Exhibit 10.1
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U.S. $100,000,000
RECEIVABLES LOAN AND SECURITY AGREEMENT
Dated as of May 9, 2003
Among
MAXTOR FUNDING LLC,
as the Borrower
and
MAXTOR CORPORATION,
as the Servicer
and
XXXXXXX XXXXX COMMERCIAL FINANCE CORP.,
as the Lender
and
XXXXXXX XXXXX COMMERCIAL FINANCE CORP.,
as Agent
and
RADIAN REINSURANCE INC.,
as Facility Insurer
and
U.S. BANK NATIONAL ASSOCIATION,
as the Backup Servicer, the Trustee, the Collateral Agent
and the Collection Account Bank
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TABLE OF CONTENTS
Page
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I. DEFINITIONS......................................................................................... 1
SECTION 1.01 Certain Defined Terms................................................................. 1
SECTION 1.02 Other Terms........................................................................... 27
SECTION 1.03 Computation of Time Periods........................................................... 27
II. THE RECEIVABLES FACILITY............................................................................ 27
SECTION 2.01 Borrowings............................................................................ 27
SECTION 2.02 The Initial Borrowing and Subsequent Borrowings....................................... 27
SECTION 2.03 Facility Maturity Date................................................................ 28
SECTION 2.04 Determination of Fixed Periods........................................................ 28
SECTION 2.05 Remittance Procedures................................................................. 28
(a) Yield and Liquidation Fees............................................................ 29
(b) [Intentionally omitted.].............................................................. 29
(c) Remittance Date Transfers from Collection Account..................................... 29
(d) Borrower Deficiency Payments.......................................................... 31
(e) [Intentionally omitted.].............................................................. 31
(f) Reinvestment Withdrawals.............................................................. 31
(g) Instructions to the Collection Account Bank........................................... 31
SECTION 2.06 Payments and Computations, Etc........................................................ 32
SECTION 2.07 Fees and Premium...................................................................... 32
SECTION 2.08 Increased Costs; Capital Adequacy..................................................... 33
SECTION 2.09 Collateral Assignment of Agreements................................................... 34
SECTION 2.10 Grant of a Security Interest.......................................................... 34
SECTION 2.11 The Collateral Agent and the Pledged Assets........................................... 35
SECTION 2.12 Limitations on Duties of Collateral Agent, Etc........................................ 36
SECTION 2.13 Exculpatory Provisions................................................................ 36
SECTION 2.14 Reliance by Collateral Agent, Etc..................................................... 36
SECTION 2.15 Collateral Agent's Reliance, Etc...................................................... 37
SECTION 2.16 Delegation of Duties by the Collateral Agent.......................................... 38
SECTION 2.17 Agent................................................................................. 38
SECTION 2.18 Evidence of Debt...................................................................... 39
SECTION 2.19 Survival of Representations and Warranties; Repayment Obligations..................... 39
SECTION 2.20 Release of Pledged Receivables........................................................ 39
SECTION 2.21 Treatment of Amounts Paid by the Borrower............................................. 40
SECTION 2.22 Termination........................................................................... 40
SECTION 2.23 Increase of Borrowing Limit........................................................... 40
SECTION 2.24 Successor Collateral Agent............................................................ 40
SECTION 2.25 Successor Trustee..................................................................... 41
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III. CONDITIONS OF LOANS................................................................................. 41
SECTION 3.01 Conditions Precedent to Initial Borrowing............................................. 41
SECTION 3.02 Conditions Precedent to All Borrowings................................................ 42
SECTION 3.03 Advances Do Not Constitute a Waiver................................................... 43
IV. REPRESENTATIONS AND WARRANTIES...................................................................... 43
SECTION 4.01 Representations and Warranties of the Borrower........................................ 43
SECTION 4.02 Representations and Warranties of the Servicer........................................ 48
SECTION 4.03 Sale of Receivables Upon Breach of Covenant or Representation and
Warranty by Borrower ................................................................. 53
SECTION 4.04 Representations and Warranties of the Backup Servicer,the Trustee,
the Collateral Agent and the Collection Account Bank.................................. 54
V. GENERAL COVENANTS OF THE BORROWER AND THE SERVICER.................................................. 54
SECTION 5.01 General Covenants..................................................................... 54
VI. ADMINISTRATION AND SERVICING; CERTAIN COVENANTS..................................................... 60
SECTION 6.01 Appointment and Designation of the Servicer........................................... 60
SECTION 6.02 Collection of Receivable Payments; Modification and Amendment of Receivables........... 61
SECTION 6.03 Realization Upon Receivables.......................................................... 62
SECTION 6.04 Insurance............................................................................. 62
SECTION 6.05 Maintenance of Security Interests in the Related Security............................. 62
SECTION 6.06 Pledged Receivable Receipts........................................................... 63
SECTION 6.07 Unidentified Payments; Lender's Right of Presumption.................................. 63
SECTION 6.08 No Rights of Withdrawal............................................................... 63
SECTION 6.09 Permitted Investments................................................................. 63
SECTION 6.10 Servicing Compensation................................................................ 64
SECTION 6.11 Reports; Account Statements; Servicing Information.................................... 64
SECTION 6.12 Statements as to Compliance; Financial Statements..................................... 66
SECTION 6.13 Access to Certain Documentation....................................................... 68
SECTION 6.14 Backup Servicer....................................................................... 70
SECTION 6.15 Additional Remedies of Collateral Agent Upon Early Amortization Event................. 73
SECTION 6.16 Waiver of Defaults.................................................................... 74
SECTION 6.17 Maintenance of Certain Insurance...................................................... 74
SECTION 6.18 Segregation of Collections............................................................ 74
SECTION 6.19 UCC Matters; Protection and Perfection of Pledged Assets.............................. 74
SECTION 6.20 Servicer Advances..................................................................... 76
SECTION 6.21 [Intentionally Omitted.].............................................................. 76
SECTION 6.22 Breach of Covenant or Representation and Warranty by Servicer.......................... 76
SECTION 6.23 Compliance with Applicable Law........................................................ 76
VII. EARLY AMORTIZATION EVENTS........................................................................... 76
SECTION 7.01 Early Amortization Events............................................................. 76
SECTION 7.02 Additional Remedies................................................................... 79
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VIII. INDEMNIFICATION..................................................................................... 80
SECTION 8.01 Indemnities by the Borrower........................................................... 80
SECTION 8.02 Indemnities by the Servicer........................................................... 82
IX. MISCELLANEOUS................................................................................ ...... 84
SECTION 9.01 Amendments and Waivers................................................................. 84
SECTION 9.02 Notices, Etc........................................................................... 84
SECTION 9.03 No Waiver; Remedies.................................................................... 84
SECTION 9.04 Binding Effect; Assignability; Multiple Lenders........................................ 85
SECTION 9.05 Term of This Agreement................................................................. 86
SECTION 9.06 Governing Law; Jury Waiver............................................................. 86
SECTION 9.07 Costs, Expenses and Taxes.............................................................. 86
SECTION 9.08 No Proceedings......................................................................... 87
SECTION 9.09 Recourse Against Certain Parties....................................................... 87
SECTION 9.10 Execution in Counterparts; Severability; Integration................................... 88
SECTION 9.11 Tax Characterization................................................................... 88
SECTION 9.12 Consent of the Facility Insurer........................................................ 88
SECTION 9.13 No Reliance............................................................................ 89
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule I Condition Precedent Documents
Schedule II [Intentionally omitted.]
Schedule III Prior Names, Tradenames, Fictitious Names and "Doing Business
As" Names
Schedule IV-A Litigation of the Borrower
Schedule IV-B Litigation of the Servicer
Schedule V Debt Ratings of Obligors
Schedule VI Cut-Off Dates
Schedule VII Representations and Warranties With Respect to Eligible
Receivables
EXHIBITS
EXHIBIT A Form of Borrowing Report
EXHIBIT B Form of Daily Report
EXHIBIT C Form of Monthly Remittance Report
EXHIBIT D-1 Form of Contract: Agreement
EXHIBIT D-2 Form of Contract: Invoice
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F-1 Form of Backup Servicer Certification Letter Regarding Monthly
Remittance Report
EXHIBIT F-2 Form of Backup Servicer Certification Letter Regarding Borrowing
Report
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THIS RECEIVABLES LOAN AND SECURITY AGREEMENT is made as of May 9,
2003, among:
(1) MAXTOR FUNDING LLC, a Delaware limited liability company (the
"Borrower");
(2) MAXTOR CORPORATION, a Delaware corporation, as the Servicer (as
defined herein);
(3) XXXXXXX XXXXX COMMERCIAL FINANCE CORP., as the Lender (as defined
herein);
(4) XXXXXXX XXXXX COMMERCIAL FINANCE CORP., as agent for the Lenders
(the "Agent");
(5) RADIAN REINSURANCE INC., a stock insurance company incorporated
under the laws of the State of New York ("Radian"), as Facility
Insurer (as defined herein); and
(6) U.S. BANK NATIONAL ASSOCIATION, as the Backup Servicer, the Trustee,
the Collateral Agent and the Collection Account Bank (as such terms
are defined herein); and
IT IS AGREED as follows:
I. DEFINITIONS
SECTION 1.01 Certain Defined Terms. Certain capitalized terms used
throughout this Agreement are defined above or in this Section 1.01.
As used in this Agreement and its exhibits, 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):
"Accountants' Report" has the meaning assigned to that term in
Section 6.13(a).
"Accrued Liability" means the reimbursement obligations and
liability owed by the Borrower to the Facility Insurer with respect to any
claims paid by the Facility Insurer pursuant to the Facility Insurance Policy,
it being understood and agreed that Accrued Liability shall not include any
obligations or liability with respect to Premiums, Facility Insurer Interest,
expenses, indemnification or any other amounts (other than the amount of such
reimbursement obligations) specified in the Facility Insurance Agreement, in any
related agreement or otherwise.
"Adjusted Base Rate" means with respect to any Fixed Period for any
Loan allocated to such Fixed Period, an interest rate per annum equal to the sum
of (i) the Applicable Margin in effect during such Fixed Period (or if more than
one Applicable Margin was in effect
during such Fixed Period, the average of the Applicable Margins in effect on
each day during such Fixed Period) plus (ii) the average of the Base Rates in
effect on each day during such Fixed Period.
"Adjusted Canadian Overconcentration Amount" means, as of any date
of determination, an amount which bears the same proportionate relationship to
the aggregate Outstanding Balance of all Eligible Receivables as of such date of
determination as the Canadian Overconcentration Amount calculated (or as should
have been calculated) as of the Cut-Off Date reported upon (or as should have
been reported upon) in the most recent Monthly Remittance Report required
hereunder bore to the aggregate Outstanding Balance of all Eligible Receivables
as of such Cut-Off Date.
"Adjusted Dilution Reserve" means, as of any date of determination,
an amount which bears the same proportionate relationship to the aggregate
Outstanding Balance of all Eligible Receivables as of such date of determination
as the Dilution Reserve calculated (or as should have been calculated) as of the
Cut-Off Date reported upon (or as should have been reported upon) in the most
recent Monthly Remittance Report required hereunder bore to the aggregate
Outstanding Balance of all Eligible Receivables as of such Cut-Off Date.
"Adjusted Eurodollar Rate" means with respect to any Fixed Period
for any Loan allocated to such Fixed Period, an interest rate per annum equal to
the sum of (i) the Applicable Margin in effect during such Fixed Period (or if
more than one Applicable Margin was in effect during such Fixed Period, the
average of the Applicable Margins in effect on each day during such Fixed
Period) plus (ii) the Eurodollar Rate for such Fixed Period.
"Adjusted Loss Reserve" means, as of any date of determination, an
amount which bears the same proportionate relationship to the aggregate
Outstanding Balance of all Eligible Receivables as of such date of determination
as the Loss Reserve calculated (or as should have been calculated) as of the
Cut-Off Date reported upon (or as should have been reported upon) in the most
recent Monthly Remittance Report required hereunder bore to the aggregate
Outstanding Balance of all Eligible Receivables as of such Cut-Off Date.
"Adjusted Net Eligible Receivables Balance" means, (x) as of any
Cut-Off Date, an amount equal to (i) the Net Eligible Receivables Balance as of
such Cut-Off Date minus (ii) the greater of (1) the sum of (a) the Loss Reserve
as of such Cut-Off Date, (b) the Dilution Reserve as of such Cut-Off Date and
(c) the Yield and Fee Reserve as of such Cut-Off Date and (2) 21% of the Net
Eligible Receivables Balance as of such Cut-Off Date and (y) as of any date of
determination other than a Cut-Off Date, an amount equal to (i) the Net Eligible
Receivables Balance as of such date of determination minus (ii) the greater of
(1) the sum of (a) the Adjusted Loss Reserve as of such date of determination,
(b) the Adjusted Dilution Reserve as of such date of determination and (c) the
Adjusted Yield and Fee Reserve as of such date of determination and (2) 21% of
the Net Eligible Receivables Balance as of such date of determination.
"Adjusted Overconcentration Amount" means, as of any date of
determination, an amount which bears the same proportionate relationship to the
aggregate Outstanding Balance of all Eligible Receivables as of such date of
determination as the Overconcentration Amount
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calculated (or as should have been calculated) as of the Cut-Off Date reported
upon (or as should have been reported upon) in the most recent Monthly
Remittance Report required hereunder bore to the aggregate Outstanding Balance
of all Eligible Receivables as of such Cut-Off Date.
"Adjusted Yield and Fee Reserve" means, as of any date of
determination, an amount which bears the same proportionate relationship to the
aggregate Outstanding Balance of all Eligible Receivables as of such date of
determination as the Yield and Fee Reserve calculated (or as should have been
calculated) as of the Cut-Off Date reported upon (or as should have been
reported upon) in the most recent Monthly Remittance Report required hereunder
bore to the aggregate Outstanding Balance of all Eligible Receivables as of such
Cut-Off Date.
"Adverse Claim" means a lien, security interest, charge, encumbrance
or other right or claim of any Person other than, with respect to the Pledged
Assets, any lien, security interest, charge, encumbrance or other right or claim
in favor of the Lender (or the Collateral Agent on behalf of the Secured
Parties).
"Affected Party" has the meaning assigned to that term in Section
2.08(a).
"Affiliate" when used with respect to a Person means any other
Person controlling, controlled by or under common control with such Person. For
the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" has the meaning assigned to that term in the preamble
hereto.
"Agreement" means this Receivables Loan and Security Agreement, as
the same may be amended, restated, supplemented and/or otherwise modified from
time to time hereafter in accordance with Section 9.01 hereof.
"Amortization Commencement Date" means the earlier of (i) the date
of the declaration or automatic occurrence of the Amortization Commencement Date
pursuant to Section 7.01 hereof or (ii) the Facility Maturity Date.
"Applicable Margin" has the meaning ascribed to such term in the Fee
Letter.
"Assigned Documents" has the meaning assigned to that term in
Section 2.09.
"Assignment and Acceptance" has the meaning assigned to that term in
Section 9.04(a).
"Backup Servicer" means U.S. Bank National Association or any
substitute Backup Servicer appointed by the Facility Insurer, in its sole
discretion, pursuant to Section 6.14.
"Backup Servicer Fee" means, for any Remittance Period or portion
thereof after the occurrence of a Servicer Default and the appointment of the
Backup Servicer as Servicer
3
hereunder, an amount, payable out of Collections on the Pledged Receivables and
amounts applied to the payment of, or treated as payments on, the Pledged
Receivables, equal to the Backup Servicing Fee Rate multiplied by the Net
Eligible Receivables Balance as of the first day of such Remittance Period.
"Backup Servicer Standby Fee" means, for any Remittance Period or
portion thereof, an amount payable out of Collections on the Pledged Receivables
and amounts applied to the payment of, or treated as payments on, the Pledged
Receivables, equal to the greater of (i) the Backup Servicer Standby Fee Rate
multiplied by the Net Eligible Receivables Balance as of the first day of such
Remittance Period or (ii) an amount equal to (x) $2,000 plus (y) $750 multiplied
by the number of any Borrowing Reports in excess of one delivered during such
Remittance Period; provided, that during the period, if any, when the Backup
Servicer is acting as the Servicer, the Backup Servicer Standby Fee shall equal
$0.00.
"Backup Servicer Standby Fee Rate" means the per annum rate of
0.03%.
"Backup Servicing Fee Rate" means the per annum rate of 0.75%.
"Bankruptcy Code" means Xxxxx 00, Xxxxxx Xxxxxx Code, 11 U.S.C.
Section 101 et seq., as amended.
"Bankruptcy Event" shall be deemed to have occurred with respect to
a Person if:
(1) 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, sequestration 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
(2) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestration (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
fail to, 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.
"Base Rate" means, on any date, a fluctuating rate of interest per
annum equal to the arithmetic average of the rates of interest publicly
announced by JPMorgan Chase Bank and
4
Citibank, N.A. (or their respective successors) as their respective prime
commercial lending rates (or, as to any such bank that does not announce such a
rate, such bank's "base" or other rate determined by the Lender to be the
equivalent rate announced by such bank), except that, if any such bank shall,
for any period, cease to announce publicly its prime commercial lending (or
equivalent) rate, the Agent shall, during such period, determine the Base Rate
based upon the prime commercial lending (or equivalent) rates announced publicly
by the other such banks or, if each such bank ceases to announce publicly its
prime commercial lending (or equivalent) rate, based upon the prime commercial
lending (or equivalent) rate or rates announced publicly by one or more other
banks reasonably acceptable to the Borrower and the Facility Insurer. The prime
commercial lending (or equivalent) rates used in computing the Base Rate are not
intended to be the lowest rates of interest charged by such banks in connection
with extensions of credit to debtors. The Base Rate shall change as and when
such banks' prime commercial lending (or equivalent) rates change.
"Borrower" has the meaning assigned to that term in the preamble
hereto.
"Borrowing" means a borrowing of Loans under this Agreement.
"Borrowing Base Deficiency" means, at any time that the Capital
Limit shall be less than the Facility Amount, an amount equal to the amount of
such deficiency.
"Borrowing Date" means, with respect to any Borrowing, the date on
which such Borrowing is funded (which date, other than in the case of the
initial Borrowing, shall be a "Subsequent Borrowing Date").
"Borrowing Limit" means initially $100,000,000 as such amount may be
increased pursuant to Section 2.23; provided, that at all times, on or after the
Amortization Commencement Date, the Borrowing Limit shall mean the aggregate
outstanding Loans.
"Borrowing Objection Notice" means a written notice to the Agent and
the Lender from the Facility Insurer which (i) instructs the Agent and the
Lender not to fund a Borrowing requested in a Notice of Borrowing on account of
a failure to comply with the conditions to Borrowing set forth in Article II and
Article III and (ii) sets forth the basis for the delivery of the Borrowing
Objection Notice.
"Borrowing Report" means a report, in substantially the form of
Exhibit A, delivered by the Servicer pursuant to Section 6.11(h) which, among
other things, (a) shall calculate the Adjusted Net Eligible Receivables Balance
using (i) Eligible Receivables data current as of (and, in any event, not
including any Receivable which was a Delinquent Receivable as of) the end of
business on the Business Day prior to the Business Day it is delivered by the
Servicer to the Agent and the Facility Insurer (the "Borrowing Report Delivery
Date") and (ii) an Overconcentration Amount, a Canadian Overconcentration
Amount, an Adjusted Loss Reserve, an Adjusted Dilution Reserve and an Adjusted
Yield and Fee Reserve, in each case, as of the end of business on the Business
Day prior to such Borrowing Report Delivery Date, (b) sets forth the amount of
the Borrowing which the Borrower requests be advanced on the next Borrowing Date
and (c) demonstrates that after giving effect to such
5
Borrowing and the Pledge of the Eligible Receivables to be purchased by the
Borrower with the proceeds of such Borrowing, if any, the Capital Limit shall
not be less than the Facility Amount.
"Business Day" means a day of the year other than a Saturday or a
Sunday or any other day on which banks are not authorized or required to close
in New York City or the State of Minnesota; provided, that, if any determination
of a Business Day shall relate to a Loan bearing interest at the Adjusted
Eurodollar Rate, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Canadian Overconcentration Amount" means, at any time, the amount
by which the sum of the Outstanding Balances of all Eligible Receivables which
are payable by Obligors that are residents of, or have a principal place of
business or a billing address in, Canada or any Affiliate thereof exceeds (i)
15% of the sum of the Outstanding Balances of all Eligible Receivables (to the
extent not in excess of the Borrowing Limit) at such time or (ii) if the foreign
currency rating of Canada is less than A from S&P, A from Fitch or A2 by
Xxxxx'x, 10% of the sum of the Outstanding Balances of all Eligible Receivables
(to the extent not in excess of the Borrowing Limit) at such time.
"Capital Limit" means, at any time, an amount equal to:
ANEB + CA
where: ANEB = the Adjusted Net Eligible Receivables Balance at such time; and
CA = the amount of Collections on deposit in the Collection
Account at such time to be applied in accordance with
Section 2.05 on the next Remittance Date.
"Change of Control" means that at any time (i) Maxtor shall fail to
own directly 100% of all of the outstanding Capital Stock of the Borrower or
shall cease to have the right or ability by voting power, contract or otherwise,
to elect or designate for election a majority of the Board of Directors of the
Borrower, (ii) Maxtor or the Borrower merges or consolidates with any other
Person or (iii) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), shall
become or obtain rights (whether by means of warrants, options or otherwise) to
become, the "beneficial owner" (as defined under the Securities Exchange Act of
1934, as amended), directly or indirectly, of more than 50% of the outstanding
Capital Stock of Maxtor. For purposes of this definition, the following terms
have the following meanings:
"Board of Directors" means, with respect to any Person, such
Person's board of directors or any committee thereof duly authorized to
act on behalf of such board of directors.
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"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, contingent share issuances,
participations or other equivalents of or interest in equity (however
designated) of such Person.
"Closing Date" means May 12, 2003.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means U.S. Bank National Association in its role
as Collateral Agent under this Agreement, or its successors and assigns in such
capacity.
"Collection Account" means the special trust account (account number
00000000 at the Collection Account Bank) in the name of the Borrower and under
the sole dominion and control of the Collateral Agent for the benefit of the
Secured Parties; provided, that the funds deposited in such account (including
any interest and earnings thereon) from time to time shall constitute the
property and assets of the Borrower and the Borrower shall be solely liable for
any taxes payable with respect to the Collection Account.
"Collection Account Agreement" means that certain "Collection
Account Securities Account Agreement" dated as of the date hereof among the
Collateral Agent, the Borrower, the Servicer and the Collection Account Bank, as
securities intermediary, as such agreement may from time to time be amended,
supplemented or otherwise modified in accordance with the terms thereof, which
agreement shall (i) provide that the Collection Account Bank shall not release
any funds from the Collection Account other than pursuant to a Daily Report
confirmed and signed by the Trustee or on a Remittance Date pursuant to Section
2.05(c) and (ii) otherwise be satisfactory to the Agent and the Facility Insurer
in form and substance.
"Collection Account Bank" means U.S. Bank National Association and
its successors in interest.
"Collection Date" means the date on which the aggregate outstanding
principal amount of the Loans have been repaid in full and all Yield, Premium
and Fees and all other Obligations have been paid in full and the Lender shall
have no further obligation to make any additional Loans.
"Collections" means, without duplication, with respect to any
Pledged Receivable all cash receipts and proceeds in respect of such Pledged
Receivable, including, without limitation, all payments of any purchase price,
finance charge, interest, fees, delinquent payments recovered by the Servicer,
Liquidation Proceeds or any other proceeds from any disposition of any Pledged
Assets related to such Pledged Receivable, late fees, redemption fees, other
penalty fees and charges, Servicer Advances, any payments under any insurance
policies (excluding the Facility Insurance Policy) related to such Pledged
Receivable, all cash proceeds of Related Security with respect to such
Receivable or other amounts received by the Borrower or the Servicer with
respect to the related Contract, all cash proceeds received pursuant to any
Guaranty, all cash proceeds of any other Pledged Assets with respect to such
Pledged Receivable, any other payments made to the Borrower or Maxtor with
respect to the related Contract, any other payments made by an Obligor in
respect of any Contract, any amounts paid to the Borrower
7
pursuant to, or in connection with, the Purchase Agreement and any interest
earned on amounts on deposit in the Collection Account, any income from the
investment in Permitted Investments of amounts deposited into the Collection
Account.
"Commitment Percentage" has the meaning assigned to that term in
Section 9.04(b).
"Computer Tape or Listing" means the computer tape or listing
(whether in electronic form or otherwise) generated by the Servicer on behalf of
the Borrower which provides information relating to the Receivables included in
the Net Eligible Receivables Balance.
"Contract" means (i) collectively, an agreement between the
Originator and an Obligor substantially in the form attached hereto as Exhibit
D-1 and an invoice in the form attached hereto as Exhibit D-2 pursuant to or
under which an Obligor shall be obligated to pay for merchandise, products or
services from time to time or (ii) (in the case of any open account agreement)
an invoice in the form attached hereto as Exhibit D-2 pursuant to or under which
an Obligor shall be obligated to pay for merchandise, products or services from
time to time.
"Credit and Collection Policy" means the credit and collection
policy of Maxtor and the Borrower to be delivered to the Agent and the Facility
Insurer pursuant to Section 5.01(m) hereof, together with all exhibits thereto,
as such policies may hereafter be amended, modified or supplemented from time to
time in compliance with this Agreement.
"Cut-Off Date" means the last day of each Fiscal Month, as set forth
on Schedule VI hereto, as amended or replaced pursuant to the terms hereof.
"Daily Report" means a report, in substantially the form attached
hereto as Exhibit B which, among other things, (a) shall calculate the Adjusted
Net Eligible Receivables Balance using (i) Eligible Receivables data current as
of (and, in any event, not including any Receivable which was a Delinquent
Receivable as of ) the end of business on the Business Day prior to the Business
Day it is delivered by the Servicer to the Trustee (the "Delivery Date") and
(ii) an Adjusted Overconcentration Amount, an Adjusted Canadian
Overconcentration Amount, an Adjusted Loss Reserve, an Adjusted Dilution Reserve
and an Adjusted Yield and Fee Reserve, in each case, as of the end of business
on the Business Day prior to such Delivery Date, (b) sets forth an amount of
funds which the Borrower requests be released from the Collection Account on the
Business Day following such Delivery Date and demonstrates that (1) after giving
effect to such withdrawal and the Pledge of the Eligible Receivables to be
purchased by the Borrower with such funds, the Capital Limit shall not be less
than the Facility Amount and (2) the amount to be withdrawn from the Collection
Account is not in excess of (x) the amount of funds on deposit in the Collection
Account minus (y) an amount equal to the accrued and unpaid (i) Yield, (ii)
Premium, (iii) Non-Use Fees, (iv) Servicing Fees and Backup Servicer Standby
Fees (or, if the Backup Servicer has been appointed as Servicer hereunder, the
Backup Servicer Fees) and (v) the Trustee Fees and (c) sets forth, in a manner
satisfactory to the Agent and the Facility Insurer, the aggregate amount of
Pledged Receivables owed by each of the Top Ten Obligors as of the date of such
report.
8
"Debt" of any Person means (i) indebtedness of such Person for
borrowed money, (ii) obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) obligations of such Person to pay the
deferred purchase price of property or services, (iv) obligations of such Person
as lessee under leases which shall have been or should be, in accordance with
GAAP, recorded as capital leases, (v) obligations secured by an Adverse Claim
upon property or assets owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations and (vi)
obligations of such Person under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (v) above.
"Default Premium" has the meaning set forth in the Premium Letter.
"Default Ratio" means, as of any Cut-Off Date, the ratio, expressed
as a percentage, equal to (i) the aggregate Outstanding Balances of all
Defaulted Receivables on such Cut-Off Date divided by (ii) the aggregate
Outstanding Balances of all Pledged Receivables on such Cut-Off Date.
"Default Yield" means, with respect to any Remittance Date after the
occurrence of an Early Amortization Event, all Yield on all Loans which is
accrued and unpaid as of, and including, the day immediately preceding such
Remittance Date minus the amount of Yield on all Loans which would have been
accrued and unpaid as of, and including, the day immediately preceding such
Remittance Date if such Early Amortization Event had not occurred.
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof, remains unpaid
for more than 90 days from the original due date for such payment;
(ii) if a Bankruptcy Event has occurred with respect to the
Obligor thereof or any other Person obligated thereon; or
(iii) which, consistent with the Credit and Collection Policy,
should be written off the Originator's or the Borrower's books as
uncollectible.
"Deferred Purchase Price" has the meaning set forth in the Purchase
Agreement.
"Delinquency Ratio" means, as of any Cut-Off Date, the ratio,
expressed as a percentage, equal to (i) the aggregate Outstanding Balances of
all Delinquent Receivables on such Cut-Off Date divided by (ii) the aggregate
Outstanding Balances of all Pledged Receivables on such Cut-Off Date.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and:
9
(i) as to which any payment, or part thereof, remains unpaid
for more than 30 days, but less than or equal to 90 days, from the
original due date for such payment; or
(ii) which, consistent with the Credit and Collection Policy,
would be classified as delinquent by the Originator, the Servicer or the
Borrower.
"Dell" means Dell Computer Corporation.
"Dell Concentration Percentage" means, as of any date of
determination, (x) (A) 20% if Dell's Long Term Rating is A- or higher from S&P
and A3 or higher from Xxxxx'x as of such date of determination, (B) 15% if
Dell's Long Term Rating is BBB+ or BBB from S&P and Baa1 or Baa2 from Xxxxx'x as
of such date of determination, (C) 10% if Dell's Long Term Rating is BBB- from
S&P and Baa3 from Xxxxx'x as of such date of determination, (D) 5% if Dell's
Long Term Rating is BB+ or BB from S&P and Ba1 or Ba2 from Xxxxx'x as of such
date of determination and (E) 3% if Dell's Long Term Rating is below BB from S&P
or has been cancelled, suspended or withdrawn by S&P or below Ba2 from Xxxxx'x
or has been cancelled, suspended or withdrawn by Xxxxx'x as of such date of
determination; provided, that, if Dell's Long Term Ratings from S&P and Xxxxx'x
do not appear in the same clause above, the Dell Concentration Percentage shall
be the lower of the percentages set forth in the two clauses in which such Long
Term Ratings appear, or (y) at the option of the Borrower, a percentage not in
excess of 25%; provided, that to the extent that such percentage exceeds the
percentage that would have been calculated pursuant to clause (x) above, the
Borrower must have put into place a credit default swap with respect to such
excess that is provided by a Person, and on terms, satisfactory to the Facility
Insurer and the Agent in their sole discretion.
"Dilution" means the portion of any Receivable which is either (a)
reduced or canceled as a result of (i) any defective, rejected or returned
merchandise or services, any cash discount, or any failure by the Originator to
deliver any merchandise or services or otherwise perform under the related
Contract, (ii) any change in or cancellation of any of the terms of the related
Contract or any other adjustment by the Originator which reduces the amount
payable by the Obligor on the related Receivable (including, without limitation,
any price protection, marketing, incentive and "meet the competition" credits or
other program credits and any volume and revenue rebates and advertising
allowances), or (iii) any setoff in respect of any claim by the Obligor thereof
(whether such claim arises out of the same or a related transaction or an
unrelated transaction) or (b) subject to any specific dispute, offset,
counterclaim or defense whatsoever (except the discharge in bankruptcy of the
Obligor thereof). The Borrower shall be deemed to have received Collections
equal to the amount of any Dilution on the day such Dilution occurs and the
Outstanding Balance of the related Receivable shall be reduced by that amount.
"Dilution Reserve" means, as of any date of determination, an amount
equal to (i) the Net Eligible Receivables Balance as of such date of
determination multiplied by (ii) the Dilution Reserve Percentage as calculated
in, or as should have been calculated in, the most recent Monthly Remittance
Report required to have been delivered pursuant to Section 6.11(b) hereof.
10
"Dilution Reserve Percentage" means a percentage, determined as of a
Cut-Off Date, in accordance with the following formula:
{(SF x ED) + ((DS-ED) x DS/ED)} x DHR where:
SF = the Stress Factor, which shall be 2.0;
ED = the "Expected Dilution", which shall be equal to the average of
the Sales-Based Dilution Ratios during the twelve-Fiscal Month period ending on
such Cut-Off Date, expressed as a percentage;
DS = the "Dilution Spike", which shall be equal to the highest
average of the Sales-Based Dilution Ratios for any three successive Fiscal
Months during the immediately preceding 24 Fiscal Months, expressed as a
percentage; and
DHR = the "Dilution Horizon Ratio", which shall be equal to the
Sales during the Fiscal Month ending on such Cut-Off Date divided by the Net
Eligible Receivables Balance as of such Cut-Off Date.
"Dilution-to-Liquidation Ratio" means, as of any Cut-Off Date, the
ratio, expressed as a percentage, equal to (i) the aggregate amount of Dilution
with respect to all Pledged Receivables which occurred during the twelve Fiscal
Month period ending on such Cut-Off Date divided by (ii) the aggregate amount of
Collections from Obligors on all Pledged Receivables received by the Borrower
during such period.
"Dynamic Loss Reserve Percentage" means an amount calculated
pursuant to the following formula:
DLRP = LR x LH x SF where:
DLRP = the Dynamic Loss Reserve Percentage;
LR = the Loss Ratio, which shall be equal to the greater of (i) the
average of the Sales-Based Default Ratios as of the three most recent
consecutive Cut-Off Dates and (ii) the highest average of the Sales-Based
Default Ratios as of any three consecutive Cut-Off Dates occurring during the
previous twelve Fiscal Months;
LH = the Loss Horizon, which shall be equal to the cumulative Sales
during the previous 75 days divided by the Net Eligible Receivables Balance as
of the most recent Cut-Off Date; and
SF = the Stress Factor, which shall be 2.
"Early Amortization Event" has the meaning set forth in Section 7.01
hereof.
11
"Earned Discount Rate" means, as of any date of determination, a
percentage rate calculated by the Agent equal to the sum of (i) the weighted
average of the Yield Rates related to the Fixed Periods in effect as of such
date of determination, (ii) the Premium Rate (as defined in the Premium Letter)
and (iii) at any time after an Early Amortization Event has occurred, the
Default Premium Rate (as defined in the Premium Letter) in effect as of such
date of determination.
"Eligible Receivable" means, as of any date, each Pledged Receivable
with respect to which each representation and warranty set forth on Schedule VII
annexed hereto is true and correct.
"ERISA" means the United States Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Eurodollar Disruption Event" means any of the following: (i) a
determination by the Lender that it would be contrary to law or to the directive
of any central bank or other governmental authority (whether or not having the
force of law) to obtain United States dollars in the London interbank market to
make, fund or maintain any Loan, (ii) a determination by the Lender that the
rate at which deposits of United States dollars are being offered in the London
interbank market does not accurately reflect the cost to the Lender of making,
funding or maintaining any Loan or (iii) the inability of the Lender to obtain
United States dollars in the London interbank market to make, fund or maintain
any Loan.
"Eurodollar Rate" means with respect to any Fixed Period for any
Loan allocated to such Fixed Period, the rate per annum appearing on Telerate
Access Service Page 3750 (British Bankers Association Settlement Rate) as the
London Interbank Offered Rate for United States dollar deposits having a term of
thirty (30) days and a principal amount of $1,000,000 or more (or, if such page
shall cease to be publicly available or, if the information contained on such
page, in the Lender's sole judgment, shall cease to accurately reflect such
London Interbank Offered Rate, such rate as reported by any publicly available
recognized source of similar market data selected by the Agent that, in the
Agent's reasonable judgment, accurately reflects such London Interbank Offered
Rate) at approximately 11:00 a.m., London time, two Business days prior to the
commencement of such Fixed Period.
"Facility Amount" means, at any time, the sum of the aggregate Loans
Outstanding hereunder plus accrued and unpaid Yield, Premium and Non-Use Fees at
such time.
"Facility Insurance Agreement" means the Insurance and Reimbursement
Agreement among the Borrower, the Servicer, the Collateral Agent, the Agent and
the Facility Insurer, dated as of the date hereof, pursuant to which the
Facility Insurance Policy has been issued, as such Insurance Agreement may be
amended, supplemented, modified, extended or replaced from time to time, with
the consent of the Agent and the Lender.
"Facility Insurance Policy" means Financial Guaranty Insurance
Policy (Policy Number FANR-0510-03129-NY) issued by the Facility Insurer
pursuant to the Facility Insurance Agreement, as such Financial Guaranty
Insurance Policy may be amended, supplemented,
12
modified, extended or replaced from time to time, with the prior written consent
of the Agent and the Lender (or another insurance policy, in an insured amount
not less than $100,000,000, in form and substance satisfactory to the Agent and
the Lender).
"Facility Insurer" means Radian or any successor insurance company
which has underwritten the Facility Insurance Policy.
"Facility Insurer Bankruptcy Event" shall be deemed to have occurred
if the Facility Insurer (1) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
supervision, rehabilitation, liquidation, bankruptcy or insolvency law or other
similar law affecting creditors' rights or a petition is presented for its
winding-up or liquidation (including, without limitation, any application by the
Superintendent of Insurance of the State of New York (or any Person succeeding
to the duties of such Superintendent) or any other insurance regulatory body,
instrumentality or agency having authority over it (collectively, an "Insurance
Regulator") for an order (I) pursuant to Section 7402 of the New York Insurance
Law (or any successor provision thereto) directing the rehabilitation of the
Facility Insurer, (II) pursuant to Section 7404 of the New York Insurance Law
(or any successor provision thereto) directing the liquidation of the business
of the Facility Insurer, or (III) pursuant to Section 7416 of the New York
Insurance Law (or any successor provision thereto) dissolving the corporate
existence of the Facility Insurer) and, in the case of any such proceeding or
petition instituted or presented against it other than by the Facility Insurer
itself or an Insurance Regulator, such proceeding or petition (A) results in a
judgment of insolvency or bankruptcy or the entry of an order for relief or the
making of an order for its rehabilitation, winding-up or liquidation or (B) is
not dismissed, discharged, stayed or restrained in each case within 30 days of
the institution or presentation thereof; (2) has a resolution passed for its
rehabilitation winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); or (3) seeks or becomes
subject to the appointment of an administrator, supervisor, rehabilitator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets or becomes
subject to a corrective order or similar document issued by an Insurance
Regulator which cites or otherwise references the Facility Insurer's financial
impairment, deteriorating financial condition or failure to meet minimum levels
of statutory capital or surplus.
"Facility Insurer Default" means (i) the Facility Insurance Policy
fails to be in full force and effect or the Facility Insurer directly or
indirectly contests in any manner the effectiveness of the Facility Insurance
Policy, (ii) the Facility Insurer fails to make any payment under the Facility
Insurance Policy as and when payable, and such failure is not cured within five
Business Days or (iii) a Facility Insurer Bankruptcy Event occurs.
"Facility Insurer Early Amortization Event" means an Early
Amortization Event described in clause (r) of Section 7.01 hereof.
"Facility Insurer Interest" means any interest owed to the Facility
Insurer pursuant to the Facility Insurance Agreement, the Premium Letter or any
related agreement, accrued on amounts owed by the Borrower to the Facility
Insurer with respect to (i) any claims paid by the Facility Insurer pursuant to
the Facility Insurance Policy, (ii) Premiums and/or (iii) any other
13
amounts due and owing to the Facility Insurer as specified in the Facility
Insurance Agreement, the Premium Letter or any related agreement.
"Facility Insurer Non-Use Fee" has the meaning ascribed thereto in
the Fee Letter.
"Facility Insurer Prepayment Discount Rate" means with respect to
any date of determination, the rate per annum appearing on Telerate Access
Service Page 3750 (British Bankers Association Settlement Rate) as the London
Interbank Offered Rate for United States dollar deposits having a term of thirty
(30) days and a principal amount of $1,000,000 or more (or, if such page shall
cease to be publicly available or, if the information contained on such page, in
the Facility Insurer's sole judgment, shall cease to accurately reflect such
London Interbank Offered Rate, such rate as reported by any publicly available
recognized source of similar market data selected by the Facility Insurer that,
in the Facility Insurer's reasonable judgment, accurately reflects such London
Interbank Offered Rate) at approximately 11:00 a.m., London time, two Business
days prior to such date of determination.
"Facility Maturity Date" means the second anniversary of the date of
this Agreement.
"Fee Letter" has the meaning assigned to that term in Section
2.07(a).
"Fees" has the meaning assigned to that term in Section 2.07(a).
"Final Maturity Date" has the meaning assigned to that term in
Section 2.03.
"Fiscal Month" means a fiscal month of the Originator and the
Borrower.
"Fitch" means Fitch Ratings, Ltd. (or its successors in interest).
"Fixed Period" means for any outstanding Loans, a period determined
pursuant to Section 2.04.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States.
"Government Entity" means the United States, any State, any
political subdivision of a State and any agency or instrumentality of the United
States or any State or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranty" means any guaranty executed by any Person in respect of
the obligations of an Obligor arising under or in connection with a Contract.
"HPQ" means Hewlett Packard Company.
14
"HPQ Concentration Percentage" means, as of any date of
determination, (A) 20% if HPQ's Long Term Rating is A- or higher from S&P and A3
or higher from Xxxxx'x as of such date of determination, (B) 15% if HPQ's Long
Term Rating is BBB+ or BBB from S&P and Baa1or Baa2 from Xxxxx'x as of such date
of determination, (C) 10% if HPQ's Long Term Rating is BBB- from S&P and Baa3
from Xxxxx'x as of such date of determination, (D) 5% if HPQ's Long Term Rating
is BB+ or BB from S&P and Ba1 or Ba2 from Xxxxx'x as of such date of
determination and (E) 3% if HPQ's Long Term Rating is below BB from S&P or has
been cancelled, suspended or withdrawn by S&P or below Ba2 from Xxxxx'x or has
been cancelled, suspended or withdrawn by Xxxxx'x as of such date of
determination; provided, that, if HPQ's Long Term Ratings from S&P and Xxxxx'x
do not appear in the same clause above, the HPQ Concentration Percentage shall
be the lower of the percentages set forth in the two clauses in which such Long
Term Ratings appear.
"Indemnified Amounts" has the meaning assigned to that term in
Section 8.01.
"Independent Accountants" has the meaning assigned to that term in
Section 6.13(a).
"Lender" means, collectively, MLCFC and/or any other Person
(including, without limitation, any present or future Affiliate of MLCFC) that
agrees, pursuant to the pertinent Assignment and Acceptance, to make Loans
secured by Pledged Assets pursuant to Article II of this Agreement.
"Lender Non-Use Fee" has the meaning ascribed thereto in the Fee
Letter.
"Lender Prepayment Discount Rate" means with respect to any date of
determination, the rate per annum appearing on Telerate Access Service Page 3750
(British Bankers Association Settlement Rate) as the London Interbank Offered
Rate for United States dollar deposits having a term of thirty (30) days and a
principal amount of $1,000,000 or more (or, if such page shall cease to be
publicly available or, if the information contained on such page, in the Agent's
sole judgment, shall cease to accurately reflect such London Interbank Offered
Rate, such rate as reported by any publicly available recognized source of
similar market data selected by the Agent that, in the Agent's reasonable
judgment, accurately reflects such London Interbank Offered Rate) at
approximately 11:00 a.m., London time, two Business days prior to such date of
determination.
"Level I Obligor" means an Obligor (other than Dell or HPQ) whose
Long Term Ratings and Short Term Ratings correspond to Level I as determined in
accordance with Schedule V annexed hereto.
"Level II Obligor" means an Obligor (other than Dell or HPQ) whose
Long Term Ratings and Short Term Ratings correspond to Level II as determined in
accordance with Schedule V annexed hereto.
"Level III Obligor" means an Obligor (other than Dell or HPQ) whose
Long Term Ratings and Short Term Ratings correspond to Level III as determined
in accordance with Schedule V annexed hereto.
15
"Level IV Obligor" means an Obligor (other than Dell or HPQ) whose
Long Term Ratings and Short Term Ratings correspond to Level IV as determined in
accordance with Schedule V annexed hereto.
"Lien" means any mortgage, security interest, or other interest in
property securing an obligation owed to, or valid claim by, a Person other than
the owner of such property, whether such interest arises in equity or is based
on common law, statute, or contract.
"Liquidation Fee" means, for Loans allocated to any Fixed Period
during which such Loans are repaid (in whole or in part) prior to the end of
such Fixed Period, the amount, if any, by which (i) Yield (calculated without
taking into account any Liquidation Fee) which would have accrued on the amount
of the payment of such Loans during such Fixed Period (as so computed) if such
payment had not been made, as the case may be, exceeds (ii) the sum of (A) Yield
actually received by the Lender in respect of such Loans for such Fixed Period
plus, if applicable, (B) the income, if any, received by the Lender from the
Lender's investing the proceeds of such payments on such Loans.
"Liquidation Proceeds" means with respect to a Receivable with
respect to which the related inventory has been foreclosed upon by the Servicer,
all amounts realized with respect to such Receivable net of reasonable expenses
of the Servicer incurred in connection with the collection, repossession and
disposition of the related Related Security; provided, however, that the
Liquidation Proceeds with respect to any Receivable shall in no event be less
than zero.
"Loan" has the meaning set forth in Section 2.01(a).
"Loans Outstanding" means the sum of the principal amounts loaned to
the Borrower for the initial and any subsequent Borrowings pursuant to Sections
2.01 and 2.02, reduced from time to time by Collections received and distributed
on account of such Loans Outstanding pursuant to Section 2.05; provided,
however, that such Loans Outstanding shall not be reduced by any distribution of
any portion of Collections if at any time such distribution is rescinded or must
be returned for any reason.
"Lockbox" means a post office box (box number 73255) to which
Collections are remitted for retrieval by the Lockbox Bank and for deposit by
the Lockbox Bank into the Lockbox Account.
"Lockbox Account" means the deposit account (account number
12334-05099 at the Lockbox Bank) in the name of the Borrower and under the sole
dominion and control of the Collateral Agent for the benefit of the Secured
Parties.
"Lockbox Agreement" means an agreement relating to lockbox services
in connection with the Lockbox and the Lockbox Account and the control of the
Collateral Agent, for the benefit of the Secured Parties, over the Lockbox
Account, which is satisfactory to the Agent and the Facility Insurer in form and
substance and among the Borrower, the Servicer, the
16
Collateral Agent and the Lockbox Bank, as such agreement may from
time to time be amended, supplemented or otherwise modified in accordance with
the terms thereof.
"Lockbox Bank" means Bank of America, N.A. and its successors in
interest.
"Long Term Rating" for any Person, shall mean the rating by Xxxxx'x
or S&P of such Person's long-term public senior unsecured non-credit-enhanced
debt.
"Loss Reserve" means, as of any date of calculation, the product of
(A) the Dynamic Loss Reserve Percentage, as calculated in, or as should have
been calculated in, the most recent Monthly Remittance Report required to have
been delivered pursuant to Section 6.11(b) hereof and (B) the Net Eligible
Receivables Balance as of such date of calculation.
"Material Adverse Effect" means a material adverse effect on (i) the
business, operations, condition (financial or otherwise) of the Borrower or
Maxtor (in its capacity as Servicer or otherwise), (ii) the ability of the
Borrower or Maxtor (in its capacity as Servicer or otherwise) to conduct its
business as is currently conducted, (iii) the ability of the Borrower or Maxtor
(in its capacity as Servicer or otherwise) to perform its obligations under this
Agreement or any other Transaction Document to which it is a party, (iv) the
validity or enforceability of this Agreement or any other Transaction Document
to which the Borrower or Maxtor (in its capacity as Servicer or otherwise), as
applicable, is a party, (v) the rights and remedies of the Lender, the Agent,
the Collateral Agent, or the Facility Insurer under this Agreement or any of the
Transaction Documents or (vi) the validity, enforceability or collectibility of
all or any portion (other than an inconsequential portion) of the Pledged
Receivables.
"Maxtor" means Maxtor Corporation, a Delaware corporation.
"Minimum Shadow Rating" has the meaning assigned to that term in
Section 5.01(dd) hereof.
"MLCFC" means Xxxxxxx Xxxxx Commercial Finance Corp.
"Monthly Remittance Report" means a report, in substantially the
form of Exhibit C, furnished by the Servicer to the Agent, the Lender, the
Backup Servicer and the Facility Insurer pursuant to Section 6.11(b).
"Moody's" means Xxxxx'x Investors Service, Inc. (or its successors
in interest).
"Net Eligible Receivables Balance" means, (x) as of any Cut-Off
Date, an amount equal to (i) the Outstanding Balance of all Eligible Receivables
as of such Cut-Off Date minus (ii) the sum of (a) the Overconcentration Amount
as of such Cut-Off Date and (b) the Canadian Overconcentration Amount as of such
Cut-Off Date and (y) as of any date of determination other than a Cut-Off Date,
an amount equal to (i) the Outstanding Balance of all Eligible Receivables as of
such date of determination minus (ii) the sum of (a) the Adjusted
17
Overconcentration Amount as of such date of determination and (b)
the Adjusted Canadian Overconcentration Amount as of such date of determination.
"Net Worth" means, with respect to the Borrower as of any date of
determination, the excess, if any, of (a) the aggregate Outstanding Balance of
the Pledged Receivables at such time, over (b) the sum of (i) the Loans
Outstanding at such time plus (ii) the aggregate outstanding principal balance
of the Subordinated Note (including any Deferred Purchase Price proposed to be
incurred on the date of determination).
"Non-Use Fees" means, collectively, the Facility Insurer Non-Use Fee
and the Lender Non-Use Fee.
"Notice of Borrowing" has the meaning assigned to that term in
Section 2.02(b) hereof.
"Obligations" means all present and future indebtedness and other
liabilities and obligations (howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, or due or to become due) of the
Borrower to the Lender, the Agent, the Collateral Agent or the Facility Insurer
arising under this Agreement and the other Transaction Documents and shall
include, without limitation, all Fees (including, without limitation, any unpaid
portion of the Structuring Fee) all liability for principal of and interest on
the Loans, all Premiums, indemnifications and other amounts due or to become due
under this Agreement and such other documents, including, without limitation,
interest, fees, premiums and other obligations that accrue after the
commencement of an insolvency proceeding (in each case whether or not allowed as
a claim in such insolvency proceeding).
"Obligor" means a Person obligated to make payments under a
Contract.
"Officer's Certificate" means a certificate signed by the chief
executive officer, president, the secretary, the chief financial officer or any
vice president of any Person.
"Opinion of Counsel" means a written opinion of independent counsel
acceptable to the Agent and the Facility Insurer in their reasonable discretion,
which opinion, if such opinion or a copy thereof is required by the provisions
of this Agreement or the Purchase Agreement, is reasonably acceptable in form
and substance to the Agent and the Facility Insurer.
"Originator" means Maxtor in its capacity as the seller under the
Purchase Agreement.
"Other Conveyed Property" means, with respect to any Receivable, all
of the Borrower's right, title and interest in, to and under (i) all monies at
any time received or receivable with respect to such Receivable, including,
without limitation, Collections, (ii) the Related Security with respect to such
Receivable and any and all agreements, documents, certificates and instruments
evidencing such Related Security, (iii) the payment rights and all rights
related to such payment rights under the related Contract and any and all other
documents or electronic records that the Borrower keeps on file in accordance
with its customary procedures
18
relating to such Receivable, the related Related Security or the related
Obligor, (iv) all property (including the right to receive future Liquidation
Proceeds) that secures such Receivable and that has been acquired by or on
behalf of the Borrower pursuant to the liquidation of such Receivable, and (v)
all present and future rights, claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds and investments of any kind and nature in respect of any of the
foregoing.
"Other Permitted Liens" means tax liens or statutory liens which, in
the aggregate, are not in excess of an inconsequential amount.
"Outstanding Balance" means, as of any date, with respect to a
Receivable, the unpaid balance of such Receivable, minus an amount equal to (i)
the maximum potential volume rebates and advertising allowances that could be
credited or offset against such balance plus (ii) without duplication, the
amount of all actual Dilution that has occurred with respect to such Receivable.
"Overconcentration Amount" means, at any time, without duplication,
the sum of:
(a) for each single Level I Obligor, the amount by which the sum of
the Outstanding Balances of all Eligible Receivables which are payable by
such single Level I Obligor and/or its Affiliates (regardless of whether
such Persons are assigned one or more "xxxx to" numbers by the Originator)
exceeds 12% of the sum of the Outstanding Balances of all Eligible
Receivables (to the extent not in excess of the Borrowing Limit) at such
time;
(b) for each single Level II Obligor, the amount by which the sum of
the Outstanding Balances of all Eligible Receivables which are payable by
such single Level II Obligor and/or its Affiliates (regardless of whether
such Persons are assigned one or more "xxxx to" numbers by the Originator)
exceeds 10% of the sum of the Outstanding Balances of all Eligible
Receivables (to the extent not in excess of the Borrowing Limit) at such
time;
(c) for each single Level III Obligor, the amount by which the sum
of the Outstanding Balances of all Eligible Receivables which are payable
by such single Level III Obligor and/or its Affiliates (regardless of
whether such Persons are assigned one or more "xxxx to" numbers by the
Originator) exceeds 5% of the sum of the Outstanding Balances of all
Eligible Receivables (to the extent not in excess of the Borrowing Limit)
at such time;
(d) for each single Level IV Obligor, the amount by which the sum of
the Outstanding Balances of all Eligible Receivables which are payable by
such single Level IV Obligor and/or its Affiliates (regardless of whether
such Persons are assigned one or more "xxxx to" numbers by the Originator)
exceeds 3% of the sum of the Outstanding Balances of all Eligible
Receivables (to the extent not in excess of the Borrowing Limit) at such
time;
19
(e) the amount by which the sum of the Outstanding Balances of all
Eligible Receivables which are payable by Dell and/or its Affiliates
(regardless of whether such Persons are assigned one or more "xxxx to"
numbers by the Originator) exceeds the applicable Dell Concentration
Percentage of the sum of the Outstanding Balances of all Eligible
Receivables (to the extent not in excess of the Borrowing Limit) at such
time;
(f) the amount by which the sum of the Outstanding Balances of all
Eligible Receivables which are payable by HPQ and/or its Affiliates
(regardless of whether such Persons are assigned one or more "xxxx to"
numbers by the Originator) exceeds the applicable HPQ Concentration
Percentage of the sum of the Outstanding Balances of all Eligible
Receivables (to the extent not in excess of the Borrowing Limit) at such
time; and
(g) the amount by which the sum of the Outstanding Balances of all
Eligible Receivables which are payable by an Obligor other than Dell and
which are required to be paid in full pursuant to the related Contract
later than 45 days, but not later than 60 days, from the date of the
related Contract, exceeds 5% of the sum of the Outstanding Balances of all
Eligible Receivables (to the extent not in excess of the Borrowing Limit)
at such time.
"Past Due Receivable" means a Receivable that is not a Defaulted
Receivable and as to which any payment, or part thereof, remains unpaid for 60
or more days, but less than or equal to 90 days, from the original due date for
such payment.
"Permitted Investments" means any one or more of the following:
(i) direct obligations of, or obligations fully guaranteed as
to principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the full
faith and credit of the United States;
(ii) repurchase obligations (the collateral for which is held
by a third party) with respect to any security described in clause (i)
above, provided that the long-term unsecured obligations of the party
agreeing to repurchase such obligations are at the time rated by Moody's
and S&P in one of their two highest long-term rating categories and if
rated by Fitch, in one of its two highest long-term rating categories;
(iii) certificates of deposit, time deposits, demand deposits
and bankers' acceptances of any bank or trust company incorporated under
the laws of the United States or any State thereof or the District of
Columbia, provided that the short-term commercial paper of such bank or
trust company (or, in the case of the principal depository institution in
a depository institution holding company, the long-term unsecured debt
obligations of the depository institution holding company) at the date of
acquisition thereof has been rated by Moody's and S&P in their highest
short-term rating category, and if rated by Fitch, in its highest
short-term rating category;
20
(iv) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States or any State thereof or the District of Columbia, having a
rating, on the date of acquisition thereof, of no less than P-1 by
Moody's, A-1 by S&P and F-1 if rated by Fitch; and
(v) money market mutual funds registered under the Investment
Company Act of 1940, as amended, having a rating, at the time of such
investment, of no less than Aaa by Moody's, AAAm by S&P and AAA/V1+ if
rated by Fitch;
provided, that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive either (a) interest only payments with
respect to the obligations underlying such instrument or (b) both principal and
interest payments derived from obligations underlying such instrument where the
principal and interest payments with respect to such instrument provide a yield
to maturity exceeding 120% of the yield to maturity at par of such underlying
obligation. Each Permitted Investment may be purchased by the Collection Account
Bank or through an Affiliate of the Collection Account Bank.
"Permitted Liens" means Liens created under and pursuant to the
Transaction Documents.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture, Government Entity or other entity.
"Personal Property Act" means the Personal Property Security Act of
Ontario (or any successor statute) or similar legislation of any other province
of Canada.
"Pledge" means the pledge of any Receivable pursuant to Article II.
"Pledged Assets" has the meaning assigned to that term in Section
2.10.
"Pledged Receivables" has the meaning assigned to that term in
Section 2.10(a).
"Premium" means, collectively, (i) the "Premium", as defined in the
Premium Letter as in effect on the date hereof without giving effect to any
amendment or modification thereof that has not been consented to in writing by
the Agent, and (ii) the Default Premium.
"Premium Letter" means the Premium Letter dated as of the date
hereof among the Borrower, the Servicer and the Facility Insurer, as the same
may be amended, restated, supplemented or otherwise modified from time to time
with the consent of the Agent and the Lender.
"Pre-payment Fee" means a fee, in an amount equal to the net present
value as of the date of determination (calculated using a discount rate equal to
the Lender Prepayment Discount Rate as of such date of determination) of the fee
that would accrue at a rate equal to the Pre-payment Non-Use Fee Rate on the
entire Borrowing Limit hereunder (as the same may be
21
increased pursuant to any amendment hereto or amendment and restatement hereof)
from the effective date of the termination of this Agreement through and
including the Facility Maturity Date.
"Pre-payment Non-Use Fee Rate" has the meaning ascribed thereto in
the Fee Letter.
"Program Deficiency" means, at any time, that the Facility Amount at
such time exceeds the lesser of (x) the Borrowing Limit at such time and (y) the
Capital Limit at such time.
"Purchase Agreement" means that certain Purchase and Contribution
Agreement, dated as of the date hereof, by and between the Borrower, as
purchaser, and Maxtor, as seller, together with all instruments, documents and
agreements executed in connection therewith, as the same may from time to time
be amended, restated, supplemented and/or otherwise modified in accordance with
the terms hereof.
"Radian" has the meaning set forth in the Preamble hereto.
"Rating Agencies" mean Xxxxx'x, S&P and Fitch, or such other
nationally recognized statistical rating organizations as may be designated by
the Agent and the Facility Insurer.
"Receivable" means the indebtedness of, and the right to all
payments from, an Obligor resulting from the sale of merchandise, products or
services by the Originator under a Contract, including, without limitation, the
right to any payments with respect to (i) interest or finance charges with
respect thereto, (ii) any other obligations of such Obligor with respect thereto
and (iii) all Related Security with respect thereto.
"Records" means all documents, books, records and other information
(including, without limitation, computer programs, tapes, disks, data processing
software and related property and rights) maintained with respect to Receivables
and the related Obligors which the Borrower has itself generated, in which the
Borrower has acquired an interest pursuant to the applicable Purchase Agreement
or in which the Borrower has otherwise obtained an interest.
"Related Security" means with respect to any Receivable:
(i) all of the Borrower's interest in any merchandise or
products (including returned merchandise or products) relating to any sale
giving rise to such Receivable;
(ii) all security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all financing statements under which an Obligor is the
debtor describing any collateral securing such Receivable;
22
(iii) all guaranties, letters of credit, letter of credit
rights, supporting obligations, insurance and other agreements or
arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract
related to such Receivable or otherwise;
(iv) the payment rights and all rights related to such payment
rights under the Contract related to such Receivable and, to the extent
that the assignment of the Borrower's interests therein is enforceable
under applicable law, all Records relating to such Receivable and the
related Obligor; and
(v) all proceeds of the foregoing.
"Release Price" means with respect to a Pledged Receivable to be
released hereunder, an amount equal to the Outstanding Balance of such Pledged
Receivable plus all accrued but unpaid interest and fees thereon.
"Remittance Date" means the tenth Business Day of each Fiscal Month;
provided, that the final Remittance Date shall occur on the Collection Date.
"Remittance Period" means, (i) as to the initial Remittance Date,
the period beginning on the date of this Agreement and ending on, and including,
the last day of the Fiscal Month in which such date shall occur (or such other
dates as the Agent and the Borrower may agree) and (ii) as to any subsequent
Remittance Date, the period beginning on, and including, the first day of the
most recently ended Fiscal Month and ending on, and including, the last day of
the most recently ended Fiscal Month; provided, that the final Remittance Period
shall begin on the first day of the most recently ended Fiscal Month and shall
end on the Collection Date.
"Required Capital Amount" means, at any time of determination, the
greater of (i) $5,000,000 and (ii) an amount equal to 3% of the Outstanding
Balance of all Pledged Receivables at such time of determination.
"Rollover Fixed Period" means any Fixed Period other than any Fixed
Period (i) applicable to the Loan arising as a result of the Borrowing on the
initial Borrowing Date or (ii) applicable to any new Loan arising as a result of
a Borrowing on a Subsequent Borrowing Date.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc. (or its successors in interest).
"Sales" means, with respect to any period, the aggregate original
Outstanding Balances (without giving effect to any reduction for volume rebates,
advertising allowances or other Dilution) of the Receivables generated by the
sales of merchandise, products and services by the Originator during such
period.
"Sales-Based Default Ratio" means, with respect to any Cut-Off Date,
the ratio, expressed as a percentage, of (i) the aggregate Outstanding Balance
of all Past Due Receivables
23
as of such Cut-Off Date, divided by (ii) the Sales during the Fiscal Month
ending on the third Cut-Off Date prior to such Cut-Off Date.
"Sales-Based Dilution Ratio" means, with respect to any Cut-Off
Date, the aggregate amount of Dilution (other than Dilution attributable to
volume rebates and advertising allowances) which occurred with respect to
Pledged Receivables during the Fiscal Month ending on such Cut-Off Date; divided
by the Sales during the Fiscal Month immediately prior to such Fiscal Month.
"Secured Parties" means the Agent, the Lender, the Facility Insurer
and their successors and assigns.
"Servicer" means at any time the Person then authorized, pursuant to
Section 6.01, to service, administer and collect Pledged Receivables.
"Servicer Advance" has the meaning assigned to such term in Section
6.20.
"Servicer Default" means the occurrence of any of the following
events:
(i) the failure (which failure shall not have been cured
within one Business Day) of the Servicer to deliver any payments,
collections or proceeds which it is obligated to deliver under the terms
hereof or of any other Transaction Document at the times it is obligated
to make such deliveries under the terms hereof or of any other Transaction
Document;
(ii) the inability or failure (which failure shall not have
been cured within three Business Days) of the Servicer to satisfy any of
its reporting, certification, notification or documentation requirements
under the terms hereof or of any other Transaction Document or the failure
of the Servicer to observe or perform any other covenant under the terms
hereof or of any other Transaction Document;
(iii) any representation, warranty or statement of the
Servicer made herein or in any other Transaction Document shall prove to
be incorrect in any material respect; provided, however, that if any such
event is cured by the repurchase of Receivables pursuant to Section 6.22
hereof, such event shall cease to constitute a Servicer Default;
(iv) the occurrence of an Early Amortization Event described
in clause (j) through (n) of Section 7.01; or
(v) the occurrence of any Bankruptcy Event in respect of the
Servicer.
"Servicing Fee" means, for any Remittance Period, an amount, payable
out of Collections on the Pledged Receivables and amounts applied to the payment
of, or treated as payments on, the Pledged Receivables, equal to (i) the
Servicing Fee Rate multiplied by (ii) the Net Eligible Receivables Balance as of
the first day of such Remittance Period.
24
"Servicing Fee Rate" means with respect to the Pledged Receivables,
the per annum rate of 0.75%.
"Shadow Rating" has the meaning set forth in the definition of
Shadow Rating Letter.
"Shadow Rating Letter" means a credit assessment letter from S&P
which states that the credit performance of the financing facility provided
hereunder is consistent with a certain rating (the "Shadow Rating").
"Short Term Rating" for any Person, shall mean the rating by Moody's
or S&P of such Person's short-term public senior unsecured non-credit-enhanced
debt.
"State" means one of the fifty states of the United States or the
District of Columbia.
"Structuring Fee" has the meaning ascribed thereto in the Fee
Letter.
"Subordinated Note" has the meaning set forth in the Purchase
Agreement.
"Subsequent Borrowing" means a Borrowing which occurs on a
Subsequent Borrowing Date.
"Subsequent Borrowing Date" has the meaning ascribed to such term in
the definition of "Borrowing Date".
"Top Ten Obligors" means as of any date of determination the ten
Obligors owing the largest aggregate Outstanding Balances of Receivables as of
such date of determination.
"Transaction Documents" means this Agreement, the Purchase
Agreement, the Lockbox Agreement, the Collection Account Agreement, the Fee
Letter, the Facility Insurance Policy, the Facility Insurance Agreement, the
Premium Letter and each document and instrument related to any of the foregoing.
"Transition Fee" means a fee in the amount of $50,000 payable to the
Backup Servicer in connection with a transfer of servicing from the Servicer to
the Backup Servicer as the successor Servicer.
"Trustee" means U.S. Bank National Association or any successor
Trustee appointed by the Agent, with the consent of the Facility Insurer,
pursuant to Section 2.25 hereof.
"Trustee Fee" means, for any Remittance Period or portion thereof,
an amount payable out of Collections on the Pledged Receivables and amounts
applied to the payment of, or treated as payments on, the Pledged Receivables,
equal to the greater of (i) the Trustee Fee Rate multiplied by the Net Eligible
Receivables Balance as of the first day of such Remittance Period or (ii)
$2,000.
25
"Trustee Fee Rate" means the per annum rate of 0.04%.
"Turnover Rate" means the ratio (expressed as a percentage), as of
any Cut-Off Date, of (i) the aggregate Outstanding Balances of all Eligible
Receivables as of such Cut-Off Date divided by (ii) the aggregate Collections
from Obligors of Eligible Receivables received by the Borrower during the Fiscal
Month ending on such Cut-Off Date.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"Unmatured Early Amortization Event" means any event that, if it
continues uncured, will, with lapse of time or notice or lapse of time and
notice, constitute an Early Amortization Event.
"Yield" means with respect to any Fixed Period for any Loan
allocated to such Fixed Period, the product of:
YR x L x ED
--
360
where: YR = the Yield Rate for such Fixed Period;
L = the principal amount of Loans Outstanding allocated to
such Fixed Period; and
ED = the actual number of days elapsed during such Fixed
Period;
provided, however, that (i) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by
applicable law and (ii) Yield shall not be considered paid by any distribution
if at any time such distribution is required to be rescinded by the Lender to
the Borrower or any other Person for any reason including, without limitation,
such distribution becoming void or otherwise avoidable under any statutory
provision or common law or equitable action, including, without limitation, any
provision of the Bankruptcy Code.
"Yield and Fee Reserve" means, as of any date of determination, an
amount equal to (i) the Net Eligible Receivables Balance as of such date of
determination multiplied by (ii) the sum of (A) the Earned Discount Rate in
effect as of such date of determination and (B) the Servicing Fee Rate, divided
by (iii) 12, multiplied by (iv) 2, multiplied by (v) the Turnover Rate
calculated in, or as should have been calculated in, the most recent Monthly
Remittance Report required to have been delivered pursuant to Section 6.11(b)
hereof.
26
"Yield Rate" means with respect to any Fixed Period for any Loan
allocated to such Fixed Period, an interest rate per annum equal to the Adjusted
Eurodollar Rate; provided, however, that if the Lender shall have notified the
Agent that a Eurodollar Disruption Event has occurred, the Yield Rate shall be
equal to the Adjusted Base Rate until the Lender shall have notified the Agent
that such Eurodollar Disruption Event has ceased, at which time the Yield Rate
shall again be equal to the Adjusted Eurodollar Rate).
SECTION 1.02 Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used
in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in of the UCC of the State of
New York
SECTION 1.03 Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding."
II. THE RECEIVABLES FACILITY
SECTION 2.01 Borrowings. On the terms and conditions
hereinafter set forth, the Lender shall make loans ("Loans") to the
Borrower secured by Pledged Assets from time to time during the period from
the date hereof until the Amortization Commencement Date. Under no
circumstances shall the Borrower request, or the Lender make, any Loan if,
(a) the principal amount of such Loan is less than $1,000,000 or (b) after
giving effect to the Borrowing of such Loan, (i) an Early Amortization
Event or an event that but for notice or lapse of time or both would
constitute an Early Amortization Event shall have occurred and is
continuing or (ii) a Program Deficiency shall have occurred and is
continuing. Under no circumstances shall the Borrower request more than six
Loans be advanced in any one calendar month.
SECTION 2.02 The Initial Borrowing and Subsequent Borrowings.
(a) Until the occurrence of the Amortization Commencement Date, the Lender
will make Loans on any Business Day at the request of the Borrower, subject
to and in accordance with the terms and conditions of Sections 2.01 and
this Section 2.02 and subject to the provisions of Article III hereof.
SECTION 1.1
(b) The initial Borrowing and each Subsequent Borrowing shall be
made on at least four Business Days' irrevocable written notice from the
Borrower to the Agent and the Facility Insurer in the form attached hereto as
Exhibit E, (any such written notice, a "Notice of Borrowing"), provided that
such Notice of Borrowing is received by the Agent no later than 1:00 P.M. (New
York City time) on the Business Day of receipt. Any Notice of Borrowing received
after 1:00 P.M. (New York City time) shall be deemed received prior to 1:00 P.M.
(New York City time) on the following Business Day. Each such Notice of
Borrowing shall include (A) the aggregate amount of such Borrowing and (B) the
requested Borrowing Date. Each such Notice of Borrowing, other than a Notice of
Borrowing requesting a Borrowing on a Remittance Date, shall be accompanied by a
Borrowing Report. On each Borrowing Date, the Lender shall, upon satisfaction of
the applicable conditions set forth in this Section 2.02 and Article III, make
27
available to the Borrower on such Borrowing Date, no later than 4:00 P.M. (New
York City time) in same day funds, the amount of the Borrowing requested for
such Borrowing Date (net of amounts payable to or for the benefit of the Lender)
by payment into the Borrower's account number 00000-00000 at Bank of America,
N.A., ABA No. 000000000 or such other account which the Borrower has designated
in writing.
(c) Notwithstanding any provision in Section 2.02(b), if the
Facility Insurer delivers a Borrowing Objection Notice to the Agent and the
Lender no later than 1:00 P.M. (New York City time), two Business Days prior to
the date of Borrowing requested in a Notice of Borrowing, the Lender shall not
fund such Borrowing. Any Borrowing Objection Notice delivered to the Agent and
the Lender later than 1:00 P.M. (New York City time), two Business Days prior to
the date of Borrowing requested in a Notice of Borrowing, shall be deemed
ineffective and the Lender shall fund such Borrowing. The Facility Insurer shall
have no obligation to deliver any Borrowing Objection Notice at any time,
regardless of whether all conditions precedent to any Borrowing have been met.
(d) Unless otherwise provided in this Agreement, the Loans shall
bear interest at the Yield Rate.
(e) Subject to the terms, conditions, provisions and limitations set
forth herein, the Borrower may borrow, repay or prepay Loans, on and after the
date hereof and prior to the Amortization Commencement Date.
(f) Determinations by the Lender of the existence of any Eurodollar
Disruption Event, or of the effect of any Eurodollar Disruption Event on its
making or maintaining Loans at the Adjusted Eurodollar Rate, shall be conclusive
absent manifest error.
SECTION 2.03 Facility Maturity Date. Any Loans outstanding on
the Facility Maturity Date shall mature on the Facility Maturity Date.
Notwithstanding any other provision hereof, on the Facility Maturity Date,
the outstanding principal of all outstanding Loans, if any, and all Yield
and all Fees accrued thereon and all Premium and other Obligations shall be
immediately due and payable (and the Borrower shall pay all such amounts
immediately).
SECTION 2.04 Determination of Fixed Periods. The initial Fixed
Period applicable to any new Loan arising as a result of a Borrowing shall
commence on, and include, the date of such Borrowing and shall terminate
on, and include, the day immediately prior to the next occurring Remittance
Date. All outstanding Loans allocated to one or more initial Fixed Periods
or Rollover Fixed Periods maturing on the same date shall be combined and
allocated to a single Rollover Fixed Period at the end of such initial
Fixed Periods or Rollover Fixed Periods. Each Rollover Fixed Period shall
commence on, and include, the Remittance Date following the last day of the
immediately preceding Fixed Period and shall terminate on, and include, the
day immediately prior to the next occurring Remittance Date.
SECTION 2.05 Remittance Procedures. Subject to the other
provisions of this Section 2.05, the Trustee, as agent for the Servicer,
the Agent, the Lender and the Facility Insurer, shall instruct the
Collection Account Bank, and, to the extent that the Trustee fails to do
so, the
28
Agent may instruct the Collection Account Bank, to apply funds on deposit in the
Collection Account as described in this Section 2.05. No funds shall be
transferred from the Collection Account except in accordance with this Section
2.05.
(a) Yield and Liquidation Fees. On each Business Day (including any
Remittance Date), the Trustee shall, and, to the extent that the Trustee fails
to do so, the Agent may, direct the Collection Account Bank to set aside in the
Collection Account (whether on such day or on a subsequent day) collected funds
in an amount equal to Yield accrued through such day on the Loans and the
Premium, the Non-Use Fees, the Trustee Fee, the Backup Servicer Standby Fee and
the Servicing Fee accrued through such day, in each case, not so previously set
aside and the amount of any unpaid Liquidation Fees owed to the Lender on such
day. Any funds set aside in respect of accrued Yield, Premium, Non-Use Fees,
Trustee Fee, Backup Servicer Standby Fee, Servicing Fee and Liquidation Fees
pursuant to this Section 2.05(a) shall remain set aside in the Collection
Account until the next Remittance Date, at which time such funds shall be
disbursed pursuant to Section 2.05(c).
(b) [Intentionally omitted.]
(c) Remittance Date Transfers from Collection Account. The Trustee
shall, pursuant to a Monthly Remittance Report that has been prepared by the
Servicer and confirmed and signed by the Trustee, and, to the extent that the
Trustee fails to do so, the Agent may, on each Remittance Date, direct the
Collection Account Bank to transfer collected funds held by the Collection
Account Bank in the Collection Account, in the following amounts and priority:
(i) at any time after the occurrence of a Servicer Default and
the appointment of the Backup Servicer as the Servicer hereunder, to the
Backup Servicer in an amount equal to the Backup Servicer Fees which are
accrued and unpaid as of the last day of the preceding Remittance Period
plus any Transition Fee not previously paid to the Backup Servicer;
(ii) on a pari passu basis (A) to the Trustee in an amount
equal to the Trustee Fee which is accrued and unpaid as of the last day of
the preceding Remittance Period, (B) at any time prior to the appointment
of the Backup Servicer as the Servicer hereunder, to the Backup Servicer
in an amount equal to the Backup Servicer Standby Fees which are accrued
and unpaid as of the last day of the preceding Remittance Period and (C)
to the Lockbox Bank in an amount equal to fees and expenses (but not
amounts related to indemnification obligations or any other amounts) due
and owing to the Lockbox Bank under the Lockbox Agreement which are
accrued and unpaid as of the last day of the preceding Remittance Period;
(iii) on a pari passu basis (A) to the Agent for the
account of the Lender in an amount equal to (and for the pro rata
payment of) (x) all Yield (other than Default Yield) on all Loans
which is accrued and unpaid as of, and including, the day immediately
preceding such Remittance Date, (y) any Lender Non-Use Fee which is
payable as of such Remittance Date pursuant to the terms of the Fee
Letter and (z) any unpaid Liquidation Fees and (B) to the Facility
Insurer in an amount equal to (and for the
29
pro rata payment of) (x) any Premium (other than Default Premium) which is
payable as of such Remittance Date pursuant to the terms of the Premium
Letter and (y) any Facility Insurer Non-Use Fee which is payable as of
such Remittance Date pursuant to the terms of the Fee Letter;
(iv) to the Servicer (if the Servicer is Maxtor or any
Affiliate thereof) in an amount equal to the Servicing Fee which is
accrued and unpaid as the last day of the preceding Remittance Period plus
any Servicer Advances not previously reimbursed to the Servicer;
(v) to the Agent for the account of the Lender in an amount
equal to the Borrowing Base Deficiency (if any) as of such Remittance
Date;
(vi) on or after the occurrence of the Amortization
Commencement Date, to the Agent for the account of the Lender for the
repayment of Loans outstanding in an amount equal to the lesser of (i) all
remaining funds in the Collection Account and (ii) an amount necessary to
repay the outstanding principal amount of all Loans in full;
(vii) to the Facility Insurer an amount equal to any Accrued
Liability then due and payable;
(viii) on a pari passu basis (A) to the Agent for the
account of the Lender in an amount equal to all Default Yield on all
Loans which is accrued and unpaid as of, and including, the day
immediately preceding such Remittance Date and (B) to the Facility
Insurer in an amount equal to any Default Premium which is payable as
of such Remittance Date pursuant to the terms of the Premium Letter;
(ix) on a pari passu basis to the Agent, the Lender, the
Facility Insurer and any other Indemnified Party hereunder in an amount
equal to the aggregate amount of any other obligations of the Borrower
then due to the Agent, the Lender, the Facility Insurer and any other
Indemnified Party hereunder or under any other Transaction Document (other
than, in the case of the Facility Insurer, those specified in clause (x)
below);
(x) to the Facility Insurer an amount equal to any Facility
Insurer Interest then due and payable;
(xi) to the Lockbox Bank in an amount equal to any amounts
(other than fees and expenses) due and owing to the Lockbox Bank under the
Lockbox Agreement which are accrued and unpaid as of the last day of the
preceding Remittance Period; and
(xii) to, or at the direction of, the Borrower (or at the
direction of the Servicer, on behalf of the Borrower), any remaining
amounts.
30
Upon its receipt of funds pursuant to clauses (v), (vi), (viii) and (ix), the
Agent shall apply such funds as directed by the Lender or as otherwise provided
in this Agreement.
(d) Borrower Deficiency Payments. Notwithstanding anything to the
contrary contained in this Section 2.05 or in any other provision in this
Agreement, if, on any day prior to the Collection Date, a Program Deficiency
shall occur, then the Borrower shall remit to the Agent, within three Business
Days, a payment (to be applied by the Agent to repay Loans selected by the
Agent, in its sole discretion) in such amount as may be necessary to eliminate
such Program Deficiency.
(e) [Intentionally omitted.]
(f) Reinvestment Withdrawals. Notwithstanding anything to the
contrary contained in this Section 2.05 or in any other provision in this
Agreement, on any Business Day (provided that such Business Day shall be prior
to the Amortization Commencement Date and no amount payable by the Borrower
hereunder or under any other Transaction Document shall be past due including,
without limitation, any amount which would have been paid on the immediately
preceding Remittance Date pursuant to Section 2.05(c) but for the insufficiency
of funds in the Collection Account on such Remittance Date) the Borrower may
request (by causing the Servicer to deliver a Daily Report to the Trustee) that
the Trustee cause the Collection Account Bank to withdraw from the Collection
Account and deposit, on behalf of the Borrower, into the Originator's account
number 1484004218 at Bank of America, N.A., ABA No. 000000000, or such other
account which the Borrower has designated in writing an amount not in excess of
(x) the amount of funds on deposit in the Collection Account minus (y) an amount
equal to the accrued and unpaid (i) Yield, (ii) Premium, (iii) Non-Use Fees,
(iv) Servicing Fees and Backup Servicer Standby Fees (or, if the Backup Servicer
has been appointed as Servicer hereunder, the Backup Servicer Fees) and (v)
Trustee Fees, in each case, as of such Business Day; provided, that the Daily
Report delivered in connection with such request has been confirmed by the
Trustee pursuant to Section 6.11(c), signed by the Trustee and delivered by the
Trustee to the Agent and the Facility Insurer (via telecopier or other
electronic means approved by the Agent and the Facility Insurer), and such Daily
Report demonstrates that (1) after giving effect to such withdrawal and the
Pledge of such Receivables, the Capital Limit shall not be less than the
Facility Amount and (2) the amount to be withdrawn from the Collection Account
on such Business Day is not in excess of (x) the amount of funds on deposit in
the Collection Account minus (y) an amount equal to the accrued and unpaid (i)
Yield, (ii) Premium, (iii) Non-Use Fees, (iv) Servicing Fees and Backup Servicer
Standby Fees (or, if the Backup Servicer has been appointed as Servicer
hereunder, the Backup Servicer Fees) and (v) Trustee Fees, in each case, as of
such Business Day.
(g) Instructions to the Collection Account Bank. All instructions
and directions given to the Collection Account Bank by the Trustee or the Agent
pursuant to this Section 2.05 shall be in writing (including instructions and
directions transmitted to the Collection Account Bank by telecopy) and such
written instructions and directions shall be delivered with a written
certification that such instructions and directions are in compliance with the
provisions of this Section 2.05. A copy of all instructions and directions given
to the Collection Account Bank by the Trustee pursuant to this Section 2.05
shall be immediately
31
transmitted by the Trustee to the Agent and the Facility Insurer by telecopy. A
copy of all instructions and directions given to the Collection Account Bank by
the Agent pursuant to this Section 2.05, shall be immediately transmitted by the
Agent to the Servicer, the Borrower and the Facility Insurer by telecopy.
SECTION 2.06 Payments and Computations, Etc. (a) All amounts to be
paid or deposited by the Borrower or the Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 1:00 P.M. (New York
City time) on the day when due in lawful money of the United States in
immediately available funds to the Collection Account or such other account as
is designated by the Agent with the consent of the Facility Insurer. The
Borrower shall, to the extent permitted by law, pay to the Agent interest on all
amounts not paid or deposited when due hereunder (whether owing by the Borrower
or the Servicer) at the Base Rate plus 2.00%, payable on demand; provided,
however, that such interest rate shall not at any time exceed the maximum rate
permitted by applicable law. Such interest shall be for the account of, and
distributed by the Agent to, the Lender and/or the Facility Insurer, as
applicable. Any Obligation hereunder shall not be reduced by any distribution of
any portion of Collections if at any time such distribution is rescinded or
returned to the Borrower or any other Person for any reason. All computations of
interest and all computations of Yield, Premium, Liquidation Fee and other fees
hereunder (including, without limitation, the Fees, the Backup Servicer Fee, the
Backup Servicer Standby Fee, the Trustee Fee and the Servicing Fee) shall be
made on the basis of a year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of Yield, Premium, interest or any fee payable hereunder,
as the case may be.
(c) If any Borrowing requested by the Borrower and approved by the
Lender and the Agent pursuant to Section 2.02 is not for any reason whatsoever,
except as a result of the gross negligence or wilful misconduct of the Lender
and/or the Agent or the delivery of a Borrowing Objection Notice by the Facility
Insurer on a timely basis pursuant to Section 2.02, made on the date specified
therefor, the Borrower shall indemnify the Lender against any loss, cost or
expense incurred by the Lender (other than any such loss, cost or expense solely
due to the gross negligence or willful misconduct of the Lender or the Agent),
including, without limitation, any loss (including cost of funds and
out-of-pocket expenses), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by the Lender to fund Loans
or maintain Loans during such Fixed Period.
SECTION 2.07 Fees and Premium. (a) The Borrower shall pay the Lender
and the Facility Insurer (either directly or through the Agent) certain fees
(the "Fees") in the amounts and on the dates set forth in a fee letter (the "Fee
Letter"), dated the date hereof, among the Borrower, the Facility Insurer, the
Agent, and the Lender as in effect on the date hereof and as such fee letter may
be amended by the parties thereto. The Borrower shall pay the Facility Insurer
the Premiums in the amounts and on the dates set forth in the Premium Letter.
32
(b) All of the Fees and Premiums payable pursuant to this Section
2.07 shall be payable solely from amounts available for application pursuant to,
and subject to the priority of payment set forth in, Section 2.05.
SECTION 2.08 Increased Costs; Capital Adequacy. (a) If, due to
either (i) the introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements) in or in the
interpretation, administration or application of any law or regulation
(including, without limitation, any law or regulation resulting in any interest
payments paid to the Lender under this Agreement being subject to United States
withholding tax) or any guideline of any accounting board or authority (whether
or not a part of any government) which is responsible for the establishment or
interpretation of national or international accounting principles, in each case
whether foreign or domestic or (ii) the compliance with any guideline or request
from any central bank or other Government Entity (whether or not having the
force of law), there shall be any increase in the cost to the Agent, the Lender,
or any Affiliate, successor or assign thereof (each of which shall be an
"Affected Party") of agreeing to make or making, funding or maintaining any Loan
(or any reduction of the amount of any payment (whether of principal, interest,
fees, compensation or otherwise) to any Affected Party hereunder), as the case
may be, the Borrower shall, from time to time, upon written demand complying
with Section 2.08(c) by the Agent, on behalf of such Affected Party, pay to the
Agent (from Collections pursuant to, and subject to the priority of payment set
forth in, Section 2.05), on behalf of such Affected Party, additional amounts
sufficient to compensate such Affected Party for such increased costs or reduced
payments. For the avoidance of doubt, FASB Interpretation No. 46 or any other
interpretation of Accounting Research Bulletin No. 51 by the Financial
Accounting Standards Board shall constitute a change in the interpretation,
administration or application of a guideline subject to this Section 2.08(a).
(b) If either (i) the introduction of or any change in or in the
interpretation, administration or application of any law, guideline, rule or
regulation, directive or request or (ii) the compliance by any Affected Party
with any law, guideline, rule, regulation, directive or request, from any
central bank, any Government Entity or any accounting board or authority
(whether or not a part of government) which is responsible for the establishment
or interpretation of national or international accounting principles, in each
case whether foreign or domestic (whether or not having the force of law),
including, without limitation, compliance by an Affected Party with any request
or directive regarding capital adequacy, has or would have the effect of
reducing the rate of return on the capital of any Affected Party, as a
consequence of its obligations hereunder or any related document or arising in
connection herewith or therewith to a level below that which any such Affected
Party could have achieved but for such introduction, change or compliance
(taking into consideration the policies of such Affected Party with respect to
capital adequacy), by an amount deemed by such Affected Party to be material,
then, from time to time, after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth the basis of such demand), the Agent
shall be paid, on behalf of such Affected Party (from Collections pursuant to,
and subject to the priority of payment set forth in, Section 2.05), such
additional amounts as will compensate such Affected Party for such reduction.
For the avoidance of doubt, FASB Interpretation No. 46 or any other
interpretation of Accounting Research Bulletin No. 51 by the Financial
Accounting Standards Board shall
33
constitute a change in the interpretation, administration or application of a
guideline subject to this Section 2.08(b).
(c) In determining any amount provided for in this Section 2.08, the
Affected Party may use any reasonable averaging and attribution methods. The
Agent, on behalf of any Affected Party making a claim under this Section 2.08,
shall submit to the Borrower a certificate setting forth in reasonable detail
the basis for and the computations of such additional or increased costs, which
certificate shall be conclusive absent demonstrable error.
SECTION 2.09 Collateral Assignment of Agreements. The Borrower
hereby collaterally assigns to the Collateral Agent, for the benefit of the
Secured Parties, all of the Borrower's right, title and interest in, to and
under the Lockbox Agreement, the Purchase Agreement and all Contracts related to
each Pledged Receivable and all other agreements, documents and instruments
evidencing, securing or guarantying any Pledged Receivable and all other
agreements, documents and instruments related to any of the foregoing (the
"Assigned Documents"). The Borrower confirms and agrees that the Collateral
Agent (or any designee thereof) shall, at the option of the Facility Insurer,
have, following an Early Amortization Event (other than a Facility Insurer Early
Amortization Event) and, at the option of the Agent, have, following a Facility
Insurer Early Amortization Event, the sole right to enforce (and, at the
direction the Facility Insurer or the Agent, as applicable, the Collateral Agent
shall enforce) the Borrower's rights and remedies under each Assigned Document,
but without any obligation on the part of the Agent, the Collateral Agent, the
Lender and the Facility Insurer or any of their respective Affiliates to perform
any of the obligations of the Borrower under any such Assigned Document. In
addition, each of the Servicer and the Borrower confirms and agrees that the
Servicer or the Borrower will send to the Collateral Agent, with a copy to the
Agent and the Facility Insurer, a notice of (i) any breach of any
representation, warranty, agreement or covenant under any such Assigned Document
or (ii) any event or occurrence that, upon notice to the Servicer or the
Borrower, as applicable, or upon the passage of time or both, would constitute
such a breach. The Borrower further confirms and agrees that such assignment to
the Collateral Agent shall terminate upon the Collection Date.
SECTION 2.10 Grant of a Security Interest. (a) To secure the prompt
and complete payment when due of the Obligations and the performance by the
Borrower of all of the covenants and obligations to be performed by it pursuant
to the Transaction Documents, the Borrower hereby assigns and pledges to the
Collateral Agent, on behalf of the Secured Parties (and their successors and
assigns) and grants to the Collateral Agent, on behalf of the Secured Parties
(and their successors and assigns), a security interest in all of the Borrower's
right, title and interest in, to and under all of its assets, including without
limitation all of the following property and interests in property
(collectively, the "Pledged Assets"), whether tangible or intangible and whether
now owned or existing or hereafter arising or acquired and wheresoever located:
(i) all Receivables purchased by or contributed (or otherwise
transferred or pledged pursuant to the terms of the Purchase Agreement) to
the Borrower under the Purchase Agreement from time to time (the "Pledged
Receivables"), all Other Conveyed Property related to the Pledged
Receivables purchased by or contributed (or
34
otherwise transferred or pledged pursuant to the terms of the Purchase
Agreement) to the Borrower under the Purchase Agreement, all Related
Security related to the Pledged Receivables, and all Collections and other
monies due and to become due under the Contracts related to the Pledged
Receivables;
(ii) the Assigned Documents, including in each case, without
limitation, all monies due and to become due to the Borrower under or in
connection therewith, and, to the extent of the Borrower's interests
therein (including any causes of actions thereunder and collections
related thereto), all legal opinions, if any, delivered or rendered in
connection with any item included in clause (i) above or this clause (ii)
or any transaction related to any of the foregoing;
(iii) the Collection Account, the Lockbox (and all checks and
other items therein), the Lockbox Account, and all other bank and similar
accounts relating to the collection of Pledged Receivables (whether now
existing or hereafter established) and all funds held therein or in such
other accounts, and all investments in and all income from the investment
of funds in the Collection Account, the Lockbox Account and such other
accounts;
(iv) to the extent of the Borrower's interests therein, the
Records relating to any Pledged Receivables;
(v) all UCC financing statements filed by the Borrower against
Maxtor under or in connection with the Purchase Agreement;
(vi) all Liquidation Proceeds relating to any Pledged
Receivables; and
(vii) all proceeds of the foregoing property described in
clauses (i) through (vi) above, including interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for or on account of
the sale or other disposition of any or all of the then existing Pledged
Receivables.
SECTION 2.11 The Collateral Agent and the Pledged Assets. (a) The
Collateral Agent hereby agrees that all of its interests, including security
interests, in the Pledged Assets are held solely for the benefit of the Secured
Parties. The Secured Parties hereby authorize the Collateral Agent to, and the
Collateral Agent hereby agrees that it shall execute (if necessary) and cause
the proper filing of each UCC financing statement and each UCC financing
statement extension required to perfect and maintain its security interests in
the Pledged Assets and execute all Transaction Documents relating to the Pledged
Assets requiring execution and delivery by it and shall accept delivery from the
Borrower of those Transaction Documents relating to the Pledged Assets which do
not require the Collateral Agent's execution. The Collateral Agent shall take
any action with respect to the Pledged Assets, this Agreement and the other
Transaction Documents relating to the Pledged Assets requested in a written
notice signed by each of the Secured Parties (or, after the occurrence of an
Early Amortization Event (other than a Facility Insurer Early Amortization
Event), by the Facility Insurer), including, without
35
limitation, releasing portions of the Pledged Assets from the security interests
imposed pursuant to this Agreement and the other Transaction Documents relating
to the Pledged Assets; provided, however, that the Collateral Agent shall not be
obligated to take any such action which is in conflict with any provisions of
law, of this Agreement, or of the other Transaction Documents. The Collateral
Agent shall not be under any obligation to take any action which is
discretionary under the provisions hereof or under any other Transaction
Document relating to the Pledged Assets unless so directed to do so in a written
notice signed by each of the Secured Parties (or, after the occurrence of an
Early Amortization Event (other than a Facility Insurer Early Amortization
Event), by the Facility Insurer). The Collateral Agent shall not have any duty
to any Secured Party as to any Pledged Assets in the possession or control of
such Secured Party.
(b) The Collateral Agent hereby agrees that it shall (i) take no
actions under the Lockbox Agreement or the Collection Account Agreement without
the prior written consent of each of the Secured Parties (or, after the
occurrence of an Early Amortization Event (other than a Facility Insurer Early
Amortization Event), of the Facility Insurer) other than those, expressly
permitted by this Agreement, (ii) take all actions under the Lockbox Agreement
or the Collection Account Agreement requested by each of the Secured Parties
(or, after the occurrence of an Early Amortization Event (other than a Facility
Insurer Early Amortization Event), by the Facility Insurer) and (iii) upon the
request of any Secured Party, deliver to such Secured Party copies of any daily
deposit advices or bank statements received by the Collateral Agent pursuant to
the Lockbox Agreement.
SECTION 2.12 Limitations on Duties of Collateral Agent, Etc. The
Backup Servicer, the Trustee, the Collateral Agent and the Collection Account
Bank shall be obligated to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against any such Person. The
Backup Servicer, the Trustee, the Collateral Agent and the Collection Account
Bank shall exercise the rights and powers vested in it by this Agreement or by
any other Transaction Document, and no such Person shall be liable with respect
to any action taken or omitted to be taken by it in accordance with the
direction of the Secured Parties in accordance with the terms of this Agreement.
SECTION 2.13 Exculpatory Provisions. The Backup Servicer, the
Trustee, the Collateral Agent and the Collection Account Bank shall not be
responsible in any manner whatsoever for the correctness of any recitals,
statements, representations or warranties contained herein or in the other
Transaction Documents, except for those made by or required to be verified by
such Person. None of the Backup Servicer, the Trustee, the Collateral Agent or
the Collection Account Bank makes any representations as to the value or
condition of the Pledged Assets or any part thereof, or as to the title of the
Borrower thereto or as to the security afforded by the Transaction Documents or
this Agreement. None of the Backup Servicer (prior to its appointment as
Servicer hereunder), the Trustee, the Collateral Agent and the Collection
Account Bank shall be responsible for insuring the Pledged Assets or for the
payment of taxes, charges, assessments or liens upon the Pledged Assets or for
the maintenance of the Pledged Assets.
SECTION 2.14 Reliance by Collateral Agent, Etc. (a) Whenever in the
administration of the Pledged Assets under this Agreement the Backup Servicer,
the Trustee, the
36
Collateral Agent or the Collection Account Bank shall deem it necessary or
desirable that a matter be proved or established with respect to any or all of
the Secured Parties in connection with the taking, suffering or omission of any
action hereunder by the Backup Servicer, the Trustee, the Collateral Agent or
the Collection Account Bank, such matter (unless other evidence in respect
thereof is specifically prescribed under this Agreement) may be deemed to be
conclusively provided or established by Officer's Certificate of all of the
Secured Parties (or, after the occurrence of an Early Amortization Event (other
than a Facility Insurer Early Amortization Event), of the Facility Insurer), in
each case, delivered to such Person. Without in any way limiting the foregoing,
all certificates, notices or directions required to be delivered by any of the
Secured Parties to the Backup Servicer, the Trustee, the Collateral Agent or the
Collection Account Bank pursuant to the terms hereof shall in all cases be
signed by a duly authorized officer of such Person.
(b) The Backup Servicer, the Trustee, the Collateral Agent or the
Collection Account Bank may consult with counsel, accountants and other experts,
and any opinion or advice of any such counsel, any such accountant, and any such
other expert shall be full and complete authorization and protection in respect
of any action taken or suffered by such Person hereunder in accordance
therewith. The Backup Servicer, the Trustee, the Collateral Agent or the
Collection Account Bank shall have the right at any time to seek instructions
concerning the administration of the Pledged Assets from any court of competent
jurisdiction.
(c) The Backup Servicer, the Trustee, the Collateral Agent or the
Collection Account Bank may rely, and shall be fully protected in acting, upon
any resolution, statement, certificate, instrument, opinion, report, notice,
request, consent, order, bond or other paper or document which it has no
reasonable reason to believe to be other than genuine and to have been signed or
presented by the proper party or parties or, in the case of cables, telecopies
and telexes, to have been sent by the proper party or parties. In the absence of
its negligence or willful misconduct, the Backup Servicer, the Trustee, the
Collateral Agent or the Collection Account Bank may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to such Person and conforming to the
requirements of this Agreement or any other Transaction Document.
SECTION 2.15 Collateral Agent's Reliance, Etc. None of the Backup
Servicer, the Trustee, the Collateral Agent or the Collection Account Bank nor
any of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them as the Backup
Servicer, the Trustee, the Collateral Agent or the Collection Account Bank, as
applicable, under or in connection with this Agreement or any other agreement
executed pursuant hereto, except for its or their own negligence or willful
malfeasance. Without limiting the foregoing, each of the Backup Servicer, the
Trustee, the Collateral Agent and the Collection Account Bank: (i) may consult
with legal counsel (including counsel for the Borrower, the Servicer, the Backup
Servicer, the Collection Account Bank and the Facility Insurer), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranties or
representations to the Lender or the Facility Insurer other than those set forth
in Section 4.04 hereof and shall not be responsible to the Lender or the
Facility Insurer for any statements, warranties or representations made in or in
connection with this Agreement, or in
37
connection with any of the other agreements executed pursuant hereto, on the
part of any other Person, except for those made by or required to be verified by
the Backup Servicer, the Trustee, the Collateral Agent or the Collection Account
Bank; (iii) shall not, except as otherwise provided herein, have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the Borrower or the
Servicer or to inspect the property (including the books and records) of the
Borrower or the Servicer; (iv) shall not, except as otherwise provided herein,
be responsible to the Lender or the Facility Insurer for the due execution,
liability, validity, enforceability, genuineness or sufficiency of value of this
Agreement or any other agreement, instrument or document furnished pursuant
hereto any other Person; and (v) shall incur no liability under or in respect of
this Agreement or any other agreement executed pursuant hereto, by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telex or facsimile) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 2.16 Delegation of Duties by the Collateral Agent. The
Backup Servicer, the Trustee, the Collateral Agent and the Collection Account
Bank may execute any of its duties under this Agreement by or through agents or
attorneys-in-fact approved by the Secured Parties and shall be entitled to
advice of counsel concerning all matters pertaining to such duties; provided,
that the Backup Servicer, the Trustee, the Collateral Agent and the Collection
Account Bank shall remain responsible for all actions and failures to act and
any negligence or misconduct of any such agents or attorneys-in-fact.
SECTION 2.17 Agent. (a) The Agent may, upon thirty (30) days' notice
to the Borrower, the Servicer, the Lender, the Facility Insurer and each other
party hereto, resign as Agent. If MLCFC shall resign as Agent under this
Agreement, then the Lender (with the consent of the Facility Insurer) during
such thirty-day period shall appoint a successor Agent, whereupon such successor
Agent shall succeed to the rights, powers and duties of the Agent and references
herein to the Agent shall mean such successor agent, effective upon its
appointment; and such former Agent's rights, powers and duties in such capacity
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. After any retiring
Agent's resignation hereunder as such agent, the provisions of Article VIII,
this Article II and Section 9.07 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
(b) Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them as Agent, as applicable, under or in connection with this Agreement or any
other agreement executed pursuant hereto, except for its or their own gross
negligence or willful malfeasance. Without limiting the foregoing, the Agent:
(i) may consult with legal counsel (including counsel for the Borrower, the
Servicer, the Backup Servicer, the Collection Account Bank and the Facility
Insurer), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (ii)
makes no warranty or representation to the Lender or the Facility Insurer and
shall not be responsible to the Lender or the Facility Insurer for any
statements, warranties or representations made by any Person other than the
Agent in or in
38
connection with this Agreement or in connection with any of the other agreements
executed pursuant hereto; (iii) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or the Servicer or to
inspect the property (including the books and records) of the Borrower or the
Servicer; (iv) shall not be responsible to the Lender or the Facility Insurer
for the genuineness or sufficiency of value of the Pledged Assets or the due
execution, liability, validity, enforceability, genuineness or sufficiency of
value of this Agreement or any other agreement, instrument or document furnished
pursuant hereto; and (v) shall incur no liability under or in respect of this
Agreement or any other agreement executed pursuant hereto, by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telex or facsimile) believed by it to be genuine and signed or sent by the
proper party or parties.
(c) The Agent may execute any of its duties under this Agreement by
or through agents or attorneys-in-fact approved by the Secured Parties or any
Affiliate of the Agent and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
SECTION 2.18 Evidence of Debt. The Lender shall maintain an account
or accounts evidencing the indebtedness of the Borrower to the Lender resulting
from each Loan owing to the Lender from time to time, including the amounts of
principal and interest payable and paid to the Lender from time to time
hereunder. The entries made in such account(s) of the Lender shall be conclusive
and binding for all purposes, absent manifest error.
SECTION 2.19 Survival of Representations and Warranties; Repayment
Obligations. It is understood and agreed that the representations and warranties
set forth in Section 4.01 are made on the date of this Agreement (which
representations and warranties shall survive the execution and delivery of this
Agreement), at the time of the initial Borrowing, and on each Subsequent
Borrowing Date and Remittance Date thereafter. If, as a result of the breach of
any of the representations and warranties in Section 4.01 or for any other
reason there exists or would exist a Program Deficiency, the Borrower shall
promptly (and, in any case, within three Business Days) prepay to the Agent, for
the account of the Lender, the portion of the Loans as is necessary to cure such
Program Deficiency. The Borrower shall promptly reimburse the Agent and the
Lender for any reasonable out-of-pocket expenses incurred by the Agent and the
Lender, respectively, in respect of any such prepayment including, without
limitation, Liquidation Fees.
SECTION 2.20 Release of Pledged Receivables. (a) Solely in
connection with the consummation of any payment in full by the related Obligor
or liquidation by the Servicer of any Receivable, or any required repurchase by
Maxtor of Pledged Receivables pursuant to the Purchase Agreement, the Borrower
shall be entitled to obtain the release of any Pledged Receivable and the
related Other Conveyed Property or Related Security subject to any such
transaction, pay off, liquidation or repurchase at any time after the date
hereof by depositing into the Collection Account the Release Price therefor on
any Remittance Date and upon such deposit the Collateral Agent shall execute and
deliver, within a reasonable period of time and at the sole expense of the
Borrower, such documents as the Borrower determines in its reasonable discretion
to be necessary to effect such release; provided, that the foregoing release
shall only be available
39
(in cases other than a required repurchase by Maxtor of Pledged Receivables
pursuant to the Purchase Agreement) if, after giving effect thereto and the
application of the proceeds thereof in accordance with the terms hereof, there
shall not be a Program Deficiency or Early Amortization Event.
(b) The Borrower shall notify the Agent and the Facility Insurer of
any Release Price to be paid pursuant to this Section 2.20 on the Business Day
on which such Release Price shall be paid specifying the Pledged Receivables to
be released and the Release Price.
SECTION 2.21 Treatment of Amounts Paid by the Borrower. Amounts paid
by the Borrower pursuant to Section 2.20 on account of Pledged Receivables shall
be treated as Collections hereunder.
SECTION 2.22 Termination. The Borrower may terminate this Agreement
solely upon (i) 45 Business Days' prior written notice to the Agent, the Lender
and the Facility Insurer, (ii) the payment in full of the Facility Amount as of
the date of such termination, (iii) the payment of the Pre-payment Fee to the
Agent, (iv) if the date of the termination occurs prior to the date of the first
anniversary of the Closing Date, the payment to the Facility Insurer of the net
present value (calculated using a discount rate equal to the Facility Insurer
Prepayment Discount Rate) of the Premiums that would have been payable to the
Facility Insurer during the period commencing on the date of such termination
and ending on the first anniversary of the Closing Date, such amount to be
calculated assuming that the Facility Amount was equal to the Borrowing Limit on
each day during such period, and (v) the payment by the Borrower of all other
Obligations owed to the Agent, the Collateral Agent, the Lender and the Facility
Insurer.
SECTION 2.23 Increase of Borrowing Limit. The Borrower may, upon 30
days' prior written notice (which written notice may not be delivered prior to
November 9, 2003) to the Agent, the Lender, the Collateral Agent and the
Facility Insurer, request that the Borrowing Limit be increased to $125,000,000,
which request may be granted in the sole discretion, and with the written
consent, of the Lender and the Facility Insurer, it being agreed that the
Borrower shall pay to the Lender a fee of $150,000 in connection with any such
increase, which fee shall be the exclusive fee payable to the Lender, the Agent
or the Facility Insurer in connection with such increase other than the
additional Yield, Premium and Fees which will accrue as a result of the
increased outstanding balance of Loans and the increase in the Borrowing Limit;
provided, that the Borrower shall remain liable for any expenses (including
legal fees) incurred by the Lender, the Agent or the Facility Insurer in
connection with such increase.
SECTION 2.24 Successor Collateral Agent. U.S. Bank National
Association may, upon sixty (60) days' notice to the Borrower, the Servicer, the
Agent, the Lender, the Facility Insurer and each other party hereto, resign as
Collateral Agent. If U.S. Bank National Association shall resign as Collateral
Agent under this Agreement, then the Agent and the Facility Insurer (or,
following the occurrence of an Early Amortization Event (other than a Facility
Insurer Early Amortization Event), the Facility Insurer only) shall appoint a
successor Collateral Agent, whereupon such successor Collateral Agent shall
succeed to the rights, powers and duties of the Collateral Agent hereunder (and,
without limitation, such successor Collateral Agent is hereby authorized and
empowered to file any financing statement amendments and
40
execute and deliver, on behalf of the former Collateral Agent, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the transfer of the rights, powers and duties of the former Collateral Agent
hereunder to such successor Collateral Agent) and references herein to the
Collateral Agent shall mean such successor Collateral Agent, effective upon its
appointment; and such former Collateral Agent's rights, powers and duties in
such capacity shall be terminated, without any other or further act or deed on
the part of such former Collateral Agent or any of the parties to this
Agreement. No such resignation shall be effective until a successor Collateral
Agent designated by the Agent and the Facility Insurer (or, following the
occurrence of an Early Amortization Event (other than a Facility Insurer Early
Amortization Event), the Facility Insurer only) shall have assumed the
responsibilities and obligations of the Collateral Agent hereunder. The former
Collateral Agent and the Servicer agree to cooperate with any successor
Collateral Agent in effecting the transfer of the former Collateral Agent's
responsibilities and rights hereunder.
SECTION 2.25 Successor Trustee. U.S. Bank National Association may,
upon sixty (60) days' notice to the Borrower, the Servicer, the Agent, the
Lender, the Facility Insurer and each other party hereto, resign as Trustee. If
U.S. Bank National Association shall resign as Trustee under this Agreement,
then the Agent and the Facility Insurer (or, following the occurrence of an
Early Amortization Event (other than a Facility Insurer Early Amortization
Event), the Facility Insurer only) shall appoint a successor Trustee, whereupon
such successor Trustee shall succeed to the rights, powers and duties of the
Trustee hereunder (and, without limitation, such successor Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the former
Trustee, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the transfer of the rights, powers and duties of the
former Trustee hereunder to such successor Trustee) and references herein to the
Trustee shall mean such successor Trustee, effective upon its appointment; and
such former Trustee's rights, powers and duties in such capacity shall be
terminated, without any other or further act or deed on the part of such former
Trustee or any of the parties to this Agreement. No such resignation shall be
effective until a successor Trustee designated by the Agent and the Facility
Insurer (or, following the occurrence of an Early Amortization Event (other than
a Facility Insurer Early Amortization Event), the Facility Insurer only) shall
have assumed the responsibilities and obligations of the Trustee hereunder. The
Trustee agrees to cooperate with any successor Trustee in effecting the
termination of the Trustee's responsibilities and rights hereunder.
III. CONDITIONS OF LOANS
SECTION 3.01 Conditions Precedent to Initial Borrowing. The initial
Borrowing hereunder is subject to the conditions precedent that:
(a) all fees due on the Closing Date, including the Structuring Fee
shall have been paid in full, on the Closing Date, to the Agent pursuant
to the terms of the Fee Letter and all acts and conditions (including,
without limitation, the obtaining of any necessary regulatory approvals
and the making of any required filings, recordings or registrations)
required to be done and performed and to have happened prior to the
execution, delivery
41
and performance of this Agreement and all related documents and to
constitute the same legal, valid and binding obligations, enforceable in
accordance with their respective terms, shall have been done and performed
and shall have happened in due and strict compliance with all applicable
laws; and
(b) the Agent and the Facility Insurer shall have received on or
before the date of such Borrowing the items listed in Schedule I annexed
hereto, each in form and substance satisfactory to the Agent, the Lender
and the Facility Insurer.
SECTION 3.02 Conditions Precedent to All Borrowings. Except as
otherwise expressly provided below, each Borrowing (including the initial
Borrowing) by the Borrower from the Lender shall be subject to the further
conditions precedent that:
(a) With respect to any such Borrowing (other than the initial
Borrowing), on or prior to the date of such Borrowing, the Servicer shall
have delivered to the Agent, with a copy to the Facility Insurer, in form
and substance satisfactory to the Agent and the Facility Insurer, the most
recent Monthly Remittance Report required by the terms of Section 6.11(b);
(b) At least four Business Days prior to the date of such Borrowing,
the Servicer shall have delivered to the Agent, the Facility Insurer and
the Backup Servicer a Borrowing Report, in form and substance satisfactory
to the Agent and the Facility Insurer, signed by an officer of the
Borrower having responsibility for financial matters of the Borrower which
shall demonstrate that, after giving effect to such Borrowing requested by
the Borrower no Program Deficiency shall exist and such Borrowing Report
shall have been verified by the Backup Servicer pursuant to Section
6.14(g);
(c) On the Borrowing Date of such Borrowing, the following
statements shall be true, and the Borrower by accepting the amount of such
Borrowing shall be deemed to have certified that:
(i) the representations and warranties contained in Section
4.01 are true and correct, before and after giving effect to the Borrowing
to take place on such Borrowing Date and to the application of proceeds
therefrom, on and as of such day as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing, which constitutes an Early Amortization Event
hereunder, or an event that but for notice or lapse of time or both would
constitute an Early Amortization Event;
(iii) (a) the principal amount of such Loan being advanced on
such Borrowing Date is not less than $1,000,000 and (b) on and as of such
day, after giving effect to such Borrowing no Program Deficiency shall
exist;
(iv) (A) the Borrower has delivered to the Agent and the
Facility Insurer a timely copy of a Notice of Borrowing pursuant to
Section 2.02(b), appropriately
42
completed and executed by the Borrower, (B) the Facility Insurer has not
delivered to the Agent and the Lender a timely copy of a Borrowing
Objection Notice pursuant to Section 2.02(c), and (C) the Contract related
to each Pledged Receivable hereunder on such Borrowing Date has been duly
assigned by Maxtor to the Borrower and duly assigned by the Borrower to
the Collateral Agent, for the benefit of the Secured Parties;
(v) all terms and conditions of the Purchase Agreement
required to be satisfied in connection with the transfer and sale of each
Receivable (and the Other Conveyed Property related thereto) being Pledged
hereunder on such Borrowing Date, including, without limitation, the
perfection of the Borrower's interests therein shall have been satisfied
in full, and all filings (including, without limitation, UCC filings)
required to be made by any Person and all actions required to be taken or
performed by any Person in any jurisdiction to give the Collateral Agent,
for the benefit of the Secured Parties, a first priority perfected
security interest in the Pledged Assets and the proceeds thereof (subject
only to Other Permitted Liens) shall have been made, taken or performed;
and
(vi) the Facility Insurance Policy shall be in full force and
effect;
(d) No law or regulation shall prohibit, and no order, judgment or
decree of any federal, state or local court or Government Entity shall
prohibit or enjoin, the making of such Loans by the Lender in accordance
with the provisions hereof;
(e) The Agent and the Facility Insurer shall have received and found
to be satisfactory with respect to the Pledged Receivables being Pledged
in connection with such Borrowing, which have been previously pledged,
assigned or otherwise transferred to any Person by Maxtor, the Borrower or
any Affiliate thereof under any other financing facility, evidence of the
release of any liens granted in connection with such financing with
respect to any such Pledged Receivables; and
(f) The Agent, the Collateral Agent and the Facility Insurer shall
have received such other opinions, documents and instruments, as such
Person shall have reasonably requested to be delivered by the Servicer or
the Borrower.
SECTION 3.03 Advances Do Not Constitute a Waiver. No advance of a
Loan hereunder shall constitute a waiver of any condition to the Lender's
obligation to make such an advance unless such waiver is in writing and executed
by the Lender and the Facility Insurer. The acceptance of funds by the Borrower
on any Borrowing Date shall be deemed to be a representation and warranty by the
Borrower that each of the conditions hereunder to the Borrowing on such
Borrowing Date have been fulfilled or waived in writing by each of the Agent and
the Facility Agent.
IV. REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrower. The
Borrower hereby represents and warrants to the Agent, the Lender and the
Facility Insurer, as of the date
43
hereof, on each Borrowing Date, on the date of each withdrawal from the
Collection Account pursuant to Section 2.05(f) hereof and on each Remittance
Date, as follows:
(a) Each Pledged Receivable designated as an Eligible Receivable on
any Borrowing Report, Monthly Remittance Report or Daily Report is an
Eligible Receivable.
(b) The Borrower is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware and
has the power and all licenses necessary to own its assets and to transact
the business in which it is presently engaged, and is duly qualified and
in good standing under the laws of each jurisdiction where its ownership
of the Pledged Receivables requires such qualification except where
failure to obtain such licenses or to be so qualified would not cause a
Material Adverse Effect.
(c) The Servicer is a corporation duly formed, validly existing and
in good standing under the laws of the State of Delaware and has the power
and all licenses necessary to own its assets and to transact the business
in which it is presently engaged (which includes servicing Receivables on
behalf of third parties and itself), and is duly qualified and in good
standing under the laws of each jurisdiction where its servicing of the
Pledged Receivables requires such qualification except where failure to
obtain such licenses or to be so qualified would not cause a Material
Adverse Effect.
(d) Each of the Servicer and the Borrower has the power, authority
and legal right to make, deliver and perform this Agreement and each of
the Transaction Documents to which it is a party and all of the
transactions contemplated hereby and thereby, and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement and each of the Transaction Documents to which it is a party,
and, in the case of the Borrower, to grant to the Collateral Agent, for
the benefit of the Secured Parties, a first priority perfected security
interest in the Pledged Assets (subject only to Other Permitted Liens) on
the terms and conditions of this Agreement. This Agreement and each of the
Transaction Documents to which the Servicer or the Borrower is a party
constitutes the legal, valid and binding obligation of the Servicer and
the Borrower, as applicable, enforceable against such Person in accordance
with their respective terms except as the enforceability hereof and
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization and other similar laws of general application affecting
creditors' rights generally and by general principles of equity (whether
such enforceability is considered in a proceeding in equity or at law). No
consent of any other party and no consent, license, approval or
authorization of, or registration or declaration with, any Government
Entity is required in connection with the execution, delivery or
performance by the Borrower or the Servicer of this Agreement or any
Transaction Document to which it is a party, or the validity or
enforceability of this Agreement or any such Transaction Document or the
Pledged Receivables.
(e) The execution, delivery and performance of this Agreement, the
other Transaction Documents and all other agreements and instruments
executed and delivered or to be executed and delivered pursuant hereto or
thereto will not (i) create any Adverse
44
Claim on the Pledged Assets or any other assets of the Borrower or the
Servicer other than as contemplated herein or (ii) violate any provision
of any existing law or regulation or any order or decree of any court,
regulatory body or administrative agency or the certificate of
incorporation or the bylaws of the Servicer or the certificate of
formation or limited liability company agreement of the Borrower or any
mortgage, indenture, contract or other agreement to which the Servicer or
the Borrower is a party or by which the Servicer or the Borrower or any
property or assets of the Servicer or the Borrower may be bound, other
than, in the case of the Servicer, any such mortgage, indenture, contract
or other agreement the violation of which would not reasonably be expected
to have a Material Adverse Effect.
(f) Except as set forth on Schedule IV-A annexed hereto, as amended
from time to time by delivery to the Agent and the Facility Insurer by the
Servicer of an updated schedule, no litigation or administrative
proceeding of or before any court, tribunal or Government Entity is
presently pending or, to the best of the Borrower's knowledge , threatened
against the Borrower or any properties of the Borrower or with respect to
this Agreement (x) which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect or (y) which purports to affect
the legality, validity or enforceability of this Agreement, any
Transaction Document to which the Borrower is a party, or any of the other
applicable documents forming part of the Pledged Assets or which seeks to
prevent the Pledge by the Borrower of the Pledged Assets or the
consummation of any other transactions contemplated by this Agreement or
any other Transaction Document.
(g) Except as set forth on Schedule IV-B annexed hereto, as amended
from time to time by delivery to the Agent and the Facility Insurer by the
Servicer of an updated schedule, no litigation or administrative
proceeding of or before any court, tribunal or Government Entity is
presently pending or, to the best of the Borrower's knowledge, threatened
against the Servicer or any properties of the Servicer or with respect to
this Agreement (x) which is reasonably likely to have a Material Adverse
Effect or (y) which purports to affect the legality, validity or
enforceability of this Agreement, any Transaction Document to which the
Servicer is a party, or any of the other applicable documents forming part
of the Pledged Assets or which seeks to prevent the Pledge by the Borrower
of the Pledged Assets or the consummation of any other transactions
contemplated by this Agreement or any other Transaction Document.
(h) The grant of the security interest in the Pledged Assets by the
Borrower to the Collateral Agent for the benefit of the Secured Parties
pursuant to this Agreement is in the ordinary course of business for the
Borrower and is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction. No such Pledged
Assets have been sold, transferred, assigned or pledged by the Borrower to
any Person other than the Collateral Agent, for the benefit of the Secured
Parties, pursuant to the terms of this Agreement.
(i) The Borrower has no Debt or other indebtedness, other than Debt
incurred under (or contemplated by) the terms of this Agreement and the
Purchase Agreement.
45
(j) The Borrower has been formed solely for the purpose of engaging
in transactions of the types contemplated by this Agreement and the
Purchase Agreement.
(k) No injunction, writ, restraining order or other order of any
nature adversely affects the Servicer's or the Borrower's performance of
their respective obligations under this Agreement or any Transaction
Document to which the Servicer or the Borrower is a party.
(l) Each of the Servicer and the Borrower has filed (on a
consolidated basis or otherwise) on a timely basis all federal, state and
other material tax returns required to be filed, is not liable for taxes
payable by any other Person and has paid or made adequate provisions for
the payment of all taxes, assessments and other governmental charges due
from the Servicer or the Borrower, as applicable. No tax lien or similar
adverse claim has been filed, and, to the best of the Borrower's
knowledge, no claim is being asserted, with respect to any such tax,
assessment or other governmental charge other than any Other Permitted
Liens. Any taxes, fees and other governmental charges payable by the
Servicer or the Borrower, as applicable in connection with the execution
and delivery of this Agreement and the other Transaction Documents and the
transactions contemplated hereby or thereby have been paid, if due, or
shall have been paid prior to delinquency.
(m) The chief executive office of the Servicer (and the location of
the Servicer's records regarding the Pledged Receivables) is located at
000 XxXxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000. The chief executive office of
the Borrower (and the location of the Borrower's records regarding the
Pledged Receivables) is located at 000 XxXxxxxx Xxxxxxxxx, #00,000,
Xxxxxxxx, XX 00000. Neither the Servicer nor the Borrower has had any
chief executive office outside the state of California since its
formation.
(n) Each of the Servicer's and the Borrower's legal names and
jurisdiction of formation are as set forth in this Agreement; each of the
Servicer and the Borrower has not changed its jurisdiction of formation;
each of the Servicer and the Borrower has not changed its name since its
formation, each of the Servicer and the Borrower does not have tradenames,
fictitious names, assumed names or "doing business as" names other than as
disclosed on Schedule III annexed hereto (as such Schedule may be updated
from time to time upon receipt of a notice delivered to the Agent and the
Facility Insurer pursuant to Section 6.19 and compliance with all terms
and conditions of Section 6.19). The Servicer's only jurisdiction of
formation is Delaware. The Borrower's only jurisdiction of formation is
Delaware.
(o) Each of the Servicer and the Borrower is solvent and will not
become insolvent after giving effect to the transactions contemplated
hereby; each of the Servicer and the Borrower is paying its debts as they
become due; and each of the Servicer and the Borrower, after giving effect
to the transactions contemplated hereby, will have adequate capital to
conduct its business.
46
(p) The Borrower has no subsidiaries and has engaged in no business
activities other than those expressly contemplated in this Agreement and
the Purchase Agreement.
(q) The Borrower has received as a contribution to its capital from
the Originator under the Purchase Agreement, or given fair consideration
and reasonably equivalent value in exchange for the sale of, the Pledged
Receivables under the Purchase Agreement (and no such contribution or sale
is or may be void or subject to avoidance under any section of the
Bankruptcy Code).
(r) No Monthly Remittance Report, Borrowing Report or Daily Report
(each if prepared by the Borrower or the Servicer, or to the extent that
information contained therein is supplied by the Borrower or the
Servicer), information, exhibit, financial statement, document, book,
record or report furnished by the Borrower or the Servicer to the Agent,
the Lender or the Facility Insurer in connection with this Agreement is
inaccurate in any material respect as of the date it is dated or (except
as otherwise disclosed in writing to the Agent, the Lender or the Facility
Insurer, as the case may be, at such time) as of the date so furnished,
and no such document contains any material misstatement of fact or omits
or shall omit to state a material fact or any fact necessary to make the
statements contained therein not misleading.
(s) No proceeds of any Loans have been used by the Borrower to
acquire any security in any transaction which is subject to Section 13 or
14 of the Securities Exchange Act of 1934, as amended.
(t) There are no agreements in effect adversely affecting the
rights of the Borrower to make, or cause to be made, the grant of the
security interest in the Pledged Assets contemplated by Section 2.10.
(u) Neither the Servicer nor the Borrower is an "investment
company" or an "affiliated person" of or "promoter" or "principal
underwriter" for an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended, nor is the Servicer or the
Borrower otherwise subject to regulation thereunder.
(v) No Early Amortization Event or Unmatured Early Amortization
Event has occurred and is continuing.
(w) Each of the Pledged Receivables was underwritten and is being
serviced in conformance with the Servicer's and the Borrower's standard
underwriting, credit, collection, operating and reporting procedures and
systems (including, without limitation, the Credit and Collection Policy).
(x) Each of the Servicer and the Borrower is in compliance in all
material respects with ERISA and has not incurred and does not expect to
incur any material liabilities (except for premium payments arising in the
ordinary course of business) to the Pension Benefit Guaranty Corporation
(or any successor thereto) under ERISA.
47
(y) There is not now, nor will there be at any time in the future,
any agreement or understanding between the Servicer and the Borrower
(other than as expressly set forth herein) providing for the allocation or
sharing of obligations to make payments or otherwise in respect of any
taxes, fees, assessments or other governmental charges.
(z) On or prior to the date of the initial Borrowing hereunder (i)
all filings (including, without limitation, UCC filings) required to be
made by any Person and all other actions required to be taken or performed
by any Person in any jurisdiction to give the Collateral Agent for the
benefit of the Secured Parties a first priority perfected security
interest on all Pledged Assets, including without limitation all Related
Security related thereto and the proceeds thereof (subject only to Other
Permitted Liens), shall have been made, taken or performed and (ii) all
filings (including, without limitation, UCC filings) required to be made
by any Person and all other actions required to be taken or performed by
any Person in any jurisdiction to grant the Borrower a first priority
perfected security interest on all Receivables and Other Conveyed Property
transferred to it under the Purchase Agreement and the proceeds thereof
(subject only to Other Permitted Liens) shall have been made, taken or
performed.
(aa) No Obligor is an Affiliate of the Servicer or the Borrower.
(bb) There has been no material adverse change in the condition
(financial or otherwise), business, operations, results of operations, or
properties of the Servicer or the Borrower since the date of the
Servicer's most recent audited financial statements delivered to the Agent
and the Facility Insurer and the date of the Borrower's organization.
(cc) The Pledged Assets are free and clear of any Adverse Claim
other than any Other Permitted Liens.
(dd) All Obligors have been instructed to remit all Collections
directly to the Lockbox or the Lockbox Account. The Lockbox and Lockbox
Account are subject to the Lockbox Account Agreement.
(ee) The Borrower has good and marketable title to the Pledged
Receivables.
(ff) Upon the initial Borrowing hereunder this Agreement will create
a valid and continuing security interest (as defined in the applicable
UCC) in the Pledged Assets in favor of the Collateral Agent for the
benefit of the Secured Parties, which security interest is prior to all
other Liens (other than Other Permitted Liens), and is enforceable as such
as against creditors of and purchasers from the Borrower.
(gg) The Pledged Receivables constitute "accounts" within the
meaning of the UCC.
48
(hh) Other than the security interest granted to the Collateral
Agent for the benefit of the Secured Parties pursuant to this Agreement,
neither the Borrower nor the Servicer has pledged, assigned, sold, granted
a security interest in, or otherwise conveyed any of the Pledged Assets.
Neither the Borrower nor the Servicer has authorized the filing of, or is
aware of, any financing statements against the Borrower that include a
description of any portion of the Pledged Assets other than any such
financing statement relating to the security interest granted to the
Collateral Agent for the benefit of the Secured Parties hereunder or any
such financing statement that has been terminated. Neither the Borrower
nor the Servicer is aware of any judgment or tax lien filings against the
Borrower.
None of the Agent, the Lender or the Facility Insurer shall waive any breach of
the representations and warranties contained in Sections 4.01(z), 4.01 (cc),
4.01 (ee), 4.01 (ff), 4.01(gg) or 4.01(hh).
SECTION 4.02 Representations and Warranties of the Servicer. The
Servicer, in its capacity as Servicer, hereby represents and warrants to the
Agent, the Lender and the Facility Insurer, as of the date hereof, on each
Borrowing Date, on the date of each withdrawal from the Collection Account
pursuant to Section 2.05(f) hereof and on each Remittance Date, as follows:
(a) (i) No Pledged Receivable designated as an Eligible Receivable
on any Borrowing Report, Monthly Remittance Report or Daily Report is a
Defaulted Receivable or a Delinquent Receivable and (ii) to the best of
the Servicer's knowledge, each Pledged Receivable designated as an
Eligible Receivable on any Borrowing Report, Monthly Remittance Report or
Daily Report is an Eligible Receivable.
(b) To the best of the Servicer's knowledge, the Borrower is a
limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware and has the power and all
licenses necessary to own its assets and to transact the business in which
it is presently engaged, and is duly qualified and in good standing under
the laws of each jurisdiction where its ownership of the Pledged
Receivables requires such qualification except where failure to obtain
such licenses or to be so qualified would not cause a Material Adverse
Effect.
(c) The Servicer is a corporation duly formed, validly existing and
in good standing under the laws of the State of Delaware and has the power
and all licenses necessary to own its assets and to transact the business
in which it is presently engaged (which includes servicing Receivables on
behalf of third parties and itself), and is duly qualified and in good
standing under the laws of each jurisdiction where its servicing of the
Pledged Receivables requires such qualification except where failure to
obtain such licenses or to be so qualified would not cause a Material
Adverse Effect.
(d) Each of the Servicer and, to the best of the Servicer's
knowledge, the Borrower has the power, authority and legal right to make,
deliver and perform this Agreement and each of the Transaction Documents
to which it is a party and all of the transactions contemplated hereby and
thereby, and has taken all necessary action to
49
authorize the execution, delivery and performance of this Agreement and
each of the Transaction Documents to which it is a party, and, to the best
of the Servicer's knowledge in the case of the Borrower, to grant to the
Collateral Agent, for the benefit of the Secured Parties, a first priority
perfected security interest in the Pledged Assets (subject only to Other
Permitted Liens) on the terms and conditions of this Agreement. This
Agreement and each of the Transaction Documents to which the Servicer or
the Borrower is a party constitutes the legal, valid and binding
obligation of the Servicer and, to the best of the Servicer's knowledge,
the Borrower, as applicable, enforceable against the Servicer and, to the
best of the Servicer's knowledge, the Borrower in accordance with their
respective terms except as the enforceability hereof and thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization and other
similar laws of general application affecting creditors' rights generally
and by general principles of equity (whether such enforceability is
considered in a proceeding in equity or at law). No consent of any other
party and no consent, license, approval or authorization of, or
registration or declaration with, any Government Entity is required in
connection with the execution, delivery or performance by the Servicer or,
to the best of the Servicer's knowledge, the Borrower, of this Agreement
or any Transaction Document to which it is a party, or the validity or
enforceability of this Agreement or any such Transaction Document or the
Pledged Receivables.
(e) The execution, delivery and performance of this Agreement, the
other Transaction Documents and all other agreements and instruments
executed and delivered or to be executed and delivered pursuant hereto or
thereto will not (i) create any Adverse Claim on the Pledged Assets or any
other assets of the Servicer or, to the best of the Servicer's knowledge,
the Borrower other than as contemplated herein or (ii) violate any
provision of any existing law or regulation or any order or decree of any
court, regulatory body or administrative agency or the certificate of
incorporation or the bylaws of the Servicer or, to the best of the
Servicer's knowledge, the certificate of formation or limited liability
company agreement of the Borrower or any mortgage, indenture, contract or
other agreement to which the Servicer or, to the best of the Servicer's
knowledge, the Borrower is a party or by which the Servicer or, to the
best of the Servicer's knowledge, the Borrower or any property or assets
of the Servicer or, to the best of the Servicer's knowledge, the Borrower
may be bound, other than, in the case of the Servicer, any such mortgage,
indenture, contract or other agreement the violation of which would not
reasonably be expected to have a Material Adverse Effect.
(f) Except as set forth on Schedule IV-A annexed hereto, as amended
from time to time by delivery to the Agent and the Facility Insurer by the
Servicer of an updated schedule, no litigation or administrative
proceeding of or before any court, tribunal or Government Entity is, to
the best of the Servicer's knowledge, presently pending or threatened
against the Borrower or any properties of the Borrower or with respect to
this Agreement (x) which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect or (y) which purports to affect
the legality, validity or enforceability of this Agreement, any
Transaction Document to which the Borrower is a party, or any of the other
applicable documents forming part of the Pledged Assets or which seeks to
prevent the Pledge by the Borrower of the Pledged Assets or the
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consummation of any other transactions contemplated by this Agreement or
any other Transaction Document.
(g) Except as set forth on Schedule IV-B annexed hereto, as amended
from time to time by delivery to the Agent and the Facility Insurer by the
Servicer of an updated schedule, no litigation or administrative
proceeding of or before any court, tribunal or Government Entity is
presently pending or, to the best of the Servicer's knowledge, threatened
against the Servicer or any properties of the Servicer or with respect to
this Agreement (x) which is reasonably likely to have a Material Adverse
Effect or (y) which purports to affect the legality, validity or
enforceability of this Agreement, any Transaction Document to which the
Servicer is a party, or any of the other applicable documents forming part
of the Pledged Assets or which seeks to prevent the Pledge by the Borrower
of the Pledged Assets or the consummation of any other transactions
contemplated by this Agreement or any other Transaction Document.
(h) To the best of the Servicer's knowledge, the grant of the
security interest in the Pledged Assets by the Borrower to the Collateral
Agent for the benefit of the Secured Parties pursuant to this Agreement is
in the ordinary course of business for the Borrower and is not subject to
the bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction. To the best of the Servicer's knowledge, no such
Pledged Assets have been sold, transferred, assigned or pledged by the
Borrower to any Person other than the Collateral Agent, for the benefit of
the Secured Parties, pursuant to the terms of this Agreement.
(i) To the best of the Servicer's knowledge, the Borrower has no
Debt or other indebtedness, other than Debt incurred under (or
contemplated by) the terms of this Agreement and the Purchase Agreement.
(j) To the best of the Servicer's knowledge, the Borrower has been
formed solely for the purpose of engaging in transactions of the types
contemplated by this Agreement and the Purchase Agreement.
(k) No injunction, writ, restraining order or other order of any
nature adversely affects the Servicer's or, to the best of the Servicer's
knowledge, the Borrower's performance of their respective obligations
under this Agreement or any Transaction Document to which the Servicer or
the Borrower is a party.
(l) Each of the Servicer and, to the best of the Servicer's
knowledge, the Borrower has filed (on a consolidated basis or otherwise)
on a timely basis all federal, state and other material tax returns
required to be filed, is not liable for taxes payable by any other Person
and has paid or made adequate provisions for the payment of all taxes,
assessments and other governmental charges due from the Servicer or the
Borrower, as applicable. No tax lien or similar adverse claim has been
filed, and, to the best of the Servicer's knowledge, no claim is being
asserted, with respect to any such tax, assessment or other governmental
charge with respect to the Servicer or, to the best of the Servicer's
knowledge, the Borrower other than any Other Permitted Liens. Any taxes,
51
fees and other governmental charges payable by the Servicer or, to the
best of the Servicer's knowledge, the Borrower, as applicable in
connection with the execution and delivery of this Agreement and the other
Transaction Documents and the transactions contemplated hereby or thereby
have been paid, if due, or shall have been paid prior to delinquency.
(m) The chief executive office of the Servicer (and the location of
the Servicer's records regarding the Pledged Receivables) is located at
000 XxXxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000. To the best of the Servicer's
knowledge, the chief executive office of the Borrower (and the location of
the Borrower's records regarding the Pledged Receivables) is located at
000 XxXxxxxx Xxxxxxxxx, #00,000, Xxxxxxxx, XX 00000. Neither the Servicer
nor, to the best of the Servicer's knowledge, the Borrower has had any
chief executive office outside the State of California since its
formation.
(n) Each of the Servicer's and, to the best of the Servicer's
knowledge, the Borrower's legal names and jurisdiction of formation are as
set forth in this Agreement; each of the Servicer and, to the best of the
Servicer's knowledge, the Borrower has not changed its jurisdiction of
formation, each of the Servicer and, to the best of the Servicer's
knowledge, the Borrower has not changed its name since its formation, each
of the Servicer and, to the best of the Servicer's knowledge, the Borrower
does not have tradenames, fictitious names, assumed names or "doing
business as" names other than as disclosed on Schedule III annexed hereto
(as such Schedule may be updated from time to time upon receipt of a
notice delivered to the Agent and the Facility Insurer pursuant to Section
6.19 and compliance with all terms and conditions of Section 6.19). The
Servicer's only jurisdiction of formation is Delaware. To the best of the
Servicer's knowledge, the Borrower's only jurisdiction of formation is
Delaware.
(o) Each of the Servicer and, to the best of the Servicer's
knowledge, the Borrower is solvent and will not become insolvent after
giving effect to the transactions contemplated hereby; each of the
Servicer and, to the best of the Servicer's knowledge, the Borrower is
paying its debts as they become due; and each of the Servicer and, to the
best of the Servicer's knowledge, the Borrower, after giving effect to the
transactions contemplated hereby, will have adequate capital to conduct
its business.
(p) To the best of the Servicer's knowledge, the Borrower has no
subsidiaries and has engaged in no business activities other than those
expressly contemplated in this Agreement and the Purchase Agreement.
(q) To the best of the Servicer's knowledge, the Borrower has
received as a contribution to its capital from the Originator under the
Purchase Agreement, or given fair consideration and reasonably equivalent
value in exchange for the sale of, the Pledged Receivables under the
Purchase Agreement (and no such contribution or sale is or may be void or
subject to avoidance under any section of the Bankruptcy Code).
(r) No Monthly Remittance Report, Borrowing Report or Daily Report
(each if prepared by the Servicer or, to the best of the Servicer's
knowledge, by the Borrower, or to the extent that information contained
therein is supplied by the Servicer or, to the
52
best of the Servicer's knowledge, by the Borrower), information, exhibit,
financial statement, document, book, record or report furnished or to be
furnished by the Servicer or, to the best of the Servicer's knowledge, the
Borrower to the Agent, the Lender or the Facility Insurer in connection
with this Agreement is inaccurate in any material respect as of the date
it is dated or (except as otherwise disclosed in writing to the Agent, the
Lender or the Facility Insurer, as the case may be, at such time) as of
the date so furnished, and no such document contains any material
misstatement of fact or omits or shall omit to state a material fact or
any fact necessary to make the statements contained therein not
misleading.
(s) To the best of the Servicer's knowledge, no proceeds of any
Loans have been used by the Borrower to acquire any security in any
transaction which is subject to Section 13 or 14 of the Securities
Exchange Act of 1934, as amended.
(t) To the best of the Servicer's knowledge, there are no
agreements in effect adversely affecting the rights of the Borrower to
make, or cause to be made, the grant of the security interest in the
Pledged Assets contemplated by Section 2.10.
(u) Neither the Servicer nor, to the best of the Servicer's
knowledge, the Borrower is an "investment company" or an "affiliated
person" of or "promoter" or "principal underwriter" for an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended, nor is the Servicer or, to the best of the Servicer's
knowledge, the Borrower otherwise subject to regulation thereunder.
(v) No Early Amortization Event or Unmatured Early Amortization
Event (other than an Early Amortization Event or Unmatured Early
Amortization Event caused by or related to the Borrower or the Facility
Insurer) has occurred and is continuing and, to the best of the Servicer's
knowledge, no Early Amortization Event or Unmatured Early Amortization
Event caused by or related to the Borrower has occurred and is continuing.
(w) Each of the Pledged Receivables was underwritten and is being
serviced in conformance with the Servicer's and, to the best of the
Servicer's knowledge, the Borrower's standard underwriting, credit,
collection, operating and reporting procedures and systems (including,
without limitation, the Credit and Collection Policy).
(x) Each of the Servicer and, to the best of the Servicer's
knowledge, the Borrower is in compliance in all material respects with
ERISA and has not incurred and does not expect to incur any material
liabilities (except for premium payments arising in the ordinary course of
business) to the Pension Benefit Guaranty Corporation (or any successor
thereto) under ERISA.
(y) There is not now, nor will there be at any time in the future,
any agreement or understanding between the Servicer and the Borrower
(other than as expressly set forth herein) providing for the allocation or
sharing of obligations to make payments or otherwise in respect of any
taxes, fees, assessments or other governmental charges.
53
(z) On or prior to the date of the initial Borrowing hereunder (i)
all filings (including, without limitation, UCC filings) required to be
made by any Person and all other actions required to be taken or performed
by any Person in any jurisdiction to give the Collateral Agent for the
benefit of the Secured Parties a first priority perfected security
interest on all Pledged Assets, including without limitation all Related
Security related thereto and the proceeds thereof (subject only to Other
Permitted Liens), shall have been made, taken or performed and (ii) all
filings (including, without limitation, UCC filings) required to be made
by any Person and all other actions required to be taken or performed by
any Person in any jurisdiction to grant the Borrower a first priority
perfected security interest on all Receivables and Other Conveyed Property
transferred to it under the Purchase Agreement and the proceeds thereof
(subject only to Other Permitted Liens) shall have been made, taken or
performed.
(aa) No Obligor is an Affiliate of the Servicer or, to the best of
the Servicer's knowledge, the Borrower.
(bb) There has been no material adverse change in the condition
(financial or otherwise), business, operations, results of operations, or
properties of the Servicer or, to the best of the Servicer's knowledge,
the Borrower since the date of the Servicer's most recent audited
financial statements delivered to the Agent and the Facility Insurer and
the date of the Borrower's organization.
(cc) To the best of the Servicer's knowledge, the Pledged Assets are
free and clear of any Adverse Claim other than any Other Permitted Liens.
(dd) All Obligors have been instructed to remit all Collections
directly to the Lockbox or the Lockbox Account. The Lockbox and Lockbox
Account are subject to the Lockbox Account Agreement.
(ee) To the best of the Servicer's knowledge, the Borrower has good
and marketable title to the Pledged Receivables.
(ff) Upon the initial Borrowing hereunder this Agreement will create
a valid and continuing security interest (as defined in the applicable
UCC) in the Pledged Assets in favor of the Collateral Agent for the
benefit of the Secured Parties, which security interest is prior to all
other Liens (other than Other Permitted Liens), and is enforceable as such
as against creditors of and purchasers from the Borrower.
(gg) The Pledged Receivables constitute "accounts" within the
meaning of the UCC.
(hh) Other than the security interest granted to the Collateral
Agent for the benefit of the Secured Parties pursuant to this Agreement,
neither the Servicer nor, to the best of the Servicer's knowledge, the
Borrower has pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Pledged Assets. Neither the Servicer nor, to
the best of the Servicer's knowledge, the Borrower has authorized the
54
filing of, or is aware of, any financing statements against the Borrower
that include a description of any portion of the Pledged Assets other than
any such financing statement relating to the security interest granted to
the Collateral Agent for the benefit of the Secured Parties hereunder or
any such financing statement that has been terminated. Neither the
Servicer nor, to the best of the Servicer's knowledge, the Borrower is
aware of any judgment or tax lien filings against the Borrower.
None of the Agent, the Lender or the Facility Insurer shall waive any breach of
the representations and warranties contained in Sections 4.02(z), 4.02(cc),
4.02(ee), 4.02(ff), 4.02(gg) or 4.02(hh).
SECTION 4.03 Sale of Receivables Upon Breach of Covenant or
Representation and Warranty by Borrower. The Borrower or the Servicer, as the
case may be, shall inform each other and the other parties to this Agreement
promptly, in writing, upon the discovery of any breach of the representations,
warranties and/or covenants contained in Section 4.01, Section 4.02 or Article
V; provided, however, that the failure to provide any such notice shall not
diminish, in any manner whatsoever, any obligation of the Borrower hereunder to
sell any Pledged Receivable. Upon the discovery by or notice to the Borrower of
such breach that also constitutes a Maxtor Purchase Event under and as defined
in the Purchase Agreement, the Borrower shall have an obligation to, and the
Borrower shall, sell to Maxtor pursuant to the Purchase Agreement (and the Agent
or the Facility Insurer or, after an Early Amortization Event, the Facility
Insurer (other than a Facility Insurer Early Amortization Event) only may
enforce such obligation of the Borrower to sell) any Pledged Receivable
adversely affected by any such breach. The Servicer shall notify the Agent and
the Facility Insurer, in writing, promptly after it learns of any failure by the
Borrower to so resell any such Pledged Receivable. In connection with the resale
of such Pledged Receivable, the Borrower shall remit funds in an amount equal to
the Release Price for such Pledged Receivable to the Collection Account on the
date of such resale.
SECTION 4.04 Representations and Warranties of the Backup Servicer,
the Trustee, the Collateral Agent and the Collection Account Bank. Each of the
Backup Servicer, the Trustee, the Collateral Agent and the Collection Account
Bank hereby represents and warrants to the Agent, the Lender and the Facility
Insurer, as of the date hereof, as follows:
(a) It is a national banking association, duly formed, validly
existing and in good standing under the laws of the United States and has
the power and all licenses necessary to own its assets and to transact the
business in which it is presently engaged.
(b) It has the power, authority and legal right to make, deliver and
perform under this Agreement and each of the Transaction Documents to
which it is a party, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and each of the
Transaction Documents to which it is a party. This Agreement and each of
the Transaction Documents to which it is a party constitutes its legal,
valid and binding obligation, enforceable against it in accordance with
their respective terms except as the enforceability hereof and thereof may
be limited by bankruptcy, insolvency, moratorium, reorganization and other
similar laws of general
55
application affecting creditors' rights generally and by general
principles of equity (whether such enforceability is considered in a
proceeding in equity or at law). No consent of any other party and no
consent, license, approval or authorization of, or registration or
declaration with, any Government Entity is required in connection with the
execution, delivery or performance by it of this Agreement or any
Transaction Document to which it is a party, or the validity or
enforceability of this Agreement or any such Transaction Document.
V. GENERAL COVENANTS OF THE BORROWER AND THE SERVICER
SECTION 5.01 General Covenants. (a) The Servicer will observe all
corporate procedures required by its certificate of incorporation and bylaws and
the laws of its jurisdiction of incorporation. The Borrower will observe all
limited liability company procedures required by its certificate of formation
and limited liability company agreement and the laws of its jurisdiction of
organization. The Servicer will maintain its corporate existence in good
standing under the laws of its jurisdiction of incorporation and will promptly
obtain and thereafter maintain qualifications to do business as a foreign
corporation in any other state in which it does business and in which it is
required to so qualify in accordance with applicable law. The Borrower will
maintain its limited liability company existence in good standing under the laws
of its jurisdiction of organization and will promptly obtain and thereafter
maintain qualifications to do business as a foreign limited liability company in
any other state in which it does business and in which it is required to so
qualify in accordance with applicable law.
(b) The Borrower will at all times ensure that (i) its directors act
independently and in its interests and in the interest of its creditors, (ii) it
shall at all times maintain at least two independent directors (x) each of whom
is not currently and has not been during the five years preceding the date of
this Agreement an officer, director or employee of the Borrower or an Affiliate
thereof and (y) each of whom is not a holder of any equity interest of the
Borrower or an Affiliate thereof, (iii) its assets are not commingled with those
of Maxtor or any other Affiliate of the Borrower, (iv) its directors authorize
all of its limited liability company actions, (v) it maintains separate and
accurate records and books of account and such books and records are kept
separate from those of Maxtor and any other Affiliate of the Borrower, (vi) it
shall use the mailing address and telephone number set forth for it in the
signature pages hereto and (vii) it maintains minutes of the meetings and other
proceedings of the directors. Where necessary, the Borrower will obtain proper
authorization from its directors for limited liability company action.
(c) The Borrower will pay its operating expenses and liabilities
from its own assets; provided, however, that the Borrower's organizational
expenses and the expenses incurred in connection with the negotiation and
execution of this Agreement and the other Transaction Documents may be paid by
Maxtor.
(d) Furthermore, the Borrower will not hold itself out, or permit
itself to be held out, as having agreed to pay or as being liable for the debts
of Maxtor or any Affiliate of Maxtor and the Borrower will not engage in
business transactions with Maxtor or any Affiliate of Maxtor, except on an
arm's-length basis. The Borrower will not hold Maxtor or any Affiliate of
56
Maxtor out to third parties as other than an entity with assets and liabilities
distinct from the Borrower. The Borrower will cause any financial statements
consolidated with those of Maxtor or any Affiliate of Maxtor to state that the
Borrower is a separate legal entity with its own separate creditors who, in any
liquidation of the Borrower, will be entitled to be satisfied out of the
Borrower's assets prior to any value in the Borrower becoming available to the
Borrower's equity holders. The Borrower will not act in any other manner that
could foreseeably mislead others with respect to the Borrower's separate
identity.
(e) In its capacity as Servicer, Maxtor will, to the extent
necessary, maintain separate records on behalf of and for the benefit of the
Agent, the Lender and the Facility Insurer, will act in accordance with
instructions and directions, delivered in accordance with the terms hereof, from
the Borrower, the Agent, the Lender and/or the Facility Insurer in connection
with its servicing of the Pledged Receivables hereunder, and will ensure that,
at all times when it is dealing with or in connection with the Pledged
Receivables in its capacity as Servicer, it holds itself out as Servicer, and
not in any other capacity.
(f) The Servicer shall, to the extent required by applicable law,
disclose all material transactions associated with this transaction in
appropriate regulatory filings and public announcements.
(g) The Borrower shall take all other actions necessary to maintain
the accuracy of the factual assumptions and understandings set forth in the
legal opinion of Xxxxxxxx & Xxxxxxxx LLP, special counsel to Maxtor and the
Borrower, issued in connection with the Purchase Agreement and relating to the
issues of substantive consolidation and true sale or contribution of the Pledged
Receivables.
(h) Except as otherwise provided herein or in any other Transaction
Document, neither the Borrower nor the Servicer, in its capacity as Servicer,
shall (i) sell, assign (by operation of law or otherwise) or otherwise dispose
of, or create or (other than any Other Permitted Liens) suffer to exist any
Adverse Claim upon or with respect to, any Pledged Receivable, any Collections
related thereto or any other Pledged Assets related thereto, or upon or with
respect to any account to which any Collections of any Receivable are sent, or
assign any right to receive income in respect thereof or (ii) create or (other
than any Other Permitted Liens) suffer to exist any Adverse Claim upon or with
respect to any of the Borrower's assets.
(i) The Borrower will not merge or consolidate with, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions), all or substantially all of its assets (whether now
owned or hereafter acquired), or acquire all or substantially all of the assets
or capital stock or other ownership interest of any Person.
(j) The Borrower will not account for or treat (whether in financial
statements or otherwise) the transactions contemplated by the Purchase Agreement
in any manner other than the sale or contribution of Receivables, Related
Security and Other Conveyed Property by Maxtor, as the case may be, to the
Borrower.
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(k) The Borrower will not amend, modify, waive or terminate any
terms or conditions of the Purchase Agreement (including, without limitation,
any eligibility criteria thereunder) without the written consent of the Agent
and the Facility Insurer, and shall perform its obligations thereunder.
(l) The Borrower will not amend, modify or otherwise make any
change to its certificate of formation or limited liability company agreement
without the prior written consent of the Agent and the Facility Insurer.
(m) The Servicer and the Borrower shall, by no later than June 1,
2003, deliver to the Agent and the Facility Insurer a correct and complete copy
of the Credit and Collection Policy which shall be (i) in form and substance
satisfactory to the Agent and the Facility Insurer and (ii) accompanied by
certificates from the chief executive officer, president or secretary of each of
the Servicer and the Borrower certifying that attached thereto is a correct and
complete copy of the Credit and Collection Policy. Neither the Borrower nor the
Servicer will make or allow to be made any material amendment to the Credit and
Collection Policy without the prior written consent of the Agent and the
Facility Insurer. Each of the Borrower and, unless the Backup Servicer has
succeeded Maxtor as Servicer, the Servicer shall comply with all provisions of
the Credit and Collection Policy.
(n) If the Borrower or the Servicer receive any Collections, the
Borrower or the Servicer, as applicable, will remit such Collections to the
Collection Account within two (2) Business Day of the Borrower's or the
Servicer's receipt thereof.
(o) Each of the Servicer and the Borrower shall take all actions
necessary (including, without limitation, making payment of premiums payable) in
order for payments to be made by the applicable insurer under and pursuant to
the terms of the Facility Insurance Policy and each other insurance policy
required hereunder.
(p) The Servicer shall instruct and the Borrower shall cause the
Obligor of each Receivable that is Pledged hereunder to remit all Collections
owed by such Obligor by delivery of checks to the Lockbox or by wire transfers
to the Lockbox Account (and shall ensure that only funds constituting
Collections shall be deposited into the Lockbox Account). The Servicer shall
instruct and the Borrower shall cause (i) the Lockbox Bank to deposit all
Collections in the Lockbox into the Lockbox Account on each Business Day and
(ii) the Lockbox Bank to remit all Collections on deposit in the Lockbox Account
to the Collection Account on each Business Day.
(q) Each of the Borrower and the Servicer shall promptly, from time
to time, provide to the Facility Insurer, the Lender and the Agent such
information, documents, records or reports relating to the Receivables or the
condition or operations, financial or otherwise, of the Borrower or the Servicer
as the Agent or the Facility Insurer may from time to time reasonably request in
order to protect the interests of the Collateral Agent and the Secured Parties
under or as contemplated by this Agreement.
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(r) Each of the Borrower and the Servicer will notify the Agent and
the Facility Insurer in writing of any of the following events within one
Business Day (or in the case of the event described in clause (iii) below,
within two Business Days) of learning of the occurrence thereof, describing the
same and, if applicable, the steps being taken with respect thereto: (1)
(i) The occurrence of each Early Amortization Event and each
Unmatured Early Amortization Event.
(ii) (A) (1) The entry of any judgment or decree against the
Servicer or any of its Subsidiaries if the aggregate amount of all
judgments and decrees then outstanding against the Servicer and its
Subsidiaries exceeds $1,000,000 after deducting (a) the amount with
respect to which the Servicer or any such Subsidiary is insured and with
respect to which the insurer has assumed responsibility in writing, and
(b) the amount for which the Servicer or any such Subsidiary is otherwise
indemnified if the terms of such indemnification are satisfactory to the
Agent and the Facility Insurer, and (2) the institution of any litigation,
arbitration proceeding or governmental proceeding against the Servicer
which, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect; and (B) the entry of any judgment or
decree, or the institution of any litigation, arbitration proceeding or
governmental proceeding, against the Borrower. (3) The occurrence of any
event or condition that has had, or could reasonably be expected to have,
a Material Adverse Effect.
(iii) The occurrence of a default or an event of default under
any other financing arrangement pursuant to which the Servicer is a debtor
or an obligor.
(iv) Any downgrade in the rating of any Indebtedness of, or of
any implied rating of, the Servicer by S&P or Xxxxx'x, setting forth the
Indebtedness, if any, affected and the nature of such change.
(s) The Servicer will (and will cause Originator to) maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing all Pledged Receivables in
the event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information reasonably necessary or
advisable for the collection of all Pledged Receivables (including, without
limitation, records adequate to permit the immediate identification of each new
Pledged Receivable and all Collections of and adjustments to each existing
Pledged Receivable). The Servicer will (and will cause the Originator to) give
the Agent and the Facility Insurer notice of
59
any material change in the administrative and operating procedures referred to
in the previous sentence.
(t) The Borrower and the Servicer will (and will cause Originator
to) upon the occurrence of an Early Amortization Event and the request of the
Agent or the Facility Insurer, deliver to the Collateral Agent all Contracts
(including, without limitation, all multiple originals of any such Contract to
the extent that originals may be necessary to allow the enforcement of rights
thereunder) relating to the Pledged Receivables.
(u) [Intentionally omitted.]
(v) Borrower will, and will require Originator to, perform each of
their respective obligations and undertakings under and pursuant to the Purchase
Agreement, will purchase Receivables thereunder in strict compliance with the
terms thereof and will vigorously enforce the rights and remedies accorded to
Borrower under the Purchase Agreement. Borrower will take all actions to perfect
and enforce its rights and interests (and the rights and interests of the
Collateral Agent and the Secured Parties as assignees of Borrower) under the
Purchase Agreement as the Agent or the Facility Insurer may from time to time
reasonably request, including, without limitation, making claims to which it may
be entitled under any indemnity, reimbursement or similar provision contained in
the Purchase Agreement.
(w) Each of the Borrower and the Servicer 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 by it, except any such taxes which
are not yet delinquent or are 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. The Borrower will pay when due any taxes
payable in connection with the Receivables.
(x) The Borrower shall maintain its Net Worth at an amount which
shall be at all times greater than or equal to the Required Capital Amount and
the Borrower will refrain from making any dividend, distribution, redemption of
capital stock or payment of or borrowing under any subordinated indebtedness
which would cause the Net Worth of the Borrower to be less than the Required
Capital Amount at any time. The Borrower shall maintain non-restricted and
unencumbered cash in an amount not less than $100,000 at all times, it being
understood and agreed that, without limitation to the foregoing, such cash shall
not include any funds in the Collection Account or the Lockbox Account.
(y) The Borrower will 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
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contemplated and authorized by this Agreement and the Purchase Agreement; and it
does not create, incur, guarantee, assume or suffer to exist any indebtedness or
other liabilities, whether direct or contingent, other than (1) as a result of
the endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (2) the incurrence of
obligations under this Agreement, (3) the incurrence of obligations, as
expressly contemplated in the Purchase Agreement, to make payment to Originator
thereunder for the purchase of Receivables from Originator under the Purchase
Agreement and for Collections received not on the account of a Conveyed
Receivable, and (4) the incurrence of operating expenses in the ordinary course
of business of the type otherwise contemplated by this Agreement.
(z) Each of the Borrower and the Servicer will cause the Lockbox
Agreement and the Collection Account Agreement to be in full force and effect at
all times.
(aa) No Monthly Remittance Report, Borrowing Report or Daily Report
(each if prepared by the Borrower or the Servicer, or to the extent that
information contained therein is supplied by the Borrower or the Servicer),
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by the Borrower or the Servicer to the Agent, the
Lender or the Facility Insurer in connection with this Agreement will be
inaccurate in any material respect as of the date it shall be dated or (except
as otherwise disclosed in writing to the Agent, the Lender or the Facility
Insurer, as the case may be, at such time) as of the date so furnished, and no
such document will contain any material misstatement of fact or omits or shall
omit to state a material fact or any fact necessary to make the statements
contained therein not misleading.
(bb) The Borrower will not use the proceeds of any Loans to acquire
any security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended.
(cc) Prior to December 27, 2003, the Borrower and the Servicer shall
deliver to the Agent, the Facility Insurer and the Backup Servicer a schedule
listing the Cut-Off Dates for the period commencing December 28, 2003 and ending
on the first Cut-Off Date following the Facility Maturity Date, it being agreed
that (i) such schedule shall replace Schedule VI hereto for all purposes hereof
and (ii) if the Borrower and the Servicer shall fail to so deliver such
schedule, the Cut-Off Dates following December 27, 2003 shall be deemed to be
the last Saturday of each calendar month following December, 2003.
(dd) The Borrower and the Servicer shall take such actions as and
when requested by the Facility Insurer or the Agent and as otherwise may be
necessary to obtain a Shadow Rating Letter from S&P which contains a Shadow
Rating with respect to the credit performance of the financing facility provided
hereunder equal to at least "BBB-" (the
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"Minimum Shadow Rating") as soon as practicable after the Closing Date, and in
any event, within 60 days after the Closing Date (including, without limitation,
entering into such amendments to the Transaction Documents as may be necessary
to obtain such a Minimum Shadow Rating), provided, however, that the Servicer
shall in no event be required to expend any monies in its efforts to obtain such
Shadow Rating Letter.
VI. ADMINISTRATION AND SERVICING; CERTAIN COVENANTS
SECTION 6.01 Appointment and Designation of the Servicer. (a) The
Borrower, the Lender, the Facility Insurer, the Collateral Agent and the Agent
hereby appoint the Person designated by the Facility Insurer from time to time
pursuant to this Section 6.01 (the "Servicer"), as their agent to service,
administer and collect the Pledged Receivables and otherwise to enforce their
respective rights and interests in and under the Pledged Receivables and the
other Pledged Assets. The Servicer shall collect such Pledged Receivables by
means of the collection procedures set forth in the Credit and Collection
Policy, to the extent consistent with the provisions of this Article VI;
provided, that if the Backup Servicer has succeeded Maxtor as Servicer, then the
Servicer shall collect such Pledged Receivables by means of the collection
procedures that are in accordance with customary and usual procedures of
institutions which service comparable receivables and, to the extent more
exacting, the degree of skill and attention that the Backup Servicer exercises
from time to time with respect to all comparable receivables that it services
for itself or others and, to the extent more exacting, the requirements of this
Article VI. The Servicer's authorization under this Agreement shall terminate on
the Collection Date. Maxtor is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Servicer pursuant to the terms hereof
at all times until the earliest of (i) the Facility Insurer's designation of a
new Servicer upon the occurrence of any Servicer Default, or (ii) the Collection
Date. Upon the occurrence of any Servicer Default, the Facility Insurer may at
any time designate as Servicer any Person to succeed Maxtor, as Servicer, or any
successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof. Each of the Borrower and Maxtor, as Servicer,
hereby grants to any successor Servicer an irrevocable power of attorney and
license to take any and all steps in the name of the Borrower or Maxtor, as
Servicer, as applicable, and on behalf of the Borrower or Maxtor, as Servicer,
necessary or desirable, in the determination of such successor Servicer, to
service, administer or collect any and all Pledged Receivables.
(b) The Servicer is hereby authorized to act for the Borrower, the
Lender, the Facility Insurer, the Agent and the Collateral Agent and in such
capacity shall manage, service, administer and make collections on the Pledged
Receivables, and perform the other actions required by the Servicer under this
Agreement for the benefit of the Agent, the Collateral Agent, the Lender and the
Facility Insurer. The Servicer agrees that its servicing of the Pledged
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Receivables shall be carried out in accordance with customary and usual
procedures of institutions which service comparable receivables and, to the
extent more exacting, the degree of skill and attention that the Servicer
exercises from time to time with respect to all comparable receivables that it
services for itself or others in accordance with (to the extent that the Backup
Servicer has not been appointed as the Servicer) the Credit and Collection
Policy and, to the extent more exacting, the requirements of this Article VI.
The Servicer's duties shall include, without limitation, collection and posting
of all payments on the Pledged Receivables, responding to inquiries of Obligors
on the Pledged Receivables, investigating delinquencies, sending notices to
Obligors of Delinquent Receivables and Defaulted Receivables demanding payment
of amounts due with respect thereto, reporting any required tax information to
Obligors, policing all Related Security, complying with the provisions of the
Credit and Collection Policy (to the extent that the Backup Servicer has not
been appointed as the Servicer) and the terms of the Collection Account
Agreement, accounting for collections, furnishing monthly and annual statements
to the Agent, with a copy to the Facility Insurer, with respect to distributions
and performing the other duties specified herein.
(c) To the extent consistent with the standards, policies and
procedures otherwise required hereby, the Servicer shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. The Servicer is authorized to release Liens on any Pledged
Receivables in order to collect insurance with respect thereto and to liquidate
the Related Security in accordance with its customary standards, policies and
procedures; provided, however, that notwithstanding the foregoing, the Servicer
shall not, (i) except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under any
Pledged Receivable or (ii) waive the right to collect the unpaid balance of any
Pledged Receivable from such Obligor, except that, subject to Section 6.02(a),
the Servicer may forego collection efforts if the amount which the Servicer, in
its reasonable judgment, expects to realize in connection with such collection
efforts is determined by the Servicer in its reasonable judgment to be less than
the reasonably expected costs of pursuing such collection efforts, and if the
Servicer would forego such collection efforts in accordance with its customary
procedures. The Servicer is hereby authorized to commence, in its own name or in
the name of the Borrower, the Agent, the Collateral Agent, the Lender or the
Facility Insurer (provided that if the Servicer is acting in the name of the
Borrower, the Agent, the Collateral Agent, the Lender or the Facility Insurer,
the Servicer shall have obtained the Borrower's, the Agent's, the Collateral
Agent's, the Lender's, and the Facility Insurer's consent, as the case may be,
which consent shall not be unreasonably withheld), a legal proceeding to enforce
a Pledged Receivable or to commence or participate in any other legal proceeding
(including, without limitation, a bankruptcy proceeding) relating to or
involving a Pledged Receivable, an Obligor or any Pledged Assets. If the
Servicer commences or participates in such a legal proceeding in its own name,
the Borrower, the Agent, the Collateral Agent, the Lender or the Facility
Insurer, as the case may be, shall thereupon be
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deemed to have automatically assigned such Pledged Receivable to the Servicer
solely for purposes of commencing or participating in any such proceeding as a
party or claimant, and the Servicer is authorized and empowered by the Borrower,
the Agent, the Collateral Agent, the Lender or the Facility Insurer, as the case
may be, to execute and deliver in the Servicer's name any notices, demands,
claims, complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. The Borrower, the Agent, the Collateral
Agent, the Lender or the Facility Insurer, as the case may be, shall furnish the
Servicer with any powers of attorney and other documents which the Servicer may
reasonably request in writing and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
(d) The Servicer shall not resign from the obligations and duties
hereby imposed on it hereunder except upon determination that (i) the
performance of its duties hereunder is no longer permissible under applicable
law and (ii) there is no reasonable action which can be taken to make the
performance of its duties hereunder permissible under applicable law. Any such
determination permitting the resignation of the Servicer pursuant to clause (ii)
of the previous sentence hereof shall be evidenced by an Opinion of Counsel to
such effect delivered to the Agent and the Facility Insurer. Unless otherwise
required by applicable law, no such resignation shall be effective until a
successor Servicer designated by the Facility Insurer shall have assumed the
responsibilities and obligations of the Servicer hereunder.
SECTION 6.02 Collection of Receivable Payments; Modification and
Amendment of Receivables. (a) Consistent with the standards, policies and
procedures required by this Agreement, the Servicer shall make reasonable
efforts to collect all payments called for under the terms and provisions of the
Pledged Receivables as and when the same shall become due, and shall follow such
collection procedures as it follows with respect to all comparable receivables
that it services for itself or others (or that it formerly serviced for itself
or others) and otherwise act with respect to the Pledged Receivables in such
manner as will, in the reasonable judgment of the Servicer, maximize the amount
to be received by the Borrower, the Lender and the Collateral Agent with respect
thereto.
(b) The Servicer may not permit any extensions, amendments or other
modifications to a Pledged Receivable except in accordance with the Credit and
Collection Policy and as otherwise permitted herein.
(c) The Servicer shall remit all payments by or on behalf of the
Obligors received directly by the Servicer to the Collection Account, without
deposit into any intervening account as soon as practicable, but in no event
later than two (2) Business Days after receipt thereof.
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(d) The Servicer shall hold in trust for the Collateral Agent, for
the benefit of the Secured Parties, all Contracts and all Records which evidence
or relate to any Pledged Receivables.
SECTION 6.03 Realization Upon Receivables. Consistent with the
standards, policies and procedures required by this Agreement, the Servicer
shall use its best efforts to foreclose upon (or otherwise comparably convert
the ownership of) and liquidate any Related Security securing a Pledged
Receivable (to the extent it has the right to do so under the related Contract)
with respect to which the Servicer has determined that payments thereunder have
ceased and are not likely to be resumed, as soon as is practicable after default
on such Pledged Receivable but in no event later than thirty (30) days after
such determination or an earlier date that would be customary under the
circumstances involved and, in any case, in a manner as will, in the reasonable
judgment of the Servicer, maximize the amount to be received by the Borrower,
the Lender and the Collateral Agent with respect thereto. The Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by Section
6.01, which practices and procedures may include reasonable efforts to realize
upon any recourse to any Obligor, selling the Related Security at public or
private sale, and other actions by the Servicer in order to realize upon such
Pledged Receivable. All Liquidation Proceeds shall be remitted directly by the
Servicer to the Collection Account without deposit into any intervening account
as soon as practicable, but in no event later than two (2) Business Days after
receipt thereof.
SECTION 6.04 Insurance. Without limiting the effect of any other
provision hereof, the Servicer shall monitor the status of and maintain in full
force and effect the Facility Insurance Policy.
SECTION 6.05 Maintenance of Security Interests in the Related
Security. If the Borrower has failed to, the Servicer shall (and is hereby
authorized by the Borrower to) take all steps necessary under all applicable law
in order to cause a valid, subsisting and enforceable first priority security
interest to exist in the Collateral Agent's favor in the Receivables, all Other
Conveyed Property and all Related Security (and the proceeds thereof) being
Pledged hereunder (and immediately prior to the Pledge of such Receivables,
Other Conveyed Property and Related Security by the Borrower to the Collateral
Agent (for the benefit of the Secured Parties), there shall have existed in
favor of the Borrower as secured party, a valid, subsisting and enforceable
first priority perfected security interest in such Receivable, Other Conveyed
Property and Related Security (and the proceeds thereof)), and the Collateral
Agent's security interest is and shall be prior to all other liens upon and
security interests in such Receivable, Other Conveyed Property and Related
Security (and the proceeds thereof) that now exist or may hereafter arise or be
created (other than Other Permitted Liens); provided, however, that the Servicer
shall not be
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required to expend its own funds to repay any debt secured by Receivables, Other
Conveyed Property or Related Security in order to cause such valid, subsisting
and enforceable first priority security interest to exist.
SECTION 6.06 Pledged Receivable Receipts. The Servicer shall
promptly make a deposit or cause the Borrower or any of its Affiliates to make a
deposit into the Collection Account in an amount equal to the Collections
received or made by or on behalf of it, the Borrower or any such Affiliate, as
the case may be, within two (2) Business Days of receiving any such Collections.
SECTION 6.07 Unidentified Payments; Lender's Right of Presumption.
The Borrower agrees and consents that the Servicer and/or the Backup Servicer
may apply any payment it receives (or any such payment the Servicer deposits
into the Collection Account) from an Obligor to any Loan secured by a Pledged
Receivable if the Servicer and/or the Backup Servicer is unable in good faith to
determine whether such payment from an Obligor relates to such Pledged
Receivable.
SECTION 6.08 No Rights of Withdrawal. Until the Collection Date, the
Borrower shall have no rights of direction or withdrawal with respect to amounts
held in the Collection Account or the Lockbox Account, except as provided for
herein.
SECTION 6.09 Permitted Investments. The Servicer (if Maxtor or an
Affiliate thereof and, if the Servicer is not Maxtor or an Affiliate thereof,
the Borrower) shall, pursuant to written instruction, direct the Collection
Account Bank (and if the Servicer or the Borrower, as applicable, fails to do
so, the Agent or the Facility Insurer may, pursuant to written instruction,
direct the Collection Account Bank) to invest, or cause the investment of, funds
on deposit in the Collection Account, in Permitted Investments, from the date of
this Agreement until the Collection Date. Absent any such written instruction,
the Collection Account Bank shall invest, or cause the investment of, such funds
in the First American Prime Obligations Fund ("First Prime"), so long as First
Prime is a Permitted Investment at the time of such investment, or in Permitted
Investments described in clause (v) of the definition thereof. A Permitted
Investment acquired with funds deposited in the Collection Account shall mature
not later than the Business Day immediately preceding the last day of the next
ending Fixed Period, and shall not be sold or disposed of prior to its maturity.
All such Permitted Investments shall be registered in the name of the Collateral
Agent (in its capacity as such) or its nominee for the benefit of the Secured
Parties. All income and gain realized from any such investment as well as any
interest earned on deposits in the Collection Account shall be distributed in
accordance with the provisions of Section 2.05 hereof. The Servicer (if Maxtor
or an Affiliate thereof and, if the Servicer is not Maxtor or an Affiliate
thereof, the Borrower) shall deposit in the Collection Account (with respect to
investments made hereunder of funds held therein), an amount equal to the amount
of
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any actual loss incurred in respect of any such investment immediately upon
realization of such loss. None of the Collection Account Bank, the Facility
Insurer or the Agent shall be liable for the amount of any loss incurred in
respect of any investment, or lack of investment, of funds held in the
Collection Account.
SECTION 6.10 Servicing Compensation. As compensation for its
activities hereunder, the Servicer shall be entitled to be paid the Servicing
Fee from the Collection Account as provided in Section 2.05(c). The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor, except any Servicer Advances made by the Servicer pursuant hereto;
provided, that the Backup Servicer, if serving as the Servicer, shall not be
required to pay any expenses in connection with curing or otherwise remedying
mistakes made by the predecessor Servicer or the costs of attorneys engaged in
connection with the enforcement and/or collection of any Receivables to the
extent that such attorneys and the related enforcement and/or collection action
have been consented to in writing by the Facility Insurer. The Servicing Fee may
not be transferred in whole or in part except in connection with the transfer of
all the Servicer's responsibilities and obligations under this Agreement.
SECTION 6.11 Reports; Account Statements; Servicing Information. (a)
The Borrower will deliver to the Agent and the Facility Insurer (i) on the
Amortization Commencement Date, a report identifying the Pledged Receivables
(and any information with respect thereto requested by the Agent or the Facility
Insurer) on the day immediately preceding the Amortization Commencement Date and
(ii) upon the Agent's or the Facility Insurer's reasonable request and upon
reasonable notice, on any other Business Day, a report identifying the Pledged
Receivables (and any information with respect thereto reasonably requested by
the Agent or the Facility Insurer) on such day.
(b) On the sixth Business Day of each Fiscal Month, the Servicer
shall prepare and deliver or have delivered to the Trustee, the Agent and the
Facility Insurer, (i) a Monthly Remittance Report and any other information
reasonably requested by the Agent (or the Facility Insurer) relating to all
Pledged Receivables (including if requested, a Computer Tape or Listing), all
information in the Monthly Remittance Report (including, without limitation, the
calculation of the Dell Concentration Percentage, the HPQ Concentration
Percentage, the Dilution Reserve Percentage, the Dynamic Loss Reserve
Percentage, the Turnover Rate, the Default Ratio, Delinquency Ratio, Sales Based
Dilution Ratio, Sales-Based Default Ratio, Dilution-to-Liquidation Ratio and the
three-month rolling averages for the immediately preceding Cut-Off Date) and all
other such information to be accurate as of the immediately preceding Cut-Off
Date, (ii) a listing, in form and substance satisfactory to the Agent and the
Facility Insurer, of the Outstanding Balance of Pledged Receivables allocated to
each "xxxx to number" under the Servicer's accounting records and (iii) in an
electronic format mutually acceptable to the
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Servicer, the Agent and the Facility Insurer, all additional information
reasonably requested by the Agent (or the Facility Insurer) relating to all
Pledged Receivables. If any Monthly Remittance Report indicates the existence of
a Borrowing Base Deficiency, the Borrower shall on the date of delivery of such
Monthly Remittance Report prepay to the Agent, for the account of the Lender, a
portion of the Loans as is necessary to cure such Borrowing Base Deficiency (or
otherwise cure such Borrowing Base Deficiency).
(c) By no later than 9:00 P.M. (New York City time) on each Business
Day, the Servicer shall prepare and deliver to the Trustee a Daily Report. If
any Daily Report indicates the existence of a Borrowing Base Deficiency, the
Borrower shall on the date of delivery of such Daily Report prepay to the Agent,
for the account of the Lender, a portion of the outstanding Loans as is
necessary to cure such Borrowing Base Deficiency (or otherwise cure such
Borrowing Base Deficiency). The Trustee shall by 12:00 noon (New York City time)
on the Business Day following its receipt of a Daily Report (i) either (a)
confirm such Daily Report pursuant to the following sentence, sign such Daily
Report and deliver to the Agent and the Facility Insurer (via telecopier or
other electronic means approved by the Agent and the Facility Insurer) a signed
copy of such Daily Report or (b) notify the Servicer, the Agent and the Facility
Insurer that the Trustee could not confirm such Daily Report pursuant to the
following sentence, and (ii) direct the Collection Account Bank to release to
the Borrower (or the designee of the Borrower) funds from the Collection Account
requested in such Daily Report, if such Daily Report has been confirmed pursuant
to the following sentence and demonstrates that (1) after giving effect to the
withdrawal of funds from the Collection Account requested in such Daily Report
and the Pledge of the Receivables purchased with such funds, the Capital Limit
shall not be less than the Facility Amount and (2) the amount requested to be
withdrawn from the Collection Account is not in excess of (x) the amount of
funds on deposit in the Collection Account minus (y) an amount equal to the
accrued and unpaid (i) Yield, (ii) Premium, (iii) Non-Use Fees, (iv) Servicing
Fees and Backup Servicer Standby Fees (or, if the Backup Servicer has been
appointed as Servicer hereunder, the Backup Servicer Fees) and (v) the Trustee
Fees. On each Business Day, the Trustee shall review the information on the
computer tape or diskette (or other means of electronic transmission acceptable
to the Trustee) to be delivered by the Servicer to the Trustee concurrently with
any Daily Report and shall recalculate and confirm the Adjusted Net Eligible
Receivables Balance included in such Daily Report using (i) the Eligible
Receivables information contained in such computer tape, diskette or other means
of electronic transmission and (ii) an Adjusted Overconcentration Amount, an
Adjusted Canadian Overconcentration Amount, an Adjusted Loss Reserve, an
Adjusted Dilution Reserve and an Adjusted Yield and Fee Reserve, in each case,
as calculated by the Trustee based upon the Eligible Receivables information on
such computer tape, diskette or other means of electronic transmission and the
Overconcentration Amount, Canadian Overconcentration Amount, Loss Reserve,
Dilution Reserve and Yield and Fee Reserve set forth in the most recent Monthly
Remittance Report delivered to the Trustee by the Servicer pursuant to Section
6.11(b).
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(d) On the sixth Business Day of each Fiscal Month, the Servicer
shall prepare and deliver or have delivered to the Backup Servicer (i) a Monthly
Remittance Report in respect of the immediately preceding Remittance Period and
(ii) a computer tape or a diskette or any other electronic transmission in a
format acceptable to the Backup Servicer containing the information (in raw and
not summary form) with respect to the Pledged Receivables during such Remittance
Period which was necessary for preparation of such Monthly Remittance Report.
(e) On each Business Day, the Servicer shall prepare and deliver or
have delivered to the Trustee a computer tape or a diskette or any other
electronic transmission in a format acceptable to the Trustee containing
information with respect to the Pledged Receivables which was necessary for
preparation of the Daily Report delivered on such Business Day.
(f) The Borrower shall deliver to the Agent and the Facility Insurer
all reports it receives pursuant to the Purchase Agreement within one (1)
Business Day of the receipt thereof.
(g) Together with the information provided to the Lender, the
Facility Insurer and the Agent under Section 6.12(f) herein, the Servicer shall
deliver to the Lender, the Facility Insurer and the Agent a report, in form and
substance satisfactory to the Lender, the Facility Insurer and the Agent, (i)
which demonstrates that the Early Amortization Events described in Section
7.01(v) and Section 7.01(w) have not occurred during or with respect to such
fiscal quarter and (ii) which is signed by, and the accuracy of which is
certified by, the financial vice president, treasurer, chief financial officer
or controller of the Servicer.
(h) At least four Business Days prior to the date of any Borrowing
other than a Borrowing to take place on a Remittance Date, the Servicer shall
(i) deliver to the Agent, the Facility Insurer and the Backup Servicer, a
Borrowing Report, in form and substance satisfactory to the Agent and the
Facility Insurer, signed by an officer of the Borrower having responsibility for
financial matters of the Borrower which shall demonstrate that, after giving
effect to such Borrowing and the Pledge of the Eligible Receivables to be
purchased by the Borrower with the proceeds of such Borrowing, the Capital Limit
shall not be less than the Facility Amount and (ii) deliver or have delivered to
the Backup Servicer a computer tape or a diskette or any other electronic
transmission in a format acceptable to the Backup Servicer containing the
information (in raw and not summary form) with respect to the Pledged
Receivables which was necessary for preparation of such Borrowing Report. (1)
SECTION 6.12 Statements as to Compliance; Financial Statements. (a)
The Servicer shall deliver to the Agent, the Facility Insurer, the Backup
Servicer, the Borrower and the Lender on or before January 15 of each year,
beginning with January 15, 2004, an Officer's Certificate stating that (x) a
review of the activities of the Servicer during the preceding calendar
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year and of its performance under this Agreement has been made under such
officer's supervision, and (y) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all of its obligations under this
Agreement throughout such calendar year (or portion thereof, as the case may be)
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and the action being taken to cure such default.
(b) [Intentionally omitted.]
(c) As soon as available and no later than forty-five (45) days
after the end of each fiscal quarter in each fiscal year of Maxtor, the Servicer
shall deliver, or cause to be delivered, to the Lender, the Facility Insurer,
the Backup Servicer and the Agent copies of:
(i) a consolidated balance sheet of Maxtor and its
consolidated subsidiaries (including the Borrower) as of the end of such
calendar quarter setting forth in comparative form the corresponding
figures for the most recent year-end for which an audited balance sheet
has been prepared, which such balance sheet shall be prepared and
presented in accordance with, and provide all necessary disclosure
required by, GAAP and shall be accompanied by a certificate signed by the
financial vice president, treasurer, chief financial officer or controller
of Maxtor stating that such balance sheet presents fairly the financial
condition of the companies being reported upon and has been prepared in
accordance with GAAP consistently applied; and
(ii) consolidated statements of income, stockholders' equity
and cash flow of Maxtor and its consolidated subsidiaries (including the
Borrower) for such calendar quarter, in each case and for the portion of
the fiscal year ending with such calendar quarter setting forth in
comparative form the corresponding figures for the comparable period one
year prior thereto (subject to normal year-end adjustments), which such
statements shall be prepared and presented in accordance with, and provide
all necessary disclosure required by, GAAP and shall be accompanied by a
certificate signed by the financial vice president, treasurer, chief
financial officer or controller of Maxtor, stating that such financial
statements present fairly the financial condition and results of
operations of the companies being reported upon and have been prepared in
accordance with GAAP consistently applied. (1)
(d) As soon as available and no later than one-hundred and twenty
(120) days after the end of each fiscal year of Maxtor, the Servicer shall
deliver, or cause to be delivered, to the Lender, the Facility Insurer, the
Backup Servicer and the Agent copies of:
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(i) a consolidated balance sheet of Maxtor and its
consolidated subsidiaries (including the Borrower), all as of the end of
the fiscal year, setting forth in comparative form the figures for the
previous fiscal year and accompanied by an opinion of the Independent
Accountants stating that such balance sheet presents fairly the financial
condition of the companies being reported upon and has been prepared in
accordance with GAAP consistently applied (except for changes in
application in which such accountants concur); and
(ii) consolidated statements of income, stockholders' equity
and cash flow of Maxtor and its consolidated subsidiaries (including the
Borrower), for such fiscal year; in each case setting forth in comparative
form the figures for the previous fiscal year and accompanied by an
opinion of the Independent Accountants stating that such financial
statements present fairly the financial condition of the companies being
reported upon and have been prepared in accordance with GAAP consistently
applied (except for changes in application in which such accountants
concur).
(e) As soon as available and no later than one-hundred and twenty
(120) days after the end of each fiscal year of the Borrower, the Borrower shall
deliver to the Lender, the Facility Insurer and the Agent copies of:
(i) a balance sheet of the Borrower, as of the end of the
fiscal year, setting forth in comparative form the figures for the
previous fiscal year (if applicable) and accompanied by an opinion of the
Independent Accountants stating that such balance sheet presents fairly
the financial condition of the Borrower and has been prepared in
accordance with GAAP consistently applied (except for changes in
application in which such accountants concur); and
(ii) statements of income, stockholders' equity and cash flow
of the Borrower for such fiscal year; setting forth in comparative form
the figures for the previous fiscal year and accompanied by an opinion of
the Independent Accountants stating that such financial statements present
fairly the financial condition of the Borrower and have been prepared in
accordance with GAAP consistently applied (except for changes in
application in which such accountants concur).
(f) As soon as available and no later than forty-five (45) days
after the end of each fiscal quarter of the Borrower, the Borrower shall deliver
to the Lender, the Facility Insurer and the Agent copies of:
(i) a balance sheet of the Borrower, as of the end of such
fiscal quarter, which such balance sheet shall be prepared and presented
in accordance with, and
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provide all necessary disclosure required by, GAAP and shall be
accompanied by a certificate signed by the financial vice president,
treasurer, chief financial officer or controller of Maxtor, stating that
such financial statements present fairly the financial condition and
results of operations of the companies being reported upon and have been
prepared in accordance with GAAP consistently applied); and
(ii) a statement of income of the Borrower for such fiscal
quarter, which such statement shall be prepared and presented in
accordance with, and provide all necessary disclosure required by, GAAP
and shall be accompanied by a certificate signed by the financial vice
president, treasurer, chief financial officer or controller of Maxtor,
stating that such statement presents fairly the financial condition and
results of operations of the companies being reported upon and have been
prepared in accordance with GAAP consistently applied).
SECTION 6.13 Access to Certain Documentation. (a) (i) Each of the
Lender, the Agent and the Facility Insurer (and their respective agents or
professional advisors including, without limitation, any independent certified
public accountants acceptable to the Agent and the Facility Insurer (the
"Independent Accountants")) shall at the expense of the Borrower, have the right
under this Agreement, two (2) times during each calendar year, upon reasonable
prior notice to the Servicer, to examine and audit, during business hours or at
such other times as might be reasonable under applicable circumstances, any and
all of the books, records, or other information of the Servicer or the Borrower,
or held by another for the Servicer or the Borrower or on the Servicer's or the
Borrower's behalf, concerning this Agreement. Each of the Lender, the Agent and
the Facility Insurer (and their respective agents or professional advisors
including, without limitation, any Independent Accountants) shall at the expense
of the Borrower and as frequently as the Lender, the Agent or the Facility
Insurer may desire, have the right under this Agreement after the occurrence and
during the continuance of an Early Amortization Event or if, in the opinion of
the Agent or the Facility Insurer, the circumstances warrant additional
examinations and audits, upon reasonable prior notice to the Servicer, to
examine and audit, during business hours or at such other times as might be
reasonable under applicable circumstances, any and all of the books, records, or
other information of the Servicer or the Borrower, or held by another for the
Servicer or the Borrower or on the Servicer's or the Borrower's behalf,
concerning this Agreement and to discuss such matters relating to the Servicer's
and Borrower's financial condition or the Pledged Assets or the Servicer's or
the Borrower's performance under the Transaction Documents or the Contracts with
any of the officers or employees of the Borrower or the Servicer having
knowledge of such matters. The Lender, the Agent and the Facility Insurer (and
their respective agents and professional advisors) shall treat as confidential
any information obtained during such examination which is not already publicly
known or available; provided, however, that the Lender, the Agent and the
Facility Insurer may disclose such information (i) to such of its officers,
directors, employees, agents and
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representatives as need to know such information in connection with the
transaction contemplated hereunder; (ii) to the Rating Agencies and to any of
the Facility Insurer's reinsurers; (iii) to the extent required by applicable
laws and regulations or by any subpoena or similar legal process, or if
requested by any Government Entity having authority over it; (iv) to the extent
such confidential information becomes publicly available other than as a result
of a breach of this agreement; (v) that was already in the Agent's, the Lender's
or the Facility Insurer's possession prior to the date hereof; and (vi) to the
extent the Borrower shall have consented to such a disclosure in writing;
provided, that to the extent that the Lender, the Agent or the Facility Insurer
is requested pursuant to any subpoena or similar legal process to disclose such
information, the Lender, the Agent or the Facility Insurer, as applicable, shall
provide the Borrower and the Servicer with reasonably prompt notice of such
request unless, the Lender, the Agent or the Facility Insurer believes that it
is prohibited from doing so by applicable law or court order. Notwithstanding
anything to the contrary described herein or any related document, the Parties
hereto and each of their respective employees, representatives or other agents,
are, and hereby confirm that they have been at all times, permitted to disclose
to any and all Persons, without limitations of any kind, the tax treatment and
tax structure of the transactions contemplated hereunder and all materials of
any kind (including opinions or other tax analyses) that are or have been
provided to such Parties related to such tax treatment and tax structure.
(ii) Each of the Lender, the Agent and the Facility Insurer shall
make available to each other the results, findings and reports related to any
examinations and audits described in clause (i) above.
(iii) In connection with any examinations and audits described
above, the Agent or the Facility Insurer may, at the expense of the Borrower,
cause a firm of Independent Accountants, to deliver to the Agent and the
Facility Insurer a statement (the "Accountants' Report") addressed to the
Facility Insurer and to the Agent, to the effect that such firm has examined
such Borrowing Reports, Monthly Remittance Reports and Daily Reports prepared by
the Servicer during a designated period as it deemed necessary in order to issue
the Accountants' Report and that such examination was made in accordance with
generally accepted auditing standards, and accordingly included such tests of
the accounting records and such other auditing procedures as such firm
considered necessary in the circumstances. Each Accountants' Report shall
further state that (i) a review in accordance with agreed upon procedures (which
procedures are agreed to by the Facility Insurer and the Agent) was made; (ii)
except as disclosed in the Accountants' Report, no exceptions or errors in the
Borrowing Reports, Monthly Remittance Reports and Daily Reports examined were
found except for (A) such exceptions as the Independent Accountants believe to
be immaterial and (B) such other exceptions as shall be set forth in the
Accountants' Report. The Accountants' Report shall also indicate that the firm
is independent of the Borrower and the Servicer within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants.
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(b) The Lender, the Agent and the Facility Insurer (and their
respective agents or professional advisors) shall, at their own expense (and,
after the occurrence and during the continuance of an Early Amortization Event,
at the expense of the Borrower), have the right under this Agreement to, not
more frequently than twice each calendar year (but as frequently as the Lender,
the Agent or the Facility Insurer may desire after the occurrence and during the
continuance of an Early Amortization Event), contact any or all Obligors with
respect to any Receivables which are Pledged hereunder in order to procure such
information related to any or all such Obligors, the related Contracts, and the
Receivables as the Lender, the Agent or the Facility Insurer deems reasonable
under the circumstances; provided, that so long as no Early Amortization Event
has occurred and is continuing, the Lender, the Agent and the Facility Insurer
shall (i) provide the Servicer with five Business Days' prior written notice of
such contact, indicating the purpose of such contact and any specific
information sought from such Obligors by such contact and (ii) make such contact
with such Obligors only in the presence of the Servicer or its authorized
representative (unless such requirement is waived by the Servicer or the
Servicer does not make itself or an authorized representative available to
accompany the Lender, the Agent and the Facility Insurer in connection with such
contact by the fifth Business Day after notice of such Person's desire to make
such contact is delivered to the Servicer). The Servicer and the Borrower hereby
agree to cooperate with the Lender, the Agent and the Facility Insurer (and
their respective agents or professional advisors) in connection with any attempt
thereby to contact any such Obligor and shall provide to the Lender, the Agent
and the Facility Insurer such information as is needed in order to facilitate
such contact. The Lender, Agent and Facility Insurer (and their respective
agents and professional advisors) shall treat as confidential any information
obtained during any such contact with any such Obligor which is not already
publicly known or available; provided, however, that the Lender, the Agent and
the Facility Insurer may disclose such information (i) to such of its officers,
directors, employees, agents and representatives as need to know such
information in connection with the transaction contemplated hereunder; (ii) to
the Rating Agencies and any of the Facility Insurer's reinsurers; (iii) to the
extent required by applicable laws and regulations or by any subpoena or similar
legal process, or if requested by any Governmental Entity having authority over
it; (iv) to the extent such information becomes publicly available other than as
a result of a breach of this agreement; (v) that was already in the Agent's, the
Lender's or the Facility Insurer's possession prior to the date hereof; and (vi)
to the extent the Borrower shall have consented to such a disclosure in writing.
SECTION 6.14 Backup Servicer. (a) The Facility Insurer may at any
time after a Servicer Default, by notice to the Servicer, the Borrower and the
Backup Servicer, terminate all of the rights and obligations of the Servicer
under this Agreement and the Insurance Agreement. Upon the delivery to the
Servicer of such notice, all obligations, authority and power of the Servicer
under this Agreement and the Insurance Agreement, whether with respect to the
Pledged
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Assets or otherwise, shall pass to and be vested in the Backup Servicer pursuant
to and under this Section, and, without limitation, the Backup Servicer is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer or the Borrower, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination or to perform the duties of the Servicer under this Agreement. The
Servicer agrees to cooperate with the Collateral Agent and the Backup Servicer
in effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, delivering notification to the
Obligors of the assignment of the servicing function and instructions to abide
by payment directions delivered by the Collateral Agent or the Backup Servicer,
providing the Backup Servicer with all records, in electronic or other form,
reasonably requested by it to enable the Backup Servicer to assume the servicing
functions hereunder and the transfer to the Backup Servicer for administration
by it all cash amounts which at the time should be or should have been deposited
by the Servicer in the Collection Account or thereafter be received by the
Servicer with respect to the Pledged Receivables. Neither the Agent, the
Collateral Agent nor the Backup Servicer shall be deemed to have breached any
obligation hereunder as a result of a failure to make or delay in making any
distribution as and when required hereunder caused by the failure of the
Servicer to remit any amounts received by it or to deliver any documents held by
it with respect to the Pledged Assets.
(b) The Backup Servicer Fees and Transition Fee shall be paid out of
Collections as set forth in Section 2.05(c) on and after the date, if any, that
the Backup Servicer assumes the responsibilities of the Servicer pursuant to
this Section.
(c) Any obligations of Maxtor under any Transaction Document other
than in its capacity as Servicer shall continue in effect notwithstanding
Maxtor's termination as Servicer.
(d) On and after the time the Servicer receives a notice of
termination pursuant to this Section 6.14, the Backup Servicer shall be (and the
Backup Servicer hereby agrees to be) the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement and the Insurance
Agreement and the transactions set forth or provided for herein and therein and
shall have all the rights and powers and be subject thereafter to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof and thereof; provided, however, that any
failure to perform such duties or responsibilities caused by the Servicer's
failure to provide information required by this Section 6.14 shall not be
considered a default by the Backup Servicer hereunder. The Backup Servicer shall
have (i) no liability with respect to any obligation which was required to be
performed by the terminated Servicer prior to the date that the Backup Servicer
becomes the successor to the Servicer or any claim of a third party based on any
alleged action or inaction of the terminated Servicer, (ii) no obligation to
perform any repurchase or advancing obligations, if any, of the Servicer, (iii)
no obligation to pay any taxes required to be paid by the Servicer
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(provided that the Backup Servicer shall pay any income taxes for which it is
liable), (iv) no obligation to pay any of the fees and expenses of any other
party to the transactions contemplated hereby, and (v) no liability or
obligation with respect to any Servicer indemnification obligations of any prior
Servicer, including the original Servicer. The liability and indemnification
obligations of the Backup Servicer, upon becoming a successor Servicer, are
expressly limited to those arising on account of its negligence or willful
misconduct. In addition, the Backup Servicer shall have no liability relating to
the representations and warranties of the Servicer contained in Section 4.02
hereof. Notwithstanding the above, the Facility Insurer may, if the Backup
Servicer shall be unwilling to so act, or shall, if the Backup Servicer is
unable to so act, appoint any established servicing institution acceptable to
the Facility Insurer, as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder. Pending appointment of a successor to the Servicer
hereunder, and after the Facility Insurer notifies the Servicer to discontinue
performing servicing functions under this Agreement, the Backup Servicer (or the
Agent if there is no Backup Servicer) shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Facility
Insurer may make such arrangements for the compensation of such successor out of
payments on Pledged Receivables as it and such successor shall agree. The
Borrower, the Collateral Agent and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
(e) Not later than the Business Day immediately prior to each
Remittance Date, the Backup Servicer shall compare the information on the
computer tape or diskette (or other means of electronic transmission acceptable
to the Backup Servicer) most recently delivered to the Backup Servicer by the
Servicer pursuant to Section 6.11(d) to the Monthly Remittance Report most
recently delivered to the Backup Servicer by the Servicer pursuant to Section
6.11(d) and shall:
(i) confirm that such Monthly Remittance Report is in the form
attached hereto as Exhibit C and is complete on its face;
(ii) recompute using the raw per Obligor Receivables
information contained in such computer tape or diskette (or other means of
electronic transmission acceptable to the Backup Servicer), and verify the
accuracy of items 1 through 9 on such Monthly Remittance Report and all
other information specified by the Agent or the Facility Insurer, in each
case, in a manner satisfactory to the Agent and the Facility Insurer; and
(iii) deliver to the Agent and the Facility Insurer a
certification letter with respect to the above substantially in the form
of Exhibit F-1 hereto on or before such Business Day.
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(f) In the event of any discrepancy between the information set
forth in Section 6.14(e)(ii) as calculated by the Servicer from that determined
or calculated by the Backup Servicer, the Backup Servicer shall promptly report
such discrepancy to the Servicer, the Agent and the Facility Insurer. In the
event of a discrepancy as described in the preceding sentence, the Servicer and
the Backup Servicer shall attempt to reconcile such discrepancies prior to the
related Remittance Date, but in the absence of a reconciliation, distributions
on the related Remittance Date shall be made consistent with the information
calculated by the Servicer, the Servicer and the Backup Servicer shall attempt
to reconcile such discrepancies prior to the next Remittance Date, and the
Servicer shall promptly report to the Agent and the Facility Insurer regarding
the progress, if any, which shall have been made in reconciling such
discrepancies. If the Backup Servicer and the Servicer are unable to reconcile
such discrepancies with respect to such Monthly Remittance Report by the next
Remittance Date that falls in April, July, October or January, the Servicer
shall cause independent accountants acceptable to the Agent and the Facility
Insurer, at the Servicer's expense, to examine such Monthly Remittance Report
and attempt to reconcile such discrepancies at the earliest possible date (and
the Servicer shall promptly provide the Agent and the Facility Insurer with a
report regarding such events). The effect, if any, of such reconciliation shall
be reflected in the Monthly Remittance Report for the next succeeding Remittance
Date.
(g) Not later than two Business Days prior to each Borrowing Date
(other than a Borrowing Date that is also a Remittance Date), the Backup
Servicer shall compare the information on the computer tape or diskette (or
other means of electronic transmission acceptable to the Backup Servicer) most
recently delivered to the Backup Servicer by the Servicer pursuant to Section
6.11(h) to the related Borrowing Report delivered to the Backup Servicer by the
Servicer pursuant to Section 6.11(h) and shall: (1)
(i) confirm that such Borrowing Report is in the form attached
hereto as Exhibit A and is complete on its face;
(ii) recompute using the raw per Obligor Receivables
information contained in such computer tape or diskette (or other means of
electronic transmission acceptable to the Backup Servicer), and verify the
accuracy of, items 1 through 9 on such Borrowing Report in a manner
satisfactory to the Agent and the Facility Insurer; and
(iii) deliver to the Agent and the Facility Insurer a
certification letter with respect to the above substantially in the form
of Exhibit F-2 hereto.
(h) In the event of any discrepancy between the information set
forth in Section 6.14(g)(ii) as calculated by the Servicer from that determined
or calculated by the
77
Backup Servicer, the Backup Servicer shall promptly report such discrepancy to
the Servicer, the Agent and the Facility Insurer. In the event of a discrepancy
as described in the preceding sentence, the Servicer and the Backup Servicer
shall attempt to reconcile such discrepancies prior to the related Borrowing
Date and the Backup Servicer shall promptly report to the Agent and the Facility
Insurer the progress, if any, which shall have been made in reconciling such
discrepancies.
(i) The Backup Servicer may not resign except upon sixty (60) day's
prior written notice to the Collateral Agent, the Facility Insurer, the Servicer
and the Borrower. In addition, the Backup Servicer may be removed by the
Facility Insurer with or without cause at any time upon thirty (30) day's prior
written notice to the Backup Servicer, the Servicer and the Borrower. In the
event of any such resignation or removal, the Backup Servicer may be replaced by
a new Backup Servicer selected by the Facility Insurer upon notice to the
Servicer and the Borrower.
SECTION 6.15 Additional Remedies of Collateral Agent Upon Early
Amortization Event. During the continuance of any Early Amortization Event
(other than a Facility Insurer Early Amortization Event) and upon and at the
direction of the Facility Insurer and during the continuance of any Facility
Insurer Early Amortization Event and upon and at the direction of the Agent, the
Collateral Agent, in addition to the rights specified in Section 7.01, shall, in
its own name and as agent for the Secured Parties, take all actions now or
hereafter existing at law, in equity or by statute to enforce its rights and
remedies and to protect the interests, and enforce the rights and remedies, of
the Secured Parties (including the institution and prosecution of all judicial,
administrative and other proceedings and the filings of proofs of claim and debt
in connection therewith). Except as otherwise expressly provided in this
Agreement, no remedy provided for by this Agreement shall be exclusive of any
other remedy, and each and every remedy shall be cumulative and in addition to
any other remedy, and no delay or omission to exercise any right or remedy shall
impair any such right or remedy or shall be deemed to be a waiver of any Early
Amortization Event.
SECTION 6.16 Waiver of Defaults. The Agent and the Facility Insurer
together may waive (and after the occurrence of an Early Amortization Event
(other than a Facility Insurer Early Amortization Event), the Facility Insurer
may waive) any default by the Servicer or the Borrower in the performance of
their respective obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and any Servicer
Default and/or any Early Amortization Event arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall be
effective unless it shall be in writing and signed by the Agent on the Lender's
and the Facility Insurer's behalf and no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
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SECTION 6.17 Maintenance of Certain Insurance. During the term of
its service as Servicer, the Servicer shall maintain in force an "errors and
omissions" and an employee fidelity/crime insurance policy, in each case, (i) in
an amount not less than $2,000,000, (ii) in a form reasonably acceptable to the
Lender, the Agent and the Facility Insurer and, in any case, that would, in the
case of the employee fidelity/crime insurance policy, cover any loss of
Collections by the Servicer hereunder caused by employee dishonesty, (iii) with
an insurance company reasonably acceptable to the Lender, the Agent and the
Facility Insurer and (iv) covering the Servicer and the Borrower as insured
parties. Unless otherwise directed by the Facility Insurer, the Servicer shall
prepare and present, on behalf of itself, the Agent, the Lender and the Facility
Insurer, claims under any such policy in a timely fashion in accordance with the
terms of such policy, and upon the filing of any claim on any policy described
in this Section, the Servicer shall promptly notify the Agent and the Facility
Insurer of such claim and deposit the proceeds of any such claim into the
Collection Account.
SECTION 6.18 Segregation of Collections. The Servicer shall not
commingle funds constituting Collections with any other funds of the Servicer
(nor shall it allow any other Person to do so).
SECTION 6.19 UCC Matters; Protection and Perfection of Pledged
Assets. The Borrower will not change the jurisdiction of its organization or
make any change to its name or use any tradenames, fictitious names, assumed
names, "doing business as" names or other names (other than those listed on
Schedule III annexed hereto, as such Schedule may be revised from time to time
to reflect name changes and name usage permitted under the terms of this Section
6.19 after compliance with all terms and conditions of this Section 6.19 related
thereto) unless prior to the effective date of any such change in the
jurisdiction of its organization or name change or use, the Borrower notifies
the Agent and the Collateral Agent of such change in writing and delivers to the
Collateral Agent such financing statements as the Collateral Agent, the Agent or
the Facility Insurer may reasonably request to reflect such name change or use,
together with such Opinions of Counsel, other documents and instruments as the
Collateral Agent, the Agent or the Facility Insurer may reasonably request in
connection therewith. The Borrower will not change the location of its chief
executive office or the location of its records regarding the Pledged
Receivables unless prior to the effective date of any such change of location,
the Borrower notifies the Collateral Agent, the Agent and the Facility Insurer
of such change of location in writing and delivers to the Collateral Agent such
financing statements as the Collateral Agent, the Agent or the Facility Insurer
may reasonably request to reflect such change of location, together with such
Opinions of Counsel, documents and instruments as the Collateral Agent may
reasonably request in connection therewith. The Borrower agrees that from time
to time, at its expense, it will promptly execute and deliver all further
instruments and
79
documents, and take all further action that the Collateral Agent, the Agent or
the Facility Insurer may reasonably request in order to perfect, protect or more
fully evidence the Collateral Agent's interest in the Pledged Assets acquired
hereunder, or to enable the Collateral Agent to exercise or enforce any of their
respective rights hereunder. Without limiting the generality of the foregoing,
the Borrower will upon the request of the Collateral Agent, the Agent or the
Facility Insurer: (i) execute (if necessary) and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate or as the
Collateral Agent, the Agent or the Facility Insurer may request and (ii) xxxx
its master data processing records evidencing such Pledged Receivables with a
legend acceptable to the Collateral Agent, the Agent and the Facility Insurer,
evidencing that the Collateral Agent, for the benefit of the Secured Parties,
has acquired an interest therein as provided in this Agreement. The Borrower
hereby authorizes the Collateral Agent, the Agent or the Facility Insurer to
file one or more financing or continuation statements, and amendments thereto
and assignments thereof, relative to all or any of the Pledged Receivables and
the Other Conveyed Property and the Related Security related thereto and the
proceeds of the foregoing now existing or hereafter arising without the
signature of the Borrower where permitted by law. Subject to applicable law, a
carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Pledged Receivables, or any part thereof shall be
sufficient as a financing statement. The Borrower shall, upon the request of the
Collateral Agent, the Agent or the Facility Insurer at any time after the
occurrence of an Early Amortization Event and at the Borrower's expense, notify
the Obligors obligated to pay any Pledged Receivables, or any of them, of the
security interest of the Secured Parties in the Pledged Assets. If the Borrower
fails to perform any of its agreements or obligations under this Section 6.19,
the Collateral Agent may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable by the Borrower upon the
Collateral Agent's demand therefor. For purposes of enabling the Collateral
Agent to exercise its rights described in the preceding sentence and elsewhere
in this Article VI, the Borrower, the Lender and the Facility Insurer hereby
authorize each of the Collateral Agent and its successors and assigns to take
any and all steps in the Borrower's name and on behalf of the Borrower, the
Lender and the Facility Insurer necessary or desirable, in the determination of
the Collateral Agent, the Agent or the Facility Insurer, to collect all amounts
due under any and all Pledged Receivables, including, without limitation,
endorsing the Borrower's name on checks and other instruments representing
Collections and enforcing such Pledged Receivables and other Contracts and, if
any, the related Guarantees.
SECTION 6.20 Servicer Advances. The Servicer may, in its sole
discretion, make an advance in respect of any payment due on a Pledged
Receivable to the extent such payment has not been received by the Servicer as
of its due date and the Servicer reasonably expects such payment will be
ultimately recoverable (a "Servicer Advance"). The Servicer shall deposit into
the Collection Account in immediately available funds the aggregate of all
Servicer
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Advances to be made during a Remittance Period on or prior to the Business Day
immediately preceding the related Remittance Date. The Servicer shall be
entitled to reimbursement for such Servicer Advances from monies in the
Collection Account as provided in Section 2.05(c) hereof.
SECTION 6.21 [Intentionally Omitted.]
SECTION 6.22 Breach of Covenant or Representation and Warranty by
Servicer. The Servicer hereby indemnifies the Borrower, the Agent, the Lender,
the Collateral Agent and the Facility Insurer against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them in
connection with any of the events or facts giving rise to a breach of the
Servicer's representations, warranties, agreements and/or covenants set forth in
Article IV, Article V or Article VI, except for any such amounts (i) resulting
from any gross negligence, bad faith or willful misconduct of the Borrower, the
Agent, the Lender, the Collateral Agent or the Facility Insurer or (ii) to the
extent that providing such indemnity would constitute recourse for losses due to
the uncollectibility of any Receivable due to the insolvency, bankruptcy, or
financial inability to pay of the Obligor.
SECTION 6.23 Compliance with Applicable Law. Each of the Servicer
and the Borrower shall at all times comply in all material respects with all
requirements of federal, state and local laws, and regulations thereunder, that
are applicable to the conduct of its business (including, without limitation but
only if and to the extent applicable, usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief Act of 1940 and
state adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and all other credit laws and equal credit opportunity and
disclosure laws and any regulations promulgated thereunder).
VII. EARLY AMORTIZATION EVENTS
SECTION 7.01 Early Amortization Events. If any of the following
events (each, an"Early Amortization Event") shall occur:
(a) the Borrower, the Servicer (if Maxtor or any Affiliate thereof)
or Maxtor (in any capacity) shall fail to (i) perform or observe any term,
covenant or agreement hereunder or under any other Transaction Document or
(ii) make any payment or deposit to be made by it hereunder or under the
Fee Letter or any other Transaction Document when due or otherwise
required to be paid; or
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(b) any representation or warranty made or deemed to be made by the
Borrower, Maxtor or the Servicer (or any of their respective officers)
under or in connection with this Agreement or any other Transaction
Document, any remittance report or other information or report delivered
pursuant hereto or any other Transaction Document shall prove to have been
false or incorrect in any material respect when made (including, without
limitation, any representation or warranty made or deemed to be made by
Maxtor (or any of its officers or agents) under or in connection with the
Purchase Agreement); provided, however, that if any breach described above
is cured by the repurchase of Receivables pursuant to Article VI of the
Purchase Agreement or by a repayment pursuant to Section 2.19 hereof, such
breach shall cease to constitute an Early Amortization Event; or
(c) the Borrower, Maxtor or any other Affiliate of Maxtor shall fail
to pay any principal of or premium or interest on any Debt, which Debt is
in an amount in excess of $1,000,000 in the aggregate, when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall
continue beyond the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any Debt or any other event, shall
occur and shall continue beyond the applicable grace period, if any,
specified in such agreement or instrument if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; or
(d) the occurrence of any Bankruptcy Event with respect to the
Borrower, the Servicer or Maxtor; or
(e) (i) the Collateral Agent shall at any time fail to have a valid,
perfected, first priority security interest in any of the Pledged Assets
or (ii) any purchase by the Borrower of a Receivable and the Collections,
Related Security and Other Conveyed Property under the Purchase Agreement
shall, for any reason, cease to create in favor of the Borrower a
perfected ownership interest in such Receivable and the Collections,
Related Security and the Other Conveyed Property; provided, however, that
if an event described in the foregoing clause (i) or (ii) is cured by the
repurchase of Receivables pursuant to Article VI of the Purchase Agreement
or by a repayment pursuant to Section 2.19 or a repurchase pursuant to
Section 6.22 hereof, such event shall cease to constitute an Early
Amortization Event; or
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(f) this Agreement, the Purchase Agreement or any other Transaction
Document shall cease to be in full force and effect or any provision
thereof shall for any reason cease to be the valid, binding and
enforceable obligation of Maxtor or the Borrower, as the case may be, or
Maxtor or the Borrower shall directly or indirectly contest in any manner
such effectiveness, validity, binding nature or enforceability; or
(g) a Change of Control shall occur; or
(h) the Borrower, Maxtor or the Servicer (if Maxtor or an Affiliate
thereof) shall have suffered any material adverse change to its financial
condition, prospects or operations, the collectibility of the Pledged
Receivables or the ability of the Borrower, Maxtor or the Servicer (if
Maxtor or an Affiliate thereof) to collect such Pledged Receivables or
otherwise perform their respective obligations under the Transaction
Documents or conduct their respective businesses; or
(i) the Long Term Rating, or any implied rating, of Maxtor is at any
time rated less than "B" by S&P or less than "B2" by Xxxxx'x for a period
of at least five (5) Business Days; or
(j) the rolling average of the Delinquency Ratios for the
immediately preceding three Cut-Off Dates shall at any time exceed 5.00%;
or
(k) the rolling average of the Default Ratios for the immediately
preceding three Cut-Off Dates shall at any time exceed 15.00%; or
(l) the rolling average of the Sales-Based Dilution Ratios for the
immediately preceding three Cut-Off Dates shall at any time exceed 12.00%;
or
(m) the rolling average of the Dilution-to-Liquidation Ratios for
the immediately preceding three Cut-Off Dates shall at any time exceed
15.00%; or
(n) the sum of the Dynamic Loss Reserve Percentage at any time and
the Dilution Reserve Percentage as of the immediately preceding Cut-Off
Date shall at any time equal or exceed 50.00%; or
(o) a Program Deficiency shall occur and shall remain unremedied for
three (3) Business Days; or
(p) any amount shall be drawn under the Facility Insurance Policy;
or
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(q) the financial strength rating (or any equivalent or similar
rating) of the Facility Insurer is rated "BBB+" or below by S&P or "Baa1"
or below by Xxxxx'x for a period of at least five (5) Business Days; or
(r) the occurrence and continuance of a Facility Insurer Default; or
(s) the occurrence of a Servicer Default; or
(t) (i) one or more final judgments for the payment of money shall
be entered against the Borrower or (ii) one or more final judgments for
the payment of money in an amount in excess of $5,000,000, individually or
in the aggregate, shall be entered against the Servicer 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 fifteen (15) consecutive days without a stay of execution; or
(u) the Originator shall for any reason cease to transfer, or cease
to have the legal capacity to transfer, or otherwise be incapable of
transferring all of its Receivables to the Borrower under the Purchase
Agreement; or
(v) the non-restricted and unencumbered cash, non-restricted and
unencumbered cash equivalents (determined and valued in accordance with
GAAP) and non-restricted and unencumbered marketable securities
(determined and valued in accordance with GAAP) of the Servicer (if Maxtor
or any Affiliate thereof) and its consolidated subsidiaries (including the
Borrower) shall be, in the aggregate, less than $175 million at any time;
or
(w) the operating cash flow (determined in accordance with GAAP) of
the Servicer (if Maxtor or any Affiliate thereof) and its consolidated
subsidiaries (including the Borrower) for any fiscal quarter of the
Servicer multiplied by four (4) shall be less than 20% of the long-term
debt (determined in accordance with GAAP) of the Servicer and its
consolidated subsidiaries (including the Borrower) as of the last day of
such fiscal quarter;
(x) S&P advises the Facility Insurer that S&P cannot provide a
Shadow Rating Letter containing a Shadow Rating equal to or above the
Minimum Shadow Rating and 60 days have passed since the date on which S&P
so advised the Facility Insurer without S&P having provided to the
Facility Insurer a Shadow Rating Letter containing a Shadow Rating equal
to or above the Minimum Shadow Rating; or
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(y) S&P delivers to the Facility Insurer a Shadow Rating Letter
containing a Shadow Rating that is below the Minimum Shadow Rating and 60
days have passed since the date of such delivery without S&P having
provided to the Facility Insurer a subsequent Shadow Rating Letter
containing a Shadow Rating equal to or above the Minimum Shadow Rating; or
(z) S&P fails to deliver to the Facility Insurer a Shadow Rating
Letter containing a Shadow Rating at least equal to the Minimum Shadow
Rating during the 60 day period following the Closing Date for any reason,
including, without limitation, the failure of the Borrower or the Servicer
to enter into such amendments to the Transaction Documents as may be
necessary to obtain such a Shadow Rating Letter, and 60 days have passed
since the last day of such 60-day period without S&P having provided to
the Facility Insurer a Shadow Rating Letter containing a Shadow Rating
equal to or above the Minimum Shadow Rating; or
(aa) S&P delivers to the Facility Insurer a Shadow Rating Letter
containing a Shadow Rating that is equal to or above the Minimum Shadow
Rating and S&P thereafter notifies the Facility Insurer that S&P has
reduced such Shadow Rating to below the Minimum Shadow Rating or has
withdrawn such Shadow Rating;
then the Agent or the Facility Insurer may, by notice to each other and the
Borrower, declare the Amortization Commencement Date to have occurred; provided,
that, in the case of any event described in Section 7.01(d) above, the
Amortization Commencement Date shall be deemed to have occurred automatically
upon the occurrence of such event and provided further, that, only the Agent may
declare an Amortization Commencement Date to have occurred with respect to any
event described in Section 7.01(q) or Section 7.01(r) above. Upon any such
declaration or automatic occurrence, (i) the Borrower shall cease purchasing
Receivables from Maxtor under the Purchase Agreement, (ii) at the request of the
Facility Insurer, the Servicer shall direct and cause the Obligors to make all
payments under the Pledged Receivables directly to the Backup Servicer, the
Agent, the Lender or any lockbox or account established by the Backup Servicer
as directed by the Facility Insurer, (iii) at the request of the Facility
Insurer and at the Borrower's expense, the Borrower and the Servicer shall
assemble all of the documents, instruments and other records (including, without
limitation, computer tapes and disks) that evidence or relate to any Pledged
Receivable, and shall make the same available to the Collateral Agent at a place
selected by the Collateral Agent or its designee and (iv) the Facility Insurer
shall have the sole right to give directions to the Collateral Agent, the
Trustee, the Borrower and/or the Servicer with respect to the rights and
remedies of the Agent, the Lender and/or the Facility Insurer hereunder which
may, pursuant to the terms hereof, otherwise be given by the Agent, the Lender
and/or the Facility Insurer.
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SECTION 7.02 Additional Remedies. (a) The Collateral Agent shall
have, in addition to all the rights and remedies provided herein and provided by
applicable federal, state, foreign, and local laws (including, without
limitation, the rights and remedies of a secured party under the Uniform
Commercial Code of any applicable state, to the extent that the Uniform
Commercial Code is applicable, and the right to offset any mutual debt and
claim), all rights and remedies available to the lenders in law, in equity, or
under any other agreement between the Lender or the Facility Insurer and the
Borrower.
(b) Except as otherwise expressly provided in this Agreement, no
remedy provided for by this Agreement shall be exclusive of any other remedy,
and each and every remedy shall be cumulative and in addition to any other
remedy, and no delay or omission to exercise any right or remedy shall impair
any such right or remedy or shall be deemed to be a waiver of any Early
Amortization Event.
(c) If on the Final Maturity Date, the outstanding principal of all
outstanding Loans, if any, and all Yield, Premium and all Fees accrued thereon
and all other Obligations shall not have been paid in full, then the Facility
Insurer, in addition to all other rights and remedies specified hereunder, shall
have the right to direct the Collateral Agent to, in its own name, immediately
sell in a commercially reasonable manner, in a recognized market (if one exists)
at such price or prices as the Facility Insurer may reasonably deem
satisfactory, any or all Pledged Receivables and all Other Conveyed Property
related thereto. The parties hereto recognize that it may not be possible to
sell all of the Pledged Receivables and the Other Conveyed Property related
thereto on a particular Business Day, or in a transaction with the same
purchaser, or in the same manner because the market for such assets may not be
liquid. Accordingly, the Facility Insurer may elect, in its sole discretion, the
time and manner of liquidating any Pledged Receivables and the Other Conveyed
Property related thereto, and nothing contained herein shall obligate the
Facility Insurer to liquidate any such assets on in the same manner or on the
same Business Day. Any amounts received from any sale or liquidation of assets
pursuant to this paragraph shall be deposited into the Collection Account for
distribution pursuant to Section 2.05(c).
VIII. INDEMNIFICATION
SECTION 8.01 Indemnities by the Borrower. Without limiting any other
rights which the Agent, the Collateral Agent, the Lender, the Backup Servicer,
the Collection Account Bank, the Facility Insurer, the Trustee or any of their
respective Affiliates may have hereunder or under applicable law, the Borrower
hereby agrees to indemnify the Agent, the Lender, the Backup Servicer, the
Collection Account Bank, the Facility Insurer, the Trustee and each of their
respective Affiliates, officers, directors, successors, assigns, employees and
agents (each an "Indemnified Party" for purposes of this Article VIII) from and
against any and all damages,
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losses, claims, liabilities and related costs and expenses, including reasonable
attorneys' fees and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of them
arising out of or as a result of this Agreement or any other Transaction
Document or in respect of any Pledged Assets, excluding, however, Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of the Agent, the Lender, the Backup Servicer, the Collection Account
Bank, the Facility Insurer, the Trustee or such Affiliate. Without limiting the
foregoing, but subject to the aforementioned exclusion, the Borrower shall
indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(a) any Pledged Receivable treated as or represented by the Borrower
to be an Eligible Receivable which is not an Eligible Receivable;
(b) reliance on any representation or warranty made or deemed made
by the Borrower, the Servicer or any of their respective officers under or
in connection with this Agreement or any Transaction Document, which shall
have been false or incorrect when made or deemed made or delivered;
(c) the failure by the Borrower or the Servicer to comply with any
term, provision or covenant contained in this Agreement or any agreement
executed in connection with this Agreement, or with any applicable law,
rule or regulation with respect to any Pledged Assets, or the
nonconformity of any Pledged Assets with any such applicable law, rule or
regulation;
(d) the failure to vest and maintain vested in the Collateral Agent,
for the benefit of the Secured Parties, or to transfer to the Collateral
Agent, for the benefit of the Secured Parties, a first priority perfected
security interest in the Receivables which are, or are purported to be,
Pledged Receivables, together with all Collections, Related Security and
other Pledged Assets related thereto, free and clear of any Adverse Claim
whether existing at the time of the related Borrowing or at any time
thereafter;
(e) the failure to maintain, as of the close of business on each
Business Day prior to the Collection Date, a Facility Amount which is less
than or equal to the lesser of (x) the Borrowing Limit on such Business
Day, or (y) the Capital Limit on such Business Day (provided, that in
determining the Capital Limit for purposes of this Section 8.01(e), all
information used in such determination must be accurate as of the date of
such determination);
(f) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other
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applicable laws with respect to any Receivables which are, or are
purported to be, Pledged Receivables or the other Pledged Assets related
thereto, whether at the time of any Borrowing or at any subsequent time;
(g) any dispute, claim, offset or defense (other than the discharge
in bankruptcy of an Obligor) to the payment of any Receivable which is, or
is purported to be, a Pledged Receivable (including, without limitation, a
defense based on such Receivable (or the Contract evidencing such
Receivable) 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, products or services
related to such Receivable or the furnishing or failure to furnish such
merchandise or services or relating to collection activities with respect
to such Receivable (if such collection activities were performed by the
Seller or any of its Affiliates acting as Servicer);
(h) any products liability or other claim arising out of or in
connection with the merchandise, products or services which are the
subject of any Contract;
(i) any failure of the Borrower or the Servicer to perform its
duties or obligations in accordance with the provisions of this Agreement;
(j) the failure to pay prior to delinquency any taxes payable in
connection with the Pledged Receivables or the Pledged Assets related
thereto;
(k) any repayment by the Agent or the Lender of any amount
previously distributed in payment of Loans or payment of Yield, Premium or
Fees or any other amount due hereunder, in each case which amount the
Agent, the Lender or the Facility Insurer believes in good faith is
required to be repaid;
(l) the commingling of Collections at any time with other funds;
(m) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Loans or the Pledged Assets;
(n) any failure by the Borrower to give reasonably equivalent value
to Maxtor in consideration for the transfer by Maxtor to the Borrower of
any Receivable or any attempt by any Person to void or otherwise avoid any
such transfer under any statutory provision or common law or equitable
action, including, without limitation, any provision of the Bankruptcy
Code;
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(o) any failure of the Borrower, the Servicer or any of their
respective agents or representatives (including, without limitation,
agents, representatives and employees of the Servicer acting pursuant to
authority granted under Section 6.01 hereof) to remit to the Servicer or
the Agent, Collections of Pledged Receivables remitted to the Borrower,
the Servicer or any such agent or representative;
(p) any claim arising out of or in connection with the Borrower's
or the Servicer's administration or servicing of the Receivables; or
(q) the sale or other transfer of any Receivables, or any interests
therein, in violation of applicable law.
Any amounts subject to the indemnification provisions of this Section 8.01 shall
be paid from monies in the Collection Account, subject to the order of priority
set forth in Section 2.05(c) hereof, to the applicable Indemnified Party on the
Remittance Date following such Indemnified Party's written demand therefor.
SECTION 8.02 Indemnities by the Servicer. Without limiting any other
rights which the Agent, the Collateral Agent, the Lender, the Facility Insurer,
the Trustee or any of their respective Affiliates may have hereunder or under
applicable law, the Servicer (if Maxtor or one of its Affiliates) hereby agrees
to indemnify each Indemnified Party from and against any and all Indemnified
Amounts awarded against or incurred by any of them arising out of or as a result
of the Servicer's performance of or failure to perform its obligations under
this Agreement excluding, however, Indemnified Amounts to the extent (i)
resulting from gross negligence or willful misconduct on the part of the Agent,
the Collateral Agent, the Lender, the Facility Insurer, the Trustee or such
Affiliate or (ii) that paying such Indemnified Amounts would constitute recourse
for losses due to the uncollectibility of any Receivable due to the insolvency,
bankruptcy, or financial inability to pay of the Obligor. Without limiting the
foregoing, but subject to the aforementioned exclusion, the Servicer (if Maxtor
or one of its Affiliates) shall indemnify each Indemnified Party for Indemnified
Amounts relating to or resulting from:
(a) any Pledged Receivable treated as or represented by the Servicer
to be an Eligible Receivable which is (i) a Defaulted Receivable or a
Delinquent Receivable or (ii) to the best of the Servicer's knowledge, not
an Eligible Receivable; or
(b) reliance on any representation or warranty made or deemed made
by the Servicer (if Maxtor or one of its Affiliates) or any of their
respective officers under or in connection with this Agreement or any
other Transaction Document, which shall have been false or incorrect in
any material respect when made or deemed made or delivered; or
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(c) the failure by the Servicer (if Maxtor or one of its Affiliates)
to comply with any term, provision or covenant applicable to it under this
Agreement or any agreement executed in connection with this Agreement, or
with any law, rule or regulation applicable to the Servicer's duties
hereunder or any Pledged Assets, or the nonconformity of any Pledged
Assets with any such law, rule or regulation; or
(d) the failure to vest and maintain vested in the Collateral Agent,
for the benefit of the Secured Parties, or to transfer to the Collateral
Agent, for the benefit of the Secured Parties, a first priority perfected
security interest in the Receivables which are, or are purported to be,
Pledged Receivables, together with all Collections, Related Security and
other Pledged Assets related thereto, free and clear of any Adverse Claim
whether existing at the time of the related Borrowing or at any time
thereafter; or
(e) the commingling by the Servicer of Collections any time with
other funds; or (1)
(f) any failure of the Servicer or any of its respective agents or
representatives (including, without limitation, agents, representatives
and employees of the Servicer acting pursuant to authority granted under
Section 6.01 hereof) to remit to the Collection Account, Collections of
Pledged Receivables remitted to the Borrower, the Servicer or any such
agent or representative; or
(g) any claim arising out of or in connection with the Servicer's
administration or servicing of the Receivables.
Any amounts subject to the indemnification provisions of this Section 8.02 shall
be paid by the Servicer to the applicable Indemnified Party, within five (5)
Business Days following such Indemnified Party's written demand therefor.
Each applicable Indemnified Party shall deliver to the indemnifying
party under Section 8.01 and/or Section 8.02 within a reasonable time after such
Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by such Indemnified Party relating to the
claim giving rise to the Indemnified Amounts. Each such Indemnified Party will
cooperate with the Borrower and the Servicer in connection with any claim giving
rise to the Indemnified Amounts to minimize the liability of such indemnifying
parties, provided that nothing contained herein shall obligate any such
Indemnified Party to take any action which, in the opinion of such Indemnified
Party, is unlawful or otherwise disadvantageous to such Indemnified Party.
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IX. MISCELLANEOUS
SECTION 9.01 Amendments and Waivers. (a) Except as provided in
Section 9.01(b), no amendment or modification of any provision of this Agreement
shall be effective without the written agreement of the Borrower, the Servicer,
the Collateral Agent, the Trustee, the Agent, the Facility Insurer and the
Lender and no termination or waiver of any provision of this Agreement or
consent to any departure therefrom by the Borrower or the Servicer shall be
effective without the written concurrence of the Agent, the Facility Insurer and
the Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) In addition to the consents required by Section 9.01(a) the
written consent of each Lender (in the event that there is more than one Lender)
shall be required for any amendment, modification or waiver (i) reducing any
outstanding Loans, or the Yield thereon, (ii) postponing any date for any
payment of any Loan, or the Yield thereon, (iii) modifying the provisions of
this Section 9.01 or (iv) increasing the Capital Limit or the Borrowing Limit.
SECTION 9.02 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex communication and communication by facsimile copy) and mailed,
telexed, transmitted or delivered, as to each party hereto, at its address set
forth under its name on the signature pages hereof or specified in such party's
Assignment and Acceptance or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, upon receipt, or in the case of (i) notice by
mail, five days after being deposited in the United States mails, first class
postage prepaid, (ii) notice by telex, when telexed against receipt of
answerback, or (iii) notice by facsimile copy, when verbal communication of
receipt is obtained, except that notices and communications pursuant to Article
II shall not be effective until received. In any case in which notice or other
communication to the Facility Insurer with respect to which a failure on the
part of the Facility Insurer to respond shall be deemed to constitute consent or
acceptance (except for the delivery of a Borrowing Notice), then a copy of such
notice or other communication should be sent to the attention of each of the
Chief Risk Officer and Chief Legal Officer of the Facility Insurer and shall be
marked to indicate "URGENT MATERIAL ENCLOSED".
SECTION 9.03 No Waiver; Remedies. Except as set forth in Section
9.13 hereof, no failure on the part of the Facility Insurer, the Agent, the
Collateral Agent or the Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
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SECTION 9.04 Binding Effect; Assignability; Multiple Lenders. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Servicer, the Facility Insurer, the Agent, the Collateral Agent, the Lender,
the Backup Servicer, the Trustee and the Collection Account Bank, and their
respective successors and permitted assigns. This Agreement and the Lender's
rights and obligations hereunder and interest herein shall be assignable in
whole or in part (including by way of the sale of participation interests
therein) by the Lender and its successors and assigns with the consent of the
Facility Insurer (which consent may not be unreasonably withheld); provided that
any assignment by the Lender to any Affiliate thereof shall not require any
consent of the Facility Insurer. This Agreement and the Agent's rights and
obligations hereunder and interest herein shall be assignable in whole or in
part by the Agent and its successors and assigns with the consent of the
Facility Insurer (which consent may not be unreasonably withheld or delayed);
provided that any assignment by the Agent to any Affiliate thereof shall not
require any consent of the Facility Insurer. None of the Borrower, the Servicer,
the Collateral Agent, the Backup Servicer, the Trustee or the Collection Account
Bank may assign any of its rights or obligations hereunder or any interest
herein without the prior written consent of the Facility Insurer, the Lender and
the Agent. The Facility Insurer may not assign any of its rights or obligations
hereunder or any interest herein (except to a successor in interest) without the
prior written consent of the Lender and the Agent. The parties to each
assignment or participation made pursuant to this Section 9.04 shall execute and
deliver to the Agent for its acceptance and recording in its books and records
and to the Facility Insurer for its consent, an assignment and acceptance
agreement (an "Assignment and Acceptance") or a participation agreement or other
transfer instrument reasonably satisfactory in form and substance to the Agent,
the Facility Insurer and the Borrower. Each such assignment or participation
shall be effective as of the date specified in the applicable Assignment and
Acceptance or other agreement or instrument only after the execution, delivery,
acceptance and recording as described in the preceding sentence. The Agent shall
notify the Borrower and the Facility Insurer of any assignment or participation
thereof made pursuant to this Section 9.04. The Lender may, in connection with
any assignment or participation or any proposed assignment or participation
pursuant to this Section 9.04, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower and
the Pledged Assets furnished to the Lender by or on behalf of the Borrower or
the Servicer; provided, however that the Lender shall obtain an agreement from
such assignee or participant or proposed assignee or participant that they shall
treat as confidential (under terms mutually satisfactory to the Agent and such
assignee or participant or proposed assignee or participant) any information
obtained which is not already publicly known or available.
(b) Whenever the term "Lender" is used herein, it shall mean MLCFC
and/or any other Person which shall have executed an Assignment and Acceptance;
provided, however, that each such party shall have a pro rata share of the
rights and obligations of the Lender
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hereunder in such percentage amount (the "Commitment Percentage") as shall be
obtained by dividing such party's commitment to fund Loans hereunder by the
total commitment of all parties to fund Loans hereunder. Any right at any time
of the Lender to enforce any remedy, or instruct the Agent to take (or refrain
from taking) any action hereunder, shall be exercised by the Agent only upon
direction by such parties that hold a majority of the Commitment Percentages at
such time. Each of the parties hereto agree, in connection with any assignment
of the Lender's rights and obligations hereunder pursuant to the terms hereof,
to enter into any amendment of the Agreement as is reasonably requested by the
Lender or the Agent in order to more fully provide for the existence of two or
more Lenders hereunder.
SECTION 9.05 Term of This Agreement. This Agreement including,
without limitation, the Borrower's obligation to observe its covenants set forth
in Articles V and VI, and the Servicer's obligation to observe its covenants set
forth in Articles V and VI, shall remain in full force and effect until the
Collection Date; provided, however, that the rights and remedies with respect to
any breach of any representation and warranty made or deemed made by the
Borrower or Servicer pursuant to Articles III and IV and the indemnification and
payment provisions of Article VIII and Article IX and the provisions of Section
9.08 and Section 9.09 shall be continuing and shall survive any termination of
this Agreement.
SECTION 9.06 GOVERNING LAW; JURY WAIVER. THIS AGREEMENT SHALL, IN
ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
ANY CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF
THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE INTERESTS OF THE COLLATERAL AGENT IN THE PLEDGED ASSETS, OR
REMEDIES HEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREUNDER.
SECTION 9.07 Costs, Expenses and Taxes. (a) In addition to the
rights of indemnification granted to the Backup Servicer, the Collection Account
Bank, the Agent, the Collateral Agent, the Lender, the Facility Insurer, the
Trustee and the other Indemnified Parties under Article VIII hereof, the
Borrower agrees to pay on demand all reasonable costs and expenses of the Backup
Servicer, the Collection Account Bank, the Agent, the Collateral Agent, the
Lender, the Facility Insurer, the Trustee or such other Indemnified Parties
incurred in
93
connection with the preparation, execution, delivery, administration of, or any
waiver or consent issued or amendment prepared in connection with, this
Agreement, the other Transaction Documents and the other documents to be
delivered hereunder or in connection herewith or therewith or incurred in
connection with any amendment, waiver or modification of this Agreement, any
other Transaction Document, and any other documents to be delivered hereunder or
thereunder or in connection herewith or therewith including, without limitation,
the reasonable fees and reasonable out-of-pocket expenses of counsel for the
Backup Servicer, the Collection Account Bank, the Agent, the Collateral Agent,
the Lender, the Facility Insurer, the Trustee or such other Indemnified Parties
with respect thereto and with respect to advising the Backup Servicer, the
Collection Account Bank, the Facility Insurer, the Trustee, the Agent, the
Collateral Agent and the Lender as to their respective rights and remedies under
this Agreement and the other documents to be delivered hereunder or in
connection herewith, and all costs and expenses, if any (including reasonable
counsel fees and expenses), incurred by the Backup Servicer, the Collection
Account Bank, the Agent, the Collateral Agent, the Lender, the Facility Insurer,
the Trustee or such other Indemnified Parties in connection with the enforcement
of this Agreement and/or the other Transaction Documents.
(b) The Borrower shall pay on demand any and all stamp, sales,
excise and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement
or the other documents to be delivered hereunder.
SECTION 9.08 No Proceedings. The Servicer and U.S. Bank National
Association each hereby agrees that it will not institute against, or join any
other Person in instituting against, the Borrower any proceedings of the type
referred to in the definition of Bankruptcy Event unless and until one year and
one day shall have elapsed after the Collection Date.
SECTION 9.09 Recourse Against Certain Parties. No recourse under or
with respect to any obligation, covenant or agreement (including, without
limitation, the payment of any fees or any other obligations) of the Lender, the
Agent, the Collateral Agent or the Facility Insurer as contained in this
Agreement or any other agreement, instrument or document entered into by the
Lender, the Agent, the Collateral Agent or the Facility Insurer pursuant hereto
or in connection herewith shall be had against any administrator of the Lender,
the Agent, the Collateral Agent or the Facility Insurer or any incorporator,
affiliate, stockholder, officer, employee or director of the Lender, the Agent,
the Collateral Agent or the Facility Insurer or of any such administrator, as
such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that the agreements of each party hereto contained in this Agreement
and all of the other agreements, instruments and documents entered into by the
Lender, the Agent, the Collateral Agent or the Facility Insurer pursuant hereto
or in connection herewith are, in each
94
case, solely the corporate obligations of such party (and nothing in this
Section 9.09 shall be construed to diminish in any way such corporate
obligations of such party), and that no personal liability whatsoever shall
attach to or be incurred by any administrator of the Lender, the Agent, the
Collateral Agent or the Facility Insurer or any incorporator, stockholder,
affiliate, officer, employee or director of the Lender, the Agent, the
Collateral Agent or the Facility Insurer or of any such administrator, as such,
or any of them, under or by reason of any of the obligations, covenants or
agreements of the Lender, the Agent, the Collateral Agent or the Facility
Insurer contained in this Agreement or in any other such instruments, documents
or agreements, or which are implied therefrom, and that any and all personal
liability of every such administrator of the Lender, the Agent, the Collateral
Agent or the Facility Insurer and each incorporator, stockholder, affiliate,
officer, employee or director of the Lender, the Agent or the Facility Insurer
or of any such administrator, or any of them, for breaches by the Lender, the
Agent, the Collateral Agent or the Facility Insurer of any such obligations,
covenants or agreements, which liability may arise either at common law or at
equity, by statute or constitution, or otherwise, is hereby expressly waived as
a condition of and in consideration for the execution of this Agreement. The
provisions of this Section 9.09 shall survive the termination of this Agreement.
SECTION 9.10 Execution in Counterparts; Severability; Integration.
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 facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. This
Agreement contains 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
other than the Fee Letter, the Facility Insurance Agreement and the Premium
Letter.
SECTION 9.11 Tax Characterization. Notwithstanding any provision of
this Agreement, the parties hereto intend for the transactions effected
hereunder to constitute a financing transaction for federal taxation purposes.
SECTION 9.12 Consent of the Facility Insurer. (a) The Facility
Insurer acknowledges and agrees that with respect to each provision under this
Agreement where its approval or consent is required (other than any such
approval or consent with respect to (i) the termination or the designation of a
successor Servicer, Backup Servicer, Collateral Agent or
95
Trustee or (ii) any remedies available to the Agent or the Lender hereunder),
such approval or consent shall not be unreasonably withheld or delayed.
(b) The Facility Insurer and each other party hereto acknowledges
and agrees that during the continuation of a Facility Insurer Default, the
Facility Insurer's agreement, permission, vote, acknowledgment or other act or
consent shall not be required for the Agent or the Lender, as the case may be,
to take any action permitted to be taken under, pursuant to or in connection
with this Agreement (whether alone or together with the Facility Insurer) and
the Facility Insurer shall have no right to take any action permitted by it to
be taken, or instruct or direct the taking of any action under, pursuant to, or
in connection with this Agreement or any other Transaction Document other than
the Insurance Agreement, the Policy and the Premium Letter, without the prior
consent of the Agent and the Lender. Notwithstanding the previous sentence, the
Facility Insurer shall not lose any voting, acknowledgment or consent rights
with respect to any action permitted to be taken under, pursuant to or in
connection with this Agreement which would have the effect of (i) increasing the
Capital Limit or Borrowing Limit, (ii) postponing any date for any payment of
any Loan or Yield thereon, (iii) increasing the Yield or Fees or other amounts
payable to any party by the Borrower, (iv) amending or modifying any provision
of this Agreement or any other Transaction Document or (v) increasing the
obligations of the Facility Insurer hereunder or under the Facility Insurance
Policy.
SECTION 9.13 No Reliance. (a) Each of the Agent, the Collateral
Agent and the Lender hereby confirms that the Facility Insurer has not made any
warranties or representations as to (x) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Transaction Document
(other than with respect to their obligations under the Premium Letter, the
Facility Insurance Agreement and the Facility Insurance Policy) or the condition
or value of the Pledged Assets or the creation, perfection or priority of any
security interest therein created under the Transaction Documents, or (y) the
business condition (financial or otherwise), operations, properties or prospects
of the Backup Servicer, the Servicer, the Originator and/or the Borrower or the
performance or observance by any such Person of any of its obligations under any
Transaction Document.
(b) Each of the parties hereto hereby confirms that neither the
Agent nor the Lender has not made any warranties or representations as to (x)
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Transaction Document or the condition or value of the Pledged
Assets or the creation, perfection or priority of any security interest therein
created under the Transaction Documents, or (y) the business condition
(financial or otherwise), operations, properties or prospects of the Backup
Servicer, the Servicer, the Originator and/or the Borrower or the performance or
observance by any such Person of any of its obligations under any Transaction
Document.
96
[SIGNATURE PAGES TO FOLLOW.]
97
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER: MAXTOR FUNDING LLC
By: /s/ Xxxx Xxxxx
______________________________________
Title: Director, V.P. and Treasurer
000 XxXxxxxx Xxxxxxxxx, #00,000
Xxxxxxxx, XX 00000
Attention: Treasurer
Facsimile No.: 000-000-0000
Confirmation No.: 000-000-0000
THE SERVICER: MAXTOR CORPORATION
By: /s/ Xxxx Xxxxx
______________________________________
Title: Treasurer
000 XxXxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Treasurer
Facsimile No.: 000-000-0000
Confirmation No.: 000-000-0000
THE AGENT: XXXXXXX XXXXX COMMERCIAL FINANCE CORP.
By: (illegible)
______________________________________
Title: Director
Four World Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
Facsimile No.: 000-000-0000
Confirmation No.: 000-000-0000
THE LENDER: XXXXXXX XXXXX COMMERCIAL FINANCE CORP.
By: (illegible)
______________________________________
Title: Director
Four World Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
Facsimile No.: 000-000-0000
Confirmation No.: 000-000-0000
THE FACILITY INSURER: RADIAN REINSURANCE INC.
By: (illegible)
______________________________________
Title: Vice President
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Risk Officer and Chief
Legal Officer
Facsimile No.: 000-000-0000
Confirmation No.: 212-983-3100
THE BACKUP SERVICER, THE TRUSTEE,
THE COLLATERAL AGENT AND THE
COLLECTION ACCOUNT BANK: U.S. BANK NATIONAL ASSOCIATION
By: (illegible)
______________________________________
Title: Vice President
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/Maxtor Funding
Facsimile No.: 000-000-0000
Confirmation No.: 000-000-0000
SCHEDULE I
CONDITION PRECEDENT DOCUMENTS
As required by Section 3.01 of the Agreement, each of the following
items must be delivered to the Agent prior to the date of the initial Borrowing:
(2) A copy of this Agreement duly executed by each of the parties
hereto;
(3) A certificate of the Secretary or Assistant Secretary of the
Borrower dated the date of this Agreement, certifying (i) the names and true
signatures of the incumbent officers of the Borrower authorized to sign this
Agreement and the other documents to be delivered by it hereunder (on which
certificate the Agent and the Lender may conclusively rely until such time as
the Agent shall receive from the Borrower a revised certificate meeting the
requirements of this paragraph (b)), (ii) that the copy of the certificate of
formation of the Borrower attached thereto is a complete and correct copy and
that such certificate of formation has not been amended, modified or
supplemented and is in full force and effect, (iii) that the copy of the limited
liability company agreement of the Borrower attached thereto is a complete and
correct copy and that such limited liability company agreement has not been
amended, modified or supplemented and are in full force and effect, and (iv) the
resolutions of the Borrower's board of directors approving and authorizing the
execution, delivery and performance by the Borrower of this Agreement and the
documents related thereto;
(4) Good standing certificate dated as of a recent date for the
Borrower issued by the Secretary of State of each of the States of Delaware and
California;
(5) Copies of proper financing statements (the "Facility Financing
Statements"), to be filed on or immediately following the Closing Date,
describing the Pledged Assets and naming the Borrower as debtor and the
Collateral Agent, on behalf of the Secured Parties, as secured party, and other,
similar instruments or documents, as may be necessary or, in the opinion of the
Collateral Agent, the Facility Insurer or the Lender, desirable under the UCC of
all appropriate jurisdictions or any comparable law to perfect the Collateral
Agent's interests in all Pledged Assets;
(6) Acknowledgment copies of proper financing statements, if any,
necessary to release all security interests and other rights of any Person in
the Pledged Receivables, Related Security and other Pledged Assets previously
granted by Maxtor;
(7) Certified copies of requests for information or copies (or a
similar UCC search report certified by a party acceptable to the Agent and the
Facility Insurer), dated a date reasonably near to the date of the initial
Borrowing, listing all effective financing statements which name the Borrower as
debtor, together with copies of such financing statements (none of which shall
cover any Pledged Assets);
(8) One or more favorable Opinions of Counsel of Xxxxxxxx & Xxxxxxxx
LLP with respect to such matters as the Agent or the Facility Insurer may
reasonably request
Sch. I-1
(including an opinion with respect to the first priority perfected security
interest of the Borrower and the Collateral Agent (for the benefit of the
Secured Parties) in the Pledged Assets);
(9) One or more favorable Opinions of Counsel of Xxxxxxxx & Xxxxxxxx
LLP, with respect to the true conveyance of the Pledged Receivables under the
Purchase Agreement, and issues of substantive consolidation;
(10) One or more favorable Opinions of Counsel of Xxxxxxxx &
Xxxxxxxx LLP, addressed and acceptable to the Agent with respect to, among other
things, the enforceability of, this Agreement and the other Transaction
Documents;
(11) One or more favorable Opinions of Counsel of Xxxxxxxx &
Xxxxxxxx LLP, addressed and acceptable to the Agent with respect to, among other
things, the due authorization, execution and delivery of this Agreement and the
other Transaction Documents;
(12) A favorable Opinion of Counsel of Xxxxxxxx & Xxxxxxxx LLP with
respect to the first priority perfected security interest of the Collateral
Agent (for the benefit of the Secured Parties), in the Collection Account, the
Lockbox Account and, in each case, the funds therein;
(13) Any necessary third party consents to the closing of the
transactions contemplated hereby;
(14) A copy of each of the other Transaction Documents duly executed
by the parties thereto;
(15) Evidence that Maxtor's lockbox account at Bank of America has
been renamed in the name of the Borrower; and
(16) A draft of the Credit and Collection Policy. (1)
Sch. I-2
SCHEDULE II
[Intentionally omitted.]
Sch. II-2
SCHEDULE III
PRIOR NAMES, TRADENAMES, FICTITIOUS NAMES
AND "DOING BUSINESS AS" NAMES
BORROWER:
Prior names:
None.
Tradenames:
None.
SERVICER:
Prior names:
None.
Tradenames:
None.
Sch. III-3
SCHEDULE IV-A
LITIGATION OF BORROWER
None.
Sch. IV-1
SCHEDULE IV-B
LITIGATION OF SERVICER
None.
Sch. IV-1
SCHEDULE V
DEBT RATINGS OF OBLIGORS
-----------------------------------------------------------------------------------------
LEVEL I LEVEL II LEVEL III LEVEL IV
-----------------------------------------------------------------------------------------
Long Term Rating: Long Term Rating: Long Term Rating: Long Term Rating:
A+ or better from A, A- or BBB+ from BBB or BBB- from BB+ or below from
S&P and/or A1 or S&P and/or A2, A3 S&P and/or Baa2 or S&P and/or Baa1 or
better from Xxxxx'x; or Baa1 from Baa3 from Xxxxx'x; below from Xxxxx'x;
Short Term Rating: Xxxxx'x; Short Term Rating: Short Term Rating:
A-1 or better from Short Term Rating: A-3 from S&P and/or B or below from
S&P and/or P-1 from A-2 from S&P P-3 from Xxxxx'x S&P and/or "Not
Xxxxx'x and/or P-2 from Prime" from
Xxxxx'x Xxxxx'x; not rated
-----------------------------------------------------------------------------------------
In the event that (i) the Long Term Ratings and/or Short Term
Ratings of an Obligor fall within different levels described above (each, a
"Level"), the highest-numbered Level in which any such Long Term Rating or Short
Term Rating falls shall apply to such Obligor, (ii) Long Term Ratings and/or
Short Term Ratings for an Obligor are available from one of Xxxxx'x and S&P (but
not each of them), the Long Term Ratings and/or Short Term Ratings which are
available shall be used to determine the Level to be applied to such Obligor and
(iii) an Obligor has no Long Term Ratings and no Short Term Ratings, Level IV
shall apply to such Obligor.
Sch. V-1
SCHEDULE VI
CUT-OFF DATES
February 1, 2003
March 1, 2003
March 29, 2003
May 3, 2003
May 31, 2003
June 28, 2003
August 2, 2003
August 30, 2003
September 27, 2003
November 1, 2003
November 29, 2003
December 27, 2003
Sch. VI-1
SCHEDULE VII
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO ELIGIBLE RECEIVABLES
The following representations and warranties are made by the Borrower,
with respect to each Pledged Receivable which is designated as being an Eligible
Receivable and is represented to the Agent, the Lender and the Facility Insurer
as being an Eligible Receivable, or are included as Eligible Receivables in any
calculation set forth in the Agreement.
1. (i) The related Obligor and the Originator have fully executed
and delivered a Contract, in substantially the form of one of the contracts
attached hereto as Exhibit D-1, with respect to the merchandise, products or
services related to such Pledged Receivable or (ii) the Originator has delivered
to the related Obligor an invoice, in substantially the form of one of the
invoices attached hereto as Exhibit D-2, with respect to the merchandise,
products or services related to such Pledged Receivable.
2. The Obligor with respect to such Pledged Receivable received a
completely legible, completely filled-in copy of the related Contract and each
other document that such Obligor was required to sign in connection with the
purchase of the merchandise, products or services related to such Pledged
Receivable.
3. The Contract related to such Pledged Receivable is in full force
and effect in accordance with its terms and the Obligor related thereto has not
suspended or reduced payments or obligations due or to become due thereunder by
reason of default by any other party to such Contract.
4. Such Pledged Receivable was originated in the United States or
Canada and is denominated and payable only in United States dollars.
5. Such Pledged Receivable represents the genuine, legal, valid,
binding and full recourse payment obligation of the Obligor to pay the stated
amount thereunder.
6. The Contract related to such Pledged Receivable is enforceable by
the Originator and its successors and assigns, in accordance with its terms.
7. The Obligor with respect to such Pledged Receivable (and any
Person executing a Guaranty in connection therewith), has full legal capacity to
execute and deliver the related Contract and any other documents related
thereto.
8. Each such Pledged Receivable, at the time of origination and at
all times thereafter, conforms to all requirements of the Credit and Collection
Policy in effect from time to time and, in any case, no such Receivable is
required to be written off pursuant to such Credit and Collection Policy.
9. No Bankruptcy Event has occurred and is continuing with respect
to the Obligor related to such Pledged Receivable.
Sch. VII-1
10. Such Pledged Receivable and the related Contract was originated
by the Originator in the ordinary course of the Originator's business and the
Originator had all necessary licenses and permits to originate such Pledged
Receivable and the related Contract under all applicable laws.
11. Such Pledged Receivable and the related Contract was originated
by the Originator without any fraud or material misrepresentation on the part of
such Obligor or the Originator.
12. Such Pledged Receivable, the related Contract and the other
Related Security are not subject to laws which would make unlawful, void or
voidable the sale, transfer, pledge and/or assignment of such Pledged
Receivable, the related Contract and the other Related Security.
13. The Contract related to such Pledged Receivable does not contain
a confidentiality provision that purports to restrict the ability of the Agent
or the Secured Parties to exercise their rights under this Agreement, including
their rights to review the related Contract.
14. The payment obligation under such Pledged Receivable is not
assignable to any Person in a manner which would release the Obligor thereof
from such Obligor's payment obligations thereunder.
15. No selection procedures adverse to the Agent or the Secured
Parties have been utilized in selecting such Pledged Receivable from all similar
receivables originated by the Originator.
16. Such Pledged Receivable is not a Defaulted Receivable or a
Delinquent Receivable.
17. The Obligor related to such Pledged Receivable is not an Obligor
with respect to any Defaulted Receivables the Outstanding Balances of which, in
the aggregate, constitute more than 20% of the aggregate Outstanding Balance of
all Pledged Receivables with respect to such Obligor.
18. Such Pledged Receivable is an obligation representing all or
part of the sales price of merchandise, insurance or services within the meaning
of Section 3(c)(5) of the Investment Company Act of 1940, as amended, and the
nature of which is such that its purchase would constitute a "current
transaction" within the meaning of Section 3(a)(3) of the Securities Act of
1933, as amended.
19. Such Pledged Receivable is an "account" within the meaning of
Article 9 of the UCC. 1.
20. The Contract and other related documents related to such Pledged
Receivable are in full force and effect and have not been amended, extended,
rewritten or modified from the original terms thereof.
Sch. VII-2
21. The purchase of such Pledged Receivable under the Purchase
Agreement by the Borrower constitutes a "true-sale" and the Agent and the
Facility Insurer shall have received an Opinion of Counsel to such effect.
22. The Borrower has all necessary licenses and permits to purchase
such Pledged Receivable, the related Contract and the other Related Security
under all applicable laws.
23. Such Pledged Receivable, together with the related Contract,
does not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules or regulations relating to usury,
consumer protection, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy).
24. With respect to such Pledged Receivable, the related Contract
and the other Related Security, neither the Borrower or the Originator has
entered into any agreement that prohibits, restricts or conditions the sale,
transfer, pledge and/or assignment of such Pledged Receivable, the related
Contract and the other Related Security.
25. Such Pledged Receivable, the related Contract and the Related
Security related thereto are neither subject to any litigation, nor subject to
any right of rescission, setoff, counterclaim or defense on the part of the
Obligor thereunder or any other Person and the merchandise, products or services
related to such Pledged Receivable have been shipped to the related Obligor and
the related Obligor's obligation to pay such Pledged Receivable is absolute.
26. Such Pledged Receivable was not contractually past due at the
time of Conveyance (as defined in the Purchase Agreement) pursuant to the
Purchase Agreement.
27. The Obligor related to such Pledged Receivable is not an
Affiliate of any of the parties hereto, and is not a Government Entity.
28. The original Outstanding Balance of such Pledged Receivable is
required to be paid in full, pursuant to the related Contract, no later than 60
days from the date of the related Contract.
29. The Borrower has not taken any action to convey any right to any
Person that would result in such Person having a right to payments due under any
such Pledged Receivable or impair the rights of the Borrower in such Pledged
Receivable or any proceeds thereof.
30. With respect to such Pledged Receivable, by the Borrowing Date
on which such Pledged Receivable is Pledged hereunder and on each relevant date
thereafter, the Borrower will have caused its master computer records relating
to such Pledged Receivable to be clearly and unambiguously marked to show that
such Pledged Receivable has been Pledged under this Agreement.
31. With respect to such Pledged Receivable, by the Borrowing Date
on which such Pledged Receivable is Pledged hereunder and on each relevant date
thereafter, Maxtor will have caused its master computer records relating to such
Pledged Receivable to be clearly and
Sch. VII-3
unambiguously marked to show that such Pledged Receivable has been sold or
contributed under the Purchase Agreement.
32. With respect to such Pledged Receivable, the Borrower has taken
(or caused to be taken) all steps necessary under all applicable law in order to
perfect the security interest of the Collateral Agent, for the benefit of the
Secured Parties, and there exists in favor of the Collateral Agent, for the
benefit of the Secured Parties, a valid, subsisting and enforceable first
priority perfected security interest in the Pledged Assets with respect to such
Pledged Receivable (and the proceeds thereof) and such security interest is and
shall be prior to all other liens upon and security interests in such Pledged
Assets.
33. Such Pledged Receivable arises from the completion of the sale
and delivery of merchandise, products or services which comply with the terms
and specifications of the related Contract and any related purchase order, and
does not represent an invoice in advance of such completion.
34. With respect to such Pledged Receivable, at or prior to the
later of the date of this Agreement and the date such Pledged Receivable is
created, neither the Agent nor the Facility Insurer has notified the Borrower
that such Pledged Receivable (or class of Pledged Receivables) is no longer
acceptable to be Pledged hereunder.
35. Such Pledged Receivable is owned by the Borrower free and clear
of any Adverse Claim.
36. Such Pledged Receivable is not subject to any contingent
performance requirements of the Originator or the Borrower.
37. The Obligor of such Pledged Receivable is located or resides in
the United States or a province of Canada that has enacted the Personal Property
Act.
38. Such Pledged Receivable does not relate to a Contract that was
issued to evidence the remaining amount owed on a prior Contract after a partial
payment was made on such prior Contract.
Sch. VII-4
EXHIBIT A
FORM OF BORROWING REPORT
(See attached.)
Exh. A-1
EXHIBIT B
FORM OF DAILY REPORT
(See attached.)
Exh. B-1
EXHIBIT C
FORM OF MONTHLY REMITTANCE REPORT
(See attached.)
Exh. C-1
EXHIBIT D-1
FORM OF CONTRACT: AGREEMENT
(See attached.)
Exh. D1-1
EXHIBIT D-2
FORM OF CONTRACT: INVOICE
(See attached.)
Exh. D2-1
EXHIBIT E
FORM OF NOTICE OF BORROWING
(See attached.)
Exh. E-1
EXHIBIT F
FORM OF BACKUP SERVICER CERTIFICATION LETTER
(See attached.)
Exh. F-1
