurodollar
Reserve Percentage
where:
"Eurodollar Rate" means, with respect to any Yield Period
and any Asset Tranche, the rate per annum at which Dollar
deposits in immediately available funds are offered to the
Eurodollar Office of the Administrator two Eurodollar
Business Days prior to the beginning of such period by prime
banks in the interbank eurodollar market at or about 11:00
a.m., New York City time, for delivery on the first day of
such Yield Period, for the number of days comprised therein
and in an amount equal or comparable to the Purchaser's
Tranche Investment of such Asset Tranche for such Yield
Period.
"Eurodollar Business Day" means a day of the year on which
dealings are carried on in the eurodollar interbank market
and banks are not required or authorized to close in New
York City or Boston, Massachusetts.
"Eurodollar Reserve Percentage" means, with respect to any
Yield Period, the then applicable percentage (expressed as a
decimal) prescribed by the Federal Reserve Board for
determining reserve requirements applicable to "Eurocurrency
Liabilities" pursuant to Regulation D.
"Event of Bankruptcy" shall be deemed to have occurred with
respect to a Person if either:
(a) a case or other proceeding shall be commenced,
without the application or consent of such Person, in any
court, seeking the liquidation, reorganization, debt
arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of
a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or
substantially all of its assets, or any similar action with
respect to such Person under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a
period of 60 consecutive days; or an order for relief in
respect of such Person shall be entered in an involuntary
case under the federal bankruptcy laws or other similar laws
now or hereafter in effect; or
(b) such Person shall commence a voluntary case or
other proceeding under any applicable bankruptcy,
insolvency, reorganization, debt arrangement, dissolution
or other similar law now or hereafter in effect, or shall
consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall be
adjudicated insolvent, or admit in writing its inability to,
pay its debts generally as they become due, or, if a
corporation or similar entity, its board of directors shall
vote to implement any of the foregoing.
"Excess Concentration Amount" means, as of any date, the sum
of the amounts by which the aggregate Unpaid Balance of
Receivables of each Obligor exceeds the Obligor Concentration
Limit for such Obligor.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal (for each day during such period)
to
(a) the weighted average of the rates on overnight
federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of Chicago; or
(b) if such rate is not so published for any day which
is a Business Day, the average of the quotations for such
day on such transactions received by Norwest from three
federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto or to the
functions thereof.
"Fee Letter" has the meaning set forth in Section 4.01.
"Final Payout Date" means the date following the Termination
Date on which Purchaser's Total Investment shall have been
reduced to zero and all other amounts payable by Seller under the
Transaction Documents shall have been paid in full.
"Fiscal Month" means each period of four (in the case of the
first and third Fiscal Months in each quarter) or five (in the
case of the second Fiscal Month in each quarter) weeks, in each
case ending on a Saturday, determined such that the last Fiscal
Month of each year ends on the last Saturday of December. A
schedule of Fiscal Months is attached hereto as Schedule I.
"GAAP" shall mean generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
accounting profession, which are applicable to the circumstances
as of the date of determination.
"IBM" has the meaning set forth in the Background.
"Inacom" has the meaning set forth in the preamble.
"Indemnified Amounts" has the meaning set forth in Section
13.01.
"Indemnified Party" has the meaning set forth in Section
13.01.
"Information Package" for any Fiscal Month means the
Receivables Report and the Settlement Report related to such
Fiscal Month, collectively.
"Lien" means any security interest, lien, encumbrance,
pledge, assignment, title retention, claim or similar right or
interest.
"Liquidation Cost Reserve" means, on any day during a
Settlement Period, an amount equal to the product of
(a) the sum of (i) 1% over the Alternate Base Rate in
effect on such day, plus (ii) the percentage as may be in
effect for the purposes of calculating the Program Fee
applicable to the Purchaser's Total Investment, plus (iii)
1.00% (or, if greater, such other percentage as may be in
effect for purposes of clause (b)(x) of the definition of
"Servicer's Fee"); times
(b) the Purchaser's Total Investment on such day;
divided by
(c) six (6).
"Liquidation Event" has the meaning set forth in Section
10.01.
"Liquidation Fee" means, for each Asset Tranche (or portion
thereof) for each day in any Yield Period or Settlement Period
(computed without regard to clause (iii) of the proviso of the
definition of "Yield Period"), the amount, if any, by which:
(a) the additional Earned Discount (calculated without
taking into account any Liquidation Fee) which would have
accrued on the reductions of the Purchaser's Tranche
Investment with respect to such Asset Tranche during such
Yield Period or Settlement Period (as so computed) if such
reductions had not been made, exceeds
(b) the income, if any, received by Purchaser from
investing the proceeds of such reductions of the Purchaser's
Tranche Investment.
"Liquidation Period" means the period commencing on the date
on which the conditions precedent to Purchases and Reinvestments
set forth in Section 5.02 are not satisfied (or expressly waived
by Purchaser) and the Administrator shall have notified Seller,
Servicer and the Relationship Bank in writing that the
Liquidation Period has commenced, and ending on the Final Payout
Date.
"Liquidity Agent" means Norwest, as agent for the Liquidity
Banks under the Liquidity Agreement, or any successor to Norwest
in such capacity.
"Liquidity Agreement" means and includes (a) the Liquidity
Asset Purchase Agreement dated as of the date hereof among
Purchaser, as borrower, State Street Capital, as Program
Administrator, Norwest, as Liquidity Agent, and Norwest and/or
one or more other banks or other financial institutions, as
lenders, and (b) any other agreement hereafter entered into by
Purchaser providing for the making of loans, purchase of assets
or other extensions of credit to Purchaser secured by a direct or
indirect security interest in the Asset Interest (or any portion
thereof), to support all or part of Purchaser's payment
obligations under the Commercial Paper Notes or to provide an
alternate means of funding Purchaser's investments in accounts
receivable or other financial assets, and under which the amount
available from such extensions of credit is limited to an amount
calculated by reference to the value or eligible unpaid balance
of such accounts receivable or other financial assets or any
portion thereof or the level of deal-specific credit enhancement
available with respect thereto, as such Liquidity Agreement or
other agreement may be amended, supplemented or otherwise
modified from time to time.
"Liquidity Bank" means any one of, and "Liquidity Banks"
means all of, the commercial lending institutions that are at any
time parties to the Liquidity Agreement as Liquidity Providers
thereunder.
"Liquidity Fee" has the meaning set forth in the Fee Letter.
"Liquidity Funding" means a purchase made by the Liquidity
Bank (or simultaneous purchases made by the Liquidity Banks)
pursuant to the Liquidity Agreement.
"Lock-Box Agreement" means a letter agreement, in
substantially the form of Exhibit 5.01(f), among Servicer,
Purchaser, the Administrator, Seller and any Lock-Box Bank.
"Lock-Box Account" means any bank account into which
Collections are deposited or transferred.
"Lock-Box Bank" means any of the banks holding one or more
lock-boxes or Lock-Box Accounts receiving Collections from Pool
Receivables.
"Lock-Box Notice" means a letter, in substantially the form
of Exhibit 5.01(f)-2, addressed to a Lock-Box Bank and executed
by an Originator.
"Loss Reserve" means, on any day during a Settlement Period,
an amount equal to the product of 10% times the Net Pool Balance
on such day.
"Material Adverse Effect" with respect to any event or
circumstance, means a material adverse effect on:
(i) the financial condition of any Seller Party;
(ii) the ability of any Seller Party to perform its
obligations under this Agreement or any other Transaction
Document;
(iii) the validity or enforceability of this Agreement
or any other Transaction Document, or the validity,
enforceability or collectibility of the Receivables or the
related Contracts; or
(iv) the status, existence, perfection, priority or
enforceability of Purchaser's interest in the Pool
Receivables.
"Material Subsidiary" means each Subsidiary of Inacom that
has assets with a value in excess of 10% of Inacom's Tangible Net
Worth.
"Net Pool Balance" means, at any time, an amount equal to
(i) the aggregate Unpaid Balance of all Eligible Receivables in
the Receivables Pool at such time, minus (ii) the Excess
Concentration Amount at such time.
"Net Profit After Tax" means all Revenue, plus all other
income, minus all costs, including applicable taxes.
"Norwest" has the meaning set forth in the preamble.
"91-120 Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of each Cut-Off Date by dividing (x) the
aggregate Unpaid Balance of Pool Receivables as to which any
payment, or part thereof, remains unpaid for more than 90, but
less than 121, days from the original due date for such payment
by (y) the aggregate Unpaid Balance of Pool Receivables on such
Cut-Off Date.
"Non-Competes" means the amount Inacom has to pay another
Person for that Person's agreement to not compete with Inacom.
"Obligor" means a Person obligated to make payments with
respect to a Receivable, including any guarantor thereof.
"Obligor Concentration Limit" means, at any time, in
relation to the aggregate Unpaid Balance of Receivables owed by
any single Obligor and its Affiliated Obligors (if any):
(a) in the case of any Special Obligor 10% of the
aggregate Unpaid Balance of Eligible Receivables at such
time; and
(b) in the case of any Obligor other than an Obligor
described in clause (a) above, an amount equal to 2% of the
aggregate Unpaid Balance of Eligible Receivables at such
time.
"Original Purchase Agreement" has the meaning set forth in
the Background.
"Original Purchase and Sale Agreement" has the meaning set
forth in the Sale Agreement.
"Originator" means each of Inacom, Inacom Business Centers,
Inc. and Inacom Communications, Inc.
"Originator Material Adverse Effect" is defined in
Exhibit IV to the Sale Agreement.
"Originator Note" has the meaning set forth in the Sale
Agreement.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, government or any
agency or political subdivision thereof or any other entity.
"Pool Receivable" means a Receivable in the Receivables
Pool.
"Program Fee" has the meaning set forth in the Fee Letter.
"Program Information" has the meaning set forth in Section
14.08(a)(i).
"Purchase" has the meaning set forth in Section 1.01.
"Purchase and Sale Termination Date" has the meaning set
forth in Section 1.02(c) of the Sale Agreement.
"Purchase Limit" has the meaning set forth in Section 1.01.
"Purchase Termination Date" means that day on which a
Liquidation Event has occurred and is continuing, and
(a) the Administrator declares a Purchase Termination
Date in a notice to Seller in accordance with Section
10.02(a); or
(b) in accordance with Section 10.02(b), becomes the
Purchase Termination Date automatically.
"Purchaser" has the meaning set forth in the preamble.
"Purchaser's Total Investment" means at any time with
respect to the Asset Interest an amount equal to (a) the
aggregate of the amounts theretofore paid to Seller for Purchases
pursuant to Section 1.01, less (b) the aggregate amount of
Collections theretofore received and actually distributed to
Purchaser on account of such Purchaser's Total Investment
pursuant to Section 1.03.
"Purchaser's Tranche Investment" means in relation to any
Asset Tranche the amount of the Purchaser's Total Investment
allocated by the Administrator to that Asset Tranche pursuant to
Section 2.01, provided, that at all times the aggregate amounts
allocated to all Asset Tranches shall equal the Purchaser's Total
Investment.
"Qualifying Liquidity Bank" means a Liquidity Bank with a
rating of its short-term securities equal to or higher than
(i) A-1 by Standard & Poor's Ratings Group and (ii) P-1 by
Xxxxx'x Investors Service, Inc.
"Receivable" means (i) any right to payment from a Person,
whether constituting an account, chattel paper, instrument or
general intangible, arising from the sale of computer or
technology information merchandise or provision of services by an
Originator, and includes the right to payment of any interest or
finance charges and other obligations of such Person with respect
thereto, provided that the term "Receivable" shall not include
any such right to payment from the United States government, or
an agency or department thereof, so long as the payments related
thereto are not commingled with Collections in the Lock-Box
Accounts and (ii) any Dealer Financed Receivable.
"Receivables Outstanding Ratio" at any time during a Fiscal
Month means the product of (i) the aggregate Unpaid Balance of
all Pool Receivables as of the Cut-Off Date for the preceding
Fiscal Month divided by the aggregate amount of products and
services sold by the Originators during the Fiscal Month ending
on such Cut-Off Date, multiplied by (ii) thirty (30).
"Receivables Pool" means at any time all then outstanding
Receivables which have been sold or contributed as capital by an
Originator to Seller.
"Receivables Report" has the meaning set forth in Section
3.01(a).
"Regulation D" means Regulation D of the Federal Reserve
Board, or any other regulation of the Federal Reserve Board that
prescribes reserve requirements applicable to nonpersonal time
deposits or "Eurocurrency Liabilities" as presently defined in
Regulation D, as in effect from time to time.
"Regulatory Change" means, relative to any Affected Party
(a) any change in (or the adoption, implementation,
phase-in or commencement of effectiveness of) any
(i) United States federal or state law or foreign
law applicable to such Affected Party;
(ii) regulation, interpretation, directive,
requirement or request (whether or not having the force
of law) applicable to such Affected Party of (A) any
court, government authority charged with the
interpretation or administration of any law referred to
in clause (a)(i) or of (B) any fiscal, monetary or
other authority having jurisdiction over such Affected
Party; or
(iii) GAAP or regulatory accounting principles
applicable to such Affected Party and affecting the
application to such Affected Party of any law,
regulation, interpretation, directive, requirement or
request referred to in clause (a)(i) or (a)(ii) above;
or
(b) any change in the application to such Affected
Party of any existing law, regulation, interpretation,
directive, requirement, request or accounting principles
referred to in clause (a)(i), (a)(ii) or (a)(iii) above.
"Reinvestment" has the meaning set forth in Section
1.03(a)(iii).
"Related Assets" means (a) all rights to, but not any
obligations under, all related Contracts and Related Security
with respect to any Pool Receivables, (b) all rights and
interests of Seller under the Sale Agreement in relation to any
Pool Receivables, (c) all books and records evidencing or
otherwise relating to any Pool Receivables, and (d) all
Collections in respect of, and other proceeds of, any Pool
Receivables or any other Related Assets.
"Related Security" means, with respect to any Pool
Receivable, all of Seller's or any Originator's right, title and
interest in and to: (a) all Contracts that relate to such Pool
Receivable; (b) all merchandise (including returned merchandise),
if any, relating to the sale which gave rise to such Pool
Receivable; (c) all other security interests or liens and
property subject thereto from time to time purporting to secure
payment of such Pool Receivable, whether pursuant to the Contract
related to such Pool Receivable or otherwise; (d) all UCC
financing statements covering any collateral securing payment of
such Pool Receivable (but only to the extent of the interest of
Purchaser in the respective Pool Receivable); (e) all guarantees
and other agreements or arrangements of whatever character from
time to time supporting or securing payment of such Pool
Receivable whether pursuant to the Contract related to such Pool
Receivable or otherwise; and (f) all insurance policies, and all
claims thereunder, related to such Pool Receivable. The interest
of Purchaser in any Related Security is only to the extent of
Purchaser's undivided percentage interest, as more fully
described in the definition of Asset Interest.
"Relationship Bank" has the meaning set forth in the
preamble.
"Reporting Date" means the third Business Day following each
Cut-Off Date.
"Revenue" means the monetary expression of the aggregate of
products or services transferred by an enterprise to its
customers for which such customers have paid or are obligated to
pay, plus other income as allowed.
"Sale Agreement" means the Amended and Restated Purchase and
Sale Agreement dated as of August 21, 1995 among the Servicer,
the Originators and Seller, as initial purchaser (and the
Original Purchase and Sale Agreement for as long as it was in
effect), as it may be further amended, supplemented or otherwise
modified in accordance with Section 7.03(f).
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means Purchaser, the Administrator, the
Relationship Bank, the Indemnified Parties and the Affected
Parties.
"Security Agreement" means the Security Agreement dated as
of September 24, 1992 between Purchaser, as grantor, and the
Collateral Agent, as secured party, as the same may be amended,
supplemented or otherwise modified from time to time.
"Seller" has the meaning set forth in the preamble.
"Seller Information" has the meaning set forth in Section
14.07(a).
"Seller Information Provider" has the meaning set forth in
Section 14.07(a).
"Seller Party" and "Seller Parties" have the meanings set
forth in the preamble.
"Servicer" has the meaning set forth in the preamble.
"Servicer Transfer Event" has the meaning set forth in
Section 8.01(b).
"Servicer's Fee" accrued for any day in a Settlement Period
means
(a) an amount equal to (x) 1.0% per annum, times (y)
the amount of the Purchaser's Total Investment at the close
of business on the first day of such Settlement Period,
times (z) 1/360; or
(b) on and after Servicer's reasonable request made at
any time when Inacom shall no longer be Servicer, an
alternative amount specified by Servicer not exceeding (x)
110% of Servicer's costs and expenses of performing its
obligations under the Agreement during the Settlement Period
when such day occurs, divided by (y) the number of days in
such Settlement Period.
"Settlement Date" means the tenth Business Day following
each Cut-Off Date.
"Settlement Period" means
(a) the period from the date of the initial Purchase
to the last day of the Fiscal Month in which such date
occurs; and
(b) thereafter, each period from the last day of the
next preceding Settlement Period to the last day of the next
following Fiscal Month;
provided, however, that the last Settlement Period shall end on
the Final Payout Date.
"Settlement Report" has the meaning set forth in Section
3.01(a).
"61-90 Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of each Cut-Off Date by dividing (x) the
aggregate Unpaid Balance of Pool Receivables as to which any
payment, or part thereof, remains unpaid for more than 60, but
less than 91, days from the original due date for such payment by
(y) the aggregate Unpaid Balance of Pool Receivables on such Cut-
Off Date.
"Special Obligor" means each Obligor whose short term
unsecured debt is rated at least P-1 by Xxxxx'x Investors
Service, Inc. and A-1 by Standard & Poor's Ratings Group.
"State Street Bank" means State Street Bank and Trust
Company, a bank organized under the laws of the Commonwealth of
Massachusetts.
"State Street Capital" has the meaning set forth in the
preamble.
"Subordinated Debt" means Inacom's indebtedness to officers
or owners as evidenced by an executed notes payable subordination
agreement in favor of IBM.
"Subscription Agreement" is defined in Exhibit I of the Sale
Agreement.
"Subsidiary" of any Person means (i) a corporation more than
50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at
the time stock of any class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at the time owned or controlled by such Person,
directly or indirectly through Subsidiaries, and (ii) any
partnership, association, joint venture or other entity in which
such Person, directly or indirectly through Subsidiaries, has
more than a 50% equity interest at the time.
"Successor Notice" has the meaning set forth in Section
8.01(b).
"Tangible Net Worth" means stockholders' equity, minus
goodwill and Non-Competes.
"Termination Date" means the earliest of
(a) the date of termination (whether by scheduled
expiration, termination on default or otherwise) of either
the Liquidity Banks' commitments under the Liquidity
Agreement or the Credit Bank's commitment under the Credit
Agreement (unless such commitments are renewed, extended or
replaced on or before such date);
(b) the Purchase Termination Date;
(c) the date designated by Seller as the "Termination
Date" on not less than five (5) Business Days' notice to the
Administrator and the Relationship Bank, provided that on
such date the Purchaser's Total Investment has been reduced
to zero, all accrued Earned Discount and fees have been paid
in full and all other amounts due to Purchaser, the
Administrator and the Relationship Bank have been paid in
full;
(d) August 20, 1998; and
(e) the date on which any of the following shall
occur:
(i) Failure to obtain a Liquidity Agreement in
substitution for the then existing Liquidity Agreement
on or before 30 days prior to the expiration of the
commitments of the Liquidity Banks thereunder; or
(ii) A Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing
for not less than 45 days, (ii) the Downgraded
Liquidity Bank shall not have been replaced by a
Qualifying Liquidity Bank pursuant to a Liquidity
Agreement in form and substance acceptable to Purchaser
and the Administrator, and (iii) the commitment of such
Downgraded Liquidity Bank under the Liquidity Agreement
shall not have been funded or collateralized in such a
manner that such Downgrading Event will not result in a
reduction or withdrawal of the credit rating applied to
the Commercial Paper Notes by any of the rating
agencies then rating the Commercial Paper Notes; or
(iii) Purchaser shall become an "investment
company" within the meaning of the Investment Company
Act of 1940, as amended.
"31-60 Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of each Cut-Off Date by dividing (x) the
aggregate Unpaid Balance of Pool Receivables as to which any
payment, or part thereof, remains unpaid for more than 30, but
less than 61, days from the original due date for such payment by
(y) the aggregate Unpaid Balance of Pool Receivables on such Cut-
Off Date.
"Total Assets" means, as of any date, all assets which, in
accordance with GAAP, should be classified as assets on a
consolidated balance sheet of Inacom and its consolidated
Subsidiaries.
"Total Liabilities" means, as of any date, all obligations
which, in accordance with GAAP, should be classified as
liabilities on a consolidated balance sheet of Inacom and its
consolidated Subsidiaries, minus Subordinated Debt resulting from
past or current transactions that require settlement in the
future.
"Transaction Documents" means this Agreement, the Lock-Box
Agreements, the Lock-Box Notices, the Sale Agreement, the Fee
Letter and the other documents to be executed and delivered in
connection herewith.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction or jurisdictions.
"Unmatured Liquidation Event" means any event which, with
the giving of notice or lapse of time, or both, would become a
Liquidation Event.
"Unpaid Balance" of any Receivable means at any time the
unpaid amount thereof, but excluding all late payment charges,
delinquency charges, extension or collection fees, all discounts
charged by the Obligor of Dealer Financed Receivables and all
amounts that are recourse to an Originator in the case of Dealer
Financed Receivables.
"Yield Period" with respect to any Asset Tranche funded by a
Liquidity Funding or a Credit Draw means
(a) the period commencing on the date of the initial
Purchase of the Asset Interest, the making of such Liquidity
Funding or a Credit Draw or the creation of such Asset
Tranche pursuant to Section 2.01 (whichever is latest) and
ending such number of days thereafter as the Administrator
shall select; and
(b) each period commencing on the last day of the
immediately preceding Yield Period for the related Asset
Tranche and ending such number of days thereafter as the
Administrator shall select;
provided, however, that
(i) any such Yield Period (other than a Yield
Period consisting of one day) which would otherwise end
on a day that is not a Business Day shall be extended
to the next succeeding Business Day (unless the related
Asset Tranche shall be accruing Earned Discount at a
rate determined by reference to Eurodollar Rate
(Reserve Adjusted), in which case if such succeeding
Business Day is in a different calendar month, such
Yield Period shall instead be shortened to the next
preceding Business Day);
(ii) in the case of Yield Periods of one day for
any Asset Tranche, (A) the initial Yield Period shall
be the date such Yield Period commences as described in
clause (a) above; and (B) any subsequently occurring
Yield Period which is one day shall, if the immediately
preceding Yield Period is more than one day, be the
last day of such immediately preceding Yield Period,
and if the immediately preceding Yield Period is one
day, shall be the next day following such immediately
preceding Yield Period; and
(iii) in the case of any Yield Period for any
Asset Tranche which commences before the Termination
Date and would otherwise end on a date occurring after
such Termination Date, such Yield Period shall end on
such Termination Date and the duration of each such
Yield Period which commences on or after the
Termination Date for such Asset Tranche shall be of
such duration as shall be selected by the
Administrator.
B. Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All
terms used in Article 9 of the UCC in the State of New York, and
not specifically defined herein, are used herein as defined in
such Article 9.
C. Computation of Time Periods. Unless otherwise stated
in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to
but excluding".
