EXHIBIT 10
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RECEIVABLES LOAN AGREEMENT
DATED AS OF JANUARY 22, 2002
AMONG
AGERE SYSTEMS RECEIVABLES FUNDING LLC,
AS THE BORROWER,
AGERE SYSTEMS INC.,
AS THE INITIAL COLLECTION AGENT,
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,
AS THE AGENT AND
AS A LENDER AGENT,
DRESDNER BANK AG AND
THE OTHER LENDER AGENTS
FROM TIME TO TIME PARTY HERETO,
THE RELATED COMMITTED LENDERS
FROM TIME TO TIME PARTY HERETO,
PARADIGM FUNDING LLC AND
BEETHOVEN FUNDING CORPORATION,
AS CONDUIT LENDERS
AND
THE OTHER CONDUIT LENDERS
FROM TIME TO TIME PARTY HERETO
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TABLE OF CONTENTS
PAGE
ARTICLE I LOANS TO BORROWER AND SETTLEMENTS......................................................1
Section 1.1. Loans..................................................................................1
Section 1.2. Maturity; Prepayments..................................................................2
Section 1.3. Selection of Interest Rates and Tranche Periods........................................3
Section 1.4. Fees and Other Costs and Expenses......................................................3
Section 1.5. Maintenance of Borrowing Base; Deemed Collection.......................................3
Section 1.6. Reduction in Commitments...............................................................4
Section 1.7. Optional Prepayments...................................................................4
Section 1.8. Security Interest......................................................................4
ARTICLE II SALES TO AND FROM CONDUIT LENDERS; ALLOCATIONS.........................................6
Section 2.1. Required Loans from Conduit Lenders....................................................6
Section 2.2. Purchases by Conduit Lenders...........................................................6
Section 2.3. Allocations and Distributions..........................................................6
ARTICLE III ADMINISTRATION AND COLLECTIONS.........................................................7
Section 3.1. Appointment of Collection Agent........................................................7
Section 3.2. Duties of Collection Agent.............................................................8
Section 3.3. Reports................................................................................9
Section 3.4. Lock-Box Arrangements..................................................................9
Section 3.5. Enforcement Rights....................................................................10
Section 3.6. Collection Agent Fee..................................................................10
Section 3.7. Responsibilities of the Borrower......................................................11
Section 3.8. Actions by Borrower...................................................................11
Section 3.9. Indemnities by the Collection Agent...................................................11
Section 3.10. Policy and Optical Policy.............................................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................13
Section 4.1. Representations and Warranties........................................................13
ARTICLE V COVENANTS.............................................................................16
Section 5.1. Covenants of the Borrower.............................................................16
ARTICLE VI INDEMNIFICATION.......................................................................21
Section 6.1. Indemnities by the Borrower...........................................................21
Section 6.2. Reserved Requirements, Change in Circumstances........................................23
Section 6.3. Other Costs and Expenses..............................................................24
Section 6.4. Withholding Taxes and Other Taxes.....................................................24
Section 6.5. Payments and Allocations..............................................................26
ARTICLE VII CONDITIONS PRECEDENT..................................................................26
Section 7.1. Conditions to Closing.................................................................26
Section 7.2. Conditions to Each Loan...............................................................28
ARTICLE VIII THE AGENT.............................................................................28
Section 8.1. Appointment and Authorization.........................................................28
Section 8.2. Delegation of Duties..................................................................29
Section 8.3. Exculpatory Provisions................................................................29
Section 8.4. Reliance by Agent and Lender Agents...................................................30
Section 8.5. Assumed Payments......................................................................30
Section 8.6. Notice of Termination Events..........................................................31
Section 8.7. Non-Reliance on Agent and Other Lenders...............................................31
Section 8.8. Agent and Affiliates..................................................................31
Section 8.9. Indemnification.......................................................................31
Section 8.10. Successor Agent.......................................................................32
ARTICLE IX MISCELLANEOUS.........................................................................32
Section 9.1. Termination...........................................................................32
Section 9.2. Notices...............................................................................32
Section 9.3. Payments and Computations.............................................................33
Section 9.4. Sharing of Recoveries.................................................................33
Section 9.5. Right of Setoff.......................................................................33
Section 9.6. Amendments............................................................................33
Section 9.7. Waivers...............................................................................34
Section 9.8. Successors and Assigns; Participations; Assignments; Addition of Lender Groups........35
Section 9.9. Intended Tax Characterization.........................................................37
Section 9.10. Confidentiality.......................................................................37
Section 9.11. Agreement Not to Petition.............................................................38
Section 9.12. Excess Funds..........................................................................38
Section 9.13. Headings; Counterparts................................................................39
Section 9.14. Cumulative Rights and Severability....................................................39
Section 9.15. Governing Law; Submission to Jurisdiction.............................................39
Section 9.16. WAIVER OF TRIAL BY JURY...............................................................39
Section 9.17. Entire Agreement......................................................................39
Section 9.18. Limited Recourse......................................................................39
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SCHEDULES DESCRIPTION
Schedule I Definitions
Schedule II Lenders
EXHIBITS DESCRIPTION
Exhibit A Form of Loan Request
Exhibit B Form of Notification of Assignment to a Conduit Lender from its Related Committed Lenders
Exhibit C-1 Form of Daily Report
Exhibit C-2 Form of Monthly Report
Exhibit D Addresses and Names of Borrower and Originators
Exhibit E Subsidiaries
Exhibit F Lock-Boxes and Lock-Box Banks
Exhibit G Form of Lock-Box Letter
Exhibit H Compliance Certificate
Exhibit I Credit and Collection Policy
Exhibit J Forms of Contract
Exhibit K Form of Joinder Agreement
Exhibit L Form of Optical Policy
Exhibit M Form of Policy
Exhibit N Approved Jurisdictions
Exhibit O Money Market Accounts
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RECEIVABLES LOAN AGREEMENT
RECEIVABLES LOAN AGREEMENT, dated as of January 22, 2002, among AGERE
SYSTEMS RECEIVABLES FUNDING LLC, a Delaware limited liability company, as
borrower (the "Borrower"), AGERE SYSTEMS INC., a Delaware corporation, as
initial collection agent (the "Initial Collection Agent," and, together with any
successor thereto, the "Collection Agent"), WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH, as agent for the Lenders (the "Agent"), the
lender agents party hereto (the "Lender Agents"), Paradigm Funding LLC
("Paradigm") and the other conduit lenders party hereto (collectively with
Paradigm, the "Conduit Lenders") and the related committed lenders party hereto
(the "Related Committed Lenders"). Certain capitalized terms used herein, and
certain rules of construction, are defined in Schedule I.
The parties hereto agree as follows:
ARTICLE I
LOANS TO BORROWER AND SETTLEMENTS
Section 1.1. Loans.
(a) The Loans. Subject to the terms and conditions hereof, the
Borrower may, from time to time before the Liquidity Termination Date, borrow
from the Conduit Lenders or, only if a Conduit Lender declines or fails to make
the applicable loan, ratably from the Related Committed Lenders for such Conduit
Lender loans secured by a security interest in the Receivables, the Related
Security and all related Collections. Any such loan (a "Loan") shall be made by
each relevant Lender remitting funds to the Borrower, through the Agent,
pursuant to Section 1.1(c). The aggregate outstanding principal amount of the
Loans may not exceed at any time the lessor of (i) the Loan Limit, and (ii) the
Borrowing Base. As used herein, the term "Borrowing Base" means:
NRB - AR
where:
NRB = the Net Receivables Balance at such time; and
AR = the Aggregate Reserve at such time.
(b) Conduit Lenders' Option and Other Lenders' Commitments. At no
time will any Conduit Lender have any obligation to make a Loan, however, each
Conduit Lender expects to fund all Loans through the issuance of commercial
paper absent a disruption in the commercial paper market or the occurrence of a
Termination Event. Each Committed Lender severally hereby agrees, subject to
Section 7.2 and the other terms and conditions hereof (including, that the
related Conduit Lender has refused or fails to make a requested Loan), to make
Loans before the Liquidity Termination Date, based on the applicable Lender
Group's Ratable Share of each Loan (and in the case of each Committed Lender,
its Commitment Percentage of its Lender Group's Ratable Share of such Loan), to
the extent its Loan Amount would not thereby exceed
its Commitment, the Aggregate Loan Amount would not thereby exceed the Loan
Limit, and the Matured Aggregate Loan Amount would not thereby exceed the
Aggregate Commitments. All Loans hereunder shall be made ratably by each Lender
Group in accordance with the Commitments of such Lender Groups.
(c) Loan Mechanics. In order to request a Loan from a Lender, the
Borrower must provide to each Lender Agent an irrevocable written request
substantially in the form of Exhibit A, by (i) 10:00 a.m. (New York time) two
Business Days before the requested date (the "Loan Date") of such Loan, in the
case of each Loan by a Conduit Lender, (ii) 10:00 a.m. (New York time) three
Business Days before the Loan Date in the case of each Loan by one or more
Related Committed Lenders that is to accrue Interest at the Eurodollar Rate and
(iii) 10:00 a.m. (New York time) on the Loan Date in the case of each Loan by
one or more Related Committed Lenders that is to accrue Interest at the Prime
Rate. Each such notice shall specify the requested Loan Date (which must be a
Business Day) and the requested amount of such Loan, which must be in a minimum
amount of $1,000,000 and multiples thereof (or, if less, an amount equal to the
Maximum Loan Amount). All Loans must be requested ratably from the Conduit
Lenders unless a Conduit Lender, in its sole discretion, determines not to fund
its Ratable Share of such Loan, in which case, the Borrower may request such
Ratable Share from the Related Committed Lenders in such Conduit Lender's Lender
Group. Each Lender Agent shall promptly notify the contents of any such request
to each Lender in its Lender Group from which the Loan is requested. If a
Conduit Lender determines, in its sole discretion, to fund its Ratable Share of
the requested Loan, such Conduit Lender shall transfer to the applicable Lender
Agent's Account its Ratable Share of such Loan on the requested Loan Date. If a
Conduit Lender determines, in its sole discretion, not to fund its Ratable Share
of a requested Loan and the Borrower requests the Loan from the Related
Committed Lenders subject to Section 7.2 and the other terms and conditions
hereof, each Related Committed Lender shall transfer its Commitment Percentage
of its Lender Group's Ratable Share of that portion of the requested Loan not
funded by such Conduit Lender into the applicable Lender Agent's Account by no
later than 12:00 noon (New York time) on the Loan Date (which, in the case of a
Loan that is to accrue Interest at the Eurodollar Rate, in no event will be
earlier than three Business Days after such request is made to such Committed
Lenders). Each Lender Agent shall transfer to the Borrower Account the proceeds
of any Loan delivered into such Lender Agent's Account.
Section 1.2. Maturity; Prepayments. (a) Maturity. Each Loan shall be
payable in full on the Liquidity Termination Date but only to the extent
Collections are available to pay such amounts pursuant to Section 2.3(b).
(b) Mandatory Prepayment Upon Termination Event. In addition to
prepayments permitted or required pursuant to Section 1.5 or 1.7, the Borrower
shall prepay all Loans in full upon the occurrence of a Termination Event at a
prepayment price equal to the Aggregate Loan Amount plus accrued and unpaid
Interest thereon plus any Early Payment Fee payable in connection with such
prepayment pursuant to any Rate Supplement plus all other amounts payable to the
Lenders, the Lender Agents and the Agent under this Agreement and the other
Transaction Documents but only to the extent Collections are available to pay
such amounts pursuant to Section 2.3(b).
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Section 1.3. Selection of Interest Rates and Tranche Periods. The
Interest Rates, Tranche Periods and related matters for all Loan Amounts of each
Lender Group shall be set forth in, and governed by the terms of, the Rate
Supplement for such Lender Group. Each Rate Supplement shall supplement this
agreement with respect to the terms and provisions set forth therein.
Section 1.4. Fees and Other Costs and Expenses. The Borrower shall pay
to the Agent for itself and to each Lender Agent for the benefit of its Lender
Group, such amounts as agreed to with such Lender Group in the Fee Letter.
Section 1.5. Maintenance of Borrowing Base; Deemed Collection. (a)
General. If on any Business Day prior to the Liquidity Termination Date the
Aggregate Loan Amount (or, if a Termination Event exists, the Matured Aggregate
Loan Amount) is greater than the sum of (i) the Borrowing Base plus, (ii) if
such Business Day is not a Settlement Date, the value of the Eligible Money
Market Accounts plus, (iii) if such Business Day is not a Settlement Date, (A)
the amount on deposit in the Lock-Box Accounts pursuant to clause (y) of the
third sentence of Section 2.3(a) less (B) the portion of such amount which
constitutes a payment on a Receivable that has not been applied to reduce the
Outstanding Balance of such Receivable for purposes of calculating the Borrowing
Base, the Borrower shall pay to the Agent, to the extent Collections are
available for such purpose, an amount equal to such deficiency for application
to reduce the Loan Amounts of the Lenders ratably in accordance with the
principal amount of their respective Loan Amounts, applied with respect to each
such Lender first to such Lender's Prime Tranches, if any, and second to the
other Tranches applicable to the Loan Amount of such Lender with the shortest
remaining maturities unless otherwise specified by the Borrower.
(b) Deemed Collections. If on any day the outstanding balance of a
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including any adjustment
resulting from the application of any special refund or other discounts or any
reconciliation), any setoff or credit (whether such claim or credit arises out
of the same, a related, or an unrelated transaction) or any other reason not
arising from the financial inability of the Obligor to pay undisputed
indebtedness, the Borrower shall be deemed to have received on such day a
Collection on such Receivable in the amount of such reduction or cancellation.
If on any day any representation, warranty, covenant or other agreement of the
Borrower related to a Receivable is not true or is not satisfied and such
failure could be reasonably expected to have a Material Effect, the Borrower
shall be deemed to have received on such day a Collection in the amount of the
outstanding balance of such Receivable. As used herein, the term "Material
Effect" means, with respect to any Receivable, (i) if such Receivable was at any
time treated as or represented to be an Eligible Receivable, the failure of such
Receivable to be an Eligible Receivable, (ii) the failure of the Agent to have a
first priority perfected security interest in such Receivable or (iii) the
occurrence of a Material Adverse Effect with respect thereto. All such
Collections deemed received by the Borrower under this Section 1.5(b) shall be
remitted by the Borrower to the Collection Agent in accordance with Section
5.1(i).
(c) Adjustment to Borrowing Base. At any time before the Liquidity
Termination Date that the Borrower is deemed to have received any Collection
under Section 1.5(b) ("Deemed
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Collections") that derives from a Receivable that is otherwise reported as an
Eligible Receivable, the Borrower may satisfy its obligation to deliver such
amount to the Collection Agent by instead notifying the Collection Agent that
the Borrowing Base should be recalculated by decreasing the Eligible Receivables
Balance by the amount of such Deemed Collections, so long as after such
adjustment the Aggregate Loan Amount does not exceed the Borrowing Base.
(d) Payment Assumption. Unless an Obligor otherwise specifies or
another application is required by contract or law, any payment received by the
Borrower from any Obligor shall be applied as a Collection of Receivables of
such Obligor (starting with the oldest such Receivable) and remitted to the
Collection Agent as such.
Section 1.6. Reduction in Commitments. The Borrower may, upon thirty
days' notice to the Agent and each Lender Agent, reduce the Aggregate Commitment
in increments of $1,000,000, so long as the Aggregate Commitment as so reduced
is no less than the Matured Aggregate Loan Amount. Each such reduction in the
Aggregate Commitment shall reduce the Commitment of each Lender Group in
accordance with its Ratable Share (and, in the case of each Committed Lender,
its Commitment Percentage of its Lender Group's Ratable Share of such reduction)
and shall reduce the Loan Limit so that the Aggregate Commitment remains at
least 102% of the Loan Limit and the Loan Limit is no less than the outstanding
Aggregate Loan Amount.
Section 1.7. Optional Prepayments. Upon five (5) Business Days' notice
to the Agent and each Lender Agent, the Borrower may prepay the Aggregate Loan
Amount in whole or in part (but if in part, in aggregate amounts not less than
$1,000,000) at a prepayment price equal to the Loan Amount prepaid plus all
accrued Interest thereon plus any other amounts payable in connection with such
prepayment under each Rate Supplement. Such prepayments (if in part) shall be
applied ratably to the Loans of the Lenders in accordance with their respective
Loan Amounts, applied with respect to each such Lender as specified by the
Borrower or, in the absence of such specification, first to such Lender's Prime
Tranches, if any, and second to the other Tranches applicable to the Loan Amount
of such Lender with the shortest remaining maturities unless otherwise specified
by the Borrower.
Section 1.8. Security Interest. (a) The Borrower hereby grants to the
Agent, for its own benefit and for the ratable benefit of the Lender Agents and
the Lenders, a first priority security interest in all Receivables, Related
Security, Collections, the Policy, the Insurance Payments, the Optical Policy,
the Optical Payments, Lock-Box Accounts and the Money Market Accounts to secure
the payment of all amounts owing hereunder.
(b) The Borrower hereby grants to the Agent (for the benefit of the
Agent, each Lender Agent, each Lender and any other Person to whom any amount is
owed hereunder), a first priority security interest in all of the Borrower's
right, title and interest in, to and under the Limited Guaranty and each
Purchase Agreement. The Borrower shall execute, file and record all financing
statements, continuation statements and other documents required to perfect or
protect such grant. This grant includes (a) all monies due and to become due to
the Borrower from the Parent under or in connection with the Limited Guaranty
(including fees, expenses, costs, indemnities and damages for the breach of any
obligation or representation related to the Limited Guaranty), (b) all monies
due and to become due to the Borrower from the applicable Originator
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under or in connection with the Purchase Agreements (including fees, expenses,
costs, indemnities and damages for the breach of any obligation or
representation related to such agreement), (c) all rights, remedies, powers,
privileges and claims of the Borrower against the Parent under or in connection
with the Limited Guaranty and (d) all rights, remedies, powers, privileges and
claims of the Borrower against the applicable Originator under or in connection
with the Purchase Agreements. All provisions of the Limited Guaranty and the
Purchase Agreements shall inure to the benefit of, and may be relied upon by,
the Agent, each Lender Agent, each Lender and each such other Person. At any
time that a Termination Event has occurred and is continuing, the Agent shall
have the sole right to enforce the Borrower's rights and remedies under the
Limited Guaranty and the Purchase Agreements to the same extent as the Borrower
could absent this grant, but without any obligation on the part of the Agent,
any Lender Agent, any Lender or any other such Person to perform any of the
obligations of the Borrower under the Limited Guaranty and the Purchase
Agreements (or any promissory note executed thereunder). All amounts distributed
to the Borrower under the Purchase Agreements from Receivables sold to the
Borrower thereunder shall constitute Collections hereunder and shall be applied
in accordance herewith.
(c) This agreement shall be a security agreement for purposes of the
UCC. Upon the occurrence of a Termination Event, the Agent shall have all rights
and remedies of a secured party provided under the UCC after default as in
effect in all applicable jurisdictions.
Section 1.9. Release of Amounts in Money Market Account. At the written
request of the Borrower to the Agent, the Agent shall permit the Borrower to
withdraw monies from a Money Market Account (each a "Withdrawal") subject to the
conditions that on the date of such Withdrawal before and after giving effect to
such Withdrawal:
(a) no Potential Termination Event shall then exist or shall
occur as a result of the Withdrawal;
(b) the Liquidity Termination Date has not occurred;
(c) after giving effect to such Withdrawal, (x) the
outstanding Matured Aggregate Loan Amount would not exceed the Aggregate
Commitment and (y) the outstanding Aggregate Loan Amount would not
exceed the lesser of (i) the Loan Limit and (ii) the Borrowing Base;
(d) the representations and warranties of the Borrower, the
Originators and the Collection Agent contained herein or in any other
Transaction Document are true and correct in all material respects on
and as of such date (except to the extent such representations and
warranties relate solely to an earlier date and then are true and
correct as of such earlier date); and
(e) each of the Borrower and each Originator Entity is in
full compliance with the Transaction Documents (including all covenants
and agreements in Article V).
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ARTICLE II
SALES TO AND FROM CONDUIT LENDERS; ALLOCATIONS
Section 2.1. Required Loans from Conduit Lenders. Each Conduit Lender
may, at any time, sell to its Related Committed Lenders pursuant to the relevant
Transfer Agreement any percentage designated by such Conduit Lender of its Loan
Amount and its related Conduit Lender Settlement (each, a "Put").
Section 2.2. Purchases by Conduit Lenders. Each Conduit Lender may at
any time deliver to its Lender Agent, Agent and each Related Committed Lender a
notification of assignment in substantially the form of Exhibit B. If a Conduit
Lender delivers such notice, each Related Committed Lender shall sell to such
Conduit Lender and such Conduit Lender shall purchase in full from each Related
Committed Lender, the Loan Amount of such Committed Lenders on the last day of
the relevant Tranche Periods, at a purchase price equal to such Loan Amount plus
accrued and unpaid Interest thereon. Any sale from any Committed Lender to a
Conduit Lender pursuant to this Section 2.2 shall be without recourse,
representation or warranty except for the representation and warranty that the
Loan Amount sold by such Committed Lender is free and clear of any Adverse Claim
created or granted by such Committed Lender and that such Lender has not
suffered a Bankruptcy Event.
Section 2.3. Allocations and Distributions. (a) Settlement Dates. If the
Collection Agent shall fail to deliver the Daily Report on any Deposit Date
prior to the occurrence of the Liquidity Termination Date, the Collection Agent
shall not be permitted to withdraw any amounts from the Lock-Box Accounts unless
the Collection Agent is in compliance with this subsection. On the Business Day
following each Deposit Date occurring prior to the Liquidity Termination Date,
(x) the Collection Agent shall set aside from Collections the amounts necessary
to make all distributions to the Agent, the Lender Agents, the Lenders and the
Collection Agent required by this Section 2.3(a) with respect to the next
succeeding Settlement Date and (y) if the Daily Report for such Deposit Date
indicates a Borrowing Base Deficiency, maintain amounts on deposit in the
Lock-Box Accounts at least equal to such Borrowing Base Deficiency. The balance
of such Collections shall be released to the Borrower on a daily basis. On each
Settlement Date prior to the Liquidity Termination Date, all Collections so set
aside during the preceding Settlement Period shall be applied where applicable
by the Collection Agent (or, if the Agent is then in control of any Collections,
by the Agent) in the following order:
(i) ratably to the Lenders, all Interest due and payable on
such date;
(ii) all fees and other amounts due and payable to the Agent
and the Lender Agents;
(iii) ratably to the Lenders, all other amounts due and
payable to the Lenders under the Transaction Documents;
(iv) to the Collection Agent, an amount equal to the
Collection Agent Fee due and payable on such date; and
(v) to the Borrower.
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On the last day of each Tranche Period for Loan Amounts of the Committed Lenders
that ends prior to the next succeeding Settlement Date, the Collection Agent
(or, if the Agent is then in control of any Collections, the Agent) shall pay
Interest due and payable to such Committed Lenders from amounts set aside for
such purpose pursuant to Section 3.2(a) during such Settlement Period.
(b) Liquidity Termination Date. On each day on and after the
Liquidity Termination Date, the Collection Agent (or, if the Agent is then in
control of any Collections, by the Agent) shall set aside and hold in trust
solely for the account of the Agent, for the benefit of the Lender Agents and
the Lenders (or deliver to the Agent, if so instructed pursuant to Section
3.2(a)) all Collections received on such day and such Collections shall be
allocated as follows:
(i) first, to the Agent until all reasonable costs of
collection, administration and enforcement of this Agreement owed to the
Agent for its own account have been paid in full;
(ii) second, to the Lender Agents and the Lenders in each
Lender Group based upon its Ratable Share, until all Loan Amounts and
Interest owed but not already paid to the Lenders have been paid in
full;
(iii) third, to each Lender Group until all other amounts owed
to such Lender Group have been paid in full;
(iv) fourth, to any other Person (other than the Borrower,
the Collection Agent or an Originator) to whom any amounts are owed
under the Transaction Documents until all such amounts have been paid in
full; and
(v) fifth, to the Collection Agent until all amounts owed to
the Collection Agent under this Agreement have been paid in full; and
(vi) sixth, to the Borrower.
On the last day of each Tranche Period (unless otherwise instructed by the Agent
at the direction of the Instructing Group pursuant to Section 3.2(a)), the
Collection Agent shall deposit into the applicable Lender Agent's Account, from
such set aside Collections, all amounts allocated to such Tranche Period and all
Tranche Periods that ended before such date that are due in accordance with the
priorities in clauses (i) - (iii) above. No distributions shall be made to pay
amounts under clauses (iv) - (vi) until sufficient Collections have been set
aside to pay all amounts described in clauses (i) - (iii) that may become
payable for all outstanding Tranche Periods. All distributions by the Agent
shall be made ratably within each priority level in accordance with the
respective amounts then due each Person included in such level unless otherwise
agreed by the Agent and all Lender Agents.
ARTICLE III
ADMINISTRATION AND COLLECTIONS
Section 3.1. Appointment of Collection Agent. (a) The servicing,
administering and collecting of the Receivables shall be conducted by a Person
(the "Collection Agent") designated to so act on behalf of the Lenders under
this Article III. As the Initial Collection Agent, the
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Parent is hereby designated as, and agrees to perform the duties and obligations
of, the Collection Agent. The Initial Collection Agent acknowledges that the
Agent, each Lender Agent and each Lender have relied on the Initial Collection
Agent's agreement to act as Collection Agent (and the agreement of any of the
sub-collection agents to so act) in making the decision to execute and deliver
this Agreement and agrees that it will not voluntarily resign as Collection
Agent nor permit any Originator agent to voluntarily resign as a sub-collection
agent. At any time after the occurrence of a Collection Agent Replacement Event,
the Agent may designate a new Collection Agent to succeed the Parent (or any
successor Collection Agent).
(b) The Initial Collection Agent may delegate its duties and
obligations as Collection Agent to an Affiliate (or a third-party to the extent
expressly permitted by the applicable Purchase Agreement) of the Initial
Collection Agent (acting as a sub-collection agent). Notwithstanding such
delegation, the Initial Collection Agent shall remain primarily liable for the
performance of the duties and obligations so delegated, and the Agent, each
Lender Agent and each Lender shall have the right to look solely to the Initial
Collection Agent for such performance. The Agent may at any time after the
occurrence of a Collection Agent Replacement Event remove or replace any
sub-collection agent.
(c) If replaced, the Collection Agent agrees it will terminate, and
will cause each existing sub-collection agent to terminate, its collection
activities in a manner requested by the Agent to facilitate the transition to a
new Collection Agent. The Collection Agent shall cooperate with and assist any
new Collection Agent (including providing access to, and (subject to any
applicable confidentiality restrictions) transferring copies of, all Records and
allowing (to the extent permitted by applicable law and contract) the new
Collection Agent to use all licenses, hardware or software necessary or
desirable to collect the Receivables). The Initial Collection Agent irrevocably
agrees to act (if requested to do so) as the data-processing agent for any new
Collection Agent in substantially the same manner as the Initial Collection
Agent conducted such data-processing functions while it acted as the Collection
Agent.
Section 3.2. Duties of Collection Agent. (a) The Collection Agent shall
take, or cause to be taken, all actions necessary or advisable to collect each
Receivable in accordance with this Agreement, the Credit and Collection Policy
and all applicable laws, rules and regulations using the skill and attention the
Collection Agent exercises in collecting other receivables or obligations owed
solely to it. The Collection Agent shall, in accordance herewith, set aside all
Collections to which a Lender is entitled and pay from such Collections all
Interest and Fees when due. If so instructed by the Agent, the Collection Agent
shall transfer to the Agent the amount of Collections to which the Agent, each
Lender Agent and the Lenders are entitled by the Business Day following receipt.
Each party hereto hereby appoints the Collection Agent to enforce such Person's
rights and interests in the Receivables, but (notwithstanding any other
provision in any Transaction Document) the Agent at all times after the
occurrence of a Collection Agent Replacement Event shall have the sole right to
direct the Collection Agent to commence or settle any legal action to enforce
collection of any Receivable; provided, that such direction shall not conflict
with (i) the terms of the Transaction Documents or the relevant Contract, (ii)
applicable law or (iii) so long as no Insurer Default has occurred, any
instructions from the Insurer.
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(b) If no Termination Event exists and the Collection Agent
determines that such action is appropriate in order to maximize the Collections,
the Collection Agent may, in accordance with the Credit and Collection Policy,
extend the maturity of any Receivable (but not beyond the time period permitted
by the Policy or the Optical Policy) or adjust the outstanding balance of any
Receivable; provided that the Collection Agent shall not extend the maturity of
any Receivable unless either (i) the Obligor admits in writing that it is unable
to pay the outstanding balance of such Receivable or (ii) the Obligor fails to
pay such Receivable in full by its due date. Any such extension or adjustment
shall not alter the status of a Receivable as a Defaulted Receivable or
Delinquent Receivable or limit any rights of the Agent or the Lenders hereunder.
If a Termination Event exists, the Collection Agent may make such extensions or
adjustments only with the prior consent of the Agent.
(c) The Collection Agent shall turn over to the Borrower the
collections and records for any indebtedness owed to the Borrower that is not a
Receivable. The Collection Agent shall have no obligation to remit any such
funds or records to the Borrower until the Collection Agent receives evidence
(reasonably satisfactory to the Collection Agent) that the Borrower is entitled
to such items. The Collection Agent has no obligations concerning indebtedness
that is not a Receivable other than to deliver the collections and records for
such indebtedness to the Borrower when required by this Section 3.2(c).
(d) The Collection Agent shall take all actions reasonably within
its control that are necessary to maintain the perfection and priority of the
security interest of the Agent in the Receivables.
Section 3.3. Reports. On each Business Day, by no later than 4:00 P.M.
(New York City time), the Collection Agent shall deliver to the Agent and each
Lender Agent, a report reflecting information as of the close of business of the
Collection Agent for the immediately preceding Business Day (each a "Daily
Report"), containing the information described on Exhibit C-1 (with such
modifications or additional information as reasonably requested by the Agent,
any Lender Agent or the Instructing Group). On or before the ninth day (or, if
such day is not a Business Day, the next succeeding Business Day) of each month,
and at such other times covering such other periods as may be requested by the
Agent or the Instructing Group, the Collection Agent shall deliver to the Agent
a report reflecting information as of the close of business of the Collection
Agent for the immediately preceding calendar month or such other preceding
period as is requested (each a "Monthly Report," and collectively with each
Daily Report, a "Periodic Report"), containing the information described on
Exhibit C (with such modifications or additional information as reasonably
requested by the Agent, any Lender Agent or the Instructing Group).
Section 3.4. Lock-Box Arrangements. The Agent is hereby authorized to
give notice at any time to any or all Lock-Box Banks that the Agent is
exercising its rights under the Lock-Box Letters and to take all actions
permitted under the Lock-Box Letters. The Borrower agrees to take any action
reasonably requested by the Agent to facilitate the foregoing. After the Agent
takes any such action under the Lock-Box Letters, the Borrower shall immediately
deliver to the Agent any Collections received by the Borrower. If the Agent
takes control of any Lock-Box Account, the Agent shall distribute Collections it
receives in accordance herewith and shall
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deliver to the Collection Agent, for distribution under Section 3.2, all other
amounts it receives from such Lock-Box Account; provided, however, that the
Agent agrees prior to the occurrence of a Termination Event and so long as the
Borrower is then in compliance with the provisions of Section 1.5(a) to release
on a daily basis to the Borrower all such amounts in excess of the Collections
required to be distributed to the Agent, the Lender Agents, the Lenders and the
Collection Agent pursuant to Section 2.3(a) on the immediately succeeding
Settlement Date.
Section 3.5. Enforcement Rights. (a) The Agent may at any time direct
the Lock-Box Banks and, after the occurrence and during the continuation of a
Termination Event the Obligors, to make all payments on the Receivables directly
to the Agent or its designee; provided, however, that the Agent agrees prior to
the occurrence of a Termination Event and so long as the Borrower is then in
compliance with the provisions of Section 1.5(a) to release on a daily basis to
the Borrower all such amounts in excess of the Collections required to be
distributed to the Agent, the Lender Agents, the Lenders and the Collection
Agent pursuant to Section 2.3(a) on the immediately succeeding Settlement Date.
The Agent may, and the Borrower shall at the Agent's request, withhold the
identity of the Lenders from the Obligors and Lock-Box Banks. Upon the Agent's
request at any time, the Borrower (at the Borrower's expense) shall (i) give
notice to each Obligor of the Agent's security interest in the Receivables and
direct that payments on Receivables be made directly to the Agent or its
designee, (ii) direct the Insurer to make payments under the Policy directly to
the Agent or its designee, (iii) direct Optical to make payments under the
Optical Policy directly to the agent or its designee, (iv) assemble for the
Agent all Records and collateral security for the Receivables and the Related
Security and transfer to the Agent (or its designee), or (to the extent
permitted by applicable law and contract) license to the Agent (or its designee)
the use of, all software useful to collect the Receivables and (v) segregate in
a manner acceptable to the Agent all Collections the Borrower receives and,
promptly upon receipt, remit such Collections in the form received, duly
endorsed or with duly executed instruments of transfer, to the Agent or its
designee.
(b) After the occurrence and during the continuation of a Collection
Agent Replacement Event, the Borrower hereby irrevocably appoints the Agent as
its attorney-in-fact coupled with an interest, with full power of substitution
and with full authority in the place of the Borrower, to take any and all steps
deemed desirable by the Agent, in the name and on behalf of the Borrower to (i)
collect any amounts due under any Receivable, the Policy and the Optical Policy,
including endorsing the name of the Borrower on checks and other instruments
representing Collections and enforcing such Receivables and the Related
Security, and (ii) exercise any and all of the Borrower's rights and remedies
under the Purchase Agreements. The Agent's powers under this Section 3.5(b)
shall not subject the Agent to any liability if any action taken by it proves to
be inadequate or invalid, nor shall such powers confer any obligation whatsoever
upon the Agent.
(c) None of the Agent, any Lender Agent nor any Lender shall have
any obligation to take or consent to any action to realize upon any Receivable
or Related Security or to enforce any rights or remedies related thereto.
Section 3.6. Collection Agent Fee. On or before the ninth day of each
calendar month (or such other date as the Borrower and the Collection Agent
agree), the Borrower shall pay to
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the Collection Agent, to the extent Collections are available for such purpose
pursuant to Section 2.3, a fee for the immediately preceding calendar month as
compensation for its services (the "Collection Agent Fee") equal to (a) at all
times an Affiliate of the Borrower is the Collection Agent, such consideration
as is acceptable to it, so long as such consideration is upon fair and
reasonable terms no less favorable to the Borrower than could be obtained in a
comparable arm's-length transaction with a Person other than a Originator
Entity, the receipt and sufficiency of which is hereby acknowledged, and (b) at
all times any other Person is the Collection Agent, a reasonable amount agreed
upon by the Agent and the new Collection Agent on an arm's-length basis
reflecting rates and terms prevailing in the market at such time; provided that
in no event will the Collection Agent Fee exceed 110% of the Collection Agent's
costs and expenses. The Collection Agent shall pay all fees and expenses of any
sub-collection agent
Section 3.7. Responsibilities of the Borrower. The Borrower shall, or
shall cause each Originator to, pay when due all Taxes payable in connection
with the Receivables and the Related Security or their creation or satisfaction.
The Borrower shall, and shall cause each Originator to, perform all of its
obligations under agreements related to the Receivables and the Related Security
to the same extent as if interests in the Receivables and the Related Security
had not been transferred hereunder or, in the case of each Originator, under the
applicable Purchase Agreement. The Agent's, any Lender Agents' or any Lender's
exercise of any rights hereunder shall not relieve the Borrower or any
Originator from such obligations. None of the Agent, any Lender Agent nor any
Lender shall have any obligation to perform any obligation of the Borrower or of
any Originator or any other obligation or liability in connection with the
Receivables or the Related Security.
Section 3.8. Actions by Borrower. The Borrower shall defend and
indemnify the Agent and each Lender against all costs, expenses, claims and
liabilities for any action taken by the Borrower, any Originator or any other
Affiliate of the Borrower or of any Originator (whether acting as Collection
Agent or otherwise) related to any Receivable and the Related Security, or
arising out of any alleged failure of compliance of any Receivable or the
Related Security with the provisions of any law or regulation. If any goods
related to a Receivable are repossessed, the Borrower agrees to seek to resell,
or to have the applicable Originator or another Affiliate seek to resell, such
goods in a commercially reasonable manner for the account of the Agent and
remit, or have remitted, to the Agent the Lenders' share in the gross sale
proceeds thereof net of any out-of-pocket expenses and any equity of redemption
of the Obligor thereon. Any such moneys collected by the Borrower or any
Originator or other Affiliate of the Borrower pursuant to this Section 3.8 shall
be applied as Collections in accordance with the terms hereof.
Section 3.9. Indemnities by the Collection Agent. Without limiting any
other rights any Person may have hereunder or under applicable law, the
Collection Agent hereby indemnifies and holds harmless the Agent, each Lender
Agent and each Lender and their respective officers, directors, agents and
employees (each a "Collection Agent Indemnified Party") from and against any and
all damages, losses, claims, liabilities, penalties, costs and expenses
(including attorneys' fees and court costs) (all of the foregoing collectively,
the "Collection Agent Indemnified Losses") at any time imposed on or incurred by
any Collection Agent Indemnified Party arising out of or otherwise relating to:
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(i) any representation or warranty made by, on behalf of or
in respect of, the Collection Agent in this Agreement, any other
Transaction Document, any Periodic Report or any other information or
report delivered by the Collection Agent pursuant hereto, which shall
have been false or incorrect in any material respect when made;
(ii) the failure by the Collection Agent to comply with any
applicable law, rule or regulation related to any Receivable or the
Related Security;
(iii) any loss of a perfected security interest (or in the
priority of such security interest) as a result of any commingling by
the Collection Agent of funds to which the Agent, any Lender Agent or
any Lender is entitled hereunder with any other funds;
(iv) the imposition of any Lien with respect to any
Receivable, Related Security or Lock-Box Account as a result of any
action taken by the Collection Agent under any Transaction Documents;
(v) any failure of the Collection Agent to perform its
duties or obligations in accordance with the provisions of this
Agreement (including, without limitation, compliance with the Credit and
Collection Policy) or any other Transaction Document to which the
Collection Agent is a party;
(vi) the failure of the Borrower and/or the Collection Agent
to comply with any term or condition of the Policy or the Optical
Policy; or
(vii) any failure for any reason of Collections to be remitted
to the Agent, the Lender Agents and Lenders entitled thereto to the
extent required by this Agreement;
whether arising by reason of the acts to be performed by the Collection Agent
hereunder or otherwise, excluding only Collection Agent Indemnified Losses to
the extent (a) such Collection Agent Indemnified Losses resulted from gross
negligence or willful misconduct of the Collection Agent Indemnified Party
seeking indemnification or any Affiliate of such Collection Agent Indemnified
Party, (b) such Collection Agent Indemnified Losses arose as a result of any
default, insolvency, receivership or lack of creditworthiness of an Obligor or
the Insurer or (c) such Collection Agent Indemnified Losses include Taxes;
provided, however, that nothing contained in this sentence shall limit the
liability of the Collection Agent or limit the recourse of the Agent, each
Lender Agent and each Lender to the Collection Agent for any amounts otherwise
specifically provided to be paid by the Collection Agent hereunder.
Section 3.10. Policy and Optical Policy. Each of the Borrower and the
Collection Agent at all times will comply in all material respects with all
terms and conditions of each of the Policy and the Optical Policy and the
Collection Agent will notify the Agent of any event that is likely to cause the
Collection Agent to make a claim under either the Policy or the Optical Policy.
The Borrower shall, and shall cause the Collection Agent to (i) maintain in full
force and effect each of the Policy and the Optical Policy (ii) take all actions
necessary to cause each Eligible Receivable to be an Insured Receivable at all
times, and (iii) take all actions and execute all documents as the Agent or any
Lender Agent may reasonably request in order to ensure that the Agent shall be
loss payee under each of the Policy and the Optical Policy. If on any date the
Borrower or the Collection Agent is or becomes entitled to assert a claim under
either the Policy or the Optical Policy in respect of any Eligible Receivable,
the Borrower (i) shall take or cause to
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be taken on such date or as soon as practical thereafter (and in any event prior
to the last day on which such claim can be asserted under the Policy or the
Optical Policy, as applicable) all actions necessary to assert such claim under
and in accordance with the terms of the Policy or the Optical Policy, as
applicable and (ii) on each day thereafter until such claim is paid in full, (x)
ensure that such claim is processed as soon as practical thereunder, including,
without limitation, by taking all action that the Insurer or the Agent or any
Lender Agent may reasonably request in connection with the submission or
processing of such claim and (y) diligently enforce (and cause each other
Originator Entity to diligently enforce) the right to receive payment of such
claim in accordance with the terms thereof. The Borrower hereby delegates to the
Collection Agent the obligation to perform all duties of the Borrower under each
of the Policy and the Optical Policy and the Collection Agent hereby accepts
such delegation. With respect to any Receivable insured under the Policy or the
Optical Policy, the Collection Agent will not take any action under the Policy
or the Optical Policy, as applicable, or fail to take any action, under the
Policy or the Optical Policy, as applicable, that, because of the Collection
Agent's action or failure to act in accordance with the Policy or the Optical
Policy, as applicable, would result in the Insurer or Optical, as applicable,
being released from its obligations to pay any Loss (as defined respectively in
each of the Policy and the Optical Policy) with respect to such Receivable, in
whole or in part, or the Insurer having a claim against the Borrower in respect
of such Receivable. The Borrower will immediately remit all Insurance Payments
and Optical Payments it receives to the Collection Agent for application in
accordance with the terms of this Agreement. The Borrower and the Collection
Agent will not permit any amendment to or other modification of the Policy or
the Optical Policy without the prior written consent of the Agent. The
Collection Agent shall promptly provide the Agent with copies of all notices it
receives or sends in connection with each of the Policy and the Optical Policy.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties. The Borrower represents and
warrants to the Agent, each Lender Agent and each Lender that:
(a) Existence and Power. The Borrower is a limited liability
company duly organized, validly existing and in good standing under the
laws of Delaware, and is duly qualified to do business, and is in good
standing, in every jurisdiction where the nature of its business
requires it to be so qualified, unless the failure to so qualify would
not reasonably be expected to have a Material Adverse Effect.
(b) Authorization and No Contravention. The execution,
delivery and performance by the Borrower of this Agreement and the other
documents to be delivered by it hereunder, including the Borrower's
transfer of a security interest in the Receivables hereunder and the
Borrower's use of the proceeds of Loans, (i) are within the Borrower's
limited liability company powers, (ii) have been duly authorized by all
necessary action, (iii) do not contravene (1) the Borrower's
organizational documents, (2) any law, rule or regulation applicable to
the Borrower, (3) any contractual restriction binding on or affecting
the Borrower or its property or (4) any order, writ, judgment, award,
injunction or decree binding on or affecting the Borrower or its
property, except in the case of clauses 2, 3 and 4, where such
contravention would not reasonably be expected to have a
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Material Adverse Effect, and (iv) do not result in or require the creation of
any Adverse Claim upon or with respect to any of its properties (except for the
grant of a security interest in the Receivables pursuant to this Agreement).
This Agreement has been duly executed and delivered by the Borrower.
(c) No Consent Required. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower of this Agreement or any other document to be delivered by it
hereunder except where the failure to obtain such authorization or approval, to
take such other action or to give such notice or make such filing would not
reasonably be expected to have a Material Adverse Effect.
(d) Binding Effect. Each Transaction Document to which the Borrower
is a party constitutes the legal, valid and binding obligation of the Borrower
enforceable against that Person in accordance with its terms, except as limited
by bankruptcy, insolvency, or other similar laws of general application relating
to or affecting the enforcement of creditors' rights generally and subject to
general principles of equity.
(e) Perfection. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law. Immediately preceding its
sale of Receivables to the Borrower, an Originator was the owner of, had good
title to, and effectively sold, such Receivables to the Borrower, free and clear
of any Adverse Claim other than Adverse Claims arising under the Agere Credit
Documents. The Borrower owns and has good title to the Receivables free of any
Adverse Claim other than the interests of the Lenders (through the Agent)
therein that are created hereby, and each Lender shall at all times have a valid
and continuing first priority perfected security interest for purposes of
Article 9 of the applicable Uniform Commercial Code enforceable as such against
creditors of and lenders from the Borrower, in the Receivables and Collections
to the extent of its Loan Amount then in effect. Other than the security
interest granted to the Agent pursuant to this Agreement, the Borrower has not
pledged, assigned, sold or granted a security interest in, or otherwise
conveyed, the Receivables or the Collections. The Borrower has not authorized
the filing of and is not aware of any financing statements against the Borrower
that include a description of collateral covering the Receivables or the
Collections other than any financing statement relating to the security interest
granted to the Agent hereunder. The Borrower has caused or will have caused,
within ten days after the date hereof, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
the applicable law in order to perfect the security interest in the Receivables
granted by the Borrower hereunder.
(f) Accuracy of Information. All information furnished in writing by
the Borrower, any Originator Entity or any Affiliate of any such Person to the
Agent, any Lender Agent or any Lender in connection with any Transaction
Document, or any transaction contemplated thereby (taken as a whole and combined
with all information previously furnished to the Agent, such Lender Agent or
such Lender), is true and accurate in all material respects (and is not
incomplete by omitting any information necessary to prevent such information
from being materially misleading).
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(g) No Actions, Suits. There are no actions, suits or other
proceedings (including matters relating to environmental liability) pending or
to the knowledge of the Borrower, threatened against or affecting the Borrower,
or any of its properties, that (i) if adversely determined (individually or in
the aggregate), could reasonably be expected to have a Material Adverse Effect
or (ii) involve any Transaction Document or any transaction contemplated
thereby. The Borrower is not in default of any contractual obligation or in
violation of any order, rule or regulation of any Governmental Authority, which
default or violation could reasonably be expected to have a Material Adverse
Effect.
(h) No Material Adverse Effect. Since September 30, 2001, there has
been no Material Adverse Effect.
(i) Accuracy of Exhibits; Lock-Box Arrangements. All information on
Exhibits D-F (listing offices and names of the Borrower and each Originator and
where they maintain Records and Lock Boxes) is true and complete in all material
respects, subject to any changes permitted by, and notified to the Agent in
accordance with, Article V. None of the Borrower's or Originators' respective
jurisdictions of organization, chief executive offices and principal places of
business has changed within the past 12 months (or such shorter period as the
Borrower has been in existence). Neither the Borrower nor any Originator has
been known or used any legal, fictitious or trade name other than a name set
forth of Exhibit D. Exhibit D lists the federal employer identification numbers
of each Originator organized under the laws of a jurisdiction within the United
States. The Borrower has delivered a copy of all Lock-Box Agreements to the
Agent. The Borrower has not granted any interest in any Lock-Box or Lock-Box
Account to any Person other than the Agent and, upon delivery to a Lock-Box Bank
of the related Lock-Box Letter, the Agent will have exclusive ownership and
control of the Lock-Box Account at such Lock-Box Bank.
(j) Sales by Originators. Each sale by an Originator to the Borrower
of an interest in Receivables and their Collections has been made in accordance
with the terms of the applicable Purchase Agreement, including the payment by
the Borrower to such Originator of the purchase price described in such Purchase
Agreement.
(k) Eligible Receivables. Each Receivable listed on the Periodic
Report as part of the Eligible Receivables Balance is an Eligible Receivable.
(l) No Margin Securities. No proceeds of any Loan will be used for a
purpose that violates, or would be inconsistent with, Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time.
(m) The Policy and the Optical Policy. Each of the Policy and the
Optical Policy is in full force and effect.
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ARTICLE V
COVENANTS
Section 5.1. Covenants of the Borrower. The Borrower hereby covenants
and agrees to comply with the following covenants and agreements, unless the
Agent (with the consent of the Instructing Group) shall otherwise consent:
(a) Financial Reporting. The Borrower will, and will cause each
Originator Entity to, maintain a system of accounting established and
administered in accordance with GAAP and will furnish to the Agent, each Lender
Agent and each Lender:
(i) Annual Financial Statements. Within 105 days after each
fiscal year of the Borrower the annual balance sheet for the Borrower
and an annual profit and loss statement certified by a Designated
Financial Officer thereof, in each case, prepared on a consolidated
basis in conformity with GAAP as of the close of such fiscal year for
the fiscal year then ended;
(ii) Officer's Certificate. Each time financial statements
are furnished pursuant to clause (i) of this Section 5.1(a), a
compliance certificate (in substantially the form of Exhibit H) signed
by a Designated Financial Officer, dated the date of such financial
statements;
(iii) ERISA Reporting Requirements. Promptly after the filing
or receiving thereof, copies of all reports and notices that the
Borrower or any Affiliate files under ERISA with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or that the Borrower or any Affiliate receives from
any of the foregoing or from any multiemployer plan (within the meaning
of Section 4001(a)(3) of ERISA) to which the Borrower or any Affiliate
is or was, within the preceding five years, a contributing employer, in
each case, in respect of the assessment of withdrawal liability or an
event or condition which could, in the aggregate, result in the
imposition of liability on the Borrower and/or any such Affiliate in
excess of $100,000,000.
(iv) Other Information. With reasonable promptness, subject
to any applicable confidentiality restrictions, such other information
(including, solely in the case of the Agent, non-financial information)
as may be reasonably requested by the Agent or any Lender Agent or any
Lender (with a copy of such request to the Agent).
(b) Notices. Promptly, and with respect to clauses (i) through (vi)
below in any event within five Business Days, after becoming aware of any of the
following, the Borrower will notify the Agent and each Lender Agent and provide
a description of:
(i) Potential Termination Events. The occurrence of any
Potential Termination Event;
(ii) Representations and Warranties. The failure of any
representation or warranty herein to be true (when made) in any material
respect;
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(iii) Downgrading. The downgrading, withdrawal or suspension
of any rating by any rating agency of any indebtedness of the Parent;
(iv) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding reasonably likely to
be material to the Borrower or the collectibility or quality of a
material portion of the Receivables or relating to the Policy or the
Optical Policy;
(v) Judgments. The entry of any judgment, award or decree
against the Borrower;
(vi) Changes in Business. Any change in, or proposed change
in, the character of the Borrower's business that could impair the
collectibility or quality of any Receivable or the insurance of any
Receivable under the Policy or the Optical Policy; or
(vii) Policy and Optical Policy. Copies of all notices and
communications received by the Borrower (for any agent of the Borrower
or any Originator Entity), to the Insurer regarding the Policy and/or
the Optical Policy including, without limitation, the daily certificate
prepared by ▇▇▇▇▇ Group (or its successor) as to compliance with policy
credit limits and eligibility guidelines from, or sent by the Borrower
(or any such agent) and any failure of the Insurer to make payment with
respect to a claim submitted under the Policy.
If the Agent receives such a notice, the Agent shall promptly give notice
thereof to each Lender Agent.
(c) Conduct of Business. The Borrower will comply in all respects
with all applicable laws, rules, regulations and orders and preserve and
maintain its legal existence, rights, franchises, qualifications and privileges
except to the extent that the failure so to comply with such laws, rules and
regulations or the failure so to preserve and maintain such rights, franchises,
qualifications, and privileges would not reasonably be expected to have a
Material Adverse Effect.
(d) Compliance with Laws. The Borrower will comply, and will cause
each Originator Entity to comply, with all laws, regulations, judgments and
other directions or orders imposed by any Governmental Authority to which such
Person or any Receivable, any Related Security or Collection may be subject,
except where the failure to so comply would not be reasonably likely to have a
Material Adverse Effect.
(e) Furnishing Information and Inspection of Records. The Borrower
will furnish to the Agent, each Lender Agent and the Lenders such information
concerning the Receivables and the Related Security as the Agent, a Lender Agent
or a Lender may reasonably request. The Borrower will, and will cause each
Originator to, permit, at any time during regular business hours, the Agent, any
Lender Agent or any Lender (or any representatives thereof) (i) to examine and
make copies of all Records, (ii) to visit the offices and properties of the
Borrower and each Originator for the purpose of examining the Records and (iii)
to discuss matters relating hereto with any of the Borrower's or the
Originators' officers, directors, employees or independent public accountants
having knowledge of such matters; provided, however, that prior to the
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occurrence of a Termination Event the Borrower shall not be required to
reimburse the Agent for more than one such inspection per calendar year. Once a
year upon reasonable notice and during regular business hours, the Agent and
each Lender Agent may (at the reasonable expense of the Borrower) have an
independent public accounting firm conduct an audit of the Records or make test
verifications of the Receivables and Collections.
(f) Keeping Records. (i) The Borrower will, and will cause each
Originator to, have and maintain (A) administrative and operating procedures
(including an ability to recreate Records if originals are destroyed), (B)
adequate facilities, personnel and equipment and (C) all Records and other
information necessary for collecting the Receivables (including Records adequate
to permit the immediate identification of each new Receivable and all
Collections of, and adjustments to, each existing Receivable). The Borrower will
give the Agent and each Lender Agent prior notice of any material change in such
administrative and operating procedures.
(ii) The Borrower will, upon the request of the Agent
following the occurrence and during the continuation of a Termination
Event, deliver to the Agent copies of all such contracts (including all
multiple originals of such contracts), or segregate (from all other
receivables then owned or being serviced by the Borrower) the
Receivables and all contracts relating to each Receivable and hold in
trust and safely keep such contracts in separate filing cabinets or
other suitable containers at such locations as the Agent may specify.
(g) Perfection. (i) The Borrower will at its expense, promptly and,
in any event, within five days following such request, execute and deliver all
instruments and documents and take all action, necessary or reasonably requested
by the Agent (including the execution and filing of financing or continuation
statements, amendments thereto or assignments thereof) to vest and maintain
vested in the Agent a valid, first priority perfected security interest in the
Receivables, the Collections, the Related Security, the Purchase Agreements, the
Lock-Box Accounts and proceeds thereof free and clear of any Adverse Claim
(other than the Borrower's interest therein). The Agent will be permitted to
sign and file any continuation statements, amendments thereto and assignments
thereof without the Borrower's signature.
(ii) The Borrower will only change its name, jurisdiction of
organization, identity or corporate structure or relocate its chief
executive office or the Records following thirty (30) days advance
written notice to the Agent and the delivery to the Agent of all
financing statements, instruments and other documents (including
direction letters) reasonably requested by the Agent to the extent such
request is made not later than 15 days after the Agent's receipt of such
notice.
(iii) The Borrower will at all times maintain its jurisdiction
of organization and chief executive offices within a jurisdiction in the
USA in which Article 9 of the UCC is in effect. If the Borrower moves
its jurisdiction of organization or chief executive office to a location
that imposes Taxes, fees or other charges to perfect the Agent's, the
Lender Agents' and the Lenders' interests hereunder or the Borrower's
interests under the Purchase Agreements, the Borrower will pay all such
amounts and any other costs and expenses reasonably incurred in order to
maintain the enforceability of the Transaction
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Documents and the interests of the Agent, the Lender Agents and the
Lenders in the Receivables, the Related Security, Collections, Purchase
Agreements and Lock-Box Accounts.
(h) Performance of Duties. The Borrower will perform its duties or
obligations in accordance with the provisions of each of the Transaction
Documents. The Borrower (at its expense) will (i) fully and timely perform in
all material respects all agreements required to be observed by it in connection
with each Receivable, (ii) comply in all material respects with the Credit and
Collection Policy, and (iii) refrain from any action that may impair in any
material respect the rights of the Agent, the Lender Agents or the Lenders in
the Receivables, the Related Security, Collections, Purchase Agreements or
Lock-Box Accounts.
(i) Payments on Receivables, Accounts. The Borrower will cause all
Obligors at all times to be instructed to deliver payments on the Receivables to
a Lock-Box or Lock-Box Account. If any such payments or other Collections
(including Deemed Collections) are received by the Borrower or any Originator,
it shall hold such payments in trust for the benefit of the Agent, the Lender
Agents and the Lenders and promptly (but in any event within two Business Days
after receipt) remit such funds into a Lock-Box Account. The Borrower will
instruct each Lock-Box Bank to comply with the terms of each applicable Lock-Box
Letter. The Borrower will take reasonable steps to prevent the funds of any
Affiliate from being deposited into any Lock-Box Account other than Collections
of Receivables. If such funds are nevertheless deposited into any Lock-Box
Account, the Borrower will promptly identify and separate such funds for
segregation. The Borrower will not, and will not permit any Collection Agent or
other Person to, commingle Collections or other funds to which the Agent or any
Lender is entitled with any other funds except that the Collection Agent or any
sub-collection agent may commingle Collections set aside for future remittance
pursuant to Section 2.3 with its other funds unless the Agent otherwise directs.
The Borrower shall only add, and shall only permit the Originators to add, a
Lock-Box Bank, Lock-Box, or Lock-Box Account to those listed on Exhibit F if (i)
the Agent has received notice of such addition and (ii) the Agent receives
evidence reasonably satisfactory to it that the Agent has a first priority
perfected security interest in such Lock-Box or Lock-Box Account immediately
upon such addition, a copy of any new Lock-Box Agreement and an executed and
acknowledged copy of a Lock-Box Letter substantially in the form of Exhibit G
(with such changes as are acceptable to the Agent) from any new Lock-Box Bank.
The Borrower shall only terminate a Lock-Box Bank or Lock-Box, or close a
Lock-Box Account, upon 30 days advance notice to the Agent.
(j) Sales and Adverse Claims Relating to Receivables. Except as
otherwise provided herein, the Borrower will not (by operation of law or
otherwise) dispose of or otherwise transfer, or create or suffer to exist any
Adverse Claim upon, any Receivable or any proceeds thereof.
(k) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 3.2(b) and then subject to Section 1.5, the Borrower will
not, and will not permit any Originator to, extend, amend, rescind or cancel any
Receivable except to the extent that all Deemed Collections relating to such
Receivable required to be remitted by the Borrower or such Originator in
accordance with the terms of this Agreement are so remitted.
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(l) Change in Business or Credit and Collection Policy. The Borrower
will not make any material change in the character of its business and will not,
and will not permit any Originator to, make any material change to the Credit
and Collection Policy that could be reasonably expected to materially and
adversely affect the collectibility of the Receivables or change the standard
payment terms set forth in the Credit and Collection Policy.
(m) Certain Agreements. The Borrower will not amend, modify, waive,
revoke or terminate any Transaction Document to which the Borrower is a party or
any provision of Sections 7, 8, 9, 10, 25, 27, 31 or 34 of its LLC Agreement.
(n) Other Business. The Borrower will not: (i) engage in any
business other than the transactions contemplated by the Transaction Documents,
(ii) create, incur or permit to exist any Debt of any kind (or cause or permit
to be issued for its account any letters of credit or bankers' acceptances)
other than pursuant to the Transaction Documents, or (iii) form any Subsidiary
or make any investments in any other Person (excluding short-term investments of
cash); provided, however, that the Borrower shall be permitted to incur minimal
obligations to the extent necessary for the day-to-day operations of the
Borrower (such as expenses for stationery, audits, maintenance of legal status,
etc.).
(o) Nonconsolidation. The Borrower will operate in such a manner
that the separate limited liability company existence of the Borrower and each
Originator Entity and Affiliate thereof would not be disregarded in the event of
the bankruptcy or insolvency of any Originator Entity and Affiliate thereof and,
without limiting the generality of the foregoing:
(i) the Borrower will not engage in any activity other than
those activities expressly permitted under the Borrower's organizational
documents and the Transaction Documents, nor will the Borrower enter
into any agreement other than this Agreement, the other Transaction
Documents to which it is a party and, with the prior written consent of
the Agent, any other agreement necessary to carryout more effectively
the provisions and purposes hereof or thereof;
(ii) the Borrower will maintain a business office separate
from that of each of the Borrower Entities and the Affiliates thereof
(it being understood that such office may be located within any office
space of any Originator Entity);
(iii) the Borrower will cause the financial statements and
books and records of the Borrower, the Originators to reflect the
separate corporate existence of the Borrower;
(iv) except as otherwise expressly permitted hereunder, under
the other Transaction Documents and under the Borrower's organizational
documents, the Borrower will not permit any Originator Entity or
Affiliate thereof to (A) pay the Borrower's expenses, (B) guarantee the
Borrower's obligations, or (C) advance funds to the Borrower for the
payment of expenses or otherwise; and
(v) the Borrower will not act as agent for any Originator
Entity or Affiliate, but instead will present itself to the public as a
limited liability company separate from each such Person and
independently engaged in the business of purchasing and financing
Receivables.
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(p) Mergers, Consolidations and Acquisitions. The Borrower
will not merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or purchase, lease or otherwise
acquire (in one transaction or a series of transactions) all or substantially
all of the assets of any other Person (whether directly by purchase, lease or
other acquisition of all or substantially all of the assets of such Person or
indirectly by purchase or other acquisition of all or substantially all of the
capital stock of such other Person) other than the acquisition of the
Receivables and Related Security pursuant to the Purchase Agreements.
(q) Offers for Purchase. Unless and until the Termination
Date has occurred, the Borrower shall accept each offer for the purchase of
Receivables made pursuant to any Purchase Agreement with any Originator.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnities by the Borrower. Without limiting any other
rights any Person may have hereunder or under applicable law, the Borrower
hereby indemnifies and holds harmless the Agent, each Lender Agent and each
Lender and their respective officers, directors, agents and employees (each an
"Indemnified Party") from and against any and all damages, losses, claims,
liabilities, penalties, costs and expenses (including attorneys' fees and court
costs) (all of the foregoing collectively, the "Indemnified Losses") at any time
imposed on or incurred by any Indemnified Party arising out of or otherwise
relating to any Transaction Document, the transactions contemplated thereby or
any action taken or omitted by any of the Indemnified Parties (including any
action taken by the Agent as attorney-in-fact for the Borrower pursuant to
Section 3.5(b)), whether arising by reason of the acts to be performed by the
Borrower hereunder or otherwise, excluding only Indemnified Losses to the extent
(a) such Indemnified Losses resulted from gross negligence or willful misconduct
of the Indemnified Party seeking indemnification or any Affiliate of such
Indemnified Party or (b) such Indemnified Losses include Taxes or (c) such
Indemnified Losses arose as a result of any default, insolvency, receivership or
lack of creditworthiness of an Obligor or the Insurer. Without limiting the
foregoing indemnification, but subject to the limitations set forth in clauses
(a) and (c) of the previous sentence, the Borrower shall indemnify each
Indemnified Party for Indemnified Losses relating to or resulting from:
(i) any representation or warranty made by the Borrower, any
Originator Entity or the Collection Agent (or any employee or agent of
the Borrower, any Originator Entity or the Collection Agent) under or in
connection with this Agreement, any Periodic Report or any other
information or report delivered by the Borrower, any Originator Entity
or the Collection Agent pursuant hereto, which shall have been false or
incorrect in any material respect when made or deemed made;
(ii) the failure by the Borrower, any Originator Entity, or
the Collection Agent to comply with any applicable law, rule or
regulation related to any Receivable, or the nonconformity of any
Receivable with any such applicable law, rule or regulation or the
failure by the Borrower to satisfy any of its obligations under any
Transaction Document;
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(iii) the failure of the Borrower to vest and maintain vested
in the Agent, for the benefit of the Lenders, a perfected security
interest in the property conveyed pursuant to Section 1.8, free and
clear of any Adverse Claim;
(iv) any commingling of funds to which any Indemnified Party
is entitled hereunder with any other funds;
(v) any failure of a Lock-Box Bank to comply with the terms
of the applicable Lock-Box Letter or any failure for any reason of
Collections to be remitted to the Agent, the Lender Agents and the
Lenders entitled thereto to the extent required by this Agreement;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable, or any other claim resulting from the sale or lease of
goods or the rendering of services related to such Receivable or the
furnishing or failure to furnish any such goods or services or other
similar claim or defense not arising from the financial inability of any
Obligor to pay undisputed indebtedness;
(vii) any failure of the Borrower or any Originator Entity, or
any Affiliate of any thereof, to perform its duties or obligations in
accordance with the provisions of this Agreement or any other
Transaction Document to which such Person is a party (as a Collection
Agent or otherwise);
(viii) any action taken by the Agent as attorney-in-fact for
the Borrower pursuant to Section 3.5(b);
(ix) any environmental liability claim, products liability
claim or personal injury or property damage suit or other similar or
related claim or action of whatever sort, arising out of or in
connection with any Receivable or any other suit, claim or action of
whatever sort relating to any of the Transaction Documents;
(x) any dispute, claim, offset or defense (other than
discharge in any insolvency or bankruptcy of the Insurer or any delay
occurring in connection with any insolvency or bankruptcy proceeding
relating to the Insurer) of the Insurer to the payment of any claim
under the Policy (including, without limitation, a defense based on the
Policy not being a legal, valid and binding obligation of the Insurer
enforceable against it in accordance with its terms), or any other claim
relating to the Policy;
(xi) any dispute, claim, offset or defense (other than
discharge in any insolvency or bankruptcy of Optical or any delay
occurring in connection with any insolvency or bankruptcy proceeding
relating to Optical) of Optical to the payment of any claim under
Optical Policy (including, without limitation, a defense based on the
Optical Policy not being a legal, valid and binding obligation of the
Optical enforceable against it in accordance with its terms), or any
other claim relating to the Optical Policy; or
(xii) the failure of any loss in respect of an Eligible
Receivable to be payable in full from Insurance Payments and Optical
Payments for any reason.
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Section 6.2. Reserve Requirements, Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date hereof any change
in applicable law or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) shall result in
the imposition, modification or applicability of any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by any Funding Source, the Agent, any Lender Agent or any Lender
(collectively, the "Funding Parties"), or shall result in the imposition on such
Funding Party or the London interbank market any other condition affecting this
Agreement, such Funding Party's Commitment or any Eurodollar Tranche funded by
such Funding Party, and the result of any of the foregoing shall be to increase
the cost to such Funding Party of making or maintaining any Eurodollar Tranche
or to reduce the amount of any sum received or receivable by such Funding Party
hereunder (whether or principal, interest or otherwise) by an amount deemed by
such Funding Party to be material, then the Borrower will subject to Sections
(c) and (d) below, pay to such Lender upon demand such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Funding Party shall have determined that the
applicability of any law, rule, regulation or guideline adopted after the date
hereof pursuant to or arising out of the July 1988 report of the Basle Committee
on Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards", or the adoption after
the date hereof of any other law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in the interpretation
or administration of any of the foregoing by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Funding Party (or any lending office of such
Funding Party) or any Funding Party's holding company with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Funding Party's capital or on the
capital of such Funding Party's holding company, if any, as a consequence of
this Agreement, such Funding Party's Commitment or the Loans made by such
Funding Party pursuant hereto to a level below that which such Funding Party or
such Funding Party's holding company could have achieved but for such adoption,
change or compliance (taking into consideration such Funding Party's policies
and the policies of such Funding Party's holding company with respect to capital
adequacy) by an amount deemed by such Funding Party to be material, then from
time to time the Borrower shall pay to such Funding Party such additional amount
or amounts as will compensate such Funding Party or such Funding Party's holding
company for any such reduction suffered.
(c) A certificate of the Funding Party setting forth such amount or
amounts (including computation of such amount or amounts) as shall be necessary
to compensate the Funding Party or its holding company as specified in paragraph
(a) or (b) above, as the case may be, shall be delivered to the Borrower and
such amount or amounts may be reviewed by the Borrower. Unless the Borrower
disagrees in good faith with the computation of the amount or amounts in such
certificate, the Borrower shall pay to the Funding Party, within 10 Business
Days after receipt by the Borrower of such certificate delivered by the Funding
Party, the amount shown as due on any such certificate. If the Borrower, after
receipt of any such certificate from the
-23-
Funding Party, disagrees with the Funding Party on the computation of the amount
or amounts owed to the Funding Party pursuant to paragraph (a) or (b) above, the
Funding Party and the Borrower shall negotiate in good faith to promptly resolve
such disagreement. In either case, however, the Funding Party shall have a duty
to use reasonable efforts to mitigate the damages that may arise as a
consequence of paragraph (a) or (b) above to the extent that such mitigation
will not, in the sole judgment of the Funding Party, entail any cost or
disadvantage to the Funding Party that the Funding Party is not reimbursed or
compensated for by the Borrower.
(d) Failure on the part of any Funding Party to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any period shall not constitute a
waiver of such Funding Party's right to demand compensation with respect to any
other period; provided that if any Funding Party fails to make such demand
within 45 days after it obtains knowledge of the event giving rise to the demand
such Funding Party shall, with respect to amounts payable pursuant to Section
6.2 resulting from such event, only be entitled to payment under this Section
6.2 for such costs incurred or reduction in amounts or return on capital from
and after the date 45 days prior to the date that such Funding Party does make
such demand. The protection of this Section shall be available to each Funding
Party regardless of any possible contention of the invalidity or inapplicability
of the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
Section 6.3. Other Costs and Expenses. The Borrower shall pay to the
Agent on demand all reasonable costs and expenses in connection with (a) the
preparation, execution, delivery and administration (including amendments of any
provision) of the Transaction Documents, (b) the perfection of the Agent's
rights in the Receivables and Collections, (c) the enforcement by the Agent, any
Lender Agent or the Lenders of the obligations of the Borrower under the
Transaction Documents or of any Obligor under a Receivable and (d) the
maintenance by the Agent of the Lock-Boxes and Lock-Box Accounts, including
reasonable fees, costs and expenses of legal counsel for the Agent and the
Lender Agents relating to any of the foregoing or to advising the Agent, any
Lender Agent, any Lender or any Funding Source about its rights and remedies
under any Transaction Document or any related Funding Agreement and all
reasonable costs and expenses (including reasonable counsel fees and expenses)
of the Agent, each Lender Agent, each Lender and each Funding Source in
connection with the enforcement of the Transaction Documents or any Funding
Agreement and in connection with the administration of the Transaction Documents
following a Termination Event; provided that the Borrower shall not be
responsible for the fees and expenses of any legal counsel other than legal
counsel for the Agent (in their capacity as counsel to the Agent and the other
Lender Agents). The Borrower shall reimburse the Agent and each Lender Agent for
the cost of the Agent's or such Lender Agent's auditors (which may be employees
of such Person) auditing the books, records and procedures of the Borrower. The
Borrower shall reimburse each Lender on demand for all other reasonable costs
and expenses incurred by Lender in connection with the preparation, execution,
delivery and administration of the Transaction Documents or the transactions
contemplated thereby, including the cost of the Ratings and the reasonable fees
and out-of-pocket expenses of counsel of the Agent and each Lender Agent.
Section 6.4. Withholding Taxes and Other Taxes. (a) Any and all payments
by the Borrower hereunder shall be made free and clear of and without deduction
for any and all present
-24-
or future Taxes excluding taxes imposed on the Agent's, any Lender Agent's or
any Lender's (or any transferee's or assignee's, including a participation
holder's (any such entity a "Transferee")) net income and franchise taxes
imposed on the Agent or any Lender (or Transferee) (all such nonexcluded Taxes
being hereinafter referred to as "Covered Taxes"). If the Borrower shall be
required by law to deduct any Covered Taxes from or in respect of any sum
payable hereunder to any Lender (or any Transferee), any Lender Agent or the
Agent, (i) the sum payable shall be increased by the amount necessary so that
after making all required deductions such Lender (or Transferee), any Lender
Agent or the Agent (as the case may be) shall receive an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxing authority or other Governmental Authority in accordance
with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or the transactions contemplated hereby (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify each Lender (or Transferee), any
Lender Agent and the Agent for the full amount of Covered Taxes and Other Taxes
paid by such Lender (or Transferee), any Lender Agent or the Agent, as the case
may be, with respect to the Borrower and any liability (including penalties,
interest and reasonable out-of-pocket expenses) arising therefrom or with
respect thereto (other than any such liability that results from the gross
negligence or willful misconduct of the Lender (or Transferee), any Lender Agent
or Agent), whether or not such Covered Taxes or Other Taxes were correctly or
legally asserted by the relevant taxing authority or other Governmental
Authority. Such indemnification shall be made within 30 days after the date any
Lender (or Transferee), any Lender Agent or the Agent, as the case may be, makes
written demand therefor. If the Borrower or any Lender (or Transferee), any
Lender Agent or the Agent shall determine that Covered Taxes or Other Taxes may
not have been correctly or legally assessed by the relevant taxing authority or
other Governmental Authority, and that a Lender (or Transferee), any Lender
Agent or the Agent may be entitled to receive a refund in respect of Covered
Taxes or Other Taxes, it shall promptly notify the other party of the
availability of such refund and such Lender (or Transferee), any Lender Agent or
the Agent shall, within 30 days after receipt of a request by the Borrower,
apply for such refund at the Borrower's expense.
(d) Before the first date on which any amount is payable hereunder
for the account of any Lender Agent or Lender (or Transferee) not incorporated
or organized under the laws of the USA such Lender Agent or Lender (or
Transferee) shall deliver to the Borrower and the Agent each two (2) duly
completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI
(or successor applicable form) certifying that such Lender Agent or Lender (or
Transferee) is entitled to receive payments hereunder without deduction or
withholding of any United States federal income taxes. Each such Lender Agent or
Lender (or Transferee) shall replace or update such forms when necessary to
maintain any applicable exemption and as requested by the Agent or the Borrower.
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(e) The Borrower shall not be required to pay any additional amounts
pursuant to paragraph (a) above to any Lender (or Transferee), Lender Agent or
the Agent if the obligation to pay such additional amounts would not have arisen
but for (i) failure by such Lender (or Transferee), Lender Agent or Agent to
comply with the provisions of paragraph (d) above unless such Lender (or
Transferee), Lender Agent or Agent is unable to comply with paragraph (d)
because of a change in applicable law, regulation or official interpretation
thereof, or (ii) an amendment, modification or revocation of any applicable tax
treaty or a change in official position regarding the application or
interpretation thereof, in each case after the initial Loan Date (and, in the
case of a Transferee, after the date of assignment or transfer).
(f) If any Lender (or Transferee), Lender Agent or the Agent
receives a refund or credit or offset against another tax liability in respect
of any taxes for which such Lender (or Transferee), Lender Agent or Agent has
received payment from the Borrower hereunder it shall promptly repay such refund
or credit or offset (including any interest received by such Lender (or
Transferee), Lender Agent or Agent from the taxing authority with respect to the
refund with respect to such taxes) to the Borrower, net of all out-of-pocket
expenses of such Lender (or Transferee), Lender Agent or the Agent; provided
that the Borrower, upon the request of such Lender (or Transferee), Lender Agent
or the Agent, agrees to return such refund or credit or offset against another
tax liability (plus penalties, interest or other charges) to such Lender (or
Transferee), Lender Agent or the Agent in the event such Lender (or Transferee),
Lender Agent or the Agent is required to repay such refund or credit or offset
against another tax liability.
(g) Any Lender (or Transferee), Lender Agent or Agent claiming any
additional amounts payable under paragraph (a) above shall (i) to the extent
legally able to do so, upon written request from the Borrower, file any
certificate or document if such filing would avoid the need for or reduce the
amount of any such additional amounts which may thereafter accrue, and the
Borrower shall not be obligated to pay such additional amounts if, after the
Borrower's request, any Lender (or Transferee), Lender Agent or Agent could have
filed such certificate or document and failed to do so; or (ii) consistent with
legal and regulatory restrictions, use reasonable efforts to change the
jurisdiction of its applicable lending office if the making of such change would
avoid the need for or reduce the amount of any additional amounts which may
thereafter accrue and would not, in the sole determination of such Lender (or
Transferee), Lender Agent or Agent, be otherwise materially disadvantageous to
such Lender (or Transferee), Lender Agent or Agent.
Section 6.5. Payments and Allocations. Unless otherwise specified
herein, any Person seeks compensation pursuant to this Article VI, such Person
shall deliver to the Borrower, its Lender Agent and the Agent a certificate
setting forth the amount due to such Person, a description of the circumstance
giving rise thereto and the basis of the calculations of such amount. The
Borrower shall pay to the Agent (for the account of such Person) the amount
shown as due on any such certificate within 10 Business Days after receipt of
the notice.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to Closing. This Agreement shall become
effective on the first date all conditions in this Section 7.1 are satisfied. On
or before such date, the Borrower shall
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deliver to the Agent the following documents in form, substance and quantity
reasonably acceptable to the Agent:
(a) A certificate of the Secretary or Assistant Secretary of
each of the Borrower and each Originator Entity certifying (i) the
resolutions of the Borrower's and each Originator Entity's governing
body approving each Transaction Document to which it is a party, (ii)
the name, signature, and authority of each officer who executes on the
Borrower's or any Originator Entity's behalf a Transaction Document (on
which certificate the Agent and each Lender may conclusively rely until
a revised certificate is received), (iii) the Borrower's and each
Originator Entity's organizational documents certified by the Secretary
of State or other appropriate official of its jurisdiction of
organization, and (iv) a copy of the Borrower's and each Originator
Entity's by-laws, operating agreement, or other equivalent document;
(b) All instruments and other documents required, or deemed
desirable by the Agent, to perfect the Agent's first priority interest
in the Receivables, Collections, the Purchase Agreements and the
Lock-Box Accounts in all appropriate jurisdictions;
(c) UCC search reports from all jurisdictions the Agent or
any Lender Agent reasonably requests;
(d) Executed copies of (i) all consents and authorizations
necessary in connection with the Transaction Documents, (ii) all
Lock-Box Letters, (iii) a compliance certificate in the form of Exhibit
H covering the period ending September 30, 2001, (iv) a Periodic Report
covering the month ended December 31, 2001 and (v) each Transaction
Document;
(e) Favorable opinions of counsel to the Borrower, each
Originator Entity and the Insurer covering such matters as any Lender
Agent or the Agent may reasonably request;
(f) A true and correct copy of the Policy (including all
amendments and endorsements thereto) together with evidence that the
Borrower's rights under the Policy have been properly assigned to the
Agent;
(g) A true and correct copy of the Optical Policy (including
all amendments and endorsements thereto) together with evidence that the
Borrower's rights under the Optical Policy have been properly assigned
to the Agent;
(h) Such other approvals, opinions or documents as the Agent
or any Lender Agent may request;
(i) Evidence from the Insurer satisfactory to the Agent that
the Insurer has received payment in full of premium on the Policy for
one full year and that as a result of such payment the Policy may not be
cancelled due to non-payment of premium prior to the Liquidity
Termination Date;
(j) Evidence from Optical satisfactory to the Agent that the
Optical has received payment in full of premium on the Optical Policy
for one full year and that as a
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result of such payment the Optical Policy may not be cancelled due to
non-payment of premium prior to the Liquidity Termination Date;
(k) A certificate of the Secretary of Assistant Secretary of
the Collection Agent certifying as of the effective date of the Policy
the name of each Obligor that is Insolvent (as defined under the Policy)
or more than 60 days past due in any non-disputed payment obligations to
Borrower in respect of an Eligible Repayment (as defined under the
Policy);
(l) All legal matters related to the effectiveness of this
Agreement are reasonably satisfactory to the Agent, the Lender Agents
and the Lenders; and
(m) For each Conduit Lender subject to pre-closing review by
the Rating Agencies, ratings letters from each of such Rating Agencies
in form and substance satisfactory to such Conduit Lender's Lender
Agent.
Section 7.2. Conditions to Each Loan. The obligation of each Committed
Lender to make any Loan, and the right of the Borrower to request or accept any
Loan, are subject to the conditions (and each Loan shall evidence the Borrower's
representation and warranty that clauses (a)-(e) of this Section 7.2 have been
satisfied) that on the date of such Loan before and after giving effect to the
Loan:
(a) no Potential Termination Event shall then exist or shall
occur as a result of the Loan;
(b) the Liquidity Termination Date has not occurred;
(c) after giving effect to such Loan, (x) the outstanding
Matured Aggregate Loan Amount would not exceed the Aggregate Commitment
and (y) the outstanding Aggregate Loan Amount would not exceed the
lesser of (i) the Loan Limit and (ii) the Borrowing Base;
(d) the representations and warranties of the Borrower, the
Originators and the Collection Agent contained herein or in any other
Transaction Document are true and correct in all material respects on
and as of such date (except to the extent such representations and
warranties relate solely to an earlier date and then are true and
correct as of such earlier date); and
(e) each of the Borrower and each Originator Entity is in
full compliance with the Transaction Documents (including all covenants
and agreements in Article V).
Nothing in this Section 7.2 limits the obligations of each Related Committed
Lender to its Conduit Lender (including its obligations under the applicable
Transfer Agreement).
ARTICLE VIII
THE AGENT
Section 8.1. Appointment and Authorization. (a) Each Lender and each
Lender Group hereby irrevocably designates and appoints Westdeutsche Landesbank
Girozentrale, New York Branch, as the "Agent" under the Transaction Documents
and authorizes the Agent to take such
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actions and to exercise such powers as are delegated to the Agent thereby and to
exercise such other powers as are reasonably incidental thereto. The Agent shall
hold, in its name, for the benefit of each Lender, the Loan Amount of the
Lender. The Agent shall not have any duties other than those expressly set forth
in the Transaction Documents or any fiduciary relationship with any Lender, and
no implied obligations or liabilities shall be read into any Transaction
Document, or otherwise exist, against the Agent. The Agent does not assume, nor
shall it be deemed to have assumed, any obligation to, or relationship of trust
or agency with, the Borrower (except as provided in Section 9.8(g)).
Notwithstanding any provision of this Agreement or any other Transaction
Document, in no event shall the Agent ever be required to take any action which
exposes the Agent to personal liability or which is contrary to the provision of
any Transaction Document or applicable law.
(b) Each Lender hereby irrevocably designates and appoints the
respective institution identified on the applicable signature page hereto or in
the related Transfer Supplement (as applicable) as its Lender Agent hereunder,
and each authorizes such Lender Agent to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to such Lender Agent by the terms of this
Agreement, if any, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Lender Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Lender
or other Lender Agent or the Agent, and no implied obligations or liabilities on
the part of such Lender Agent shall be read into this Agreement or otherwise
exist against such Lender Agent. No Lender Agent assumes, nor shall it be deemed
to have assumed, any obligation to, or relationship of trust or agency with, the
Borrower.
Section 8.2. Delegation of Duties. The Agent and each Lender Agent may
execute any of its duties through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Neither the Agent nor any Lender Agent shall be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
Section 8.3. Exculpatory Provisions. None of the Agent, any Lender Agent
or any of their respective directors, officers, agents or employees shall be
liable to any Lender for any action taken or omitted (i) with the consent or at
the direction of the Instructing Group or (ii) in the absence of such Person's
gross negligence or willful misconduct. Subject to the terms of this Agreement,
neither the Agent nor any Lender Agent shall be responsible to any Lender or
other Person for (i) any recitals, representations, warranties or other
statements made by the Borrower, any Originator Entity or any of their
Affiliates, (ii) the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any Transaction Document, (iii) any failure of the Borrower,
any Originator Entity or any of their Affiliates to perform any obligation or
(iv) the satisfaction of any condition specified in Article VII. Neither the
Agent nor any Lender Agent shall have any obligation to any Lender to ascertain
or inquire about the observance or performance of any agreement contained in any
Transaction Document or to inspect the properties, books or records of the
Borrower, any Originator Entity or any of their Affiliates.
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Section 8.4. Reliance by Agent and Lender Agents. (a) The Agent shall in
all cases be entitled to rely, and shall be fully protected in relying, upon any
document, other writing or conversation believed by it in good faith to be
genuine and correct and to have been signed, sent or made by the proper Person
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall in all cases be fully justified in failing or refusing to take any
action under any Transaction Document unless it shall first receive such advice
or concurrence of the Lenders, and assurance of its indemnification, as it deems
appropriate.
(b) The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Instructing Group, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Lenders, the Agent and Lender Agents.
(c) Each Lender Agent shall determine with its Lender Group the
number of such Lenders (each, a "Voting Block"), which shall be required to
request or direct such Lender Agent to take action, or refrain from taking
action, under this Agreement on behalf of such Lenders. Such Lender Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement in accordance with a request of its appropriate Voting Block, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of such Lender Agent's Lenders.
(d) Unless otherwise advised in writing by a Lender Agent or by any
Lender on whose behalf such Lender Agent is purportedly acting, each party to
this Agreement may assume that (i) such Lender Agent is acting for the benefit
and on behalf of each of the Lenders in respect of which such Lender Agent is
identified as being the "Lender Agent" in the definition of "Lender Agent"
hereto, as well as for the benefit of each assignee or other transferee from any
such Person, and (ii) each action taken by such Lender Agent has been duly
authorized and approved by all necessary action on the part of the Lenders on
whose behalf it is purportedly acting. Each Lender Agent and the Lenders in its
Lender Group shall agree amongst themselves as to the circumstances and
procedures for removal and resignation of such Lender Agent.
Section 8.5. Assumed Payments. Unless the Agent shall have received
notice from the applicable Lender Agent before the date of any Loan that the
applicable Lender Group will not make available to the Agent the amount it is
scheduled to remit as part of such Loan, the Agent may assume such Lender Group
has made such amount available to the Agent when due (an "Assumed Payment") and,
in reliance upon such assumption, the Agent may (but shall have no obligation
to) make available such amount to the appropriate Person. If and to the extent
that any Lender in a Lender Group shall not have made its Assumed Payment
available to the Agent, such Lender and the Borrower hereby agree to pay the
Agent forthwith on demand such unpaid portion of such Assumed Payment up to the
amount of funds actually paid by the Agent, together with interest thereon for
each day from the date of such payment by the Agent until the date the requisite
amount is repaid to the Agent, at a rate per annum equal to (i) in the case of
such Lender, the Federal Funds Rate plus 2% and (ii) in the case of the
Borrower, the Interest Rate applicable to such amount.
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Section 8.6. Notice of Termination Events. Neither any Lender Agent nor
the Agent shall be deemed to have knowledge or notice of the occurrence of any
Potential Termination Event unless the Agent or such Lender Agent has received
notice from any Lender or the Borrower stating that a Potential Termination
Event has occurred hereunder and describing such Potential Termination Event. If
the Agent receives such a notice, it shall promptly give notice thereof to each
Lender Agent whereupon each Lender Agent shall promptly give notice thereof to
the members of its Lender Group. If a Lender Agent receives such a notice from
any Person other than the Agent, it shall promptly give notice thereof to the
Agent and each Lender Agent whereupon each Lender Agent shall promptly give
notice thereof to the members of its Lender Group. The Agent shall take such
action concerning a Potential Termination Event as may be directed by the
Instructing Group (or, if required for such action, all of the Lenders), but
until the Agent receives such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, as the Agent
deems advisable and in the best interests of the Lenders.
Section 8.7. Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that none of the Agent, the Lender Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Agent hereafter taken, including any review of the affairs of the Borrower
or any Originator Entity, shall be deemed to constitute any representation or
warranty by the Agent. Each Lender represents and warrants to the Agent and the
Lender Agents that, independently and without reliance upon the Agent, any
Lender Agent or any other Lender and based on such documents and information as
it has deemed appropriate, it has made and will continue to make its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Borrower,
the Insurer, the Originator Entities and the Receivables and its own decision to
enter into this Agreement and to take, or omit, action under any Transaction
Document. The Agent shall deliver each month to any Lender that so requests a
copy of the Periodic Report(s) received covering the preceding calendar month.
Except for items specifically required to be delivered hereunder, the Agent
shall not have any duty or responsibility to provide any Lender or any Lender
Agent with any information concerning the Borrower, the Insurers any Originator
Entity or any of its Affiliates that comes into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
Section 8.8. Agent and Affiliates. The Agent, each Lender Agent and
their respective Affiliates may extend credit to, accept deposits from and
generally engage in any kind of business with the Borrower, any Originator
Entity or any of their Affiliates and WestLB may exercise or refrain from
exercising its rights and powers as if it were not the Agent. The parties
acknowledge that WestLB acts as agent for Paradigm and subagent for Paradigm's
management company in various capacities, as well as providing credit facilities
and other support for Paradigm not contained in the Transaction Documents.
Section 8.9. Indemnification. Each Lender Group shall indemnify and hold
harmless the Agent and its officers, directors, employees, representatives and
agents (to the extent not reimbursed by the Borrower or any Originator Entity
and without limiting the obligation of the Borrower or any Originator Entity to
do so), ratably in accordance with its Ratable Share from
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and against any and all liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses and disbursements of any kind whatsoever
(including in connection with any investigative or threatened proceeding,
whether or not the Agent or such Person shall be designated a party thereto)
that may at any time be imposed on, incurred by or asserted against the Agent or
such Person as a result of or related to, any of the transactions contemplated
by the Transaction Documents or the execution, delivery or performance of the
Transaction Documents or any other document furnished in connection therewith
(but excluding any such liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses or disbursements resulting solely from
the gross negligence or willful misconduct of the Agent or such Person as
finally determined by a court of competent jurisdiction).
Section 8.10. Successor Agent. The Agent may, upon at least five (5)
days notice to the Borrower and each Lender Agent, resign as Agent. Such
resignation shall not become effective until a successor agent is appointed by
an Instructing Group and has accepted such appointment. Upon such acceptance of
its appointment as Agent hereunder by a successor Agent, such successor Agent
shall succeed to and become vested with all the rights and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Transaction Documents. After any retiring Agent's
resignation hereunder, the provisions of Article VI and this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Termination. Each Conduit Lender shall cease to be a party
hereto when the Liquidity Termination Date has occurred, such Conduit Lender
holds no Loan Amount and all amounts payable to it hereunder have been
indefeasibly paid in full. This Agreement shall terminate following the
Liquidity Termination Date when no Loan Amount is held by a Lender and all other
amounts payable hereunder have been indefeasibly paid in full, but the rights
and remedies of the Agent, each Lender Agent and each Lender under Article VI
and Section 8.9 shall survive such termination.
Section 9.2. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. Each party hereto, however, authorizes the
Agent and each Lender Agent to act on telephone notices of Loans and Interest
Rate and Tranche Period selections from any person the Agent or such Lender
Agent in good faith believes to be acting on behalf of the relevant party and,
at the Agent's or such Lender Agent's option, to tape record any such telephone
conversation. Each party hereto agrees to deliver promptly a confirmation of
each telephone notice given or received by such party (signed by an authorized
officer of such party), but the absence of such confirmation shall not affect
the validity of the telephone notice. The Agent's or such Lender Agent's records
of all such conversations shall be presumed correct. The number of days for any
advance notice required hereunder may be waived (orally or in writing) by the
Person receiving such notice and, in the case of notices to the
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Agent or such Lender Agent, the consent of each Person to which the Agent or
such Lender Agent is required to forward such notice.
Section 9.3. Payments and Computations. Notwithstanding anything herein
to the contrary, any amounts to be paid or transferred by the Borrower or the
Collection Agent to, or for the benefit of, any Lender or any other Person shall
be paid or transferred to the Agent or the appropriate Lender Agent (for the
benefit of such Lender or other Person). The Agent or the appropriate Lender
shall promptly (and, if reasonably practicable, on the day it receives such
amounts) forward each such amount to the Person entitled thereto and such Person
shall apply the amount in accordance herewith. All amounts to be paid or
deposited hereunder shall be paid or transferred on the day when due in
immediately available Dollars (and, if due from the Borrower or Collection
Agent, by 11:00 a.m. (New York time), with amounts received after such time
being deemed paid on the Business Day following such receipt). The Borrower
shall, to the extent permitted by law, pay to the Agent or the appropriate
Lender upon demand, for the account of the applicable Person, interest on all
amounts not paid or transferred by the Borrower or the Collection Agent when due
hereunder at a rate equal to the Prime Rate, calculated from the date any such
amount became due until the date paid in full. Any payment or other transfer of
funds scheduled to be made on a day that is not a Business Day shall be made on
the next Business Day, and any Interest Rate or interest rate accruing on such
amount to be paid or transferred shall continue to accrue to such next Business
Day. All computations of interest, fees and Interest shall be calculated for the
actual days elapsed based on a 360 day year.
Section 9.4. Sharing of Recoveries. Each Lender agrees that if it
receives any recovery, through set-off, judicial action or otherwise, on any
amount payable or recoverable hereunder in a greater proportion than should have
been received hereunder or otherwise inconsistent with the provisions hereof,
then the recipient of such recovery shall purchase for cash an interest in
amounts owing to the other Lenders (as return of Loan Amount or otherwise),
without representation or warranty except for the representation and warranty
that such interest is being sold by each such other Lender free and clear of any
Adverse Claim created or granted by such other Lender, in the amount necessary
to create proportional participation by the Lenders in such recovery (as if such
recovery were distributed pursuant to Section 2.3). If all or any portion of
such amount is thereafter recovered from the recipient, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
Section 9.5. Right of Setoff. During the continuance of a Termination
Event, each Lender is hereby authorized (in addition to any other rights it may
have) to setoff, appropriate and apply (without presentment, demand, protest or
other notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by such Lender (including by any branches or agencies
of such Lender) to, or for the account of, the Borrower against amounts owing by
the Borrower hereunder (even if contingent or unmatured).
Section 9.6. Amendments. (a) Except as otherwise expressly provided
herein, no amendment or waiver hereof shall be effective unless signed by the
Borrower and the Instructing Group. In addition, no amendment of any Transaction
Document shall, without the consent of (a) all the Lender Agents, (i) extend the
Liquidity Termination Date or the date of any payment or transfer of Collections
by the Borrower to the Collection Agent or by the Collection Agent to
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the Agent, (ii) reduce the rate or extend the time of payment of Interest for
any Eurodollar Tranche or Prime Tranche, (iii) reduce or extend the time of
payment of any fee payable to the Committed Lenders, (iv) except as provided
herein, release, transfer or modify any Committed Lender's Loan Amount or change
any Commitment, (v) amend the definition of Instructing Group, Termination Event
or Section 1.1, 1.2, 1.5, 2.1, 2.2, 2.3, 7.2 or 9.6, Article VI, or any
provision of the Limited Guaranty, (vi) consent to the assignment or transfer by
the Borrower or any Originator of any interest in the Receivables other than
transfers under the Transaction Documents or permit any Originator Entity to
transfer any of its obligations under any Transaction Document except as
expressly contemplated by the terms of the Transaction Documents, or (vii) amend
any defined term relevant to the restrictions in clauses (i) through (vi) in a
manner which would circumvent the intention of such restrictions or (b) the
Agent and each affected Lender Agent, amend any provision hereof if the effect
thereof is to affect the indemnities to, or the rights or duties of, the Agent
or any Lender Agent or to reduce any fee payable for the Agent's own account.
Notwithstanding the foregoing, the amount of any fee or other payment due and
payable from the Borrower to any Person may be changed or otherwise adjusted
solely with the consent of the Borrower and the party to which such payment is
payable. Any amendment hereof shall apply to each Lender equally and shall be
binding upon the Borrower, the Lenders and the Agent. If required by the Rating
Agencies for any Conduit Lender, no material amendment hereof or assignment,
termination, resignation or removal hereunder shall be effective unless a
statement is obtained from the applicable Rating Agencies that its Rating will
not be downgraded, withdrawn or suspended as a result of such amendment,
assignment, termination, resignation or removal.
(b) If, in connection with any proposed amendment or waiver,
discharge or termination with respect to any of the provisions of this Agreement
as contemplated by clauses (i) through (vii), inclusive, of Section 9.6(a), the
consent of the Instructing Group is obtained but the consent of one or more
Lender Groups whose consent is required is not obtained, then the Borrower shall
have the right, so long as all non-consenting Lender Groups whose individual
consent is required are treated as described in either clause (A) or (B) below,
to either (A) replace each such non-consenting Lender Groups with one or more
replacement Lender Groups so long as at the time of such replacement, each such
replacement Lender Group consents to the proposed amendment, waiver, discharge
or termination or (B) terminate such non-consenting Lender Group's Commitment
and repay in full such non-consenting Lender Group's outstanding Loan Amounts in
accordance herewith.
Section 9.7. Waivers. No failure or delay of the Agent, any Lender Agent
or any Lender in exercising any power, right, privilege or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right, privilege or remedy preclude any other or further
exercise thereof or the exercise of any other power, right, privilege or remedy.
Any waiver hereof shall be effective only in the specific instance and for the
specific purpose for which such waiver was given. After any waiver, the
Borrower, the Lenders, the Lender Agents and the Agent shall be restored to
their former position and rights and any Potential Termination Event waived
shall be deemed to be cured and not continuing, but no such waiver shall extend
to (or impair any right consequent upon) any subsequent or other Potential
Termination Event. Any additional Interest that has accrued after a Termination
Event before the execution of a
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waiver thereof, solely as a result of the occurrence of such Termination Event,
may be waived by the Agent or the related Lender Agent at the direction of the
Lender entitled thereto.
Section 9.8. Successors and Assigns; Participations; Assignments;
Addition of Lender Groups.
(a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Except as otherwise provided herein, the Borrower may not assign or
transfer any of its rights or delegate any of its duties without the prior
consent of the Agent and the Lender Agents.
(b) Participations. Any Lender may sell to one or more Persons (each
a "Participant") participating interests in the interests of such Lender
hereunder and under the applicable Transfer Agreement; provided that such sale
of a participating interest shall require the consent of the Borrower (which
consent shall not be unreasonably withheld) so long as no Termination Event has
occurred and is continuing. Such Lender shall remain solely responsible for
performing its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations hereunder and under the Transfer Agreement. Each
Participant shall be entitled to the benefits of Article VI and shall have the
right of setoff through its participation in amounts owing hereunder and under
the applicable Transfer Agreement to the same extent as if it were a Lender
hereunder and under the Transfer Agreement, which right of setoff is subject to
such Participant's obligation to share with the Lenders as provided in Section
9.4. A Lender shall not agree with a Participant to restrict such Lender's right
to agree to any amendment hereto, except amendments described in clause (a) of
Section 9.6.
(c) Assignments by Committed Lenders. Any Committed Lender may
assign to one or more Persons ("Purchasing Committed Lenders"), acceptable to
(i) the Lender Agent for the relevant Lender Group in its sole discretion and
(ii) so long as a Termination Event is not continuing, the Borrower, any portion
of its Commitment as a Committed Lender hereunder and under the applicable
Transfer Agreement and Loan Amount pursuant to a supplement hereto and to the
applicable Transfer Agreement (a "Transfer Supplement") in form satisfactory to
the Agent and the applicable Lender Agent and, so long as a Termination Event is
not continuing, the Borrower (which approval shall not be unreasonably
withheld), executed by each such Purchasing Committed Lender, such selling
Committed Lender, the Agent, the applicable Lender Agent and, so long as a
Termination Event is not continuing, the Borrower. Any such assignment by a
Committed Lender must be for an amount of at least Five Million Dollars. Each
Purchasing Committed Lender shall pay a fee of Three Thousand Dollars to the
Agent. Any partial assignment shall be an assignment of an identical percentage
of such selling Committed Lender's Loan Amount and its Commitment as a Committed
Lender hereunder and under the applicable Transfer Agreement. Upon the execution
and delivery to the Agent and the applicable Lender Agent of the Transfer
Supplement and payment by the Purchasing Committed Lender to the selling
Committed Lender of the agreed purchase price, such selling Committed Lender
shall be released from its obligations hereunder and under the applicable
Transfer Agreement to the extent of such assignment and such Purchasing
Committed Lender shall for all purposes be a Committed Lender party hereto and
shall have all the rights and obligations of a Committed
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Lender hereunder to the same extent as if it were an original party hereto and
to the applicable Transfer Agreement with a Commitment as a Committed Lender,
any Loan Amount and any related Assigned Conduit Lender Settlement described in
the applicable Transfer Supplement.
(d) Replaceable Committed Lenders. If any Committed Lender other
than a Committed Lender that provides program enhancement to a Conduit Lender (a
"Replaceable Committed Lender") shall (i) petition the Borrower for any amounts
under Section 6.2 or (ii) have a short-term debt rating lower than the Required
Conduit Ratings for such Conduit the Borrower or applicable Conduit Lender may
designate a replacement financial institution (a "Replacement Committed Lender")
acceptable to the Agent and the Lender Agent, in their sole discretion and, so
long as a Termination Event is not continuing, the Borrower (which approval
shall not be unreasonably withheld), to which such Replaceable Committed Lender
shall, subject to its receipt of an amount equal to its Loan Amount, any related
Assigned Conduit Lender Settlement, and accrued Interest and fees thereon (plus,
from the Borrower, any Early Payment Fee that would have been payable if such
transferred Loan Amount had been paid on such date) and all amounts payable
under Section 6.2, promptly assign all of its rights, obligations and Committed
Lender Commitment hereunder and under the applicable Transfer Agreement,
together with all of its Loan Amount, and any related Assigned Conduit Lender
Settlement, to the Replacement Committed Lender in accordance with Section
9.8(c).
(e) Assignment by Conduit Lenders. Each party hereto agrees and
consents (i) to each Conduit Lender's assignment, participation, grant of
security interests in or other transfers of any portion of, or any of its
beneficial interest in, such Conduit Lender's Loan Amount and any other amount
specified in such Conduit Lender's Transfer Agreement and (ii) to the complete
assignment by each Conduit Lender of all of its rights and obligations hereunder
to the Related Committed Lenders in its Lender Group or any other Person
approved by the Borrower, and upon such assignment such Conduit Lender shall be
released from all obligations and duties hereunder; provided, however, that no
Conduit Lender may, without the prior consent of the Instructing Group and,
during the continuation of a Termination Event, the Borrower (which approval
shall not be unreasonably withheld), transfer any of its rights or obligations
hereunder or under its respective Transfer Agreement unless the assignee (i) is
a corporation whose principal business is the purchase of assets similar to the
Receivables, and (ii) issues commercial paper with credit ratings substantially
comparable to the Ratings. Each Conduit Lender shall promptly notify each party
hereto of any such assignment. Upon such an assignment of any portion of any
Conduit Lender's Loan Amount and any other amount specified in such Conduit
Lender's Transfer Agreement, the assignee shall have all of the rights of such
Conduit Lender hereunder related to such Loan Amount and any other amount
specified in such Conduit Lender's Transfer Agreement.
(f) Opinions of Counsel. If required by the Agent or to maintain the
Ratings, each Transfer Supplement must be accompanied by an opinion of counsel
of the assignee as to such matters as the Agent may reasonably request.
(g) Loan Register. The Borrower hereby designates the Agent to serve
as its agent for the sole purpose of maintaining a register (the "Register") on
which the Agent will record the name and address of each holder of a Loan, the
amount of the Loan owned by such holder and
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each repayment in respect of the principal amount of the Loan. The entries in
the Register shall be conclusive, in the absence of demonstrable error, and the
Borrower, the Agent and each holder of a Loan shall treat each person in whose
name a Loan is registered as the owner thereof for all purposes hereunder.
Notwithstanding anything to the contrary in this Section 9.8, a Loan may be
assigned or otherwise transferred in whole or in part only by registration of
such assignment or transfer of a such Loan in the Register and no assignment of
a Loan shall be effective unless it shall have been recorded in the Register by
the Agent.
(h) An additional Lender Group may be added to this Agreement at any
time by the execution and delivery of a Joinder Agreement by the Borrower and
the members of such proposed additional Lender Group without the consent of any
other party. Upon the effective date of such Joinder Agreement, (i) each Person
specified therein as a "Conduit Lender" shall become a party hereto as a Conduit
Lender, entitled to the rights and subject to the obligations of a Conduit
Lender hereunder, (ii) each Person specified therein as a "Related Committed
Lender" shall become a party hereto as a Related Committed Lender, entitled to
the rights and subject to the obligations of a Related Committed Lender
hereunder, (iii) the Person specified therein as a "Lender Agent" shall become a
party hereto and a party to the Fee Letter as a Lender Agent, entitled to the
rights and subject to the obligations of a Lender Agent hereunder and (iv) each
of the Aggregate Commitment and the Loan Limit shall be increased by the amount
of the Commitment of such Lender Group. On or prior to the effective date of
such Joinder Agreement, the Borrower, the Collection Agent, the new Related
Committed Lender(s) and the new Lender Agent shall enter into a Rate Supplement.
Upon the effective date of any such Joinder Agreement, the new Lender Group
shall accept such assignments of the then outstanding Loan Amounts of the other
Lender Groups such that following such assignments each Lender Group shall have
a Loan Amount not in excess of its Ratable Share of the Aggregate Loan Amount
then outstanding.
Section 9.9. Intended Tax Characterization. It is the intention of the
parties hereto that, for the purposes of all Taxes, the transactions
contemplated hereby shall be treated as a loan by the Lenders (through the Agent
and the Lender Agents) to the Borrower that is secured by the Receivables (the
"Intended Tax Characterization"). The parties hereto agree to report and
otherwise to act for the purposes of all Taxes in a manner consistent with the
Intended Tax Characterization.
Section 9.10. Confidentiality. The parties hereto agree to hold the
Transaction Documents or any other confidential or proprietary information
received in connection therewith in confidence and agree not to provide any
Person with copies of any Transaction Document or such other confidential or
proprietary information other than to (i) any officers, directors, members,
managers, employees or outside accountants, auditors or attorneys thereof, (ii)
any prospective or actual assignee or participant or in the case of the Borrower
or the Parent, any lender, underwriter or buyer requesting a copy of the
Transaction Documents in connection with any due diligence conducted by such
party which (in each case) has signed a confidentiality agreement containing
provisions substantively identical to this Section, (iii) any rating agency,
(iv) any surety, guarantor or credit or liquidity enhancer to the Agent, any
Lender Agent or any Lender which (in each case) has signed and delivered to the
Borrower a confidentiality agreement substantively identical to this Section
9.10, (v) any entity organized to loan, or make
-37-
loans secured by, financial assets for which any financial institution acting as
Agent or a Lender Agent provides managerial services or acts as an
administrative agent which (in each case) has signed and delivered to the
Borrower a confidentiality agreement substantively identical to this Section
9.10, (vi) any Conduit Lender's administrator, management company, referral
agents, issuing agents or depositaries or CP Dealers who have executed
confidentiality agreements substantively identical to this Section 9.10, (vii)
Governmental Authorities with appropriate jurisdiction and (viii) any bank
examiner or independent auditor of any Lender or Lender Agent. Notwithstanding
the above stated obligations, provided that the other parties hereto are given
notice of the intended disclosure or use, the parties hereto will not be liable
for disclosure or use of such information which such Person can establish by
tangible evidence: (i) was required by law or applicable regulations, including
pursuant to a valid subpoena or other legal process, (ii) was in such Person's
possession or known to such Person prior to receipt, (iii) is or becomes known
to the public through disclosure in a printed publication (without breach of any
of such Person's obligations hereunder) or (iv) is or becomes available to such
Person on a non-confidential basis from another source; provided further that
the Borrower or the Parent may file copies of the Transaction Documents with the
Securities and Exchange Commission.
Section 9.11. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for each Conduit Lender, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause such
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against such Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official for such Conduit
Lender, or any substantial part of its property, or (c) ordering the winding up
or liquidation of the affairs of such Conduit Lender.
Section 9.12. Excess Funds. Each Conduit Lender shall be required to
make payment of the amounts required to be paid pursuant hereto only if such
Conduit Lender has Excess Funds (as defined below). If such Conduit Lender does
not have Excess Funds, the excess of the amount due hereunder over the amount
paid shall not constitute a "claim" (as defined in Section 101(5) of the Federal
Bankruptcy Code) against such Conduit Lender until such time as such Conduit
Lender has Excess Funds. If such Conduit Lender does not have sufficient Excess
Funds to make any payment due hereunder, then such Conduit Lender may pay a
lesser amount and make additional payments that in the aggregate equal the
amount of deficiency as soon as possible thereafter. The term "Excess Funds"
means the excess of (a) the aggregate projected value of such Conduit Lender's
assets and other property (including cash and cash equivalents), over (b) the
sum of (i) the sum of all scheduled payments of principal, interest and other
amounts payable on publicly or privately placed indebtedness of such Conduit
Lender for borrowed money, plus (ii) the sum of all other liabilities,
indebtedness and other obligations of such Conduit Lender for borrowed money or
owed to any credit or liquidity provider, together with all unpaid interest then
accrued thereon, plus (iii) all taxes payable by such Conduit Lender to the
Internal Revenue Service, plus (iv) all other indebtedness, liabilities and
obligations of such Conduit Lender then due and payable, but the amount of any
liability, indebtedness or obligation of such Conduit Lender shall not exceed
the projected value of the assets to which recourse for
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such liability, indebtedness or obligation is limited. Excess Funds shall be
calculated once each Business Day.
Section 9.13. Headings; Counterparts. Article and Section Headings in
this Agreement are for reference only and shall not affect the construction of
this Agreement. This Agreement may be executed by different parties on any
number of counterparts, each of which shall constitute an original and all of
which, taken together, shall constitute one and the same agreement.
Section 9.14. Cumulative Rights and Severability. All rights and
remedies of the Lenders, the Lender Agents, and Agent hereunder shall be
cumulative and non-exclusive of any rights or remedies such Persons have under
law or otherwise. Any provision hereof that is prohibited or unenforceable in
any jurisdiction shall, in such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and without affecting such provision in any other
jurisdiction.
Section 9.15. Governing Law; Submission to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK, BUT OTHERWISE WITHOUT REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW
YORK. THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK, NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF, OR RELATING TO, THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY. The Borrower hereby irrevocably waives, to the fullest
extent permitted by law, any objection it may now or hereafter have to the venue
of any such proceeding and any claim that any such proceeding has been brought
in an inconvenient forum. Nothing in this Section 9.15 shall affect the right of
the Agent, any Lender Agent or any Lender to bring any action or proceeding
against the Borrower or its property in the courts of other jurisdictions.
Section 9.16. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 9.17. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
Section 9.18. Limited Recourse. Each of the parties hereto agrees that
its recourse for the payment of any obligations of the Borrower owing hereunder
or in respect hereof shall in all events be limited to the collateral described
in Section 1.8 and any proceeds thereof and such obligations shall only be
payable by the Borrower to the extent that funds are available therefor in
accordance with this Agreement.
-39-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
WESTDEUTSCHE LANDESBANK GIROZENTRALE WESTDEUTSCHE LANDESBANK
GIROZENTRALE, New York Branch, GIROZENTRALE, New York Branch,
as Agent and a Lender Agent as a Related Committed Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------ ------------------------------------------------
Title: Director Title: Director
----------------------------------- -----------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------ ------------------------------------------------
Title: Associate Director, Securitization Title: Associate Director, Securitization
----------------------------------- -----------------------------------------
Address: 1211 Avenue of the Americas Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PARADIGM FUNDING LLC,
as a Conduit Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------------
Title: Vice President
-----------------------------------------------
Address: c/o AMACAR Group, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ Branch, DRESDNER BANK AG, New York Branc,
as a Lender Agent as a Related Commitment Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------ ------------------------------------------------
Title: Director Title: Director
---------------------------------- -----------------------------------------
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------ ------------------------------------------------
Title: Vice President Title: Vice President
---------------------------------- -----------------------------------------
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Securitization Attention: Securitization
Group Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-41-
BEETHOVEN FUNDING CORPORATION,
as a Conduit Lender
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------------
Title: Vice President
-----------------------------------------
Address: c/o Global Securitization Services, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-42-
AGERE SYSTEMS RECEIVABLES FUNDING LLC, as Borrower
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------------
Title: Vice President
-----------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
--------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------
AGERE SYSTEMS INC.,
as Initial Collection Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Title: Senior Vice President - Treasurer
-----------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
---------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------
-43-
SCHEDULE I
DEFINITIONS
The following terms have the meanings set forth, or referred to, below:
"Adjusted LIBOR" means, for any Settlement Period (i) LIBOR divided by
(ii) one minus the "Reserve Requirement." "Reserve Requirement" means, for any
Tranche Period for a Eurodollar Tranche, the maximum reserve requirement imposed
during such Tranche Period on "eurocurrency liabilities" as currently defined in
Regulation D of the Board of Governors of the Federal Reserve System.
"Adverse Claim" means, for any asset or property of a Person, a lien,
security interest, charge, mortgage, pledge, hypothecation, assignment or
encumbrance, or any other right or similar claim, in, of or on such asset or
property in favor of any other Person, except those created by the Transaction
Documents.
"Affiliate" means, for any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person. For purposes of this definition, "control" means the power,
directly or indirectly, to either (i) vote ten percent (10%) or more of the
securities having ordinary voting power for the election of directors of a
Person or (ii) cause the direction of the management and policies of a Person.
Notwithstanding the foregoing, Lucent and its Subsidiaries shall not be
considered Affiliates of the Borrower or any Originator Entity.
"Agent" is defined in the first paragraph hereof.
"Agere Credit Documents" means, collectively, the Agere Credit Facility
and the "Security Documents" (as such term is defined in the Agere Credit
Facility).
"Agere Credit Facility" means the $1,500,000,000 364-Day Amended and
Restated Revolving Credit and Term Loan Facility Agreement, dated as of October
4, 2001 among the Borrower, the lenders party thereto, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc., as syndication agent and The Chase Manhattan Bank, as administrative
agent, as amended, restated, supplemented or otherwise modified from time to
time, and any successor as amended and supplemented through the date hereof, but
without regard to any further amendment, supplement, waiver or termination of
any Article VI or Article VII thereof and, to the extent relating to such
provision, any defined terms therein unless consented to by the Instructing
Group hereunder. The foregoing consent of the Instructing Group shall be subject
to such conditions as the Lenders shall determine in their sole discretion
including without limitation the payment of an amendment fee in an amount equal
to the consideration paid to the Lenders under the Agere Credit Facility in
connection with such amendment, waiver, supplement or termination.
"Aggregate Commitment" means the aggregate Commitments of all Lender
Groups as such amount may be reduced pursuant to Section 1.6 or increased
through the addition of one or more Lender Groups pursuant to a Joinder
Agreement.
"Aggregate Loan Amount" means the sum of the Loan Amounts of all
Lenders.
"Aggregate Reserve" means, at any time at which such amount is
calculated, the sum of the Loss and Dilution Reserve and Interest Reserve.
"Approved Jurisdiction" means the jurisdictions set forth on Exhibit N
hereof, as the same may be supplemented or amended from time to time in
accordance with the terms hereof.
"Assigned Conduit Lender Settlement" means, for each Related Committed
Lender for a Conduit Lender for any Put, the product of such Related Committed
Lender's Purchased Percentage and the amount of the Conduit Lender Settlement
being transferred pursuant to such Put.
"Bankruptcy Event" means, for any Person, that (a) such Person makes a
general assignment for the benefit of creditors or any proceeding is instituted
by or against such Person seeking to adjudicate it bankrupt or insolvent, or
seeking the liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors and, if instituted
against such Person, such proceeding remains undismissed and unstayed for a
period of 30 days, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property or such Person generally does not pay its debts
as such debts become due or admits in writing its inability to pay its debts
generally or (b) such Person takes any corporate action to authorize any such
action.
"Beethoven" mean Beethoven Funding Corporation.
"Borrower" is defined in the first paragraph hereof.
"Borrowing Base" is defined in Section 1.1(a).
"Borrowing Base Deficiency" means, for any date of calculation, the
amount, if any by which the Aggregate Loan Amount exceeds the Borrowing Base.
"Business Day" means any day other than (a) a Saturday, Sunday or other
day on which banks in New York, New York are authorized or required to close,
(b) a holiday on the Federal Reserve calendar, (c) solely for matters relating
to a Eurodollar Tranche, a day on which dealings in Dollars are not carried on
in the London interbank market and (d) solely for matters relating to any
payment, report, notice or other communication to be made or furnished by the
Collection Agent, a day on which the Collection Agent is open for business in
Pennsylvania.
"Charge-Off" means any Receivable that has or should have been (in
accordance with the Credit and Collection Policy) charged off or written off by
the Borrower.
"Charge-Off Ratio" means, for any calendar month, the ratio (expressed
as a percentage) of the Charge-Offs made during such calendar month to the
aggregate amount of Collections during such calendar month.
I-2
"Collection Agent" is defined in Section 3.1(a).
"Collection Agent Fee" is defined in Section 3.6.
"Collection Agent Replacement Event" means the occurrence of any one or
more of the following:
(a) The Collection Agent shall fail to make when due any
payment or deposit to be made by it under this Agreement and such
failure shall continue for three Business Days;
(b) the Collection Agent (or any sub-collection agent) fails
to observe or perform (i) any covenant set forth in Section 3.2(d) or
3.3 or (ii) any other material term, covenant or agreement under any
Transaction Document and in the case of clause (ii) any, such failure
continues for ten Business Days after written notice from the Agent to
the Collection Agent;
(c) any written representation, warranty, certification or
statement made by the Collection Agent in, or pursuant to, any
Transaction Document proves to have been incorrect in any material
adverse respect when made;
(d) the Collection Agent suffers a Bankruptcy Event; or
(e) for so long as the Collection Agent is an Affiliate of
the Borrower, a Termination Event.
"Collections" means collectively, any amount paid on a Receivable or
actually remitted by the Borrower as a Deemed Collection under Section 1.5(b),
Insurance Payments, Optical Payments and payments due from the Originators under
the Purchase Agreements and from the Parent under the Limited Guaranty.
"Commitment" means, for each Committed Lender, the amount set forth on
Schedule II for such Committed Lender or in a Transfer Supplement or Joinder
Agreement, and, for each Lender Group, the amount set forth on Schedule II for
such Lender Group or in a Joinder Agreement, in each case, as adjusted in
accordance with Sections 1.6 and 9.8.
"Commitment Percentage" means, for each Related Committed Lender in a
Lender Group, such Related Committed Lender's Commitment divided by the total of
all Commitments of all Related Committed Lenders in such Lender Group.
"Conduit Lender" means each Person party to this Agreement and listed as
such on Schedule II hereto and each other Person that becomes a Conduit Lender
pursuant to a Transfer Supplement or Joinder Agreement.
"Conduit Lender Investment Percentage" means a fraction, expressed as a
decimal, obtained by dividing the Loan Amount of a Conduit Lender by the Loan
Amount of all Lenders.
I-3
"Conduit Lender Settlement" means the sum of all claims and rights to
payment pursuant to Section 1.5 or 1.7 or any other provision owed to a Conduit
Lender (or owed to the Agent or Lender Agent or the Collection Agent for the
benefit of a Conduit Lender) by the Borrower that, if paid, would be applied to
reduce such Conduit Lender's Loan Amount.
"Contract" means an agreement between an Originator and an Obligor,
pursuant to which such Obligor may purchase from such Originator, and shall be
obligated to pay for, merchandise, insurance or services (including software
licensing fees) from time to time.
"CP Dealer" means, at any time, each Person a Conduit Lender then
engages as a placement agent or commercial paper dealer.
"CP Interest" means, for any Interest Period, the amount of interest or
discount accrued, during such Interest Period on all the outstanding commercial
paper, or portion thereof, issued by Conduit Lender to fund its Loan Amount,
including all dealer commissions and other costs of issuing commercial paper,
whether any such commercial paper was issued specifically to fund such Loan
Amount or is allocated, in whole or in part, to such funding.
"CP Rate" means a rate per annum established pursuant to the applicable
Rate Supplement.
"Credit and Collection Policy" means the Borrower's credit and
collection policy and practices relating to Receivables attached hereto as
Exhibit I.
"Daily Report" is defined in Section 3.3.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services (other
than unsecured trade payables incurred in the ordinary course of business), (iv)
obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (v) obligations 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 (iv)
above.
"Debt Rating" for any Person, shall mean the rating by S&P or Moody's of
such Person's long-term public senior unsecured non-credit-enhanced debt.
"Deemed Collections" is defined in Section 1.5(c).
"Delinquency Ratio" means, the ratio (expressed as a percentage), for
any Settlement Period of (a) the sum of the aggregate outstanding balance of all
Delinquent Receivables as of the end of such Settlement Period plus the
aggregate amount of all claims paid under either the Policy or the Optical
Policy during such Settlement Period to (b) the sum of the aggregate
I-4
outstanding balance of all Receivables as of the end of the Settlement Period
four months prior to such Settlement Period.
"Delinquent Receivable" means any Receivable (other than a Charge-Off)
on which any amount is unpaid more than 90 days past the original due date
therefor.
"Deposit Date" means each day on which any Collections are deposited in
any of the Lock-Box Accounts or on which the Collection Agent receives any
Collections.
"Designated Financial Officer" means the treasurer or chief financial
officer of the Borrower or the relevant Originator Entity, as applicable.
"Dilution" means, for any Settlement Period, the amount Deemed
Collections deemed to be received during such Settlement Period pursuant to
Section 1.5(b) excluding any Deemed Collections in respect of Receivables owing
by Lucent, for so long as such Receivables are not Eligible Receivables.
"Dilution Ratio" means, as of any Settlement Date, a percentage equal to
a fraction, the numerator of which is the total amount of decreases in
Outstanding Balances due to Dilutions during the most recent Settlement Period,
and the denominator of which is the amount of Receivables (excluding Receivables
owing by Lucent for so long as such Receivables are not Eligible Receivables)
generated by the Originator Entities during the Settlement Period three months
prior to the most recent Settlement Period.
"Dollar" and "$" means lawful currency of the United States of America.
"Early Payment Fee" is defined in the applicable Rate Supplement.
"Eligible Money Market Account" means and includes each Money Market
Account if and so long as:
(a) such account is maintained in the name of the Borrower;
(b) such account invests solely in money market funds
denominated in Dollars rated not lower than A-1 (and without the "r"
symbol) attached to any such rating by S&P and P-1 by Moody's or
otherwise acceptable to the Rating Agencies;
(c) the Borrower, the financial intermediary at which such
account is maintained and the Agent have executed and delivered an
account control agreement in form and substance satisfactory to the
Agent which provides, among other things, for such financial
intermediary's agreement that it shall comply with entitlement orders,
and apply any value distributed in connection with such account, as
directed by the Agent without further consent of the Borrower; and
(d) such account is subject to a first priority perfected
security interest in favor of the Agent.
I-5
"Eligible Receivable" means, at any time, any Receivable:
(i) which is an Insured Receivable;
(ii) the Obligor of which (a) is not an Affiliate of any of
the parties hereto or any Originator Entity (provided that the foregoing
clause (a) shall not apply to Receivables originated by Lucent or any of
its wholly-owned Subsidiaries); (b) is not a government or a
governmental subdivision or agency; (c) has not suffered a Bankruptcy
Event which is continuing; and (d) is a resident of an Approved
Jurisdiction;
(iii) which has been invoiced by the applicable Originator or
the Collection Agent and which is stated to be due and payable within 90
days after such invoice (except as otherwise agreed to by the
Instructing Group);
(iv) which is not a Delinquent Receivable or a Charge-Off;
(v) which is an "account" or "general intangible" within
the meaning of the UCC of all applicable jurisdictions;
(vi) which is denominated and payable only in Dollars in the
country of organization of the applicable Originator;
(vii) which arises under a Contract in substantially the form
of one of the contracts set forth on Exhibit J hereto (or in another
form which is substantially the same in substance as one of the forms
set forth on Exhibit J hereto), or otherwise approved by the Agent in
writing, that is in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor enforceable against
such Obligor in accordance with its terms subject to no offset,
counterclaim, defense or other Adverse Claim, and is not an executory
contract or unexpired lease within the meaning of Section 365 of the
Bankruptcy Code (or any equivalent statute or law in the jurisdiction of
organization of the applicable Originator);
(viii) which arises under a Contract that (a) contains an
obligation to pay a specified sum of money and is subject to no
contingencies, (b) does not contain an enforceable requirement that the
Obligor under such contract to consent to the transfer, sale or
assignment of the rights to payment of the Originator under such
contract, (c) does not contain a confidentiality provision that purports
to restrict any Lender's exercise of rights under this Agreement, and
(d) is governed by the laws of jurisdiction in the United States or of
the jurisdiction of organization of the applicable Originator;
(ix) which does not, in whole or in part, contravene in any
material respect any law, rule or regulation applicable thereto
(including, without limitation, those relating to usury, truth in
lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy);
I-6
(x) which satisfies all applicable requirements of the
Credit and Collection Policy and was generated in the ordinary course of
the Originator's business from the sale of goods or provision of
services to a related Obligor solely by the applicable Originator;
(xi) the Obligor of which has been instructed to make payment
to a Lock-Box or Lock-Box Account;
(xii) if such Receivable is originated by an Originator other
than the Parent, 100% of the outstanding voting stock of the Originator
of which is owned or controlled, directly or indirectly, by the Parent;
and
(xiii) the aggregate outstanding balance of which, when added
to the aggregate outstanding balance of Eligible Receivables originated
by Agere Systems Singapore Pte. Ltd. would cause the aggregate
outstanding balance of Eligible Receivables originated by Agere Systems
Singapore Pte. Ltd. to exceed 50% of the Eligible Receivables Balance.
"Eligible Receivables Balance" means, at any time, the aggregate
Outstanding Balance of all Eligible Receivables.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Eurodollar Rate" means, a rate per annum established pursuant to the
applicable Rate Supplement.
"Face Amount" means the face amount of any Conduit Lender commercial
paper issued on a discount basis or, if not issued on a discount basis, the
principal amount of such note and interest scheduled to accrue thereon to its
stated maturity.
"Federal Funds Rate" means for any day the greater of (i) the average
rate per annum as determined by WestLB at which overnight Federal funds are
offered to WestLB for such day by major banks in the interbank market, and (ii)
if WestLB is borrowing overnight funds from a Federal Reserve Bank that day, the
average rate per annum at which such overnight borrowings are made on that day.
Each determination of the Federal Funds Rate by WestLB shall be conclusive and
binding on the Borrower except in the case of manifest error.
"Fee Letter" means the letter agreement among the Borrower, the Agent
and each Lender Agent related to fees payable to each Lender Group in connection
with the Transaction Documents.
"Funding Agreement" means any agreement or instrument executed by a
Conduit Lender and executed by or in favor of any Funding Source or executed by
any Funding Source at the request of such Conduit Lender.
"Funding Document" means a Funding Agreement or this Agreement.
I-7
"Funding Source" means any insurance company, bank or other financial
institution providing liquidity, back-up purchase or credit support for a
Conduit Lender.
"GAAP" means generally accepted accounting principles in the USA,
applied on a consistent basis.
"German Purchase Agreement" means the Purchase Agreement dated as of
January 22, 2002, between Agere Systems Deutschland GmbH & Co. KG and the
Borrower.
"Governmental Authority" means any (a) Federal, state, municipal or
other governmental entity, board, bureau, agency or instrumentality, (b)
administrative or regulatory authority (including any central bank or similar
authority) or (c) court, judicial authority or arbitrator, in each case, whether
foreign or domestic.
"Initial Collection Agent" is defined in the first paragraph hereof.
"Instructing Group" means the Lender Agents representing Lender Groups
with more than 50% of the Commitments.
"Insurance Limit" means, as of any date, the "Policy Limit of Liability"
as defined in the Policy less the total dollar amount of claim payments made
under the Policy.
"Insurance Payments" means all amounts paid by the Insurer under the
Policy with respect to Receivables.
"Insured Receivable" means that portion of any Receivable which is
insured without deductible or co-insurance under the Policy and the Optical
Policy.
"Insurer" means National Union Fire Insurance Company of Pittsburgh,
Pennsylvania.
"Insurer Default" means the occurrence of any event specified in clauses
(l), (m) or (n) of the definition of Termination Event.
"Intended Tax Characterization" is defined in Section 9.9.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of
the date hereof among the Agent, the Borrower, the Initial Collection Agent and
The Chase Manhattan Bank, as Bank Administrative Agent.
"Interest" means, for any Tranche Period, (a) the product of (i) the
Interest Rate for such Tranche Period, (ii) the total amount of Loan Amount
allocated to the Tranche Period, and (iii) the number of days elapsed during
such Tranche Period divided by (b) 360.
"Interest Period" means, with respect to any Settlement Date or the
Liquidity Termination Date, the period from and including the preceding
Settlement Date (or if none, the
I-8
date that the first Loan is made hereunder) to but not including such Settlement
Date or Liquidity Termination Date, as applicable.
"Interest Rate" is defined in the applicable Rate Supplement.
"Interest Reserve" means, at any time, the product of (a) Adjusted LIBOR
for the most recent Settlement Period plus 2.00% multiplied by (b) Aggregate
Loan Amount multiplied by (c) a fraction, the numerator of which is the Turnover
Ratio and the denominator of which is 360.
"Joinder Agreement" means an agreement substantially in the form of
Exhibit K hereto pursuant to which a Lender Group becomes party to this
Agreement.
"Lender Agent" means each Person party to this Agreement and listed as
such on Schedule II hereto and each other Person who becomes a party to this
Agreement as a Lender Agent pursuant to a Transfer Supplement or a Joinder
Agreement.
"Lender Agent's Account" means, with respect to each Lender Agent, the
account designated to the Borrower and the Lenders in such Lender Agent's Lender
Group by such Lender Agent.
"Lender Group" means, for each Conduit Lender, such Conduit Lender, its
Related Committed Lenders (if any), and the purchasers party to its Transfer
Agreement.
"Lenders" means the Conduit Lenders and the Related Committed Lenders.
"LIBOR" means, for any Settlement Period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) for deposits in Dollars for a period equal to such Settlement Period,
which appears on Page 3750 of the Telerate Service (or any successor page or
successor service that displays the British Bankers' Association Interest
Settlement Rates for Dollar deposits) as of 11:00 a.m. (London, England time)
two Business Days before the commencement of such Settlement Period. If for any
Settlement Period no such displayed rate is available (or, for any other period,
if such displayed rate is not available or the need to calculate LIBOR is not
notified to the Agent at least 3 Business Days before the commencement of the
period for which it is to be determined), the Agent shall determine such rate
based on the rates WestLB is offered deposits of such duration in the London
interbank market.
"Limited Guaranty" means the Limited Guaranty, dated the date hereof, by
the Parent in favor of the Borrower.
"Liquidity Termination Date" means the earliest of (a) the date of the
occurrence of a Termination Event described in clause (e) of the definition of
Termination Event, (b) the date designated by the Agent (at the direction of the
Instructing Group) to the Borrower at any time after the occurrence of any other
Termination Event, (c) the Business Day designated by the Borrower with no less
than thirty (30) Business Days prior notice to the Agent and (d) January 21,
2003.
I-9
"Loan" is defined in Section 1.1(a).
"Loan Amount" means, for each Lender, (a) the sum of (i) all Loans by
such Lender and (ii) the aggregate amount of any payments or exchanges made by,
or on behalf of, such Lender to any other Lender to acquire Loan Amount from
such other Lender minus (b) all Collections, amounts received from other Lenders
and other amounts received or exchanged and, in each case, applied by the Agent
or such Lender to reduce such Lender's Loan Amount. A Lender's Loan Amount shall
be restored to the extent any amounts so received or exchanged and applied are
rescinded or must be returned for any reason.
"Loan Date" is defined in Section 1.1(c).
"Loan Limit" means $200,000,000 as such amount may be reduced pursuant
to Section 1.6, or increased through the addition of one or more Lender Groups
pursuant to a Joinder Agreement.
"Lock-Box" means each post office box or bank box listed on Exhibit F,
as revised pursuant to Section 5.1(i).
"Lock-Box Account" means each account maintained by the Collection
Agent at a Lock-Box Bank for the purpose of receiving or concentrating
Collections.
"Lock-Box Agreement" means each agreement between the Collection Agent
and a Lock-Box Bank concerning a Lock-Box Account.
"Lock-Box Bank" means each bank listed on Exhibit F, as revised
pursuant to Section 5.1(i).
"Lock-Box Letter" means a letter in substantially the form of Exhibit G
(or otherwise acceptable to the Agent) from the Borrower and the Collection
Agent to each Lock-Box Bank, acknowledged and accepted by such Lock-Box Bank and
the Agent.
"Loss and Dilution Reserve" means, at any time, the product of (i) the
greater of (a) 10% and (b) the sum of (x) two times the average Delinquency
Ratio for the most recent three Settlement Periods plus (y) two times the
average Dilution Ratio for the most recent three Settlement Periods multiplied
by (ii) the Eligible Receivables Balance at such time.
"Lucent" means Lucent Technologies Inc.
"Material Adverse Effect" means, with respect to the Borrower, a
material adverse effect on (i) the ability of the Borrower to perform its
obligations under any Transaction Document, (ii) the legality, validity or
enforceability of any Transaction Document, (iii) the interest of the Borrower,
the Agent, the Lender Agents or the Lenders in any Receivables, the Related
Security or the Collections with respect thereto, (iv) the collectibility of any
Receivables, (v) the enforceability of the Policy, or (vi) the enforceability of
the Optical Policy. It is understood that
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a change in the debt ratings of the Parent does not, in and of itself,
constitute a Material Adverse Effect.
"Matured Aggregate Loan Amount" means, at any time, the Matured Value of
each Conduit Lender's Loan Amount plus the total Loan Amounts of all other
Lenders then outstanding.
"Matured Value" means, of any Loan Amount, the sum of such Loan Amount
and all unpaid Interest scheduled to become due (whether or not then due) on
such Loan Amount during all Tranche Periods to which any portion of such Loan
Amount has been allocated.
"Maximum Loan Amount" means, at any time, the lesser of (a) the
difference between the Loan Limit and the Aggregate Loan Amount then outstanding
and (b) the difference between the Aggregate Commitment and the Matured
Aggregate Loan Amount then outstanding.
"Money Market Account" means each money market account maintained by the
Borrower and listed on Exhibit D, as amended, modified or supplemented from time
to time with the consent of the Agent.
"Monthly Report" is defined in Section 3.3.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Receivables Balance" means the lesser of (i) the Eligible
Receivables Balance and (ii) the Insurance Limit.
"Obligor" means, for any Receivable, each Person obligated to pay such
Receivable and each guarantor of such obligation other than the Insurer.
"Optical" means Optical Insurance Co.
"Optical Payments" means all amounts paid by Optical under the Optical
Policy with respect to Receivables.
"Optical Policy" means the Comprehensive Credit Insurance
Difference-In-Conditions Form Policy No. OP-TRCD-DIC-1-01-22-02, dated January
22, 2002, issued by Optical to the Borrower, including all attachments, records
of understanding and endorsements thereto, attached hereto as Exhibit L, as
amended from time to time with the consent of the Agent.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Originator" means each of the following persons: the Parent, Agere
Systems Ltd., Agere Systems Deutschland GmbH & Co. KG, Agere Systems Singapore
Pte. Ltd. and (following the Effective Date as defined in the Purchase Agreement
between the Borrower and Ortel dated as of even date herewith) Ortel.
I-11
"Originator Entity" means the Parent and the Originators.
"Ortel" means ▇▇▇▇▇ Corporation, a Delaware corporation.
"Paradigm" is defined in the first paragraph of the Agreement.
"Parent" means Agere Systems Inc., a Delaware corporation.
"Periodic Report" is defined in Section 3.3.
"Permitted Investments" shall mean (a) evidences of indebtedness,
maturing not more than thirty (30) days after the date of purchase thereof,
issued by, or the full and timely payment of which is guaranteed by, the full
faith and credit of, the federal government of the United States of America, (b)
repurchase agreements with banking institutions or broker-dealers that are
registered under the Securities Exchange Act of 1934 fully secured by
obligations of the kind specified in clause (a) above, (c) money market funds
denominated in Dollars rated not lower than A-1 (and without the "r" symbol
attached to any such rating) by S&P and P-1 by Moody's or otherwise acceptable
to the Rating Agencies or (d) commercial paper denominated in Dollars issued by
any corporation incorporated under the laws of the United States or any
political subdivision thereof, provided that such commercial paper is rated at
least A-1 (and without any "r" symbol attached to any such rating) thereof by
S&P and at least Prime-1 thereof by Moody's.
"Person" means an individual, partnership, corporation, limited
liability company, association, joint venture, Governmental Authority or other
entity of any kind.
"Policy" means Comprehensive Credit Insurance Policy No. 649-9309, dated
January 22, 2002, issued by the Insurer to the Borrower, including all
attachments, records of understanding and endorsements thereto, attached hereto
as Exhibit M, as amended from time to time with the consent of the Agent.
"Potential Termination Event" means any Termination Event or any event
or condition that with the lapse of time or giving of notice, or both, would
constitute a Termination Event.
"Prime Rate" means (a), for any period, the daily average during such
period of (x) the greater of (i) the floating commercial loan rate per annum of
WestLB (which rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer by WestLB) publicly
announced from time to time as its prime rate or equivalent for Dollar loans in
the USA, changing as and when said rate changes and (ii) the Federal Funds Rate
plus 0.75% plus (y) during the pendency of a Termination Event, 2.00% or (b)
with respect to any Prime Tranche, the "Prime Rate" specified in the applicable
Rate Supplement.
"Purchase Agreement" means each Purchase Agreement, Purchase Framework
Agreement or Purchase and Contribution Agreement (including without limitation
the German Purchase Agreement) dated as of the date hereof between the Borrower
and an Originator, as amended.
I-12
"Purchased Percentage" means, for any Put, for each Committed Lender,
its Commitment Percentage or such lesser percentage as is necessary to prevent
the Purchase Price of such Lender from exceeding its Unused Commitment.
"Put" is defined in Section 2.1(a).
"Ratable Share" means, for each Lender Group, such Lender Group's
aggregate Commitments divided by the aggregate Commitments of all Lender Groups.
"Rate Supplement" means, with respect to any Lender Group, each
agreement among the Borrower, the Collection Agent, a Lender Agent and the
Related Committed Lenders in such Lender Group designated a "Rate Supplement"
for purposes of this Agreement.
"Rating Agency" means, for any Conduit Lender, each rating agency such
Conduit Lender chooses to rate its commercial paper notes.
"Ratings" means, for any Conduit Lender, the ratings by the Rating
Agencies of the indebtedness for borrowed money of such Conduit Lender.
"Receivable" means the indebtedness of any Obligor under a Contract
other than (i) any indebtedness of an Obligor (other than Lucent and its
wholly-owned Subsidiaries) that is an Affiliate of the Borrower, the Initial
Collection Agent or any Originator Party and (ii) any indebtedness denominated
in a currency other than U.S. dollars. On and after the Liquidity Termination
Date, the term "Receivable" shall only include receivables existing on the date
the Liquidity Termination Date occurred. Deemed Collections shall reduce the
outstanding balance of Receivables hereunder, so that any Receivable that has
its outstanding balance deemed collected shall cease to be a Receivable
hereunder after (x) the Collection Agent receives payment of such Deemed
Collections under Section 1.5(b) or (y) if such Deemed Collection is received
before the Liquidity Termination Date, an adjustment to the Borrowing Base
permitted by Section 1.5(c) is made. Notwithstanding the foregoing, any
Receivable which has been paid in full from Insurance Payments or Optical
Payments shall be excluded from the definition of "Receivables" immediately upon
such payment, and such Receivable, together with all Related Security and
Collections with respect thereto, shall be automatically released from the
security interest granted to the Agent hereunder.
"Records" means, for any Receivable, all contracts, books, records and
other documents or information (including computer programs, tapes, disks,
software and related property and rights) relating to such Receivable or the
related Obligor.
"Related Committed Lenders" is defined in the preamble.
"Related Security" means with respect to any Receivable:
(i) all of the Borrower's interest in any merchandise
(including returned merchandise) relating to any sale giving rise to
such Receivable;
I-13
(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 signed by an
Obligor describing any collateral securing such Receivable;
(iii) all guaranties, 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; and
(iv) the Contract and all other books, records and other
information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and
rights) relating to such Receivable and the related Obligor but
excluding any computer programs and data processing software, that are
subject to license agreements which prohibit any Borrower, as licensee,
from granting an interest therein as contemplated by this Agreement and
the applicable Purchase Agreement.
"Required Conduit Ratings" means (i) with respect to ▇▇▇▇▇▇▇▇, "▇-▇" by
S&P, "F-1" by Fitch and "P-1" by ▇▇▇▇▇'▇ and (ii) with respect to Beethoven,
"A-1" by S+P "P-1" by ▇▇▇▇▇'▇.
"Reserve Percentage" means, at any time, the quotient obtained by
dividing (a) the Aggregate Reserve by (b) the Eligible Receivables Balance.
"Settlement Date" means the 9th day of each calendar month.
"Settlement Period" means for each Settlement Date, the calendar month
preceding such Settlement Date.
"S&P" means Standard & Poor's Ratings Services.
"Subordinated Note" means each subordinated revolving promissory note
issued by the Borrower to the Originator under a Purchase Agreement.
"Subsidiary" means any Person of which at least a majority of the voting
stock (or equivalent equity interests) is owned or controlled by the Borrower or
any Originator Entity or by one or more other Subsidiaries of the Borrower or
such Originator Entity.
"Taxes" means all taxes, charges, fees, levies or other assessments
(including income, gross receipts, profits, withholding, excise, property,
sales, use, license, occupation and franchise taxes and including any related
interest, penalties or other additions) imposed by any jurisdiction or taxing
authority (whether foreign or domestic).
I-14
"Termination Event" means the occurrence of any one or more of the
following:
(a) any representation, warranty, certification or statement
made by the Borrower or any Originator Entity in, or pursuant to, any
Transaction Document proves to have been incorrect in any material
respect as of the date when made or deemed made (including pursuant to
Section 7.2) (unless the breach of such representation, warranty,
certification or statement is capable of being cured and is in fact
cured (without any adverse impact on the Lenders or the collectibility
of the Receivables) within three Business Days of the first date on
which the Borrower obtains actual knowledge or receives written notice
of such breach); or
(b) any Originator Entity or the Borrower fails to make any
payment or other transfer of funds hereunder when due (including any
payments under Section 1.5(a)) or the Parent fails to make any payment
under the Limited Guaranty when due, and, in each case, such failure
continues for three Business Days; or
(c) the Borrower fails to observe or perform any covenant or
agreement contained in Sections 5.1(b), 5.1(g), 5.1(i) or 5.1(j) of this
Agreement or Section 6.01 of the German Purchase Agreement; or
(d) the Borrower fails to observe or perform any other term,
covenant or agreement under any Transaction Document, and such failure
remains unremedied for ten Business Days or more after the Borrower
receives written notice of such failure from the Agent; or
(e) the Borrower, any Originator Entity or the Insurer
suffers a Bankruptcy Event; or
(f) the average Delinquency Ratio for the most recent three
Settlement Periods exceeds 8.5%, the average Dilution Ratio for the most
recent three Settlement Periods exceeds 13% for the most recent three
Settlement Periods, the average Charge-Off Ratio at the end each of the
three most recent Settlement Periods exceeds 2.0%, or the average
Turnover Ratio for the most recent three Settlement Periods exceeds 75
days; or
(g) (i) the Borrower, any Originator Entity or any
Affiliate, directly or indirectly, disaffirms or contests the validity
or enforceability of any Transaction Document or (ii) any Transaction
Document fails to be the enforceable obligation of the Borrower or any
Affiliate party thereto: or
(h) the Collection Agent shall, directly or indirectly,
enter into or otherwise consent to an amendment, supplement or any other
modification of any credit agreement, reimbursement agreement, note
purchase agreement or other agreement or instrument under which,
directly or indirectly, any person undertakes to make or provide funds
to make payment of debt of, or to purchase assets of, the Borrower, any
Originator or the Parent, as applicable, which includes a provision
permitting termination and/or
I-15
acceleration of such credit facilities or the debt issued thereunder as a result
of downgrade of the Debt Rating of the Parent or a withdrawal or suspension of
any such Debt Rating; or
(i) the Parent shall fail to own and control, directly or
indirectly, 100% of the outstanding voting stock of the Borrower; or
(j) an "Event of Default" under and as defined in the Agere
Credit Facility; or
(k) the Insurer's financial strength rating is less than AA-
by S&P and Aa3 by ▇▇▇▇▇'▇ (or S&P or ▇▇▇▇▇'▇ has withdrawn or suspended
such rating); or
(l) (i) the Insurer shall fail to make any payment with
respect to a claim submitted under the Policy within 30 days of its
receipt of such claim and such claim shall not have been paid under the
Optical Policy within such 30 day period or (ii) Optical shall fail to
make any payment under the Optical Policy within 30 days of its receipt
of such claim; or
(m) any Governmental Authority shall assert or find any
material provision of the Policy at any time, for any reason, invalid
and not binding on the Insurer or declare any provision of the Policy
null and void or any Governmental Authority shall assert of find any
material provision of the Optical Policy at any time, for any reason,
invalid and not binding on Optical or declare any provision of the
Optical Policy null and void; or
(n) the Insurer shall in writing deny that it has any
liability under the Policy or the Policy shall expire, terminate or
otherwise be cancelled or Optical shall in writing deny that it has any
liability under the Optical Policy or the Optical Policy shall expire,
terminate or otherwise be cancelled; or
(o) either a Collection Agent Replacement Event or an "Event
of Termination" under and as defined in any Purchase Agreement has
occurred and is continuing.
Notwithstanding the foregoing, a failure of a representation or warranty or
breach of any covenant described in clause (a), (c) or (d) above related to a
Receivable shall not constitute a Termination Event if the Borrower has been
deemed to have collected such Receivable pursuant to Section 1.5(b) or, before
the Liquidity Termination Date, has adjusted the Borrowing Base as provided in
Section 1.5(c) so that such Receivable is no longer considered to be
outstanding.
"Tranche" means a portion of a Loan allocated to a Tranche Period
pursuant to Section 1.3. A Tranche is a (i) CP Tranche, (ii) Eurodollar Tranche
or (iii) Prime Tranche depending whether Interest accrues during its Tranche
Period based on a (i) CP Rate, (ii) Eurodollar Rate, or (iii) Prime Rate.
I-16
"Tranche Period" means a period of days ending on a Business Day
selected pursuant to Section 1.3, which (i) for a CP Tranche shall not exceed
270 days, (ii) for a Eurodollar Tranche shall not exceed 180 days, and (iii) for
a Prime Tranche shall not exceed 30 days.
"Transaction Documents" means this Agreement, the Fee Letter, the
Limited Guaranty, the Purchase Agreements, the Intercreditor Agreement, the
Subordinated Notes, the Transfer Agreements, the Policy, the Optical Policy, the
Rate Supplements and all other documents, instruments and agreements executed or
furnished in connection herewith and therewith.
"Transfer Agreement" means each transfer or asset purchase agreement
entered into among a Conduit Lender, its Lender Agent and its Related Committed
Lenders in connection with this Agreement.
"Transfer Supplement" is defined in Section 9.8.
"Turnover Ratio" means with respect to any Settlement Period, an amount,
expressed in days, obtained by multiplying (a) a fraction, (i) the numerator of
which is equal to the aggregate Outstanding Balance of the Receivables on the
first day of such Settlement Period and (ii) the denominator of which is equal
to Collections on the Receivables during such Settlement Period multiplied by
(b) 30.
"UCC" means, for any state, the Uniform Commercial Code as in effect in
such state.
"Uninsured Excess" means the positive difference, if any, obtained by
subtracting the Insurance Limit from the Eligible Receivables Balance.
"USA" means the United States of America (including all states and
political subdivisions thereof).
"Unused Aggregate Commitment" means, at any time, the difference between
the Aggregate Commitment then in effect and the outstanding Matured Aggregate
Loan Amount.
"Unused Commitment" means, for any Committed Lender at any time, the
difference between its Commitment and its Loan Amount then outstanding.
"WestLB" means Westdeutsche Landesbank Girozentrale, New York Branch in
its individual capacity and not in its capacity as the Agent.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
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SCHEDULE II
LENDERS
COMMITMENT(S) OF
CONDUIT LENDER RELATED COMMITTED LENDER(S) RELATED COMMITTED LENDER(S)
-------------- --------------------------- ---------------------------
Paradigm Funding LLC Westdeutsche Landesbank $100,000,000
Girozentrale, New York Branch
Beethoven Funding Corporation Dresdner Bank AG, New York Branch $100,000,000