EXHIBIT A
Exhibit 10(a)(1)
SECOND AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT(1)
Dated as of June 14, ▇▇▇▇
▇▇▇▇▇
▇▇▇ FUNDING, INC.
as Seller
SCI TECHNOLOGY, INC.
as initial Servicer
SCI SYSTEMS, INC.
as Guarantor
RECEIVABLES CAPITAL CORPORATION,
as Exiting Purchaser
QUINCY CAPITAL CORPORATION
and
AMSTERDAM FUNDING CORPORATION
as Conduit Purchasers
and
BANK OF AMERICA, NATIONAL ASSOCIATION
and
ABN AMRO BANK N.V.
----------
(1) Conformed as amended by the Second Amendment dated as of August 10, 2001.
as Bank Purchasers
BANK OF AMERICA, NATIONAL ASSOCIATION
as Administrative Agent
TABLE OF CONTENTS
Section Page
ARTICLE I
PURCHASES AND REINVESTMENTS..............................................2
1.01. Purchases and Reinvestments..................................2
1.02. Purchase and Reinvestment Limits.............................4
1.03. Making Purchases from Seller.................................4
1.04. Assignment...................................................5
1.05. Facility Termination Date....................................5
1.06. Purchase Termination Date....................................5
1.07. Voluntary Termination of Facility or
Reduction of Maximum Purchase Limit..........................5
1.08. Limitation of Ownership Interest.............................6
1.09. Assignments on Closing Date..................................6
1.10. Assignment by Quincy to its Bank Purchasers..................6
1.11. Downgrade of Bank Purchaser..................................7
1.12. Non-Renewing Bank Investors.................................10
ARTICLE II
UNDIVIDED INTEREST AND PURCHASERS' SHARE................................11
2.01. Undivided Interest..........................................11
2.02. Required Allocation.........................................11
2.03. Purchaser's Investment......................................12
2.04. Net Pool Balance............................................13
2.05. Purchasers' Share...........................................14
ARTICLE III
SETTLEMENTS.............................................................14
3.01. Non-Run Off Settlement Procedures for Collections...........14
3.02. Run Off Settlement Procedures for Collections...............16
3.03. Special Settlement Procedures; Reduction of
Purchaser's Investment, Etc.................................16
3.04. Reporting...................................................19
3.05. Payments and Computations, Etc..............................19
3.06. Treatment of Collections and Deemed Collections.............20
ARTICLE IV
FEES AND YIELD PROTECTION...............................................20
4.01. Fees........................................................20
4.02. Yield Protection............................................20
ARTICLE V
CONDITIONS TO EFFECTIVENESS OF PURCHASES................................22
5.01. Conditions Precedent to Initial Purchase....................22
5.02. Conditions Precedent to All Purchases and Reinvestments.....24
ARTICLE VI
REPRESENTATIONS AND WARRANTIES..........................................24
6.01. Representations and Warranties - Seller.....................24
6.02. Representations and Warranties - SCI........................27
6.03. Representations and Warranties - Guarantor..................29
ARTICLE VII
GENERAL COVENANTS.......................................................31
7.01. Affirmative Covenants.......................................31
7.02. Reporting Requirements......................................34
7.03. Negative Covenants..........................................36
7.04. Separate Corporate Existence................................37
7.05. Financial Covenants.........................................39
ARTICLE VIII
ADMINISTRATION AND COLLECTION...........................................39
8.01. Designation of Servicer.....................................39
8.02. Duties of Servicer..........................................40
8.03. Rights of the Administrative Agent..........................41
8.04. Responsibilities of Seller..................................43
8.05. Further Action Evidencing Purchases.........................43
ii
8.06. Application of Collections..................................44
ARTICLE IX
SECURITY INTEREST........................................................45
9.01. Grant of Security Interest..................................45
9.02. Further Assurances..........................................45
9.03. Remedies....................................................45
ARTICLE X
TERMINATION EVENTS.......................................................45
10.01. Termination Events..........................................45
10.02. Remedies....................................................48
ARTICLE XI
THE ADMINISTRATIVE AGENT.................................................48
11.01. Authorization and Action....................................48
11.02. Administrative Agent's Reliance, Etc........................48
11.03. Administrative Agent and Affiliates.........................49
11.04. Seller's Failure to Perform.................................49
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST.......................................49
12.01. Restrictions on Assignments.................................49
12.02. Rights of Assignee..........................................50
12.03. Notice of Assignment........................................50
12.04. Evidence of Assignment......................................50
ARTICLE XIII
INDEMNIFICATION..........................................................50
13.01. Indemnities.................................................50
ARTICLE XIV
GUARANTEE...............................................................53
14.01. Guarantee...................................................53
iii
14.02. Maintenance of Ownership....................................55
14.03. Representation and Warranty.................................55
14.04. Subrogation.................................................55
ARTICLE XV
MISCELLANEOUS...........................................................55
15.01. Amendments, Etc.............................................55
15.02. Notices, Etc................................................56
15.03. No Waiver; Remedies.........................................56
15.04. Binding Effect; Survival....................................56
15.05. Costs, Expenses and Taxes...................................57
15.06. No Proceedings..............................................57
15.07. Confidentiality of Information..............................57
15.08. Captions and Cross References...............................60
15.09. Integration.................................................60
15.10. Governing Law...............................................60
15.11. Waiver Of Jury Trial........................................60
15.12. Consent To Jurisdiction; Waiver Of Immunities...............60
15.13. Execution in Counterparts...................................61
15.14. Originators.................................................61
15.15. Confidentiality of SCI Information..........................61
15.16. Funding.....................................................62
15.17. Sharing of Payments, Etc....................................62
15.18. Excess Funds................................................62
APPENDICES
APPENDIX A - DEFINITIONS.....................................................A-1
APPENDIX B - CALCULATION OF DISCOUNT AND RESERVE.............................B-1
SCHEDULE I - Commitments
iv
SCHEDULES
---------
SCHEDULE 2.04(c) Special Concentration Limits
SCHEDULE 6.01(d) Litigation
SCHEDULE 6.01(k) List of Offices of Seller where Records Are Kept
SCHEDULE 6.01(l) List of Lock-Box Banks
SCHEDULE 6.01(m)-1 Forms of Contracts
SCHEDULE 6.01(m)-2 Description of Credit and Collection Procedure
SCHEDULE 15.02 Addresses
EXHIBITS
--------
EXHIBIT 1.03(a) Form of Purchase Notice
EXHIBIT 3.04(a) Form of Periodic Report
EXHIBIT 5.01(i) Form of Lock-Box Agreement
EXHIBIT 12.04 Form of Assignment (for assignment to third
party)
EXHIBIT I-1 Form of Guaranty
v
SECOND AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of June 14, 2000
THIS IS A SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT,
among SCI FUNDING, INC., a Delaware corporation ("Seller"), SCI TECHNOLOGY,
INC., an Alabama corporation ("SCI"), SCI SYSTEMS, INC., a Delaware corporation
(together with its successors and permitted assigns, "Guarantor"), RECEIVABLES
CAPITAL CORPORATION, a Delaware corporation ("RCC" or "Exiting Purchaser"),
QUINCY CAPITAL CORPORATION, a Delaware corporation, ("Quincy"), AMSTERDAM
FUNDING CORPORATION, a Delaware corporation ("Amsterdam", and together with
Quincy , individually a "Conduit Purchaser" and collectively the "Conduit
Purchasers"), BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking
association ("BofA"), ABN AMRO BANK N.V., a bank organized under the laws of The
Netherlands ("ABN", and together with BofA , individually a "Bank Purchaser" and
collectively the "Bank Purchasers", and together with the Conduit Purchasers,
individually a "Purchaser" and collectively the "Purchasers"), and BANK OF
AMERICA, NATIONAL ASSOCIATION, a national banking association, as administrative
agent for the Purchasers (together with its successors and assigns, in such
capacity, the "Administrative Agent"). Unless otherwise indicated, capitalized
terms used in this Agreement are defined in Appendix A.
Background
1. SCI, Guarantor, RCC and the Administrative Agent entered into a
Receivables Purchase Agreement, dated as of June 30, 1995, which was amended and
restated pursuant to the Amended and Restated Receivables Purchase Agreement,
dated as of September 27, 1996 (as heretofore amended, the "Original Receivables
Agreement"). RCC has assigned all of its right, title and interest hereunder to
Quincy.
2. The parties hereto desire to amend and restate the Original Receivables
Agreement in its entirety as set forth herein .
3. Seller has, and expects to have, Pool Receivables in which Seller
intends to sell an undivided interest. Seller has requested the Conduit
Purchasers, and the Conduit Purchasers may,
1
subject to the terms and conditions contained in this Agreement, fund the
purchase of such undivided interest, referred to herein as the Undivided
Interest, from Seller from time to time during the term of this Agreement. In
the event that any Conduit Purchaser decides not to fund a Purchase or
Reinvestment hereunder, subject to the terms and conditions contained in this
Agreement, such Conduit Purchaser's Related Bank Purchasers shall fund such
Purchase or Reinvestment.
4. Seller and Purchasers also desire that, subject to the terms and
conditions of this Agreement, certain of the daily Collections be reinvested in
Pool Receivables through the sale by Seller to the Administrative Agent, for the
benefit of the Purchasers, of additional undivided interests in the Pool
Receivables, such daily reinvestment of Collections to be effected by an
automatic daily adjustment to the Undivided Interest, and to be intended to
permit each Purchaser then funding a portion of the Undivided Interest to
maintain its Purchaser's Investments fully invested in uncollected Pool
Receivables.
5. The Conduit Purchasers expect generally to fund their respective
Purchases and Reinvestments through the issuance of Commercial Paper Notes. Each
Conduit Purchaser has entered into Program Support Agreements providing for the
purchase by a Program Support Provider of, or the making by a Program Support
Provider of loans secured by, such Conduit Purchaser's portion of the Undivided
Interest in the event such Conduit Purchaser is unable or unwilling to fund its
Purchases or Reinvestments pursuant to this Agreement by the issuance of
Commercial Paper Notes or otherwise prefers to fund such Purchases or
Reinvestments under its Program Support Agreements rather than by the issuance
of Commercial Paper Notes, or is unable to pay such Commercial Paper Notes at
maturity from the proceeds of Collections.
6. BofA has been requested, and is willing, to act as the Administrative
Agent.
7. It is a condition precedent for Purchasers and the Administrative Agent
to enter into this Agreement that Guarantor guaranty the performance of SCI and
the Originators under the Agreement Documents, and Guarantor is willing to
guaranty such performance, in each case upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby amend
and restate the Original Receivables Agreement in its entirety, and hereby
agree, as follows:
2
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. Purchases and Reinvestments. On the terms and subject to the
conditions set forth in this Agreement (including Article V):
(a) Purchases. Each Conduit Purchaser may, in its sole discretion,
fund purchases from Seller of the Undivided Interest or increases therein
from time to time during the period from the date hereof to the Purchase
Termination Date. In the event that a Conduit Purchaser decides not to
fund a Purchase or a Reinvestment, such Conduit Purchaser's Related Bank
Purchasers, subject to the terms and conditions of this Agreement, shall
fund such Purchase. Each such purchase and, as the context may require,
the purchase price paid by the Purchasers funding such purchase to Seller
in respect thereof (determined pursuant to Section 1.03(b)), is herein
called a "Purchase".
(b) Reinvestments. Pursuant to Section 3.01, during the period from
the date hereof to the Facility Termination Date, each Conduit Purchaser
may, in its sole discretion, permit Servicer to cause certain of the
Collections in respect of its Funded Percentage of the Undivided Interest
to be applied to the purchase of additional undivided interests in the
Pool Receivables, thereby resulting in an appropriate readjustment of the
Undivided Interest. Pursuant to Section 3.01, but subject to the terms and
conditions set forth herein, during the period from the date hereof to the
Facility Termination Date, each Bank Purchaser shall permit Servicer to
cause certain of the Collections in respect of its Funded Percentage of
the Undivided Interest to be applied to the purchase of additional
undivided interests in the Pool Receivables, thereby resulting in an
appropriate readjustment of the Undivided Interest. Each such purchase of
an additional undivided interest pursuant to Section 3.01 is herein called
a "Reinvestment".
(c) Sale by Conduit Purchaser to Bank Purchaser. ▇▇▇▇▇▇ ▇▇▇ at any
time, at its discretion, sell all or any portion of its Funded Percentage
of the Undivided Interest to its Related Bank Purchasers, and each Related
Bank Purchaser shall purchase from Quincy its Conduit Related Percentage
of the amount being so sold, (the related purchase price with respect to
such sale not to exceed the purchase price Quincy would have received
therefor under its Liquidity Agreement), provided that no Related Bank
Purchaser shall be obligated to make any such purchase (i) after such
Related Bank Purchaser's Support Termination Date; (ii) if Quincy is
subject to an Event of Bankruptcy at the time of such purchase or (iii) to
the extent that, after giving effect to such purchase, such Bank
Purchaser's outstanding Purchaser's Investment would exceed its
Commitment. Any such sale by Quincy shall be made upon notice
3
given to its Related Bank Purchasers no later than 12:00 noon (New York
time) on the date of such purchase.
Nothing set forth in this Agreement shall be deemed to be or shall be construed
as a commitment by any Conduit Purchaser to fund the purchase of, or increase
in, the Undivided Interest. However, so long as the conditions to Reinvestment
set forth in this Agreement are met, Servicer may presume that Collections may
be used to make Reinvestments on behalf of each Conduit Purchaser as provided
herein, absent notice from such Conduit Purchaser (through its Related
Administrator to the Administrative Agent) to the contrary (which notice may be
given at any time). Purchases and Reinvestments made hereunder shall be without
recourse with regard to Defaulted Receivables (except as otherwise specifically
provided in Article II of this Agreement in connection with the calculation of
the Undivided Interest).
SECTION 1.02. Purchase and Reinvestment Limits. Under no circumstances
shall any Purchaser fund any Purchase or Reinvestment to the extent that, after
giving effect to such Purchase or Reinvestment, as the case may be:
(a) Purchase Limit. The Total Purchasers' Investments would exceed
an amount (the "Purchase Limit") equal to $210,000,000, as such amount may
be reduced pursuant to Section 1.07;
(b) Required Allocation Limit. The Required Allocation would exceed
an amount (the "Required Allocation Limit") equal to 100% of the Net Pool
Balance;
(c) Percentage. Such Purchaser's Purchaser's Investment would exceed
an amount equal to such Purchaser's Percentage of the Total Purchasers'
Investments or the aggregate of the Purchaser's Investments for all
members of such Purchaser's Related Group would exceed an amount equal to
the Group Percentage of such Purchaser's Related Group of the Total
Purchasers' Investments;
(d) Commitment. Such Purchaser's Purchaser's Investment would exceed
an amount equal to such Purchaser's Commitment or the Purchaser's
Investments for all members of such Purchaser's Related Group would exceed
an amount equal to the aggregate Commitments of the Bank Purchasers in
such Purchaser's Related Group; or
(e) Coverage Limit. The sum of the Total Purchasers' Investments
plus the Earned Discount to accrue through the end of the applicable
Settlement Periods would exceed $214,200,000.
4
Each Purchaser's Commitment is several and not joint.
SECTION 1.03. Making Purchases from Seller. (a) Notice of Purchase. Each
Purchase from Seller shall be made on notice from Seller to the Administrative
Agent and each Related Administrator received not later than 11:00 a.m. (New
York time) on the Business Day next preceding the date of such proposed
Purchase. Each such notice of a proposed Purchase shall be in substantially the
form attached as Exhibit 1.03(a) and shall specify the desired amount and date
of such Purchase. In the event that a Conduit Purchaser elects not to fund such
Purchase hereunder, it shall notify Seller and the Administrative Agent thereof
by the close of business on the Business Day next preceding the date of proposed
Purchase.
(b) Amount of Purchase. The amount of each Purchase shall be equal to the
lesser of (x) the amount proposed by Seller pursuant to Section 1.03(a) and (y)
the maximum amount permitted under Section 1.02. All Purchases hereunder other
than on the date hereof shall be made by each Related Group on a pro rata basis
(based on the aggregate Percentages of the Bank Purchasers in each Related
Group).
(c) Funding of Purchase. On the date of each Purchase, each Conduit
Purchaser and/or each Bank Purchaser funding such Purchase shall, upon
satisfaction of the applicable conditions set forth in Article V, make available
to the Administrative Agent at the Administrative Agent's Account not later than
11:00 a.m. (New York time) the amount of its Purchase (determined pursuant to
Section 1.03(b)) in same day funds, and after receipt by the Administrative
Agent of such funds, the Administrative Agent will make such funds immediately
available to Seller at such office.
SECTION 1.04. Assignment. Seller hereby sells, assigns and transfers to
the Administrative Agent, for the benefit of the applicable Purchasers, the
Undivided Interest in the Pool.
SECTION 1.05. Facility Termination Date. (a) The "Facility Termination
Date" shall be the earlier to occur of (i) November 10, 2001 (herein, as the
same may be extended, called the "Scheduled Facility Termination Date"), and
(ii) the date of termination of the Facility pursuant to Section 1.07 or 10.02.
(b) The then Scheduled Facility Termination Date may be extended from time
to time for successive periods of 364 days by written notice of request given by
Seller to the Administrative Agent and each Bank Purchaser at least 90 days
prior to the then Scheduled Facility Termination Date and written notice of
acceptance given by each Bank Purchaser to the Administrative Agent and Seller
not later than 5 Business Days prior to such Scheduled Facility Termination
Date. Failure of any Bank Purchaser to respond in such time frame shall be
deemed to be a rejection of such request.
5
SECTION 1.06. Purchase Termination Date. (a) The "Purchase Termination
Date" shall be the earlier to occur of (i) the Facility Termination Date and
(ii) the date of termination of the purchase facility with respect to Purchases
pursuant to subsection (b).
(b) The Facility shall terminate with respect to Purchases by a Conduit
Purchaser on the scheduled date of termination of any Program Support Agreement
for such Conduit Purchaser. Each Conduit Purchaser agrees to give Seller at
least 30 days' prior written notice of the termination of the Facility (if such
date is earlier than the Purchase Termination Date) with respect to Purchases by
it pursuant to this clause (b), but no failure to give or delay in giving such
notice shall prevent or delay such termination.
SECTION 1.07. Voluntary Termination of Facility or Reduction of Maximum
Purchase Limit. Seller may, upon at least 30 days' prior written notice to the
Administrative Agent and each Bank Purchaser, terminate the Facility in whole or
reduce in part the unused portion of the Purchase Limit; provided, however, that
(a) each partial reduction shall be in an amount equal to $5,000,000 or an
integral multiple thereof and (b) after giving effect to such reduction, the
remaining Purchase Limit will not be less than $150,000,000. Any reduction of
the Purchase Limit shall be applied to reduce each Purchaser's Commitment on a
pro rata basis.
SECTION 1.08. Limitation of Ownership Interest. Nothing in this Agreement
shall be interpreted as providing the Administrative Agent or any Purchaser with
an ownership interest in any Receivables that are not Pool Receivables.
SECTION 1.09. Assignments on Closing Date. On the date that the conditions
precedent set forth in Sections 5.01 and 5.02 are satisfied (i) RCC shall assign
and transfer to Quincy all of its right, title and interest in the Undivided
Interest, and upon such assignment and transfer, RCC shall no longer be a
Purchaser hereunder and (ii) Quincy shall assign and transfer to the other
Conduit Purchasers, and the other Conduit Purchasers may purchase (and if any
Conduit Purchaser elects not to purchase, its Related Bank Purchaser shall
purchase) from Quincy, without recourse or warranty, a portion of Quincy's
right, title and interest in the Undivided Interest such that, after giving
effect thereto, the Funded Percentage of each Related Group equals its Group
Percentage.
SECTION 1.10. Assignment by Quincy to its Bank Purchasers.
(a) Assignment Amounts. At any time on or prior to the Support Termination
Date for the Bank Purchasers in the Quincy Related Group, if the Quincy's
Related Administrator on behalf of Quincy so elects, by written notice to the
Administrative Agent and the Bank Purchasers in the Quincy Related Group, Quincy
does hereby assign effective on the Assignment Date referred to below all or
such portions as may be elected by Quincy of its interest in its Purchaser's
Investment and the Undivided Interest at such time to its Bank Purchasers
pursuant
6
to this Section 1.10 and the Seller hereby agrees to pay the amounts described
in Section 1.10(b); provided, however, that unless such assignment is an
assignment of all of Quincy's interest in its Purchaser's Investment and the
Undivided Interest in whole on or after the date Quincy has provided written
notice to its Related Administrator that it elects, in its sole discretion, to
commence the amortization of its Purchaser's Investment (the "Conduit Investment
Termination Date"), no such assignment shall take place pursuant to this Section
1.10 if a Termination Event described in Section 10.1(h) shall then exist; and
provided, further, that no such assignment shall take place pursuant to this
Section 1.10 at a time when an Event of Bankruptcy with respect to Quincy
exists. No further documentation or action on the part of Quincy or the Seller
shall be required to exercise the rights set forth in the immediately preceding
sentence, other than the giving of the notice by the Related Administrator on
behalf of Quincy referred to in such sentence and the delivery by the Related
Administrator of a copy of such notice to each Related Bank Purchaser (the date
of the receipt by the Bank Purchasers of any such notice being the "Assignment
Date"). Each Related Bank Purchaser of Quincy hereby agrees, unconditionally and
irrevocably and under all circumstances, without setoff, counterclaim or defense
of any kind, to pay the full amount of its Assignment Amount on such Assignment
Date to Quincy in immediately available funds to an account designated by the
Administrative Agent. Upon payment of its Assignment Amount, each such Bank
Investor shall acquire an interest in Quincy's Purchaser's Investment equal to
its pro rata share (based on the outstanding portions funded by it) of such
Purchaser's Investment. Upon any assignment in whole by Quincy to its Related
Bank Purchasers on or after the Conduit Investment Termination Date as
contemplated hereunder, Quincy shall cease to make any additional Purchases or
Reinvestments hereunder. At all times prior to the Conduit Investment
Termination Date, nothing herein shall prevent Quincy from making a subsequent
Purchase or Reinvestment hereunder, in its sole discretion, following any
assignment pursuant to this Section 1.10 or from making more than one assignment
pursuant to this Section 1.10.
(b) Seller's Obligation to Pay Certain Amounts; Additional Assignment
Amount. The Seller shall pay to the Administrative Agent, for the account of
Quincy, in connection with any assignment by Quincy to its Related Bank
Purchasers pursuant to this Section 1.10, an aggregate amount equal to all
Earned Discount to accrue through the end of each outstanding Settlement Period
to the extent attributable to the portion of the Purchaser's Investment so
assigned to the Bank Purchasers (which Earned Discount shall be determined for
such purpose using the Commercial Paper Rate most recently determined by the
Related Administrator) (as determined immediately prior to giving effect to such
assignment), plus all other amounts owed to Quincy at such time (other than the
Purchaser's Investment and other than any Earned Discount not described above).
If the Seller fails to make payment of such amounts at or prior to the time of
assignment by Quincy to the Bank Purchasers, such amount shall be paid by the
Bank Purchasers (in accordance with their respective pro rata shares) to Quincy
as additional consideration for the interests assigned to the Bank Purchasers
and the amount of the "Purchaser's Investment"
7
hereunder held by the Bank Purchasers shall be increased by an amount equal to
the additional amount so paid by the Bank Purchasers.
(c) Administration of Agreement after Assignment from Quincy to Bank
Purchasers following the Conduit Investment Termination Date. After any
assignment in whole by Quincy to the Bank Purchasers pursuant to this Section
1.10 at any time on or after the Conduit Investment Termination Date (and the
payment of all amounts owing to Quincy in connection therewith), all rights of
the Related Administrator set forth herein shall be given to the Administrative
Agent on behalf of the Bank Purchasers instead of the Related Administrator.
(d) Payments to Agent's Account. After any assignment in whole by Quincy
to the Bank Purchasers pursuant to this Section 1.10 at any time on or after the
Conduit Investment Termination Date, all payments to be made hereunder by the
Seller or the Servicer to Quincy shall be made to the Administrative Agent's
account as such account shall have been notified to the Seller and the Servicer.
(e) Recovery of Purchaser's Investment. In the event that the aggregate of
the Assignment Amounts paid by the Bank Purchasers pursuant to this Section 1.10
on any Assignment Date occurring on or after the Conduit Investment Termination
Date is less than the Purchaser's Investment of Quincy on such Assignment Date,
then to the extent Collections thereafter received by the Administrative Agent
hereunder in respect of the Purchaser's Investment exceed the aggregate of the
unrecovered Assignment Amounts and Purchaser's Investment funded by the Bank
Investors, such excess shall be remitted by the Administrative Agent to Quincy.
SECTION 1.11. Downgrade of Bank Purchaser. (a) Downgrades Generally. If at
any time on or prior to the Support Termination Date for the Bank Purchasers in
the Quincy Related Group, the short term debt rating of any Bank Purchaser shall
be "A-2", "P-2" or "F-2" from S&P, ▇▇▇▇▇'▇ or Fitch, respectively, with negative
credit implications, such Bank Purchaser, upon request of the Related
Administrator, shall, within thirty (30) days of such request, assign its rights
and obligations hereunder to another financial institution (which institution's
short term debt shall be rated at least "A-2", "P-2" or "F-2" from S&P, ▇▇▇▇▇'▇
or Fitch, respectively, and which shall not be so rated with negative credit
implications and which is acceptable to Quincy and the Related Administrator).
If the short term debt rating of an Bank Purchaser shall be "A-3", "P-3" or
"F-3", or lower, from S&P, ▇▇▇▇▇'▇ or Fitch, respectively (or such rating shall
have been withdrawn by S&P or ▇▇▇▇▇'▇), such Bank Purchaser, upon request of the
Related Administrator, shall, within five (5) Business Days of such request,
assign its rights and obligations hereunder to another financial institution
(which institution's short term debt shall be rated at least "A-2", "P-2" or
"F-2", from S&P, ▇▇▇▇▇'▇ or Fitch, respectively, and which shall not be so rated
with negative credit implications and which is acceptable to Quincy and
8
the Related Administrator). In either such case, if any such Bank Purchaser
shall not have assigned its rights and obligations under this Agreement within
the applicable time period described above (in either such case, the "Required
Downgrade Assignment Period"), the Related Administrator on behalf of Quincy
shall have the right to require such Bank Purchaser to pay upon one (1) Business
Day's notice at any time after the Required Downgrade Assignment Period (and
each such Bank Purchaser hereby agrees in such event to pay within such time) to
the Related Administrator an amount equal to such Bank Purchaser's unused
Commitment (a "Downgrade Draw") for deposit by the Related Administrator into an
account, in the name of the Related Administrator (a "Downgrade Collateral
Account"), which shall be in satisfaction of such Bank Purchaser's obligations
to make Purchases and to pay its Assignment Amount upon an assignment from
Quincy in accordance with Section 1.10; provided, however, that if, during the
Required Downgrade Assignment Period, such Bank Purchaser delivers a written
notice to the Related Administrator of its intent to deliver a direct pay
irrevocable letter of credit pursuant to this proviso in lieu of the payment
required to fund the Downgrade Draw, then such Bank Purchaser will not be
required to fund such Downgrade Draw. If any Bank Purchaser gives the Related
Administrator such notice, then such Bank Purchaser shall, within one (1)
Business Day after the Required Downgrade Assignment Period, deliver to the
Related Administrator a direct pay irrevocable letter of credit in favor of the
Related Administrator in an amount equal to the unused portion of such Bank
Purchaser's Commitment, which letter of credit shall be issued through an United
States office of a bank or other financial institution (i) whose short-term debt
ratings by S&P and ▇▇▇▇▇'▇ are at least equal to the ratings assigned by such
statistical rating organization to the Commercial Paper and (ii) that is
acceptable to Quincy and the Related Administrator. Such letter of credit shall
provide that the Related Administrator may draw thereon for payment of any
Purchase or Assignment Amount payable by such Bank Purchaser which is not paid
hereunder when required, shall expire no earlier than the Support Termination
Date and shall otherwise be in form and substance acceptable to the Related
Administrator.
(b) Application of Funds in Downgrade Collateral Account. If any Bank
Purchaser shall be required pursuant to Section 1.11(a) to fund a Downgrade
Draw, then the Related Administrator shall apply the monies in the Downgrade
Collateral Account applicable to such Bank Purchaser's pro rata share of
Purchases required to be made by the Bank Purchasers in the Quincy Related
Group, to any Assignment Amount payable by such Bank Purchaser pursuant to
Section 1.10 and to any purchase price payable by such Bank Purchaser pursuant
to Section 1.12(b) at the times, in the manner and subject to the conditions
precedent set forth in this Agreement. The deposit of monies in such Downgrade
Collateral Account by any Bank Purchaser shall not constitute a Purchase or the
payment of any Assignment Amount (and such Bank Purchaser shall not be entitled
to interest on such monies except as provided below in this Section 1.11(b),
unless and until (and then only to the extent that) such monies are used to fund
Purchases or to pay any Assignment Amount or purchase price pursuant to Section
1.12(b) pursuant to the first sentence of this Section 1.11(b). The amount on
deposit in such Downgrade
9
Collateral Account shall be invested by the Related Administrator in eligible
investments and such eligible investments shall be selected by the Related
Administrator in its sole discretion. The Related Administrator shall remit to
such Bank Purchaser, on the last Business Day of each month, the income actually
received thereon. Unless required to be released as provided below in this
subsection, Collections received by the Related Administrator in respect of such
Bank Purchaser's Purchaser's Investment shall be deposited in the Downgrade
Collateral Account for such Bank Purchaser. Amounts on deposit in such Downgrade
Collateral Account shall be released to such Bank Purchaser (or the stated
amount of the letter of credit delivered by such Bank Purchaser pursuant to
subsection (a) above may be reduced) within one Business Day after each
Settlement Date following the Termination Date to the extent that, after giving
effect to the distributions made and received by the Purchasers on such
Settlement Date, the amount on deposit in such Downgrade Collateral Account
would exceed such Bank Purchaser's pro rata share (determined as of the day
prior to the Termination Date) of the sum of the Purchaser's Investment then
funded by Quincy, plus Earned Discount accrued and to accrue with respect
thereto. All amounts remaining in such Downgrade Collateral Account shall be
released to such Bank Purchaser no later than the Business Day immediately
following the earliest of (i) the effective date of any replacement of such Bank
Purchaser or removal of such Bank Purchaser as a party to this Agreement, (ii)
the date on which such Bank Purchaser shall furnish the Related Administrator
with confirmation that such Bank Purchaser shall have short-term debt ratings of
at least "A-2", "P-2" or "F-1" from S&P, ▇▇▇▇▇'▇ and Fitch, respectively,
without negative credit implications, and (iii) the Support Termination Date (or
if earlier, the Support Termination Date in effect prior to any renewal pursuant
to Section 1.12 which such Bank Purchaser does not consent, but only after
giving effect to any required purchase pursuant to Section 1.12(b)). Nothing in
this Section 3.2 shall affect or diminish in any way any such downgraded Bank
Purchaser's Commitment to the Seller or Quincy or such downgraded Bank
Purchaser's other obligations and liabilities hereunder and under the other
transaction documents.
(c) Program Support Agreement Downgrade Provisions. Notwithstanding the
other provisions of this Section 1.11, a Bank Purchaser shall not be required to
make a Downgrade Draw (or provide for the issuance of a letter of credit in lieu
thereof) pursuant to Section 1.11(a) at a time when such Bank Purchaser has a
downgrade collateral account (or letter of credit in lieu thereof) established
pursuant to its Program Support Agreement relating to the transactions
contemplated by this Agreement to which it is a party in an amount at least
equal to its unused Commitment, and the Related Administrator may apply monies
in such downgrade collateral account in the manner described in Section 1.12(b)
as if such downgrade collateral account were a Downgrade Collateral Account.
SECTION 1.12. Non-Renewing Bank Investors. If at any time the Seller
requests that the Bank Purchasers in the Quincy Related Group renew their
Commitments hereunder and some but less than all the Bank Purchasers consent to
such renewal within 30 days of the Seller's
10
request, the Seller may arrange for an assignment to one or more financial
institutions of all the rights and obligations hereunder of each such
non-consenting Bank Purchaser. Any such assignment shall become effective on the
then-current Support Termination Date. Each Bank Purchaser which does not so
consent to any renewal shall cooperate fully with the Seller in effectuating any
such assignment.
(b) If at any time the Seller requests that the Bank Purchasers in the
Quincy Related Group extend the Support Termination Date hereunder and some but
less than all the Bank Purchasers consent to such extension within 30 days after
the Seller's request, and if none or less than all the Commitments of the
non-renewing Bank Purchasers are assigned as provided in Section 1.12(a), then
(without limiting the obligations of all the Bank Purchasers to make Purchases
and pay any Assignment Amount prior to the Support Termination Date in
accordance with the terms hereof) ▇▇▇▇▇▇ ▇▇▇ sell an interest in its Purchaser's
Investment and Undivided Interest hereunder for an aggregate purchase price
equal to the lesser of (i) the maximum aggregate Assignment Amounts which would
be payable if Quincy assigned its entire interest in its Purchaser's Investment
and the Undivided Interest at that time under Section 1.10, and (ii) the
aggregate available Commitments of the non-renewing Bank Purchasers, which
purchase price shall be paid solely by the non-renewing Bank Purchasers, pro
rata according to their respective Commitments. Following the payment of such
purchase price, the extended Support Termination Date shall be effective with
respect to the renewing Bank Purchasers, this Agreement and the Commitments of
the renewing Bank Purchasers shall remain in effect in accordance with their
terms notwithstanding the expiration of the Commitments of the non-renewing Bank
Purchasers. Prior to the Termination Date, all amounts which are to be applied
in reduction of the Purchaser's Investment sold to the non-renewing Bank
Purchasers as described above in this subsection, shall be distributed to the
non-renewing Bank Purchasers ratably according to the aggregate Purchaser's
Investments held by them, in reduction of such Purchaser's Investments. On and
after the Termination Date, each non-renewing Bank Purchaser shall be entitled
to receive distributions as otherwise provided in Article III, such that all
distributions of Collections pursuant to Article III thereafter shall be
allocated among the non-renewing Bank Purchasers and the other Bank Purchasers
(based on the Purchaser's Investments as of the Termination Date). When (after
the expiration of the Commitments of the non-renewing Bank Purchasers) the
aggregate of the Purchaser's Investments described above in this subsection
shall have been reduced to zero and all accrued Earned Discount allocable
thereto and all other Aggregate Unpaids owing to such Bank Purchasers shall have
been paid to such Bank Purchasers in full, then such Bank Purchasers shall cease
to be parties to this Agreement for any purpose.
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ARTICLE II
UNDIVIDED INTEREST AND PURCHASERS' SHARE
SECTION 2.01. Undivided Interest. (a) Definition and Computation of
Undivided Interest. For purposes of this Agreement, "Undivided Interest" means,
as the context may require (i) an undivided ownership interest, in a percentage
determined from time to time as provided in clause (ii) below, in (A) all then
outstanding Pool Receivables, (B) all Related Security with respect to such Pool
Receivables, (C) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security and (D) all books and records (including,
without limitation, computer disks) related to the foregoing (collectively, the
"Pool"), and (ii) at any time, the quotient, expressed as a percentage, obtained
by dividing the Required Allocation by the Net Pool Balance. The Undivided
Interest shall be computed as follows:
UI = RA = PI + DF + CR + SFR
--- ------------------
NPB NPB
where:
-----
UI = the Undivided Interest at any time;
RA = the Required Allocation at such time, as determined pursuant to
Section 2.02; and
NPB = the Net Pool Balance at such time, as determined pursuant to Section
2.04.
(b) Frequency of Computation of Purchasers' Interest. The Undivided
Interest shall initially be computed by Servicer as of the opening of business
of Servicer on the date of each Purchase, and the Undivided Interest shall be
recomputed upon receipt of each Periodic Report. In addition, until the
Undivided Interest shall be reduced to zero, the Undivided Interest shall be
deemed to be automatically recomputed as of the close of business of Servicer on
each day (other than a day on which an actual recomputation is done), and, as so
recomputed, shall constitute the percentage ownership interest in Pool
Receivables held by the Administrative Agent, for the benefit of the Purchasers,
on such day. The Undivided Interest shall become zero at such time as each of
the Purchasers shall have received its accrued Earned Discount, shall have
recovered its Purchaser's Investment and shall have received all other amounts
payable to such Purchaser pursuant to this Agreement and Servicer shall have
received the accrued Servicer's Fee. The Undivided Interest shall remain
constant from the time as of which any such computation or recomputation is made
until the time as of which the next such recomputation, if any, shall be made.
SECTION 2.02. Required Allocation. The "Required Allocation" at any time
means an amount determined as follows:
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RA = PI + DF + CR + SFR
where:
RA = the Required Allocation at any time;
PI = the Total Purchasers' Investment at such time, as determined
pursuant to Section 2.03;
DF = the Discount Factor at such time, as determined pursuant to Part I
of Appendix B;
CR = the Credit Reserve at such time, as determined pursuant to Part II
of Appendix B;
SFR = the Servicer's Fee Reserve at such time, as determined pursuant to
Part IV of Appendix B; and
SECTION 2.03. Purchaser's Investment. (a) Subject to subsections (b) and
(c), "Purchaser's Investment" with respect to any Purchaser or its assignees at
any time means an amount equal to
(i) the aggregate of the amounts theretofore paid by such Purchaser
to Seller for the funding of a portion of the Undivided Interest (A) by
Purchases pursuant to Sections 1.01(a) and 1.03 and (B) by Reinvestments
pursuant to Sections 1.01(b) and 3.01, less
(ii) the aggregate amount of Collections (including Deemed
Collections) theretofore received and distributed to such Purchaser on
account of such Purchaser's Purchaser's Investment pursuant to Sections
3.01 and 3.02.
(b) Solely for purposes of calculating the Earned Discount (and each
component thereof) pursuant to the proviso to the definition of "Earned
Discount" in Appendix B:
(i) "Purchaser's Investment" of any portion of the Undivided
Interest owned by a Program Support Provider (or any permitted assignee
thereof) or otherwise funded by a Funding shall be deemed to be the amount
paid to the related Conduit Purchaser by such Program Support Provider as
the purchase price of, or the original principal amount loaned with
respect to, such portion, as reduced from time to time by Collections
received and distributed to such Program Support Provider (or such
assignee) on account of such Funding pursuant to Sections 3.01 and 3.02 or
by payments by or for the account of the related Conduit Purchaser to the
Program Support Provider in reimbursement of any Funding; and
13
(ii) "Purchaser's Investment" of any other portion of the Undivided
Interest with respect to any Conduit Purchaser shall mean such Conduit
Purchaser's Purchaser's Investment less the sum of Purchaser's Investments
of all portions of the Undivided Interest described in clause (i) above
with respect to such Conduit Purchaser, calculated in accordance with such
clause (i).
(c) No Purchaser's Investment shall be considered reduced by any
distribution of any portion of Collections if at any time such distribution is
rescinded or must otherwise be returned for any reason.
SECTION 2.04. Net Pool Balance. (a) The "Net Pool Balance" at any time
means an amount equal to
(i) the aggregate Unpaid Balance of the Eligible Receivables in the
Receivables Pool at such time, minus
(ii) the aggregate (for all Obligors) of the amounts by which (x)
the Unpaid Balance of all Pool Receivables of each Obligor exceeds (y) the
Concentration Limit for such Obligor at such time, minus
(iii) so long as Receivables from Compaq generated at "Plant 11" are
subject to offset by Compaq, the aggregate Unpaid Balance of Receivables
from Compaq generated at "Plant 11" (provided that the aggregate Unpaid
Balance of such Receivables from Compaq shall only be subtracted following
delivery by any Purchaser of a notice to the Seller and the Servicer
requesting such subtraction), minus
(iv) for all Obligors that are Governmental Authorities the amount
by which (x) the aggregate Unpaid Balance of all Pool Receivables of such
Obligors exceeds (y) 5% of the Eligible Receivables at such time, minus
(v) from and after the occurrence of a Trigger Event, the Accounts
Payable Amount at such time, plus
(vi) so long as Receivables from IBM fail to qualify as Eligible
Receivables solely because they fail to satisfy the requirements of
paragraph (s) of the definition of Eligible Receivables, an amount equal
to (x) the aggregate Unpaid Balance of Receivables from IBM, minus (y) the
Accounts Payable Amount owed to IBM.
(b) "Concentration Limit" for any Obligor at any time means, as applicable
(x) 7% of Eligible Receivables at such time or (y) the Special Concentration
Limit for such Obligor, whichever is greater.
14
(c) "Special Concentration Limit" for (A) any Obligor identified on
Schedule 2.04(c), means the applicable percentage set forth on Schedule 2.04(c)
and (B) for any other Obligor consented to by all Purchasers in writing
following a request from the Seller for such Obligor to be designated as an
Obligor for which Special Concentration Limits are to apply, means at any time,
such percentage consented to by all Purchasers in written notice delivered to
Seller of the aggregate Unpaid Balance of all Eligible Receivables at such time;
provided that any Purchaser may, at its discretion, reduce any such Special
Concentration Limit upon ten (10) Business Days' prior written notice to Seller,
the Administrative Agent and the other Purchasers.
(d) In the case of any Obligor which, to the actual knowledge of Seller,
is an Affiliate of any other Obligor, the Concentration Limit, the Special
Concentration Limit, if any, and the aggregate Unpaid Balance of Pool
Receivables of such Obligors shall be calculated as if such Obligors were one
Obligor.
SECTION 2.05. Purchasers' Share. "Purchasers' Share" of Collections of
Pool Receivables received (or deemed received) by Seller or Servicer on any day
means an amount equal to the product of
(a) the amount of all Collections of Pool Receivables received (or
deemed received) by Seller or Servicer on such day, times:
(b) (i) if such day is not a Run Off Day, the Undivided Interest on
such day, expressed as a decimal, and
(ii) if such day is a Run Off Day, either (A) the Undivided
Interest on the day immediately preceding the first Run Off Day to have
occurred during the then current Run Off Period or (B) if higher, upon the
request of the Administrative Agent or any Purchaser, the most recently
calculated Undivided Interest (it being understood that in the event that
the Purchasers' Share shall exceed 100%, the Purchasers shall share
Collections, pro rata, based on their respective Funded Percentages);
provided that (i) during the continuance of any Termination Event, the
Purchasers' Share shall be 100% and (ii) after such time as the Undivided
Interest shall equal zero, the Purchasers' Share of Collections shall also equal
zero.
15
ARTICLE III
SETTLEMENTS
SECTION 3.01. Non-Run Off Settlement Procedures for Collections. (a) Daily
Procedure. On each day (other than a Run Off Day) in any Settlement Period,
Servicer shall:
(i) out of Purchasers' Share of Collections of Pool Receivables
received or deemed received on such day, hold in trust for the benefit of
the Purchasers an amount equal to the Earned Discount for all Purchasers
and Servicer's Fee accrued through such day and not previously so held for
the benefit of the Purchasers,
(ii) apply an amount equal to the remainder of Purchasers' Share of
such Collections (the "Remaining Collections") to reduce the Total
Purchasers' Investment (it being understood that such amount need not be
physically paid to any Purchaser under this clause (ii)), and
(iii) subject to Section 3.03, after such reduction, (A) apply such
Remaining Collections to the Reinvestment, for the benefit of Purchasers
then funding the Undivided Interest, of additional undivided interests in
Pool Receivables by recomputation of the Undivided Interest pursuant to
Section 2.01 as of the end of such day, thereby increasing the Total
Purchasers' Investment, and (B) pay to Seller such Remaining Collections.
The recomputed Undivided Interest shall constitute the percentage ownership
interest in Pool Receivables on such day held by the Administrative Agent, for
the benefit of the Purchasers.
(b) Settlement Date Procedure. On each Settlement Date, for each day in
the related Settlement Period that is not a Run Off Day, Servicer shall deposit
to the Administrative Agent's Account the amounts set aside as described in
Section 3.01(a)(i) and the amounts, if any, set aside pursuant to Section
3.03(b) or (c) for payment to the Administrative Agent on such Settlement Date;
provided, however, that until Servicer receives written notice from the
Administrative Agent or the Required Purchasers to the contrary, Servicer may
retain amounts which would otherwise be deposited in respect of Servicer's Fee,
in which case no distribution shall be made in respect of Servicer's Fee under
clause (c) below.
(c) Order of Application. Upon receipt by the Administrative Agent of
funds distributed pursuant to subsection (b), the Administrative Agent shall
promptly distribute them in the type of funds received (i) to the account
specified by the applicable Related Administrator for each Conduit Purchaser or
by the applicable Bank Purchaser funding the Undivided Interest in payment of
the accrued and unpaid Earned Discount on each such Purchaser's Purchaser's
Investment, (ii) unless retained pursuant to
16
subsection (b), to Servicer in payment of the accrued and unpaid Servicer's Fee
payable on such Settlement Date and (iii) in the case of any amounts set aside
pursuant to Section 3.03(b) or (c), to the account specified by the applicable
Related Administrator for each Conduit Purchaser or by the applicable Bank
Purchaser funding the Undivided Interest in reduction of its related Purchaser's
Investment, such Purchaser's Funded Percentage of such amounts. If there shall
be insufficient funds on deposit for the Administrative Agent to distribute
funds in payment in full of the aforementioned amounts, the Administrative Agent
shall distribute funds, first, in payment of such Earned Discount, on a pro rata
basis (calculated on the basis of the Earned Discount owed to each Purchaser as
a percentage of the Earned Discount owed to all Purchasers), second, in payment
of such Servicer's Fee and third, to such reduction of the Total Purchasers'
Investment on a pro rata basis (calculated on the basis of the Purchasers'
Investment of each Purchaser as a percentage of the Total Purchaser's
Investment).
SECTION 3.02. Run Off Settlement Procedures for Collections. (a) Daily
Procedure. On each Run Off Day occurring in any Settlement Period, Servicer
shall set aside and hold in trust for the Purchasers the Purchasers' Share of
the Collections of Pool Receivables for such Run Off Day and shall, if requested
by the Administrative Agent or the Required Purchasers or if a Termination Event
has occurred and is continuing, deposit such Collections within one Business Day
of Servicer's receipt thereof into the Administrative Agent's Account or to
another bank account acceptable to the Required Purchasers in which no other
funds shall be deposited.
(b) Settlement Date Procedure. On each Settlement Date, if one or more Run
Off Days occurred during such Settlement Period ending on such Settlement Date,
Servicer shall deposit to the Administrative Agent's Account the amounts set
aside pursuant to Section 3.02(a) during such Settlement Period, but not to
exceed the sum of (i) the accrued and unpaid Earned Discount for each Purchaser,
(ii) the Total Purchasers' Investment, (iii) the aggregate of other amounts owed
hereunder by Seller to any Purchaser or the Administrative Agent, and (iv) the
accrued Servicer's Fee. If no Termination Event or Unmatured Termination Event
shall have occurred and be continuing, any amounts set aside pursuant to clause
(a) of this Section 3.02 and not required to be deposited to the Administrative
Agent's Account pursuant to the next preceding sentence shall be paid to Seller
by Servicer.
(c) Order of Application. Upon receipt of funds deposited to the
Administrative Agent's Account pursuant to Section 3.02(b), the Administrative
Agent shall promptly distribute them in the type of funds received (i) to the
account specified by the applicable Related Administrator for each Conduit
Purchaser, by the applicable Bank Purchaser or the Administrative Agent (as the
case may be) (A) in payment of the accrued and unpaid Earned Discount for each
Purchaser, (B) in reduction of the Total Purchasers' Investment and (C) in
payment of any other amounts owed by Seller hereunder to any Purchaser or the
Administrative Agent, in each case until reduced to zero, and (ii) to Servicer
in payment of the accrued Servicer's Fee, also until reduced to zero. If there
shall be insufficient funds on deposit for the Administrative Agent to
distribute funds in payment in full of the aforementioned amounts, the
Administrative Agent shall distribute funds on deposit, first, to the Purchasers
in payment of the Earned
17
Discount, on a pro rata basis (calculated on the basis of the Earned Discount
owed to each Purchaser as a percentage of the aggregate Earned Discount owed to
all Purchasers), second, in payment of the Servicer's Fee payable on such
Settlement Date, if any (if Servicer is not SCI or an Affiliate of SCI), third,
to each Purchaser, its Funded Percentage of the remaining amounts, which shall
be applied in reduction of such Purchaser's Purchaser's Investment, fourth, in
payment of other amounts payable to any Purchaser or the Administrative Agent
hereunder, and fifth, in payment of the Servicer's Fee payable on such
Settlement Date (if Servicer is SCI or an Affiliate of SCI).
SECTION 3.03. Special Settlement Procedures; Reduction of Purchaser's
Investment, Etc. (a) Deemed Collections. If on any day
(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective, rejected or returned
merchandise or services, any cash discount, any credit, pricing
adjustment or other adjustment by Seller or any Affiliate of Seller
(other than any adjustment permitted by Section 8.02(c)(i)),
(B) reduced or cancelled as a result of a setoff in respect of
any claim by the Obligor thereof against Seller or any other Person
(whether such claim arises out of the same or a related or an
unrelated transaction), or as a result of any dispute, or
(C) reduced on account of the obligation of Seller or any
other Person to pay to the related Obligor any rebate or refund, or
to rework any product or service related to such Receivable; or
(ii) any of the representations or warranties of Seller set forth in
Section 6.01(i) or (m) is no longer true with respect to a Pool
Receivable; or
(iii) Seller receives a payment of a Deemed Collection pursuant to
any Second Tier Sale Agreement;
then, on such day, Seller shall be deemed to have received a Collection of such
Pool Receivable;
(I) in the case of clause (i) above, in the amount of such
reduction or cancellation;
(II) in the case of clause (ii) above, in the amount of the
Unpaid Balance of such Pool Receivable; and
(III) in the case of clause (iii) above, in the amount of such
Deemed Collection.
18
(b) Unreinvested Collections. Collections that may not be reinvested by
means of Reinvestments in the Undivided Interest on account of the application
of the Required Allocation Limit or the Purchase Limit pursuant to Section 2.01
shall be so reinvested as soon as it is possible to do so without violating such
Required Allocation Limit or Purchase Limit, as the case may be. To the extent
and so long as such Collections may not be so reinvested, subject to Section
1.01, Servicer shall hold such Collections in trust for the benefit of
Purchasers (and, if requested by the Administrative Agent or the Required
Purchasers or if a Termination Event has occurred and is continuing, shall
deposit such Collections in a separate interest-bearing deposit account
containing only such Collections and earnings thereon and no other funds; it
being understood that any interest earned on such funds shall be for the account
of Seller and shall be paid to Seller on the Settlement Date next succeeding the
date on which such interest is credited to such account, so long as no
Termination Event has occurred and is continuing), for payment to the
Administrative Agent on the next following Settlement Date, and the Total
Purchasers' Investment shall be deemed reduced in the amount to be paid to the
Administrative Agent only when in fact finally so paid in accordance with
Section 3.05(a).
(c) Seller's Reduction of Purchaser's Investment. If at any ▇▇▇▇ ▇▇▇▇▇▇
shall wish to cause the reduction of the Total Purchasers' Investment (but not
to commence the liquidation, or reduction to zero, of the Undivided Interest),
Seller may do so as follows:
(i) Seller shall give all Purchasers at least five (5) Business
Days' prior written notice thereof (including the amount of such proposed
reduction and the proposed date on which such reduction will commence,
which date shall be a Business Day),
(ii) on the proposed date of commencement of such reduction and on
each day thereafter, Servicer shall refrain from reinvesting Remaining
Collections until the amount thereof not so reinvested shall equal the
desired amount of reduction, and
(iii) Servicer shall hold such Collections for the benefit of the
Purchasers, for payment to the Administrative Agent on the next following
Settlement Date, and the Total Purchasers' Investment shall be deemed
reduced in the amount to be paid to the Administrative Agent only when in
fact finally so paid in accordance with Section 3.05(a);
provided that,
(A) the amount of any such reduction shall be not less than
$1,000,000 and shall be an integral multiple of $100,000, and the Total
Purchasers' Investment after giving effect to such reduction shall be not
less than $5,000,000 (unless the Total Purchasers' Investment shall
thereby be reduced to zero) and shall be in an integral multiple of
$100,000,
19
(B) if Seller shall commence any voluntary reduction in a Settlement
Period containing all or a portion of any Run Off Period, Collections not
so reinvested shall be treated as if collected on the next following Run
Off Day,
(C) Seller shall use reasonable efforts to attempt to choose a
reduction amount, and the date of commencement thereof, so that such
reduction shall commence and conclude in the same Settlement Period, and
(D) any reduction of the Total Purchasers' Investment shall be
applied pro rata to the Purchaser's Investment of each Purchaser on the
basis of its Funded Percentage.
(d) Allocations of Obligor's Payments. Except as otherwise required by law
or the underlying Contract, all Collections received from an Obligor of any Pool
Receivable shall be applied to Pool Receivables then outstanding of such Obligor
in the order of the age of such Pool Receivables, starting with the oldest such
Pool Receivable; provided, however, that, if payment is designated by such
Obligor for application to specific Pool Receivables, it shall be applied to
such specified Pool Receivables.
SECTION 3.04. Reporting. (a) On June 19, 2000 and on or prior to the tenth
(10th) day of each month (or the next Business Day if such tenth (10th) day is
not a Business Day) thereafter, Servicer shall prepare and forward to the
Administrative Agent and each Bank Purchaser
(i) a Periodic Report relating to the Undivided Interest as of the
close of business of Servicer on the next preceding Month End Date,
(ii) if requested by the Administrative Agent or any Bank Purchaser,
an aggregate listing of aged Pool Receivables, and
(iii) a listing of the Unpaid Balance of Eligible Receivables for
each Obligor with Eligible Receivables equal to or greater than 7.0% of
the aggregate Unpaid Balance of Eligible Receivables as of the next
preceding Month End Date.
If requested by the Administrative Agent or any Bank Purchaser, Servicer
shall prepare and forward Periodic Reports more frequently than once a month
(but in no event more frequently than once per week unless such calendar month
contains a Run Off Day), using the most current information available to
Servicer.
(b) On or prior to the Settlement Date of any Settlement Period containing
a Run Off Day, Servicer shall prepare and forward to the Administrative Agent
and each Bank Purchaser a Periodic Report as of the close of business of
Servicer on the next preceding Month End Date.
20
(c) Seller will advise the Administrative Agent, each Bank Purchaser and
Servicer of each Run Off Day immediately upon the occurrence thereof.
SECTION 3.05. Payments and Computations, Etc. (a) All amounts to be paid
or deposited by Seller or Servicer hereunder shall be paid or deposited in
accordance with the terms hereof no later than 2:00 p.m. (New York time) on the
day when due in lawful money of the United States of America in same day funds
to the Administrative Agent at Bankers Trust Company, New York, NY, ABA
#▇▇▇▇▇▇▇▇▇ Account of BTCO as Depository for Bank of America, Account
#▇▇-▇▇▇-▇▇▇, reference: SCI Funding Inc.; Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"Administrative Agent's Account").
(b) Seller or Servicer, as applicable, shall, to the extent permitted by
law, pay to the Administrative Agent interest on all amounts not paid or
deposited when due hereunder at 2% per annum above the Alternate Reference Rate,
payable on demand, provided, however, that such interest rate shall not at any
time exceed the maximum rate permitted by applicable law. Such interest shall be
retained by the Administrative Agent except to the extent that such failure to
make a timely payment or deposit has continued beyond the date for distribution
by the Administrative Agent of such overdue amount to a Purchaser or any other
Person having an interest in such overdue amount, in which case such interest
accruing after such date shall be for the account of, and distributed by the
Administrative Agent, to such Persons ratably in accordance with their
respective interests in such overdue amount.
(c) All computations of interest, Earned Discount, Negative Spread Fee and
any other fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
elapsed.
SECTION 3.06. Treatment of Collections and Deemed Collections. Seller
shall pay to Servicer all Collections deemed received by Seller pursuant to
Section 3.03(a), and Servicer shall hold or distribute such Collections to the
same extent as if such Collections had actually been received on the date of
such delivery to Servicer. If Collections are then being paid to the
Administrative Agent, or lock boxes or accounts directly or indirectly owned or
controlled by the Administrative Agent, Servicer shall forthwith cause such
deemed Collections to be paid to the Administrative Agent or to such lock boxes
or accounts, as applicable. So long as Seller shall hold any Collections or
deemed Collections required to be paid to Servicer or the Administrative Agent,
it shall hold such Collections in trust and separate and apart from its own
funds.
21
ARTICLE IV
FEES AND YIELD PROTECTION
22
SECTION 4.01. Fees. Seller shall pay to the Administrative Agent and
Purchasers certain fees on such dates and in such amounts as set forth in the
letter agreement dated as of June 14, 2000 among Seller, the Administrative
Agent and the Bank Purchasers (as amended from time to time, the "Fee Letter").
SECTION 4.02. Yield Protection. (a) If (i) Regulation D or (ii) any
Regulatory Change occurring after the date hereof
(A) shall subject an Affected Party to any tax, duty or other charge
with respect to any Undivided Interest owned by or funded by it, or any
obligations or right to make Purchases or Reinvestments or to provide
funding therefor, or shall change the basis of taxation of payments to the
Affected Party of any Purchaser's Investments or Earned Discount owned by,
owed to or funded by it or any other amounts due under this Agreement in
respect of any Undivided Interest owned by or funded by it or its
obligations or rights, if any, to make Purchases or Reinvestments or to
provide funding therefor (except for changes in the rate of tax on or
based upon the overall net income of such Affected Party imposed by the
United States of America and any state, local or foreign jurisdiction in
which such Affected Party is subject to income taxation); or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Federal Reserve Board, but
excluding any reserve included in the determination of Earned Discount),
special deposit or similar requirement against assets of any Affected
Party, deposits or obligations with or for the account of any Affected
Party or with or for the account of any Affiliate (or entity deemed by the
Federal Reserve Board to be an Affiliate) of any Affected Party, or credit
extended by any Affected Party; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting any portion of the
Undivided Interest owned or funded by any Affected Party, or its
obligations or rights, if any, to make Purchases or Reinvestments or to
provide funding therefor;
and the result of any of the foregoing is or would be
(x) to increase the cost or to impose a cost on (I) an Affected
Party funding or making or maintaining any Purchases or Reinvestments, any
purchases, reinvestments, or loans or other extensions of credit under any
Program Support Agreement, or any Funding, or any commitment of such
Affected Party with respect to any of the foregoing, or (II) the
Administrative Agent for continuing its, or Seller's, relationship with
any Purchaser,
23
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement, or under any Program Support
Agreement with respect thereto, or
(z) in the sole determination of such Affected Party, to materially
reduce the rate of return on the capital of an Affected Party as a
consequence of its obligations hereunder or arising in connection herewith
to a level below that which such Affected Party could otherwise have
achieved,
then within thirty (30) days after written demand by such Affected Party (which
demand shall be accompanied by a statement setting forth in reasonable detail
the basis of such demand), Seller shall pay (and if the Seller does not pay such
amounts when due, the Guarantor shall pay) directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
additional or increased cost or such reduction.
(b) Each Affected Party will promptly notify Seller and the Administrative
Agent of any event of which it has actual knowledge which will entitle such
Affected Party to compensation pursuant to this Section 4.02; provided, however,
no failure to give or delay in giving such notification shall adversely affect
the rights of any Affected Party to such compensation.
(c) In determining any amount provided for or referred to in this Section
4.02, an Affected Party will use reasonable averaging and attribution methods.
Any Affected Party when making a claim under this Section 4.02 shall submit to
Seller a certificate setting forth such increased cost or reduced return in
reasonable detail, which certificate shall, in the absence of manifest error, be
presumed correct as to the amount thereof.
(d) Notwithstanding anything to the contrary contained in this Section
4.02, unless an Affected Party gives notice to Seller that Seller is obligated
to pay any amount under Section 4.02 within 180 days after the later of (x) the
date such Affected Party incurs the increased costs, reduction in the amounts
received or receivable hereunder or reduction in return on capital, or other
liability described in this Section 4.02, as applicable or (y) the date such
Affected Party has actual knowledge of its incurrence of any of the foregoing,
such Affected Party shall only be entitled to be compensated for any such amount
by the Seller to the extent any such amounts are incurred or suffered on or
after the date which occurs 180 days prior to such Affected Party giving notice
to Seller as set forth above; provided that if the circumstance giving rise to
such claim by its terms has a retroactive effect to an earlier date, such
180-day period shall be extended to include the period of such retroactive
effect.
24
ARTICLE V
CONDITIONS TO EFFECTIVENESS OF PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase. The effectiveness
of this Second Amended and Restated Receivables Purchase Agreement and the
initial Purchase hereunder are subject to the condition precedent that the
Administrative Agent shall have received, on or before the date of such
Purchase, the following, each (unless otherwise indicated) dated such date and
in form and substance satisfactory to the Administrative Agent and each Bank
Purchaser:
(a) A copy of the resolutions of the Board of Directors of each SCI
Party approving the Agreement Documents to be delivered by such SCI Party
and the transactions contemplated thereby, certified on behalf of such SCI
Party by such SCI Party's Secretary or Assistant Secretary;
(b) A good standing certificate for Seller issued by the Secretary
of State of Delaware and a foreign qualification certificate issued by the
Secretary of State of California; good standing or foreign qualification
certificates for SCI issued by the Secretaries of State of Alabama,
California, Colorado, New Hampshire, North Carolina, Maine and South
Dakota; good standing or foreign qualification certificates for Guarantor
issued by the Secretaries of State of Delaware and California; and good
standing certificates for each Originator issued by the Secretary of State
or other governmental authority of the states or jurisdictions of such
Originator's incorporation and principal place of business;
(c) A certificate of the Secretary or Assistant Secretary of each
SCI Party certifying on behalf of such Person the names and true
signatures of the officers authorized on its behalf to sign the Agreement
Documents to be delivered by it in connection herewith (on which
certificate the Administrative Agent and each Purchaser may conclusively
rely until such time as the Administrative Agent shall receive a revised
certificate meeting the requirements of this subsection (c));
(d) The Articles or Certificate of Incorporation of each SCI Party,
duly certified by the Secretary of State or similar office of the State
under the laws of which such SCI Party was organized, as of a recent date,
together with a copy of the By-laws of each SCI Party, duly certified on
behalf of such Person by the Secretary or an Assistant Secretary of such
SCI Party;
(e) Acknowledgment copies (or other evidence of filing reasonably
satisfactory to the Administrative Agent) of amendments to the Financing
Statements, filed in connection with the Original Receivables Agreement,
and acknowledgment copies of Financing Statements or other filings with
respect to all of the Originators, or other, similar instruments or
documents, as may be
25
necessary or, in the reasonable opinion of the Administrative Agent,
desirable under the UCC or any comparable law of all appropriate
jurisdictions to perfect Seller's interests in the Pool Receivables and
the Administrative Agent's interests in the Pool assigned to it or
otherwise created or arising hereunder;
(f) A search report provided in writing to the Administrative Agent
listing all effective Financing Statements filed in the jurisdictions in
which filings were made pursuant to subsection (e) above and in such other
jurisdictions that Administrative Agent shall reasonably request, together
with copies of such financing statements (none of which shall cover the
Pool or any part thereof, except for those in favor of the Administrative
Agent);
(g) Opinions of Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for
Seller, SCI and Guarantor, a favorable opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Esq., in-house counsel for Seller, SCI and Guarantor, and a favorable
opinion of counsel for each Originator, in each case, satisfactory in form
and substance to the Administrative Agent and each Bank Purchaser;
(h) Evidence of the payment by Seller to the Administrative Agent of
the structuring fee set forth in the separate engagement letter between
the Administrative Agent and the Seller; and
(i) Such other documents, amendments or certificates as the
Administrative Agent or any Purchaser shall reasonably request.
SECTION 5.02. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase (including the initial Purchase) and each
Reinvestment hereunder shall be subject to the further conditions
precedent ("Conditions Precedent") that on the date of such Purchase or
Reinvestment the following statements shall be true (and Seller by
accepting the amount of such Purchase or by receiving the proceeds of such
Reinvestment shall be deemed to have certified that):
(a) The representations and warranties contained in Article VI are
correct on and as of such day as though made on and as of such day and
shall be deemed to have been made on such day unless they specifically
relate solely to an earlier period,
(b) No event has occurred and is continuing, or would result from
such Purchase or Reinvestment, that constitutes a Termination Event or
Unmatured Termination Event,
(c) After giving effect to each proposed Purchase or Reinvestment,
the Total Purchasers' Investments will not exceed the Purchase Limit and
the Required Allocation will not exceed the Required Allocation Limit, and
26
(d) The Purchase Termination Date shall not have occurred;
provided, however, the absence of the occurrence and continuance of an Unmatured
Termination Event shall not be a Condition Precedent to any Reinvestment on any
day which does not cause the Total Purchasers' Investments, after giving effect
to such Reinvestment to exceed the Total Purchasers' Investments as of the
opening of business on such day.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties - Seller. Seller represents
and warrants as follows:
(a) Organization, Good Standing and Qualification. It is a
corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and is duly qualified to
do business, and is in good standing, and has obtained all necessary
licenses and approvals, in every jurisdiction where the ownership of
property or the nature of its business requires it to be so qualified or
have such licenses and approvals except where the failure to so qualify or
have such licenses and approvals would not have a Seller Material Adverse
Effect.
(b) Power and Authority; Due Authorization. The execution, delivery
and performance by it of this Agreement and any other Agreement Documents
to be delivered by it hereunder and thereunder, and the assignment of the
Undivided Interest and the other transactions contemplated hereby and
thereby, are within its corporate powers, have been duly authorized by all
necessary corporate action, do not (i) contravene (1) its charter or
by-laws, or (2) any law, rule or regulation or any contractual restriction
to which Seller or its property is subject and, in the case of this clause
(2), which contravention would have a Seller Material Adverse Effect; (ii)
result in or require the creation of any Lien upon or with respect to any
of its properties other than as specifically contemplated by this
Agreement; or (iii) violate any law or any order, rule, or regulation
applicable to Seller of any court or of any federal or state regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over Seller or any of its properties, which violation would
have a Seller Material Adverse Effect.
(c) Valid Sale; Binding Obligations. This Agreement constitutes a
valid sale, transfer, and assignment of the Undivided Interest to the
Administrative Agent, for the benefit of the Purchasers, enforceable
against creditors of, and purchasers from, Seller and each Originator.
This Agreement and each other Agreement Document to which Seller is a
party constitute Seller's legal,
27
valid and binding obligations enforceable against it in accordance with
their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally or by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) No Proceedings. Except as listed on Schedule 6.01(d), there are
no proceedings or investigations pending or, to the best of its knowledge,
threatened, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement or any other Agreement Document to which
Seller is a party, (ii) seeking to prevent the sale and assignment of any
Receivable, the Undivided Interest or the consummation of any of the other
transactions contemplated by this Agreement or any other Agreement
Document to which Seller is a party, (iii) seeking any determination or
ruling that could reasonably be expected to have a Seller Material Adverse
Effect or (iv) seeking to adversely affect the federal income tax
attributes of the Purchases hereunder.
(e) Government Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by it of this Agreement or any other document or instrument to
be delivered hereunder except for the filing of the amendments to the
Financing Statements referred to in Article V, all of which, at the time
required in Article V, shall have been duly made and shall be in full
force and effect.
(f) Financial Condition. The balance sheet of Seller as at May 21,
2000, certified on behalf of Seller by Seller's chief financial or
accounting officer, copies of which have been furnished to the
Administrative Agent and each Bank Purchaser, fairly present the financial
condition of Seller as at such date, all in accordance with GAAP
consistently applied and since the date of Seller's formation, there has
been no material adverse change in Seller's financial condition, business,
assets, prospects or operations.
(g) Litigation. No injunction, decree or other decision has been
issued or made by any court, governmental agency or instrumentality
thereof in a proceeding to which Seller is a party that prevents, and, to
its knowledge, no threat by any Person has been made in writing to attempt
to obtain any such decision that would prevent, Seller from conducting a
material part of its business operations.
(h) Margin Regulations. No proceeds of any Purchase will be used to
acquire any security in any transaction which is subject to Sections 13
and 14 of the Securities Exchange Act of 1934, as amended; and the use of
all funds obtained by Seller under this Agreement will not conflict with
or contravene any of Regulations T, U and X promulgated by the Board of
Governors of the Federal Reserve System from time to time.
28
(i) Quality of Title. Each Pool Receivable, together with the
related Contract and all purchase orders and other agreements related to
such Pool Receivable, is owned by Seller free and clear of any Adverse
Claim (other than any Adverse Claim arising solely as the result of any
action taken by a Purchaser or by the Administrative Agent) except as
provided herein; each Pool Receivable was purchased by Seller from an
Originator pursuant to a Second Tier Sale Agreement in a "true sale"
transaction, which sale is enforceable against all creditors of, and
purchasers from, such Originator, and Seller took all steps necessary to
perfect its ownership interest in such Pool Receivable against such
Originator; when the Administrative Agent, on behalf of the Purchasers,
makes a Purchase, it shall have acquired and shall continue to have
maintained a valid and perfected undivided percentage ownership interest
to the extent of the Undivided Interest in each Pool Receivable and in the
Related Security and Collections with respect thereto, free and clear of
any Adverse Claim (other than any Adverse Claim arising solely as the
result of any action taken by a Purchaser or by the Administrative Agent);
and no effective financing statement or other instrument similar in effect
covering the Pool or any part thereof is on file in any recording office
except such as may be filed (i) in favor of an Originator in accordance
with the Contracts, or in accordance with this Agreement with respect to
Pool Receivables purchased by SCI from any Originator, or (ii) in favor of
a Purchaser or the Administrative Agent in accordance with this Agreement
or in connection with any Adverse Claim arising solely as the result of
any action taken by a Purchaser or by the Administrative Agent.
(j) Accurate Reports. Each Periodic Report (if prepared by Seller,
or to the extent that information contained therein is supplied by
Seller), information, exhibit, financial statement, document, book, record
or report furnished at any time by Seller to the Administrative Agent, any
Purchaser or any Owner in connection with this Agreement is accurate in
all material respects as of its date or as of the date so furnished, and
no such document contains any material misstatement of fact or omits to
state a material fact or any fact necessary to make the statements
contained therein not materially misleading in light of the circumstances
when made.
(k) Offices. The chief place of business and chief executive office
of Seller, SCI and each Originator are located at the address of Seller,
SCI or the applicable Originator referred to in Section 15.02, and the
offices where Seller keeps all its books, records and documents evidencing
Pool Receivables, the related Contracts and all purchase orders and other
agreements related to such Pool Receivables are located at the addresses
specified in Schedule 6.01(k) (or, in each case, at such other locations,
notified to the Administrative Agent and each Bank Purchaser in accordance
with Section 7.01(f), in jurisdictions where all action required by
Section 8.05 has been taken and completed).
(l) Lock-Box Accounts. The names and addresses of all the Lock-Box
Banks, together with the account numbers of the lock-box accounts of
Seller at such Lock-Box Banks,
29
are specified in Schedule 6.01(l) (or have been notified to the
Administrative Agent and each Bank Purchaser in accordance with Section
7.03(d)).
(m) Eligible Receivables. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Purchase or
Reinvestment shall be an Eligible Receivable on such date.
(n) Compliance With Certain Statutes. Each Purchase from Seller
hereunder, and each Reinvestment of Collections in Pool Receivables made
hereunder, will constitute (a) a "current transaction" within the meaning
of Section 3(a)(3) of the Securities Act of 1933, as amended, and (b) a
purchase or other acquisition of notes, drafts, acceptances, open accounts
receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended.
(o) No Defaults. Seller is not in default under or with respect to
any contractual obligation or any law or court order in any respect which
could reasonably be expected to have a Seller Material Adverse Effect.
SECTION 6.02. Representations and Warranties - SCI. SCI represents and
warrants as follows:
(a) Organization, Good Standing and Qualification. It is a
corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and is duly qualified to
do business, and is in good standing, and has obtained all necessary
licenses and approvals in every jurisdiction where the nature of its
business requires it to be so qualified or have such licenses and
approvals except where the failure to so qualify or have such licenses and
approvals would not have a Material Adverse Effect.
(b) Power and Authority; Due Authorization. The execution, delivery
and performance by it of this Agreement and any other Agreement Documents
to be delivered by it hereunder and thereunder, are within its corporate
powers, have been duly authorized by all necessary corporate action, do
not (i) contravene (1) its charter or by-laws, or (2) any law, rule or
regulation or any contractual restriction to which SCI or its property is
subject and, in the case of this clause (2), which contravention would
have a Material Adverse Effect, (ii) do not result in or require the
creation of any Lien upon or with respect to any of its properties other
than as specifically contemplated by this Agreement; or (iii) violate any
law or any order, rule, or regulation applicable to SCI of any court or of
any federal or state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over SCI or any of its
properties, which violation would have a Material Adverse Effect; and no
transaction contemplated hereby requires compliance with any bulk sales
act or similar law.
30
(c) Binding Obligations. This Agreement and each other Agreement
Document to which SCI is a party constitute its legal, valid and binding
obligations enforceable against it in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law).
(d) No Proceedings. Except as listed on Schedule 6.01(d), there are
no proceedings or investigations pending or, to the best of its knowledge,
threatened, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement or any other Agreement Document to which SCI
is a party, (ii) seeking to prevent the consummation of any of the other
transactions contemplated by this Agreement, or any other Agreement
Document to which SCI is a party, or (iii) seeking any determination or
ruling that could reasonably be expected to have a Material Adverse
Effect.
(e) Government Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by it of this Agreement or any other document or instrument to
be delivered hereunder.
(f) Financial Condition. The balance sheet of SCI as at June 30,
1999, and the related statements of earnings, stockholders' equity and
statement of cash flows of SCI for the fiscal year then ended certified by
SCI's chief financial or accounting officer or treasurer, and the balance
sheet of SCI as at March 31, 2000, and the related statements of earnings,
stockholders' equity and statement of cash flows of SCI for the nine
fiscal months then ended, certified on behalf of SCI by SCI's chief
financial or accounting officer, copies of which have been furnished to
the Administrative Agent and each Bank Purchaser, fairly present the
financial condition of SCI as at such dates and the results of the
operations of SCI for the periods ended on such dates, all in accordance
with GAAP consistently applied and since June 30, 1999, there has been no
material adverse change in the financial condition, business, assets,
prospects or operations of SCI.
(g) Litigation. No injunction, decree or other decision has been
issued or made by any court, governmental agency or instrumentality
thereof in a proceeding to which SCI is a party that prevents, and, to its
knowledge, no threat by any Person has been made in writing to attempt to
obtain any such decision that would prevent, SCI from conducting a
material part of its business operations.
(h) Accurate Reports. All information, exhibits, financial
statements, documents, books, records or reports furnished at any time by
SCI to the Administrative Agent, any Purchaser or any Owner in connection
with this Agreement is accurate in all material respects as of its date
31
or as of the date so furnished, and no such document contains any material
misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained therein not materially
misleading in light of the circumstances when made.
(i) No Defaults. SCI is not in default under or with respect to any
contractual obligation or any law or court order in any respect which
could reasonably be expected to have a Material Adverse Effect.
SECTION 6.03. Representations and Warranties - Guarantor. Guarantor
represents and warrants as follows:
(a) Organization, Good Standing and Qualification. It is a
corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and is duly qualified to
do business, and is in good standing, and has obtained all necessary
licenses and approvals in every jurisdiction where the nature of its
business requires it to be so qualified or have such licenses and
approvals except where the failure to so qualify or have such licenses and
approvals would not have a Material Adverse Effect.
(b) Power and Authority; Due Authorization. The execution, delivery
and performance by it of this Agreement and any other Agreement Documents
to be delivered by it hereunder and thereunder, are within its corporate
powers, have been duly authorized by all necessary corporate action, do
not (i) contravene (1) its charter or by-laws, or (2) any law, rule or
regulation or any contractual restriction to which Guarantor or its
property is subject and, in the case of this clause (2), which
contravention would have a Material Adverse Effect, (ii) do not result in
or require the creation of any Lien upon or with respect to any of its
properties other than as specifically contemplated by this Agreement; or
(iii) violate any law or any order, rule, or regulation applicable to
Guarantor of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over Guarantor or any of its properties, which violation
would have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
(c) Binding Obligations. This Agreement and each other Agreement
Document to which Guarantor is a party constitute its legal, valid and
binding obligations enforceable against it in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally or by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(d) No Proceedings. Except as listed on Schedule 6.01(d), there are
no proceedings or investigations pending or, to the best of its knowledge,
threatened, before any court, regulatory
32
body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or any
other Agreement Document to which Guarantor is a party, (ii) seeking to
prevent the consummation of any of the other transactions contemplated by
this Agreement or any other Agreement Document to which Guarantor is a
party, or (iii) seeking any determination or ruling that could reasonably
be expected to have a Material Adverse Effect.
(e) Government Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by it of this Agreement or any other document or instrument to
be delivered hereunder.
(f) Financial Condition. The consolidated balance sheet of Guarantor
and its consolidated Subsidiaries as at June 30, 1999, and the related
statements of earnings, stockholders' equity and statement of cash flows
of Guarantor and its consolidated Subsidiaries for the fiscal year then
ended certified by Ernst & Young, independent public accountants, and the
consolidated balance sheet of Guarantor and its consolidated Subsidiaries
as at March 31, 2000, and the related statements of earnings,
stockholders' equity and statement of cash flows of Guarantor and its
consolidated Subsidiaries for the nine fiscal months then ended, certified
on behalf of Guarantor by Guarantor's chief financial or accounting
officer or treasurer, copies of which have been furnished to the
Administrative Agent and each Bank Purchaser, fairly present the
consolidated financial condition of Guarantor and its consolidated
Subsidiaries as at such dates and the consolidated results of the
operations of Guarantor and its consolidated Subsidiaries for the periods
ended on such dates, all in accordance with GAAP consistently applied and
since June 30, 1999, there has been no material adverse change in the
financial condition, business, assets, prospects or operations of
Guarantor and its consolidated Subsidiaries, taken as a whole.
(g) Litigation. No injunction, decree or other decision has been
issued or made by any court, governmental agency or instrumentality
thereof in a proceeding to which Guarantor is a party that prevents, and,
to its knowledge, no threat by any Person has been made in writing to
attempt to obtain any such decision that would prevent, Guarantor from
conducting a material part of its business operations.
(h) Accurate Reports. All information, exhibits, financial
statements, documents, books, records or reports furnished at any time by
Guarantor to the Administrative Agent, any Purchaser or any Owner in
connection with this Agreement is accurate in all material respects as of
its date or as of the date so furnished, and no such document contains any
material misstatement of fact or omits to state a material fact or any
fact necessary to make the statements contained therein not materially
misleading in light of the circumstances when made.
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(i) No Defaults. Guarantor is not in default under or with respect
to any contractual obligation or any law or court order in any respect
which could reasonably be expected to have a Material Adverse Effect.
ARTICLE VII
GENERAL COVENANTS
SECTION 7.01. Affirmative Covenants. From the date hereof until the End
Date, unless the Required Purchasers shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Each of SCI and Seller will, and
Guarantor will, and will cause SCI to, comply in all respects with all
applicable laws, rules, regulations, orders and contractual obligations
with respect to it, its business and properties and all Pool Receivables
and related Contracts, the noncompliance with which would, either singly
or in the aggregate, have a Material Adverse Effect or a Seller Material
Adverse Effect.
(b) Conduct of Business and Preservation of Corporate Existence.
Each of SCI and Seller will, and Guarantor will, and will cause SCI to,
continue to engage in business of substantially the same general type as
now conducted by it, and preserve, renew and keep in full force and effect
its corporate existence and take all action to maintain all rights,
privileges and franchises material to the conduct of its business, and
comply with all its contractual obligations and all Requirements of Law,
except with respect to each of the foregoing where such failure would not,
singly or in the aggregate, have a Material Adverse Effect or a Seller
Material Adverse Effect.
(c) Audits. Subject to contractual, statutory, regulatory or other
similar limitations regarding confidential or proprietary information,
each of SCI and Seller will, and Guarantor will, and will cause SCI to, at
any time and from time to time during regular business hours upon at least
three (3) Business Days' prior written notice (unless a Termination Event
has occurred and is continuing, in which case, no such notice shall be
required), permit the Administrative Agent or any Bank Purchaser, or its
agents or representatives, (i) to examine and make copies of and abstracts
from all books, records and documents (including, without limitation,
computer tapes and disks) in its possession or under its control relating
to Pool Receivables, including, without limitation, the related Contracts,
purchase orders and other agreements, and (ii) to visit the offices and
properties of Seller, SCI and Guarantor for the purpose of examining such
materials described in clause (i) next above, and to discuss matters
relating to Pool Receivables or Seller's, SCI's or Guarantor's performance
hereunder with any of the officers or employees of Seller, SCI or
Guarantor having knowledge of such matters. Seller, SCI and Guarantor
expressly reserve the right to restrict access to any of their facilities
in accordance with reasonably adopted procedures relating to safety and
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security. Article XIII notwithstanding, the reasonable costs and expenses
incurred by the Administrative Agent, any Bank Purchaser or its agents or
representatives in connection with any such examinations, copies,
abstracts, visits or discussions occurring or made (i) more than twice
during any calendar year, (ii) prior to the occurrence of a Termination
Event and (iii) other than in connection with a change by SCI of its
information systems, shall be for the account of the Bank Purchasers. Each
Owner of an interest in the Undivided Interest, by acceptance of the
benefits of such ownership, and the Administrative Agent agree to use
their reasonable efforts to ensure that any information concerning
Guarantor and its Subsidiaries obtained by the Administrative Agent or any
Bank Purchaser pursuant to this Section 7.01(c) which is not contained in
a report or other document filed by Guarantor with the SEC or otherwise
available to the public generally or to the Administrative Agent or any
Bank Purchaser from a source other than Seller, SCI or Guarantor will, to
the extent permitted by law and except as may be required by subpoena, by
any agency or other governmental entity which regulates the Administrative
Agent's or any such Owner's business under federal, state or local law
(the "Regulators") or in the normal course of the business operations of
the Administrative Agent or such Owner, be treated confidentially by the
Administrative Agent and each such Owner and, so long as no Termination
Event has occurred and is then continuing hereunder, will not be
distributed or otherwise made available to any Person, other than the
Regulators, any Program Support Provider or potential Program Support
Provider, any rating agency then rating the Commercial Paper Notes and the
employees, authorized agents, Affiliates or representatives of the
Administrative Agent or such Owner, and except as may otherwise be
required by law, unless the Administrative Agent or such Owner, as
applicable, shall have given Guarantor, SCI and Seller ten (10) days'
prior written notice of such distribution or other disclosure. In the
event that the Administrative Agent or any such Owner is required by law
to disclose any information concerning Guarantor and its Subsidiaries (or
any of them), the Administrative Agent or such Owner shall provide prompt
written notice thereof (to the extent practicable, prior to disclosure;
otherwise promptly after such disclosure) to Guarantor, SCI and Seller so
that Guarantor, SCI and Seller (or any of them) may seek a protective
order or other appropriate remedy.
(d) Keeping of Records and Books of Account. Each of SCI and Seller
will, and Guarantor will cause SCI to, maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables in the event of
the destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily identification of each
new Pool Receivable and all Collections of and adjustments to each
existing Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts. Each
of SCI and Seller will, and Guarantor will cause SCI to, at SCI's expense
timely and fully perform and comply with all provisions, covenants and
other promises required to be observed by it under the Contracts
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related to the Pool Receivables, all purchase orders and other agreements
related to such Pool Receivables subject, however, to the right of SCI to
dispute or contest its obligations so to perform or comply with any such
provision, covenant or other promise where it reasonably believes that
such performance or compliance is not required or is not in the best
interest of SCI, and such failure to perform or comply would not have a
material adverse effect on the collectibility or enforceability of the
related Pool Receivable or Receivables.
(f) Location of Records. Each of SCI and Seller will, and Guarantor
will cause SCI to, keep its chief place of business and chief executive
office, and the offices where it keeps its records concerning the Pool
Receivables, all related Contracts and all purchase orders and other
agreements related to such Pool Receivables (and all original documents
relating thereto), at the address(es) of Seller referred to in Section
15.02 or, upon thirty (30) days' prior written notice to the
Administrative Agent and each Bank Purchaser, at such other locations in
jurisdictions where all action required by Section 8.05 shall have been
taken and completed.
(g) Credit and Collection Policies. Each of SCI and Seller will, and
Guarantor will cause SCI to, comply in all material respects with its
Credit and Collection Procedure and all other policies and practices of
SCI referred to in, or discussed in connection with, the due diligence
report prepared by PriceWaterhouseCoopers (as successor to Coopers &
▇▇▇▇▇▇▇) on or prior to the date hereof in regard to each Pool Receivable
and the related Contract and otherwise comply with past business practices
in regard to Pool Receivables.
(h) Collections. Each of SCI and Seller will, and Guarantor will
cause SCI to, instruct all Obligors to cause all Collections of Pool
Receivables to be deposited directly with a Lock-Box Bank. If a Trigger
Event has occurred and is continuing, each of SCI and Seller will, and
Guarantor will cause SCI to, segregate all payments that do not constitute
Collections from the lock-box accounts into which any Collections are
deposited.
(i) Marking of Records. To the extent reasonably practicable, at its
expense, each of SCI and Seller will, and Guarantor will cause SCI to,
▇▇▇▇ its master data processing records evidencing Pool Receivables and
▇▇▇▇ the related Contracts with a legend evidencing that an interest in
such Pool Receivables and related Contracts have been sold to the
Administrative Agent, for the benefit of the Purchasers, in accordance
with this Agreement.
SECTION 7.02. Reporting Requirements. From the date hereof until the End
Date, unless the Required Purchasers shall otherwise consent in writing:
(a) Quarterly Financial Statements. Guarantor will, furnish to the
Administrative Agent and each Bank Purchaser as soon as available and in
any event within sixty (60) days after the end of each of the first three
quarters of each fiscal year of Guarantor copies of such consolidated and
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consolidating (showing each of the Originators and Seller) financial
statements as Guarantor may prepare for its own use for the fiscal quarter
then ended, which consolidated financial statements shall be prepared in
conformity with GAAP applied on a Consistent Basis and certified by the
chief financial officer, chief executive officer, treasurer or chief
accounting officer of Guarantor; together with a certificate from such
officer containing a computation of, and showing compliance with, the
financial restrictions contained in Section 7.04.
(b) Annual Financial Statements. Guarantor will furnish to the
Administrative Agent and each Bank Purchaser as soon as available and in
any event within ninety (90) days after the end of each fiscal year of
Guarantor, copies of both the consolidated and consolidating (showing each
of the Originators and Seller) balance sheets as at the end of such fiscal
year, and the related statements of income and retained earnings, and,
with respect to the consolidated statements, related statements of cash
flows and changes in financial position for the fiscal year then ended, or
statements providing substantially similar information, in each case
prepared in reasonable detail (except for consolidating statements) and in
accordance with GAAP applied on a Consistent Basis and, with respect to
the consolidated statements, certified by nationally recognized public
accountants; together with a certificate from such accountants containing,
as applicable, a computation of the financial restrictions contained in
Section 7.04 and a statement that to the best knowledge of such
accountants the restrictions in Section 7.04 have not been violated.
(c) Reports to Holders and Exchanges. Each of SCI and Seller will,
and Guarantor will, and will cause SCI to, furnish to the Administrative
Agent and each Bank Purchaser, in addition to the reports required by
subsections (a) and (b) next above, promptly upon the Administrative
Agent's or any Bank Purchaser's request, copies of any reports specified
in such request which it sends its public stockholders generally, and any
reports or registration statements that it files with the SEC or any
national securities exchange other than registration statements relating
to employee benefit plans and to registrations of securities for selling
security holders.
(d) ERISA. Each of SCI and Seller will, and Guarantor will, and will
cause SCI to, furnish to the Administrative Agent and each Bank Purchaser,
promptly after the filing or receiving thereof, copies of all reports and
notices with respect to any Reportable Event defined in Article IV of
ERISA which it or any of its Affiliates files under ERISA with the
Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or which it or any of its Affiliates receives
from the Pension Benefit Guaranty Corporation.
(e) Termination Events. Each of SCI and Seller will, and Guarantor
will, and will cause SCI to, furnish to the Administrative Agent and each
Bank Purchaser, as soon as possible and in any event within three (3)
Business Days after any Executive Officer of Guarantor, SCI or Seller has
notice or actual knowledge of the occurrence of each Termination Event and
each Unmatured Termination Event, a written statement of an Executive
Officer of Seller, SCI or
37
Guarantor, as the case may be, setting forth details of such event and the
action that Seller, SCI or Guarantor, as the case may be, proposes to take
with respect thereto.
(f) Litigation. Each of SCI and Seller will, and Guarantor will, and
will cause SCI to, furnish to the Administrative Agent and each Bank
Purchaser as soon as possible and in any event within five Business Days
of Seller's SCI's or Guarantor's knowledge thereof, notice of (i) the
commencement of or any development in any litigation, investigation or
proceeding which may exist at any time which could reasonably be expected
to have a Material Adverse Effect or Seller Material Adverse Effect and
(ii) any material adverse development in previously disclosed litigation.
(g) Credit and Collection Procedure. SCI will, and Guarantor will
cause SCI to, deliver to the Administrative Agent and each Bank Purchaser
any proposed material changes in the Credit and Collection Procedure at
least thirty (30) days prior to the implementation of such changes.
(h) Bank Credit Agreement. Guarantor will use its reasonable efforts
to deliver to the Administrative Agent and each Bank Purchaser which is
not a party to the Bank Credit Agreement copies of all drafts of all
consents, waivers and amendments to the Bank Credit Agreement that are
distributed to the bank group, and all final executed copies thereof, in
each case promptly after they are available (it being understood that
neither the Administrative Agent, in such capacity, nor any Bank
Purchaser, in such capacity, has any right to approve such consents,
waivers and amendments).
(i) Other. Each of SCI and Seller will, and Guarantor will, and will
cause SCI to, promptly, from time to time, furnish to the Administrative
Agent and each Bank Purchaser such other information, documents, records
or reports respecting the Receivables or the condition or operations,
financial or otherwise, of Seller, SCI or Guarantor as the Administrative
Agent or any Bank Purchaser may from time to time reasonably request in
order to protect the interests of the Administrative Agent or the
Purchasers under or as contemplated by this Agreement.
SECTION 7.03. Negative Covenants. From the date hereof until the End Date,
without the prior written consent of the Required Purchasers:
(a) Sales, Liens, Etc. Seller will not, except as otherwise provided
herein, sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Lien upon or with respect to,
any Pool Receivable or related Contract or Related Security, or any
interest therein, or any lock-box account to which any Collections of any
Pool Receivable are sent, or any right to receive income from or in
respect of any of the foregoing.
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(b) Extension or Amendment of Receivables. Neither SCI nor Seller
will, and Guarantor will not permit SCI to, except as otherwise permitted
in Section 8.02(c), extend, amend or otherwise modify the terms of any
Pool Receivable, or amend, modify or waive any material term or condition
of any Contract related thereto, or any term or condition of any such
Contract that relates to collectibility of the related Receivable.
(c) Change in Business or Credit and Collection Procedure. SCI will
not, and Guarantor will not permit SCI to, cease to engage in business of
substantially the same general type now conducted by it, or make any
material change in the Credit and Collection Procedure.
(d) Change in Payment Instructions to Obligors. Neither SCI nor
Seller will, and Guarantor will not permit SCI to, add or terminate any
bank as a Lock-Box Bank from those listed in Schedule 6.01(l) or make any
change in its instructions to Obligors regarding payments to be made to
Seller or Servicer or payments to be made to any Lock-Box Bank, unless the
Administrative Agent and each Bank Purchaser shall have received notice of
(and the Administrative Agent, upon direction of the Required Purchasers,
consented to) such addition, termination or change and duly executed
copies of Lock-Box Agreements with each new Lock-Box Bank.
(e) Deposits to Special Accounts. Neither SCI nor Seller will, and
Guarantor will not permit SCI to, deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock-Box Account cash or
cash proceeds other than Collections of Pool Receivables.
(f) Purchase and Sale Agreement. SCI will not, and Guarantor will
not permit SCI to, amend, waive or terminate any Purchase and Sale
Agreement or any material provision thereof.
(g) Sale Agreements. Neither SCI nor Seller shall amend, waive,
terminate or modify any Second Tier Sale Agreement or Initial Purchaser
Note. Seller shall not amend Article III, IV(b), VI, VII or VIII of its
articles of incorporation.
(h) Incurrence of Indebtedness. Seller will not incur or suffer to
exist any Indebtedness other than its obligations to Servicer, the
Purchasers and the Administrative Agent hereunder and its obligations to
SCI under the Initial Purchaser Note.
(i) Restricted Payments. Seller shall not (i) declare or pay any
dividends, (ii) lend or advance any funds or (iii) repay any loans or
advances to, for or from any Originator or any other Affiliated Party
(including making any payment pursuant to the Initial Purchaser Notes)
(all of the foregoing, "Restricted Payments"), provided that Seller may
make payments on any Initial Purchaser Note in accordance with its terms
and pay dividends and make Originator Loans, in each case, from
Collections paid or released to Seller pursuant to Section 3.01 or 3.02,
so long
39
as no Termination Event or Unmatured Termination Event has occurred and is
continuing or would result therefrom, and after giving effect thereto,
Seller's Tangible Net Worth is not less than $20,000,000.
Section 7.04. Separate Corporate Existence. Guarantor, Seller and SCI
hereby acknowledge that each Purchaser and the Administrative Agent are entering
into the transactions contemplated by this Agreement in reliance upon the
Seller's identity as a legal entity separate from the other Affiliated Parties.
Therefore, Guarantor, Seller and SCI shall take the steps described in this
Section 7.04 and any other steps that the Administrative Agent or any Purchaser
reasonably requests to continue Seller's identity as such a separate legal
entity and to make it apparent to third Persons that Seller is an entity with
assets and liabilities distinct from those of the other Affiliated Parties and
those of any other Person, and not a division of the other Affiliated Parties or
any other Person:
(a) Seller will be a limited purpose corporation whose primary
activities are restricted in its articles of incorporation to purchasing
Receivables from the Originators pursuant to the Second Tier Sale
Agreements, entering into agreements for the servicing of such
Receivables, selling undivided interests in the Receivables to the
Administrative Agent for the benefit of the Purchasers, and conducting
such other activities as it reasonably deems necessary or appropriate to
carry out its primary activities;
(b) At least two members of Seller's Board of Directors shall be
individuals who are not direct, indirect or beneficial stockholders,
officers, directors, employees, affiliates, associates, customers or
suppliers of any other Affiliated Party;
(c) No director or officer of Seller shall at any time serve as a
trustee in bankruptcy for any other Affiliated Party;
(d) Any employee, consultant or agent of Seller will be paid by the
Manager for services provided to Seller, which payment shall be charged to
Seller's account, except as provided in this Agreement in respect of the
Servicing Fee. Seller will engage no agents other than a Servicer for the
Receivables, which Servicer (if an Affiliated Party) will be fully
compensated for its services to Seller by payment of the Servicing Fee,
and the Manager pursuant to the Management Agreement, which Manager's fees
shall not exceed $10,000 in any calendar year;
(e) Seller will not incur any liabilities other than its liabilities
hereunder and under the other Agreement Documents, liabilities to the
independent directors not exceeding $10,000 at any time outstanding
(although annual compensation may exceed $10,000 per year), plus $1,000
for each meeting in excess of three per year, plus out-of-pocket expenses
approved by the Manager and other liabilities incurred in the ordinary
course of business that do not exceed $3,000 due and owing at any one
time;
40
(f) Seller's operating expenses will not be paid by any other
Affiliated Party;
(g) Seller will have its own separate mailing address, stationery
and, if used, bank checks and, if it uses premises leased, owned or
occupied by any other Affiliated Party, its portion of such premises will
be defined and separately identified;
(h) Seller's books and records will be maintained separately from
those of every other Affiliated Party;
(i) Any financial statements of any other Affiliated Party which are
consolidated to include Seller will contain detailed notes clearly stating
that (A) all of Seller's assets are owned by the Seller, and (B) Seller is
a separate corporate entity with its own separate creditors which will be
entitled to be satisfied out of Seller's assets prior to any value in the
Seller becoming available to Seller's equity holders;
(j) The assets of Seller will be maintained in a manner that
facilitates their identification and segregation from those of any other
Affiliated Party;
(k) Seller will strictly observe corporate formalities in its
dealings with each other Affiliated Party, and funds or other assets of
Seller will not be commingled or pooled with those of any other Affiliated
Party;
(l) Seller shall not maintain joint bank accounts with any other
Affiliated Party or other depository accounts to which any other
Affiliated Party (other than SCI or any Originator in its capacity as
Servicer or Subservicer) has independent access;
(m) Seller shall not, directly or indirectly, be named and shall not
enter into any agreement to be named as a direct or contingent beneficiary
or loss payee on any insurance policy covering the property of any other
Affiliated Party;
(n) Seller will maintain arm's length relationships with each other
Affiliated Party. Any other Affiliated Party which renders or otherwise
furnishes services or merchandise to Seller will be compensated by Seller
at market rates for such services or merchandise; and
(o) Neither Seller, on the one hand, nor any other Affiliated Party,
on the other hand, will be or will hold itself out to be responsible for
the debts of the other or the decisions or actions respecting the daily
business and affairs of the other.
SECTION 7.05. Financial Covenants. From the date hereof until the End
Date, the Guarantor will:
41
(a) not permit its Total Debt to Capitalization Ratio (as defined in
and calculated in accordance with the terms of the Credit Agreement) to
exceed 0.60 to 1.00.
(b) not permit its Interest Coverage Ratio (as defined and
calculated in accordance with the Credit Agreement) to be less than 2.00
to 1.00.
(c) not permit at any time its Consolidated Net Worth (as defined
and calculated in accordance with the Credit Agreement) to be less than
the sum of (i) $958,278,000 and (ii) an amount equal to 50% of the net
income (if positive) of the Guarantor and its Consolidated Subsidiaries
(as defined in the Credit Agreement) (determined on a consolidated basis
without duplication in accordance with GAAP) for each quarter of Guarantor
commencing with and including the fiscal quarter ending March 26, 2000.
The covenants contained in this Section 7.05 shall be calculated in the
same manner as the corresponding covenants contained in the Bank Credit
Agreement are calculated. If the financial covenants set forth in the Bank
Credit Agreement which correspond to the financial covenants set forth in this
Section 7.05 are amended or deleted, the Guarantor will promptly provide notice
of such event and a copy of such amendments or deletions to the Administrative
Agent and each Bank Purchaser. If requested by all Bank Purchasers, this
Agreement shall be amended to reflect such changes, and the Guarantor and the
Seller hereby agree to promptly execute and deliver such amendments hereto as
the Purchasers shall reasonably request to effect the foregoing.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer. (a) SCI as Initial Servicer. The
servicing, administering and collection of the Pool Receivables shall be
conducted by the Person designated as
42
Servicer hereunder ("Servicer") from time to time in accordance with this
Section 8.01. Until the Administrative Agent (acting at the direction of all
Bank Purchasers) gives to SCI a Successor Notice (as defined in Section
8.01(b)), SCI is hereby designated as, and hereby agrees to perform the duties
and obligations of, Servicer pursuant to the terms hereof.
(b) Successor Notice; Servicer Transfer Events. Upon SCI's receipt of a
notice from the Administrative Agent (given at the direction of all Bank
Purchasers) of the designation of a new Servicer, which new Servicer shall have
been approved by all Bank Purchasers (a "Successor Notice"), SCI agrees that it
will terminate its activities as Servicer hereunder in a manner that the
Administrative Agent believes will facilitate the transition of the performance
of such activities to the new Servicer, and the Administrative Agent (or its
designee) shall assume each and all of SCI's said obligations to service and
administer such Receivables, on the terms and subject to the conditions herein
set forth, and SCI shall use its reasonable efforts to assist the Administrative
Agent (or its designee) in assuming such obligations. From and after the
acceptance by a new Servicer of its appointment as Servicer hereunder, the prior
Servicer shall be released from its obligations as Servicer under this
Agreement, other than its obligations set forth in the previous sentence. The
Administrative Agent agrees not to give SCI a Successor Notice until after the
occurrence and during the continuance of any Termination Event (any such
Termination Event or other event being herein called a "Servicer Transfer
Event"), in which case such Successor Notice may be given at any time at the
direction of all Bank Purchasers. If SCI disputes the occurrence of a Servicer
Transfer Event, SCI may take appropriate action to resolve such dispute;
provided that SCI must terminate its activities hereunder as Servicer and allow
the newly designated Servicer to perform such activities on the date provided by
the Administrative Agent as described above, notwithstanding the commencement or
continuation of any proceeding to resolve the aforementioned dispute.
(c) Subcontracts. Servicer may, with the prior consent of the Required
Purchasers, subcontract with any other Person for servicing, administering or
collecting the Pool Receivables; provided that such Person agrees to conduct
such duties in accordance with the terms of this Agreement; and provided,
further, however, that Servicer shall remain liable for the performance of the
duties and obligations of Servicer pursuant to the terms hereof; and, provided,
further, that the Administrative Agent shall have the right to terminate or to
continue any such subcontract upon the designation of a new Servicer approved by
all Bank Purchasers.
SECTION 8.02. Duties of Servicer. (a) Appointment; Duties in General. Each
of Seller, each Purchaser and the Administrative Agent hereby appoints as its
agent Servicer, as from time to time designated pursuant to Section 8.01, to
enforce its rights and interests in and under the Pool Receivables, the Related
Security and the Contracts. Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
with reasonable care and diligence, and in accordance with the Credit and
Collection Procedure.
43
(b) Allocation of Collections; Segregation. Servicer shall set aside for
the account of Seller and the Purchasers their respective allocable shares of
the Collections of Pool Receivables in accordance with Sections 3.01 and 3.02
but shall not be required (unless otherwise requested by the Administrative
Agent or the Required Purchasers) to segregate the funds constituting such
portions of such Collections, or to segregate the respective allocable shares of
any Purchaser and any Program Support Party, if applicable, prior to the
remittance thereof in accordance with such Sections. If instructed by the
Administrative Agent or the Required Purchasers at any time, Servicer shall
segregate and deposit with a bank (which may be a Bank Purchaser) designated by
the Administrative Agent such allocable shares of Collections of Pool
Receivables, set aside for any Purchaser, any Program Support Party and any
other assignee from any Purchaser, on the first Business Day following receipt
by Servicer of such Collections in immediately available funds.
(c) Modification of Receivables. So long as no Termination Event or
Unmatured Termination Event shall have occurred and be continuing, SCI, while it
is Servicer, may, in accordance with the Credit and Collection Procedure, (i)
extend the maturity or adjust the Unpaid Balance of any Defaulted Receivable as
Servicer may reasonably determine to be appropriate to maximize Collections
thereof; provided that, no such extension shall be for more than a total of
thirty (30) days or cause any Defaulted Receivable to be an Eligible Receivable
and, after giving effect to such extension of maturity, the Required Allocation
will not exceed the Required Allocation Limit, and (ii) adjust the Unpaid
Balance of any Receivable to reflect the reductions or cancellations described
in Section 3.03(a)(i).
(d) Documents and Records. Seller shall deliver to Servicer, and Servicer
shall hold in trust for Seller and the Purchasers in accordance with their
respective interests, all documents, instruments and records (including, without
limitation, computer tapes or disks) that evidence or relate to Pool
Receivables, except for Excluded Data.
(e) Certain Duties to Seller. Servicer shall, as soon as practicable
following receipt, turn over to Seller (i) that portion of Collections of Pool
Receivables representing its undivided interest therein, less, in the event SCI
or an Affiliate of SCI is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses (excluding overhead and any subservicing costs)
of Servicer of servicing, collecting and administering the Pool Receivables to
the extent not covered by the Servicer's Fee received by it, and (ii) the
Collections of any Receivable that is not a Pool Receivable. Servicer, if other
than SCI or an Affiliate of the SCI, shall, as soon as practicable upon demand,
deliver to Seller all documents, instruments and records in its possession that
evidence or relate to Receivables of Seller other than Pool Receivables, and
copies of documents, instruments and records in its possession that evidence or
relate to Pool Receivables.
(f) Termination. Servicer's authorization under this Agreement shall
terminate on the End Date.
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SECTION 8.03. Rights of the Administrative Agent. (a) Notice to Obligors.
At any time following the occurrence and during the continuance of a Termination
Event, the Administrative Agent may (and, upon direction of the Required
Purchasers, shall) notify the Obligors of Pool Receivables, or any of them, of
the ownership of the Undivided Interest by the Administrative Agent, on behalf
of the Purchasers.
(b) Notice to Lock-Box Banks. At any time following the earliest to occur
of (i) the occurrence of a Termination Event, (ii) any of the Conditions
Precedent shall not be satisfied and the Administrative Agent or the Required
Purchasers, by written notice to Seller and Servicer, shall have requested
implementation of the settlement procedures set forth in Section 3.02, and (iii)
the warranty in Section 6.01(i) shall no longer be true with respect to a
material portion of the Pool Receivables, the Administrative Agent is hereby
authorized to give notice to the Lock-Box Banks (and shall give such notice if
directed by the Required Purchasers), as provided in the Lock-Box Agreements, of
the transfer to the Administrative Agent of dominion and control over the
lock-box accounts to which the Obligors of Pool Receivables make payments.
Seller hereby transfers to the Administrative Agent, effective when the
Administrative Agent shall give notice to the Lock-Box Banks as provided in the
Lock-Box Agreements, the exclusive dominion and control over such lock-box
accounts, and shall take any further action that the Administrative Agent may
reasonably request to effect such transfer. SCI shall promptly (but in any event
within two (2) Business Days) identify any amounts deposited into any lock-box
account that do not constitute Collections.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than SCI pursuant to Section 8.01:
(i) the Administrative Agent may (and, upon the direction of the
Required Purchasers, shall) direct the Obligors of Pool Receivables, or
any of them, to pay all amounts payable under any Pool Receivable directly
to the Administrative Agent or its designee.
(ii) Seller shall, at the Administrative Agent's or the Required
Purchasers' request and at Seller's expense, give notice of the
Administrative Agent's ownership to each said Obligor and direct that
payments be made directly to the Administrative Agent or its designee.
(iii) Seller shall, at the Administrative Agent's or the Required
Purchasers' request, (A) assemble all of the documents, instruments and
other records (including, without limitation, computer programs, tapes and
disks), other than the Excluded Data, which evidence the Pool Receivables,
and the related Contracts and Related Security, or which are otherwise
necessary or desirable to collect such Pool Receivables, and shall make
the same available to the Administrative Agent at a place selected by the
Administrative Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting
Collections of Pool Receivables in a manner acceptable to the
Administrative Agent and shall, promptly upon receipt,
45
remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to the Administrative Agent or its
designee.
(iv) Each of Seller and each Purchaser hereby authorizes the
Administrative Agent to take any and all steps, at any time after the
Administrative Agent or the Required Purchasers have given notice to any
Lock-Box Bank pursuant to Section 8.03(b), in Seller's name and on behalf
of Seller and each Purchaser which are necessary or desirable, in the
reasonable determination of the Administrative Agent, to collect all
amounts due under any and all Pool Receivables, including, without
limitation, endorsing Seller's name on checks and other instruments
representing Collections and enforcing such Pool Receivables and the
related Contracts.
(v) Actions taken by the Administrative Agent pursuant to this
Article shall be subject to the confidentiality provisions of Section
7.01(c).
SECTION 8.04. Responsibilities of Seller. Anything herein to the contrary
notwithstanding:
(a) Seller shall perform all of its obligations under the Contracts
related to the Pool Receivables and under the related purchase orders and
other agreements to the same extent as if the Undivided Interest had not
been sold hereunder and the exercise by the Administrative Agent of its
rights hereunder shall not relieve Seller from such obligations.
(b) Neither the Administrative Agent nor any Purchaser shall have
any obligation or liability with respect to any Pool Receivables,
Contracts related thereto or any other related purchase orders or other
agreements, nor shall any of them be obligated to perform any of the
obligations of Seller thereunder.
(c) Seller hereby grants to Servicer an irrevocable power of
attorney, with full power of substitution, coupled with an interest, to
take in the name of Seller all steps which are necessary or advisable to
endorse, negotiate or otherwise realize on any writing or other right of
any kind held or transmitted by Seller or transmitted or received by any
Purchaser (whether or not from Seller) in connection with any Pool
Receivable.
SECTION 8.05. Further Action Evidencing Purchases. (a) Seller agrees that
from time to time, at Seller's expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the
Administrative Agent or any Bank Purchaser may reasonably request in order to
perfect, protect or more fully evidence the Purchases hereunder and the
resulting Undivided Interest, or to enable any Purchaser or the Administrative
Agent to exercise or enforce any of their respective rights hereunder. Without
limiting the generality of the foregoing, Seller will:
46
(i) upon the request of the Administrative Agent or the Required
Purchasers, execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate, to evidence that the
Undivided Interest has been sold in accordance with this Agreement;
(ii) upon the request of the Administrative Agent or the Required
Purchasers, to the extent reasonably practicable, ▇▇▇▇ conspicuously each
Contract evidencing each Pool Receivable with a legend, acceptable to the
Administrative Agent and the Required Purchasers, evidencing that the
Undivided Interest has been sold in accordance with this Agreement; and
(iii) on or before the date of the initial Purchase, to the extent
reasonably practicable, ▇▇▇▇ its master data processing records evidencing
such Pool Receivables and related Contracts with a legend, acceptable to
the Administrative Agent and the Required Purchasers, evidencing that the
Undivided Interest has been sold in accordance with this Agreement.
(b) Seller hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Pool now existing or hereafter arising in
the name of Seller.
(c) Without limiting the generality of subsection (a), Seller will, not
earlier than six (6) months and not later than two (2) months prior to the fifth
anniversary of the date of filing of each of the financing statement referred to
in Section 5.01(f) or any other financing statement filed pursuant to this
Agreement or in connection with any Purchase hereunder, unless the End Date
shall have occurred:
(i) deliver to the Administrative Agent for execution and, upon
receipt from the Administrative Agent of such executed statements, file or
cause to be filed appropriate continuation statements with respect to such
financing statements; and
(ii) deliver or cause to be delivered to the Administrative Agent
and each Bank Purchaser an opinion of the counsel for Seller referred to
in Section 5.01(g) (or other counsel for Seller reasonably satisfactory to
the Required Purchasers), in form and substance reasonably satisfactory to
the Required Purchasers, confirming and updating the opinion delivered
pursuant to Section 5.01 with respect to (and only with respect to)
perfection issues, subject to customary qualifications, assumptions and
exclusions typically included in such opinions.
SECTION 8.06. Application of Collections. Any payment by an Obligor in
respect of any indebtedness owed by it to Seller shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
the Administrative Agent (with the consent of the Required Purchasers) instructs
otherwise, be applied as a Collection of any Pool Receivable or Receivables of
such
47
Obligor to the extent of any amounts then due and payable thereunder before such
payment is applied to any other indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all obligations of
Seller arising in connection with this Agreement and each other Agreement
Document to which it is a party, whether now or hereafter existing, due or to
become due, direct or indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, payments on account of Collections received
or deemed to be received, fees and Earned Discount, in each case pro rata
according to the respective amounts thereof, Seller hereby assigns and grants to
the Administrative Agent, for the benefit of the Purchasers, a security interest
in all of Seller's right, title and interest (including specifically any
undivided interest retained by Seller hereunder) now or hereafter existing in,
to and under all the Pool Receivables, the Related Security and all Collections
with regard thereto, and all proceeds of the foregoing.
SECTION 9.02. Further Assurances. The provisions of Section 8.05 shall
apply to the security interest granted under Section 9.01 as well as to the
Purchases and the Undivided Interest hereunder.
SECTION 9.03. Remedies. Upon the occurrence and during the continuance of
a Termination Event, the Administrative Agent, for the benefit of the
Purchasers, shall have, with respect to the collateral granted pursuant to
Section 9.01, and in addition to all other rights and remedies available to any
Purchaser or the Administrative Agent under this Agreement or other applicable
law, all the rights and remedies of a secured party upon default under the UCC.
ARTICLE X
TERMINATION EVENTS
SECTION 10.01. Termination Events. If any of the following events
("Termination Events") shall occur:
(a) (i) Servicer (if SCI or an Affiliate of SCI) shall fail to
perform or observe any term, covenant or agreement hereunder (other than
as referred to in clause (ii) next following) and such failure shall
remain unremedied for two (2) Business Days after notice (which may be by
telephone) to Servicer if such failure is the failure to deliver a
Periodic Report when due or ten (10) Business
48
Days after notice (which may be by telephone) to SCI in all other cases or
(ii) Servicer (if SCI or an Affiliate of Seller) or Seller shall fail to
make any payment or deposit to be made by it hereunder when due; or
(b) Seller, SCI or Guarantor shall fail to perform or observe any
term, obligation, covenant or agreement contained in Section 7.03, 7.04 or
7.05 or to furnish to the Administrative Agent and each Bank Purchaser,
pursuant to Section 7.02(e), a certificate required as a result of
knowledge by an Executive Officer of Seller, SCI or Guarantor (as
applicable) of the occurrence of a Termination Event or an Unmatured
Termination Event; or
(c) (i) If Seller or SCI shall fail to perform or observe any other
term, obligation, covenant or agreement contained herein or any other
Agreement Document on its part to be performed or observed (other than as
set forth in Section 10.01(a) above or in Section 7.03, 7.04 or 7.05) and
any such failure remains unremedied, until the first to occur of the date
forty-five (45) days after an Executive Officer of Seller, SCI or
Guarantor first obtains knowledge, or should have, in the exercise of
reasonable diligence, obtained knowledge, thereof or the date thirty (30)
days after written notice thereof shall have been given to Seller or SCI,
as applicable, by the Administrative Agent or any Bank Purchaser, (ii) if
any representation or warranty made by Seller, SCI or Guarantor in this
Agreement (other than in Section 6.01(b), 6.01(c), 6.01(e), 6.01(h),
6.02(b), 6.02(c), 6.02(e), 6.03(b), 6.03(c) or 6.03(e)), or in any other
Agreement Document to which it is a party, shall prove to have been
incorrect, incomplete or misleading when made or deemed made in any
material respect, and any such representation or warranty continues to be
incorrect, incomplete or misleading in any material respect until the
first to occur of the date forty-five (45) days after an Executive Officer
of Seller, SCI or Guarantor first obtains knowledge, or should have, in
the exercise of reasonable diligence, obtained knowledge, thereof or the
date thirty (30) days after written notice thereof shall have been given
to Seller by the Administrative Agent or any Bank Purchaser or (iii) any
representation or warranty made by Seller, SCI or Guarantor in Section
6.01(b), 6.01(c), 6.01(e), 6.01(h), 6.02(b), 6.02(c), 6.02(e), 6.03(b),
6.03(c) or 6.03(e) shall prove to have been incorrect, incomplete or
misleading when made or deemed made in any material respect; or
(d) (i) An "Event of Default" shall have occurred and be continuing
under the Bank Credit Agreement; or (ii) with respect to any Indebtedness
for money borrowed (other than the notes issued under the Bank Credit
Agreement) or for the deferred purchase price of property created, issued,
guaranteed, incurred or assumed by Seller, SCI, Guarantor or any Affiliate
thereof which Indebtedness is in an aggregate principal amount equal to or
greater than $10,000,000, Seller, SCI, Guarantor or any Affiliate thereof
shall (A) default in the payment of principal of or interest on any such
Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created, or (B)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained
49
in any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist, the effect of which
default or other event or condition described in either clause (i) or (ii)
of this paragraph is a failure to pay such Indebtedness at maturity or is
to cause, or to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause, such
Indebtedness to become due prior to its stated maturity; provided,
however, that in the event any such default or other condition described
in either clause (i) or (ii) of this paragraph shall have been cured or
waived or any such acceleration rescinded in accordance with the terms
thereof prior to the time that the Administrative Agent has declared the
Facility Termination Date to have occurred, this Termination Event shall
automatically cease to exist; or
(e) A Change of Control shall occur; or
(f) An Event of Bankruptcy shall have occurred and remained
continuing with respect to any SCI Party; or
(g) (i) Any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not
disclosed in writing by Seller or SCI to the Administrative Agent and each
Purchaser prior to the date of execution and delivery of this Agreement is
pending against Seller, SCI or Guarantor, or (ii) any material development
not so disclosed has occurred in any litigation (including, without
limitation, derivative actions), arbitration proceedings or governmental
proceedings so disclosed, which, in the case of clause (i) or (ii), in the
reasonable opinion of the Required Purchasers is likely to have a Material
Adverse Effect; or
(h) At any time, the Required Allocation shall exceed the Required
Allocation Limit; or
(i) The Sales-Based Default Ratio exceeds 3% or the Delinquency
Ratio exceeds 8%; or
(j) The Losses to Liquidations Ratio exceeds 1.5%; or
(k) The average of the Sales-Based Dilution Ratios for the preceding
six consecutive months exceeds 3%; or
(l) There shall have occurred any event which has a Material Adverse
Effect or a Seller Material Adverse Effect; or
(m) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Internal Revenue Code with regard to any
of the assets of Seller or Guarantor and such lien
50
shall not have been released within five (5) days, or the Pension Benefit
Guaranty Corporation shall file notice of a lien pursuant to Section 4068
of the Employee Retirement Income Security Act of 1974 with regard to any
of the assets of Seller or Guarantor and such lien shall not have been
released within five (5) days; or
(n) A Purchase and Sale Termination Event shall occur under any
Second Tier Sale Agreement.
SECTION 10.02. Remedies. (a) Optional Termination. Upon the occurrence of
a Termination Event (other than a Termination Event described in subsection (f)
of Section 10.01), the Administrative Agent shall, at the request, or may with
the consent, of the Required Purchasers, by written notice to Seller declare the
Facility Termination Date to have occurred, which Facility Termination Date
shall be the date of such notice.
(b) Automatic Termination. Upon the occurrence of a Termination Event
described in subsection (f) of Section 10.01, the Facility Termination Date
shall be deemed to have occurred automatically upon the occurrence of such
event.
(c) Additional Remedies. Upon any termination of the facility pursuant to
this Section 10.02, the Administrative Agent and each Purchaser shall have, in
addition to all other rights and remedies under this Agreement and any other
Agreement Document or otherwise, all other rights and remedies provided under
the UCC of each applicable jurisdiction and other applicable laws, which rights
shall be cumulative. Without limiting the foregoing or the general applicability
of Article XII hereof, (i) the occurrence of a Termination Event shall not deny
to any Purchaser any remedy in addition to termination of the Facility to which
such Purchaser may be otherwise appropriately entitled, whether at law or in
equity, and (ii) following the occurrence of any Termination Event each
Purchaser may elect to assign to any Person any portion of the Undivided
Interest owned by or on behalf of such Purchaser.
ARTICLE XI
THE ADMINISTRATIVE AGENT
SECTION 11.01. Authorization and Action. Each Purchaser hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto.
SECTION 11.02. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be
51
taken by it or the Administrative Agent under or in connection with this
Agreement (including, without limitation, the servicing, administering or
collecting Pool Receivables as Servicer pursuant to Section 8.01), except for
its or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Administrative Agent: (a) may consult with
legal counsel (including counsel for Seller), independent certified public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (b) makes no warranty or
representation to any Purchaser or any other holder of any interest in Pool
Receivables and shall not be responsible to any Purchaser or any such other
holder for any statements, warranties or representations made in or in
connection with this Agreement or any other Agreement Document; (c) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement on the part of any
SCI Party or to inspect the property (including the books and records) of any
SCI Party; (d) shall not be responsible to any Purchaser or any other holder of
any interest in Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Agreement Document; and (e) shall incur no liability under or in respect of this
Agreement or any other Agreement Document by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or writing (which
may be by facsimile or telex) believed by it to be genuine and signed or sent by
the proper party or parties.
SECTION 11.03. Administrative Agent and Affiliates. BofA and its
Affiliates may generally engage in any kind of business with Seller, Guarantor,
SCI, any Originator or any Obligor, any of their respective Affiliates and any
Person who may do business with or own securities of Seller, Guarantor, SCI, any
Originator or any Obligor or any of their respective Affiliates, all as if BofA
were not the Administrative Agent and without any duty to account therefor to
any Purchaser or any other holder of an interest in Pool Receivables.
SECTION 11.04. Seller's Failure to Perform. If Seller or SCI fails to
perform any of its agreements or obligations under this Agreement within any
applicable time or grace period, the Administrative Agent may (but shall not be
required to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Administrative Agent incurred in connection
therewith shall be payable by Seller or SCI, as the case may be, as provided in
Section 13.01, provided, however, that the Administrative Agent shall not
perform Seller's obligations under any Contract, other than those necessary to
service and collect the related Pool Receivables.
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ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
53
SECTION 12.01. Restrictions on Assignments. (a) None of SCI, Seller or
Guarantor may assign its rights hereunder or any interest herein without the
prior written consent of each Bank Purchaser, and no Purchaser may assign its
rights or obligations hereunder or its Purchaser's Interest (or portion thereof)
to any Person without the prior written consent of Seller, which consent shall
not be unreasonably withheld; provided, however, that without any such consent
(i) Any Purchaser may assign, or grant a security interest in, its
Purchaser's Interest (or portion thereof) to any of its Related Bank
Purchasers (or any successor of any thereof by merger, consolidation or
otherwise), any other commercial paper conduit administered by its Related
Administrator or any Affiliate thereof, or any of its Program Support
Providers (which may then assign the Purchaser's Interest (or portion
thereof) so assigned or any interest therein to such party or parties as
it may choose); and
(ii) Any Conduit Purchaser may assign and grant a security interest
in any interest in, to and under its Purchaser's Interest, this Agreement
and the other Agreement Documents to any collateral trustee for its
commercial paper program, and any successor in such capacity, to secure
Purchaser's obligations under or in connection with its Commercial Paper
Notes, any of its Program Support Agreement, and certain other obligations
of such Purchaser incurred in connection with the funding of the Purchases
and Reinvestments by it hereunder, which assignment and grant of a
security interest shall not be considered an "assignment" for purposes of
Section 12.01(b), Section 12.03 or 12.04 or, prior to the enforcement of
such security interest, for purposes of any other provision of this
Agreement.
(b) Seller agrees to advise the requesting Purchaser within five (5)
Business Days after receipt by Seller of written notice of any proposed
assignment by such Purchaser of its Purchaser's Interest (or portion thereof),
not otherwise permitted under subsection (a), of Seller's consent or non-consent
to such assignment. If Seller does not consent to such assignment, such
Purchaser may immediately assign its Purchaser's Interest (or portion thereof)
to any of its Related Bank Purchasers or Program Support Providers or any
Affiliate thereof. All of the aforementioned assignments shall be upon such
terms and conditions as the related Purchaser and the assignee may mutually
agree.
SECTION 12.02. Rights of Assignee. Upon an assignment by a Purchaser in
accordance with this Article XII, (a) the assignee receiving such assignment
shall have all of the rights, and shall be deemed to have assumed all of the
obligations, of such Purchaser hereunder with respect to the portion of such
Purchaser's rights and obligations so assigned and (b) all references to such
Purchaser in Section 4.02 shall be deemed to apply to such assignee to the
extent of its interest in the related Purchaser's Investment and the related
Collections.
SECTION 12.03. Notice of Assignment. Each Purchaser shall provide written
notice to Seller and the Administrative Agent of any assignment of any interest
in the Undivided Interest (or portion
54
thereof) by such Purchaser to any assignee, other than an assignment to a
Program Support Provider pursuant to an applicable Program Support Agreement or
to a collateral trustee for such Purchaser's commercial paper program.
SECTION 12.04. Evidence of Assignment. Any assignment of any interest in
the Undivided Interest (or portion thereof) to any Person may be evidenced by an
instrument of assignment in the form of Exhibit 12.04 or by such other
instrument(s) or document(s) as may be satisfactory to the assigning Purchaser,
the Administrative Agent and the assignee.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities. (a) General Indemnity of Seller. Without
limiting any other rights which any such Person may have hereunder or under
applicable law, Seller hereby agrees to indemnify each of the Administrative
Agent, each Purchaser, each Program Support Provider, BofA, each of BofA's
Affiliates, their respective successors, transferees, participants and assigns
and all officers, directors, shareholders, controlling persons, employees and
agents of any of the foregoing (each an "Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or relating to this Agreement, any other Agreement Document or the ownership or
funding of the Undivided Interest or in respect of any Receivable or any
Contract, excluding, however, (a) Indemnified Amounts with respect to an
Indemnified Party to the extent determined by a court of competent jurisdiction
to have resulted from gross negligence or willful misconduct on the part of such
Indemnified Party and (b) recourse (except as otherwise specifically provided in
Article II of this Agreement in connection with the calculation of the Undivided
Interest) for Defaulted Receivables. Without limiting the foregoing, Seller
hereby agrees to indemnify each Indemnified Party for Indemnified Amounts
arising out of or relating to:
(i) the transfer by Seller of any interest in any Pool Receivable
other than the transfer of the Undivided Interest to the Administrative
Agent, for the benefit of the Purchasers, pursuant to this Agreement and
the grant of a security interest to the Administrative Agent pursuant to
Section 9.01;
(ii) the breach of any representation or warranty made by Seller (or
any of its officers) under or in connection with this Agreement, any other
Agreement Document, any Periodic Report or any other information or report
delivered by, or on behalf of, Seller pursuant hereto, which shall have
been false or incorrect in any material respect when made or deemed made;
55
(iii) the failure by Seller to comply with any applicable law, rule
or regulation with respect to any Pool Receivable or the related Contract,
or the nonconformity of any Pool Receivable or the related Contract with
any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in the Administrative
Agent, for the benefit of the Purchasers, an undivided percentage
ownership interest, to the extent of the Undivided Interest, in the
Receivables in, or purporting to be in, the Receivables Pool, free and
clear of any Adverse Claim, other than an Adverse Claim arising solely as
a result of an act of a Purchaser, any assignee from a Purchaser or the
Administrative Agent, whether existing at the time of any Purchase or
Reinvestment or at any time thereafter;
(v) the failure to file, or any delay in filing, Financing
Statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
receivables in, or purporting to be in, the Receivables Pool, whether at
the time of any Purchase or Reinvestment or at any time thereafter;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool (including, without limitation,
a defense based on such Receivable's or the related Contract's not being a
legal, valid and binding obligation of such Obligor enforceable against it
in accordance with its terms), or any other claim resulting from the sale
of the merchandise or services related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vii) any failure of Seller to perform its duties or obligations in
accordance with the provisions of this Agreement;
(viii) any breach of warranty or products liability claim arising
out of or in connection with merchandise or services that are the subject
of any Pool Receivable; or
(ix) any tax or governmental fee or charge (but not including taxes
upon or measured by net income), all interest and penalties thereon or
with respect thereto, and all out-of-pocket costs and expenses, including
the reasonable fees and expenses of counsel in defending against the same,
which may arise by reason of the purchase or ownership of the Undivided
Interest, or any other interest in the Pool Receivables or in any goods
which secure any such Pool Receivables.
(b) Indemnities by Servicer. Without limiting any other rights which any
such Person may have hereunder or under applicable law, Servicer hereby agrees
to indemnify each of the Indemnified Parties, forthwith on demand, from and
against any and all Indemnified Amounts awarded against or incurred by any of
them arising out or related to:
56
(i) the fact that any representation or warranty made by such
Servicer (or any of its officers) under or in connection with this
Agreement, any Periodic Report or any other information or report
delivered by such Servicer pursuant hereto shall have been false or
incorrect in any material respect when made or deemed made;
(ii) the failure by such Servicer to comply with any applicable law,
rule or regulation with respect to the servicing or collection of any Pool
Receivable or the related Contract;
(iii) the failure of such Servicer or any subservicer to perform its
duties or obligations in accordance with the provisions of this Agreement;
or
(iv) any dispute, claim, offset or defense of the Obligor to the
payment of any Pool Receivable by reason of the action or inaction of such
Servicer or any subservicer of such Servicer.
(c) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from Seller under Section
13.01(a)(ix), such Indemnified Party shall give prompt notice of such attempt to
Seller and Seller shall have the right, at its expense, to participate in any
proceedings resisting or objecting to the imposition or collection of any such
tax, governmental fee or charge. Indemnification hereunder shall be in an amount
necessary to make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the payment of any of the aforesaid
taxes and the receipt of the indemnity provided hereunder or of any refund of
any such tax previously indemnified hereunder, including the effect of such tax
or refund on the amount of tax measured by net income or profits which is or was
payable by the Indemnified Party.
(d) Contribution. If for any reason the indemnification provided above in
this Section 13.01 is unavailable to an Indemnified Party or is insufficient to
hold an Indemnified Party harmless, then Seller or SCI, as the case may be,
agrees to contribute to the amount paid or payable by such Indemnified Party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and Seller or SCI, as the case may be, on the
other hand but also the relative fault of such Indemnified Party as well as any
other relevant equitable considerations.
ARTICLE XIV
GUARANTEE
SECTION 14.01. Guarantee. (a) Guarantor hereby unconditionally and
irrevocably covenants and agrees that it will cause SCI and each Originator duly
and punctually to perform and observe all of the
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terms, conditions, covenants, agreements (including, without limitation,
agreements to turn over Collections or deemed Collections) and indemnities of
SCI and each Originator, respectively, under this Agreement and the other
Agreement Documents to which they are respectively a party strictly in
accordance with the terms hereof and thereof and that if for any reason
whatsoever SCI or any Originator shall fail to so perform and observe such
terms, conditions, covenants, agreements and indemnities, Guarantor will duly
and punctually perform and observe the same.
(b) The liabilities and obligations of Guarantor under this Section 14.01
shall be absolute and unconditional under all circumstances and shall be
performed by Guarantor regardless of (i) whether any Purchaser or the
Administrative Agent shall have taken any steps to collect from SCI or any
Originator any of the amounts payable by SCI or such Originator (as the case may
be) to any Purchaser or the Administrative Agent under this Agreement or the
other Agreement Documents or shall otherwise have exercised any of their rights
or remedies under this Agreement or the other Agreement Documents against SCI or
any Originator or against any Obligor under any of the Pool Receivables, (ii)
the validity, legality or enforceability of this Agreement or of any other
Agreement Documents against SCI or any Originator, or the disaffirmance of any
thereof in any Event of Bankruptcy relating to SCI or any Originator, (iii) any
law, regulation or decree now or hereafter in effect which might in any manner
affect any of the terms or provisions of this Agreement or any other Agreement
Document or any of the rights of any Purchaser or the Administrative Agent as
against SCI or any Originator or as against any Obligor under any of such Pool
Receivables or which might cause or permit to be invoked any alteration in time,
amount, manner of payment or performance of any amount payable by SCI or any
Originator to any Purchaser or the Administrative Agent under this Agreement or
the other Agreement Documents, (iv) the merger or consolidation of SCI or any
Originator into or with any corporation or any sale or transfer by SCI or any
Originator or all or any part of its property, (v) the existence or assertion of
any Adverse Claim with respect to any Pool Receivable, or (vi) any other
circumstance whatsoever (with or without notice to or knowledge of Guarantor)
which may or might in any manner or to any extent vary the risk of Guarantor, or
might otherwise constitute a legal or equitable discharge of a surety or
guarantor, it being the purpose and intent of Guarantor that the liabilities and
obligations of Guarantor under this Section 14.01 shall be absolute and
unconditional under any and all circumstances, and shall not be discharged
except by payment and performance as in this Agreement provided. The guaranty
set forth in this Section 14.01 is a guaranty of payment and performance and not
just of collection.
(c) Without in any way affecting or impairing the liabilities and
obligations of Guarantor under this Section 14.01, any Purchaser or the
Administrative Agent may at any time and from time to time in its discretion,
without the consent of, or notice to, Guarantor, and without releasing or
affecting Guarantor's liability hereunder (i) extend or change the time, manner,
place or terms of this Agreement or any other Agreement Document, (ii) settle or
compromise any of the amounts payable by SCI or any Originator to any Purchaser
under this Agreement or the other Agreement Documents or subordinate the same to
the claims of others, (iii) retain or obtain a lien upon or security interest in
any property to secure any of the obligations hereunder, (iv) retain or obtain
the primary or secondary obligation of any obligor or obligors,
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in addition to Guarantor, with respect to any of the obligations due hereunder,
or (v) release or fail to perfect any lien upon or security interest in, or
impair, surrender, release or permit any substitution in exchange for, all or
any part of any property securing any of the obligations under this Agreement,
it being understood that nothing contained in this Section 14.01(c) shall give
any Purchaser or the Administrative Agent the right to take any of the foregoing
actions if not permitted by the other provisions of this Agreement, by law, by
written consent or otherwise.
(d) The provisions of this Section 14.01 shall continue to be effective or
be reinstated, as the case may be, if any time payment of any of the amounts
payable by SCI or any Originator to any Purchaser or the Administrative Agent
under this Agreement or the other Agreement Documents is rescinded or must
otherwise be restored or returned by any Purchaser or the Administrative Agent,
as the case may be, upon any Event of Bankruptcy involving SCI or any
Originator, or otherwise, all as though such payment had not been made.
Guarantor hereby waives (i) notices of the occurrence of any default hereunder
(other than notices expressly required under this Agreement), (ii) any
requirement of diligence or promptness on the part of any Purchaser or the
Administrative Agent in making demand, commencing suit or exercising any other
right or remedy under this Agreement or the other Agreement Documents, or
otherwise, and (iii) any right to require any Purchaser or the Administrative
Agent to exercise any right or remedy against SCI or any Originator or the Pool
Receivables prior to enforcing any of their rights against Guarantor under this
Section 14.01. Guarantor agrees that, in the event of an Event of Bankruptcy
with respect to SCI, any Originator or Guarantor, or any combination thereof,
and if such event shall occur at a time when all of the Indemnified Amounts and
other amounts due under this Agreement may not then be due and payable,
Guarantor will pay to the Administrative Agent, for the benefit of the
Purchasers, forthwith the full amount which would be payable hereunder by
Guarantor if all such Indemnified Amounts and other obligations were then due
and payable.
SECTION 14.02. Maintenance of Ownership. Guarantor covenants and agrees
that until the End Date, Guarantor, or one of its Wholly Owned Subsidiaries,
will (a) maintain, directly or indirectly, ownership of 100% of all of the
issued and outstanding shares of each class of voting capital stock of each of
SCI, each Originator and Seller, free and clear of all liens and encumbrances
and (b) maintain control of the election of the Board of Directors of each of
SCI, each Originator and Seller.
SECTION 14.03. Representation and Warranty. Guarantor represents and
warrants that it now has, and will continue to have, independent means of
obtaining information concerning each of SCI's and each Originator's affairs,
financial condition and business. Neither any Purchaser nor the Administrative
Agent shall have any duty or responsibility to provide Guarantor with any credit
or other information concerning SCI's or any Originator's affairs, financial
condition or business which may come into such Purchaser's or the Administrative
Agent's possession.
SECTION 14.04. Subrogation. Guarantor hereby agrees that no payment made
by it or for its account pursuant to this Agreement shall entitle Guarantor by
subrogation, indemnification, contribution,
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reimbursement or otherwise to any payment by SCI or from or out of any property
of SCI or any Originator, until after the End Date and Guarantor shall not
exercise any rights or remedies it has or may in the future have with respect to
any of the foregoing until after the End Date.
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by Seller, SCI or Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by (a) Seller, SCI, Guarantor, the Administrative Agent and the
Required Purchasers (with respect to an amendment) or (b) the Administrative
Agent and the Required Purchasers (with respect to a waiver or consent by any of
them) or Seller, SCI or Guarantor (with respect to a waiver or consent by
Seller, SCI or Guarantor), as the case may be, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given, provided, however that no amendment shall (i) reduce the amount
of Earned Discount, Purchaser's Investment or other amount payable to any
Purchaser hereunder, or extend the time for the payment thereof, (ii) increase
the amount of any Purchaser's Commitment, (iii) extend the Purchase Termination
Date or the Scheduled Facility Termination Date with respect to any Purchaser,
(iv) change the calculation of Required Allocation or any of its components or
(v) change the definition of "Concentration Limit" or "Required Purchaser", in
each case without the prior written consent of all Purchasers affected thereby.
SECTION 15.02. Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise expressly stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage prepaid, or by facsimile, to the intended party at the
address or facsimile number of such party set forth under its name on Schedule
15.02 or at such other address or facsimile number as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered, when received,
(b) if sent by certified mail, three Business Days after having been deposited
in the mail, postage prepaid, (c) if sent by overnight courier, one Business Day
after having been given to such courier, and (d) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means, except that
notices and communications pursuant to Article I, Section 2.04(c), Section
8.01(b) and the definition of "Designated Obligor" shall not be effective until
received.
SECTION 15.03. No Waiver; Remedies. No failure on the part of the
Administrative Agent, any Affected Party, any Indemnified Party, any Purchaser
or any other holder of any interest in the Undivided Interest to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise
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thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 15.04. Binding Effect; Survival. This Agreement shall be binding
upon and inure to the benefit of Seller, SCI and Guarantor, the Administrative
Agent, the Purchasers and their respective successors and assigns, and the
provisions of Section 4.02 and Article XIII shall inure to the benefit of the
Affected Parties and the Indemnified Parties, respectively, and their respective
successors and assigns; provided, however, nothing in the foregoing shall be
deemed to authorize any assignment not permitted by Section 12.01. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the End Date. The rights and remedies with respect to any breach of any
representation and warranty made by Seller, SCI and Guarantor pursuant to
Article VI, the indemnification and payment provisions of Article XIII and
Sections 4.02, 14.05, 14.06 and 14.07, and the provisions of Sections 15.06 and
15.18 shall be continuing and shall survive any termination of this Agreement.
After the End Date, the Administrative Agent shall, at the request and expense
of the Seller, execute and deliver to the Seller such documents as the Seller
shall reasonably request to evidence the termination of the Undivided Interest,
including, without limitation, UCC termination statements.
SECTION 15.05. Costs, Expenses and Taxes. In addition to its obligations
under Article XIII, Seller, SCI and Guarantor, jointly and severally, agree to
pay on demand:
(a) all reasonable costs and expenses incurred by the Administrative
Agent, each Purchaser, BofA, each Program Support Provider and their
respective Affiliates in connection with the negotiation, preparation,
execution and delivery, the administration (including periodic auditing)
or the enforcement of, or any actual or claimed breach of, this Agreement
and the other Agreement Documents, including, without limitation (i) the
reasonable fees and out-of-pocket expenses of counsel to any of such
Persons incurred in connection with any of the foregoing or in advising
such Persons as to their respective rights and remedies under any of the
Agreement Documents, provided, that Seller, SCI and Guarantor shall only
be responsible for the fees and expenses of one counsel for each Related
Group, unless a conflict of interest or potential conflict of interest
exists among such Persons, and (ii) all reasonable out-of-pocket expenses
(including reasonable fees and expenses of independent accountants)
incurred in connection with any review of Seller's, SCI's or Guarantor's
books and records either prior to the execution and delivery hereof or
pursuant to the terms hereof; and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording
of this Agreement or the other Agreement Documents, and agrees to
indemnify each Indemnified Party against any liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes and
fees.
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SECTION 15.06. No Proceedings. Seller, SCI, Guarantor, each Bank
Purchaser, each other Conduit Purchaser and BofA, individually and as
Administrative Agent, each hereby agrees that it will not institute against any
Conduit Purchaser, or join any other Person in instituting against any Conduit
Purchaser, any insolvency proceeding (namely, any proceeding of the type
referred to in the definition of Event of Bankruptcy) so long as any Commercial
Paper Notes issued by such Conduit Purchaser shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
Commercial Paper Notes shall have been outstanding. The foregoing shall not
limit Seller's right to file any claim in or otherwise take any action with
respect to any insolvency proceeding that was instituted by any Person other
than Seller, SCI or Guarantor.
SECTION 15.07. Confidentiality of Information. (a) Each SCI Party
acknowledges that each Purchaser regards the structure of the transactions
contemplated by this Agreement, the other Agreement Documents, and by any
Program Support Agreement and the other Program Documents referred to therein,
to be proprietary, and each such SCI Party severally agrees that:
(i) unless such Purchaser shall otherwise agree in writing, and
except as provided in subsection (b), such party will not disclose to any
other person or entity:
(A) any information furnished to such party by any Information
Provider regarding the asset securitization transaction contemplated
hereby,
(B) copies of this Agreement,
(C) any information furnished to such party by any Information
Provider regarding, or copies of, any Program Support Agreement, any
of the other Program Documents referred to therein, or any
transaction contemplated thereby,
(D) any information furnished to such party by any Information
Provider regarding the organization or business of such Purchaser
generally, or
(E) any information which is furnished to such party by any
Information Provider and is designated by such Information Provider
to such party in writing or otherwise as confidential or not
otherwise available to the general public
(the information referred to in clauses (A), (B), (C), (D) and (E) above,
whether furnished by a Purchaser, BofA (including any branch or agency thereof),
any Program Support Provider, any assignee of or participant in any rights or
obligations of any Purchaser or any Program Support Provider identified to
Seller and Guarantor by written notice from the assignor or seller of such
participation interest, as the case may be, or any attorney for any of the
foregoing (each an "Information Provider"), is collectively referred to as the
"Information"; provided, however, "Information" shall not include any
information which is or
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becomes generally available to the general public or to such party on a
nonconfidential basis from a source other than any other Information Provider,
or which was known to such party on a nonconfidential basis prior to its
disclosure by any Information Provider);
(ii) such party will make the Information available to only such of
its officers, directors, employees and agents, and to officers, directors,
employees and agents of any of its Affiliates, who (A) in the good faith
belief of such party, have a need to know such Information, and (B) are
informed by such party of the confidential nature of the Information and
the terms of this Section 15.07; and
(iii) such party will not use the Information as the basis of a
similar financing with any other party.
(b) Notwithstanding clause (i) of subsection (a), each SCI Party may
disclose any Information:
(i) to its independent attorneys, consultants and auditors who (A)
in the good faith belief of such party, have a need to know such
Information and (B) are informed by such party of the confidential nature
of the Information and the terms of this Section 15.07;
(ii) to any other party to this Agreement;
(iii) as may be required in such party's reasonable judgment, by any
municipal, state, federal or other regulatory body, whether domestic or
foreign, (including, without limitation, the SEC) having or claiming to
have jurisdiction over such party, in order to comply with any law, order,
regulation, regulatory request or ruling applicable to such party (it
being understood that in no event will the Fee Letter be publicly filed
(except as required pursuant to subsection (c)(iv) below) without each
Bank Purchaser's prior written consent); or
(iv) subject to subsection (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Information.
(c) In the event that any SCI Party or anyone to whom such party or its
representatives transmits the Information is requested or becomes legally
compelled (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the
Information other than pursuant to subsections (b)(i) or (ii), such party will
(or will cause its representatives to)
(i) provide with prompt written notice so that (A) an Information
Provider, at its sole cost and expense, may seek a protective order or
other appropriate remedy, or (B) such Purchaser
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may, if it so chooses, agree that such party (or its representatives) may
disclose such Information pursuant to such request or legal compulsion;
(ii) unless the related Purchaser agrees that such Information may
be disclosed, make (at its sole cost and expense) a timely objection to
the request or compulsion to provide such Information on the basis that
such Information is confidential and subject to the agreements contained
in this Section 15.07;
(iii) take any action (at the related Purchaser's sole cost and
expense) as any related Information Provider may reasonably request to
seek a protective order or other appropriate remedy, provided that, in
connection therewith, such party shall have first received such assurances
as it may reasonably request that such Information Provider shall
reimburse such party's or its representatives' reasonable costs and
expenses or provide such other assistance as such party or its
representatives may reasonably require; and
(iv) in the event that such protective order or other remedy is not
obtained, or the related Purchaser agrees that such Information may be
disclosed, use its best efforts to furnish only that portion of the
Information which such party reasonably believes is legally required to be
furnished, and, provided such party (or its representative) is reimbursed
or assisted as referred to in clause (iii) above, exercise best efforts to
obtain reliable assurance that confidential treatment will be accorded the
Information.
(d) This Section 15.07 shall survive termination of this Agreement.
SECTION 15.08. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.
SECTION 15.09. Integration. This Agreement and the other Agreement
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.
SECTION 15.10. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW
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YORK, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF THE
ADMINISTRATIVE AGENT OR ANY PURCHASER IN THE RECEIVABLES IS GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 15.11. Waiver Of Jury Trial. SELLER, SCI AND GUARANTOR HEREBY
EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER AGREEMENT DOCUMENT
OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY BE IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, OR ANY OTHER AGREEMENT
DOCUMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT A JURY TRIAL.
SECTION 15.12. Consent To Jurisdiction; Waiver Of Immunities. EACH OF
SELLER, EACH PURCHASER, SCI AND GUARANTOR HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION,
FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL
JURISDICTION IS NOT AVAILABLE, OF ANY STATE COURT, IN EITHER CASE SITTING
IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND (ii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 15.13. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement.
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SECTION 15.14. Originators. Until such time, if ever, that a Second Tier
Sale Agreement or a Purchase and Sale Agreement with an Originator is executed,
delivered and approved by the Administrative Agent and all Bank Purchasers, all
references to such Originator other than SCI, or a purchase from such Originator
other than SCI, shall be inoperative.
SECTION 15.15. Confidentiality of SCI Information. Pursuant to the
negotiation, preparation and implementation of this Agreement and the Agreement
Documents, the Guarantor and its Affiliates may from time to time furnish to the
Administrative Agent or a Purchaser written information which is identified to
such Person in writing when delivered as confidential (the "SCI Confidential
Information"). Each such Person shall use reasonable efforts to apply to any SCI
Confidential Information such procedures regarding confidentiality as it applies
generally to information of that nature; provided, however, that any such Person
may disclose any SCI Confidential Information or other documents delivered to
such Person, and disclose any other information disclosed to such Person, by or
on behalf of the Guarantor or its Affiliates in connection with or pursuant to
this Agreement to (i) such Person's directors, officers, employees, agents and
professional consultants, (ii) the Administrative Agent, (iii) the Purchasers,
(iv) any Person to which such Person offers to sell, assign or grant a security
interest in all or any portion of its Purchaser's Interests or other rights or
interests under this Agreement pursuant to Article XII hereof, which prospective
purchaser, assignee or grantee agrees in writing prior to the receipt of SCI
Confidential Information to comply with this Section 15.15, (v) any federal or
state regulatory authority having jurisdiction over such Person, (vi) any other
Person to which such delivery or disclosure may be necessary or appropriate (a)
in compliance with any law, rule, regulation or order applicable to such Person,
(b) in response to any subpoena or other legal process, (c) in connection with
any litigation to which such Person is a party or (d) in order to protect such
Person's rights under this Agreement, (vii) any rating agency rating, or
placement agent placing, a Conduit Purchaser's Commercial Paper Notes and (viii)
any Program Support Provider. In connection with disclosures by any Person
pursuant to clause (vi)(b) or (c) above, such Person shall use its reasonable
efforts to notify the Guarantor prior to any such disclosure unless such
notification to the Guarantor is prohibited by court order. Notwithstanding the
foregoing, any Person that discloses SCI Confidential Information pursuant to
this Section 15.15 shall not be liable to the Guarantor for failure to notify
the Guarantor of such disclosure.
SECTION 15.16. Funding. Any Bank Purchaser may fund or maintain its
Purchaser's Interest hereunder through any branch or agency of such Bank
Purchaser.
SECTION 15.17. Sharing of Payments, Etc. If any Purchaser (for purposes of
this Section, a "Recipient") shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff, or otherwise) on
account of the portion of the Undivided Interest owned by it (other than as a
result of the different methods for calculating Earned Discount) in excess of
its ratable share of payments on account of the Undivided Interest obtained by
the Purchasers entitled thereto, such Recipient shall forthwith purchase from
the Purchasers entitled to a share of such amount participations in the portions
of the Undivided Interest owned by such Persons as shall be necessary to cause
such Recipient to share
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the excess payment ratably with each such other Person entitled thereto;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such Recipient, such purchase from each such other
Person shall be rescinded and each such other Person shall repay to the
Recipient the purchase price paid by such Recipient for such participation to
the extent of such recovery, together with an amount equal to such other
Person's ratable share (according to the proportion of (a) the amount of such
other Person's required payment to (b) the total amount so recovered from the
Recipient) of any interest or other amount paid or payable by the Recipient in
respect of the total amount so recovered.
SECTION 15.18. Excess Funds. No Conduit Purchaser shall be required to
make payment of any amounts required to be paid by it pursuant hereto unless
such Conduit Purchaser has Excess Funds (as defined below); provided that no
Conduit Purchaser shall be required at any time to make Purchases or permit
Reinvestments hereunder, each of which are and shall remain in its sole and
absolute discretion. If a Conduit Purchaser 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 Purchaser until such time as such Conduit Purchaser has Excess
Funds. If a Conduit Purchaser does not have sufficient Excess Funds to make any
payment due hereunder, then such Conduit Purchaser 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 a Conduit Purchaser'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 Purchaser for borrowed money,
plus (ii) the sum of all other liabilities, indebtedness and other obligations
of such Conduit Purchaser 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 Purchaser to the Internal Revenue Service, plus
(iv) all other indebtedness, liabilities and obligations of such Conduit
Purchaser then due and payable, but the amount of any liability, indebtedness or
obligation of such Conduit Purchaser shall not exceed the projected value of the
assets to which recourse for such liability, indebtedness or obligation is
limited. Excess Funds with respect to Amsterdam shall be calculated once each
Business Day.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
QUINCY CAPITAL CORPORATION,
as a Conduit Purchaser
By
--------------------------------------
Title
----------------------------------
AMSTERDAM FUNDING CORPORATION,
as a Conduit Purchaser
By
--------------------------------------
Title
----------------------------------
RECEIVABLES CAPITAL CORPORATION,
as an Exiting Purchaser
By
--------------------------------------
Title
----------------------------------
SECOND AMENDED AND RESTATED
S-1 RECEIVABLES PURCHASE AGREEMENT
BANK OF AMERICA, NATIONAL ASSOCIATION,
as the Administrative Agent
By
--------------------------------------
Title
----------------------------------
BANK OF AMERICA, NATIONAL ASSOCIATION,
as a Bank Purchaser
By
--------------------------------------
Title
----------------------------------
ABN AMRO BANK N.V.,
as a Bank Purchaser
By
--------------------------------------
Title
----------------------------------
By
--------------------------------------
SECOND AMENDED AND RESTATED
S-2 RECEIVABLES PURCHASE AGREEMENT
Title
----------------------------------
SECOND AMENDED AND RESTATED
S-3 RECEIVABLES PURCHASE AGREEMENT
SCI FUNDING, INC.,
as Seller
By
--------------------------------------
Title
----------------------------------
SCI TECHNOLOGY, INC.,
as initial Servicer
By
--------------------------------------
Title
----------------------------------
SCI SYSTEMS, INC.
By
--------------------------------------
Title
----------------------------------
SECOND AMENDED AND RESTATED
S-4 RECEIVABLES PURCHASE AGREEMENT
APPENDIX A
DEFINITIONS
This is Appendix A to the Second Amended and Restated Receivables Purchase
Agreement, dated as of June 14, 2000, among SCI Funding, Inc., as Seller, SCI
Technology, Inc., as initial Servicer, SCI Systems, Inc., as Guarantor,
Receivables Capital Corporation, as an Exiting Purchaser, Quincy Capital
Corporation and Amsterdam Funding Corporation as Conduit Purchasers, Bank of
America, National Association, and ABN AMRO Bank N.V., as Bank Purchasers, and
Bank of America, National Association, as Administrative Agent (as further
amended, supplemented or otherwise modified from time to time, and including the
Original Receivables Agreement for as long as it was in effect, this
"Agreement"). Each reference in this Appendix A to any Section, Appendix or
Exhibit refers to such Section of or Appendix or Exhibit to this Agreement.
INDEX
Page No.
--------
A. Defined Terms A-1
B. Other Terms A-24
C. Computations of Time Periods ................................... A-24
A. Defined Terms. As used in this Agreement, unless the context requires a
different meaning, the following terms have the meanings indicated hereinbelow:
"ABN" has the meaning set forth in the preamble.
"Accounts Payable Amount" means at any time the aggregate amount,
vouchered and unvouchered, owed by Seller or any Originator to any Obligor at
such time for materials used in the manufacture or production of goods by an
Originator.
A-1
"Account Payable Obligor" means any Obligor with an Accounts Payable
Amount.
"Accounts Receivable" means all rights of any Person to payment for goods
sold or leased or for services rendered, whether or not such rights to payment
have been earned by performance, including, without limitation, all accounts,
contract rights, chattel paper, instruments and documents of any Person arising
from the sale of goods or services by such Person, whether secured or unsecured,
and whether now existing or hereafter created or arising and including, further,
without limitation, federal and state tax refunds due and owing to such Person
relating to taxes previously paid by such Person less all doubtful accounts
receivable owing to such Person, as determined in accordance with GAAP.
"Adjusted Average Maturity" has the meaning set forth in Appendix B.
"Administrative Agent" has the meaning set forth in the preamble.
"Administrative Agent's Account" has the meaning set forth in Section
3.05(a).
"Adverse Claim" means a Lien or other right or claim of any Person other
than (a) a potential claim or right (that has not yet been asserted) of a
trustee appointed for an Obligor in connection with any Event of Bankruptcy or
(b) an unfiled lien for taxes accrued but not yet payable.
"Affected Party" means each of each Purchaser, each Program Support
Provider, any permitted assignee of a Purchaser, or a Program Support Provider,
any assignee of any of a Purchaser's obligations to a Program Support Provider
in respect of any Funding, or any holder of a participation interest in the
rights and obligations of any Program Support Provider under any Program Support
Agreement and in respect of any Funding, the Administrative Agent and any
holding company of BofA or any Bank Purchaser.
"Affiliate" when used with respect to a Person means any other Person
controlling, controlled by, or under common control with, such Person.
"Affiliated Party" means each of Guarantor, SCI and their Affiliates.
"Aggregate Purchasers' Investment" means the sum of the Purchaser's
Investments for all Purchasers.
A-2
"Agreement Documents" means this Agreement, the Lock-Box Agreements, the
Fee Letters, each Second Tier Sale Agreement, each Purchase and Sale Agreement
and the other documents to be executed and delivered in connection herewith.
"Alternate Reference Rate" has the meaning set forth in Appendix B.
"Amsterdam" has the meaning set forth in the preamble.
"Assignment Amount" means, with respect to any Bank Purchaser in the
Quincy Related Group at the time of an assignment pursuant to Section 1.10, an
amount equal to the least of (a) such Bank Purchaser's pro rata share of the
Purchaser's Investment requested by Quincy to be assigned at such time; (b) such
Bank Purchaser's Maximum Assignment Amount (minus any unrecovered principal
amount of such Bank Purchaser's investments pursuant to Quincy's related Program
Support Agreement) and (c) in the case of an assignment on or after the Conduit
Investment Termination Date, the sum of such Bank Purchaser's Conduit Related
Percentage of the aggregate principal balance of the Purchaser's Investment
being transferred by Quincy plus any Earned Discount accrued and to accrue
thereon minus (after the occurrence of a "Trigger Event" (as defined in the
Program Support Agreement)) the excess, if any, of "DR" over "FLP" (each, as
defined and calculated in the Program Support Agreement).
"Average Maturity" has the meaning set forth in Appendix B .
"Bank Credit Agreement" means that certain Amended and Restated Credit
Agreement dated as of August 4, 1995, by and among Guarantor, as borrower
thereunder, Citibank, N.A., as agent, ABN AMRO Bank N.V., as co-agent, and the
other lenders signatory thereto, as the same has been and may be amended,
supplemented, extended, renewed, restated, refinanced or replaced from time to
time.
"Bank Purchaser" has the meaning set forth in the preamble.
"Bank Rate" has the meaning set forth in Appendix B.
"BofA" has the meaning set forth in the preamble.
"Business Day" means a day on which commercial banks in Chicago, Illinois,
Charlotte, North Carolina, New York City and Huntsville, Alabama are not
authorized or required to be closed for business.
"Change of Control" means (i) that Seller ceases to be a Wholly Owned
Subsidiary of SCI, (ii) that SCI or any other Originator ceases to be a Wholly
Owned Subsidiary of Guarantor or (iii) in relation to Guarantor, the acquisition
by any Person or group of Persons (within the meaning of Section 13 or 14 of the
Exchange Act), of beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC
A-3
under the Exchange Act) of issued and outstanding shares of the capital stock of
Guarantor entitled (without regard to the occurrence of any contingency) to vote
for the election of members of the board of directors of Guarantor and having a
then present right to exercise 50% or more of the voting power for the election
of members of the board of directors of Guarantor attached to all such
outstanding shares of capital stock of Guarantor.
"Collections" means, with respect to any Receivable, all funds which
either (a) are received by Seller, any Originator or Servicer from or on behalf
of the related Obligors in payment of any amounts owed (including, without
limitation, purchase prices, finance charges, interest and all other charges) in
respect of such Receivable, or applied to such amounts owed by such Obligors
(including, without limitation, insurance payments that Seller, any Originator
or Servicer applies in the ordinary course of its business to amounts owed in
respect of such Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable and available
to be applied thereon), or (b) are deemed to have been received, by Seller or
any other Person as a Collection pursuant to Section 3.03.
"Commercial Paper Notes" means short-term promissory notes issued or to be
issued by a Conduit Purchaser to fund its investments in accounts receivable or
other financial assets.
"Commercial Paper Rate" has the meaning set forth in Appendix B.
"Commitment" with respect to any Purchaser means the amount listed as such
Purchaser's Commitment on Schedule I. Notwithstanding the use of the term
"Commitment" in this Agreement with respect to any Conduit Purchaser, no Conduit
Purchaser shall have any obligation hereunder to fund any Purchase or
Reinvestment, all of such fundings being at such Conduit Purchaser's sole
discretion.
"Concentration Limit" has the meaning set forth in Section 2.04(b).
"Conditions Precedent" has the meaning set forth in Section 5.02.
"Conduit Purchaser" has the meaning set forth in the preamble.
"Conduit Related Percentage" means with respect to any Bank Purchaser and
any Related Group the ratio, expressed as a percentage, of (i) such Bank
Purchaser's Commitment divided by (ii) the aggregate of the Commitments of each
of the Bank Purchasers in such Related Group.
"Consistent Basis" means, in reference to the application of GAAP, that
the accounting principles observed in the period referred to are comparable in
all material respects to those applied in the preceding
A-4
period, except to the extent required to reflect a change in GAAP or any other
changes consented to by the Required Purchasers.
"Contingent Obligation" as to any Person means any obligation of such
Person guaranteeing or in effect guaranteeing any indebtedness, leases,
dividends or other contractual obligations ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not state or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such Person
in good faith.
"Contract" means a contract between an Originator and any Person, or an
invoice from an Originator to any Person or a purchase order from any Person to
an Originator, in each case pursuant to or under which such Person shall be
obligated to make payments to an Originator.
"Credit Agreement" means that certain Amended and Restated 364-Day Credit
Agreement dated as of June 29, 2001 among SCI Systems, Inc., the Banks party
thereto, Citicorp USA, Inc., as Administrative Agent and the other parties
thereto, as in effect on August 10, 2001.
"Credit and Collection Procedure" means those credit and collection
policies and practices relating to Contracts and Receivables described in the
PriceWaterhouseCoopers report attached as Schedule 6.01(m)-2, as modified
without violating Section 7.03(c).
"Credit Reserve" at any time means an amount equal to the greater of (1)
$5,000,000 and (2) the product of (i) the Total Purchasers' Investment at such
time, times (ii) the greatest of (A) 28%, (B) the sum of (I) the Dilution
Reserve, plus (II) the product of (1) two times (2) the highest Sales-Based
Default Ratio to have occurred for the most recent twelve Month End Dates times
the quotient of (x) the cumulative ▇▇▇▇▇▇▇▇ over the most recent four months
(provided that ▇▇▇▇▇▇▇▇ for the most recent five months shall be used if
required by any Purchaser at any time) divided by (y) the aggregate Unpaid
Balance of Eligible Receivables as of the most recent Month End Date and (C) the
sum of (I) the Dilution Reserve, plus (II) the product of (1) 2.5 times (2) the
highest Delinquency Ratio to have occurred for the most recent twelve Month End
Dates.
A-5
"Deemed Collection" has the meaning assigned thereto in the applicable
Second Tier Sale Agreement.
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid for 120
days (or 150 days if the Obligor thereof is a Governmental Authority) from
the invoice date, other than amounts deemed uncollectible, in Servicer's
reasonable judgment, due to contract cancellations and adjustments, which,
in each case, are not related to and do not result from credit problems,
(b) is due from an Obligor with respect to which an Event of
Bankruptcy has occurred and remains continuing,
(c) as to which payments have been extended, or the terms of payment
thereof rewritten, without the Required Purchasers' consent, other than as
permitted in Section 8.02(c), or
(d) which has been or, consistent with the Credit and Collection
Procedure, should be, written off Seller's books as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage) computed
as of each Month End Date by dividing (x) the aggregate Unpaid Balance of all
Pool Receivables that were Delinquent Receivables on each of such Month End Date
and the five (5) immediately preceding Month End Dates by (y) the aggregate
Unpaid Balance of all Pool Receivables on such Month End Dates.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 90 days from the invoice date, other than
amounts deemed uncollectible, in Servicer's reasonable judgment, due to billing
disputes, contract cancellations for other than credit reasons and adjustments.
"Designated Obligor" means, at any time, all Obligors except Excluded
Obligors and any such Obligor as to which any Bank Purchaser has, at least three
(3) Business Days prior to the date of determination, given written notice to
Seller and the Administrative Agent that such Obligor shall not be considered a
Designated Obligor.
"Dilution Factors" means any event or condition described in clause (i) of
Section 3.03(a) that would cause any Pool Receivable or portion thereof to be
deemed a Collection.
"Dilution Horizon Ratio" means as of any Month End Date (i) the aggregate
▇▇▇▇▇▇▇▇ for the three months preceding such Month End Date, divided by (ii) the
aggregate Unpaid Balance of all Eligible Receivables at such Month End Date.
A-6
"Dilution Reserve" at any time means an amount equal to (i) (a) two times
the Expected Dilution Ratio, plus (b) the Spike Factor, times (ii) the Dilution
Horizon Ratio.
"Dilution Spike" means the highest Sales-Based Dilution Ratio to have
occurred during the twelve month period preceding such Month End Date.
"Discount Factor" has the meaning set forth in Appendix B.
"Dollars" means dollars in lawful money of the United States of America.
"Earned Discount" has the meaning set forth in Appendix B.
"Eligible Contract" means a Contract similar to one of the forms set forth
in Schedule 6.01(m)-1 or in another form approved by SCI in the exercise of its
reasonable business judgment.
"Eligible Receivable" means, at any time, a Receivable:
(a) the Obligor of which (i) is not an Affiliate of Seller, and (ii) is a
Designated Obligor at the time of the creation of an interest in such Receivable
hereunder;
(b) the Obligor of which is located in the United States (or is fully
guaranteed by an Affiliate of the Obligor that is located in the United States
pursuant to a guaranty in substantially the form attached hereto as Exhibit I-1
or such other form satisfactory in form to the Required Purchasers) or Canada,
provided that the Administrative Agent and the Required Purchasers have
determined, to their reasonable satisfaction, that such Receivables are not
subject to any offset or withholding of any kind and has received an opinion of
counsel, in form and substance satisfactory to the Required Purchasers, as to
the true sale of such Receivables to Seller, the perfection of the
Administrator's interest therein and such other matters as the Administrative
Agent or any Bank Purchaser shall reasonably request;
(c) which is not a Defaulted Receivable;
(d) (i) which arose in the ordinary course of an Originator's business
from the sale of such Originator's merchandise, insurance or services; provided
that, if such Receivable was not originated by
A-7
SCI, the Unpaid Balance of such Receivable, when added to the aggregate Unpaid
Balance of all other Pool Receivables not originated by SCI, does not exceed 5%
of the aggregate Unpaid Balance of all Eligible Receivables and (ii) which,
according to the Contract related thereto, is required to be paid in full within
thirty (30) days of the original billing date or statement date therefor;
(e) which is an account receivable representing all or part of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended;
(f) which is denominated and payable only in United States dollars;
(g) which arises under an Eligible Contract which has been duly authorized
and which, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor, as to all material terms thereof,
in accordance with its terms;
(h) the Obligor of which is not the Obligor of Defaulted Receivables that
represent more than 10% of the aggregate Unpaid Balance of all Receivables of
such Obligor;
(i) which is not subject to any existing dispute, offset, counter-claim or
defense whatsoever, except for Accounts Payable Amounts;
(j) which, together with the Contract related thereto, does not contravene
any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) in any material respect and with respect to
which no party to the Contract related thereto is in violation of any such law,
rule or regulation in any material respect;
(k) as to which, at or prior to the time of the initial creation of an
interest in such Receivable through a Purchase, the Administrative Agent has not
notified the Seller that any Bank Purchaser (exercising its reasonable credit
judgment) has determined that such Receivable (or the class of Receivables into
which such Receivable falls) is not acceptable for purchase hereunder;
(l) no portion of which includes any amounts payable in respect of sales
taxes;
(m) which is not a progress billing;
(n) which constitutes an account as defined in the UCC (or applicable
Canadian law) as in effect in the jurisdiction governing the perfection of the
Administrative Agent's ownership interest;
A-8
(o) with regard to which the warranty of Seller in Section 6.01(i) is true
and correct;
(p) which arises out of a current transaction, or the proceeds of which
have been or are to be used for current transactions, within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended;
(q) which (i) satisfies all applicable requirements of the related Credit
and Collection Procedure and (ii) complies with such other criteria and
requirements as any Bank Purchaser (exercising its reasonable credit judgment)
may from time to time specify to the Seller and the Administrative Agent;
(r) if such Receivable was originated by an Originator other than SCI,
which was sold in a true sale to SCI pursuant to a Purchase and Sale Agreement
that has been approved by the Required Purchasers and with respect to which all
conditions precedent have been met to the satisfaction of the Required
Purchasers (including, without limitation, the delivery of opinions of counsel),
and, in each case, was sold to Seller pursuant to a Second Tier Sale Agreement;
and
(s) if the Obligor of such Receivable is an Account Payable Obligor, the
Contract related to such Receivable between such Obligor and the related
Originator that is the master contract for such Obligor has a "take or pay"
clause and has been approved by the Required Purchasers.
"End Date" means the date after the Facility Termination Date on which the
Undivided Interest has been reduced to zero and all other amounts payable to any
Purchaser or the Administrative Agent hereunder have been paid in full.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Rate (Reserve Adjusted)" has the meaning set forth in Appendix
B.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a
Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or substantially all of its assets, or any
similar action with respect to such Person under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 60 consecutive
days; or an order for relief in respect of such Person shall be entered in
an involuntary case under the federal bankruptcy laws or other similar
laws now or hereafter in effect; or
A-9
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for, such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
fail to, or admit in writing its inability to, pay its debts generally as
they become due, or, if a corporation or similar entity, its board of
directors shall vote to implement any of the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Data" means any information or data pertaining to an Obligor,
the disclosure of which information and data by Seller, Guarantor or any
Affiliate of either of them (collectively, the "Disclosing Parties") to the
Administrative Agent or a Purchaser could violate, in the good faith belief of
counsel, any applicable "fair credit" law, privacy law or any similar statute,
rule or regulation, or any contractual provision binding on any such Disclosing
Party.
"Excluded Obligors" means (i) each Governmental Authority (provided that
Governmental Authorities shall only constitute "Excluded Obligors" from and
after the date any Purchaser provides notice of such designation to the Seller
and the Servicer) and (ii) any other Obligor approved as an "Excluded Obligor"
by all Bank Purchasers in a written consent accompanied by a certificate from
the Seller and the Servicer that such designation will not cause a Termination
Event or Unmatured Termination Event to occur (provided, that each Bank
Purchaser hereby consents to the future designation of NEC as an "Excluded
Obligor" upon delivery of the certificate described above).
"Executive Officer" means any of those officers of Guarantor, SCI or
Seller, as the case may be, who are deemed to be "Executive Officers" thereof
pursuant to Rule 405 of Regulation C of the Exchange Act or any officer of
Guarantor or Seller, as the case may be, who is a senior vice president thereof,
or any individual performing a similar role as any individual who is a senior
vice president of Guarantor or Seller on the date of this Agreement.
"Exiting Purchaser" has the meaning set forth in the preamble.
"Expected Dilution Ratio" for any Month End Date means the average of the
Sales-Based Dilution Ratios for the twelve months preceding such Month End Date.
"Facility" means the purchase and reinvestment facility provided by the
Purchasers pursuant to this Agreement.
"Facility Termination Date" has the meaning set forth in Section 1.05.
A-10
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Fee Letter" has the meaning set forth in Section 4.01.
"Financing Lease(s)" shall mean (a) any lease of property, real or
personal, the then present value of the minimum rental commitment of which
should, in accordance with GAAP, be capitalized on a balance sheet of the
lessee, and (b) any other such lease the obligations under which are capitalized
on a consolidated balance sheet of SCI or Guarantor and its Subsidiaries.
"Financing Statement" means any financing statement that lists the Seller
(under any current name, any previous name or any trade name) as debtor and that
is filed in any jurisdiction in which filings would be appropriate under the UCC
or any comparable law to perfect a security interest in any Receivable, any
Collections with respect thereto, any Related Security or any Contract.
"Funded Percentage" with respect to any Purchaser at any time means the
ratio, expressed as a percentage, of (i) such Purchaser's Purchaser's Investment
divided by (ii) the Total Purchasers' Investment, in each case, at such time.
"Funding" means a drawing under a letter of credit, surety bond or other
instrument issued pursuant to a Program Support Agreement, a drawing on a cash
collateral account funded pursuant to a Program Support Agreement, a purchase,
loan or other extension of credit made by a Program Support Provider to a
Conduit Purchaser under a Program Support Agreement, or any other advance or
disbursement of funds from or to a Conduit Purchaser or for such Conduit
Purchaser's account or for which such Conduit Purchaser is obligated to
reimburse a Program Support Provider pursuant to a Program Support Agreement.
"GAAP" means United States generally accepted accounting principles.
"Governmental Authority" means any nation or government (including,
without limitation, the United States government), any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative function of or pertaining to government.
"Group Percentage" means, with respect to any Related Group, the ratio,
expressed as a percentage, of (i) the aggregate of the Commitments of each of
the Bank Purchasers in such Related Group divided by (ii) the aggregate of the
Commitments of all Bank Purchasers.
"Guarantor" has the meaning set forth in the preamble.
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"Indebtedness" of a Person, at a particular date, means any of the
following at such date, without duplication, (a) indebtedness of such Person for
borrowed money or evidenced by notes, bonds, debentures or like instruments, (b)
indebtedness of such Person for the deferred purchase price of property or
services, except current accounts payable and accrued expenses arising in the
ordinary course of business, (c) obligations of such Person under any Financing
Lease, (d) indebtedness of such Person arising under acceptance facilities, (e)
unreimbursed draws on letters of credit and (f) Contingent Obligations.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
"Indemnified Party" has the meaning set forth in Section 13.01.
"Information" has the meaning set forth in Section 15.07.
"Information Provider" has the meaning set forth in Section 15.07.
"Initial Purchaser Note" has the meaning set forth in the applicable
Second Tier Sale Agreement.
"Inventory" means, with respect to any Person, all goods, merchandise and
other personal property held for sale, and all raw materials, components, work
or goods in process, finished goods, goods in transit and packing and shipping
materials, accretions and accessions thereto, trust receipts and similar
documents covering the same products, all whether now owned or hereafter
acquired by such Person, all as determined in accordance with GAAP.
"Lien" means a lien, security interest, charge or encumbrance.
"Liquidations" means all funds described in clause (a) of the definition
of Collections.
"Liquidity Agreement" means, with respect to each Conduit Purchaser, any
liquidity agreement entered into from time to time by such Conduit Purchaser
related to this Agreement.
"Liquidity Banks" means the purchasers or lenders from time to time
parties to a Liquidity Agreement.
"Lock-Box Account" means any bank account in which Collections (other than
Collections of Receivables with respect to which the Obligors are Excluded
Obligors) are received or deposited.
"Lock-Box Agreement" means a letter agreement, in substantially the form
of Exhibit 5.01(i), between Seller and any Lock-Box Bank.
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"Lock-Box Bank" means any of the banks party to a Lock-Box Agreement
holding one or more Lock-Box Accounts for receiving Collections from Pool
Receivables.
"Losses to Liquidations Ratio" means the percentage that (x) the
write-offs (net of recoveries) recognized during the six month period ending on
the most recent Month End Date on all Receivables owned by Seller was of (y)
Collections of such Receivables during such period.
"Manager" means SCI Systems (Alabama), Inc., an Alabama corporation and
the immediate parent company of SCI.
"Management Agreement" means the Management Agreement, dated as of
September 27, 1996, between Manager and Seller, as amended, supplemented or
otherwise modified from time to time.
"Material Adverse Effect" means a material adverse effect on:
(i) the financial condition, business, assets, prospects or
operations of Guarantor and its Subsidiaries, taken as a whole;
(ii) the ability of Servicer or Guarantor to perform its obligations
under this Agreement or the other Agreement Documents to which it is a
party;
(iii) the validity, enforceability, status, perfection or priority
of any Purchaser's or the Administrative Agent's interest in the Pool; or
(iv) the collectibility or enforceability of a significant portion
of the Pool Receivables.
"Maximum Assignment Amount" equals, for any Bank Purchaser in the Quincy
Related Group, an amount equal to (A) 1.02 multiplied by its aggregate
Commitment (used and unused) minus (B) the aggregate Purchaser's Investment of
such Bank Purchaser.
"Month End Date" means the last day of each fiscal month.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto.
"Negative Spread Fee" has the meaning set forth in Appendix B.
"Net Income" means, as applied to any Person for any fiscal period, the
aggregate amount of net income (or net loss) of such Person, after taxes, for
such period as determined in accordance with GAAP.
"Net Pool Balance" has the meaning set forth in Section 2.04(a).
A-13
"Obligor" means a Person obligated to make payments with respect to a
Receivable.
"Original Receivables Agreement" has the meaning set forth in the
Background.
"Originator Loan" is defined in the applicable Second Tier Sale Agreement.
"Originator Note" is defined in the applicable Second Tier Sale Agreement.
"Originators" means SCI, SCI Systems (Canada), Inc., a Canadian
corporation formed under the laws of the Province of Quebec, SCI Brockville
Corp., a Nova Scotia Company and their respective successors and permitted
assigns.
"Owner" means, for each Purchase, the Purchasers funding such Purchase;
provided, however, that, upon any assignment of any interest in the Undivided
Interest (or portion thereof) made in accordance with Article XII, the assignee
thereof shall be the Owner of such interest in the Undivided Interest (or
portion thereof).
"Percentage" with respect to any Purchaser means the percentage set forth
opposite such Purchaser's name on Schedule I hereto.
"Periodic Report" means a report in substantially the form of Exhibit
3.04(a) or such other form acceptable to the Purchasers.
"Permitted Subordinated Debentures" means debentures contemplated to be
issued from time to time by Guarantor after the date of the Original Agreement
that (i) are subordinated in writing to all obligations of Guarantor, SCI and
Seller hereunder, such subordination provisions to be on terms and conditions
reasonably satisfactory in all respects to the Required Purchasers (approval
under the Bank Credit Agreement constitutes approval hereunder) and (ii) do not
exceed $800,000,000 in the aggregate at any time.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.
"Pool" has the meaning set forth in Section 2.01.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Program Fee Rate" has the meaning set forth in the Fee Letter.
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"Program Support Agreement" with respect to any Conduit Purchaser means
and includes the Liquidity Agreement to which such Conduit Purchaser is a party
and any other agreement entered into by any Program Support Provider providing
for the issuance of one or more letters of credit for the account of such
Conduit Purchaser, the issuance of one or more surety bonds for which such
Conduit Purchaser is obligated to reimburse the applicable Program Support
Provider for any drawings thereunder, the sale by such Conduit Purchaser to any
Program Support Provider of interests in the Undivided Interest (or portions
thereof) and/or the making of loans and/or other extensions of credit to such
Conduit Purchaser in connection with such Conduit Purchaser's securitization
program, together with any letter of credit, surety bond or other instrument
issued thereunder.
"Program Support Provider" with respect to any Conduit Purchaser means and
includes the Liquidity Banks party to the Liquidity Agreement with such Conduit
Purchaser and any other or additional Person (other than any customer of such
Conduit Purchaser) now or hereafter extending credit or having a commitment to
extend credit to or for the account of such Conduit Purchaser or issuing a
letter of credit, surety bond or other instrument to support any obligations
arising under or in connection with such Conduit Purchaser's securitization
program.
"Purchase" has the meaning set forth in Section 1.01(a).
"Purchase and Sale Agreement" means a Purchase and Sale Agreement between
SCI and an Originator, as it may be amended, supplemented or otherwise modified
from time to time.
"Purchase and Sale Termination Date" means the earlier of the End Date and
the termination of the Commitments under Section 10.02.
"Purchase Limit" has the meaning set forth in Section 1.02(a).
"Purchase Termination Date" has the meaning set forth in Section 1.06.
"Purchaser" means any of the Conduit Purchasers or the Bank Purchasers,
and "Purchasers" means all of the Conduit Purchasers and the Bank Purchasers.
"Purchaser Rate" has the meaning set forth in Appendix B.
"Purchaser's Interest" means, with respect to any Purchaser, all of such
Purchaser's right, title and interest in the Pool and the Agreement Documents.
"Purchaser's Investment" has the meaning set forth in Section 2.03.
"Purchasers' Share" has the meaning set forth in Section 2.05.
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"Quincy" has the meaning set forth in the preamble.
"Rate Variance Factor" has the meaning set forth in Appendix B.
"RCC" has the meaning set forth in the preamble.
"Receivable" means any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising from the sale by any Originator of merchandise or services rendered by
such Originator, as the case may be, and includes the right to payment of any
interest or finance charges and other obligations of such Person with respect
thereto.
"Receivables Pool" means at any time all then outstanding Receivables as
to which the Obligors thereunder are Designated Obligors. If a Receivable is a
Pool Receivable on the day immediately preceding the Facility Termination Date,
such Receivable shall continue to be considered a Pool Receivable at all times
thereafter.
"Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as currently defined in Regulation D, as in effect from time to
time.
"Regulatory Change" means, relative to any Affected Party
(a) any change in (or the adoption, implementation, phase-in or
commencement of effectiveness of) any
(i) United States federal or state law or foreign law
applicable to such Affected Party;
(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to such
Affected Party of (A) any court, government authority charged with
the interpretation or administration of any law referred to in
clause (a)(i) or of (B) any fiscal, monetary or other authority
having jurisdiction over such Affected Party; or
(iii) generally accepted accounting principles or regulatory
accounting principles applicable to such Affected Party and
affecting the application to such Affected Party of any law,
regulation, interpretation, directive, requirement or request
referred to in clause (a)(i) or (a)(ii) above; or
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(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request
or accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii)
above.
"Reinvestment" has the meaning set forth in Section 1.01(b).
"Related Administrator" with respect to (i) Quincy means BofA and (ii)
Amsterdam means ABN.
"Related Bank Purchaser" with respect to any Conduit Purchaser means each
Bank Purchaser designated as a "Related Bank Purchaser" for such Conduit
Purchaser on Schedule I hereto.
"Related Group" means each of (i) Quincy and its Related Bank Purchasers
and Related Administrator, and (ii) Amsterdam and its Related Bank Purchasers
and Related Administrator.
"Related Security" means, with respect to any Pool Receivable: (a) all of
Seller's and the related Originator's right, title and interest in, under and to
all security agreements or other agreements that relate to such Pool Receivable;
(b) all of Seller's and the related Originator's interest in the merchandise
(including returned merchandise), if any, relating to the sale which gave rise
to such Pool Receivable; (c) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of such Pool
Receivable, whether pursuant to the Contract related to such Pool Receivable or
otherwise; (d) all UCC financing statements or similar filings covering any
collateral securing payment of such Pool Receivable; (e) all guarantees and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Pool Receivable whether pursuant to the
Contract related to such Pool Receivable or otherwise; and (f) all of Seller's
rights and claims under the Purchase and Sale Agreement and the Second Tier Sale
Agreements.
"Remaining Collections" has the meaning set forth in Section 3.01(a)(ii).
"Required Allocation" at any time means the sum of the Total Purchasers'
Investment, Discount Factor, Servicer's Fee Reserve and Credit Reserve at such
time as calculated pursuant to Section 2.02.
"Required Allocation Limit" has the meaning set forth in Section 1.02(b).
"Required Purchasers" means the Bank Purchasers having aggregate
Percentages of 60% or more (but not less than two Bank Purchasers).
"Requirement of Law" for any Person shall mean the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or
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determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Run Off Day" means any of (a) each day which occurs on or after the date
designated by the Administrative Agent or the Required Purchasers to Seller to
be the "Run Off Commencement Date" during a time when any of the conditions
precedent set forth in Section 5.02 are not satisfied, (b) each day which occurs
on or after the Termination Date or (c) each day which occurs on or after the
Seller shall have given written notice to the Administrative Agent and each Bank
Purchaser that it no longer wishes to sell the Undivided Interest in the
Receivables Pool pursuant to this Agreement.
"Run Off Discount" has the meaning set forth in Appendix B.
"Run Off Period" means one or more successive Run Off Days.
"Run Off Servicer's Fee" has the meaning set forth in Appendix B.
"Sales-Based Default Ratio" means, as of any Month End Date, the ratio,
expressed as a percentage, of (i) the aggregate Unpaid Balance of all Pool
Receivables that were more than 91, but less than 120, days past due for the
three successive months occurring immediately prior to the month ending on such
Month End Date, plus the aggregate write-offs for the month ending on such Month
End Date and for the immediately preceding two months, divided by (ii) the
aggregate ▇▇▇▇▇▇▇▇ for the fifth, sixth and seventh preceding months. For
example, as of April 30, the numerator of the Sales-Based Default Ratio would be
the aggregate Unpaid Balance of all Pool Receivables that were more than 91, but
less than 120, days past due as of January 31, February 28 and March 31, plus
the aggregate write-offs for the months of February, March and April; the
denominator of the Sales-Based Default Ratio would be the aggregate ▇▇▇▇▇▇▇▇ for
the months of October, November and December. For purposes of calculating the
Sales-Based Default Ratio (i) for the months of October, November and December
of 1999, Receivables owed by Monorail shall be excluded , (ii) for the month of
January of 2000, Receivables owed by Compaq shall be excluded and (iii) for the
month of February of 2001, Receivables owed by Echostar shall be excluded.
"Sales-Based Dilution Ratio" as of any Month End Date means (a) the
aggregate reduction in the Unpaid Balance of Pool Receivables attributable to
Dilution Factors which Dilution Factors were granted during the month ending on
such Month End Date, divided by (b) ▇▇▇▇▇▇▇▇ for the third month preceding such
Month End Date.
"Second Tier Sale Agreements" means, collectively, each Second Tier Sale
Agreement between an Originator and Seller, as it may be amended, supplemented
or otherwise modified from time to time.
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"Second Tier Sale Termination Event" has the meaning set forth in the
applicable Second Tier Sale Agreement.
"S&P" means Standard and Poor's Ratings Group, a division of McGraw Hill,
Inc., and any successor thereto.
"Scheduled Facility Termination Date" has the meaning set forth in Section
1.05(a).
"SCI" has the meaning set forth in the preamble.
"SCI Party" means each of SCI, Seller, Guarantor and each Originator.
"SEC" means the Securities and Exchange Commission.
"Seller" has the meaning set forth in the preamble.
"Seller Material Adverse Effect" means a material adverse effect on:
(i) the financial condition, business, assets, prospects or
operations of Seller;
(ii) the ability of Seller to perform its obligations under this
Agreement or the other Agreement Documents to which it is a party;
(iii) the validity, enforceability, status, perfection or priority
of any Purchaser's or the Administrative Agent's interest in the Pool; or
(iv) the collectibility or enforceability of a significant portion
of the Pool Receivables.
"Servicer" has the meaning set forth in Section 8.01(a).
"Servicer Transfer Event" has the meaning set forth in Section 8.01(b).
"Servicer's Fee" has the meaning set forth in Appendix B.
"Servicer's Fee Reserve" has the meaning set forth in Appendix B.
"Settlement Date" means the 15th day of each month or if such day is not a
Business Day, the next succeeding Business Day, commencing July 17, 2000;
provided, that the initial Settlement Date with respect to amounts accrued prior
to the date hereof shall be June 20, 2000.
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"Settlement Period" means each period from and including a Settlement Date
to but excluding the next succeeding Settlement Date; provided, however that
with respect to the first Settlement Period occurring after the date hereof, the
period from the date hereof through July 17, 2000.
"Special Concentration Limit" has the meaning set forth in Section
2.04(c).
"Spike Factor" means (i) the Dilution Spike minus the Expected Dilution
Ratio at such time, times (ii) the Dilution Spike divided by the Expected
Dilution at such time.
"Subordinated Debt" means (i) the Permitted Subordinated Debentures and
(ii) any other Indebtedness of Guarantor or any Subsidiary of Guarantor which is
subordinated in writing to all obligations of Guarantor or such Subsidiary on
terms and conditions satisfactory in all respects to the Required Purchasers and
approved in writing by the Required Purchasers (which approval shall not be
unreasonably withheld or delayed) including, without limitation, with respect to
interest rates, payment terms, maturities, amortization schedules, covenants,
defaults, remedies and subordination provisions.
"Subsidiary" of any Person shall mean a corporation or other entity of
which shares of stock or other ownership interests having ordinary voting power
(other than stock or other ownership interests having such power only by reason
of the happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, including through other Subsidiaries, by such
Person.
"Successor Notice" has the meaning set forth in Section 8.01(b).
"Support Termination Date" for any Bank Purchaser means the date set forth
opposite such Bank Purchaser's name on Schedule I, as such date may be extended
from time to time with the written consent of such Bank Purchaser.
"Termination Date" means the Facility Termination Date.
"Termination Event" has the meaning set forth in Section 10.01.
"Total Capital" means, as to any Person at a particular date, the sum of
(i) all items which would, in accordance with GAAP, be properly classified on
the balance sheet of such Person as (A) total shareholders' equity plus (B)
long-term deferred income taxes, plus (ii) Total Debt.
"Total Debt" means, as to any Person at a particular date, the sum of all
items which would, in accordance with GAAP, be properly classified on such
Person's balance sheet as (i) short-term debt for money borrowed, plus (ii)
current maturities of long-term debt, plus (iii) long-term debt, including,
without
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limitation, with respect to Guarantor, the Subordinated Debt and to the extent
issued, the Permitted Subordinated Debentures.
"Total Purchasers' Investment" at any time means the sum of the
Purchaser's Investment for all Purchasers hereunder.
"Trigger Event" shall be deemed to have occurred and be continuing if (i)
the Guarantor does not maintain at least one investment grade long-term senior
debt rating by S&P, ▇▇▇▇▇'▇ or ▇▇▇▇▇, Inc. and (ii) any Purchaser has provided
notice to the Seller and the Servicer that Accounts Payable Amounts are to be
deducted from the Net Pool Balance.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction or jurisdictions.
"Undivided Interest" has the meaning set forth in Section 2.01.
"Unmatured Termination Event" means any event which, with the giving of
notice or lapse of time, or both, would become a Termination Event.
"Unpaid Balance" of any Receivable means at any time the sum of (x) the
unpaid principal amount thereof, minus (y) any amounts representing any sales or
other similar tax.
"Wholly Owned Subsidiary" means a Subsidiary all of whose issued and
outstanding capital stock (other than directors' qualifying shares) is owned by
Guarantor or another Wholly Owned Subsidiary.
B. Other Terms. All accounting terms not specifically defined herein shall
be construed in of New York, and not specifically defined herein, are used
herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this Agreement,
in the computation of a period of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
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APPENDIX B
CALCULATION OF DISCOUNT AND RESERVE
This is Appendix B to the Second Amended and Restated Receivables Purchase
Agreement dated as of June 14, 2000 among SCI Funding, Inc., as Seller, SCI
Technology, Inc., as initial Servicer, SCI Systems, Inc., as Guarantor,
Receivables Capital Corporation, as Exiting Purchaser, Quincy Capital
Corporation and Amsterdam Funding Corporation, as Conduit Purchasers, Bank of
America, National Association, and ABN AMRO Bank N.V., as Bank Purchasers, and
Bank of America, National Association, as Administrative Agent (as amended,
supplemented or otherwise modified from time to time, and including the Original
Agreement for as long as it was in effect, the "Agreement"). Capitalized terms
used in this Appendix B without definition have the meanings assigned to such
terms in Appendix A to the Agreement. Each reference in this Appendix B to any
Section refers to such Section of the Agreement. Each reference in this Appendix
B to any Part refers to the part of this Appendix B so designated.
INDEX
PART I
DISCOUNT FACTOR
Sub-
Part Term Page No.
---- ---- --------
A. Discount Factor.................................................B-2
B. Earned Discount.................................................B-3
C. Negative Spread Fee.............................................B-3
D. Run Off Discount................................................B-4
E. Rate Definitions ...............................................B-4
Alternate Reference Rate.......................................B-4
Bank Rate......................................................B-5
Bank Rate Spread...............................................B-5
Commercial Paper Rate..........................................B-5
Eurodollar Rate (Reserve Adjusted).............................B-7
Pricing Grid Margin............................................B-8
Purchaser Rate.................................................B-8
F. Rate Variance Factor............................................B-9
B-1
B-2
PART II
CREDIT RESERVE
Sub-
Part Term Page No.
---- ---- --------
A. Credit Reserve..................................................B-9
PART III
DILUTION RESERVE
A. Dilution Reserve................................................B-9
PART IV
SERVICER'S FEE RESERVE
A. Servicer's Fee Reserve......................................... B-9
B. Servicer's Fee..................................................B-10
C. Run Off Servicer's Fee. . . . . . . . . . . ....................B-10
PART V
ADJUSTED AVERAGE MATURITY
A. Adjusted Average Maturity.......................................B-10
B. Average Maturity................................................B-11
--------
PART I
DISCOUNT FACTOR
B-3
A. Discount Factor. The "Discount Factor" at any time in a Settlement
Period means an amount determined as follows:
DF = ED + ROD
where:
DF = the Discount Factor at such time;
ED = Earned Discount for all Purchasers accrued and unpaid at such time,
as determined pursuant to Part I.B;
ROD = Run Off Discount at such time, as determined pursuant to Part I.D.
B. Earned Discount. The "Earned Discount" with respect to any Purchaser
for each day in a related Settlement Period means an amount determined as
follows:
ED = PI x PR x 1/360 + NSF (if any);
provided, however, that if, pursuant to the definition of "Purchaser Rate" in
Part I.E., different Purchaser Rates would apply to different portions of such
Purchaser's Purchaser's Investment, then Earned Discount shall be calculated
separately with respect to each such portion, and the Earned Discount for such
Purchaser shall be the sum of the Earned Discount so calculated for such
portions;
where:
ED = Earned Discount accrued on such day;
PI = the Purchaser's Investment of such Purchaser on such day, as
determined pursuant to Section 2.03; and
PR = the Purchaser Rate of such Purchaser on such day, as defined in
Part I.E.
NSF = the Negative Spread Fee on such day, as defined in Part C.
No provision of the Agreement shall require the payment or permit the collection
of Earned Discount in excess of the maximum permitted by applicable law. Earned
Discount shall not be considered paid by any distribution if at any time such
distribution is rescinded or must otherwise be returned for any reason.
B-4
C. Negative Spread Fee. The "Negative Spread Fee" means with respect to
any Purchaser for each day in any Settlement Period during which any Run Off Day
or Termination Date occurs, the amount, if any, by which;
(i) the additional Earned Discount (calculated without taking into
account any Negative Spread Fee) which would have accrued on the
reductions of the related Purchaser's Investment during such Settlement
Period (as so computed) if such reductions had remained as Purchaser's
Investment, exceeds
(ii) the income, if any, received by such Purchaser from such
Purchaser's investing the proceeds of such reductions of its Purchaser's
Investment.
D. Run Off Discount. The "Run Off Discount" at any time means an amount
determined as follows:
ROD = (PI x (PR + RVF) x AAM) / 360
where:
ROD = the Run Off Discount at such time;
PI = the Total Purchasers' Investment at such time;
PR = the Alternate Reference Rate at such time;
AAM = the Adjusted Average Maturity of the Receivables Pool, as
determined pursuant to Part V; and
RVF = the Rate Variance Factor deemed to be in effect at such time,
as determined pursuant to Part I.F.
E. Rate Definitions. The "Alternate Reference Rate" means, on any date, a
fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently announced by BofA at its
principal office in Charlotte, North Carolina as its reference rate; and
(b) the Federal Funds Rate (as defined below) most recently
determined by BofA plus 1.0% per annum.
B-5
For purposes of this definition, "Federal Funds Rate" means, for any day, the
average of (i) the rates per annum as determined by the applicable Bank
Purchaser at which overnight Federal funds are offered to such Bank Purchaser
for such day by major banks in the interbank market, and (ii) if the applicable
Bank Purchaser is borrowing overnight funds from a Federal Reserve Bank that
day, the rates per annum at which such overnight borrowings are made on that
day. Each determination of the Federal Funds Rate by the applicable Bank
Purchaser shall be conclusive and binding on the Seller except in the case of
manifest error.
The Alternate Reference Rate is not necessarily intended to be the lowest rate
of interest determined by the Administrative Agent or the Bank Purchasers in
connection with extensions of credit.
"Bank Rate" for any Settlement Period means an interest rate per annum
equal to the sum of (a) the Bank Rate Spread, plus (b) the Eurodollar Rate
(Reserve Adjusted) for such Settlement Period; provided, however, that if (i) it
shall become unlawful for the Administrative Agent or any Bank Purchaser or
Program Support Provider to obtain funds in the offshore dollar interbank market
in order to fund any Purchase or to maintain any interest in the Undivided
Interest, or if such funds shall not be reasonably available to the
Administrative Agent or any Bank Purchaser or Program Support Provider, or (ii)
there shall not be time prior to the commencement of an applicable Settlement
Period to determine a Eurodollar Rate in accordance with its terms, then the
"Bank Rate" for any Settlement Period shall be equal to the Alternate Reference
Rate in effect from time to time during such Settlement Period.
"Bank Rate Spread" means 0.25% plus the all-in drawn margin over the
Eurodollar Rate (or comparable rate) then applicable in the Bank Credit
Agreement (or if the Bank Credit Agreement has been terminated or is no longer
in effect, in the replacement revolving credit agreement or, if there is no such
replacement, such margin as would have been in effect if the Bank Credit
Agreement were effective at such time).
"Commercial Paper Rate" means, for any Conduit Purchaser for any
Settlement Period for any portion of its Purchaser's Investment funded by
issuing Commercial Paper Notes, a rate per annum equal to the sum of (i) the
rate or, if more than one rate, the weighted average of the rates per annum at
which such Conduit Purchaser's Commercial Paper Notes having a term selected by
its Related Administrator and issued (or allocated by its Related Administrator
from time to time during such period, but which may also be allocated to the
funding of other assets of such Conduit Purchaser) to fund such portion of the
Purchaser's Investment was or may be sold by any placement agent or commercial
paper dealer selected by its Related Administrator, as agreed between each such
agent or dealer and its Related Administrator, plus (ii) 0.05% per annum,
representing the commissions and other charges charged by such placement agent
or commercial paper dealer with respect to such Commercial Paper Notes expressed
as a percentage of the face amount of such Commercial Paper Notes and converted
to an interest-bearing equivalent rate per annum, plus (iii) certain
documentation and transaction costs directly associated with the issuance of
such Commercial Paper Notes, as are customarily charged by such Conduit
Purchaser to
B-6
its customers in similar transactions (including incremental carrying costs
incurred with respect to Commercial Paper Notes maturing on dates other than
those on which corresponding funds are received by the Conduit Purchaser), plus
(iv) costs of other related borrowings by such Conduit Purchaser, including
borrowings to fund small or odd dollar amounts that are not easily accommodated
in the commercial paper market, expressed as a percentage of the face amount of
such Commercial Paper Notes and converted to an interest-bearing equivalent rate
per annum; provided, however that if any component of such rate is a discount
rate, in calculating the "Commercial Paper Rate", such Conduit Purchaser shall
for such component use the rate resulting from converting such discount rate to
an interest-bearing equivalent rate per annum.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any Settlement
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1-Eurodollar
Reserve Percentage
where:
"Eurodollar Rate" means, with respect to any Settlement Period, the rate
per annum at which Dollar deposits in immediately available funds are
offered to the Eurodollar Office of the related Bank Purchaser two
Eurodollar Business Days prior to the beginning of such period by prime
banks in the offshore dollar interbank market at or about the relevant
local time of such Eurodollar Office, for delivery on the first day of
such Settlement Period, for the number of days comprised therein and in an
amount equal or comparable to the amount of the related Purchaser's
Investment.
"Relevant local time" as to any Eurodollar Office shall mean 11:00 a.m.,
London time when such Eurodollar Office is located in Europe or the Middle
East, or 11:00 a.m., New York time, when such Eurodollar Office is located
in North America or the Caribbean.
"Eurodollar Business Day" means a day of the year on which dealings are
carried on in the offshore dollar interbank market of the related Bank
Purchaser's Eurodollar Office and banks are open for business in the
location of the related Bank Purchaser's Eurodollar Office and are not
required or authorized to close in New York City.
"Eurodollar Office" shall mean the office of the related Bank Purchaser
located in the Cayman Islands, Grand Cayman B.W.I. or such other office or
offices through which such Bank Purchaser determines the Eurodollar Rate.
A Eurodollar Office of the related Bank Purchaser may be, at the option of
such Bank Purchaser, either a domestic or foreign office.
B-7
"Eurodollar Reserve Percentage" means, with respect to any Yield Period,
the reserve percentage (expressed as a decimal and rounded upward to the
nearest 1/100th of 1%) equal to the maximum aggregate reserve requirements
(including all basic, emergency, supplemental, marginal and other reserves
and taking into account any transitional adjustments or other scheduled
changes in reserve requirements) specified under regulations issued from
time to time by the Federal Reserve Board and then applicable to assets or
liabilities consisting of and including "Eurocurrency Liabilities", as
currently defined in Regulation D of the Federal Reserve Board, of the
related Bank Purchaser having a term approximately equal or comparable to
such Settlement Period.
"Purchaser Rate" for any Purchaser for any Settlement Period means:
(a) in all cases other than one referred to in clause (b) or (c) of
this definition, the sum of (i) the Commercial Paper Rate of such
Purchaser for such Settlement Period plus (ii) the Program Fee Rate;
(b) in the case of the portion of such Purchaser's Purchaser's
Investment (i) owned by any Program Support Provider or any other assignee
(other than a Conduit Purchaser), or funded pursuant to a Program Support
Agreement, (ii) funded by a Funding, or (iii) funded by a Bank Purchaser
and at a time when clause (c) of this definition is not applicable, the
Bank Rate for such Undivided Interest (or such portion) for such
Settlement Period; and
(c) when a Termination Event has occurred and is continuing, a rate
per annum equal for each day during such Settlement Period to the
Alternate Reference Rate in effect on such day plus 2% per annum.
F. Rate Variance Factor. The "Rate Variance Factor" means such percentage
per annum not exceeding 2% as the Administrative Agent (upon direction of the
Required Purchasers) may designate from time to time.
PART II
CREDIT RESERVE
A. Credit Reserve. The "Credit Reserve" on any day means an amount
determined in accordance with the definition of Credit Reserve in Appendix A.
PART III
B-8
DILUTION RESERVE
A. Dilution Reserve. The "Dilution Reserve" on any day means an amount
determined in accordance with the definition of Dilution Reserve in Appendix A.
PART IV
SERVICER'S FEE RESERVE
A. Servicer's Fee Reserve. The "Servicer's Fee Reserve" at any time means
an amount determined as follows:
SFR = SF + ROSF
where:
SFR = the Servicer's Fee Reserve at any time;
SF = the unpaid Servicer's Fee accrued to such time and unpaid as
determined pursuant to Part IV.B; and
ROSF = the Run Off Servicer's Fee at such time, as determined
pursuant to Part IV.C.
B. Servicer's Fee. The "Servicer's Fee" relating to any Undivided Interest
accrued for any day means
(i) an amount equal to (x) 0.50% per annum, times (y) the amount of
the Total Purchasers' Investment at the close of business on such day,
times (z) 1/360; or
(ii) on and after Servicer's reasonable request made at any time
when Seller or any of its Affiliates shall no longer be Servicer, an
alternative amount specified by Servicer not exceeding (x) 110% of
Servicer's cost and expenses of performing its obligations under the
Agreement during the Settlement Period when such day occurs, divided by
(y) the number of days in such Settlement Period.
C. Run Off Servicer's Fee. The "Run Off Servicer's Fee" at any time means
an amount equal to
(x) Total Purchasers' Investment at such time, times
B-9
(y) (A) the percentage per annum set forth in clause (i)(x) of the
definition of "Servicer's Fee", or (B) if Servicer's Fee is calculated
pursuant to clause (ii) of such definition, the percentage per annum
determined for each day by dividing the amount of the Servicer's Fee
accrued for such day by the Total Purchasers' Investment at the close of
business on such day, multiplying the quotient by 360 and expressing the
product as a percentage, times
(z) a fraction, the numerator of which is the number of days equal
to the then Adjusted Average Maturity, and the denominator of which is 360
days.
PART V
ADJUSTED AVERAGE MATURITY
"Adjusted Average Maturity" means, on any day, the product of (i) three
(3) times (ii) the Average Maturity for such day.
"Average Maturity" means, on any day, that time period (expressed in days)
equal to the weighted average maturity of the Pool Receivables as shall be
calculated by Servicer, as set forth in the most recent Periodic Report in
accordance with the provisions thereof. If the Administrative Agent shall
disagree with any such calculation, the Administrative Agent may recalculate the
Average Maturity for such day, which calculation shall, absent manifest error,
be binding upon Servicer, Seller and the Purchasers.
B-10
SCHEDULE I
PURCHASERS - COMMITMENTS
Related Conduit Support
Name of Bank Conduit Related Termination
Purchaser Purchaser Commitment Percentage Percentage Date
--------------------------------------------------------------------------------------------
Bank of America, Quincy
National Capital
Association Corporation $120,000,000 57.1429% 100.0000% November 10, 2001
--------------------------------------------------------------------------------------------
Amsterdam
ABN AMRO Funding
Bank, N.V. Corporation $90,000,000 42.8571% 100.0000% November 10, 2001
--------------------------------------------------------------------------------------------
B-11
SCHEDULE 2.04(c)
SPECIAL CONCENTRATION LIMITS
Obligor Name Commercial Paper/ Special
Short-Term Concentration
Debt Rating* Limit
Hewlett-Packard A-1+/P-1 40%
Company A-1/P-1 or better 30%
A-2/P-2 10%
below A-2/P-2 5%
Nortel A-1/P-1 30%
A-2/P-2 or better 10%
below A-2/P-2 5%
* The ratings from each of Standard and Poor's and Moody's must be maintained;
if the two ratings are different, the Special Concentration Limit shall be
determined by reference to the lower rating.
B-12
COMPARISON OF FOOTNOTES
-FOOTNOTE 1-
/Conformed as amended by the Second Amendment dated as of August 10, 2001.
COMPARISON OF HEADERS
-HEADER 1-
EXHIBIT A
COMPARISON OF FOOTERS
-FOOTER 1-
8834883 94169752
-FOOTER 2-
Footer Discontinued
-FOOTER 3-
SECOND AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
-FOOTER 4-
B-1
B-13
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B-14
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
This Second Amendment to Second Amended and Restated Receivables Purchase
Agreement, dated as of August 10, 2001 (this "Amendment"), is among SCI FUNDING,
INC. ("Seller"), SCI TECHNOLOGY, INC. ("SCI"), SCI SYSTEMS, INC. ("Guarantor"),
the Purchasers party hereto (the "Purchasers"), and BANK OF AMERICA, N.A., a
national banking association, as administrative agent for the Purchasers
("Administrative Agent").
Background
1. Seller, SCI, Guarantor, Purchasers and the Administrative Agent are
parties to that certain Second Amended and Restated Receivables Purchase
Agreement, dated as of June 14, 2000 (as amended prior to the date hereof, the
"Receivables Purchase Agreement").
2. The parties hereto desire to amend the Receivables Purchase Agreement
in certain respects as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows.
SECTION 1. Definitions. Capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings assigned thereto in the
Receivables Purchase Agreement.
SECTION 2. Amendments to the Receivables Purchase Agreement.
2.1. Effective as of the date hereof, the Receivables Purchase
Agreement is hereby amended to incorporate the changes shown on the marked pages
of the Receivables Purchase Agreement (conformed as amended) attached hereto as
Exhibit A.
SECTION 3. Assignment on Date Hereof. On the date hereof, Four Winds
Funding Corporation shall assign and transfer to (i) Quincy Capital Corporation
all of its right, title and interest in and to that portion of its Purchaser's
Investment and the related Undivided Interest under the Receivables Purchase
Agreement equal to $29,340,000 upon receipt from Quincy Capital Corporation of
$29,340,000 in immediately available funds by 11:00 a.m. New York City time, and
(ii) Amsterdam Funding Corporation all of its right, title and interest in and
to that portion of its Purchaser's Investment and the related Undivided Interest
under the Receivables Purchase Agreement equal to $22,005,000 upon receipt from
Amsterdam Funding Corporation of $22,005,000 in immediately available funds by
11:00 a.m. New York City time. Each such assignment is made without recourse
except that Four Winds Funding Corporation hereby represents and warrants that
it has not created any Adverse Claim upon or with respect to its Purchaser's
Investment or its interest in the Undivided Interest. From and after the date
hereof and following payment of the amounts specified above and in the following
sentence, Four Winds Funding Corporation and Commerzbank Aktiengesellschaft
shall no longer be parties to the Receivables Purchase Agreement. The Earned
Discount and other amounts due and payable to Four Winds Funding Corporation and
Commerzbank Aktiengesellschaft through the date hereof shall be payable by the
Seller on the date hereof in immediately available funds by 11:00 a.m. New York
City time.
SECTION 4. Upfront Fee. On the date hereof, the Seller shall pay to each
Bank Purchaser an upfront fee equal to 0.03% multiplied by such Bank Purchaser's
Commitment.
SECTION 5. Representations and Warranties. Each of Seller, SCI and
Guarantor hereby represent and warrant that (i) the representations and
warranties set forth in Article VI of the Receivables Purchase Agreement are
true and correct on and as of the date of this Amendment as though made on and
as of such date and shall be deemed to have been made on such date (except to
the extent they relate solely to an earlier date, in which event they were true
and correct as of such earlier date) and (ii) after giving effect to this
Amendment, no event has occurred and is continuing, or would result from this
Amendment, that constitutes a Termination Event or Unmatured Termination Event.
SECTION 6. Miscellaneous. The Receivables Purchase Agreement, as amended
hereby, remains in full force and effect. Any reference to the Receivables
Purchase Agreement from and after the date hereof shall be deemed to refer to
the Receivables Purchase Agreement as amended hereby, unless otherwise expressly
stated. This Amendment shall be governed by, and construed in accordance with,
the internal laws of the State of Illinois. This Amendment may be executed in
any number of counterparts, and by the different parties hereto on separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Seller, SCI and Guarantor, jointly and severally, agree to pay on
demand all costs and expenses, including all reasonable attorneys' fees and
disbursements, actually incurred by the Administrative Agent in connection with
the negotiation, preparation, execution or delivery of this Amendment.
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
QUINCY CAPITAL CORPORATION,
as a Conduit Purchaser
By
--------------------------------------
Title
----------------------------------
FOUR WINDS FUNDING CORPORATION,
as a Conduit Purchaser
By: Commerzbank Aktiengesellschaft,
New York Branch, Attorney-in-Fact
By
--------------------------------------
Title
----------------------------------
By
--------------------------------------
Title
----------------------------------
AMSTERDAM FUNDING CORPORATION,
as a Conduit Purchaser
By
--------------------------------------
Title
----------------------------------
BANK OF AMERICA, NATIONAL ASSOCIATION,
as the Administrative Agent
By
--------------------------------------
Title
----------------------------------
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED
S-1 RECEIVABLES PURCHASE AGREEMENT
BANK OF AMERICA, NATIONAL ASSOCIATION,
as a Bank Purchaser
By
--------------------------------------
Title
----------------------------------
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH,
as a Bank Purchaser
By
--------------------------------------
Title
----------------------------------
By
--------------------------------------
Title
----------------------------------
ABN AMRO BANK N.V.,
as a Bank Purchaser
By
--------------------------------------
Title
----------------------------------
By
--------------------------------------
Title
----------------------------------
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED
S-2 RECEIVABLES PURCHASE AGREEMENT
SCI FUNDING, INC.
By:
-------------------------------------
Name Printed:
---------------------------
Its
-------------------------------------
SCI TECHNOLOGY, INC.
By:
-------------------------------------
Name Printed:
---------------------------
Its
-------------------------------------
SCI SYSTEMS, INC.
By:
-------------------------------------
Name Printed:
---------------------------
Its
-------------------------------------
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED
S-3 RECEIVABLES PURCHASE AGREEMENT