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EXHIBIT 10.170
APPENDIX A
DEFINITIONS
This is Appendix A to the Receivables Purchase Agreement dated as of
July 31, 1998 among Maxtor Receivables Corporation, as Seller, Blue Keel
Funding, LLC, as Purchaser, Maxtor Corporation, as initial Servicer, and Fleet
National Bank, as Administrator (as amended, supplemented or otherwise modified
from time to time, the "Agreement"). Unless otherwise indicated, all Section,
Exhibit and schedule references in this Appendix are to Sections of and Exhibits
and Schedules to the Agreement.
A. Defined Terms. As used in the Agreement, unless the context requires a
different meaning, the following terms have the meanings indicated hereinbelow:
"Administrator" has the meaning set forth in the preamble.
"Administrator's Office" means the office of the Administrator at Xxx
Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or such other address
as shall be designated by the Administrator in writing to Seller and
Purchaser.
"Affected Party" means each of Purchaser, each Program Support Provider,
any assignee or participant of Purchaser or any Program Support Provider, Fleet,
any successor to Fleet as Administrator, and any sub-agent of the Administrator.
"Affiliate" when used with respect to a Person means any other Person,
directly or indirectly, controlling, controlled by, or under common control with
such Person, except, when used with respect to the Purchaser, Affiliate shall
mean the holder(s) of its limited liability company interests.
"Allocation Limit" has the meaning set forth in Section 1.01.
"Alternate Base Rate" means, on any date, a fluctuating rate of
interest per annum equal to the higher of
(a) the rate of interest most recently announced by the Liquidity
Agent in Boston, Massachusetts, as its prime rate; and
(b) the Federal Funds Rate most recently determined by the Liquidity
Agent plus 0.50% per annum.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Liquidity Agent in connection with extensions of
credit.
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"Applicable Law" means all existing and future applicable laws, rules,
regulations (including proposed, temporary and final income tax regulations),
statutes, treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by any Governmental Authority, and applicable
judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or
agency of competent jurisdiction.
"Asset Interest" means an undivided ownership or security interest
determined from time to time as provided in Section 1.04(b) in all Pool Assets.
"Business Day" means a day other than a Saturday or a Sunday on which both
(a) the Administrator at its principal office in Boston, Massachusetts is open
for business and (b) commercial banks in New York City, Chicago, Illinois and
San Francisco, California are not authorized or required to be closed for
business.
"Canadian Receivable" means a Receivable the Obligor of which is a
resident of Canada and which is not a Subsidiary of International Business
Machines Corporation.
"Canadian Receivables Limit" at any time means an amount equal to the
product of (i) the aggregate Unpaid Balance of all Eligible Receivables at such
time, times (ii) 10%.
"Capital" means at any time with respect to the Asset Interest an amount
equal to (a) the aggregate of the amounts theretofore paid to Seller for
Purchases pursuant to Section 1.01, less (b) the aggregate amount of Collections
theretofore received and actually distributed to Purchaser on account of the
Capital pursuant to Section 3.01.
"Capital Lease" means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee which would, in
accordance with GAAP, be required to be classified and accounted for as a
capital lease on a balance sheet of such Person, other than, in the case of
Parent or any of its Subsidiaries, any such lease under which Parent or a
wholly-owned Subsidiary of Parent is the lessor.
"Change in Control" means any of the following:
(a) in relation to Parent, the acquisition by any person or group of
persons (within the meaning of Section 13 or 14 of the Exchange Act) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of issued and
outstanding shares of the capital stock of Parent entitled (without regard
to the occurrence of any contingency) to vote for the election of members
of the board of directors of Parent and having a then present right to
exercise 51% or more of the voting power for the election of members of
the board of directors of Parent attached to
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all such outstanding shares of capital stock of Parent, unless otherwise
agreed in writing by the Liquidity Banks and the Administrator; or
(b) the creation or imposition of any Lien on any shares of capital
stock of Seller; or
(c) the failure by Parent to own all of the issued and outstanding
capital stock of Seller and each Originator (other than Parent).
"Collections" means, with respect to any Receivable, all funds which
either (a) are received by Seller, Servicer, an Originator or any other Person
from or on behalf of the related Obligors in payment of any amounts owed
(including, without limitation, purchase prices, finance charges, interest and
all other charges) in respect of such Receivable, or applied to such amounts
owed by such Obligors (including, without limitation, insurance payments that
Seller, an Originator or Servicer applies in the ordinary course of its business
to amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligor
or any other party directly or indirectly liable for payment of such Receivable
and available to be applied thereon), or (b) are deemed to have been received by
Seller or any other Person as a Collection pursuant to Section 3.02.
"Commercial Paper Holders" means the holders from time to time of the
Commercial Paper Notes.
"Commercial Paper Notes" means short-term promissory notes issued or to be
issued by Purchaser, or the proceeds of which are loaned to Purchaser, to fund
its investments in accounts receivable or other financial assets.
"Commitment Fee" means, for each day, the amount equal to the product of
(x) the unused Liquidity Commitment Amount on such day, times (y) the Commitment
Fee Rate, times (z) 1/360.
"Commitment Fee Rate" has the meaning set forth in the Fee Letter.
"Concentration Limit" for any Obligor at any time means an amount equal to
(i) the aggregate Unpaid Balance of all Eligible Receivables at such time times
(ii) the applicable percentage as set forth below opposite the appropriate
ratings of such Obligor's long-term and short-term unsecured debt; provided that
(i) as long as International Business Machines Corporation's long term unsecured
debt is rated at least A+ by S&P and A+ by Xxxxx'x, its applicable percentage
shall be 40.0%, (ii) as long as Compaq's long term unsecured debt is rated at
least BBB+ by S&P, its applicable percentage shall be 20.0%, and (iii) as long
as Dell Computer's long term unsecured debt is rated at least BBB- by S&P and
Baa3 by Xxxxx'x, its applicable percentage, shall be 10.0%. Any Obligor that has
a split rating shall be deemed to be in the lower rating category.
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Long Term Rating Short-Term Rating
----------------------------------------- ------------------------ Applicable
S&P Xxxxx'x S&P Xxxxx'x Percentage
------------ -------------- ----------- ------- ----------
A+ or better A+ or better A-1 P-1 40.0%
BBB+ to A Baa1 to A2 A-2 P-2 20.0%
BBB- to BBB Baa3 to Xxx0 X-0 P-3 10.0%
Not Rated Not Rated 2.5%
"Consolidated Interest Expense" means, for any period, total interest
expense of the Parent and its consolidated Subsidiaries (including without
limitation, interest expense attributable to Capital Leases, all capitalized
interest, all commissions, discounts and other fees and charges owed with
respect to bankers acceptance financing, net costs (i.e., costs minus benefits)
under Interest Rate Contracts, and total interest expense (whether shown as
interest expense or as loss and expenses on sales of receivables) under a
receivables purchase facility) determined on a consolidated basis in accordance
with GAAP.
"Consolidated Net Income (Loss)" means, with reference to any period, the
net income (or deficit) of the Parent and its consolidated Subsidiaries for such
period (taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions, all determined in accordance with GAAP
on a consolidated basis, after eliminating all intercompany transactions and
after deducting portions of income properly attributable to minority interests,
if any, in the stock and surplus of the Subsidiaries of the Parent.
"Contract" means a contract between an Originator and any Person, or an
invoice from an Originator to any Person, or any purchase order from any Person
to an Originator pursuant to or under which such Person shall be obligated to
make payments to an Originator. A "related" Contract with respect to the
Receivables means a Contract under which Receivables in the Receivables Pool
arise, which evidence such Receivables, or which is relevant to the collection
or enforcement of such Receivables.
"Contractual Obligation" with respect to any Person, means any provision
of any securities issued by such Person or any indenture, mortgage, deed of
trust, contract, undertaking, agreement, instrument or other document to which
such Person is party or by which it or any of its property is bound or is
subject.
"Credit and Collection Policy" means those credit and collection policies
and practices relating to Contracts and Receivables described in Schedule
7.01(g), as modified without violating Section 7.03(c).
"Cut-Off Date" means the last day of each fiscal month, as set forth on
Schedule I hereto.
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"Deemed Collection" has the meaning set forth in the Purchase Agreement.
"Defaulted Receivable" means a Receivable: (a) as to which any payment, or
part thereof, remains unpaid for more than 90 days from the original due date
for such payment, (b) as to which the Obligor thereof is the subject of an Event
of Bankruptcy, or (c) which, consistent with the Credit and Collection Policy,
would be written off the Seller's books as uncollectible.
"Default Ratio" means the ratio (expressed as a percentage) computed as of
a Cut-Off Date by dividing (x) the aggregate Unpaid Balance of all Past Due
Receivables as of such Cut-Off Date by (y) the aggregate Unpaid Balance of all
Pool Receivables on such date.
"Delinquency Ratio" means the ratio (expressed as a percentage) computed
as of the Cut-Off Date by dividing (x) the aggregate Unpaid Balance of all
Overdue Receivables on such Cut-Off Date by (y) the aggregate Unpaid Balance of
all Pool Receivables on such date.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and as to which any payment, or part thereof, remains unpaid for more
than 30 days from the original due date for such payment.
"Dilution" means any credit, adjustment, rebate, refund or setoff with
respect to any Receivable granted or allowed by Seller or any Affiliate of
Seller.
"Dilution Reserve" means, at any time, an amount equal to (i) the Net Pool
Balance at such time times (ii) the most recently calculated Dilution Reserve
Percentage.
"Dilution Reserve Percentage" as measured on any Reporting Date means a
percentage determined in accordance with the following formula:
[(SF x ED) + ((DS-ED) x DS/ED)] x DHR where:
SF = the Stress Factor, which shall be 2.5;
ED = the "Expected Dilution", which shall be equal to the
twelve-month rolling average Sales-Based Dilution Ratio,
expressed as a percentage;
DS = the "Dilution Spike", which shall be equal to the highest
one month Sales-Based Dilution Ratio over the immediately
preceding twelve months, expressed as a percentage; and
DHR = the "Dilution Horizon Ratio", which shall be equal to the
Sales for the month ending on the related Cut-Off Date
divided by the aggregate Unpaid Balance of the Eligible
Receivables as of the such Cut-Off Date.
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"Dollars" means dollars in lawful money of the United States of America.
"Dynamic Loss Reserve Percentage" shall be measured as 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 highest average
of the Sales- Based Default Ratios for any three consecutive
calendar months during the previous twelve calendar months;
LH = the Loss Horizon, which shall be equal to the cumulative
Sales over the previous three months divided by the Net Pool
Balance as of the most recent Cut-Off Date; and
SF = the Stress Factor, which shall be 2.
"Earned Discount" means for any Settlement Period:
C x ER x ED + LF
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360
where:
C = the daily average (calculated at the close of business each
day) of the Capital during such Settlement Period,
ER = the Earned Discount Rate for such Settlement Period,
ED = the actual number of days elapsed during such Settlement
Period, and
LF = the Liquidation Fee, if any, during such Settlement Period.
"Earned Discount Rate" means for any Settlement Period:
(a) in the case of any portion of the Capital funded by a Liquidity
Funding, at the option of Seller as set forth in a written notice
delivered to the Administrator at least three (3) Business Days prior to
the first day of such Settlement Period, (1) the sum of (i) the Eurodollar
Rate (Reserve Adjusted) for such Settlement Period, plus (ii) 2.50% per
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annum or (2) the sum of (i) the Alternative Base Rate in effect from time
to time during such Settlement Period, plus (ii) 0.50% per annum; and
(b) in the case of any portion of the Capital funded by any
Commercial Paper Notes, the LIBOR for such Settlement Period;
provided, however, that on any day during a Settlement Period when any
Liquidation Event or Unmatured Liquidation Event shall have occurred and be
continuing, the Earned Discount Rate for the Capital shall mean the higher of
(i) the Alternate Base Rate in effect on such day plus 2% per annum and (ii) the
LIBOR for such Settlement Period plus 3.50% per annum.
"EBITDAR" shall mean for any period, the Consolidated Net Income (Loss) of
the Parent and its consolidated Subsidiaries, plus, to the extent deducted
therefrom in determining Consolidated Net Income (Loss), the sum of (i)
Consolidated Interest Expense, (ii) provision for income taxes (whether paid or
deferred), (iii) Rental Obligations for such period, and (iv) depreciation and
amortization, and without giving effect to any extraordinary gains or losses,
and any other non-cash charges or gains or losses, including but not limited to,
gains or losses from sales of assets other than inventory sold in the ordinary
course of business.
"EBITDAR Ratio" as of the last day of any fiscal quarter means the ratio
of (i) EBITDAR for the four consecutive fiscal quarters ending on such date
divided by (ii) the Fixed Charges for such four consecutive fiscal quarters
(provided that for the last day of the fiscal quarter ending in June of 1998,
such ratio shall be calculated by annualizing the three consecutive fiscal
quarters ending on such date).
"Eligible Contract" means a Contract in one of the forms set forth in
Schedule 7.01(e) or otherwise approved by the Administrator.
"Eligible Receivable" means, at any time, a Receivable:
(a) which is originated by an Originator in the ordinary course of
its business for the sale of hard disk drives;
(b) which constitutes an account as defined in the UCC;
(c) the Obligor of which is not an Affiliate of Seller and is not a
Governmental Authority;
(d) which was purchased or otherwise acquired by Seller pursuant to
the Purchase Agreement and which was designated by the related Originator
as an "Eligible Receivable" pursuant to the Purchase Agreement;
(e) which is not a Delinquent Receivable or a Defaulted
Receivable;
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(f) with respect to which the warranty of Seller in Section 6.01(k)
is true and correct;
(g) the sale of which, or of an undivided interest in which, does
not contravene or conflict with Applicable Law, or require the consent of
the Obligor or any other Person;
(h) which is denominated and payable only in Dollars in the United
States;
(i) which arises under an Eligible Contract, which contract has been
duly authorized by the parties thereto and that, together with such
Receivable, is in full force and effect and constitutes the legal, valid
and binding obligation of the Obligor of such Receivable enforceable
against such Obligor in accordance with its terms and is not subject to
any defense whatsoever (other than discharge in bankruptcy and payment);
(j) which, together with the Contract related thereto, does not
contravene in any material respect any Applicable Law and with respect to
which no party to the Contract related thereto is in violation of any
Applicable Law;
(k) which (i) satisfies all material applicable requirements of the
Credit and Collection Policy and (ii) complies with such other criteria
and requirements (other than those relating to the collectibility of such
Receivable) as the Administrator may from time to time specify to Seller;
(l) as to which the payment terms have not been altered or extended
so as to materially affect the collectibility of such Receivable;
(m) the Unpaid Balance of which is payable within 45 days or less
from the invoice date therefor;
(n) which are not Receivables owed by an Obligor for which more than
20% of the aggregate Unpaid Balance of Receivables of such Obligor
constitute Defaulted Receivables;
(o) which arise from the completion of the sale and delivery of
goods and services performed, and which do not represent an invoice in
advance of such completion; and
(p) which are not subject to any contingent performance requirements
of the Seller or the related Originator unless such requirements are
guaranteed or insured by third parties acceptable to the Administrator.
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"Equity Proceeds" means the net proceeds received by Parent or any of its
Subsidiaries from the sale of stock or convertible subordinated debt.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any Settlement
Period and any portion of the Capital, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Eurodollar Rate = Eurodollar Rate
----------------- ---------------
(Reserve Adjusted) 1 - Eurodollar
Reserve Percentage
where:
"Eurodollar Rate" means, with respect to any Settlement Period and any
portion of the Capital, the rate per annum at which Dollar deposits in
immediately available funds are offered to the Eurodollar Office of the
Administrator two Eurodollar Business Days prior to the beginning of such
period by prime banks in the interbank eurodollar market at or about 11:00
a.m., New York City time for delivery on the first day of such Settlement
Period, for the number of days comprised therein and in an amount equal or
comparable to the applicable portion of the Capital for such Settlement
Period.
"Eurodollar Business Day" means a day of the year on which dealings are
carried on in the eurodollar interbank market and banks are open for
business in London and are not required or authorized to close in New York
City.
"Eurodollar Reserve Percentage" means, with respect to any Settlement
Period, the then maximum reserve percentage (expressed as a decimal,
rounded upward to the nearest 1/100th of 1%) prescribed by the Federal
Reserve Board for determining the maximum reserve requirements applicable
to "Eurocurrency Liabilities" pursuant to Regulation D having a term
comparable to such Settlement Period.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a
Person if either:
(a) any case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or substantially all of its assets, or any
similar action with respect to such Person under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall
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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 and shall either not be
contested or shall remain undismissed for 60 consecutive days; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
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.
"Excess Amount" as of any date, means the amount, if any, by which the sum
of the Capital, plus the Required Reserves on such date exceeds the Net Pool
Balance, as most recently calculated.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal (for each day during such period) to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York; or
(b) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions
received by Fleet from three federal funds brokers of recognized standing
selected by it.
"Fee Letter" has the meaning set forth in Section 4.01.
"Fees" means the Commitment Fee and the Program Fee.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Final Payout Date" means the date following the Termination Date on which
the Capital shall have been reduced to zero and all other amounts payable by
Seller to Purchaser, the Administrator, the Affected Parties and the Indemnified
Parties under the Transaction Documents shall have been paid in full.
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"Fixed Charges" shall mean, with reference to any period, determined in
accordance with GAAP on a consolidated basis, the sum of the following for the
Parent and its consolidated Subsidiaries, after eliminating all intercompany
items:
(a) Consolidated Interest Expense for such period; and
(b) all Rental Obligations payable as lessee under any operating lease
properly charged or chargeable to income during such period in
accordance with GAAP;
provided that any interest charges or rentals paid or accrued by any Person
acquired by the Parent or any of its Subsidiaries during such period, through
purchase, merger, consolidation or otherwise, shall be included in "Fixed
Charges" only to the extent that the earnings of such Person are taken into
account in determining EBITDAR for such period.
"Fleet" has the meaning set forth in the preamble.
"Foreign Receivable" means a Receivable the Obligor of which is not a
resident of the United States or any of its possessions or territories or Canada
and which is not a Subsidiary of International Business Machines Corporation.
"Foreign Receivables Limit" at any time means an amount equal to the
product of (i) the aggregate Unpaid Balance of all Eligible Receivables at such,
times (ii) 10%.
"GAAP" means generally accepted accounting principles as in effect in the
United States from time to time.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgements,
decrees, licenses, exemptions, publications, filings, notices to and declaration
of or with, or required by, any Governmental Authority, or required by any
Applicable Law.
"Governmental Authority" means any foreign or domestic federal, state,
county, municipal or other governmental or regulatory authority, agency, board,
body, commission, instrumentality, court or any political subdivision thereof.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
"Indemnified Party" has the meaning set forth in Section 13.01.
"Independent Director" shall mean an individual who is not, and never was,
(1) a member, stockholder, director, officer, employee, Affiliate, customer or
supplier of, or an individual that has received any benefit (excluding, however,
any compensation received in such individual's capacity as Independent Director)
in any form whatever from, or an individual who has provided
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any service (excluding, however, any service provided by such individual in such
individual's capacity as Independent Director) in any form whatever to, the
Parent or any of its subsidiaries or Affiliates, or (2) an individual owning
beneficially, directly or indirectly, any interest in the Parent, or a
stockholder, director, officer, employee, Affiliate, customer or supplier
thereof, or an individual who has received any direct economic benefit
(excluding, however, any compensation received in such individual's capacity as
Independent Director) in any form whatever from, or an individual who has
provided any service (excluding, however, any service provided by such
individual in such individual's capacity as Independent Director) in any form
whatever to, such beneficial owner or any of such beneficial owner's Affiliates,
or (3) an individual who is a relative or spouse of an individual described in
clause (1) or (2) above.
"Interest Rate Contract" means all interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements, interest rate insurance
and other agreements and arrangements designed to provide protection against
fluctuations in interest rates, in each case as the same may be from time to
time amended, restated, renewed, supplemented or otherwise modified.
"Investment" means, when used with respect to any Person, any direct or
indirect advance, loan or other extension of credit (other than the creation of
receivables in the ordinary course of business) or capital contribution by such
Person (by means of transfers of property to others or payments for property or
services for the account or use of others, or otherwise) to any Person, or any
direct or indirect purchase or other acquisition by such Person of, or of a
beneficial interest in, capital stock, partnership interests, bonds, notes,
debentures or other securities issued by any other Person.
"IPO" means the initial public offering of the capital stock of Parent
pursuant to which the Parent receives at least $310,000,000 in net proceeds.
"LIBOR" means, with respect to any Settlement Period or portion thereof,
the rate of interest (expressed as an annual rate and rounded upwards, if
necessary, to the nearest 1/16th of 1%) at which deposits in Dollars would be
offered by principal London offices of banks at approximately 11:00 a.m. (London
time) on the first day of the Settlement Period or portion thereof for the
period from that day to the next Settlement Date. For periods which extend from
one Settlement Date to the next Settlement Date, the applicable rate will be the
one-month LIBOR rate which appears on Telerate page 3750 as of 9:00 a.m. (Boston
time) or as soon thereafter as practicable. For periods which begin on a day
other than a Settlement Date, the applicable rate will be the rate equal to the
average (rounded up to the nearest 1/16th of 1%) of the rates shown on the
display referred to as the "LIBO" page (or any display substituted therefor) of
the Telerate matrix (presently page 5) for a period of time from that day to the
next Settlement Date. The determination of the applicable LIBOR rate by
Purchaser shall be conclusive in the absence of demonstratable error.
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"Lien" means any mortgage, lien, pledge, encumbrance, charge, title
retention or other security interest of any kind, whether arising under a
security agreement, mortgage, deed of trust, assignment, pledge or financing
statement or arising as a matter of law, judicial process or otherwise.
"Liquidation Event" has the meaning set forth in Section 10.01.
"Liquidation Fee" means, for each day in any Settlement Period during the
Liquidation Period following the occurrence of a Liquidation Event, the amount,
if any, by which:
(a) the additional Earned Discount (calculated without taking into
account any Liquidation Fee) which would have accrued on the reductions of
the Capital during such Settlement Period (as so computed) if such
reductions had not been made, exceeds
(b) the income, if any, received by Purchaser from investing the
proceeds of such reductions of the Capital.
"Liquidation Period" means the period commencing on the date on which the
conditions precedent to Purchases and Reinvestments set forth in Section 5.02
are not satisfied (or expressly waived by Purchaser) and the Administrator shall
have notified Seller and Servicer in writing that the Liquidation Period has
commenced, and ending on the Final Payout Date.
"Liquidity Agent" means Fleet, as agent for the Liquidity Banks under the
Liquidity Agreement, or any successor to Fleet in such capacity.
"Liquidity Agreement" means and includes the Liquidity Agreement dated as
of July 31, 1998 among Purchaser, Fleet, as Liquidity Agent, and certain other
financial institutions, party thereto as liquidity providers, and any other
agreement hereafter entered into by Purchaser providing for the making of loans,
purchases or undivided interests or other extensions of credit to Purchaser to
support all or part of Purchaser's payment obligations with respect to the
Commercial Paper Notes or to provide an alternate means of funding Purchaser's
investments in accounts receivable or other financial assets, and under which
the amount available from such extensions of credit is limited to an amount
calculated by reference to the value or eligible unpaid balance of such accounts
receivable or other financial assets or any portion thereof or the level of
deal-specific credit enhancement available with respect thereto.
"Liquidity Bank" means any one of, and "Liquidity Banks" means all of,
Fleet and the other financial institutions that are at any time parties to a
Liquidity Agreement as liquidity providers.
"Liquidity Commitment Amount" means, at any time, the then aggregate
amount of the Liquidity Banks' commitments under the Liquidity Agreement.
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"Liquidity Funding" means a loan or purchase made by the Liquidity Bank
(or simultaneous loans or purchases made by the Liquidity Banks) pursuant to a
Liquidity Agreement.
"Lock-Box" means any post office box to which Collections of Pool
Receivables are sent.
"Lock-Box Account" means any bank account to which Collections of Pool
Receivables are sent or deposited.
"Lock-Box Agreement" means a letter agreement, in substantially the form
of Exhibit 5.01(f), among Seller, Parent and any Lock-Box Bank.
"Lock-Box Bank" means any of the banks holding one or more Lock-Box
Accounts for receiving Collections from Pool Receivables.
"Loss Reserve" means the product of (A) the greater of (1) 10%; and (2)
the Dynamic Loss Reserve Percentage and (B) the Net Pool Balance.
"Material Adverse Effect" with respect to any event or circumstance, means
a material adverse effect on:
(i) the business, financial condition, assets, prospects or
operations of Seller or Parent;
(ii) the ability of Servicer or Parent to perform its obligations
under this Agreement or any other Transaction Document;
(iii) the validity, enforceability or collectibility of this
Agreement or any other Transaction Document or the validity,
enforceability or collectibility of the Receivables; or
(iv) the status, existence, perfection, priority or enforceability
of the Administrator's or Purchaser's interest in the Pool Assets.
"Monthly Servicer's Fee" means the Servicer's Fee accrued in a calendar
month.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Pool Balance" at any time means an amount equal to (i) the aggregate
Unpaid Balance of the Eligible Receivables in the Receivables Pool at such time,
minus (ii) the aggregate amount by which the aggregate Unpaid Balance of the
Eligible Receivables of each Obligor and its Affiliates exceeds the
Concentration Limit for such Obligor at such time, minus (iii) the aggregate
amount by which the aggregate Unpaid Balance of Foreign Receivables exceeds the
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Foreign Receivables Limit, minus (iv) the aggregate amount by which the
aggregate Unpaid Balance of Canadian Receivables exceeds the Canadian
Receivables Limit.
"Obligor" means a Person obligated to make payments with respect to a
Receivable, including any guarantor thereof.
"Originator" means the Parent in its capacity as originator of
Receivables, together with any other originator added as a party to the Purchase
Agreement pursuant to the terms thereof.
"Overdue Receivable" means a Receivable that remains unpaid for more than
30 days but no more than 60 days from the original due date for such payment.
"Parent" has the meaning set forth in the preamble.
"Past Due Receivable" means a Receivable that remains unpaid for more than
60 days but no more than 90 days from the original due date for such payment, or
that has been charged off before it has become 61 days past due.
"Permitted Investments" means any one or more of the following
obligations or securities:
(i) direct non-callable obligations of, and non-callable
obligations fully guaranteed by, the United States of America, or
any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(ii) demand and time deposits in, certificates of deposits of,
and bankers' acceptances issued by, any depository institution or
trust company incorporated under the laws of the United States of
America or any state thereof, having a combined capital and surplus
of at least $250,000,000, and subject to supervision and examination
by federal and/or state banking authorities, so long as at the time
of such investment or contractual commitment providing for such
investment the commercial paper or other short-term debt obligations
of such depository institution or trust company (or, in the case of
a depository institution that is the principal subsidiary of a
holding company, the commercial paper or other short-term debt
obligations of such holding company) have one of the two highest
short-term credit rating available from Moody's and S&P;
(iii) repurchase obligations with respect to and
collateralized by (A) any security described in clause (i) above or
(B) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in each case
entered into with a depository institution or trust company (acting
as principal) of the type described in clause (ii) above, provided
that the Administrator has taken delivery of such security;
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(iv) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations, but excluding
Commercial Paper Notes) payable on demand or on a specified date not
more than one year after the date of issuance thereof having the
highest short-term credit rating from Moody's and S&P at the time of
such investment; and
(v) shares in a mutual fund investing solely in short term
securities of the United States government and/or securities
described in clause (iii) above where the mutual fund custodian has
taken delivery of the collateralizing securities, provided that (i)
such fund shall have one of the two highest short-term credit rating
available from Moody's and S&P and (ii) such shares shall be freely
transferable by the holder on a daily basis.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company, government or any agency or political
subdivision thereof or any other entity.
"Pool Assets" has the meaning set forth in Section 1.04(a).
"Pool Receivable" means a Receivable in the Receivables Pool.
"Program Agreement" means each Liquidity Agreement, each agreement
pursuant to which Purchaser obtains funding, through the issuance of Commercial
Paper Notes or otherwise, and each other agreement entered into by Purchaser in
connection with its securitization program.
"Program Fee" means, for each day, the amount equal to the product of (x)
the Capital on such day, times (y) the Program Fee Rate, times (z) 1/360.
"Program Fee Rate" has the meaning set forth in the Fee Letter.
"Program Information" has the meaning set forth in Section 14.07.
"Program Support Provider" means each of each entity that issues
Commercial Paper Notes, each Liquidity Bank and the Administrator.
"Purchase" has the meaning set forth in Section 1.01.
"Purchase Agreement" means the Purchase and Sale Agreement, dated as of
July 31, 1998, among Seller and the Originators.
"Purchase Limit" has the meaning set forth in Section 1.01.
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"Purchase Termination Date" means that day
(a) the Administrator declares a Purchase Termination Date in a
notice to Seller in accordance with Section 10.02(a); or
(b) in accordance with Section 10.02(b), becomes the Purchase
Termination Date automatically.
"Purchaser" has the meaning set forth in the preamble.
"Purchaser's Share" of any amount means the then Asset Interest, expressed
as a percentage, (but not greater than 100%) times such amount.
"Rating Agencies" at any time means those rating agencies then rating the
Commercial Paper Notes.
"Receivable" means any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising under a Contract and includes the right to payment of any interest or
finance charges and other obligations of such Person with respect thereto.
Indebtedness and other obligations arising from any one transaction, including,
without limitation, indebtedness and other obligations represented by an
individual invoice or agreement, shall constitute a Receivable separate from a
Receivable consisting of the indebtedness and other obligations arising from any
other transaction.
"Receivables Pool" means at any time all then outstanding Receivables,
including, without limitation, Receivables repurchased by Seller under the
Repurchase Agreement, other than Reconveyed Receivables.
"Reconveyed Receivable" means a Receivable for which an Originator has
paid the full Unpaid Balance pursuant to the Purchase Agreement.
"Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"Regulatory Change" means, relative to any Affected Party
(a) any change in (or the adoption, implementation, change in
phase-in or commencement of effectiveness of) any
(i) United States federal or state law or foreign law
applicable to such Affected Party;
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(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to such
Affected Party of (A) any court, government authority charged with
the interpretation or administration of any law referred to in
clause (a)(i) or of (B) any fiscal, monetary or other authority
having jurisdiction over such Affected Party; or
(iii) GAAP or regulatory accounting principles applicable to
such Affected Party and affecting the application to such Affected
Party of any law, regulation, interpretation, directive, requirement
or request referred to in clause (a)(i) or (a)(ii) above; or
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request
or accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii)
above.
"Reinvestment" has the meaning set forth in Section 1.03.
"Related Security" means, with respect to any Pool Receivable: (a) all of
Seller's or the related Originator's right, title and interest in and to all
Contracts that relate to such Pool Receivable; (b) all security interests or
liens and property subject thereto from time to time purporting to secure
payment of such Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise; (c) all UCC financing statements covering any
collateral securing payment of such Pool Receivable; (d) all guarantees and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Pool Receivable whether pursuant to the
Contract related to such Pool Receivable or otherwise; and (e) all of Seller's
and the related Originator's interest in the merchandise (including returned
merchandise), if any, relating to the sale that gave rise to such Pool
Receivable.
"Rental Obligations" means, with reference to any period, the aggregate
amount of all rental obligations for which the Parent and its consolidated
Subsidiaries are directly or indirectly liable (as lessee or as guarantor or
other surety but without duplication) under all leases in effect at any time
during such period (other than operating leases for motor vehicles, computers,
office equipment and other similar items used in the ordinary course of business
of the Parent and its consolidated Subsidiaries), including all such amounts for
which any Person was liable during the period immediately prior to the date such
Person became a Subsidiary of the Parent or was merged into or consolidated with
the Parent or a Subsidiary of the Parent, as determined in accordance with GAAP.
"Reporting Date" means the sixth Business Day after each Cut-Off Date.
"Repurchase Agreement" means the Repurchase Agreement, dated August 13,
1998, among Seller, Parent, Corporate Receivables Corporation, Citicorp North
America, Inc., as Agent, and Bankers Trust Company, as Trustee.
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"Required Reserves" means, on any day, an amount equal to the sum of (1)
the Dilution Reserve, (2) the Loss Reserve, and (3) the Yield Reserve, in each
case as most recently calculated.
"S&P" means Standard & Poor's Ratings Services.
"Sales" means sales of the Originators which generate trade receivables.
"Sales-Based Default Ratio" means, as of any Cut-Off Date, the ratio,
expressed as a percentage, of (i) the aggregate Unpaid Balance of all Past Due
Receivables for the three successive months occurring immediately prior to the
month ending on such Cut-off Date, divided by (ii) the aggregate xxxxxxxx for
the fifth, sixth and seventh preceding months. For example, as of April 30, the
numerator of the Sales-Based Default Ratio would be the aggregate Unpaid Balance
of all Pool Receivables that were Past Due Receivables as of January 31,
February 28 and March 31; the denominator of the Sales-Based Default Ratio would
be the aggregate xxxxxxxx for the months of October, November and December.
"Sales-Based Dilution Ratio" as of any Cut-Off Date means (a) the
aggregate reduction attributable to Dilutions occurring in the Unpaid Balance of
Pool Receivables which Dilutions were granted during the month ending on such
Cut-Off Date; divided by (b) the aggregate amount of xxxxxxxx for the month
immediately preceding the month ending as of such Cut-Off Date.
"Secured Parties" means Purchaser, the Administrator, the Indemnified
Parties and the Affected Parties.
"Seller" has the meaning set forth in the preamble.
"Seller's Share" of any amount means (x) 100% minus the Asset Interest
(but such Asset Interest shall not be greater than 100%) times (y) such amount.
"Servicer" has the meaning set forth in Section 8.01(a).
"Servicer Report" has the meaning set forth in Section 3.01.
"Servicer Transfer Event" has the meaning set forth in Section 8.01(b).
"Servicer's Fee" means, for each day, an amount equal to (x) the
Servicer's Fee Rate, times (y) the aggregate Unpaid Balance of all Pool
Receivables at the close of business on such day, times (z) 1/360.
"Servicer's Fee Rate" means .75% per annum or, in the event that Parent is
no longer the Servicer, such higher rate as may be charged by the successor
Servicer.
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"Settlement Date" means the eighth Business Day following each Cut-Off
Date.
"Settlement Period" means the period (i) in the case of the first
Settlement Period, from, and including, the date of the initial Purchase to, but
excluding the next Settlement Date and (ii) thereafter, from, and including,
each Settlement Date to, but excluding, the next Settlement Date.
"Subsidiary" means a corporation of which Parent and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"Successor Notice" has the meaning set forth in Section 8.01(b).
"Tangible Net Worth" means, with respect to any Person, the net worth of
such Person calculated in accordance with GAAP after subtracting therefrom the
aggregate amount of such Person's intangible assets, including, without
limitation goodwill, franchises, licenses, patents, trademarks, tradenames,
copyrights and service marks.
"Termination Date" means the earliest of
(a) the date of termination or reduction (whether by scheduled
expiration, termination on default or otherwise) of any Program Support
Provider's commitment under any Program Agreement;
(b) the Purchase Termination Date;
(c) July 31, 2001; and
(d) the date on which Seller terminates Purchaser's right to make
Purchases and Reinvestments pursuant to Section 1.05.
"Transaction Documents" means this Agreement, the Lock-Box Agreements, the
Purchase Agreement, the Fee Letter and other documents to be executed and
delivered in connection herewith.
"Turnover Rate" means, as of any Cut-Off Date, the ratio (expressed as a
percentage) of (i) the aggregate Unpaid Balance of the Pool Receivables as of
such Cut-Off Date, divided by (ii) the aggregate Collections for the month
ending on such Cut-Off Date.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction or jurisdictions.
"Unmatured Liquidation Event" means any event which, with the giving of
notice or lapse of time, or both, would become a Liquidation Event.
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"Unpaid Balance" of any Receivable means at any time the unpaid
principal amount thereof.
"Yield Reserve" means, at any time, an amount equal to the product of (i)
the Net Pool Balance on such day, times (ii) the sum of (A) the LIBOR for the
current Settlement Period, plus (B) 2.50%, plus (C) the Servicer's Fee Rate,
divided by (iii) 12, times (iv) 2, times (v) the most recently calculated
Turnover Rate.
B. Other Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. All terms used in Article 9 of the UCC in
the State of California, and not specifically defined herein, are used herein as
defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this Agreement,
in the computation of a period of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
D. Interpretation. In each Transaction Document, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by the Transaction Documents, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Transaction
Document), document or instrument means such agreement, document or
instrument as amended, supplemented or modified and in effect from time to
time in accordance with the terms thereof and, if applicable, the terms of
the other Transaction Documents and reference to any promissory note
includes any promissory note which is an extension or renewal thereof or a
substitute or replacement therefor; and
(v) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision of
any Applicable Law means that provision of such Applicable Law from time
to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section or
other provision.
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