Exhibit 10.24
CREDIT AND SECURITY AGREEMENT
DATED AS OF JULY 31, 2002
BY AND AMONG
SPHERION RECEIVABLES CORP., AS BORROWER,
SPHERION CORPORATION, AS SERVICER,
BLUE RIDGE ASSET FUNDING CORPORATION,
THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO
AND
WACHOVIA BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT
TABLE OF CONTENTS
Page
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ARTICLE I THE ADVANCES.................................................................1
Section 1.1 Credit Facility.........................................................1
Section 1.2 Increases...............................................................2
Section 1.3 Decreases...............................................................3
Section 1.4 Deemed Collections; Borrowing Limit.....................................3
Section 1.5 Payment Requirements....................................................4
Section 1.6 Ratable Loans; Funding Mechanics; Liquidity Fundings....................4
Section 1.7 Requests for Increases in Aggregate Commitment..........................4
Section 1.8 Extension of the Scheduled Termination Date.............................5
ARTICLE II PAYMENTS AND COLLECTIONS....................................................5
Section 2.1 Payments................................................................5
Section 2.2 Collections Prior to Amortization.......................................6
Section 2.3 Collections Following Amortization......................................6
Section 2.4 Payment Recission.......................................................7
ARTICLE III BLUE RIDGE FUNDING.........................................................7
Section 3.1 CP Costs................................................................7
Section 3.2 Calculation of CP Costs.................................................7
Section 3.3 CP Costs Payments.......................................................7
Section 3.4 Default Rate............................................................7
ARTICLE IV LIQUIDITY BANK FUNDING......................................................8
Section 4.1 Liquidity Bank Funding..................................................8
Section 4.2 Interest Payments.......................................................8
Section 4.3 Selection and Continuation of Interest Periods..........................8
Section 4.4 Liquidity Bank Interest Rates...........................................8
Section 4.5 Suspension of the LIBO Rate.............................................9
Section 4.6 Default Rate............................................................9
ARTICLE V REPRESENTATIONS AND WARRANTIES...............................................9
Section 5.1 Representations and Warranties of the Loan Parties......................9
Section 5.2 Liquidity Bank Representations and Warranties..........................13
ARTICLE VI CONDITIONS OF ADVANCES.....................................................14
Section 6.1 Conditions Precedent to Initial Advance................................14
Section 6.2 Conditions Precedent to All Advances...................................14
ARTICLE VII COVENANTS.................................................................15
Section 7.1 Affirmative Covenants of the Loan Parties..............................15
Section 7.2 Negative Covenants of the Loan Parties.................................22
ARTICLE VIII ADMINISTRATION AND COLLECTION............................................23
Section 8.1 Designation of Servicer................................................23
Section 8.2 Duties of Servicer.....................................................24
Section 8.3 Collection Notices.....................................................25
Section 8.4 Responsibilities of Borrower...........................................26
Section 8.5 Monthly Reports........................................................26
Section 8.6 Servicing Fee..........................................................26
ARTICLE IX AMORTIZATION EVENTS........................................................26
Section 9.1 Amortization Events....................................................26
Section 9.2 Remedies...............................................................29
ARTICLE X INDEMNIFICATION.............................................................29
Section 10.1 Indemnities by the Loan Parties........................................29
Section 10.2 Increased Cost and Reduced Return......................................32
Section 10.3 Funding Losses.........................................................33
Section 10.4 Other Costs and Expenses...............................................34
Section 10.5 Allocations............................................................34
ARTICLE XI THE AGENT..................................................................34
Section 11.1 Authorization and Action...............................................34
Section 11.2 Delegation of Duties...................................................35
Section 11.3 Exculpatory Provisions.................................................35
Section 11.4 Reliance by Administrative Agent.......................................35
Section 11.5 Non-Reliance on Administrative Agent and Other Lenders.................36
Section 11.6 Reimbursement and Indemnification......................................36
Section 11.7 Administrative Agent in its Individual Capacity........................36
Section 11.8 Successor Administrative Agent.........................................36
ARTICLE XII ASSIGNMENTS; PARTICIPATIONS...............................................37
Section 12.1 Assignments............................................................37
Section 12.2 Participations.........................................................38
ARTICLE XIII SECURITY INTEREST........................................................38
Section 13.1 Grant of Security Interest.............................................38
Section 13.2 Termination after Final Payout Date....................................38
ARTICLE XIV MISCELLANEOUS.............................................................39
Section 14.1 Waivers and Amendments.................................................39
Section 14.2 Notices................................................................40
Section 14.3 Ratable Payments.......................................................40
Section 14.4 Protection of Administrative Agent's Security Interest.................40
Section 14.5 Confidentiality........................................................42
Section 14.6 Bankruptcy Petition....................................................42
Section 14.7 Limitation of Liability................................................42
Section 14.8 CHOICE OF LAW..........................................................42
Section 14.9 CONSENT TO JURISDICTION................................................43
Section 14.10 WAIVER OF JURY TRIAL...................................................43
Section 14.11 Integration; Binding Effect; Survival of Terms.........................43
Section 14.12 Counterparts; Severability.............................................44
Section 14.13 Wachovia Roles.........................................................44
Section 14.14 Construction of this Agreement and Certain Terms and Phrases...........44
EXHIBITS AND SCHEDULES
Exhibit I Definitions
Exhibit II Form of Borrowing Notice
Exhibit III Jurisdiction of Organization and Chief Executive Office of the
Loan Parties; Locations of Records; Organizational
Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Monthly Report
Exhibit X Form of Contract(s)
Exhibit XI Form of Performance Undertaking
Exhibit XII Form of Interim Report
Schedule A Commitments
Schedule B Closing Documents
Schedule I Monthly Accounting Periods
CREDIT AND SECURITY AGREEMENT
THIS
CREDIT AND SECURITY AGREEMENT, dated as of July 31, 2002 is
entered into by and among:
(a) Spherion Receivable Corp., a Delaware corporation ("BORROWER"),
(b)
Spherion Corporation, a Delaware corporation ("SPHERION"), as
initial Servicer (the Servicer together with Borrower, the "LOAN PARTIES"
and each, a "LOAN PARTY"),
(c) The entities listed on Schedule A (together with any of their
respective successors and assigns hereunder, the "LIQUIDITY BANKS"),
(d) Blue Ridge Asset Funding Corporation, a Delaware corporation
("BLUE RIDGE"), and
(e) Wachovia Bank, National Association, as administrative agent for
the Lenders hereunder or any successor agent hereunder (together with its
successors and assigns hereunder, the "ADMINISTRATIVE AGENT").
UNLESS DEFINED ELSEWHERE HEREIN, CAPITALIZED TERMS USED IN THIS AGREEMENT SHALL
HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN EXHIBIT I.
PRELIMINARY STATEMENTS
Borrower desires to borrow from the Lenders from time to time.
Blue Ridge may, in its absolute and sole discretion, make Advances
to the Borrower from time to time.
If Blue Ridge declines to make any Advance, the Liquidity Banks
shall, at the request of Borrower, make Advances from time to time.
Wachovia Bank, National Association has been requested and is
willing to act as Administrative Agent on behalf of Blue Ridge and the
Liquidity Banks in accordance with the terms hereof.
ARTICLE I
THE ADVANCES
Section 1.1 CREDIT FACILITY.
(a) Upon the terms and subject to the conditions hereof, from
time to time prior to the Facility Termination Date:
(i) Borrower may, at its option, request Advances from
the Lenders in an aggregate principal amount at any one time outstanding
not to exceed the lesser of the Aggregate Commitment and the Borrowing Base
(such lesser amount, the "BORROWING LIMIT"); and
(ii) Blue Ridge may, at its option, make the requested
Advance, or if Blue Ridge shall decline to make any Advance, except as
otherwise provided in Section 1.2, the Liquidity Banks severally agree to
make Loans in an aggregate principal amount equal to the requested Advance.
Each of the Advances, and all other Obligations, shall be secured by the
Collateral as provided in Article XIII. It is the intent of Blue Ridge to fund
all Advances by the issuance of Commercial Paper.
(b) Borrower may, upon at least five Business Days' notice to
the Administrative Agent, terminate in whole or reduce in part, ratably
among the Liquidity Banks, the unused portion of the Aggregate Commitment;
PROVIDED THAT each partial reduction of the Aggregate Commitment shall be
in an amount equal to $10,000,000 (or a larger integral multiple of
$1,000,000 if in excess thereof) and shall reduce the Commitments of the
Liquidity Banks ratably in accordance with their respective Pro Rata
Shares.
Section 1.2 INCREASES. Borrower shall provide the Administrative Agent
with at least two Business Days' prior notice in a form set forth as Exhibit II
of each Advance (each, a "BORROWING NOTICE"). Each Borrowing Notice shall be
subject to Section 6.1 and Section 6.2 hereof and, except as set forth below,
shall be irrevocable and shall specify the requested increase in Aggregate
Principal (which shall not be less than $1,000,000 or a larger integral multiple
of $100,000) and the Borrowing Date (which, in the case of any Advance after the
initial Advance hereunder, shall be no more frequently than weekly prior to any
request by the Administrative Agent for the Servicer to deliver an Interim
Report pursuant to Section 8.5, and, after such request, shall only be on a
Settlement Date that corresponds with the 15th Business Day of each monthly
accounting period) and, in the case of an Advance to be funded by the Liquidity
Banks, the requested Interest Rate and Interest Period. Following receipt of a
Borrowing Notice, the Administrative Agent will determine whether Blue Ridge
agrees to make the requested Advance. If Blue Ridge declines to make a proposed
Advance, Borrower may cancel the Borrowing Notice or, in the absence of such a
cancellation, the Advance will be made by the Liquidity Banks. On the date of
each Advance, upon satisfaction of the applicable conditions precedent set forth
in Article VI, Blue Ridge or the Liquidity Banks, as applicable, shall deposit
to the Facility Account, in immediately available funds, no later than 2:00 p.m.
(
New York time), an amount equal to (a) in the case of Blue Ridge, the principal
amount of the requested Advance or (b) in the case of a Liquidity Bank, such
Liquidity Bank's Pro Rata Share of the principal amount of the requested
Advance.
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Section 1.3 DECREASES. Except as provided in Section 1.4, Borrower shall
provide the Administrative Agent with prior notice in conformity with the
Required Notice Period (a "REDUCTION NOTICE") of any proposed reduction of
Aggregate Principal. Such Reduction Notice shall designate (a) the date (the
"PROPOSED REDUCTION DATE") upon which any such reduction of Aggregate Principal
shall occur (which date shall give effect to the applicable Required Notice
Period), and (b) the amount of Aggregate Principal to be reduced which shall be
applied ratably to the Loans of Blue Ridge and the Liquidity Banks in accordance
with the amount of principal (if any) owing to Blue Ridge, on the one hand, and
the amount of principal (if any) owing to the Liquidity Banks (ratably, based on
their respective Pro Rata Shares), on the other hand (the "AGGREGATE
REDUCTION"). Only one Reduction Notice shall be outstanding at any time.
Section 1.4 DEEMED COLLECTIONS; BORROWING LIMIT.
(a) If on any day:
(i) the Outstanding Balance of any Receivable is reduced
as a result of any defective or rejected goods or services, any cash
discount or any other adjustment by any Originator or any Affiliate
thereof, or as a result of any tariff or other governmental or regulatory
action, or
(ii) the Outstanding Balance of any Receivable is reduced
or canceled 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
(iii) the Outstanding Balance of any Receivable is reduced
on account of the obligation of any Originator or any Affiliate thereof to
pay to the related Obligor any rebate or refund, or
(iv) the Outstanding Balance of any Receivable is less
than the amount included in calculating the Net Pool Balance for purposes
of any Monthly Report (for any reason other than such Receivable becoming a
Defaulted Receivable), or
(v) any of the representations or warranties of the
Borrower set forth in Section 5.1(i), (j), (r), (s), (t) or (u) were not
true when made with respect to any Receivable,
then, on such day, the Borrower shall be deemed to have received a Collection of
such Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such
reduction or cancellation or the difference between the actual Outstanding
Balance and the amount included in calculating such Net Pool Balance, as
applicable; and (B) in the case of clause (v) above, in the amount of the
Outstanding Balance of such Receivable and, effective as of the date on which
the next succeeding Monthly Report is required to be delivered, the Borrowing
Base shall be reduced by the amount of such Deemed Collection.
(b) Borrower shall ensure that the Aggregate Principal at no
time exceeds the Borrowing Limit. If at any time the Aggregate Principal
exceeds the Borrowing Limit, Borrower shall pay to the Administrative Agent
not later than the next succeeding Settlement Date an amount to be applied
to reduce the Aggregate Principal (as allocated
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by the Administrative Agent), such that after giving effect to such payment
the Aggregate Principal is less than or equal to the Borrowing Limit.
Section 1.5 PAYMENT REQUIREMENTS. All amounts to be paid or deposited by
any Loan Party pursuant to this Agreement shall be paid or deposited in
accordance with the terms hereof no later than 12:00 noon (
New York time) on the
day when due in immediately available funds, and if not received before 12:00
noon (
New York time) shall be deemed to be received on the next succeeding
Business Day. If such amounts are payable to a Lender they shall be paid to the
Administrative Agent's Account, for the account of such Lender, until otherwise
notified by the Administrative Agent. All computations of CP Costs, Interest,
PER ANNUM fees calculated as part of any CP Costs, PER ANNUM fees hereunder and
PER ANNUM fees under the Fee Letter shall be made on the basis of a year of 360
days for the actual number of days elapsed. If any amount hereunder shall be
payable on a day which is not a Business Day, such amount shall be payable on
the next succeeding Business Day.
Section 1.6 RATABLE LOANS; FUNDING MECHANICS; LIQUIDITY FUNDINGS.
(a) Each Advance hereunder shall consist of one or more Loans
made by Blue Ridge or the Liquidity Banks.
(b) Each Lender funding any Loan shall wire transfer the
principal amount of its Loan to the Administrative Agent in immediately
available funds not later than 12:00 noon (
New York City time) on the
applicable Borrowing Date and, subject to its receipt of such Loan
proceeds, the Administrative Agent shall wire transfer such funds to the
account specified by the Borrower in its Borrowing Request not later than
2:00 p.m. (
New York City time) on such Borrowing Date.
(c) While it is the intent of Blue Ridge to fund each requested
Advance through the issuance of its Commercial Paper, the parties
acknowledge that if Blue Ridge is unable, or determines that it is
undesirable, to issue Commercial Paper to fund all or any portion of its
Loans, or is unable to repay such Commercial Paper upon the maturity
thereof, Blue Ridge may put all or any portion of its Loans to the
Liquidity Banks at any time pursuant to the Liquidity Agreement to finance
or refinance the necessary portion of its Loans through a Liquidity Funding
to the extent available. The Liquidity Fundings may be Alternate Base Rate
Loans or LIBO Rate Loans, or a combination thereof, selected by the
Borrower in accordance with Article IV. Regardless of whether a Liquidity
Funding constitutes the direct funding of a Loan, an assignment of a Loan
made by Blue Ridge or the sale of one or more participations in a Loan made
by Blue Ridge, each Liquidity Bank participating in a Liquidity Funding
shall have the rights of a "LENDER" hereunder with the same force and
effect as if it had directly made a Loan to the Borrower in the amount of
its Liquidity Funding.
(d) Nothing herein shall be deemed to commit Blue Ridge to make
Loans.
Section 1.7 REQUESTS FOR INCREASES IN AGGREGATE COMMITMENT. The Borrower
may from time to time request increases in the Aggregate Commitment in a minimum
amount of $10,000,000 (or a larger integral multiple of $1,000,000), upon at
least 30 days' prior written
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notice to the Administrative Agent, which notice shall specify the amount of and
proposed effective date for any such requested increase (each, a "COMMITMENT
INCREASE REQUEST"). If the Administrative Agent agrees to the requested increase
by notifying the Borrower of the Administrative Agent's agreement, such increase
shall be made to the Commitments of the Blue Ridge Liquidity Banks for all
purposes hereof. If the Administrative Agent does not agree to such increase,
the amount of the Aggregate Commitment shall remain unchanged.
Section 1.8 EXTENSION OF THE SCHEDULED TERMINATION DATE. Provided that
no Unmatured Amortization Event or Amortization Event exists and is continuing,
the Borrower may request an extension of the Scheduled Termination Date by
submitting a request for an extension (each, an "EXTENSION REQUEST") to the
Administrative Agent no more than [90] days prior to the Scheduled Termination
Date then in effect. The Extension Request must specify the new Scheduled
Termination Date requested by the Borrower and the date (which must be at least
thirty (30) days after the Extension Request is delivered to the Administrative
Agent) as of which the Administrative Agent, the Lenders and the Liquidity Banks
must respond to the Extension Request (the "RESPONSE DATE"). The new Scheduled
Termination Date shall be no more than 364 days after the Scheduled Termination
Date in effect at the time the Extension Request is received, including the
Scheduled Termination Date as one of the days in the calculation of the days
elapsed. Within three Business Days after receipt of an Extension Request, the
Administrative Agent shall notify Blue Ridge and the Liquidity Banks of the
contents thereof and shall request each such Person to approve the Extension
Request. Each Lender and Liquidity Bank approving the Extension Request shall
deliver its written approval to the Administrative Agent no later than the
Response Date, whereupon the Administrative Agent shall notify the Borrower
within one Business Day thereafter as to whether all of the Lenders have
approved the Extension Request. If all of the Lenders have approved the
Extension Request, the Scheduled Termination Date specified in the Extension
Request shall become effective on the existing Facility Termination Date, and
the Administrative Agent shall promptly notify the Borrower and the Lenders of
the new Facility Termination Date. If all of the Lenders do not unanimously
agree to an Extension Request, the Scheduled Termination Date shall remain
unchanged.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 PAYMENTS. Borrower hereby promises to pay:
(a) the Aggregate Principal on and after the Facility
Termination Date as and when Collections are received;
(b) the fees set forth in the Fee Letter on the dates specified
therein;
(c) all accrued and unpaid Interest on the Alternate Base Rate
Loans on each Settlement Date applicable thereto;
(d) all accrued and unpaid Interest on the LIBO Rate Loans on
the last day of each Interest Period applicable thereto;
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(e) all accrued and unpaid CP Costs on the CP Rate Loans on each
Settlement Date; and
(f) all Broken Funding Costs and Indemnified Amounts upon
demand.
Section 2.2 COLLECTIONS PRIOR TO AMORTIZATION. On each Settlement Date
prior to the Amortization Date, the Servicer shall deposit to the Administrative
Agent's Account, for distribution to the Lenders, a portion of the Collections
received by the Servicer during the preceding Settlement Period (after deduction
of its Servicing Fee) equal to the sum of the following amounts for application
to the Obligations in the order specified:
FIRST, ratably to the payment of all accrued and unpaid CP Costs,
Interest and Broken Funding Costs (if any) that are then due and owing,
SECOND, ratably to the payment of all accrued and unpaid fees under
the Fee Letter (if any) that are then due and owing,
THIRD, if required under Section 1.3 or 1.4, to the ratable
reduction of Aggregate Principal,
FOURTH, for the ratable payment of all other unpaid Obligations, if
any, that are then due and owing, and
FIFTH, the balance, if any, to Borrower or otherwise in accordance
with Borrower's instructions.
Collections applied to the payment of Obligations shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of the
priorities set forth above in this Section 2.2, shall be shared ratably (within
each priority) among the Administrative Agent and the Lenders in accordance with
the amount of such Obligations owing to each of them in respect of each such
priority.
Section 2.3 COLLECTIONS FOLLOWING AMORTIZATION. On the Amortization Date
and on each day thereafter, the Servicer shall set aside and hold in trust, for
the Secured Parties, all Collections received on such day. On and after the
Amortization Date, the Servicer shall, on each Settlement Date and on each other
Business Day specified by the Administrative Agent (after deduction of any
accrued and unpaid Servicing Fee as of such date): (i) remit to the
Administrative Agent's Account the amounts set aside pursuant to the preceding
two sentences, and (ii) apply such amounts to reduce the Obligations as follows:
FIRST, to the reimbursement of the Administrative Agent's costs of
collection and enforcement of this Agreement,
SECOND, ratably to the payment of all accrued and unpaid CP Costs,
Interest and Broken Funding Costs,
THIRD, ratably to the payment of all accrued and unpaid fees under
the Fee Letter,
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FOURTH, to the ratable reduction of Aggregate Principal,
FIFTH, for the ratable payment of all other unpaid Obligations, and
SIXTH, after the Obligations have been indefeasibly reduced to zero,
to Borrower.
Collections applied to the payment of Obligations shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of the
priorities set forth above in this Section 2.3(b), shall be shared ratably
(within each priority) among the Administrative Agent and the Lenders in
accordance with the amount of such Obligations owing to each of them in respect
of each such priority.
Section 2.4 PAYMENT RECISSION. No payment of any of the Obligations
shall be considered paid or applied hereunder to the extent that, at any time,
all or any portion of such payment or application is rescinded by application of
law or judicial authority, or must otherwise be returned or refunded for any
reason. Borrower shall remain obligated for the amount of any payment or
application so rescinded, returned or refunded, and shall promptly pay to the
Administrative Agent (for application to the Person or Persons who suffered such
recission, return or refund) the full amount thereof, plus Interest on such
amount at the Default Rate from the date of any such recission, return or
refunding.
ARTICLE III
BLUE RIDGE FUNDING
Section 3.1 CP COSTS. Borrower shall pay CP Costs with respect to the
principal balance of Blue Ridge's Loans from time to time outstanding. Each Loan
of Blue Ridge that is funded substantially with Pooled Commercial Paper will
accrue CP Costs each day on a pro rata basis, based upon the percentage share
that the principal in respect of such Loan represents in relation to all assets
held by Blue Ridge and funded substantially with related Pooled Commercial
Paper.
Section 3.2 CALCULATION OF CP COSTS. Not later than the 3rd Business Day
immediately preceding each Monthly Reporting Date, Blue Ridge shall calculate
the aggregate amount of CP Costs applicable to its CP Rate Loans for the
Calculation Period then most recently ended and shall notify Borrower of such
aggregate amount.
Section 3.3 CP COSTS PAYMENTS. On each Settlement Date, Borrower shall
pay to the Administrative Agent (for the benefit of Blue Ridge) an aggregate
amount equal to all accrued and unpaid CP Costs in respect of the principal
associated with all CP Rate Loans for the Calculation Period then most recently
ended in accordance with Article II.
Section 3.4 DEFAULT RATE. From and after the occurrence of an
Amortization Event, all Loans of Blue Ridge shall accrue Interest at the Default
Rate and shall cease to be CP Rate Loans.
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ARTICLE IV
LIQUIDITY BANK FUNDING
Section 4.1 LIQUIDITY BANK FUNDING. Prior to the occurrence of an
Amortization Event, the outstanding principal balance of each Liquidity Funding
shall accrue interest for each day during its Interest Period at either the LIBO
Rate or the Alternate Base Rate in accordance herewith. Until Borrower gives
notice to the Administrative Agent of another Interest Rate in accordance with
Section 4.4, the initial Interest Rate for any Loan transferred to the Liquidity
Banks by Blue Ridge pursuant to the Liquidity Agreement shall be the Alternate
Base Rate (unless the Default Rate is then applicable). If the Liquidity Banks
acquire by assignment from Blue Ridge any Loan pursuant to the Liquidity
Agreement, each Loan so assigned shall each be deemed to have an Interest Period
commencing on the date of any such assignment.
Section 4.2 INTEREST PAYMENTS. On the Settlement Date for each Liquidity
Funding, Borrower shall pay to the Administrative Agent (for the benefit of the
Liquidity Banks) an aggregate amount equal to the accrued and unpaid Interest
for the entire Interest Period of each such Liquidity Funding in accordance with
Article II.
Section 4.3 SELECTION AND CONTINUATION OF INTEREST PERIODS.
(a) With consultation from (and approval by) the Administrative
Agent, Borrower shall from time to time request Interest Periods for the
Liquidity Fundings, PROVIDED THAT if at any time any Liquidity Funding is
outstanding, Borrower shall always request Interest Periods such that at
least one Interest Period shall end on the date specified in clause (a) of
the definition of Settlement Date.
(b) Borrower or the Administrative Agent, upon notice to and
consent by the other received at least three Business Days prior to the end
of an Interest Period (the "TERMINATING TRANCHE") for any Liquidity
Funding, may, effective on the last day of the Terminating Tranche: (i)
divide any such Liquidity Funding into multiple Liquidity Fundings, (ii)
combine any such Liquidity Funding with one or more other Liquidity
Fundings that have a Terminating Tranche ending on the same day as such
Terminating Tranche or (iii) combine any such Liquidity Funding with a new
Liquidity Funding to be made by the Liquidity Banks on the day such
Terminating Tranche ends.
Section 4.4 LIQUIDITY BANK INTEREST RATES. Borrower may select the LIBO
Rate or the Alternate Base Rate for each Liquidity Funding. Borrower shall by
12:00 noon (
New York time): (a) at least three Business Days prior to the
expiration of any Terminating Tranche with respect to which the LIBO Rate is
being requested as a new Interest Rate and (b) at least one Business Day prior
to the expiration of any Terminating Tranche with respect to which the Alternate
Base Rate is being requested as a new Interest Rate, give the Administrative
Agent irrevocable notice of the new Interest Rate for the Liquidity Funding
associated with such Terminating Tranche. Until Borrower gives notice to the
Administrative Agent of another Interest Rate, the initial Interest Rate for any
Loan transferred to the Liquidity Banks pursuant to the Liquidity Agreement
shall be the Alternate Base Rate (unless the Default Rate is then applicable).
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Section 4.5 SUSPENSION OF THE LIBO RATE.
(a) If any Liquidity Bank notifies the Administrative Agent that
(i) such Liquidity Bank has determined that funding its Pro Rata Share of
the Liquidity Fundings at a LIBO Rate would violate any applicable law,
rule, regulation, or directive of any governmental or regulatory authority,
whether or not having the force of law, or that (ii) deposits of a type and
maturity appropriate to match fund its Liquidity Funding at such LIBO Rate
are not available or (iii) such LIBO Rate does not accurately reflect the
cost of acquiring or maintaining a Liquidity Funding at such LIBO Rate,
then the Administrative Agent shall suspend the availability of such LIBO
Rate and require Borrower to select the Alternate Base Rate for any
Liquidity Funding accruing Interest at such LIBO Rate.
(b) If less than all of the Liquidity Banks give a notice to the
Administrative Agent pursuant to Section 4.5(a), each Liquidity Bank which
gave such a notice shall be obliged, at the request of Borrower, Blue Ridge
or the Administrative Agent, to assign all of such Liquidity Bank's rights
and obligations hereunder to (i) another Liquidity Bank or (ii) another
funding entity nominated by Borrower or the Administrative Agent that is an
Eligible Assignee willing to participate in this Agreement through the
Liquidity Termination Date in the place of such notifying Liquidity Bank;
PROVIDED THAT (i) the notifying Liquidity Bank receives payment in full,
pursuant to an Assignment Agreement, of all Obligations owing to it
(whether due or accrued), and (ii) the replacement Liquidity Bank otherwise
satisfies the requirements of Section 12.1(b).
Section 4.6 DEFAULT RATE. From and after the occurrence of an
Amortization Event, all Liquidity Fundings shall accrue Interest at the Default
Rate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES. Each
Loan Party hereby represents and warrants to the Administrative Agent and the
Lenders, as to itself, as of the date hereof, as of the date of each Advance and
as of each Settlement Date that:
(a) EXISTENCE AND POWER. Such Loan Party's jurisdiction of
organization is correctly set forth in the preamble to this Agreement. Such Loan
Party is duly organized under the laws of that jurisdiction and no other state
or jurisdiction, and such jurisdiction must maintain a public record showing the
organization to have been organized. Such Loan Party is validly existing and in
good standing under the laws of its state of organization. Such Loan Party is
duly qualified to do business and is in good standing as a foreign entity, and
has and holds all organizational power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in each
jurisdiction in which its business is conducted except where the failure to so
qualify or so hold would not reasonably be expected to have a Material Adverse
Effect.
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(b) POWER AND AUTHORITY; DUE AUTHORIZATION, EXECUTION AND
DELIVERY. The execution and delivery by such Loan Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of Borrower,
Borrower's use of the proceeds of Advances made hereunder, are within its
corporate powers and authority and have been duly authorized by all necessary
corporate action on its part. This Agreement and each other Transaction Document
to which such Loan Party is a party has been duly executed and delivered by such
Loan Party.
(c) NO CONFLICT. The execution and delivery by such Loan Party
of this Agreement and each other Transaction Document to which it is a party,
and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of such Loan Party or its Subsidiaries (except as created under this
Agreement or any other Transaction Document) except, in any case, where such
contravention or violation would not reasonably be expected to have a Material
Adverse Effect; and no Transaction requires compliance with any bulk sales act
or similar law.
(d) GOVERNMENTAL AUTHORIZATION. Other than the filing of the
financing statements required hereunder, 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 and delivery by such Loan
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.
(e) ACTIONS, SUITS. There are no actions, suits or proceedings
pending, or to the best of such Loan Party's knowledge, threatened, against or
affecting such Loan Party, or any of its properties, in or before any court,
arbitrator or other body, that would reasonably be expected to have a Material
Adverse Effect. Such Loan Party is not in default with respect to any order of
any court, arbitrator or governmental body.
(f) BINDING EFFECT. This Agreement and each other Transaction
Document to which such Loan Party is a party constitute the legal, valid and
binding obligations of such Loan Party enforceable against such Loan Party in
accordance with their respective terms.
(g) ACCURACY OF INFORMATION. All information heretofore
furnished by such Loan Party or any of its Affiliates to the Administrative
Agent or the Lenders pursuant to this Agreement, any of the other Transaction
Documents or any Transaction is, and all such information hereafter furnished by
such Loan Party or any of its Affiliates to the Administrative Agent or the
Lenders will be, true and accurate in every material respect on the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(h) USE OF PROCEEDS. No proceeds of any Advance hereunder will
be used (i) for a purpose that violates, or would be inconsistent with, (1)
Section 7.2(e) or (2) Regulation T,
10
U or X promulgated by the Board of Governors of the Federal Reserve System from
time to time or (ii) to acquire any security in any transaction which is subject
to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) GOOD TITLE. Borrower is the legal and beneficial owner of
the Receivables and Related Security with respect thereto, free and clear of any
Adverse Claim, except as created by the Transaction Documents. There have been
duly filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Borrower's ownership interest in each Receivable, the Related
Security and the Collections.
(j) PERFECTION. This Agreement is effective to create a valid
security interest in favor of the Administrative Agent for the benefit of the
Secured Parties in the Collateral to secure payment of the Obligations, free and
clear of any Adverse Claim except as created by the Transactions Documents.
There have been duly filed all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect the Administrative Agent's (on behalf of the Secured
Parties) security interest in the Collateral. Such Loan Party's jurisdiction of
organization is a jurisdiction whose law generally requires information
concerning the existence of a nonpossessory security interest to be made
generally available in a filing, record or registration system as a condition or
result of such a security interest's obtaining priority over the rights of a
lien creditor which respect to collateral.
(k) PLACES OF BUSINESS AND LOCATIONS OF RECORDS. The principal
places of business and chief executive office of such Loan Party and the offices
where it keeps all of its Records are located at the address(es) listed on
Exhibit III or such other locations of which the Administrative Agent has been
notified in accordance with Section 7.2(a) in jurisdictions where all action
required by Section 14.4(a) has been taken and completed. Borrower's Federal
Employer Identification Number is correctly set forth on Exhibit III.
(l) COLLECTIONS. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The names, addresses and jurisdictions of organization of all
Collection Banks, together with the account numbers of the Collection Accounts
of Borrower at each Collection Bank and the post office box number of each
Lock-Box, are listed on Exhibit IV. Borrower has not granted any Person, other
than the Administrative Agent as contemplated by this Agreement, dominion and
control of any Lock-Box or Collection Account, or the right to take dominion and
control of any such Lock-Box or Collection Account at a future time or upon the
occurrence of a future event.
(m) MATERIAL ADVERSE EFFECT. (i) The initial Servicer represents
and warrants that, except for the downgrade of the Servicer by S&P on April 10,
2002, since December 28, 2001 through and including the date hereof, no event
has occurred that would have a material adverse effect on the financial
condition or operations of the initial Servicer and its Subsidiaries, taken as a
whole, or the ability of the initial Servicer to perform its obligations under
this Agreement, and (ii) Borrower represents and warrants that since the date of
this Agreement through and including the date hereof, no event has occurred that
would have a material adverse effect on (1) the financial condition or
operations of Borrower, (2) the ability of Borrower to
11
perform its obligations under the Transaction Documents, or (3) the
collectability of the Receivables generally or any material portion of the
Receivables.
(n) NAMES. The name in which Borrower has executed this
Agreement is identical to the name of Borrower as indicated on the public record
of its state of organization which shows Borrower to have been organized. In the
past five years, Borrower has not used any corporate names, trade names or
assumed names other than the name in which it has executed this Agreement.
(o) OWNERSHIP OF BORROWER. Performance Guarantor owns, directly
or indirectly, 100% of the issued and outstanding capital stock of the Borrower,
free and clear of any Adverse Claim except as contemplated by the Transaction
Documents. Such capital stock is validly issued, fully paid and nonassessable,
and there are no options, warrants or other rights to acquire securities of the
Borrower.
(p) NOT A HOLDING COMPANY OR AN INVESTMENT COMPANY. Such Loan
Party is not a "holding company" or a "subsidiary holding company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or any successor statute. Such Loan Party is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) COMPLIANCE WITH LAW. Such Loan Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including laws,
rules and regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy), and no part of such Contract is in violation of any such law, rule or
regulation, except where such contravention or violation would not reasonably be
expected to have a Material Adverse Effect.
(r) COMPLIANCE WITH CREDIT AND COLLECTION POLICY. Such Loan
Party has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any material change to such Credit and Collection Policy, except such material
change as to which the Administrative Agent has been notified in accordance with
Section 7.1(a)(vii).
(s) PAYMENTS TO APPLICABLE ORIGINATOR. With respect to each
Receivable transferred to Borrower under the Receivables Sale Agreement,
Borrower has given reasonably equivalent value to the applicable Originator in
consideration therefor and such transfer was not made for or on account of an
antecedent debt. No transfer by any Originator of any Receivable under the
Receivables Sale Agreement is voidable under any section of the Bankruptcy
Reform Act of 1978 (11 U.S.C. Sections 101 ET SEQ.), as amended.
(t) ENFORCEABILITY OF CONTRACTS. Each Contract with respect to
each Receivable is effective to create, and has created, a legal, valid and
binding obligation of the
12
related Obligor to pay the Outstanding Balance of the Receivable created
thereunder and any accrued interest thereon, enforceable against the Obligor in
accordance with its terms.
(u) ELIGIBLE RECEIVABLES. Each Receivable included in the Net
Pool Balance as an Eligible Receivable on the date of any Monthly Report was an
Eligible Receivable on such date.
(v) BORROWING LIMIT. Immediately after giving effect to each
Advance and each settlement on any Settlement Date hereunder, the Aggregate
Principal is less than or equal to the Borrowing Limit.
(w) ACCOUNTING. The manner in which such Loan Party accounts for
the transactions contemplated by this Agreement and the Receivables Sale
Agreement does not jeopardize the true sale analysis.
Section 5.2 LIQUIDITY BANK REPRESENTATIONS AND WARRANTIES. Each
Liquidity Bank hereby represents and warrants to the Administrative Agent, Blue
Ridge and the Loan Parties that:
(a) EXISTENCE AND POWER. Such Liquidity Bank is a banking
association duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and has all organizational power to perform
its obligations hereunder and under the Liquidity Agreement.
(b) NO CONFLICT. The execution and delivery by such Liquidity
Bank of this Agreement and the Liquidity Agreement and the performance of its
obligations hereunder and thereunder are within its corporate powers, have been
duly authorized by all necessary corporate action, do not contravene or violate
(i) its certificate or articles of incorporation or association or by-laws, (ii)
any law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or any of its property
is bound, or (iv) any order, writ, judgment, award, injunction or decree binding
on or affecting it or its property, and do not result in the creation or
imposition of any Adverse Claim on its assets. This Agreement and the Liquidity
Agreement have been duly authorized, executed and delivered by such Liquidity
Bank.
(c) GOVERNMENTAL AUTHORIZATION. 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 and delivery by such Liquidity
Bank of this Agreement or the Liquidity Agreement and the performance of its
obligations hereunder or thereunder.
(d) BINDING EFFECT. Each of this Agreement and the Liquidity
Agreement constitutes the legal, valid and binding obligation of such Liquidity
Bank enforceable against such Liquidity Bank in accordance with its terms.
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ARTICLE VI
CONDITIONS OF ADVANCES
Section 6.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. The initial Advance
under this Agreement is subject to the conditions precedent that (a) the
Administrative Agent shall have received on or before the date of such Advance
those documents listed on Schedule B and those documents listed on Schedule A to
the Receivables Sale Agreement, (b) the Rating Agency Condition shall have been
satisfied, (c) the Administrative Agent shall have received all fees and
expenses required to be paid on such date pursuant to this Agreement and the Fee
Letter, (d) the Administrative Agent shall have received audit information and
other related due diligence and the same shall be satisfactory to the
Administrative Agent in its sole discretion and (e) simultaneously with the
delivery of the initial Borrowing Notice, the Originator shall have delivered to
the Buyer the notice contemplated by the Receivables Sale Agreement in
connection with the Initial Sale Closing Date (as defined in the Receivables
Sale Agreement).
Section 6.2 CONDITIONS PRECEDENT TO ALL ADVANCES. Each Advance and each
rollover or continuation of any Advance shall be subject to the further
conditions precedent that (a) the Servicer shall have delivered to the
Administrative Agent on or prior to the date thereof, in form and substance
satisfactory to the Administrative Agent, all Monthly Reports as and when due
under Section 8.5; (b) the Facility Termination Date shall not have occurred;
(c) the Administrative Agent shall have received such other approvals, opinions
or documents as it may reasonably request; and (d) on the date thereof, the
following statements shall be true (and acceptance of the proceeds of such
Advance shall be deemed a representation and warranty by Borrower that such
statements are then true):
(i) the representations and warranties set forth in Section 5.1
are true and correct in all material respects on and as of the date of such
Advance (or such Settlement Date, as the case may be) as though made on and
as of such date; PROVIDED THAT the materiality threshold in the preceding
clause shall not be applicable with respect to any representation or
warranty which itself contains a materiality threshold
(ii) no event has occurred and is continuing, or would result
from such Advance (or the continuation thereof), that will constitute an
Amortization Event, and no event has occurred and is continuing, or would
result from such Advance (or the continuation thereof), that would
constitute an Unmatured Amortization Event; and
(iii) after giving effect to such Advance (or the continuation
thereof), the Aggregate Principal will not exceed the Borrowing Limit; and
(iv) no event has occurred which would reasonably be expected to
cause a Material Adverse Effect.
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ARTICLE VII
COVENANTS
Section 7.1 AFFIRMATIVE COVENANTS OF THE LOAN PARTIES. Until the Final
Payout Date, each Loan Party hereby covenants, as to itself, as set forth below:
(a) FINANCIAL REPORTING. Such Loan Party will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Administrative Agent:
(i) ANNUAL REPORTING. Within 120 days after the close of
each of its respective fiscal years, audited, unqualified financial
statements (which shall include balance sheets, statements of income and
retained earnings and a statement of cash flows) for Spherion and its
Subsidiaries and the Borrower and its Subsidiaries for such fiscal year
certified in a manner acceptable to the Administrative Agent by Deloitte &
Touche, LLP, or such other independent public accountants reasonably
acceptable to the Administrative Agent (which acceptance shall not be
unreasonably withheld).
(ii) QUARTERLY REPORTING. Within 60 days after the close
of the first three quarterly periods of each of Spherion's and the
Borrower's fiscal years, unaudited balance sheets of each Spherion and its
Subsidiaries and the Borrower and its Subsidiaries as at the close of each
such period and unaudited statements of income and retained earnings and an
unaudited statement of cash flows for Spherion and its Subsidiaries and the
Borrower and its Subsidiaries for the period from the beginning of such
fiscal year to the end of such quarter, all certified by such Loan Party's
Authorized Officer.
(iii) COMPLIANCE CERTIFICATE. Together with the financial
statements required hereunder, a compliance certificate in substantially
the form of Exhibit V signed by such Loan Party's Authorized Officer and
dated the date of such annual financial statement or such quarterly
financial statement, as the case may be.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly upon
the furnishing thereof to the shareholders of Spherion copies of all
financial statements, reports and proxy statements so furnished.
(v) S.E.C. FILINGS. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly, monthly or
other regular reports which any Loan Party or any of its Affiliates files
with the Securities and Exchange Commission.
(vi) COPIES OF NOTICES. Promptly upon its receipt of any
notice, request for consent, financial statements, certification, report or
other communication under or in connection with any Transaction Document
from any Person other than the Administrative Agent or any Lender, copies
of the same.
(vii) CHANGE IN CREDIT AND COLLECTION POLICY. At least 10
days prior to the effectiveness of any material change in or material
amendment to the Credit and
15
Collection Policy, a copy of the Credit and Collection Policy then in
effect and a notice (1) indicating such change or amendment, and (2) if
such proposed change or amendment would be reasonably likely to affect
adversely the collectability of the Receivables or decrease the credit
quality of any newly created Receivables, requesting the Administrative
Agent's consent thereto.
(viii) OTHER INFORMATION. Promptly, from time to time, such
other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of such
Loan Party as the Administrative Agent may from time to time reasonably
request to protect the interests of the Administrative Agent and the
Lenders under or as contemplated by this Agreement.
(b) NOTICES. Such Loan Party will notify the Administrative
Agent in writing of any of the following promptly upon learning of the
occurrence thereof, describing the same and, if applicable, the actions being
taken with respect thereto:
(i) AMORTIZATION EVENTS OR UNMATURED AMORTIZATION EVENTS.
The occurrence of each Amortization Event and each Unmatured Amortization
Event, by a statement of an Authorized Officer of such Loan Party.
(ii) JUDGMENTS AND PROCEEDINGS. (1) (A) The entry of any
judgment or decree against Performance Guarantor, the Servicer or any of
their respective Material Subsidiaries if the aggregate amount of all
judgments and decrees then outstanding against Performance Guarantor, the
Servicer and its/their respective Material Subsidiaries exceeds $1,000,000
after deducting (x) the amount with respect to which Performance Guarantor,
the Servicer or any such Material Subsidiary, as the case may be, is
insured and with respect to which the insurer has assumed responsibility in
writing, and (y) the amount for which Performance Guarantor, the Servicer
or any such Material Subsidiary is otherwise indemnified if the terms of
such indemnification are satisfactory to the Administrative Agent, and (B)
the institution of any litigation, arbitration proceeding or governmental
proceeding against Performance Guarantor or the Servicer which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect; and (2) the entry of any judgment or decree or the
institution of any litigation, arbitration proceeding or governmental
proceeding against Borrower.
(iii) MATERIAL ADVERSE EFFECT. The occurrence of any event
or condition that has had, or would reasonably be expected to have, a
Material Adverse Effect.
(iv) TERMINATION DATE. The occurrence of the "TERMINATION
DATE" under and as defined in the Receivables Sale Agreement.
(v) DEFAULTS UNDER OTHER AGREEMENTS. The occurrence of a
default or an event of default under any other financing arrangement
pursuant to which such Loan Party is a debtor or an obligor provided that,
in the case of Spherion, to the extent such other financing arrangement has
unsatisfied payment obligations in excess of $1,000,000.
(vi) NOTICES UNDER RECEIVABLES SALE AGREEMENT. Copies of
all notices delivered by or to such Loan Party under the Receivables Sale
Agreement.
16
(vii) DOWNGRADE OF PERFORMANCE GUARANTOR. Any downgrade in
the rating of any Indebtedness of Performance Guarantor by S&P or Xxxxx'x,
setting forth the Indebtedness affected and the nature of such change.
(c) COMPLIANCE WITH LAWS AND PRESERVATION OF CORPORATE
EXISTENCE. Such Loan Party will comply in all respects with all applicable laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect. Such Loan Party will
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 its business
is conducted, except where the failure to so preserve and maintain or qualify
would not reasonably be expected to have a Material Adverse Effect.
(d) AUDITS. Such Loan Party will furnish to the Administrative
Agent from time to time such information with respect to it and the Receivables
as the Administrative Agent may reasonably request. Such Loan Party will, from
time to time during regular business hours as requested by the Administrative
Agent upon reasonable notice and at the sole cost of such Loan Party, permit the
Administrative Agent, or its agents or representatives (and shall cause each
Originator to permit the Administrative Agent or its agents or representatives):
(i) to examine and make copies of and abstracts from all Records in the
possession or under the control of such Person relating to the Collateral,
including the related Contracts, and (ii) to visit the offices and properties of
such Person for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to such Person's financial condition or
the Collateral or any Person's performance under any of the Transaction
Documents or any Person's performance under the Contracts and, in each case,
with any of the officers or employees of Borrower or the Servicer having
knowledge of such matters (each of the foregoing examinations and visits, a
"REVIEW"); PROVIDED, HOWEVER, that, so long as no Amortization Event has
occurred and is continuing, (1) the Loan Parties shall only be responsible for
the costs and expenses of one (1) Review in any one calendar year unless (2) the
first such Review in such calendar year resulted in negative findings (in which
case the Loan Parties shall be responsible for the costs and expenses of two (2)
such Reviews in such calendar year), or (B) the Borrower delivers an Extension
Request and the applicable Response Date is more than three calendar months
after the first Review in such calendar year, and (2) the Administrative Agent
will not request more than four (4) Reviews in any one calendar year.
Notwithstanding the foregoing, if (i) the Borrower requests the approval of a
new Eligible Originator which is a Material Proposed Addition or (ii) any
Material Acquisition is consummated by an Originator, the Loan Parties shall be
responsible for the costs and expenses of one additional Review per proposed
Material Proposed Addition or per Material Acquisition in the calendar year in
which such Material Proposed Addition is expected to occur or such Material
Acquisition is expected to be consummated if such additional Review is requested
by any of the Agents.
(e) KEEPING AND MARKING OF RECORDS AND BOOKS.
(i) The Servicer will (and will cause each Originator to)
maintain and implement administrative and operating procedures (including
an ability to recreate records evidencing Receivables in the event of the
destruction of the originals thereof),
17
and keep and maintain all documents, books, records and other information
reasonably necessary or advisable for the collection of all Receivables
(including records adequate to permit the immediate identification of each
new Receivable and all Collections of and adjustments to each existing
Receivable). The Servicer will (and will cause each Originator to) give the
Administrative Agent notice of any material change in the administrative
and operating procedures referred to in the previous sentence.
(ii) Such Loan Party will (and will cause each Originator to):
(1) on or prior to the date hereof, xxxx its master data processing records
and other books and records relating to the Loans with a legend, acceptable
to the Administrative Agent, describing the Administrative Agent's security
interest in the Collateral and (2) upon the request of the Administrative
Agent following the occurrence of an Amortization Event: (A) xxxx each
Contract with a legend describing the Administrative Agent's security
interest and (B) deliver to the Administrative Agent all Contracts
(including all multiple originals of any such Contract constituting an
instrument, a certificated security or chattel paper) relating to the
Receivables.
(f) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION POLICY.
Such Loan Party will (and will cause each Originator to) timely and fully (i)
perform and comply in all material respects with all provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Receivables, and (ii) comply in all material respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract.
(g) PERFORMANCE AND ENFORCEMENT OF RECEIVABLES SALE AGREEMENT.
Borrower will, and will require each Originator to, perform each of their
respective obligations and undertakings under and pursuant to the Receivables
Sale Agreement, will purchase Receivables thereunder in compliance with the
terms thereof and will enforce the rights and remedies accorded to Borrower
under the Receivables Sale Agreement. Borrower will take all actions to perfect
and enforce its rights and interests (and the rights and interests of the
Administrative Agent and the Lenders as assignees of Borrower) under the
Receivables Sale Agreement as the Administrative Agent may from time to time
reasonably request, including making claims to which it may be entitled under
any indemnity, reimbursement or similar provision contained in the Receivables
Sale Agreement.
(h) OWNERSHIP. Borrower will (or will cause each Originator to)
take all necessary action to (i) vest legal and equitable title to the
Collateral purchased under the Receivables Sale Agreement irrevocably in
Borrower, free and clear of any Adverse Claims (other than Adverse Claims in
favor of the Administrative Agent, for the benefit of the Secured Parties)
including the filing of all financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Borrower's interest in such Collateral and such other
action to perfect, protect or more fully evidence the interest of Borrower
therein as the Administrative Agent may reasonably request), and (ii) establish
and maintain, in favor of the Administrative Agent, for the benefit of the
Secured Parties, a valid and perfected first priority security interest in all
Collateral, free and clear of any Adverse Claims, including the filing of all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect the
Administrative Agent's (for the benefit of the Secured Parties)
18
security interest in the Collateral and such other action to perfect, protect or
more fully evidence the interest of the Administrative Agent for the benefit of
the Secured Parties as the Administrative Agent may reasonably request.
(i) LENDERS' RELIANCE. Borrower acknowledges that the Lenders
are entering into the Transactions in reliance upon Borrower's identity as a
legal entity that is separate from each Originator. Therefore, from and after
the date of execution and delivery of this Agreement, Borrower shall take all
reasonable actions, including all actions that the Administrative Agent or any
Lender may from time to time reasonably request, to maintain Borrower's identity
as a separate legal entity and to make it manifest to third parties that
Borrower is an entity with assets and liabilities distinct from those of each
Originator and any Affiliates thereof (other than Borrower) and not just a
division of any Originator or any such Affiliate. Without limiting the
generality of the foregoing and in addition to the other covenants set forth
herein, Borrower will:
(1) conduct its own business in its own name and require
that all full-time employees of Borrower, if any, identify themselves as such
and not as employees of any Originator (including by means of providing
appropriate employees with business or identification cards identifying such
employees as Borrower's employees);
(2) compensate all employees, consultants and agents
directly, from Borrower's own funds, for services provided to Borrower by such
employees, consultants and agents and, to the extent any employee, consultant or
agent of Borrower is also an employee, consultant or agent of any Originator or
any Affiliate thereof, allocate the compensation of such employee, consultant or
agent between Borrower and such Originator or such Affiliate, as applicable, on
a basis that reflects the services rendered to Borrower and such Originator or
such Affiliate, as applicable;
(3) clearly identify its offices (by signage or
otherwise) as its offices and, if such office is located in the offices of any
Originator, Borrower shall lease such office at a fair market rent;
(4) have a separate telephone number, which will be
answered only in its name and separate stationery and checks in its own name;
(5) conduct all transactions with each Originator and the
Servicer (including any delegation of its obligations hereunder as Servicer)
strictly on an arm's-length basis, allocate all overhead expenses (including
telephone and other utility charges) for items shared between Borrower and such
Originator on the basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis reasonably related to
actual use;
(6) at all times have a Board of Directors consisting of
three members, at least one member of which is an Independent Director;
(7) observe all corporate formalities as a distinct
entity, and ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the dissolution or
liquidation of Borrower or (C) the initiation of, participation in, acquiescence
in or consent to any bankruptcy, insolvency, reorganization or
19
similar proceeding involving Borrower, are duly authorized by unanimous vote
of its Board of Directors (including the Independent Director);
(8) maintain Borrower's books and records separate from
those of each Originator and any Affiliate thereof and otherwise readily
identifiable as its own assets rather than assets of any Originator or any
Affiliate thereof;
(9) prepare its financial statements separately from
those of each Originator and insure that any consolidated financial statements
of any Originator or any Affiliate thereof that include Borrower and that are
filed with the Securities and Exchange Commission or any other governmental
agency have notes clearly stating that Borrower is a separate corporate entity
and that its assets will be available first and foremost to satisfy the claims
of the creditors of Borrower;
(10) except as herein specifically otherwise provided,
maintain the funds or other assets of Borrower separate from, and not commingled
with, those of any Originator or any Affiliate thereof and only maintain bank
accounts or other depository accounts to which Borrower alone is the account
party, into which Borrower alone makes deposits and from which Borrower alone
(or the Administrative Agent hereunder) has the power to make withdrawals;
(11) pay all of Borrower's operating expenses from
Borrower's own assets (except for certain payments by any Originator or other
Persons pursuant to allocation arrangements that comply with the requirements of
this Section 7.1(i));
(12) operate its business and activities such that: it
does not engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract, lease or
other undertaking, other than the transactions contemplated and authorized by
this Agreement and the Receivables Sale Agreement; and does not create, incur,
guarantee, assume or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (A) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (B) the incurrence of obligations under this
Agreement, (C) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to the applicable Originator
thereunder for the purchase of Receivables from such Originator under the
Receivables Sale Agreement, and (D) the incurrence of operating expenses in the
ordinary course of business of the type otherwise contemplated by this
Agreement;
(13) maintain its corporate charter in conformity with
this Agreement, such that it does not amend, restate, supplement or otherwise
modify its Certificate of Incorporation or By-Laws in any respect that would
impair its ability to comply with the terms or provisions of any of the
Transaction Documents, including Section 7.1(i) of this Agreement;
(14) maintain the effectiveness of, and continue to
perform under the Receivables Sale Agreement and the Performance Undertaking,
such that it does not amend, restate, supplement, cancel, terminate or otherwise
modify the Receivables Sale Agreement or the Performance Undertaking, or give
any consent, waiver, directive or approval thereunder or
20
waive any default, action, omission or breach under the Receivables Sale
Agreement or the Performance Undertaking or otherwise grant any indulgence
thereunder, without (in each case) the prior written consent of the
Administrative Agent;
(15) maintain its corporate separateness such that it does
not merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions, and
except as otherwise contemplated herein) all or substantially all of its assets
(whether now owned or hereafter acquired) to, or acquire all or substantially
all of the assets of, any Person, nor at any time create, have, acquire,
maintain or hold any interest in any Subsidiary.
(16) maintain at all times the Required Capital Amount (as
defined in the Receivables Sale Agreement) and refrain from making any dividend,
distribution, redemption of capital stock or payment of any subordinated
indebtedness which would cause the Required Capital Amount to cease to be so
maintained; and
(17) take such other actions as are necessary on its part
to ensure that the facts and assumptions set forth in the opinion issued by
Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC, as counsel for Borrower, in connection
with the closing or initial Advance under this Agreement and relating to
substantive consolidation issues, and in the certificates accompanying such
opinion, remain true and correct in all material respects at all times.
(j) COLLECTIONS. Such Loan Party will cause (1) all proceeds
from all Lock-Boxes to be directly deposited by a Collection Bank into a
Collection Account and (2) each Lock-Box and Collection Account to be subject at
all times to a Collection Account Agreement that is in full force and effect. If
any payments relating to the Collateral are remitted directly to Borrower or any
Affiliate of Borrower, Borrower will remit (or will cause all such payments to
be remitted) directly to a Collection Bank and deposited into a Collection
Account within two Business Days following receipt thereof, and, at all times
prior to such remittance, Borrower will itself hold or, if applicable, will
cause such payments to be held in trust for the exclusive benefit of the
Administrative Agent and the Lenders. Borrower will maintain exclusive
ownership, dominion and control (subject to the terms of this Agreement) of each
Lock-Box and Collection Account and shall not grant the right to take dominion
and control of any Lock-Box or Collection Account at a future time or upon the
occurrence of a future event to any Person, except to the Administrative Agent
as contemplated by this Agreement.
(k) TAXES. Such Loan Party will file all tax returns and reports
required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing the non-filing or non-payment or which
would reasonably be expected to cause a Material Adverse Effect, except any such
taxes which are not yet delinquent or being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books. Borrower will pay when due any
taxes payable in connection with the Receivables, exclusive of taxes on or
measured by income or gross receipts of the Administrative Agent or any Lender.
(l) PAYMENT TO APPLICABLE ORIGINATOR. With respect to any
Receivable purchased by Borrower from any Originator, such purchase shall be
effected under, and in
21
compliance with the Receivables Sale Agreement, including the terms relating to
the amount and timing of payments to be made to such Originator in respect of
the purchase price for such Receivable.
Section 7.2 NEGATIVE COVENANTS OF THE LOAN PARTIES. Until the Final
Payout Date, each Loan Party hereby covenants, as to itself, that:
(a) NAME CHANGE, OFFICES AND RECORDS. Such Loan Party will not
change its name, identity or structure (within the meaning of any applicable
enactment of the UCC), relocate its chief executive office at any time while the
location of its chief executive office is relevant to perfection of the
Administrative Agent's security interest, for the benefit of the Secured
Parties, in the Receivables, Related Security and Collections, or change any
office where Records are kept unless it shall have: (i) given the Administrative
Agent at least thirty days' prior notice thereof and (ii) delivered to the
Administrative Agent all financing statements, instruments and other documents
requested by the Administrative Agent in connection with such change or
relocation.
(b) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Except as may be
required by the Administrative Agent pursuant to Section 8.2(b), such Loan Party
will not add or terminate any bank as a Collection Bank, or make any change in
the instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Administrative Agent shall have received, at
least 10 days before the proposed effective date therefor, (i) notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
PROVIDED, HOWEVER, that the Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) MODIFICATIONS TO CONTRACTS AND CREDIT AND COLLECTION POLICY.
Such Loan Party will not, and will not permit any Originator to, make any change
to the Credit and Collection Policy that would have a material adverse affect on
the collectability of the Receivables or decrease the credit quality of any
newly created Receivables. Except as provided in Section 8.2(d), the Servicer
will not, and will not permit any Originator to, extend, amend or otherwise
modify the terms of any Receivable or any Contract related thereto other than in
accordance with the Credit and Collection Policy.
(d) SALES, LIENS. Borrower will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including the filing of
any financing statement) or with respect to, any of the Collateral, or assign
any right to receive income with respect thereto (other than, in each case, the
creation of a security interest therein in favor of the Administrative Agent as
provided for herein), and Borrower will defend the right, title and interest of
the Secured Parties in, to and under any of the foregoing property, against all
claims of third parties claiming through or under Borrower or any Originator.
(e) USE OF PROCEEDS. Borrower will not use the proceeds of the
Advances for any purpose other than (i) paying for Receivables and Related
Security under and in accordance
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with the Receivables Sale Agreement, including making payments on the
Subordinated Notes to the extent permitted thereunder and under the Receivables
Sale Agreement, (ii) paying its ordinary and necessary operating expenses when
and as due, and (iii) making Restricted Junior Payments to the extent permitted
under this Agreement.
(f) TERMINATION DATE DETERMINATION. Borrower will not designate
the Termination Date (as defined in the Receivables Sale Agreement), or send any
notice to any Originator in respect thereof, without the prior consent of the
Administrative Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 6.1(e) of the Receivables Sale Agreement.
(g) RESTRICTED JUNIOR PAYMENTS. Borrower will not make any
Restricted Junior Payment if after giving effect thereto, Borrower's Net Worth
(as defined in the Receivables Sale Agreement) would be less than the Required
Capital Amount (as defined in the Receivables Sale Agreement).
(h) BORROWER INDEBTEDNESS. Borrower will not incur or permit to
exist any Indebtedness or liability on account of deposits except: (i) the
Obligations, (ii) the Subordinated Loans, and (iii) other current accounts
payable arising in the ordinary course of business and not overdue to the extent
such current accounts payable are in excess of $10,750.
(i) PROHIBITION ON ADDITIONAL NEGATIVE PLEDGES. No Loan Party
will enter into or assume any agreement (other than this Agreement and the other
Transaction Documents) prohibiting the creation or assumption of any Adverse
Claim upon the Collateral except as contemplated by the Transaction Documents,
or otherwise prohibiting or restricting any Transaction, and no Loan Party will
enter into or assume any agreement creating any Adverse Claim (except for those
created under the Transaction Documents) upon the Subordinated Notes.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 DESIGNATION OF SERVICER.
(a) The servicing, administration and collection of the
Receivables shall be conducted by such Person (the "SERVICER") so
designated from time to time in accordance with this Section 8.1. Spherion
is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms of this Agreement. The
Administrative Agent may at any time after an Unmatured Amortization Event
or an Amortization Event designate as Servicer any Person to succeed
Spherion or any successor Servicer PROVIDED THAT the Rating Agency
Condition is satisfied.
(b) Spherion may delegate, and Spherion hereby advises the
Lenders and the Administrative Agent that it has delegated, to the other
Originators, as sub-servicers of the Servicer, certain of Spherion duties
and responsibilities as Servicer hereunder in respect of the Receivables
originated by such other Originator. Without the prior consent of the
Administrative Agent and the Required Liquidity Banks, Spherion shall not
be permitted to delegate any of its duties or responsibilities as Servicer
to any Person other
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than (i) Borrower, (ii) the other Originators, and (iii) with respect to
certain Defaulted Receivables, outside collection agencies in accordance
with its customary practices. Neither Borrower nor any Originator shall be
permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by Spherion. If at any
time the Administrative Agent shall designate as Servicer any Person other
than Spherion, all duties and responsibilities theretofore delegated by
Spherion to Borrower or the other Originators may, at the discretion of the
Administrative Agent, be terminated forthwith on notice given by the
Administrative Agent to Spherion and to Borrower and the other Originators.
(c) Notwithstanding the foregoing subsection (b): (i) Spherion
shall be and remain primarily liable to the Administrative Agent and the
Lenders for the full and prompt performance of all duties and
responsibilities of the Servicer hereunder and (ii) the Administrative
Agent and the Lenders shall be entitled to deal exclusively with Spherion
in matters relating to the discharge by the Servicer of its duties and
responsibilities hereunder. The Administrative Agent and the Lenders shall
not be required to give notice, demand or other communication to any Person
other than Spherion for communication to the Servicer and its sub-servicer
or other delegate with respect thereto to be accomplished. Spherion, at all
times that it is the Servicer, shall be responsible for providing any
sub-servicer or other delegate of the Servicer with any notice given to the
Servicer under this Agreement.
Section 8.2 DUTIES OF SERVICER.
(a) The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each 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) The Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account. The Servicer
shall effect a Collection Account Agreement substantially in the form of
Exhibit VI with each bank party to a Collection Account at any time. In the
case of any remittances received in any Lock-Box or Collection Account that
shall have been identified, to the satisfaction of the Servicer, to not
constitute Collections or other proceeds of the Receivables or the Related
Security, the Servicer shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after the
date the Administrative Agent delivers to any Collection Bank a Collection
Notice pursuant to Section 8.3, the Administrative Agent may request that
the Servicer, and the Servicer thereupon promptly shall instruct all
Obligors with respect to the Receivables, to remit all payments thereon to
a new depositary account specified by the Administrative Agent and, at all
times thereafter, Borrower and the Servicer shall not deposit or otherwise
credit, and shall not permit any other Person to deposit or otherwise
credit to such new depositary account any cash or payment item other than
Collections.
(c) The Servicer shall administer the Collections in accordance
with the procedures described in this Article VIII and in Article II. The
Servicer shall set aside
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and hold in trust for the account of Borrower and the Lenders their
respective shares of the Collections in accordance with Article II. The
Servicer shall, upon the request of the Administrative Agent, segregate, in
a manner acceptable to the Administrative Agent, all cash, checks and other
instruments received by the Servicer from time to time constituting
Collections from the general funds of the Servicer or Borrower prior to the
remittance thereof in accordance with Article II. If the Servicer shall be
required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the
Administrative Agent such allocable share of Collections of Receivables set
aside for the Lenders on the first Business Day following receipt by the
Servicer of such Collections, duly endorsed or with duly executed
instruments of transfer.
(d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; PROVIDED, HOWEVER, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Defaulted Receivable or limit the rights of the
Administrative Agent or the Lenders under this Agreement. Notwithstanding
anything to the contrary contained herein, the Administrative Agent shall
have the absolute and unlimited right to direct the Servicer to commence or
settle any legal action with respect to any Receivable or to foreclose upon
or repossess any Related Security.
(e) The Servicer shall hold in trust for Borrower and the
Lenders all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Administrative Agent, deliver or make available to the
Administrative Agent all such Records, at a place selected by the
Administrative Agent. The Servicer shall, as soon as practicable following
receipt thereof turn over to Borrower any cash collections or other cash
proceeds received with respect to Indebtedness not constituting
Receivables. The Servicer shall, from time to time at the request of any
Lender, furnish to the Lenders (promptly after any such request) a
calculation of the amounts set aside for the Lenders pursuant to Article
II.
(f) Any payment by an Obligor in respect of any indebtedness
owed by it to Originator or Borrower shall, except as otherwise specified
by such Obligor or otherwise required by contract or law and unless
otherwise instructed by the Administrative Agent, be applied as a
Collection of any Receivable of such Obligor (starting with the oldest such
Receivable) to the extent of any amounts then due and payable thereunder
before being applied to any other receivable or other obligation of such
Obligor.
Section 8.3 COLLECTION NOTICES. The Administrative Agent is authorized
at any time to date and to deliver to the Collection Banks the Collection
Notices. Borrower hereby transfers to the Administrative Agent for the benefit
of the Lenders, effective when the Administrative Agent delivers such notice,
the exclusive ownership and control of each Lock-Box and the Collection
Accounts. If any authorized signatory of Borrower whose signature appears on a
Collection Account Agreement shall cease to have such authority before the
delivery of such notice, such Collection Notice shall nevertheless be valid as
if such authority had remained in force.
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Borrower hereby authorizes the Administrative Agent, and agrees that the
Administrative Agent shall be entitled (i) at any time after delivery of the
Collection Notices, to endorse Borrower's name on checks and other instruments
representing Collections, (ii) at any time after the occurrence of an
Amortization Event, to enforce the Receivables, the related Contracts and the
Related Security, and (iii) at any time after the occurrence of an Amortization
Event, to take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Administrative Agent rather than Borrower.
Section 8.4 RESPONSIBILITIES OF BORROWER. Anything herein to the
contrary notwithstanding, the exercise by the Administrative Agent and the
Lenders of their rights hereunder shall not release the Servicer, any Originator
or Borrower from any of their duties or obligations with respect to any
Receivables or under the related Contracts. The Lenders shall have no obligation
or liability with respect to any Receivables or related Contracts, nor shall any
of them be obligated to perform the obligations of Borrower.
Section 8.5 MONTHLY REPORTS. The Servicer shall prepare and forward to
the Administrative Agent (a) on each Monthly Reporting Date, a Monthly Report
and an electronic file of the data contained therein and (b) at such times as
the Administrative Agent shall request, a listing by Obligor of all Receivables
together with an aging of such Receivables; provided, however, that if an
Amortization Event shall exist and be continuing, the Administrative Agent may
request an Interim Report be prepared and forwarded to the Administrative Agent
more frequently than monthly.
Section 8.6 SERVICING FEE. As compensation for the Servicer's servicing
activities on their behalf, the Lenders hereby agree to pay the Servicer the
Servicing Fee, which fee shall be paid in arrears on each Settlement Date.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 AMORTIZATION EVENTS. The occurrence of any one or more of
the following events shall constitute an Amortization Event:
(a) Any Loan Party or Performance Guarantor shall fail to make
any payment or deposit required to be made by it under the Transaction
Documents when due PROVIDED, HOWEVER, that no Amortization Event shall
occur under this Section 9.1(a) as a result of any late payment or deposit
which is cured within one Business day if (1) such late payment or deposit
was due to circumstances beyond such Loan Party's or Performance
Guarantor's control, (2) such late payments or deposits do not occur more
than two times in any calendar year, and (3) such Loan Party or Performance
Guarantor pays interest on the overdue amount of such payment or deposit
until paid at the Default Rate.
(b) Any representation, warranty, certification or statement
made by Performance Guarantor or any Loan Party in any Transaction Document
to which it is a
26
party or in any other document delivered pursuant thereto shall prove to
have been incorrect in any material respect when made or deemed made.
(c) Any Loan Party shall fail to perform or observe any covenant
contained in Section 7.2 or 8.5 when due.
(d) Any Loan Party or Performance Guarantor shall fail to
perform or observe any other covenant or agreement under any Transaction
Documents and such failure shall continue for 10 consecutive Business Days.
(e) Failure of Borrower to pay any Indebtedness (other than the
Obligations) when due or the default by Borrower in the performance of any
term, provision or condition contained in any agreement under which any
such Indebtedness was created or is governed, the effect of which is to
cause, or to permit the holder or holders of such Indebtedness to cause,
such Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of Borrower shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior
to the date of maturity thereof.
(f) Failure of Performance Guarantor to pay Indebtedness in
excess of $5,000,000 in aggregate principal amount (hereinafter, "MATERIAL
INDEBTEDNESS") when due; or the default by Performance Guarantor in the
performance of any term, provision or condition contained in any agreement
under which any Material Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Material Indebtedness to cause, such Material Indebtedness to become due
prior to its stated maturity; or any Material Indebtedness of Performance
Guarantor shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date of maturity
thereof.
(g) An Event of Bankruptcy shall occur with respect to
Performance Guarantor, any Loan Party or any of their respective Material
Subsidiaries.
(h) As at the end of any Calculation Period:
(i) the three-month rolling average Delinquency Ratio
shall exceed 3.70%,
(ii) the three-month rolling average Default Ratio shall
exceed 3.125%, or
(iii) the three-month rolling average Dilution Ratio shall
exceed 4.75%.
(i) A Change of Control shall occur.
(j) (i) One or more final judgments for the payment of money in
an aggregate amount of $10,750 or more shall be entered against Borrower or
(ii) one or more final judgments for the payment of money in an amount in
excess of $5,000,000, individually
27
or in the aggregate, shall be entered against Performance Guarantor or any
of its Material Subsidiaries (other than Borrower) on claims not covered by
insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect
for thirty (30) consecutive days without a stay of execution.
(k) The "TERMINATION DATE" under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement
or any Originator shall for any reason cease to transfer, or cease to have
the legal capacity to transfer, or otherwise be incapable of transferring
Receivables to Borrower under the Receivables Sale Agreement.
(l) This Agreement shall terminate in whole or in part (except
in accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Borrower, or any
Obligor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability, or the
Administrative Agent for the benefit of the Lenders shall cease to have a
valid and perfected first priority security interest in the Collateral.
(m) On any Settlement Date, after giving effect to the turnover
of Collections by the Servicer on such date and the application thereof to
the Obligations in accordance with this Agreement, the Aggregate Principal
shall exceed the Borrowing Limit.
(n) The Performance Undertaking shall cease to be effective or
to be the legally valid, binding and enforceable obligation of Performance
Guarantor, or Performance Guarantor shall directly or indirectly contest in
any manner such effectiveness, validity, binding nature or enforceability
of its obligations thereunder.
(o) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Tax Code with regard to any of the
Collateral and such lien shall not have been released within seven (7)
days, or the PBGC shall, or shall indicate its intention to, file notice of
a lien pursuant to Section 4068 of ERISA with regard to any of the
Collateral.
(p) Any Plan of Performance Guarantor or any of its ERISA
Affiliates:
(i) shall fail to be funded in accordance with the
minimum funding standard required by applicable law, the terms of such
Plan, Section 412 of the Tax Code or Section 302 of ERISA for any plan year
or a waiver of such standard is sought or granted with respect to such Plan
under applicable law, the terms of such Plan or Section 412 of the Tax Code
or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the terms of such Plan; or
(iii) shall require Performance Guarantor or any of its
ERISA Affiliates to provide security under applicable law, the terms of
such Plan, Section 401 or 412 of the Tax Code or Section 306 or 307 of
ERISA; or
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(iv) results in a liability to Performance Guarantor or
any of its ERISA Affiliates under applicable law, the terms of such Plan,
or Title IV ERISA,
and there shall result from any such failure, waiver, termination or other
event a liability to the PBGC or a Plan that would have a Material Adverse
Effect.
(q) Any event shall occur which (i) materially and adversely
impairs the ability of the Originators to originate Receivables of a credit
quality that is at least equal to the credit quality of the Receivables
sold or contributed to Borrower on the date of this Agreement or (ii) has,
or would be reasonably expected to have a Material Adverse Effect.
(r) The sum of (1) cash and Cash Equivalents as shown on the
consolidated balance sheet of the Parent and its Subsidiaries (other than
cash and Cash Equivalents which are pledged or otherwise encumbered) as of
the most recent Cut-Off Date and (2) the difference between (A) the
Borrowing Limit and (B) the Aggregate Principal is less than $25,000,000.
Section 9.2 REMEDIES. Upon the occurrence and during the continuation of
an Amortization Event, the Administrative Agent may, or upon the direction of
the Required Liquidity Banks shall, take any of the following actions: (i)
replace, if the Administrative Agent has not already done so, the Person then
acting as Servicer, (ii) declare the Amortization Date to have occurred,
whereupon the Aggregate Commitment shall immediately terminate and the
Amortization Date shall forthwith occur, all without demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Loan Party;
PROVIDED, HOWEVER, that upon the occurrence of an Event of Bankruptcy with
respect to any Loan Party, the Amortization Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by each Loan Party, (iii) deliver the Collection Notices to the
Collection Banks, (iv) exercise all rights and remedies of a secured party upon
default under the UCC and other applicable laws, and (v) notify Obligors of the
Administrative Agent's security interest in the Receivables and other
Collateral. The aforementioned rights and remedies shall be without limitation,
and shall be in addition to all other rights and remedies of the Administrative
Agent and the Lenders otherwise available under any other provision of this
Agreement, by operation of law, at equity or otherwise, all of which are hereby
expressly preserved, including all rights and remedies provided under the UCC,
all of which rights shall be cumulative.
ARTICLE X
INDEMNIFICATION
Section 10.1 INDEMNITIES BY THE LOAN PARTIES. Without limiting any other
rights that the Administrative Agent or any Lender may have hereunder or under
applicable law, (a) Borrower hereby agrees to indemnify (and pay upon demand to)
the Administrative Agent, Blue Ridge, each of the Liquidity Banks and each of
the respective assigns, officers, directors, agents and employees of the
foregoing (each, an "INDEMNIFIED PARTY") from and against any and all damages,
losses, claims, taxes, liabilities, costs, expenses and for all other amounts
payable, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively
29
referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of them
to the extent arising out of or as a result of this Agreement or the
acquisition, either directly or indirectly, by a Lender of an interest in the
Receivables, and (b) the Servicer hereby agrees to indemnify (and pay upon
demand to) each Indemnified Party for Indemnified Amounts awarded against or
incurred by any of them arising out of the Servicer's activities as Servicer
hereunder EXCLUDING, HOWEVER, in all of the foregoing instances under the
preceding clauses (a) and (b):
(i) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts resulted
from gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(ii) Indemnified Amounts to the extent the same includes losses
in respect of Receivables that are uncollectible on account of the financial
inability to pay, insolvency, bankruptcy or lack of creditworthiness of the
related Obligor; or
(iii) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, on or measured by the
overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the characterization for
income tax purposes of the acquisition by the Lenders of Loans as a loan or
loans by the Lenders to Borrower secured by the Receivables, the Related
Security, the Collection Accounts and the Collections;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of any Loan Party or limit the recourse of the Lenders to any Loan
Party for amounts otherwise specifically provided to be paid by such Loan Party
under the terms of this Agreement. Without limiting the generality of the
foregoing indemnification, Borrower shall indemnify (without duplication) the
Administrative Agent and the Lenders for Indemnified Amounts (including losses
in respect of uncollectible receivables, regardless of whether reimbursement
therefor would constitute recourse to Borrower or the Servicer) relating to or
resulting from:
(A) any representation or warranty made or deemed made by
any Loan Party or any Originator (or any officers of any such
Person) pursuant this Agreement, any other Transaction Document or
any other information or report delivered by any such Person
pursuant hereto or thereto, which shall have been false or incorrect
when made or deemed made;
(B) the failure by Borrower, the Servicer or any
Originator to comply with any applicable law, rule or regulation
with respect to any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein with
any such applicable law, rule or regulation or any failure of any
Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
30
(C) any failure of Borrower, the Servicer or any
Originator to perform its duties, covenants or other obligations in
accordance with this Agreement or any other Transaction Document;
(D) any products liability, personal injury or damage
suit, or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any
Contract or any Receivable;
(E) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable (including a defense based on such
Receivable 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 service related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(F) the commingling of Collections of Receivables at any
time with other funds;
(G) any investigation, litigation or proceeding related
to or arising from this Agreement or any other Transaction Document,
the Transactions, the use of the proceeds of any Advance, the
Collateral or any other investigation, litigation or proceeding
relating to Borrower, the Servicer or any Originator in which any
Indemnified Party becomes involved as a result of any of the
Transactions;
(H) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such Obligor
being immune from civil and commercial law and suit on the grounds
of sovereignty or otherwise from any legal action, suit or
proceeding;
(I) any Amortization Event;
(J) any failure of Borrower to acquire and maintain legal
and equitable title to, and ownership of any of the Collateral from
the applicable Originator, free and clear of any Adverse Claim
(except as created by the Transaction Documents); or any failure of
Borrower to give reasonably equivalent value to any Originator under
the Receivables Sale Agreement in consideration of the transfer by
such Originator of any Receivable, or any attempt by any Person to
void such transfer under statutory provisions or common law or
equitable action;
(K) any failure to vest and maintain vested in the
Administrative Agent for the benefit of the Lenders, or to transfer
to the Administrative Agent for the benefit of the Secured Parties,
a valid first
31
priority perfected security interests in the Collateral, free and
clear of any Adverse Claim (except as created by the Transaction
Documents);
(L) the failure to have filed, 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 Collateral, and the proceeds thereof, whether at the
time of any Advance or at any subsequent time;
(M) any action or omission by any Loan Party which
reduces or impairs the rights of the Administrative Agent or the
Lenders with respect to any Collateral or the value of any
Collateral;
(N) any successful attempt by any Person to void any
Advance or the Administrative Agent's security interest in the
Collateral under statutory provisions or common law or equitable
action; and
(O) the failure of any Receivable included in the
calculation of the Net Pool Balance as an Eligible Receivable to be
an Eligible Receivable at the time so included.
Section 10.2 INCREASED COST AND REDUCED RETURN.
(a) If any Regulatory Change or Accounting Change occurring
after the date hereof:
(i) shall subject a Funding Source to any tax, duty or
other charge with respect to its obligations hereunder or under any Funding
Agreement, its Commitment or its Liquidity Commitment, or shall change the
basis of taxation of payments to the Funding Source of any Obligations,
owed to or funded or maintained in whole or in part by it or any other
amounts due under this Agreement in respect of its Obligations or, as
applicable, its Commitment or its Liquidity Commitment; or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of any Funding
Source, deposits or obligations with or for the account of any Funding
Source or with or for the account of any Affiliate (or entity deemed by the
Federal Reserve Board to be an Affiliate) of any Funding Source, or credit
extended by any Funding Source pursuant to this Agreement or a Funding
Agreement, as applicable; or
(iii) shall affect the amount of capital required or
expected to be maintained by any Funding Source (including because the
assets and liabilities of Blue Ridge are thereafter required to be
consolidated with those of any Liquidating Bank); or
(iv) shall impose any other condition affecting any
obligation owned, funded or maintained in whole or in part by any Funding
Source, or its rights or obligations, if any, to make Loans or Liquidity
Fundings or to provide (or participate in) the funding or maintenance
thereof; or
32
(v) 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:
(i) to increase the cost to or to impose a cost on (1) a Funding
Source funding or making or maintaining (or providing or agreeing to
provide funding for) any Loan, any Liquidity Funding or loans or other
extensions of credit under any Funding Agreement or any commitment of such
Funding Source with respect to any of the foregoing, or (2) the
Administrative Agent for continuing its or Borrower's relationship with any
Funding Source, in each case, in an amount deemed to be material by such
Funding Source,
(ii) to reduce the amount of any sum received or receivable by a
Funding Source under this Agreement or under any Liquidity Agreement, or
(iii) to reduce the rate of return on such Funding Source's
capital as a consequence of its Obligations, its Commitment, its Liquidity
Commitment, its obligations under any Funding Agreement or the Loans made
by it or otherwise arising in connection herewith (or therewith) to a level
below that which such Funding Source could have achieved but for the
occurrence of such circumstances,
then, within 15 days after demand by such Funding Source (which demand shall be
accompanied by a certificate setting forth the basis of such demand, Borrower
shall pay directly to such Funding Source such additional amount or amounts as
will compensate such Funding Source for such actual additional cost, increased
cost or reduction.
(b) Each Funding Source will promptly notify Borrower and the
Administrative Agent of any event of which it has knowledge which will
entitle such Funding Source to compensation pursuant to this Section 10.2;
PROVIDED, HOWEVER, no failure to give or delay in giving such notification
shall adversely affect the rights of any Funding Source to such
compensation.
(c) In determining any amount provided for or referred to in
this Section 10.2, a Funding Source may use any reasonable averaging and
attribution methods that it (in its sole discretion) shall deem applicable.
Any Funding Source when making a claim under this Section 10.2 shall submit
to Borrower the above-referenced certificate as to such actual increased
cost or actual reduced return (including calculation thereof in reasonable
detail), which shall, in the absence of manifest error, be conclusive and
binding upon Borrower.
Section 10.3 FUNDING LOSSES. If any Funding Source 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 Funding Source,
then, upon notice from such Funding Source to the Administrative Agent, Borrower
and the Servicer, Borrower shall pay to the Servicer, and the Servicer shall pay
to such Funding Sources upon demand, the amount of such loss or expense (which
shall include without limitation all Broken Funding Costs). Such notice (which
shall include the methodology for calculating, and the calculation of, the
amount of such actual loss or
33
expense, in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding upon Borrower and the Servicer.
Section 10.4 OTHER COSTS AND EXPENSES. Borrower shall pay to the
Administrative Agent and Blue Ridge on demand all costs and out-of-pocket
expenses in connection with the preparation, execution, delivery and
administration of this Agreement, the Transactions and the other documents to be
delivered hereunder, including without limitation, the cost of Blue Ridge's
auditors auditing the books, records and procedures of Borrower, reasonable fees
and out-of-pocket expenses of legal counsel for Blue Ridge and the
Administrative Agent with respect thereto and with respect to advising Blue
Ridge and the Administrative Agent as to their respective rights and remedies
under this Agreement. Borrower shall pay to the Administrative Agent on demand
any and all costs and expenses of the Administrative Agent and the Lenders, if
any, including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following an Amortization
Event. Borrower shall reimburse Blue Ridge on demand for all other costs and
expenses incurred by Blue Ridge ("OTHER COSTS"), including the cost of auditing
Blue Ridge's books by certified public accountants, the cost of rating the
Commercial Paper by independent financial rating agencies, and the reasonable
fees and out-of-pocket expenses of counsel for Blue Ridge or any counsel for any
shareholder of Blue Ridge with respect to advising Blue Ridge or such
shareholder as to matters relating to Blue Ridge's operations.
Section 10.5 ALLOCATIONS. Blue Ridge shall allocate the liability for
Other Costs among Borrower and other Persons with whom Blue Ridge has entered
into agreements to purchase interests in or finance receivables and other
financial assets ("OTHER Customers"). If any Other Costs are attributable to
Borrower and not attributable to any Other Customer, Borrower shall be solely
liable for such Other Costs. However, if Other Costs are attributable to Other
Customers and not attributable to Borrower, such Other Customer shall be solely
liable for such Other Costs. All allocations to be made pursuant to the
foregoing provisions of this Article X shall be made by Blue Ridge in its sole
discretion and shall be binding on Borrower and the Servicer.
ARTICLE XI
THE AGENT
Section 11.1 AUTHORIZATION AND ACTION. Each Lender hereby designates and
appoints Wachovia to act as its agent under the Transaction Documents and under
the Liquidity Agreement, and authorizes the Administrative Agent to take such
actions as agent on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Liquidity Agreement or the
Transaction Documents, together with such powers as are reasonably incidental
thereto. The Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth in the Liquidity Agreement or in any
Transaction Document, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Administrative Agent shall be read into the
Liquidity Agreement or any Transaction Document or otherwise exist for the
Administrative Agent. In performing its functions and duties under the Liquidity
Agreement and the
34
Transaction Documents, the Administrative Agent shall act solely as agent for
the Lenders and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for any Loan Party or any
of such Loan Party's successors or assigns. The Administrative Agent shall not
be required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to the Liquidity Agreement or any Transaction
Document or applicable law. The appointment and authority of the Administrative
Agent hereunder shall terminate upon the indefeasible payment in full of all
Obligations. Each Lender hereby authorizes the Administrative Agent to execute
each of the UCC financing statements and each Collection Account Agreement on
behalf of such Lender (the terms of which shall be binding on such Lender).
Section 11.2 DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under the Liquidity Agreement and each Transaction Document by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
Section 11.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor
any of its directors, officers, agents or employees shall be (i) liable for any
action lawfully taken or omitted to be taken by it or them under or in
connection with the Liquidity Agreement or any Transaction Document (except for
its, their or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party contained in the Liquidity
Agreement, any Transaction Document or any certificate, report, statement or
other document referred to or provided for in, or received under or in
connection with, any Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Liquidity
Agreement or any Transaction Document or any other document furnished in
connection therewith, or for any failure of any Loan Party to perform its
obligations under any Transaction Document, or for the satisfaction of any
condition specified in Article VI, or for the perfection, priority, condition,
value or sufficiency of any collateral pledged in connection herewith. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, any Transaction
Document, or to inspect the properties, books or records of the Loan Parties.
The Administrative Agent shall not be deemed to have knowledge of any
Amortization Event or Unmatured Amortization Event unless the Administrative
Agent has received notice from a Loan Party or a Lender.
Section 11.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall in all cases be entitled to rely, and shall be fully protected in relying,
upon any document or conversation believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall in all cases be fully justified in failing or
refusing to take any action under the Liquidity Agreement or any Transaction
Document unless it shall first receive such advice or concurrence of Blue Ridge
or the Required Liquidity Banks or all of the Lenders, as applicable, as it
deems appropriate and it shall first be indemnified to its satisfaction by the
Lenders, PROVIDED THAT unless and until the Administrative Agent shall have
received such
35
advice, the Administrative Agent may take or refrain from taking any action, as
the Administrative Agent shall deem advisable and in the best interests of the
Lenders. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Blue Ridge
or the Required Liquidity Banks or all of the Lenders, as applicable, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.
Section 11.5 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent, nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of any
Loan Party, shall be deemed to constitute any representation or warranty by the
Administrative Agent. Each Lender represents and warrants to the Administrative
Agent that it has and will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of Borrower and made its own decision to
enter into the Liquidity Agreement, the Transaction Documents and all other
documents related thereto.
Section 11.6 REIMBURSEMENT AND INDEMNIFICATION. The Liquidity Banks agree
to reimburse and indemnify the Administrative Agent and its officers, directors,
employees, representatives and agents ratably according to their Pro Rata
Shares, to the extent not paid or reimbursed by the Loan Parties (a) for any
amounts for which the Administrative Agent, acting in its capacity as
Administrative Agent, is entitled to reimbursement by the Loan Parties hereunder
and (b) for any other expenses incurred by the Administrative Agent, in its
capacity as Administrative Agent and acting on behalf of the Lenders, in
connection with the administration and enforcement of the Liquidity Agreement
and the Transaction Documents.
Section 11.7 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with Borrower or any Affiliate of
Borrower as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to the making of Loans pursuant to this Agreement, the
Administrative Agent shall have the same rights and powers under the Liquidity
Agreement and this Agreement in its individual capacity as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"LIQUIDITY BANK," "LENDER," "LIQUIDITY BANKS" and "LENDERS" shall include the
Administrative Agent in its individual capacity.
Section 11.8 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent,
upon five days' notice to the Loan Parties and the Lenders, may voluntarily
resign and may be removed at any time, with or without cause, by the Required
Liquidity Lenders; PROVIDED, HOWEVER, that Wachovia shall not voluntarily resign
as the Administrative Agent so long as any of the Liquidity Commitments remain
in effect or Blue Ridge has any outstanding Loans. If the Administrative Agent
(other than Wachovia) shall voluntarily resign or be removed as Administrative
Agent under this Agreement, then the Required Liquidity Lenders during such
five-day period shall appoint, with the consent of the Borrower from among the
remaining Liquidity Banks, a successor Administrative Agent, whereupon such
successor Administrative
36
Agent shall succeed to the rights, powers and duties of the Administrative Agent
and the term "ADMINISTRATIVE AGENT" shall mean such successor agent, effective
upon its appointment, and the former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Administrative Agent or any of the
parties to this Agreement. Upon resignation or replacement of any Administrative
Agent in accordance with this Section 11.8, the retiring Administrative Agent
shall execute such UCC-3 assignments and amendments, and assignments and
amendments of the Liquidity Agreement and the Transaction Documents, as may be
necessary to give effect to its replacement by a successor Administrative Agent.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article XI and Article X shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 ASSIGNMENTS.
(a) Each of the Administrative Agent, the Loan Parties and the
Liquidity Banks hereby agrees and consents to the complete or partial
assignment by Blue Ridge of all or any portion of its rights under,
interest in, title to and obligations under this Agreement to the Liquidity
Banks pursuant to the Liquidity Agreement.
(b) Any Liquidity Bank may at any time and from time to time
assign to one or more Eligible Assignees (each, a "PURCHASING LIQUIDITY
BANK") all or any part of its rights and obligations under this Agreement
pursuant to an assignment agreement substantially in the form set forth in
Exhibit VII (an "ASSIGNMENT AGREEMENT") executed by such Purchasing
Liquidity Bank and such selling Liquidity Bank; PROVIDED, HOWEVER, that any
assignment of a Liquidity Bank's rights and obligations hereunder shall
include a pro rata assignment of its rights and obligations under the
Liquidity Agreement. The consent of Blue Ridge shall be required prior to
the effectiveness of any such assignment. Each assignee of a Liquidity Bank
must (i) be an Eligible Assignee and (ii) agree to deliver to the
Administrative Agent, promptly following any request therefor by the
Administrative Agent or Blue Ridge, an enforceability opinion in form and
substance satisfactory to the Administrative Agent and Blue Ridge. Upon
delivery of an executed Assignment Agreement to the Administrative Agent,
such selling Liquidity Bank shall be released from its obligations
hereunder and under the Liquidity Agreement to the extent of such
assignment. Thereafter the Purchasing Liquidity Bank shall for all purposes
be a Liquidity Bank party to this Agreement and the Liquidity Agreement and
shall have all the rights and obligations of a Liquidity Bank hereunder and
thereunder to the same extent as if it were an original party hereto and
thereto and no further consent or action by Borrower, the Lenders or the
Administrative Agent shall be required.
(c) Each of the Liquidity Banks agrees that if it shall suffer a
Downgrading Event, such Downgraded Liquidity Bank shall be obliged, at the
request of Blue Ridge or the Administrative Agent, to (i) collateralize its
Commitment and its Liquidity
37
Commitment in a manner acceptable to the Administrative Agent, or (ii)
assign all of its rights and obligations hereunder and under the Liquidity
Agreement to an Eligible Assignee nominated by the Administrative Agent or
a Loan Party and acceptable to Blue Ridge and willing to participate in
this Agreement and the Liquidity Agreement through the Liquidity
Termination Date in the place of such Downgraded Liquidity Bank; PROVIDED
THAT the Downgraded Liquidity Bank receives payment in full, pursuant to an
Assignment Agreement, of an amount equal to such Liquidity Bank's Pro Rata
Share of the Obligations owing to the Liquidity Banks.
(d) Except in connection with a Permitted Restructuring, no Loan
Party may assign any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent and each of
the Lenders and without satisfying the Rating Agency Condition.
Section 12.2 PARTICIPATIONS. Any Liquidity Bank may, in the ordinary
course of its business at any time sell to one or more Persons (each, a
"PARTICIPANT") participating interests in its Pro Rata Share of the Aggregate
Commitment, its Loans, its Liquidity Commitment or any other interest of such
Liquidity Bank hereunder or under the Liquidity Agreement. Notwithstanding any
such sale by a Liquidity Bank of a participating interest to a Participant, such
Liquidity Bank's rights and obligations under this Agreement and the Liquidity
Agreement shall remain unchanged, such Liquidity Bank shall remain solely
responsible for the performance of its obligations hereunder and under the
Liquidity Agreement, and the Loan Parties, Blue Ridge and the Administrative
Agent shall continue to deal solely and directly with such Liquidity Bank in
connection with such Liquidity Bank's rights and obligations under this
Agreement and the Liquidity Agreement. Each Liquidity Bank agrees that any
agreement between such Liquidity Bank and any such Participant in respect of
such participating interest shall not restrict such Liquidity Bank's right to
agree to any amendment, supplement, waiver or modification to this Agreement,
except for any amendment, supplement, waiver or modification described in
Section 14.1(b)(i).
ARTICLE XIII
SECURITY INTEREST
Section 13.1 GRANT OF SECURITY INTEREST. To secure the due and punctual
payment of the Obligations, whether now or hereafter existing, due or to become
due, direct or indirect, or absolute or contingent, including all Indemnified
Amounts, in each case pro rata according to the respective amounts thereof, the
Borrower hereby grants to the Administrative Agent, for the benefit of the
Secured Parties, a security interest in, all of the Borrower's right, title and
interest, whether now owned and existing or hereafter arising in and to all of
the Receivables, the Related Security, the Collections and all proceeds of the
foregoing (collectively, the "COLLATERAL").
Section 13.2 TERMINATION AFTER FINAL PAYOUT DATE. Each of the Secured
Parties hereby authorizes the Administrative Agent, and the Administrative Agent
hereby agrees, promptly after the Final Payout Date to execute and deliver to
the Borrower such UCC termination statements as may be necessary to terminate
the Administrative Agent's security interest in and lien upon the Collateral,
all at the Borrower's expense. Upon the Final Payout Date, all right, title and
38
interest of the Administrative Agent and the other Secured Parties in and to the
Collateral shall terminate.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 WAIVERS AND AMENDMENTS.
(a) No failure or delay on the part of the Administrative Agent,
any Loan Party or any Lender in exercising any power, right or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other
further exercise thereof or the exercise of any other power, right or
remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the
specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with this Section
14.1(b). Blue Ridge, Borrower and the Administrative Agent, at the
direction of the Required Liquidity Banks, may enter into written
modifications or waivers of any provisions of this Agreement, PROVIDED,
HOWEVER, that no such modification or waiver shall:
(i) without the consent of each affected Lender, (1)
extend the Liquidity Termination Date or the date of any payment or
deposit of Collections by Borrower or the Servicer, (2) reduce the
rate or extend the time of payment of Interest or any CP Costs (or
any component of Interest or CP Costs), (3) reduce any fee payable
to the Administrative Agent for the benefit of the Lenders, (4)
except pursuant to Article XII, change the amount of the principal
of any Lender, any Liquidity Bank's Pro Rata Share or any Liquidity
Bank's Commitment, (5) amend, modify or waive any provision of the
definition of Required Liquidity Banks or this Section 14.1(b), (6)
consent to or permit the assignment or transfer by Borrower of any
of its rights and obligations under this Agreement, (7) change the
definition of "ELIGIBLE RECEIVABLE," "LOSS RESERVE," "DILUTION
RESERVE," "YIELD RESERVE," "SERVICING RESERVE," "SERVICING FEE
RATE," "REQUIRED RESERVE" or "REQUIRED RESERVE FACTOR FLOOR" or (8)
amend or modify any defined term (or any defined term used directly
or indirectly in such defined term) used in clauses (1) through (7)
above in a manner that would circumvent the intention of the
restrictions set forth in such clauses; or
(ii) without the written consent of the then
Administrative Agent, amend, modify or waive any provision of this
Agreement if the effect thereof is to affect the rights or duties of
such Administrative Agent,
AND ANY MATERIAL AMENDMENT, WAIVER OR OTHER MODIFICATION OF THIS AGREEMENT SHALL
REQUIRE SATISFACTION OF THE RATING AGENCY CONDITION. Notwithstanding the
foregoing, (i) without the
39
consent of the Liquidity Banks, but with the consent of Borrower, the
Administrative Agent may amend this Agreement solely to add additional Persons
as Liquidity Banks hereunder and (ii) the Administrative Agent, the Required
Liquidity Banks and Blue Ridge may enter into amendments to modify Article XI,
Article XII, Section 14.13 or any other provision of this Agreement without the
consent of Borrower, PROVIDED THAT such amendment has no negative affect upon
Borrower. Any modification or waiver made in accordance with this Section 14.1
shall apply to each of the Lenders equally and shall be binding upon Borrower,
the Lenders and the Administrative Agent.
Section 14.2 NOTICES. Except as provided in this Section 14.2, all
notices, consents, approvals, demands and other communications provided for,
permitted or contemplated hereunder (including Sections 1.3, 7.2(a), 7.2(b),
8.1(b), 14.4(b)) shall be in writing (including bank wire, telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other parties hereto at their respective addresses or telecopy numbers set forth
on the signature pages hereof or at such other address or telecopy number as
such Person may hereafter specify for the purpose of notice to each of the other
parties hereto. Each such notice, consent, approval, demand or other
communication shall be effective (a) if given by telecopy, upon the receipt
thereof, (b) if given by mail (other than certified or registered mail), five
Business Days after the time such communication is deposited in the mail with
first class postage prepaid or (c) if given by any other means, when received at
the address specified in this Section 14.2. Borrower hereby authorizes the
Administrative Agent to effect Advances and Interest Period and Interest Rate
selections based on telephonic notices made by any Person whom the
Administrative Agent in good faith believes to be acting on behalf of Borrower.
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation of each telephonic notice signed by an authorized officer of
Borrower; PROVIDED, HOWEVER, the absence of such confirmation shall not affect
the validity of such notice. If the written confirmation differs from the action
taken by the Administrative Agent, the records of the Administrative Agent shall
govern absent manifest error.
Section 14.3 RATABLE PAYMENTS. If any Lender, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Obligations
owing to such Lender (other than payments received pursuant to Section 10.2 or
10.3) in a greater proportion than that received by any other Lender entitled to
receive a ratable share of such Obligations, such Lender agrees, promptly upon
demand, to purchase for cash without recourse or warranty a portion of such
Obligations held by the other Lenders so that after such purchase each Lender
will hold its ratable proportion of such Obligations; PROVIDED THAT if all or
any portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
Section 14.4 PROTECTION OF ADMINISTRATIVE AGENT'S SECURITY INTEREST.
(a) Borrower agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take
all actions, that may be necessary or desirable, or that the Administrative
Agent may request, to perfect, protect or more fully evidence the
Administrative Agent's security interest in the Collateral, or to enable
the Administrative Agent or the Lenders to exercise and enforce their
rights and remedies hereunder. At any time after the occurrence of an
Amortization Event, the
40
Administrative Agent may, or the Administrative Agent may direct Borrower
or the Servicer to, notify the Obligors of Receivables, at Borrower's
expense, of the ownership or security interests of the Lenders under this
Agreement and may also direct that payments of all amounts due or that
become due under any or all Receivables be made directly to the
Administrative Agent or its designee. Borrower or the Servicer (as
applicable) shall, at any Lender's request, withhold the identity of such
Lender in any such notification.
(b) If any Loan Party fails to perform any of its obligations
hereunder, the Administrative Agent or any Lender may (but shall not be
required to) perform, or cause performance of, such obligations, and the
Administrative Agent's or such Lender's costs and expenses incurred in
connection therewith shall be payable by Borrower as provided in Section
10.3. Each Loan Party irrevocably authorizes the Administrative Agent at
any time and from time to time in the sole discretion of the Administrative
Agent, and appoints the Administrative Agent as its attorney-in-fact, to
act on behalf of such Loan Party (i) to execute on behalf of Borrower as
debtor and to file financing statements necessary or desirable in the
Administrative Agent's sole discretion to perfect and to maintain the
perfection and priority of the interest of the Lenders in the Receivables
and (ii) to file a carbon, photographic or other reproduction of this
Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Administrative Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the Administrative Agent's security interest in
the Collateral, for the benefit of the Secured Parties. This appointment is
coupled with an interest and is irrevocable. Each of the Loan Parties
hereby: (i) authorizes the Administrative Agent to file financing
statements and other filing or recording documents with respect to the
Receivables and Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the signature or
other authorization of such Loan Party, in such form and in such offices as
the Administrative Agent reasonably determines appropriate to perfect or
maintain the perfection of the security interest of the Administrative
Agent hereunder, (ii) acknowledges and agrees that it is not authorized to,
and will not, file financing statements or other filing or recording
documents with respect to the Receivables or Related Security (including
any amendments thereto, or continuation or termination statements thereof),
without the express prior approval by the Administrative Agent, consenting
to the form and substance of such filing or recording document, and (iii)
approves, authorizes and ratifies any filings or recordings made by or on
behalf of the Administrative Agent in connection with the perfection of the
security interests in favor of Borrower or the Administrative Agent.
41
Section 14.5 CONFIDENTIALITY.
(a) Each Loan Party and each Lender shall maintain and shall
cause each of its employees and officers to maintain the confidentiality of
this Agreement and the other confidential or proprietary information with
respect to the Administrative Agent and Blue Ridge and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the Transactions, except that such Loan Party
and such Lender and its officers and employees may disclose such
information to such Loan Party's and such Lender's external accountants and
attorneys and as required by any applicable law or order of any judicial or
administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Loan
Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Administrative Agent, the Liquidity Banks or Blue
Ridge by each other, (ii) by the Administrative Agent or the Lenders to any
prospective or actual assignee or participant of any of them and (iii) by
the Administrative Agent to any rating agency, Commercial Paper dealer or
provider of a surety, guaranty or credit or liquidity enhancement to Blue
Ridge or any entity organized for the purpose of purchasing, or making
loans secured by, financial assets for which Wachovia acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, PROVIDED THAT each such
Person is informed of the confidential nature of such information. In
addition, the Lenders and the Administrative Agent may disclose any such
nonpublic information pursuant to any law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).
Section 14.6 BANKRUPTCY PETITION. Borrower, the Servicer, the
Administrative Agent and each Liquidity Bank hereby covenants and agrees that,
prior to the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of Blue Ridge, it will not institute against, or
join any other Person in instituting against, Blue Ridge any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 14.7 LIMITATION OF LIABILITY. Except with respect to any claim
arising out of the willful misconduct or gross negligence of Blue Ridge, the
Administrative Agent or any Liquidity Bank, no claim may be made by any Loan
Party or any other Person against Blue Ridge, the Administrative Agent or any
Liquidity Bank or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the Transactions, or any act, omission or event
occurring in connection therewith; and each Loan Party hereby waives, releases,
and agrees not to xxx upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW (EXCEPT IN
42
THE CASE OF THE OTHER TRANSACTION DOCUMENTS, TO THE EXTENT OTHERWISE EXPRESSLY
STATED THEREIN) AND EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP
INTEREST OF THE BORROWER OR THE SECURITY INTEREST OF THE AGENT, FOR THE BENEFIT
OF THE SECURED PARTIES, IN ANY OF THE COLLATERAL IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
Section 14.9 CONSENT TO JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR
NEW YORK STATE COURT SITTING IN
NEW YORK, NEW YORK, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY LOAN PARTY AGAINST THE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT
OR ANY DOCUMENT EXECUTED BY SUCH LOAN PARTY PURSUANT TO THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY LOAN
PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR
THEREUNDER.
Section 14.11 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS.
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). 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
43
until terminated in accordance with its terms; PROVIDED, HOWEVER, that the
rights and remedies with respect to (i) any breach of any representation
and warranty made by any Loan Party pursuant to Article V, (ii) the
indemnification and payment provisions of Article X, and Sections 14.5 and
14.6 shall be continuing and shall survive any termination of this
Agreement.
Section 14.12 COUNTERPARTS; SEVERABILITY. This Agreement may be executed
in any number of counterparts and by 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. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of a signature page to this Agreement. Any provisions of this
Agreement which are prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 14.13 WACHOVIA ROLES. Each of the Liquidity Banks acknowledges
that Wachovia acts, or may in the future act: (a) as administrative agent for
Blue Ridge or any Liquidity Bank, (b) as an issuing and paying agent for the
Commercial Paper, (c) to provide credit or liquidity enhancement for the timely
payment for the Commercial Paper, or (iv) to provide other services from time to
time for Blue Ridge or any Liquidity Bank (collectively, the "WACHOVIA ROLES").
Without limiting the generality of this Section 14.13, each Liquidity Bank
hereby acknowledges and consents to any and all Wachovia Roles and agrees that
in connection with any Wachovia Role, Wachovia may take, or refrain from taking,
any action that it, in its discretion, deems appropriate, including in its role
as administrative agent for Blue Ridge, and the giving of notice of a mandatory
purchase pursuant to the Liquidity Agreement.
Section 14.14 CONSTRUCTION OF THIS AGREEMENT AND CERTAIN TERMS AND
PHRASES.
(a) Unless the context of this Agreement otherwise requires, (i)
words of any gender include each gender; (ii) words using the singular or
plural number also include the plural or singular number, respectively;
(iii) the terms "hereof," "herein," "hereby," and derivative or similar
words refer to this entire Agreement and not to any particular provision of
this Agreement; and (iv) the terms "Article," "Section," "Schedule" and
"Exhibit" without reference to a specified document refer to the specified
Article, Section, Schedule and Exhibit, respectively, of this Agreement.
(b) The words "including," "include" and "includes" are not
exclusive and shall be deemed to be followed by the words "without
limitation"; if exclusion is intended, the word "compromising" is used
instead.
(c) The word "or" shall be construed to mean "or" unless the
context clearly prohibits that construction.
(d) Whenever this Agreement refers to a number of days, such
number shall refer to calendar days unless Business Days are specified.
44
(e) All accounting terms used herein and not expressly defined
herein shall have the meanings given to them under GAAP as consistently
applied by the Person whose financial statements or practices are at issue.
(f) All terms used in Article 9 of the UCC in the State of New
York and not specifically defined herein shall have the meaning given to
them in such Article 9.
Any representation or warranty contained herein as to the
enforceability of a contract shall be subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium or other similar law affecting the
enforcement of creditors' rights generally and to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
[SIGNATURE PAGES FOLLOW]
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
hereof.
SPHERION RECEIVABLES CORP.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President, Corporate Finance
and Treasury and Treasurer
Address: 0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
SPHERION CORPORATION, as initial Servicer
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President, Corporate
Finance and Treasury
Address: 0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
[Signature Page to
Credit and Security Agreement]
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, NATIONAL ASSOCIATION, ITS ATTORNEY-IN-FACT
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Address: Blue Ridge Asset Funding Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
and
Blue Ridge Asset Funding Corporation
c/o AMACAR Group, L.L.C.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Liquidity Bank and as Administrative Agent
By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: Director
Address: Wachovia Bank, National Association
000 Xxxxxxxxx Xxxxxx, 26th Floor
Mail Stop GA8047
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
[Signature Page to
Credit and Security Agreement]
EXHIBIT I
DEFINITIONS
AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE
FOLLOWING MEANINGS (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO BOTH THE SINGULAR
AND PLURAL FORMS OF THE TERMS DEFINED):
"ACCOUNTING CHANGE" means any change in GAAP or in any regulatory
accounting principles.
"ADJUSTED DILUTION RATIO" means, at any time, the rolling average of
the Dilution Ratio for the 12 Calculation Periods then most recently ended.
"ADMINISTRATIVE AGENT" has the meaning set forth in the preamble to
this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means account #8735-098787 at
Wachovia Bank, National Association, ABA #000000000.
"ADVANCE" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made on the same Borrowing Date.
"ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.
"AGGREGATE COMMITMENT" means, on any date of determination, the
aggregate amount of the Liquidity Banks' Commitments to make Loans hereunder. As
of the date hereof, the Aggregate Commitment is $200,000,000.
"AGGREGATE PRINCIPAL" means, on any date of determination, the
aggregate outstanding principal amount of all Advances outstanding on such date.
"AGGREGATE REDUCTION" has the meaning specified in Section 1.3.
"AGREEMENT" means this
Credit and Security Agreement, as it may be
amended or modified and in effect from time to time.
48
"ALTERNATE BASE RATE" means for any day, the rate PER ANNUM equal to
the higher as of such day of (a) the Prime Rate, or (b) one percent (1.00%)
above the Federal Funds Rate. For purposes of determining the Alternate Base
Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall be
effective on the date of each such change.
"ALTERNATE BASE RATE LOAN" means a Loan which bears interest at the
Alternate Base Rate or the Default Rate.
"AMORTIZATION DATE" means the earliest to occur of (a) the Business
Day immediately prior to the occurrence of an Event of Bankruptcy with respect
to any Loan Party, (b) the Business Day specified in a notice from the
Administrative Agent following the occurrence of any other Amortization Event,
and (c) the date which is 10 Business Days after the Administrative Agent's
receipt of notice from Borrower that it wishes to terminate the facility
evidenced by this Agreement.
"AMORTIZATION EVENT" has the meaning specified in Article IX.
"ASSIGNMENT AGREEMENT" has the meaning set forth in Section 12.1(b).
"AUTHORIZED OFFICER" means (a) with respect to Spherion, any of its
President/CEO; Executive Vice President/CFO; Vice President, Business Services
and Controller and Secretary; Vice President, Corporate Finance and Treasury;
Vice President, General Counsel and Secretary; Vice President, Risk Management;
Treasurer; Assistant Treasurer; or Assistant Secretary, acting singly, (b) with
respect to Spherion Assessment Inc., any of its, CEO; Executive Vice
President/CFO; Vice President; Vice President, Corporate Finance and Treasury;
Vice President, General Counsel and Secretary; Treasurer; or Assistant
Treasurer, acting singly, (c) with respect to Norcross Teleservices Inc., Comtex
Information Systems, Inc., Spherion Atlantic Enterprises LLC, Spherion Pacific
Enterprises LLC, Spherion Atlantic Operations LLC, Spherion Pacific Operations
LLC, Spherion Atlantic Resources LLC, Spherion Atlantic Workforce LLC, Spherion
Pacific Resources LLC, and Spherion Pacific Workforce LLC, any of its
President/CEO; Executive Vice President/CFO; Vice President; Vice President,
Corporate Finance and Treasury; Vice President, General Counsel and Secretary;
Treasurer; or Assistant Treasurer; acting singly, (d) with respect to the
Borrower, any of its, President/CEO; Executive Vice President/CFO; Vice
President; Vice President, Corporate Finance and Treasury; Vice President,
General Counsel and Secretary; Treasurer; Assistant Treasurer; or Assistant
Secretary, acting singly.
"BLUE RIDGE" has the meaning set forth in the preamble to this
Agreement.
"BORROWER" has the meaning set forth in the preamble to this
Agreement.
"BORROWING BASE" means, on any date of determination, the Net Pool
Balance as of the last day of the period covered by the most recent Monthly
Report, MINUS the Required Reserve as of the last day of the period covered by
the most recent Monthly Report, and MINUS Deemed Collections that have occurred
since the most recent Cut-Off Date to the extent that such Deemed Collections
exceed the Dilution Reserve.
49
"BORROWING DATE" means a Business Day on which an Advance is made
hereunder.
"BORROWING LIMIT" has the meaning set forth in Section 1.2.
"BORROWING NOTICE" has the meaning set forth in Section 1.2.
"BROKEN FUNDING COSTS" means for any CP Rate Loan or LIBO Rate Loan
which: (a) in the case of a CP Rate Loan, has its principal reduced without
compliance by Borrower with the notice requirements hereunder, (b) in the case
of a CP Rate Loan or a LIBO Rate Loan, does not become subject to an Aggregate
Reduction following the delivery of any Reduction Notice, (c) in the case of a
CP Rate Loan, is assigned under the Liquidity Agreement, or (d) in the case of a
LIBO Rate Loan, is terminated or reduced prior to the last day of its Interest
Period, an amount equal to the excess, if any, of (i) the CP Costs or Interest
(as applicable) that would have accrued during the remainder of the Interest
Periods or the tranche periods for Commercial Paper determined by the
Administrative Agent to relate to such Loan (as applicable) subsequent to the
date of such reduction, assignment or termination (or in respect of clause (b)
above, the date such Aggregate Reduction was designated to occur pursuant to the
Reduction Notice) of the principal of such Loan if such reduction, assignment or
termination had not occurred or such Reduction Notice had not been delivered,
over (ii) the sum of (x) to the extent all or a portion of such principal is
allocated to another Loan, the amount of CP Costs or Interest actually accrued
during the remainder of such period on such principal for the new Loan, and (y)
to the extent such principal is not allocated to another Loan, the income, if
any, actually received during the remainder of such period by the holder of such
Loan from investing the portion of such principal not so allocated. If the
amount referred to in clause (b) exceeds the amount referred to in clause (a),
the relevant Lender or Lenders agree to pay to Borrower the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
"BUSINESS DAY" means any day on which banks are not authorized or
required to close in New York, New York or Atlanta, Georgia, and The Depository
Trust Company of New York is open for business, and, if the applicable Business
Day relates to any computation or payment to be made with respect to the LIBO
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.
"CALCULATION PERIOD" means an accounting month.
"CASH EQUIVALENTS" shall mean, as to any Person, (a) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (PROVIDED that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
one (1) year from the date of acquisition, (b) time deposits or certificates of
deposit of any commercial bank incorporated under the laws of the United States
or any state thereof, of recognized standing having capital and unimpaired
surplus in excess of $1,000,000,000 and whose short-term commercial paper rating
at the time of acquisition is at least A-1 or the equivalent thereof by Standard
& Poor's Corporation or at least P-1 or the equivalent thereof by Xxxxx'x
Investors Services, Inc. (any such bank, an "Approved Bank"),
50
with such deposits or certificates having maturities of not more than one year
from the date of acquisition, (c) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses (a)
and (b) above entered into with any Approved Bank, (d) commercial paper or
finance company paper issued by any Person incorporated under the laws of the
United States or any state thereof and rated at least A-1 or the equivalent
thereof by Standard & Poor's Corporation or at least P-1 or the equivalent
thereof by Xxxxx'x Investors Service, Inc., and in each case maturing not more
than one year after the date of acquisition, and (e) investments in money market
funds that are registered under the Investment Company Act of 1940, as amended,
which have net assets of at least $1,000,000,000 and at least eighty-five
percent (85%) of whose assets consist of securities and other obligations of the
type described in clauses (a) through (d) above. All such Cash Equivalents must
be denominated solely for payment in Dollars.
"CHANGE OF CONTROL" means the acquisition by any Person or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding voting stock of any Loan Party.
"COLLATERAL" has the meaning set forth in Section 13.1.
"COLLECTION ACCOUNT" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited and which is listed on Exhibit IV.
"COLLECTION ACCOUNT AGREEMENT" means an agreement substantially in the
form of Exhibit VI among an Originator, Borrower, the Administrative Agent and a
Collection Bank.
"COLLECTION BANK" means, at any time, any of the banks holding one or
more Collection Accounts.
"COLLECTION NOTICE" means a notice, in substantially the form of Annex
A to Exhibit VI, from the Administrative Agent to a Collection Bank.
"COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
all Finance Charges or other related amounts accruing in respect thereof and all
cash proceeds of Related Security with respect to such Receivable.
"COMMERCIAL PAPER" means promissory notes of Blue Ridge issued by Blue
Ridge in the commercial paper market.
"COMMITMENT" means, for each Liquidity Bank, the commitment of such
Liquidity Bank to make Loans to Borrower hereunder if Blue Ridge elects not to
fund any Advance in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Liquidity Bank's name on
Schedule A.
"COMMITMENT INCREASE REQUEST" has the meaning set forth in Section
1.7.
51
"CONTINGENT OBLIGATION" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, any comfort letter, operating agreement, take-or-pay
contract or application for a letter of credit.
"CONTRACT" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable.
"CP COSTS" means, for each day, the sum of (a) discount or interest
accrued on Pooled Commercial Paper on such day, plus (b) any and all accrued
commissions in respect of placement agents and Commercial Paper dealers, and
issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (c) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase facilities which are
funded by Pooled Commercial Paper for such day, minus (d) any accrual of income
net of expenses received on such day from investment of collections received
under all receivable purchase or financing facilities funded substantially with
Pooled Commercial Paper, minus (e) any payment received on such day net of
expenses in respect of Broken Funding Costs (or similar costs) related to the
prepayment of any investment of Blue Ridge pursuant to any receivable purchase
or financing facilities funded substantially with Pooled Commercial Paper. In
addition to the foregoing costs, if Borrower shall request any Advance during
any period of time determined by the Administrative Agent in its sole discretion
to result in incrementally higher CP Costs applicable to such Advance, the
principal associated with any such Advance shall, during such period, be deemed
to be funded by Blue Ridge in a special pool (which may include capital
associated with other receivable purchase or financing facilities) for purposes
of determining such additional CP Costs applicable only to such special pool and
charged each day during such period against such principal.
"CP RATE LOAN" means, for each Loan of Blue Ridge prior to the time,
if any, when (a) it is refinanced with a Liquidity Funding pursuant to the
Liquidity Agreement, or (b) the occurrence of an Amortization Event and the
commencement of the accrual of Interest thereon at the Default Rate.
"CREDIT AND COLLECTION POLICY" means Borrower's credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in Exhibit VIII, as modified from time to time in
accordance with this Agreement.
"CUT-OFF DATE" means the last day of each monthly accounting period of
the Borrower as reflected on Schedule I.
"DAYS SALES OUTSTANDING" means, as of any day, an amount equal to the
product of (a) 91, multiplied by (b) the amount obtained by dividing (i) the
aggregate outstanding balance of Receivables as of the most recent Cut-Off Date,
by (ii) the aggregate amount of Receivables
52
created during the three Calculation Periods including and immediately preceding
such Cut-Off Date.
"DEEMED COLLECTIONS" means Collections deemed received by the Borrower
under Section 1.4(a).
"DEFAULT HORIZON RATIO" means, as of any Cut-Off Date, the ratio
(expressed as a decimal) computed by dividing (a) the aggregate sales generated
by the Originators during the four Calculation Periods ending on such Cut-Off
Date, by (b) the Net Pool Balance as of such Cut-off Date.
"DEFAULT RATE" means a rate per annum equal to the sum of (a) the
Alternate Base Rate, changing when and as the Alternate Base Rate changes plus
(b) 2.00%.
"DEFAULT RATIO" means, as of any Cut-Off Date, the ratio (expressed as
a percentage) computed by dividing (a) the total amount of Receivables which
became Defaulted Receivables during the Calculation Period that includes such
Cut-Off Date, by (b) the aggregate sales generated by the Originators during the
Calculation Period occurring four months prior to the Calculation Period ending
on such Cut-Off Date, provided, however, the Receivables for which Worldcom or
Xxxxx Corning or any of their respective Subsidiaries is the Obligor and which
become Defaulted Receivables solely as a result of the occurrence of an Event of
Bankruptcy with respect to Worldcom, Xxxxx Corning or any of their respective
Subsidiaries shall be excluded from the calculation of Default Ratio.
"DEFAULTED RECEIVABLE" means a Receivable: (a) as to which the Obligor
thereof has suffered an Event of Bankruptcy; (b) which, consistent with the
Credit and Collection Policy, would be written off Borrower's books as
uncollectible; or (c) as to which any payment, or part thereof, remains unpaid
for 121-150 days or more from the original invoice date for such payment.
"DELINQUENCY RATIO" means, at any time, a percentage equal to (a) the
aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (b) the aggregate Outstanding Balance of all
Receivables at such time, provided, however, the Receivables for which Worldcom
or Xxxxx Corning or any of their respective Subsidiaries is the Obligor and
which become Delinquent Receivables solely as a result of the occurrence of an
Event of Bankruptcy with respect to Worldcom, Xxxxx Corning or any of their
respective Subsidiaries shall be excluded from the calculation of Delinquency
Ratio.
"DELINQUENT RECEIVABLE" means a Receivable as to which any payment, or
part thereof, remains unpaid for 91-120 days from the original invoice date for
such payment.
"DILUTION" means the amount of any reduction or cancellation of the
Outstanding Balance of a Receivable as described in Section 1.4(a).
"DILUTION HORIZON RATIO" means, as of any Cut-off Date, a ratio
(expressed as a decimal), computed by dividing (a) the aggregate sales generated
by the Originators during the
53
1.5 Calculation Periods ending on such Cut-Off Date, by (b) the Net Pool Balance
as of such Cut-Off Date.
"DILUTION RATIO" means, as of any Cut-Off Date, a ratio (expressed as
a percentage), computed by dividing (a) the total amount of decreases in
Outstanding Balances due to Dilutions during the Calculation Period ending on
such Cut-Off Date, by (b) the aggregate sales generated by the Originators
during the Calculation Period prior to the Calculation Period ending on such
Cut-Off Date.
"DILUTION RESERVE" means, for any Calculation Period, the product
(expressed as a percentage) of:
(a) the sum of (i) two times the Adjusted Dilution Ratio as of the
immediately preceding Cut-Off Date, PLUS (ii) the Dilution Volatility
Component as of the immediately preceding Cut-Off Date, TIMES
(b) the Dilution Horizon Ratio as of the immediately preceding Cut-Off
Date.
"DILUTION VOLATILITY COMPONENT" means the product (expressed as a
percentage) of (a) the difference between (i) the highest three month rolling
average Dilution Ratio over the past 12 Calculation Periods and (ii) the
Adjusted Dilution Ratio, and (b) a fraction, the numerator of which is equal to
the amount calculated in (a)(i) of this definition and the denominator of which
is equal to the amount calculated in (b)(i) of this definition.
"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 S&P, or (ii) P-1 by Moody's.
"ELIGIBLE ASSIGNEE" means a commercial bank having a combined capital
and surplus of at least $250,000,000 with a rating of its (or its Spherion
holding company's) short-term securities equal to or higher than (a) A-1 by S&P
and (b) P-1 by Moody's.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(a) the Obligor of which (i) if a natural person, is a resident
of the United States or, if a corporation or other business organization, is
organized under the laws of the United States or any political subdivision
thereof and has its chief executive office in the United States; (ii) is not an
Affiliate of any of the parties hereto; and (iii) is not a government or a
governmental subdivision or agency as to which the assignment of receivables
owing therefrom requires compliance with the Federal Assignment of Claims Act or
other similar legislation (unless the Borrower has complied therewith);
PROVIDED, HOWEVER, that the Borrower shall not be required to comply with the
Federal Assignment of Claim Act or other similar legislation so long as the
aggregate amount of Receivables of the type described in this clause (a)(iii)
does not
54
exceed 3.5% of the aggregate Outstanding Balance of all Eligible Receivables as
of the last day of any Settlement Period,
(b) which is not a Defaulted Receivable or owing from an Obligor as
to which more than 35% of the aggregate Outstanding Balance of all Receivables
owing from such Obligor are Defaulted Receivables,
(c) which was not a Delinquent Receivable on the date on which it
was acquired by Borrower from the applicable Originator,
(d) which by its terms is due and payable within 30 days of the
original billing date therefor and has not had its payment terms extended more
than once,
(e) which is an "account" or "chattel paper" within the meaning of
Section 9-106 and Section 9-105, respectively, of the UCC of all applicable
jurisdictions,
(f) which is denominated and payable only in United States dollars
in the United States,
(g) which arises under a Contract in substantially the form of one
of the form contracts set forth on Exhibit X or otherwise approved by the
Administrative Agent in writing, which, together with such Receivable, is in
full force and effect and constitutes the legal, valid and binding obligation of
the related Obligor enforceable against such Obligor in accordance with its
terms subject to no offset, counterclaim or other defense,
(h) which arises under a Contract which (i) does not require the
Obligor under such Contract to consent to the transfer, sale, pledge or
assignment of the rights and duties of the applicable Originator or any of its
assignees under such Contract and (ii) does not contain a confidentiality
provision that purports to restrict the ability of any Lender to exercise its
rights under this Agreement, including, its right to review the Contract,
(i) which arises under a Contract that contains an obligation to
pay a specified sum of money, contingent only upon the sale of goods or the
provision of services by the applicable Originator,
(j) which, together with the Contract related thereto, does not
contravene any law, rule or regulation applicable thereto (including, any law,
rule and regulation relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation,
(k) which satisfies all applicable requirements of the Credit and
Collection Policy,
(l) which was generated in the ordinary course of the applicable
Originator's business,
55
(m) which arises solely from the sale of goods or the provision of
services to the related Obligor by the applicable Originator, and not by any
other Person (in whole or in part),
(n) as to which the Administrative Agent has not notified Borrower
that the Administrative Agent has determined that such Receivable or class of
Receivables is not acceptable as an Eligible Receivable, including, because such
Receivable arises under a Contract that is not acceptable to the Administrative
Agent,
(o) which is not subject to any dispute, counterclaim, right of
rescission, set-off, counterclaim or any other defense (including defenses
arising out of violations of usury laws) of the applicable Obligor against the
applicable Originator or any other Adverse Claim, and the Obligor thereon holds
no right as against such Originator to cause such Originator to repurchase the
goods or merchandise the sale of which shall have given rise to such Receivable
(except with respect to sale discounts effected pursuant to the Contract, or
defective goods returned in accordance with the Contract); PROVIDED, HOWEVER,
that if such dispute, offset, counterclaim or defense affects only a portion of
the Outstanding Balance of such Receivable, then such Receivable may be deemed
an Eligible Receivable to the extent of the portion of such Outstanding Balance
which is not so affected, and PROVIDED, FURTHER, that Receivables of any Obligor
which has any accounts payable by the applicable Originator or by a wholly-owned
Subsidiary of such Originator (thus giving rise to a potential offset against
such Receivables) may be treated as Eligible Receivables to the extent that the
Obligor of such Receivables has agreed pursuant to a written agreement in form
and substance satisfactory to the Administrative Agent, that such Receivables
shall not be subject to such offset,
(p) as to which the applicable Originator has satisfied and fully
performed all obligations on its part with respect to such Receivable required
to be fulfilled by it, and no further action is required to be performed by any
Person with respect thereto other than payment thereon by the applicable
Obligor,
(q) as to which each of the representations and warranties
contained in Sections 5.1(i), (j), (r), (s), (t) and (u) is true and correct,
(r) all right, title and interest to and in which has been validly
transferred by the applicable Originator directly to Borrower under and in
accordance with the Receivables Sale Agreement, and Borrower has good and
marketable title thereto free and clear of any Adverse Claim (except as created
by the Transaction Documents), and
(s) the Obligor of which is not Worldcom, Xxxxx Corning or any of
their respective Subsidiaries that have suffered an Event of Bankruptcy.
"EQUITY INTERESTS" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or
56
distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with Performance Guarantor within the meaning
of Section 414(b) or (c) of the Tax Code (and Sections 414(m) and (o) of the Tax
Code for purposes of provisions relating to Section 412 of the Tax Code).
"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 (other than a trustee under a deed of trust,
indenture or similar instrument), 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.
"EXTENSION REQUEST" has the meaning set forth in Section 1.8.
"FACILITY ACCOUNT" means Borrower's account no. 0000000000 at Bank of
America, N.A.
"FACILITY TERMINATION DATE" means the earliest of (a) the Liquidity
Termination Date, (b) the Amortization Date and (c) the Scheduled Termination
Date.
"FEDERAL BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.
57
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate PER ANNUM for each day during such period equal 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 preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 11:30 a.m. (New York time) for such day on such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.
"FEE LETTER" means that certain letter agreement dated as of the date
hereof among Borrower, Spherion and the Administrative Agent, as it may be
amended or modified and in effect from time to time.
"FINAL PAYOUT DATE" means the date on which all Obligations have been
paid in full and the Aggregate Commitment has been terminated.
"FINANCE CHARGES" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.
"FUNDING AGREEMENT" means (a) this Agreement, (b) the Liquidity
Agreement and (c) any other agreement or instrument executed by any Funding
Source with or for the benefit of Blue Ridge.
"FUNDING SOURCE" means (a) any Liquidity Bank or (b) any insurance
company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to Blue Ridge.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"INDEBTEDNESS" of a Person means such Person's (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances, or other
instruments, (e) capitalized lease obligations, (f) net liabilities under
interest rate swap, exchange or cap agreements, (g) Contingent Obligations and
(h) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"INDEPENDENT DIRECTOR" shall mean a member of the Board of Directors
of Borrower who is not at such time, and has not been at any time during the
preceding five years: (a) a director, officer, employee or affiliate of
Performance Guarantor, any Originator or any of their respective Subsidiaries or
Affiliates (other than Borrower), or (b) the beneficial owner (at the time of
such individual's appointment as an Independent Director or at any time
thereafter
58
while serving as an Independent Director) of any of the outstanding common
shares of Borrower, any Originator, or any of their respective Subsidiaries or
Affiliates, having general voting rights.
"INTEREST" means for each respective Interest Period relating to Loans
of the Liquidity Banks, an amount equal to the product of the applicable
Interest Rate for each Loan multiplied by the principal of such Loan for each
day elapsed (including the first day but, excluding the last day) during such
Interest Period, annualized on a 360-day basis.
"INTEREST PERIOD" means, with respect to any Loan held by a Liquidity
Bank:
(a) if Interest for such Loan is calculated on the basis of the
LIBO Rate, a period of one, two, three or six months, or such other period
as may be mutually agreeable to the Administrative Agent and Borrower,
commencing on a Business Day selected by Borrower or the Administrative
Agent pursuant to this Agreement. Such Interest Period shall end on the day
in the applicable succeeding calendar month which corresponds numerically
to the beginning day of such Interest Period, PROVIDED, HOWEVER, that if
there is no such numerically corresponding day in such succeeding month,
such Interest Period shall end on the last Business Day of such succeeding
month; or
(b) if Interest for such Loan is calculated on the basis of the
Alternate Base Rate, a period commencing on a Business Day selected by
Borrower and agreed to by the Administrative Agent, PROVIDED THAT no such
period shall exceed one month.
If any Interest Period would end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, PROVIDED,
HOWEVER, that in the case of Interest Periods corresponding to the LIBO Rate, if
such next succeeding Business Day falls in a new month, such Interest Period
shall end on the immediately preceding Business Day. In the case of any Interest
Period for any Loan which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Interest
Period shall end on the Amortization Date. The duration of each Interest Period
which commences after the Amortization Date shall be of such duration as
selected by the Administrative Agent.
"INTEREST RATE" means, with respect to each Loan of the Liquidity
Banks, the LIBO Rate, the Alternate Base Rate or the Default Rate, as
applicable.
"INTEREST RESERVE" means, for any Calculation Period, the product
(expressed as a percentage) of (a) 1.5 TIMES (b) the Alternate Base Rate as of
the immediately preceding Cut-Off Date TIMES (c) a fraction the numerator of
which is the highest Days Sales Outstanding for the most recent 12 Calculation
Periods and the denominator of which is 360.
"INTERIM REPORT" means a report, in substantially the form of Exhibit
XII (appropriately completed), furnished by the Servicer to the Administrative
Agent pursuant to Section 8.5.
"LENDER" means Blue Ridge and each Liquidity Bank.
59
"LIBO RATE" means, for any Interest Period, (a) the rate per annum
determined on the basis of the offered rate for deposits in U.S. dollars of
amounts equal or comparable to the principal amount of the related Loan offered
for a term comparable to such Interest Period, which rates appear on a Bloomberg
L.P. terminal, displayed under the address "US0001M [INDEX] Q [GO]" effective as
of 11:00 A.M., London time, two Business Days prior to the first day of such
Interest Period, PROVIDED that if no such offered rates appear on such page, the
LIBO Rate for such Interest Period will be the arithmetic average (rounded
upwards, if necessary, to the next higher 1/100th of 1%) of rates quoted by at
least two major banks in New York, New York, selected by the Administrative
Agent, at approximately 10:00 a.m.(New York time), two Business Days prior to
the first day of such Interest Period, for deposits in U.S. dollars offered by
leading European banks for a period comparable to such Interest Period in an
amount comparable to the principal amount of such Loan, divided by (b) one minus
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal or other reserves) which is imposed against the Administrative Agent in
respect of Eurocurrency liabilities, as defined in Regulation D of the Board of
Governors of the Federal Reserve System as in effect from time to time
(expressed as a decimal), applicable to such Interest Period plus (ii) 1.0 % PER
ANNUM. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of
1%.
"LIBO RATE LOAN" means a Loan which bears interest at the LIBO Rate.
"LIQUIDITY AGREEMENT" means that certain Liquidity Asset Purchase
Agreement, dated as of July 31, 2002 by and among Blue Ridge, the Administrative
Agent and the banks from time to time party thereto, as the same may be amended,
restated or otherwise modified from time to time in accordance with the terms
thereof.
"LIQUIDITY BANKS" has the meaning set forth in the preamble in this
Agreement.
"LIQUIDITY COMMITMENT" means, as to each Liquidity Bank, its
commitment under the Liquidity Agreement (which shall equal 102% of its
Commitment hereunder).
"LIQUIDITY FUNDING" means (a) a purchase made by any Liquidity Bank
pursuant to its Liquidity Commitment of all or any portion of, or any undivided
interest in, a Blue Ridge Loan, or (b) any Loan made by a Liquidity Bank in lieu
of Blue Ridge pursuant to Section 1.1.
"LIQUIDITY TERMINATION DATE" means the earlier to occur of the
following:
(a) the date on which the Liquidity Banks' Liquidity Commitments
expire, cease to be available to Blue Ridge or otherwise cease to be in
full force and effect; or
(b) the date on which a Downgrading Event with respect to a Liquidity
Bank shall have occurred and been continuing for at least 30 days, and
either (i) the Downgraded Liquidity Bank shall not have been replaced by an
Eligible Assignee pursuant to the Liquidity Agreement, or (ii) the
Liquidity Commitment of such Downgraded Liquidity Bank shall not have been
funded or collateralized in such a manner that will avoid a reduction in or
withdrawal of the credit rating applied to the Commercial Paper to which
60
such Liquidity Agreement applies by any of the rating agencies then rating
such Commercial Paper.
"LOAN" means any loan made by a Lender to the Borrower pursuant to
this Agreement (including, any Liquidity Funding). Each Loan shall either be a
CP Rate Loan, an Alternate Base Rate Loan or a Eurodollar Rate Loan, selected in
accordance with this Agreement.
"LOAN PARTIES" has the meaning set forth in the preamble to this
Agreement.
"LOCK-BOX" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and which is listed on Exhibit IV.
"LOSS RESERVE" means, for any Calculation Period, the product
(expressed as a percentage) of (a) 2.0, times (b) the highest three-month
rolling average Default Ratio during the 12 Calculation Periods ending on the
immediately preceding Cut-Off Date, times (c) the Default Horizon Ratio as of
the immediately preceding Cut-Off Date.
"MATERIAL ACQUISITION" means, other than in connection with Permitted
Restructuring, that any Originator acquires the Outstanding Balance of
Receivables of one or more other Persons which are not Originators, whether by
purchase, merger, consolidation or otherwise, if (a) the aggregate Outstanding
Balance of Receivables so acquired from any one such Person exceeds 10% of the
Borrowing Base in effect on the date of acquisition, merger or consolidation, or
(b) the aggregate Outstanding Balance of Receivables so acquired from all
Persons in any calendar year exceeds (or from all such Persons in any calendar
year) exceeds 10% of the weighted average Borrowing Base in effect during such
calendar year.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
financial condition or operations of any Loan Party and its Subsidiaries taken
as a whole, (b) the ability of any Loan Party to perform its obligations under
this Agreement or the Performance Guarantor to perform its obligations under the
Performance Undertaking, (c) the legality, validity or enforceability of this
Agreement or any other Transaction Document, (d) the Administrative Agent's
security interest, for the benefit of the Secured Parties, in the Receivables
generally or in any significant portion of the Receivables, or the Collections
with respect thereto, or (e) the collectability of the Receivables generally or
of any material portion of the Receivables.
"MATERIAL PROPOSED ADDITION" means, other than in connection with a
Permitted Restructuring, a Person whom any Loan Party proposes to add as an
"Originator" under the Receivables Sale Agreement if either (a) the aggregate
Outstanding Balance of such Person's receivables (on the proposal date) exceeds
3% of the weighted average Borrowing Base in effect on the proposal date, or (b)
the Outstanding Balance of such Person's receivables (on such proposal date),
when aggregated with the receivables of all other Persons added as "Originators"
under the Receivables Sale Agreement in the same calendar year (measured on the
respective dates such other Persons became "sellers" under the Receivables Sale
Agreement) exceeds 10% of the weighted average Borrowing Base in effect during
such calendar year.
61
"MATERIAL SUBSIDIARY" has the meaning set forth in the Receivables
Sale Agreement.
"MONTHLY REPORT" means a report, in substantially the form of Exhibit
IX (appropriately completed), furnished by the Servicer to the Administrative
Agent pursuant to Section 8.5.
"MONTHLY REPORTING DATE" means the 15th Business Day of each monthly
accounting period after the date of this Agreement (or if any such day is not a
Business Day, the next succeeding Business Day thereafter) or such other days of
each monthly accounting period as the Administrative Agent shall request in
connection with Section 8.5.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NET POOL BALANCE" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by the aggregate amount
by which the Outstanding Balance of all Eligible Receivables of each Obligor and
its Affiliates exceeds the Obligor Concentration Limit for such Obligor.
"OBLIGATIONS" means, at any time, any and all obligations of either of
the Loan Parties to any of the Secured Parties arising under or in connection
with the Transaction Documents, whether now existing or hereafter arising, due
or accrued, absolute or contingent, including, obligations in respect of
Aggregate Principal, CP Costs, Interest, fees under the Fee Letter, Broken
Funding Costs and Indemnified Amounts.
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract.
"OBLIGOR CONCENTRATION LIMIT" means, at any time, in relation to the
aggregate Outstanding Balance of Receivables owed by any single Obligor and its
Affiliates (if any), the applicable concentration limit shall be determined as
follows for Obligors who have short term unsecured debt ratings currently
assigned to them by S&P and Moody's (or in the absence thereof, the equivalent
long term unsecured senior debt ratings), the applicable concentration limit
shall be determined according to the following table:
Allowable % of
S&P Rating Xxxxx'x Rating Eligible Receivables
--------------------------------------------------------------------------------------------
A-1+ P-1 10%
--------------------------------------------------------------------------------------------
A-1 P-1 8%
--------------------------------------------------------------------------------------------
A-2 P-2 6%
--------------------------------------------------------------------------------------------
A-3 P-3 3%
--------------------------------------------------------------------------------------------
Below A-3 or Not Rated by either Below P-3 or Not Rated by
S&P or Moody's either S&P or Moody's 2.5%
--------------------------------------------------------------------------------------------
; PROVIDED, HOWEVER, that (a) if any Obligor has a split rating, the applicable
rating will be the lower of the two, (b) if any Obligor is not rated by either
S&P or Moody's, the applicable
62
Obligor Concentration Limit shall be the one set forth in the last line of the
table above, and (c) subject to satisfaction of the Rating Agency Condition or
an increase in the percentage set forth in clause (a)(i) of the definition of
"REQUIRED RESERVE," upon the Borrower's request from time to time, the
Administrative Agent may agree to a higher percentage of Eligible Receivables
for a particular Obligor and its Affiliates (each such higher percentage, a
"SPECIAL CONCENTRATION LIMIT"), it being understood that any Special
Concentration Limit may be cancelled by the Administrative Agent upon five
Business Days' notice to the Loan Parties. The Administrative Agent hereby
agrees that International Business Machines Corp. shall have a Special
Concentration Limit of 11%.
"ORIGINATOR" means each of
Spherion Corporation, Spherion Assessment
Inc., Norcross Teleservices Inc., Comtex Information Systems, Inc., Spherion
Pacific Enterprises LLC, Spherion Atlantic Enterprises LLC, Spherion Pacific
Operations LLC, Spherion Atlantic Operations LLC, Spherion Atlantic Resources
LLC, Spherion Atlantic Workforce LLC, Spherion Pacific Resources LLC and
Spherion Pacific Workforce LLC, each in its capacity as an originator under the
Receivables Sale Agreement.
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof.
"XXXXX CORNING" means Xxxxx Corning, an Ohio corporation.
"PARTICIPANT" has the meaning set forth in Section 12.2.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which Performance Guarantor sponsors or
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five plan years.
"PERFORMANCE GUARANTOR" means Spherion, in its capacity as Performance
Guarantor under the Performance Undertaking.
"PERFORMANCE UNDERTAKING" means that certain Performance Undertaking,
dated as of July 31, 2002 by Performance Guarantor in favor of Borrower,
substantially in the form of Exhibit XI, as the same may be amended, restated or
otherwise modified from time to time.
"PERMITTED RESTRUCTURING" means any merger, consolidation or similar
combination of an Originator (a) with another Originator, or (b) with and into a
newly formed entity that is (i) domiciled in the United States of America, and
(ii wholly-owned, directly or indirectly, by Spherion, with no assets (other
than its initial paid-in capital) and no liabilities (other than minimal
organization costs) for the purpose of changing its legal form from a
corporation, partnership or limited liability company domiciled in one state of
the United States to a corporation, partnership or limited liability company
domiciled in another state, from a
63
corporation to a partnership or limited liability company, from a partnership to
a corporation or limited liability company, or from a limited liability company
to a partnership or corporation, as the case may be, or (c) with any other
Person to which the Administrative Agent gives its prior written consent, SO
LONG AS: (1) the successor or surviving entity unconditionally assumes such
Originator's (or Originators') respective obligations under the Transaction
Documents to which it is (or they are) a party immediately prior to giving
effect to such combination, (2) prior to the effectiveness of such combination,
all UCC financing statements necessary to maintain the validity, perfection and
priority of the Borrower's ownership interest in the Receivables and Related
Rights (as defined in the Receivables Sale Agreement) acquired or to be acquired
from such Originator or Originators under the Receivables Sale Agreement, and
the Administrative Agent's security interest therein, have been duly executed
and filed in all necessary jurisdictions, and (3) if the surviving entity in
such combination(s) is not an existing party to the Receivables Sale Agreement,
all other documents required to be delivered in connection with a Joinder
Agreement under the Receivables Sale Agreement have been duly executed and
delivered substantially contemporaneously with such combination(s).
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which Performance Guarantor or any of its ERISA Affiliates sponsors or
maintains or to which Performance Guarantor or any of its ERISA Affiliates
makes, is making, or is obligated to make contributions and includes any Pension
Plan, other than a Plan maintained outside the United States primarily for the
benefit of Persons who are not U.S. residents.
"POOLED COMMERCIAL PAPER" means Commercial Paper notes of Blue Ridge
subject to any particular pooling arrangement by Blue Ridge, but excluding
Commercial Paper issued by Blue Ridge for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Blue Ridge.
"PRIME RATE" means a rate PER ANNUM equal to the prime rate of
interest announced from time to time by Wachovia (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.
"PRO RATA SHARE" means, for each Liquidity Bank, a percentage equal to
the Commitment of such Liquidity Bank, divided by the Aggregate Commitment.
"PROPOSED REDUCTION DATE" has the meaning set forth in Section 1.3.
"PURCHASING LIQUIDITY BANK" has the meaning set forth in Section
12.1(b).
"RATING AGENCY CONDITION" means that Blue Ridge has received notice
from S&P and Moody's that an amendment, a change or a waiver will not result in
a withdrawal or downgrade of the then current ratings on Blue Ridge's Commercial
Paper.
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"RECEIVABLE" means all indebtedness and other obligations owed to
Borrower or any Originator (at the time it arises, and before giving effect to
any transfer or conveyance under the Receivables Sale Agreement) or in which
Borrower or an Originator has a security interest or other interest, including,
any indebtedness, obligation or interest constituting an account, chattel paper,
instrument or general intangible, arising in connection with the sale of goods
or the rendering of services by an Originator, and further includes, the
obligation to pay any Finance Charges with respect thereto. Indebtedness and
other rights and obligations arising from any one transaction, including,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting of
the indebtedness and other rights and obligations arising from any other
transaction; provided further, that any indebtedness, rights or obligations
referred to in the immediately preceding sentence shall be a Receivable
regardless of whether the account debtor or Borrower treats such indebtedness,
rights or obligations as a separate payment obligation.
"RECEIVABLES SALE AGREEMENT" means that certain Receivables Sale
Agreement, dated as of July 31, 2002, among the Originators and Borrower, as the
same may be amended, restated or otherwise modified from time to time.
"RECORDS" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, computer
programs, tapes, disks, punch cards, data processing software and related
property and rights) relating to such Receivable, any Related Security therefor
and the related Obligor.
"REDUCTION NOTICE" has the meaning set forth in Section 1.3.
"REGULATORY CHANGE" means the adoption after the date hereof of any
applicable law, rule or regulation (including any applicable law, rule or
regulation regarding capital adequacy) or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of Borrower's interest in the inventory and goods (including
returned or repossessed inventory or goods), if any, the sale of which by
an Originator gave rise to such Receivable, and all insurance contracts
with respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of
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such Receivable whether pursuant to the Contract related to such Receivable
or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of Borrower's right, title and interest in, to and under the
Receivables Sale Agreement in respect of such Receivable and all of
Borrower's right, title and interest in, to and under the Performance
Undertaking, and
(vii) all proceeds of any of the foregoing.
"REQUIRED LIQUIDITY BANKS" means, at any time, Liquidity Banks with
Commitments in excess of 66-2/3% of the Aggregate Commitment.
"REQUIRED NOTICE PERIOD" means the number of days required notice set
forth below applicable to the Aggregate Reduction indicated below:
AGGREGATE REDUCTION REQUIRED NOTICE PERIOD
------------------- ----------------------
less than 25% of the two Business Days
Aggregate Commitment
greater than or equal to five Business Days
25% but less than 50% of the
Aggregate Commitment
greater than or equal to 50% of 10 Business Days
the Aggregate Commitment
"REQUIRED RESERVE" means, on any day during a Calculation Period, the
product of (a) the greater of (i) the Required Reserve Factor Floor and (ii) the
sum of the Loss Reserve, the Interest Reserve, the Dilution Reserve and the
Servicing Reserve, times (b) the Net Pool Balance as of the Cut-Off Date
immediately preceding such Calculation Period.
"REQUIRED RESERVE FACTOR FLOOR" means, for any Calculation Period, the
sum (expressed as a percentage) of (a) 16.5% plus (b) the product of the
Adjusted Dilution Ratio and the Dilution Horizon Ratio, in each case, as of the
immediately preceding Cut-Off Date.
"RESPONSE DATE" has the meaning set forth in Section 1.8.
"RESTRICTED JUNIOR PAYMENT" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Borrower now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock or in any junior
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class of stock of Borrower, (b) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of capital stock of Borrower now or hereafter
outstanding, (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to the Subordinated Loans (as defined in the
Receivables Sale Agreement), (d) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of capital stock of
Borrower now or hereafter outstanding, and (e) any payment of management fees by
Borrower (except for reasonable management fees to any Originator or its
Affiliates in reimbursement of actual management services performed).
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"SCHEDULED TERMINATION DATE" means July 30, 2003, unless extended in
accordance with Section 1.8.
"SECURED PARTIES" means the Indemnified Parties.
"SERVICER" means at any time the Person (which may be the
Administrative Agent) then authorized pursuant to Article VIII to service,
administer and collect Receivables.
"SERVICING FEE" means, for each day in a Calculation Period:
(a) an amount equal to (i) the Servicing Fee Rate (or, at any time
while Spherion or one of its Affiliates is the Servicer, such lesser
percentage as may be agreed between the Borrower and the Servicer on an
arms' length basis based on then prevailing market terms for similar
services), TIMES (ii) the aggregate Outstanding Balance of all Receivables
at the close of business on the Cut-Off Date immediately preceding such
Calculation Period, TIMES (iii) 1/360; or
(b) on and after the Servicer's reasonable request made at any time
when neither Spherion nor any Affiliates thereof is acting as Servicer
hereunder, an alternative amount specified by the successor Servicer not
exceeding (i) 110% of such Servicer's reasonable costs and expenses of
performing its obligations under this Agreement during the preceding
Calculation Period, DIVIDED BY (ii) the number of days in the current
Calculation Period.
"SERVICING FEE RATE" means 1.0% PER ANNUM.
"SERVICING RESERVE" means, for any Calculation Period, the product
(expressed as a percentage) of (a) the Servicing Fee Rate, TIMES (b) a fraction,
the numerator of which is the highest Days Sales Outstanding for the most recent
12 Calculation Periods and the denominator of which is 360.
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"SETTLEMENT DATE" means (a) the 2nd Business Day after each Monthly
Reporting Date, and (b) the last day of the relevant Interest Period in respect
of each Loan of the Liquidity Banks.
"SETTLEMENT PERIOD" means (a) in respect of each Loan of Blue Ridge,
the immediately preceding Calculation Period, and (b) in respect of each Loan of
the Liquidity Banks, the entire Interest Period of such Loan.
"SUBSIDIARY" of a Person means (a) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (b) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
"TAX CODE" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"TERMINATING TRANCHE" has the meaning set forth in Section 4.3(b).
"TRANSACTIONS" means the transactions contemplated by this Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each
Borrowing Notice, the Receivables Sale Agreement, each Collection Account
Agreement, the Performance Undertaking, the Fee Letter, each Subordinated Note
(as defined in the Receivables Sale Agreement) and all other instruments,
documents and agreements executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"UNMATURED AMORTIZATION EVENT" means an event which, with the passage
of time or the giving of notice, or both, would constitute an Amortization
Event.
"WACHOVIA" means Wachovia Bank, National Association in its individual
capacity and its capacity as agent.
"WORLDCOM" means Worldcom, Inc., a Georgia corporation.
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