FIFTH AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENTDATED AS OF DECEMBER 22, 2022AMONGSMITHFIELD RECEIVABLES FUNDING LLC,AS BORROWER,SMITHFIELD FOODS, INC.,AS SERVICER,THE LENDERS, L/C PARTICIPANTS AND CO-AGENTS FROM TIME TO TIMEPARTY...
Exhibit 10.4
Execution Version
FIFTH AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT DATED AS OF DECEMBER 22, 2022 AMONG SMITHFIELD RECEIVABLES FUNDING LLC, AS BORROWER, SMITHFIELD FOODS, INC., AS SERVICER, THE LENDERS, L/C PARTICIPANTS AND CO-AGENTS FROM TIME TO TIME PARTY HERETO, COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH, AS A LETTER OF CREDIT ISSUER, PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT AND A LETTER OF CREDIT ISSUER, AND PNC CAPITAL MARKETS LLC, AS STRUCTURING AGENT | ||
TABLE OF CONTENTS
| Page | |||||||||||
| ARTICLE I. THE ADVANCES | 2 | ||||||||||
| Section 1.1. | Credit Facility. | 2 | |||||||||
| Section 1.2. | Increases | 3 | |||||||||
| Section 1.3. | Decreases | 4 | |||||||||
| Section 1.4. | Deemed Collections; Borrowing Limit. | 4 | |||||||||
| Section 1.5. | Payment Requirements | 5 | |||||||||
| Section 1.6. | Advances; Ratable Loans; Funding Mechanics; Liquidity Fundings. | 5 | |||||||||
| Section 1.7. | Letters of Credit | 6 | |||||||||
| Section 1.8. | Issuance of Letters of Credit. | 6 | |||||||||
| Section 1.9. | Requirements For Issuance of Letters of Credit | 7 | |||||||||
| Section 1.10. | Disbursements, Reimbursement. | 7 | |||||||||
| Section 1.11. | Repayment of Participation Advances. | 9 | |||||||||
| Section 1.12. | Documentation. | 10 | |||||||||
| Section 1.13. | Determination to Honor Drawing Request. | 10 | |||||||||
| Section 1.14. | Nature of Participation and Reimbursement Obligations. | 10 | |||||||||
| Section 1.15. | Indemnity. | 12 | |||||||||
| Section 1.16. | Liability for Acts and Omissions. | 13 | |||||||||
| Section 1.17. | Letter of Credit Fees. | 14 | |||||||||
| Section 1.18. | Benchmark Replacement Notification | 14 | |||||||||
| ARTICLE II. PAYMENTS AND COLLECTIONS | 15 | ||||||||||
| Section 2.1. | Payments | 15 | |||||||||
| Section 2.2. | Collections Prior to the Commitment Termination Date | 15 | |||||||||
| Section 2.3. | Collections Following the Commitment Termination Date | 16 | |||||||||
| Section 2.4. | Payment Rescission | 17 | |||||||||
| ARTICLE III. CONDUIT FUNDING | 17 | ||||||||||
| Section 3.1. | CP Costs | 17 | |||||||||
| Section 3.2. | Calculation of CP Costs | 17 | |||||||||
| Section 3.3. | CP Costs Payments | 17 | |||||||||
-i-
TABLE OF CONTENTS
(continued)
| Page | |||||||||||
| Section 3.4. | Default Rate | 17 | |||||||||
| ARTICLE IV. COMMITTED LENDER FUNDING | 17 | ||||||||||
| Section 4.1. | Committed Lender Funding | 17 | |||||||||
| Section 4.2. | Interest Payments | 18 | |||||||||
| Section 4.3. | Committed Lender Interest Rates. | 18 | |||||||||
| Section 4.4. | Daily 1M SOFR, Term SOFR Rate or Adjusted Federal Funds Rate Unascertainable; Increased Costs; Illegality. | 19 | |||||||||
| Section 4.5. | Benchmark Replacement Setting. | 20 | |||||||||
| Section 4.6. | Default Rate. From and after the occurrence of an Event of Default, all Liquidity Fundings shall accrue Interest at the Default Rate. | 25 | |||||||||
| ARTICLE V. REPRESENTATIONS AND WARRANTIES | 25 | ||||||||||
| Section 5.1. | Representations and Warranties of the Loan Parties | 25 | |||||||||
| ARTICLE VI. CONDITIONS OF ADVANCES | 31 | ||||||||||
| Section 6.1. | Conditions Precedent to Initial Advance | 31 | |||||||||
| Section 6.2. | Conditions Precedent to All Advances and L/C Credit Extensions | 31 | |||||||||
| ARTICLE VII. COVENANTS | 32 | ||||||||||
| Section 7.1. | Affirmative Covenants of the Loan Parties | 32 | |||||||||
| Section 7.2. | Negative Covenants of the Loan Parties | 42 | |||||||||
| Section 7.3. | Restructuring Transactions. | 45 | |||||||||
| ARTICLE VIII. ADMINISTRATION AND COLLECTION | 45 | ||||||||||
| Section 8.1. | Designation of Servicer. | 45 | |||||||||
| Section 8.2. | Duties of Servicer. | 45 | |||||||||
| Section 8.3. | Collection Notices | 47 | |||||||||
| Section 8.4. | Responsibilities of Borrower | 47 | |||||||||
| Section 8.5. | Pool Reports | 47 | |||||||||
| Section 8.6. | Servicing Fee | 48 | |||||||||
| ARTICLE IX. EVENTS OF DEFAULT | 48 | ||||||||||
| Section 9.1. | Events of Default | 48 | |||||||||
| Section 9.2. | Remedies | 51 | |||||||||
-ii-
TABLE OF CONTENTS
(continued)
| Page | |||||||||||
| ARTICLE X. INDEMNIFICATION | 52 | ||||||||||
| Section 10.1. | Indemnities by the Loan Parties | 52 | |||||||||
| Section 10.2. | Increased Cost and Reduced Return | 55 | |||||||||
| Section 10.3. | Other Costs and Expenses | 58 | |||||||||
| ARTICLE XI. THE AGENTS | 58 | ||||||||||
| Section 11.1. | Authorization and Action. | 58 | |||||||||
| Section 11.2. | Delegation of Duties | 59 | |||||||||
| Section 11.3. | Exculpatory Provisions | 59 | |||||||||
| Section 11.4. | Reliance by Agents. | 60 | |||||||||
| Section 11.5. | Non-Reliance on Other Agents and Other Lenders | 61 | |||||||||
| Section 11.6. | Reimbursement and Indemnification | 61 | |||||||||
| Section 11.7. | Agents in their Individual Capacities | 61 | |||||||||
| Section 11.8. | Conflict Waivers | 61 | |||||||||
| Section 11.9. | UCC Filings | 62 | |||||||||
| Section 11.10. | Successor Administrative Agent and Letter of Credit Issuer | 62 | |||||||||
| ARTICLE XII. ASSIGNMENTS; PARTICIPATIONS | 65 | ||||||||||
| Section 12.1. | Assignments. | 65 | |||||||||
| Section 12.2. | Participations | 69 | |||||||||
| Section 12.3. | Register | 70 | |||||||||
| Section 12.4. | Federal Reserve and Security Trustee | 70 | |||||||||
| ARTICLE XIII. SECURITY INTEREST | 70 | ||||||||||
| Section 13.1. | Grant of Security Interest | 70 | |||||||||
| Section 13.2. | Termination after Final Payout Date | 71 | |||||||||
| ARTICLE XIV. MISCELLANEOUS | 71 | ||||||||||
| Section 14.1. | Waivers and Amendments. | 71 | |||||||||
| Section 14.2. | Notices | 72 | |||||||||
| Section 14.3. | Ratable Payments | 73 | |||||||||
| Section 14.4. | Protection of Administrative Agent’s Security Interest. | 73 | |||||||||
| Section 14.5. | Confidentiality. | 74 | |||||||||
-iii-
TABLE OF CONTENTS
(continued)
| Page | |||||||||||
| Section 14.6. | Bankruptcy Petition | 75 | |||||||||
| Section 14.7. | Limitation of Liability | 75 | |||||||||
| Section 14.8. | Choice of Law | 76 | |||||||||
| Section 14.9. | Consent to Jurisdiction | 76 | |||||||||
| Section 14.10. | Waiver of Jury Trial | 77 | |||||||||
| Section 14.11. | Integration; Binding Effect; Survival of Terms. | 77 | |||||||||
| Section 14.12. | Counterparts; Severability; Section References | 77 | |||||||||
| Section 14.13. | Acknowledgement and Consent to Bail-In of EEA Financial Institutions | 78 | |||||||||
| Section 14.14. | Patriot Act | 78 | |||||||||
| Section 14.15. | Amendment and Restatement | 78 | |||||||||
-iv-
EXHIBITS AND SCHEDULES
| Exhibit I | Definitions | ||||
| Exhibit II-A | Form of Borrowing Notice | ||||
| Exhibit II-B | Form of Reduction Notice | ||||
| Exhibit III | Places of Business of the Loan Parties and the Performance Guarantor; Locations of Records; Federal Employer Identification Number(s) | ||||
| Exhibit IV | Form of Compliance Certificate | ||||
| Exhibit V | Form of Assignment Agreement | ||||
| Exhibit VI-A | Form of Monthly Report | ||||
| Exhibit VI-B | Form of Weekly Report | ||||
| Exhibit VII | Form of Performance Undertaking | ||||
| Exhibit VIII-A | Form of Letter of Credit Application (PNC) | ||||
| Exhibit VIII-B | Form of Letter of Credit Application (Rabobank) | ||||
| Exhibit IX | Existing Letters of Credit | ||||
| Schedule A | Commitments | ||||
| Schedule B | Closing Documents | ||||
| Schedule C | Lender Supplement | ||||
| Schedule D | Account Details | ||||
| Schedule E | Permitted Monetization Obligors | ||||
-i-
FIFTH AMENDED AND RESTATED
THIS FIFTH AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT, dated as of December 22, 2022 is entered into by and among Smithfield Receivables Funding LLC, a Delaware limited liability company (“Borrower”), Smithfield Foods, Inc., a Virginia corporation (“Smithfield”), as initial servicer (the “Servicer” together with Borrower, the “Loan Parties” and each, a “Loan Party”), PNC Bank, National Association (“PNC”), in its capacity as administrative agent for the Lenders hereunder or any successor administrative agent hereunder (the “Administrative Agent” collectively with the Administrative Agent and Co-Agents, the “Agents”) and in its capacity as a letter of credit issuer hereunder, Coöperatieve Rabobank U.A., New York Branch (“Rabobank”), in its capacity as a letter of credit issuer (together with PNC in such capacity, the “Letter of Credit Issuers” and each, a “Letter of Credit Issuer”), PNC Capital Markets LLC, a Pennsylvania limited liability company, as Structuring Agent, and the Lenders, the L/C Participants and the Co-Agents from time to time party hereto, and amends and restates in its entirety that certain Fourth Amended and Restated Credit and Security Agreement, dated as of November 21, 2018, by and among the Loan Parties, PNC, as administrative agent, Rabobank, as letter of credit issuer and the Lenders and Co-Agents from time to time party thereto, as amended through the date hereof (the “Original Agreement”).
Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
WHEREAS, Borrower desires to borrow from the Lenders from time to time, which borrowings may take the form of an Advance or Letter of Credit Extension.
WHEREAS, subject to the terms and conditions hereof, the Letter of Credit Issuers shall, at the request of ▇▇▇▇▇▇▇▇, issue Letters of Credit.
WHEREAS, subject to the terms and conditions hereof, each Lender Group shall, at the request of Borrower, make its Percentage of such Advance.
WHEREAS, PNC has been requested and is willing to act as Administrative Agent on behalf of the Lenders in accordance with the terms hereof.
NOW THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows.
5th A&R Credit and Security Agreement (Smithfield)
ARTICLE I.
THE ADVANCES
Section 1.1. Credit Facility.
(a) Upon the terms and subject to the conditions hereof, from time to time prior to the Facility Termination Date:
(i) Borrower may request Advances in an aggregate principal amount at any one time outstanding not to exceed the Borrowing Limit; and
(ii) in connection with each such requested Advance, each Lender Group shall make Loans to the Borrower in an amount equal to the lesser of (x) such Lender Group’s Lender Group Commitment and (y) such Lender Group’s Percentage of the requested Advance as follows:
(A) with respect to a Lender Group with a Conduit: (i) the Conduit in such Lender Group may, in its sole discretion, make a Loan to the Borrower in a principal amount equal to its Lender Group’s Percentage of such requested Advance; it being understood and agreed that, at no time will a Conduit have any obligation to make any Loan, and (ii) if such Conduit declines to make any such Loan, the Committed Lenders in such Lender Group shall make Loans in an aggregate principal amount equal to the related Lender Group’s Percentage of such requested Advance; and
(B) with respect to a Lender Group with an Unaffiliated Committed Lender, the Unaffiliated Committed Lenders in such Lender Group shall make Loans in an aggregate principal amount equal to the related Lender Group’s Percentage of such requested Advance.
(b) Borrower may, at any time upon at least ten (10) days’ prior written notice to the Administrative Agent, terminate the Aggregate Commitment in whole or ratably reduce the Aggregate Commitment in part. Each partial reduction in the Aggregate Commitment shall be in a minimum aggregate amount of $10,000,000 or integral multiples of $1,000,000 in excess thereof, and no such partial reduction shall reduce the Aggregate Commitment to an amount less than $100,000,000. In connection with any partial reduction in the Aggregate Commitment, the Commitment of each Committed Lender shall be ratably reduced. If the Aggregate Commitment is terminated in whole, the Commitment of each Committed Lender shall be reduced to zero.
(c) In connection with any reduction of the Aggregate Commitment, the Borrower shall remit to the Administrative Agent (i) instructions regarding such reduction and (ii) for payment to the Lenders, cash in an amount sufficient to pay (A) the aggregate outstanding principal amount of all Loans of each Lender in excess of the Commitment of such Lender and (B) all other outstanding Obligations with respect to such reduction (determined based on the ratio of the reduction of the Commitments being effected to the amount of the Commitments prior to such reduction or, if the Administrative Agent reasonably determines that any portion of
2
the outstanding Obligations is allocable solely to that portion of the Commitments being reduced or has arisen solely as a result of such reduction, all of such portion). Upon receipt of any such amounts, the Administrative Agent shall apply such amounts first to the reduction of the outstanding Aggregate Principal, and second to the payment of the remaining outstanding Obligations with respect to such reduction by paying such amounts to the Lenders.
(d) On each Business Day, the Borrower shall sell certain Permitted Monetization Receivables to the Receivables Agent (on behalf of the Receivables Buyers) pursuant to the Monetization Documents. Any Permitted Monetization Receivable sold to the Receivables Buyer (on behalf of the Receivables Buyers) in accordance with the Monetization Documents shall constitute a “Monetized Receivable”. On the related Purchase Date therefor, a Monetized Receivable shall cease to constitute a Receivable and the Administrative Agent’s security interest under this Agreement in such Monetized Receivable and Related Monetized Assets (but not in any other Receivable or any other Collateral) shall automatically and without any further action be released and of no further force or effect; provided that if such Monetized Receivable and Related Monetized Assets is transferred, reconveyed or returned to the Borrower by the Receivables Agent (on behalf of the Receivables Buyers) (including in connection with an “Repurchase Event” pursuant to the Monetization Documents with respect to such Receivable), then (x) such Receivable shall cease to constitute a Monetized Receivable and shall thereafter constitute a Receivable and (y) the security interest granted herein shall immediately be reinstated with respect to such Receivable.
Section 1.2. Increases. Not later than 10:00 a.m. (New York City time) on the date of a proposed borrowing (which date shall be a Business Day), Borrower shall provide the Agents with written notice of each Advance in the form set forth as Exhibit II-A hereto (each, a “Borrowing Notice”). Each Borrowing Notice shall be subject to Section 6.2 hereof and, except as otherwise provided in this Section 1.2 and Section 4.5(e), shall be irrevocable and shall specify the requested increase in Aggregate Principal (which shall not be less than $5,000,000 or a larger integral multiple of $100,000) and the Borrowing Date and the requested Interest Rate Option and Interest Period (if applicable) for any portion to be funded by any Committed Lender. Upon receipt of a Borrowing Notice, (a) each Unaffiliated Committed Lender severally agrees to fund a Loan in an amount equal to its Percentage of the requested Advance specified in such Borrowing Notice, and (b) each Co-Agent shall determine whether its Conduit will fund a Loan in an amount equal to its Lender Group’s Percentage of the requested Advance specified in such Borrowing Notice. If a Conduit declines to make its Percentage of a proposed Advance, Borrower may cancel the Borrowing Notice as to all Lenders or, in the absence of such a cancellation, the Advance will be made by each Unaffiliated Committed Lender, each other Conduit and such Conduit’s Committed Lenders. On the date of each Advance, upon satisfaction of the applicable conditions precedent set forth in Article VI, each applicable Lender will cause the proceeds of its Loan comprising a portion of such Advance to be deposited to the account set forth in the related Borrowing Notice, in immediately available funds, no later than 3:00 p.m. (New York City time), an amount equal to (i) in the case of a Conduit or an Unaffiliated Committed Lender, its Percentage of the principal amount of the requested Advance or (ii) in the case of a Conduit’s Committed Lender, each such Committed Lender’s Pro Rata Share of its Lender Group’s Percentage of the principal amount of the requested Advance.
3
Section 1.3. Decreases. Except as provided in Section 1.4, not later than 10:00 a.m. (New York City time) on the date of a proposed reduction of Aggregate Principal (which date shall be a Business Day), Borrower shall provide the Co-Agents with written notice of such proposed reduction in the form of Exhibit II-B hereto (each, a “Reduction Notice”). Such Reduction Notice shall designate (i) the date (the “Proposed Reduction Date”) upon which any such reduction of Aggregate Principal shall occur, and (ii) the amount of Aggregate Principal to be reduced which shall be applied ratably to the Loans of each of the Lenders in accordance with the principal amount (if any) thereof (the “Aggregate Reduction”). Subject to the other terms and conditions hereof, the Borrower may from time to time borrow under Section 1.2, prepay under Section 1.3, and reborrow under Section 1.2.
Section 1.4. Deemed Collections; Borrowing Limit.
(a) If on any day:
(i) the Outstanding Balance of any Receivable is reduced as a result of any defective or rejected goods or services (including any In-Transit Collateral that is returned or not accepted by the relevant Obligor), any cash discount or any other adjustment by the applicable Originator or any Affiliate thereof, or
(ii) the Outstanding Balance of any Receivable is reduced or canceled as a result of a setoff in respect of any claim by the applicable Obligor thereof (whether such claim arises out of the same or a related or an unrelated transaction), or
(iii) the Outstanding Balance of any Receivable is reduced on account of the obligation of any Originator or any Affiliate thereof to pay to the related Obligor any rebate or refund, or
(iv) the Outstanding Balance of any Receivable is less than the amount included in calculating the Net Pool Balance for purposes of any Pool Report (for any reason other than receipt of Collections thereon or such Receivable becoming a Defaulted Receivable), or
(v) any of the representations or warranties of Borrower set forth in Section 5.1(i), (j), (r), (s), (t) or (u) were not true when made with respect to any Receivable,
then, on such day, Borrower shall be deemed to have received a Collection of such Receivable in the following amounts: (A) in the case of clauses (i)-(iv) above, in the amount of such reduction or cancellation or the difference between the actual Outstanding Balance of such Receivable and the amount included with respect to such Receivable in calculating the then applicable Net Pool Balance, as applicable; and (B) in the case of clause (v) above, in the amount of the Outstanding Balance of such Receivable and, effective as of the date on which the next succeeding Pool Report is required to be delivered, the Borrowing Base shall be reduced by the amount of such Deemed Collection.
4
(b) The Borrower shall ensure that the Aggregate Principal at no time exceeds the Borrowing Limit. If at any time the Aggregate Principal does exceed the Borrowing Limit, the Borrower shall, not later than 12:00 noon (New York City time) on the next succeeding Settlement Date in an amount sufficient to eliminate such excess, first, prepay the Loans, if any, then outstanding and second, make deposits to the L/C Collateral Account (up to the amount, if any, necessary to reduce the Adjusted Letter of Credit Liability to zero ($0)), such that after giving effect to such prepayments and/or deposits to the L/C Collateral Account, the Aggregate Principal is less than or equal to the Borrowing Limit. Any such prepayment of the Loans shall be (i) allocated ratably among the Lenders based upon the aggregate outstanding principal balance of their respective Loans and (ii) made by the Borrower by wire transfer to the applicable Co-Agent of an amount equal to the principal amount of its Lender Group’s Loans being repaid plus all accrued and unpaid interest thereon. Upon receipt of such funds, each Co-Agent shall apply such funds to the Loans of the Lenders in its Lender Group as determined by such Co-Agent.
Section 1.5. Payment Requirements. All amounts to be paid or deposited by any Loan Party pursuant to any provision of this Agreement shall be paid or deposited in accordance with the terms hereof no later than 12:00 noon (New York City time) on the day when due in immediately available funds, and if not received before 12:00 noon (New York City time) shall be deemed to be received on the next succeeding Business Day. For the avoidance of doubt, the delivery times referenced in the preceding sentence shall only apply to the payment of amounts due and payable by the Loan Parties. If such amounts are payable to a Lender they shall be paid to the applicable Payment Account, for the account of such Lender, until otherwise notified by such Lender. The fees of the Lenders shall be invoiced and paid on a monthly basis pursuant to Article II hereof. All computations of CP Costs, Interest at SOFR, per annum fees calculated as part of any CP Costs, per annum fees hereunder and per annum fees under the Fee Letter shall be made on the basis of a year of 360 days for the actual number of days elapsed. All computations of Interest at the Alternate Base Rate, the Adjusted Federal Funds Rate or the Default Rate shall be made on the basis of a year of 365 days (or 366 days, when appropriate) for the actual number of days elapsed. If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day.
Section 1.6. Advances; Ratable Loans; Funding Mechanics; Liquidity Fundings.
(a) Each Advance hereunder shall be made ratably by the Lender Groups, collectively, in accordance with their respective Percentages.
(b) Each Advance hereunder shall consist of one or more Loans made by the Conduits and/or the Committed Lenders in each Lender Group.
(c) Each Lender funding any Loan shall cause the principal amount thereof to be wire transferred to the account set forth in the related Borrowing Notice in immediately available funds as soon as possible but in no event later than 3:00 p.m. (New York City time) on the applicable Borrowing Date.
5
(d) While it is the intent of each Conduit (but not of any Committed Lender) to fund and maintain its Percentage of each requested Advance through the issuance of Commercial Paper, the parties acknowledge that if any Conduit is unable, or determines that it is undesirable, to issue Commercial Paper to fund all or any portion of its Loans, or is unable to repay such Commercial Paper upon the maturity thereof, such Conduit shall put all or any portion of its Loans to the Committed Lenders in its Lender Group at any time pursuant to its applicable Liquidity Agreement to finance or refinance the necessary portion of its Loans through a Liquidity Funding to the extent available. Regardless of whether a Liquidity Funding constitutes the direct funding of a Loan, an assignment of a Loan made by a Conduit or the sale of one or more participations in a Loan made by a Conduit, each Committed Lender in such Conduit’s Lender Group participating in a Liquidity Funding shall have the rights of a “Lender” hereunder with the same force and effect as if it had directly made a Loan to Borrower in the amount of its Liquidity Funding.
(e) Nothing herein shall be deemed to commit any Conduit to make Loans.
Section 1.7. Letters of Credit. Subject to the terms and conditions hereof (including, without limitation, Article VI), the Letter of Credit Issuers shall issue or cause the issuance of standby Letters of Credit (“Letters of Credit”) on behalf of the Borrower (and, if applicable, on behalf of, or for the account of, any Affiliate of the Borrower designated by the Borrower); provided, however, that the Letter of Credit Issuers will not be required to issue or cause to be issued any Letters of Credit to the extent that the issuance of such Letters of Credit would then cause the Aggregate Principal to exceed the Aggregate Commitment, (b) the Aggregate Principal to exceed the Borrowing Limit or (c) the Letter of Credit Liability to exceed the aggregate of the Commitments of the applicable Letter of Credit Issuer and the L/C Participants. All amounts drawn upon Letters of Credit shall accrue CP Costs and/or Interest (and any associated fees under the Fee Letter) to the same extent as if such amounts had been borrowed by the Borrower through Loans. Letters of Credit that have not been drawn upon shall not accrue CP Costs or Interest but shall accrue fees to the extent set forth in the Fee Letter.
Section 1.8. Issuance of Letters of Credit.
(a) The Borrower may request any Letter of Credit Issuer, upon five (5) Business Days’ prior written notice submitted on or before 11:00 a.m. (New York City time) to issue a Letter of Credit by delivering to the Agents a Borrowing Notice substantially in the form of Exhibit II-A attached hereto and the applicable Letter of Credit Issuer’s form of Letter of Credit Application (the “Letter of Credit Application”), substantially in the form of Exhibit VIII-A or Exhibit VIII-B, as applicable, attached hereto completed to the satisfaction of the Administrative Agent and such Letter of Credit Issuer; and, such other certificates, documents and other papers and information as the Administrative Agent may reasonably request. The Borrower also has the right to give instructions and make agreements with respect to any Letter of Credit Application and the disposition of documents, and to agree with the Administrative Agent upon any amendment, extension or renewal of any Letter of Credit.
(b) Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts or other written demands for payment when presented for honor
6
thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twelve (12) months after such Letter of Credit’s date of issuance, extension or renewal, as the case may be, and in no event later than the Facility Termination Date. The terms of each Letter of Credit may include customary “evergreen” provisions providing that such Letter of Credit’s expiry date shall automatically be extended for additional periods not to exceed twelve (12) months unless, not less than thirty (30) days (or such longer period as may be specified in such Letter of Credit) (the “Notice Date”) prior to the applicable expiry date, the applicable Letter of Credit Issuer delivers written notice to the beneficiary thereof declining such extension; provided, however, that if (x) any such extension would cause the expiry date of such Letter of Credit to occur after the Facility Termination Date or (y) the applicable Letter of Credit Issuer determines that any condition precedent (including, without limitation, those set forth in Article VI) to issuing such Letter of Credit hereunder (as if such Letter of Credit were then being first issued) are not satisfied (other than any such condition requiring the Borrower to submit a Borrowing Notice or Letter of Credit Application in respect thereof), then such Letter of Credit Issuer, in the case of clause (x) above, may (or, at the written direction of any L/C Participant, shall) or, in the case of clause (y) above, shall, use reasonable efforts in accordance with (and to the extent permitted by) the terms of such Letter of Credit to prevent the extension of such expiry date (including notifying the Borrower and the beneficiary of such Letter of Credit in writing prior to the Notice Date that such expiry date will not be so extended). Each Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600, and any amendments or revisions thereof adhered to by the applicable Letter of Credit Issuer or the International Standby Practices (ISP98 - International Chamber of Commerce Publication Number 590), and any amendments or revisions thereof adhered to by such Letter of Credit Issuer, as determined by such Letter of Credit Issuer.
(c) The Administrative Agent shall promptly notify the applicable Letter of Credit Issuer and the L/C Participants, at such Person’s address for notices hereunder, of the request by the Borrower for a Letter of Credit hereunder, and shall provide such Letter of Credit Issuer and the L/C Participants with the Borrowing Notice and Letter of Credit Application delivered to the Administrative Agent by the Borrower pursuant to clause (a), above, by the close of business on the day received or if received on a day that is not a Business Day or on any Business Day after 11:00 a.m. (New York time) on such day, on the next Business Day.
Section 1.9. Requirements For Issuance of Letters of Credit. The Borrower shall authorize and direct the applicable Letter of Credit Issuer to name the Borrower or Affiliate thereof (as determined pursuant to Section 1.7 above) as the “Applicant” or “Account Party” of each Letter of Credit; provided in no event shall any Person other than the Borrower have any obligation to reimburse such Letter of Credit Issuer under the terms of any Letter of Credit.
Section 1.10. Disbursements, Reimbursement.
(a) Immediately upon the issuance of each Letter of Credit, each L/C Participant shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the applicable Letter of Credit Issuer a participation in such Letter of Credit and each
7
drawing thereunder in an amount equal to such L/C Participant’s Ratable LC Share of the face amount of such Letter of Credit and the amount of such drawing, respectively.
(b) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the applicable Letter of Credit Issuer will promptly notify each Agent and the Borrower of such request. The Borrower shall reimburse (such obligation to reimburse the applicable Letter of Credit Issuer shall sometimes be referred to as a “Reimbursement Obligation”) the applicable Letter of Credit Issuer prior to 12:00 noon (New York City time) on each date that an amount is paid by such Letter of Credit Issuer under any Letter of Credit (each such date, a “Drawing Date”) in an amount equal to the amount so paid by such Letter of Credit Issuer. In the event the Borrower fails to reimburse the applicable Letter of Credit Issuer for the full amount of any drawing under any Letter of Credit by 12:00 noon (New York City time) on the Drawing Date, such Letter of Credit Issuer will promptly notify each L/C Participant thereof, and the Borrower shall be deemed to have requested that an Advance be made by the Lenders in the Lender Groups for such Letter of Credit Issuer and the L/C Participants to be disbursed on the Drawing Date under such Letter of Credit in accordance with clause (c) below. Any notice given by any Letter of Credit Issuer pursuant to this Section may be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such oral notice. The Borrower’s obligations to reimburse any such drawing under a Letter of Credit shall be deemed satisfied in the event such amount is fully refinanced by an Advance.
(c) Each L/C Participant shall, upon any notice pursuant to clause (b) above and (without limiting the generality of Section 1.14 below) without regard to whether any condition precedent to any Loan hereunder is satisfied or unsatisfied at such time, make available as a participation advance to the applicable Letter of Credit Issuer by no later than 2:00 p.m., New York time on the Drawing Date an amount in immediately available funds equal to its Ratable LC Share of the amount of the related drawing under a Letter of Credit; provided, however, that if any L/C Participant that is a Defaulting Lender fails to fund its portion of any such participation advance pursuant to this clause (c), then, the L/C Participants that are not Defaulting Lenders shall make available to the applicable Letter of Credit Issuer such Defaulting Lender’s portion of such participation advance pro rata in proportion to their relative Commitments (determined without regard to the Defaulting Lender’s Commitment); provided, further, however, that no L/C Participant shall be required to make any portion of any participation advance available to the applicable Letter of Credit Issuer under this clause (c) solely to the extent that such after giving effect thereto:
(i) such L/C Participant’s Ratable LC Share of the Letter of Credit Liability plus the aggregate outstanding principal balance of such L/C Participant’s Loans would exceed such L/C Participant’s Commitment; or
(ii) the Lender Group Exposure of such L/C Participant’s Lender Group would exceed its Lender Group Commitment.
Upon any L/C Participant making any such participation advance to a Letter of Credit Issuer, and whether or not any condition precedent to any Loan hereunder is satisfied or
8
unsatisfied, such L/C Participant shall be deemed to have made a Loan to the Borrower in the amount of such participation advance; provided that, if for any reason (including, without limitation, an L/C Participant being a Defaulting Lender), any portion of the amount of any such drawing is not so made available to such Letter of Credit Issuer by the L/C Participants in accordance with this clause (c), such Letter of Credit Issuer shall be deemed to have made a Loan to the Borrower for all purposes of this Agreement in an amount equal to the excess of (x) the amount of such drawing over (y) the aggregate amount made available by the L/C Participants to such Letter of Credit Issuer in respect of such drawing.
If any L/C Participant so notified fails to make available to the applicable Letter of Credit Issuer the amount of such L/C Participant’s Ratable LC Share of such amount by no later than 2:00 p.m., New York time on the Drawing Date, then interest shall accrue on such L/C Participant’s obligation to make such payment, from the Drawing Date to the date on which such L/C Participant makes such payment (i) at a rate per annum equal to the Federal Funds Rate during the first three days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to interest accruing on Loans funded or maintained by such Letter of Credit Issuer on and after the fourth day following the Drawing Date. The applicable Letter of Credit Issuer will promptly give notice of the occurrence of the Drawing Date, but failure of such Letter of Credit Issuer to give any such notice on the Drawing Date or in sufficient time to enable any L/C Participant to effect such payment on such date shall not relieve such L/C Participant from its obligation under this clause (c); provided that such L/C Participant shall not be obligated to pay interest as provided in subclauses (i) and (ii) above in this paragraph until and commencing from the date of receipt of notice from such Letter of Credit Issuer or the Administrative Agent of a drawing.
Each L/C Participant’s Commitment shall continue until the last to occur of any of the following events: (A) each Letter of Credit Issuer ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (B) no Letter of Credit issued hereunder remains outstanding and uncancelled or (C) all Persons (other than the Loan Parties and any Originator) have been fully reimbursed for all payments made under or relating to Letters of Credit.
Section 1.11. Repayment of Participation Advances.
(a) Upon (and only upon) receipt by the applicable Letter of Credit Issuer for its account of immediately available funds from the Borrower (i) in reimbursement of any payment made by such Letter of Credit Issuer under a Letter of Credit with respect to which any L/C Participant has made a participation advance to such Letter of Credit Issuer, or (ii) in payment of Interest or CP Costs on the Advances made or deemed to have been made in connection with any such draw, such Letter of Credit Issuer will pay to each L/C Participant, ratably (based on the outstanding drawn amounts funded by each such L/C Participant in respect of such Letter of Credit), in the same funds as those received by such Letter of Credit Issuer; it being understood, that such Letter of Credit Issuer shall retain a ratable amount of such funds that were not the subject of any payment in respect of such Letter of Credit by any L/C Participant.
(b) If any Letter of Credit Issuer is required at any time to return to the Borrower or Affiliate of the Borrower, or to a trustee, receiver, liquidator, custodian, or any official in any
9
insolvency proceeding, any portion of the payments made by or on behalf of the Borrower to such Letter of Credit Issuer pursuant to this Agreement in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each L/C Participant shall, on demand of such Letter of Credit Issuer, forthwith return to such Letter of Credit Issuer the amount of its Ratable LC Share of any amounts so returned by such Letter of Credit Issuer plus interest at the Federal Funds Rate from the date the payment was first made to such L/C Participant to, but not including, the date the payment is returned by such L/C Participant.
Section 1.12. Documentation.
The Borrower (on behalf of itself and any account party or applicant named on any Letter of Credit issued hereunder) agrees to be bound by the terms of the Letter of Credit Application and by the applicable Letter of Credit Issuer’s written regulations and customary practices relating to letters of credit, though such interpretation may be different from such Loan Party’s own. In the event of a conflict or inconsistency (including as to any representation, covenant or default or event of default) between the Letter of Credit Application and this Agreement, this Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct by a Letter of Credit Issuer, such Letter of Credit Issuer shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following the Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.
Section 1.13. Determination to Honor Drawing Request.
In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, the applicable Letter of Credit Issuer shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit and that any other drawing condition appearing on the face of such Letter of Credit has been satisfied in the manner so set forth.
Section 1.14. Nature of Participation and Reimbursement Obligations.
Each L/C Participant’s obligation in accordance with this Agreement to make participation advances as a result of a drawing under a Letter of Credit, and the obligation of the Borrower to reimburse the applicable Letter of Credit Issuer upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Article I under all circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or other right which such L/C Participant may have against such Letter of Credit Issuer, the Administrative Agent, any Co-Agent, any Lender, any Loan Party, any Originator or any other Person for any reason whatsoever;
10
(ii) the failure of any Loan Party or any other Person to comply with the conditions set forth in this Agreement for the making of Advances, requests for Letters of Credit or otherwise, it being acknowledged that such conditions are not required for the making of participation advances hereunder;
(iii) any lack of validity or enforceability of any Letter of Credit;
(iv) any claim of breach of warranty that might be made by any Loan Party, any Originator, any Letter of Credit Issuer, any L/C Participant or any of their respective Affiliates against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, defense or other right which any Loan Party, any Originator, any Letter of Credit Issuer, any L/C Participant or any of their respective Affiliates may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), any Letter of Credit Issuer, any L/C Participant, any Co-Agent, any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between or among any Loan Party, any Originator, the beneficiary for which any Letter of Credit was procured or any of their respective Affiliates);
(v) the lack of power or authority of any signer of, or lack of validity, sufficiency, accuracy, enforceability or genuineness of, any draft, demand, instrument, certificate or other document presented under any Letter of Credit, or any such draft, demand, instrument, certificate or other document proving to be forged, fraudulent, invalid, defective or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, even if the Administrative Agent or the applicable Letter of Credit Issuer has been notified thereof prior;
(vi) payment by the applicable Letter of Credit Issuer under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit other than as a result of the gross negligence or willful misconduct of such Letter of Credit Issuer;
(vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;
(viii) any failure by any Letter of Credit Issuer or any of such Letter of Credit Issuer’s Affiliates to issue any Letter of Credit in the form requested by the Borrower, unless such Letter of Credit Issuer has received written notice from the Borrower of such failure within three Business Days after such Letter of Credit Issuer shall have furnished the Borrower a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;
11
(ix) any Material Adverse Effect on any Loan Party, any Originator or any Affiliates thereof;
(x) any breach of this Agreement or any Transaction Document by any party thereto;
(xi) the occurrence or continuance of an Event of Bankruptcy with respect to any Loan Party, any Originator or any of their respective Affiliates;
(xii) the fact that an Event of Default or an Unmatured Event of Default shall have occurred and be continuing;
(xiii) the fact that this Agreement or the obligations of any Loan Party hereunder shall have been terminated; and
(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
Nothing in this Section 1.14 shall relieve any Letter of Credit Issuer from liability for its gross negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction.
Section 1.15. Indemnity.
In addition to other amounts payable hereunder (including, without limitation, pursuant to Article X), the Borrower hereby agrees to protect, indemnify, pay and save harmless the Administrative Agent, each Letter of Credit Issuer, each L/C Participant and any Letter of Credit Issuer’s Affiliates that have issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (but in the case of attorneys’ fees, limited to reasonable attorneys’ fees actually incurred and disbursements of one primary counsel for the Administrative Agent, the Letter of Credit Issuers and the L/C Participants (taken as a whole) (and, if necessary, one local counsel in each material jurisdiction for such parties (taken as a whole) and, solely in the case of a conflict of interest, one additional counsel as necessary to such parties actually affected by such conflict (taken as a whole))) which the Administrative Agent, any Letter of Credit Issuer, any L/C Participant or any of their respective Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (a) the gross negligence or willful misconduct of the party to be indemnified as determined by a final non-appealable judgment of a court of competent jurisdiction or (b) the wrongful dishonor by the applicable Letter of Credit Issuer of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto governmental authority (all such acts or omissions herein called “Governmental Acts”).
12
Section 1.16. Liability for Acts and Omissions.
As between the Borrower, on the one hand, and the Administrative Agent, the Letter of Credit Issuers, the L/C Participants, the Co-Agents and the Lenders, on the other, the Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit and by the respective account parties or applicants named on such Letters of Credit. In furtherance and not in limitation of the respective foregoing, none of the Administrative Agent, the Letter of Credit Issuers, the L/C Participants, the Co-Agents or the Lenders shall be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if the applicable Letter of Credit Issuer shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any Loan Party, any Originator or any of their respective Affiliates against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Loan Party, any Originator or any of their respective Affiliates and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Administrative Agent, the Letter of Credit Issuers, the L/C Participants, the Co-Agents and the Lenders, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of any Letter of Credit Issuer’s rights or powers hereunder. Nothing in the preceding sentence shall relieve any Letter of Credit Issuer from liability for its gross negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction, in connection with actions or omissions described in such clauses (i) through (viii) of such sentence. In no event shall the Administrative Agent, the Letter of Credit Issuers, the L/C Participants, the Co-Agents, the Lenders or their respective Affiliates, be liable to any Loan Party, any Originator or any other Person for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.
Without limiting the generality of the foregoing, the Administrative Agent, the Letter of Credit Issuers, the L/C Participants, the Co-Agents, the Lenders and each of their respective Affiliates (i) may rely on any written communication believed in good faith by such Person to have been authorized or given by or on behalf of the applicant for a Letter of Credit; (ii) may honor any presentation if the documents presented appear on their face to comply with
13
the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by the applicable Letter of Credit Issuer or its Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on the Administrative Agent, the Letter of Credit Issuers, the L/C Participants, the Co-Agents, the Lenders or their respective Affiliates, in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.
In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by the applicable Letter of Credit Issuer under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith and without gross negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction, shall not put such Letter of Credit Issuer under any resulting liability to any Loan Party, any Originator, any L/C Participant or any other Person.
Section 1.17. Letter of Credit Fees. The Borrower shall pay: (a) to each Co-Agent for the account of each Committed Lender, in consideration for the issuance of Letters of Credit hereunder, a fee (as defined in the Fee Letter) per annum on the aggregate available undrawn amount of the outstanding Letters of Credit; and (b) to each Letter of Credit Issuer for its own account the fees specified in the Fee Letter (collectively, the “Letter of Credit Fees”). The Letter of Credit Fees shall be payable monthly in arrears on each Settlement Date for the Calculation Period preceding such Settlement Date, commencing on the first such Settlement Date to occur after the issuance of any Letter of Credit, and continuing for so long as any Letter of Credit remains outstanding.
Section 1.18. Benchmark Replacement Notification. Section 4.6 provides a mechanism for determining an alternative rate of interest in the event that Daily 1M SOFR or the Term SOFR Rate is no longer available or in certain other circumstances. The Administrative Agent does not warrant or accept any responsibility for and shall not have any liability with respect to, the administration, submission or any other matter related to Daily 1M SOFR or the Term SOFR Rate, or with respect to any alternative or successor rate thereto, or replacement rate therefor.
14
ARTICLE II.
PAYMENTS AND COLLECTIONS
Section 2.1. Payments. Borrower hereby promises to pay:
(a) subject to Section 9.2, the Aggregate Principal on and after the Facility Termination Date as and when Collections are received;
(b) the fees set forth in the Fee Letter and the Agent Fee Letter on the dates specified therein or herein;
(c) all accrued and unpaid Interest and CP Costs on the Loans on each Settlement Date applicable thereto;
(d) all Broken Funding Costs and Indemnified Amounts within 15 days of demand and receipt of a reasonably detailed invoice therefor; and
(e) any amounts required to paid by the Borrower pursuant to Section 1.4(b) to cash collateralize Letter of Credit Liability on the dates specified herein.
Section 2.2. Collections Prior to the Commitment Termination Date. On each Settlement Date prior to the Commitment Termination Date, the Borrower shall deposit to each applicable Payment Account, for distribution to the applicable Lenders, a portion of the Collections received by it during the preceding Settlement Period (after deduction of the Servicing Fee) equal to the sum of the following amounts for application to the Obligations in the order specified:
first, ratably to the payment of (i) all accrued and unpaid CP Costs, Interest and Broken Funding Costs (if any) that are then due and owing and (ii) all accrued and unpaid fees under the Fee Letter and/or the Agent Fee Letter,
second, if required under Section 1.3 or 1.4, (i) first, to the ratable reduction of the Aggregate Principal (ratably among the Lenders based upon the outstanding principal balances of their respective Loans) and (ii) second, into the L/C Collateral Account for the benefit of the Letter of Credit Issuers and the L/C Participants (it being understood and agreed that any amount so distributed to the L/C Collateral Account shall be deposited directly therein, rather than to the applicable Co-Agent Account),
third, for the ratable payment of all other unpaid Obligations of Borrower, if any, that are then due and owing, and
fourth, to the extent that the Borrower has failed to make any payment or deposit required to be made under the Monetization Documents and such failure has remained unremedied for one (1) or more Business Days, the balance, if any, to a separate account designated by the Administrative Agent or, if so instructed by the Administrative Agent, transferred to the Receivables Agent in an amount equal to the amounts then due and owing to the Receivables Agent and the Receivables Buyers under the Monetization Documents.
15
The balance, if any, shall be paid to Borrower or otherwise in accordance with Borrower’s instructions. Collections applied to the payment of Obligations of Borrower shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.2, shall be shared ratably (within each priority) among the applicable payees in accordance with the amount of such Obligations owing to each of them in respect of each such priority.
Section 2.3. Collections Following the Commitment Termination Date. On the Commitment Termination Date and on each day thereafter, the Borrower (and the Servicer, to the extent the Servicer comes into possession of Collections on any such day) shall set aside and hold in trust, for the Secured Parties, all Collections received on such day. On and after the Commitment Termination Date, the Borrower shall, on each Settlement Date and on each other Business Day specified by the Administrative Agent (as directed by any Co-Agent) (after payment or deduction of any accrued and unpaid Servicing Fee as of such date): (i) remit to the applicable Payment Account the applicable Percentage of the amounts set aside and held in trust pursuant to the preceding sentence, and (ii) apply such amounts to reduce the Obligations of Borrower as follows:
first, to the reimbursement of each Lender Group’s Percentage of the costs of collection and enforcement of this Agreement incurred by the Administrative Agent,
second, ratably to the payment of (i) all accrued and unpaid CP Costs, Interest and Broken Funding Costs (if any), and (ii) all accrued and unpaid fees under the Fee Letter and/or the Agent Fee Letter,
third, to the ratable reduction of each Lender Group’s Percentage of the Aggregate Principal,
fourth, to the L/C Collateral Account for the benefit of the Letter of Credit Issuers and the L/C Participants, the amount (if any) necessary to cause the amount of cash collateral held in the L/C Collateral Account to equal the Letter of Credit Liability,
fifth, for the ratable payment of all other unpaid Obligations of Borrower,
sixth, to the extent that the Borrower has failed to make any payment or deposit required to be made under the Monetization Documents and such failure has remained unremedied for one (1) or more Business Days, the balance, if any, to a separate account designated by the Administrative Agent or, if so instructed by the Administrative Agent, transferred to the Receivables Agent in an amount equal to the amounts then due and owing to the Receivables Agent and the Receivables Buyers under the Monetization Documents, and
seventh, after the Final Payout Date, to Borrower.
Collections applied to the payment of Obligations of Borrower shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.3, shall be shared ratably (within each priority) among the Co-Agents and the
16
Lenders in accordance with the amount of such Obligations owing to each of them in respect of each such priority.
Section 2.4. Payment Rescission. No payment of any of the Obligations shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. Borrower shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to the applicable Payment Account (for application to the Person or Persons who suffered such rescission, return or refund) the full amount thereof, plus Interest on such amount at the Default Rate from the date of any such rescission, return or refunding.
ARTICLE III.
CONDUIT FUNDING
Section 3.1. CP Costs. Borrower shall pay CP Costs with respect to the principal balance of each Conduit’s Loans from time to time outstanding.
Section 3.2. Calculation of CP Costs. Not later than the 3rd Business Day immediately preceding each Monthly Reporting Date, each Conduit shall calculate the aggregate amount of CP Costs applicable to its CP Rate Loans for the Calculation Period then most recently ended and shall notify the Administrative Agent, who shall promptly notify the Borrower of such aggregate amount, not later than the 2nd Business Day immediately preceding such Monthly Reporting Date.
Section 3.3. CP Costs Payments. (a) With respect to CP Rate Loans made by a Pooled Fund Conduit, on each Settlement Date, Borrower shall pay to each of the Co-Agents (for the benefit of its respective Conduit) an aggregate amount equal to all accrued and unpaid CP Costs in respect of the principal associated with all such CP Rate Loans of such Conduit for the calendar month then most recently ended and (b) with respect to CP Rate Loans made by a Conduit that is not a Pooled Fund Conduit, on each Settlement Date, the Borrower shall pay to each of the Co-Agents (for the benefit of its respective Conduit) an aggregate amount equal to all accrued and unpaid CP Costs in respect of the principal associated with all such CP Rate Loans of such Conduit, in each case in accordance with Article II.
Section 3.4. Default Rate. From and after the occurrence of an Event of Default, all Loans of the Conduits shall accrue Interest at the Default Rate and shall cease to be CP Rate Loans.
ARTICLE IV.
COMMITTED LENDER FUNDING
Section 4.1. Committed Lender Funding.
(a) Prior to the occurrence of an Event of Default, the outstanding principal balance of each Liquidity Funding shall accrue interest for each day during its Interest Accrual
17
Period at either the Term SOFR Rate, Daily 1M SOFR, the Adjusted Federal Funds Rate or the Alternate Base Rate in accordance with the terms and conditions hereof. Until Borrower gives notice to the applicable Co-Agent of another Interest Rate Option in accordance with Section 4.3, the initial Interest Rate Option for any Loan transferred to the Committed Lenders in its Lender Group by the applicable Conduit pursuant to its Liquidity Agreement shall be the Adjusted Federal Funds Rate Option (unless the Default Rate is then applicable). If the applicable Committed Lenders in a Lender Group acquire by assignment from the applicable Conduit any Loan pursuant to a Liquidity Agreement, each Loan so assigned shall each be deemed to have an Interest Accrual Period commencing on the date of any such assignment.
(b) The Borrower may call the Administrative Agent on or before the date on which a Borrowing Notice is to be delivered to receive an indication of the rates then in effect, but it is acknowledged that such projection shall not be binding on the Administrative Agent or the Lenders nor affect the rate of interest which thereafter is actually in effect when the election is made.
Section 4.2. Interest Payments. On the Settlement Date for each Liquidity Funding, Borrower shall pay to the applicable Co-Agent (for the benefit of the Committed Lenders in its Lender Group) an aggregate amount equal to the accrued and unpaid Interest on each such Liquidity Funding in accordance with Article II.
Section 4.3. Committed Lender Interest Rates.
(a) So long as no Event of Default is continuing, the Borrower may, by written notice to the Administrative Agent, elect for all or any portion of the Aggregate Principal funded by the Committed Lenders to accrue interest by reference to the Term SOFR Rate (rather than Daily 1M SOFR) or any other Interest Rate Option (including Daily 1M SOFR) during any Interest Accrual Period. Any such notice must specify the amount of the Aggregate Principal subject of such election and must be delivered not later than two (2) Business Days prior to the first day of the affected Interest Accrual Period. Any such portion of the Aggregate Principal that is subject to such an election shall be apportioned among the respective Lenders’ Principal ratably. Notwithstanding the foregoing, (x) the Borrower shall not make such an election if, as a result thereof, more than ten Borrowing Tranches would exist and (y) each Borrowing Tranche for Loans accruing interest by reference to the Term SOFR Rate shall be not be less than $1,000,000 and shall be an integral multiple of $100,000. For the avoidance of doubt, if an Event of Default is then continuing, the Interest for any Loan (and any portion thereof) shall calculated by reference to the Default Rate notwithstanding any otherwise applicable election by the Borrower.
(b) The Borrower may call the Administrative Agent on or before the date on which a notice under clause (a) above is to be delivered to receive an indication of the rates then in effect, but it is acknowledged that such projection shall not be binding on the Administrative Agent or the Lenders nor affect the rate of interest which thereafter is actually in effect when the election is made.
18
Section 4.4. Daily 1M SOFR, Term SOFR Rate or Adjusted Federal Funds Rate Unascertainable; Increased Costs; Illegality.
(a) If, on or prior to the first day of an Interest Period:
(i) the Administrative Agent shall have determined (which determination shall be conclusive and binding absent manifest error) that (x) Daily 1M SOFR, the Term SOFR Rate or the Adjusted Federal Funds Rate cannot be determined pursuant to the definition thereof; or (y) a fundamental change has occurred with respect to Daily 1M SOFR, the Term SOFR Rate or the Adjusted Federal Funds Rate (including, without limitation, changes in national or international financial, political or economic conditions); or
(ii) any Lender determines that for any reason that Daily 1M SOFR, the Term SOFR Rate or the Adjusted Federal Funds Rate for any requested Interest Period does not adequately and fairly reflect the cost to such Lender of funding such ▇▇▇▇▇▇’s Loans, and such Lender has provided notice of such determination to the Administrative Agent;
then the Administrative Agent shall have the rights specified in Section 4.4(c).
(b) If at any time any Lender shall have determined that the making, maintenance or funding of any Loan accruing interest by reference to Daily 1M SOFR, the Term SOFR Rate or the Adjusted Federal Funds Rate has been made impracticable or unlawful, by compliance by such Lender in good faith with any Law or any interpretation or application thereof by any Governmental Authority or with any request or directive of any such Governmental Authority (whether or not having the force of Law), then the Administrative Agent shall have the rights specified in Section 4.4(c).
(c) In the case of any event specified in Section 4.4(a), the Administrative Agent shall promptly so notify the Lenders and the Borrower thereof, and in the case of an event specified in Section 4.4(b), such Lender shall promptly so notify the Administrative Agent and endorse a certificate to such notice as to the specific circumstances of such notice, and the Administrative Agent shall promptly send copies of such notice and certificate to the other Lenders and the Borrower.
Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of (i) the Lenders, in the case of such notice given by the Administrative Agent, or (ii) such Lender, in the case of such notice given by such Lender, to allow the Borrower to select, convert to or renew a Loan accruing interest by reference to Daily 1M SOFR, the Term SOFR Rate or the Adjusted Federal Funds Rate shall be suspended (to the extent of the affected Interest Rate Option or the applicable Interest Periods) until the Administrative Agent shall have later notified the Borrower, or such Lender shall have later notified the Administrative Agent, of the Administrative Agent’s or such ▇▇▇▇▇▇’s, as the case may be, determination that the circumstances giving rise to such previous determination no longer exist.
19
If at any time the Administrative Agent makes a determination under Section 4.4(a), (A) if the Borrower has delivered a Borrowing Notice for an affected Loan that has not yet been made, such Borrowing Notice shall be deemed to request an Alternate Base Rate Loan, (B) any outstanding affected Loans shall be deemed to have been converted into Alternate Base Rate Loans at the end of the applicable Interest Period.
If any Lender notifies the Administrative Agent of a determination under Section 4.4(b) above, the Borrower shall, as to any outstanding affected Loans, convert such Loans to an Alternate Base Rate Loan or prepay such Loan at the end of the applicable Interest Period. Absent due notice from the Borrower of conversion or prepayment, such Loan shall automatically be converted to an Alternate Base Rate Loan at the end of the applicable Interest Period.
(d) With respect to Daily 1M SOFR and the Term SOFR Rate, the Administrative Agent, in consultation with the Borrower, may make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document; provided that, with respect to any such amendment effected, the Administrative Agent shall provide notice to the Borrower and the Lenders each such amendment implementing such Conforming Changes reasonably promptly after such amendment becomes effective.
Section 4.5. Benchmark Replacement Setting.
(a) Notwithstanding anything to the contrary herein or in any other Transaction Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to any setting of the then-current Benchmark, then (A) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Transaction Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Transaction Document and (B) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Transaction Document in respect of any Benchmark setting at or after 5:00 p.m. Eastern Time on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Transaction Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Committed Lenders.
(b) In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent, in consultation with the Borrower, may make Conforming Changes from time to time and, notwithstanding anything to the contrary
20
herein or in any other Transaction Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document.
(c) The Administrative Agent will promptly notify the Borrower and the Lenders of (A) the implementation of any Benchmark Replacement, and (B) the effectiveness of any Conforming Changes in connection with the use, administration, adoption, or implementation of a Benchmark Replacement. The Administrative Agent will notify the Borrower of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to paragraph (iv) below and (y) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 4.5, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Transaction Document except, in each case, as expressly required pursuant to this Section 4.5.
(d) Notwithstanding anything to the contrary herein or in any other Transaction Document, at any time (including in connection with the implementation of a Benchmark Replacement), (A) if the then-current Benchmark is a term rate and either (I) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (II) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor; and (B) if a tenor that was removed pursuant to clause (A) above either (I) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (II) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent shall modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(e) Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any pending Borrowing Notice bearing interest based on Daily 1M SOFR or the Term SOFR Rate, conversion to or continuation of Loans bearing interest based on Daily 1M SOFR or the Term SOFR Rate to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for an Alternate Base Rate Loan. During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternate Base Rate.
21
(f) As used in this Section 4.5:
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate or is based on a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor of such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (d) of this Section 4.5.
“Benchmark” means, initially, Daily 1M SOFR and the Term SOFR Rate; provided that if a Benchmark Transition Event has occurred with respect to Daily 1M SOFR, the Term SOFR Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to this Section 4.5.
“Benchmark Replacement” means, with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:
(1) the sum of: (A) Daily Simple SOFR and (B) the SOFR Adjustment; and
(2) the sum of (A) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower, giving due consideration to (x) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (y) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time and (B) the related Benchmark Replacement Adjustment;
provided, that if the Benchmark Replacement as determined pursuant to clause (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Transaction Documents; and provided further, that any Benchmark Replacement shall be administratively feasible as determined by the Administrative Agent in its sole discretion.
22
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower, giving due consideration to (A) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Date” means a date and time determined by the Administrative Agent, which date shall be no later than the earliest to occur of the following events with respect to the then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (A) the date of the public statement or publication of information referenced therein and (B) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date determined by the Administrative Agent, which date shall promptly follow the date of the public statement or publication of information referenced therein;
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” means, the occurrence of one or more of the following events, with respect to the then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
23
(2) a public statement or publication of information by a Relevant Governmental Body having jurisdiction over the Administrative Agent, the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) or a Relevant Governmental Body having jurisdiction over the Administrative Agent announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with this Section 4.5 titled “Benchmark Replacement Setting” and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with this Section 4.5 titled “Benchmark Replacement Setting.”
“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Term SOFR Rate or, if no floor is specified, zero.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the
24
Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
Section 4.6. Default Rate. From and after the occurrence of an Event of Default, all Liquidity Fundings shall accrue Interest at the Default Rate.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties of the Loan Parties. Each Loan Party hereby represents and warrants to the Agents and the Lenders, as to itself, as of the Closing Date, as of the date hereof, as of the date of each Advance and each L/C Credit Extension and as of each Settlement Date that:
(a) Existence and Power. Such Loan Party’s jurisdiction of organization is correctly set forth in the preamble to this Agreement unless notice of a change in its jurisdiction of organization has been provided in accordance with Section 7.2(a). Such Loan Party is duly organized under the laws of that jurisdiction and no other state or jurisdiction, and such jurisdiction must maintain a public record showing the organization to have been organized. Such Loan Party is validly existing and in good standing under the laws of its state of organization. Such Loan Party is duly qualified to do business and is in good standing as a foreign entity, and has and holds all organizational power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except, in the case of Smithfield, where the failure to so qualify or so hold would not reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery. The execution and delivery by such Loan Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, in the case of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇’s use of the proceeds of Advances made hereunder, are within its corporate powers and authority and have been duly authorized by all necessary corporate action on its part. This Agreement and each other Transaction Document to which such Loan Party is a party have been duly executed and delivered by such Loan Party.
(c) No Conflict. The execution and delivery by such Loan Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) its certificate or articles of incorporation or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of such Loan Party or its Subsidiaries (except as created hereunder) except, in any case, where such contravention or violation would not reasonably be expected to have a Material
25
Adverse Effect; and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any Person or any Governmental Authority is required for the due execution and delivery by such Loan Party of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. Except as disclosed in the filings made by the Servicer with the Securities and Exchange Commission, there are no actions, suits or proceedings pending, or to the best of such Loan Party’s knowledge, threatened, against or affecting such Loan Party, or any of its properties, in or before any court, arbitrator or other body, that would reasonably be expected to have a Material Adverse Effect. Such Loan Party is not in default with respect to any order of any court, arbitrator or Governmental Authority.
(f) Binding Effect. This Agreement and each other Transaction Document to which such Loan Party is a party constitute the legal, valid and binding obligations of such Loan Party enforceable against such Loan Party in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished by such Loan Party or any of its Affiliates to the Agents or the Lenders for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Loan Party or any of its Affiliates to the Agents or the Lenders will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain, when furnished, any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not materially misleading; provided, that with respect to projected financial information, such Loan Party represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered.
(h) Use of Proceeds. Borrower represents and warrants that no proceeds of any Advance or Letter of Credit hereunder will be used (i) for a purpose that violates, or would be inconsistent with, (A) Section 7.2(e) of this Agreement or (B) Regulation T, U or X promulgated by the Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) Good Title. Borrower represents and warrants that: (i) immediately after the contribution of the Initial Contributed Assets by SFFC in accordance with the Receivables Sale Agreement, and immediately after the transfer by each Originator of the Initial Purchased Assets and each subsequent Receivable under the Receivables Sale Agreement, Borrower is the
26
legal and beneficial owner of all of the right, title and interest in the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except an Adverse Claim in favor of the Administrative Agent for the benefit of the Secured Parties or, with respect to the Monetized Receivables and Related Monetized Assets, in favor of the Receivables Agent for the benefit of the Receivables Buyers pursuant to the Monetization Documents, and (ii) there have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Borrower’s ownership interest in each Receivable, its Collections and the Related Security.
(j) Perfection. Borrower represents and warrants that: (i) this Agreement is effective to create a valid security interest in favor of the Administrative Agent for the benefit of the Secured Parties in the Collateral to secure payment of the Obligations, free and clear of any Adverse Claim, except an Adverse Claim in favor of the Administrative Agent for the benefit of the Secured Parties or, with respect to the Monetized Receivables and Related Monetized Assets, in favor of the Receivables Agent for the benefit of the Receivables Buyers pursuant to the Monetization Documents, and (ii) there have been or (within 2 Business Days after the date of any Advance) will be duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Administrative Agent’s (on behalf of the Secured Parties) first priority security interest in the Collateral. Each of the Loan Parties represents and warrants that such Loan Party’s jurisdiction of organization is a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, record or registration system as a condition or result of such a security interest’s obtaining priority over the rights of a lien creditor which respect to collateral.
(k) Places of Business and Locations of Records. The principal places of business and chief executive office of such Loan Party and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit III or such other locations of which the Administrative Agent has been notified in accordance with Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has been taken and completed. ▇▇▇▇▇▇▇▇’s Federal Employer Identification Number is correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and duly performed.
(i) Subject to such changes permitted by clauses (ii) and (iii) below and Section 7.2(b), the names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts at each Collection Bank and the post office box number of each Lock-Box, are listed on Schedule D to this Agreement. While Borrower has granted Servicer access to the Lock-Boxes and Collection Accounts prior to delivery of a Collection Notice, ▇▇▇▇▇▇▇▇ has not granted any Person, other than the Administrative Agent as contemplated by this Agreement, dominion and control of any Lock-Box or Collection Account, or the right to take dominion and control of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event.
27
(ii) On or prior to the Post-Closing Date, the Collection Accounts will be novated from each of Smithfield Direct, LLC and Smithfield Support to, in both cases, the Borrower
(iii) Borrower shall be permitted to close the Collection Account appearing opposite its name that is marked with an asterisk on Schedule D and any Lock-Box related thereto, so long as Borrower, has given the Lenders and the Administrative Agent not less than ten (10) days’ prior written notice thereof, certifying that (x) it has instructed all each relevant Originator, SFFC and Smithfield to make payments relating to Receivables originated by such Originators, SFFC and Smithfield to another existing Collection Account, and (y) payments relating to Receivables originated by it are no longer being deposited in such Collection Account.
(m) Material Adverse Effect. (i) The Servicer represents and warrants that since January 2, 2022, no event has occurred that would have a material adverse effect on the financial condition or operations of the Servicer or the ability of the Servicer to perform its obligations under this Agreement, and (ii) Borrower represents and warrants that since the date of its formation, no event has occurred that would have a material adverse effect on (A) the financial condition or operations of Borrower, (B) the ability of Borrower to perform its obligations under the Transaction Documents, or (C) the collectability of the Receivables generally or any material portion of the Receivables.
(n) Names. Borrower represents and warrants that: (i) the name in which ▇▇▇▇▇▇▇▇ has executed this Agreement is identical to the name of Borrower as indicated on the public record of its state of organization which shows Borrower to have been organized, and (ii) in the past five (5) years, Borrower has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement.
(o) Ownership of Borrower. After giving effect to the transactions on the Closing Date, Smithfield owns, directly or indirectly, 100% of the issued and outstanding Equity Interest of Borrower, free and clear of any Adverse Claim. Such Equity Interests are validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Borrower.
(p) Not an Investment Company. Such Loan Party is not, and after giving effect to the transactions contemplated hereby, will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute. The Borrower is not a “covered fund” under the ▇▇▇▇▇▇ ▇▇▇▇ and in determining that the Borrower is not a covered fund, the Borrower, among other things, either (x) is entitled to rely on the exemption from the definition of “investment company” set forth in Section 3(c)(5) of the Investment Company Act of 1940, as amended or (y) is entitled to the benefit of the exclusion for loan securitizations in the ▇▇▇▇▇▇▇ Rule under 10 C.F.R. 248.10(c)(8).
(q) Compliance with Law. Such Loan Party has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
28
which it may be subject, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect. Borrower represents and warrants that each Receivable, 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), and no part of such Contract is in violation of any such law, rule or regulation, except where such contravention or violation would not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Loan Party has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any material change to such Credit and Collection Policy (other than any change expressly permitted pursuant to the Receivables Sale Agreement).
(s) Payments to Applicable Originator. Borrower represents and warrants that: (i) with respect to each Receivable purchased by Borrower under the Receivables Sale Agreement, Borrower has given reasonably equivalent value (constituting the approximate fair market value) to the applicable Originator in consideration therefor and such transfer was not made for or on account of an antecedent debt, and (ii) no transfer by any Originator of any Receivable under the Receivables Sale Agreement is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq.), as amended.
(t) Enforceability of Contracts. Borrower represents and warrants that each Contract with respect to each Receivable is effective to create, and has created (or with respect to In-Transit Receivables will create), a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included in the Net Pool Balance as an Eligible Receivable on the date of any Pool Report was an Eligible Receivable on such date.
(v) Borrowing Limit. Immediately after giving effect to each Advance, each L/C Credit Extension and each settlement on any Settlement Date hereunder, the Aggregate Principal is less than or equal to the Borrowing Limit.
(w) Accounting. The manner in which such Loan Party accounts for the transactions contemplated by this Agreement and the Receivables Sale Agreement does not jeopardize the true sale analysis.
(x) Sanctions and other Anti-Terrorism Laws. No: (a) Covered Entity, nor any employees, officers, directors, or to the knowledge of a Covered Entity, any affiliates or
29
agents acting on a Covered Entity’s behalf in connection with this Agreement: (i) is a Sanctioned Person; (ii) directly, or indirectly through any third party, is engaged in any transactions or other dealings with or for the benefit of any Sanctioned Person or Sanctioned Jurisdiction in violation of Anti-Terrorism Laws, or any transactions or other dealings that otherwise are prohibited by any Anti-Terrorism Laws; (b) Collateral is Embargoed Property.
(y) Solvency. Immediately after the consummation of the transactions to occur on the applicable Commencement Date, (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured and (d) no Loan Party will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the applicable Commencement Date. No Loan Party intends to, and no Loan Party believes that it or any of its Non-Excluded Subsidiaries (other than Non-Material Subsidiaries) will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Non-Excluded Subsidiary (whether from anticipated refinancings, asset sales, capital contributions or otherwise) and the timing of the amounts of cash to be payable on or in respect of its Debt or the Debt of any such Non-Excluded Subsidiary.
(z) Taxes.
(i) Each Loan Party and its Non-Excluded Subsidiaries have timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid all Taxes required to be paid by it except (x) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Non-Excluded Subsidiary has set aside on its books adequate reserves or (y) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
(ii) The Borrower is and has always been treated as an entity that is disregarded as separate entity from a “United States person” (within the meaning of Section 7701(a)(30) of the Tax Code) for U.S. federal income tax purposes and is not, and has not elected under Treasury regulations Section 301.7701-3(c) to be, classified as an association (or publicly traded partnership) taxable as a corporation for U.S. federal income tax purposes.
(aa) ERISA. Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (a) each Loan Party and each of their respective ERISA Affiliates is in compliance with the applicable provisions of ERISA and of the Tax Code relating to Plans and the regulations and published interpretations thereunder, and (b) no ERISA Event has occurred or is reasonably expected to occur. The minimum funding standards of ERISA and the Tax Code with respect to each Plan have been satisfied, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
30
(bb) Anti-Corruption Laws. Each Covered Entity has (a) conducted its business in compliance with all Anti-Corruption Laws and (b) has instituted and maintains policies and procedures reasonably designed to ensure compliance with such Laws.
(cc) Beneficial Ownership Certification. As of December 22, 2022, the information included in the Beneficial Ownership Certification is true and correct in all respects.
(dd) Liquidity Coverage Ratio. The Borrower has not, does not and will not during this Agreement issue any LCR Security. The Borrower further represents and warrants that its assets and liabilities are consolidated with the assets and liabilities of the Smithfield for purposes of GAAP.
ARTICLE VI.
CONDITIONS OF ADVANCES
Section 6.1. Conditions Precedent to Initial Advance. No Lender shall be obligated to make any Advance hereunder on the occasion of the initial Advance nor shall any Letter of Credit Issuer be obligated to issue any Letter of Credit, nor shall any Lender, the Administrative Agent or any other party hereto be obligated to take, fulfill or perform any other action hereunder, until all of the following conditions, after giving effect to the proposed Advance or Letter of Credit Extension, in each case, have been satisfied, in the sole discretion of the Administrative Agent:
(a) Each Transaction Document shall have been duly executed by, and delivered to, the parties hereto and thereto and the Administrative Agent shall have received such other documents, instruments, agreements and legal opinions as the Administrative Agent shall request in connection with the transactions contemplated by this Agreement, including all those documents listed on Schedule B to this Agreement, each in form and substance satisfactory to the Administrative Agent;
(b) The Borrower shall have paid all fees required to be paid by it, including all fees required hereunder, and shall have reimbursed each Lender and each Agent for all fees, costs and expenses of closing the transaction contemplated hereunder and under the other Transaction Documents, including the attorney fees and any other legal and document preparation costs incurred by any Lender and/or any Agent pursuant to the terms of this Agreement, the Agent Fee Letter and the Fee Letter;
(c) the applicable Commencement Date shall have occurred; and
(d) the Rating Agency Condition shall have been satisfied.
Section 6.2. Conditions Precedent to All Advances and L/C Credit Extensions. Each Advance (including the initial Advance), each L/C Credit Extension and each rollover or continuation of the foregoing shall be subject to the further conditions precedent that (a) the Servicer shall have delivered to the Agents on or prior to the date thereof, in form and substance satisfactory to the Agents, all Pool Reports as and when due under Section 8.5; (b) the Facility
31
Termination Date shall not have occurred; (c) the Borrower shall have delivered the Borrowing Notice in accordance with Section 1.2 or Section 1.8(a), as applicable; (d) [reserved]; and (e) on the date thereof, the following statements shall be true (and acceptance of the proceeds of such Advance shall be deemed a representation and warranty by Borrower that such statements are then true):
(i) the representations and warranties set forth in Section 5.1 are true and correct on and as of the date of such Advance or L/C Credit Extension (or such Settlement Date, as the case may be) as though made on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date;
(ii) no event has occurred and is continuing, or would result from such Advance or L/C Credit Extension (or the continuation thereof), that will constitute (A) an Event of Default or (B) an Unmatured Event of Default;
(iii) after giving effect to such Advance or L/C Credit Extension (or the continuation thereof), the Aggregate Principal will not exceed the Borrowing Limit; and
(iv) the Borrower has not failed to make any payment or deposit required to be made under the Monetization Documents, which failure has remained unremedied for one (1) or more Business Days.
ARTICLE VII.
COVENANTS
Section 7.1. Affirmative Covenants of the Loan Parties. Until the Final Payout Date, each Loan Party hereby covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Loan Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Agents:
(i) Annual Reporting. Within 90 days after the end of each fiscal year of Servicer or Borrower, as applicable, (1) Servicer’s audited consolidated balance sheet and audited consolidated condensed statements of income, stockholders' equity and cash flows as of the end of and for such year, and related notes thereto setting forth in each case in comparative form the corresponding figures for (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all reported on by ▇▇▇▇▇ & ▇▇▇▇▇ LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception (other than a “going concern” qualification or exception in the case of the Servicer solely as a result of the upcoming maturity of the Debt outstanding under the Parent Credit Agreement and except for qualifications solely relating to changes in accounting principles or practices reflecting changes in GAAP and required or
32
approved by the Servicer’s or Borrower’s independent certified public accountant) and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Servicer and its consolidated Subsidiaries or Borrower, as applicable, on a consolidated basis in accordance with GAAP consistently applied, and (2) Borrower’s unaudited balance sheet and unaudited statement of income as of the end of and for such year, and related notes thereto setting forth in each case in comparative form the corresponding figures for (or, in the case of the balance sheet, as of the end of) the previous fiscal year.
(ii) Quarterly Reporting. Within 45 days after the end of each of the first three (3) fiscal quarters of each fiscal year of Servicer, Servicer’s unaudited consolidated balance sheet and unaudited consolidated condensed statements of income and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by the Financial Officer of Servicer as presenting fairly in all material respects the financial condition and results of operations of Servicer and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.
(iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit IV signed by such Loan Party’s Authorized Officer and dated the date of execution thereof.
(iv) [Reserved].
(v) Copies of Notices. Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than the Administrative Agent or any Lender, copies of the same.
(vi) Change in Credit and Collection Policy. At least thirty (30) days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice (A) indicating such change or amendment, and (B) if such proposed change or amendment would pursuant to the Receivables Sale Agreement require the consent of the Agent, requesting the Agents’ consent thereto.
(vii) Other Information. Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of such Loan Party as any Agent may from time to time reasonably request in order to protect the interests of the
33
Administrative Agent and the Lenders under or as contemplated by this Agreement.
(b) Notices. Such Loan Party will notify the Agents in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:
(i) Events of Default or Unmatured Events of Default. The occurrence of each Event of Default and each Unmatured Event of Default, by a statement of an Authorized Officer of such Loan Party.
(ii) Termination Date. The occurrence of the Termination Date under the Receivables Sale Agreement.
(iii) Notices under Receivables Sale Agreement. Copies of all notices delivered under the Receivables Sale Agreement.
(iv) Downgrade of Performance Guarantor. Any downgrade in the rating of any Debt of Performance Guarantor by S&P or ▇▇▇▇▇’▇, setting forth the Debt affected and the nature of such change.
(v) Material Events. (i) With respect to Borrower, the occurrence of any other event or condition that has had, or would reasonably be expected to have, a Material Adverse Effect and (ii) with respect to Servicer, a copy of each notice delivered pursuant to Section 6.02 of the Parent Credit Agreement as and when such notice is delivered thereunder.
(vi) Independent Director. The decision to appoint a new director of the Borrower as the “Independent Director” for purposes of this Agreement, such notice to be issued not less than ten (10) Business Days prior to the effective date of such appointment and to certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Director.”
(vii) ERISA. Promptly following receipt thereof, copies of any documents described in Sections 101(k) or 101(l) of ERISA that any Loan Party or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided that if the Loan Parties or any of the ERISA Affiliates have not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, then, upon reasonable request of the Administrative Agent, the Loan Parties and/or the ERISA Affiliates shall promptly make a request for such documents or notices from such administrator or sponsor and the Borrower shall provide copies of such documents and notices promptly to the Administrative Agent after receipt thereof, and further provided that the rights granted to the Administrative Agent in this section shall be exercised not more than once during a 12-month period.
34
(c) Compliance with Laws and Preservation of Corporate Existence. Such Loan Party will comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect. Such Loan Party will preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where its business is conducted, except where the failure to so preserve and maintain or qualify would not reasonably be expected to have a Material Adverse Effect.
(d) Audits. Such Loan Party will furnish to each of the Co-Agents from time to time such information with respect to it and the Receivables such Co-Agent may reasonably request. Such Loan Party will, from time to time during regular business hours as requested by any Co-Agent upon reasonable notice and at the sole cost of such Loan Party, permit such Co-Agent, or their agents or representatives (and shall cause each Originator to permit such Co-Agent or their agents or representatives): (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Person relating to the Collateral, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Person’s financial condition or the Collateral or any Person’s performance under any of the Transaction Documents or the Monetization Documents or any Person’s performance under the Contracts and, in each case, with any of the officers or employees of Borrower or the Servicer having knowledge of such matters (each of the foregoing examinations and visits, a “Review”); provided, however, that, so long as no Event of Default has occurred and is continuing, the Loan Parties shall only be responsible for the costs and expenses of one (1) Review collectively conducted by the Co-Agents in the aggregate in any one calendar year.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause each Originator to) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing 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 Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). The Servicer will (and will cause each Originator to) give the Agents notice of any material change in the administrative and operating procedures referred to in the previous sentence.
(ii) Such Loan Party will (and the Servicer will cause each Originator to): (A) on or prior to the Closing Date, mark its master data processing records and other books and records relating to the Loans with a legend, acceptable to the Agents, describing the Administrative Agent’s security interest in the Collateral and (B)
35
upon the request of the Agents following the occurrence of an Event of Default: (x) mark each Contract with a legend describing the Administrative Agent’s security interest and (y) deliver to the Administrative Agent all Contracts (including, without limitation, all multiple originals of any such Contract constituting an instrument, a certificated security or chattel paper) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such Loan Party will (and will cause each Originator to) timely and fully (i) perform and comply with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.
(g) Maintenance and Enforcement of Receivables Sale Agreement and Performance Undertaking. Borrower will maintain the effectiveness of, and continue to perform under the Receivables Sale Agreement and the Performance Undertaking, such that it does not amend, restate, supplement, cancel, terminate or otherwise modify the Receivables Sale Agreement or the Performance Undertaking, or give any consent, waiver, directive or approval thereunder or waive any default, action, omission or breach under the Receivables Sale Agreement or the Performance Undertaking or otherwise grant any indulgence thereunder, without (in each case) the prior written consent of the Required Committed Lenders. Borrower will, and will require each Originator to, perform each of their respective obligations and undertakings under and pursuant to the Receivables Sale Agreement, will purchase Receivables thereunder in strict compliance with the terms thereof and will vigorously enforce the rights and remedies accorded to Borrower under the Receivables Sale Agreement and the Performance Undertaking. Borrower will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agents and the Lenders as assignees of Borrower) under the Receivables Sale Agreement as any of the Agents may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Receivables Sale Agreement.
(h) Ownership. Borrower will (or will cause each Originator to) take all necessary action to (i) vest legal and equitable title to the Collateral purchased under the Receivables Sale Agreement irrevocably in Borrower, free and clear of any Adverse Claims (other than Adverse Claims (A) in favor of the Administrative Agent, for the benefit of the Secured Parties or, (B) with respect to the Monetized Receivables and Related Monetized Assets, in favor of the Receivables Agent for the benefit of the Receivables Buyers pursuant to the Monetization Documents) including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Borrower’s interest in such Collateral and such other action to perfect, protect or more fully evidence the interest of Borrower therein as any of the Agents may reasonably request, and (ii) establish and maintain, in favor of the Administrative Agent, for the benefit of the Secured Parties, a valid and perfected first priority security interest in all Collateral, free and clear of any Adverse Claims (other than, with respect to the Monetized Receivables and Related Monetized Assets, in favor of the Receivables Agent for the benefit of
36
the Receivables Buyers pursuant to the Monetization Documents), including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Administrative Agent’s (for the benefit of the Secured Parties) security interest in the Collateral and such other action to perfect, protect or more fully evidence the interest of the Administrative Agent for the benefit of the Secured Parties as any of the Agents may reasonably request.
(i) Lenders’ Reliance. ▇▇▇▇▇▇▇▇ acknowledges that the Agents and the Lenders are entering into the transactions contemplated by this Agreement in reliance upon ▇▇▇▇▇▇▇▇’s identity as a legal entity that is separate from each Originator. Therefore, from and after the date of execution and delivery of this Agreement, Borrower shall take all reasonable steps, including, without limitation, all steps that any Agent or any Lender may from time to time reasonably request, to maintain Borrower’s identity as a separate legal entity and to make it manifest to third parties that Borrower is an entity with assets and liabilities distinct from those of each Originator and any Affiliates thereof (other than Borrower) and not just a division of any Originator or any such Affiliate. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, Borrower will:
(i) maintain books, financial records and bank accounts in a manner so that it will not be difficult or costly to segregate, ascertain and otherwise identify the assets and liabilities of Borrower;
(ii) not commingle any of its assets, funds, liabilities or business functions with the assets, funds, liabilities or business functions of any other person or entity except for payments that may be received in any Lock-Box prior to 30 days after the date of this Agreement;
(iii) observe all appropriate limited liability company procedures and formalities;
(iv) pay its own liabilities, losses and expenses only out of its own funds;
(v) maintain separate annual and quarterly financial statements prepared in accordance with generally accepted accounting principles, consistently applied, showing its assets and liabilities separate and distinct from those of any other person or entity;
(vi) pay or bear the cost (or if such statements are consolidated, the pro-rata cost) of the preparation of its financial statements;
(vii) not guarantee or become obligated for the debts or obligations of any other entity or person;
(viii) not hold out its credit as being available to satisfy the debts or obligations of any other person or entity;
37
(ix) hold itself out as an entity separate and distinct from any other person or entity (including its Affiliates);
(x) correct any known misunderstanding regarding its separate identity;
(xi) use separate stationery, invoices, checks and the like bearing its own name;
(xii) compensate all consultants, independent contractors and agents from its own funds for services provided to it by such consultants, independent contractors and agents;
(xiii) to the extent that Borrower and any of its Affiliates occupy any premises in the same location, allocate fairly, appropriately and nonarbitrarily any rent and overhead expenses among and between such entities with the result that the Borrower bears its fair share of all such rent and expenses;
(xiv) to the extent that Borrower and any of its Affiliates share the same officers, allocate fairly, appropriately and nonarbitrarily any salaries and expenses related to providing benefits to such officers between or among such entities, with the result that the Borrower will bear its fair share of the salary and benefit costs associated with all such common or shared officers;
(xv) to the extent that Borrower and any of its Affiliates jointly contract or do business with vendors or service providers or share overhead expenses, allocate fairly, appropriately and nonarbitrarily any costs and expenses incurred in so doing between or among such entities, with the result that the Borrower bears its fair share of all such costs and expenses;
(xvi) to the extent Borrower contracts or does business with vendors or service providers where the goods or services are wholly or partially for the benefit of its Affiliates, allocate fairly, appropriately and nonarbitrarily any costs incurred in so doing to the entity for whose benefit such goods or services are provided, with the result that the Borrower bears its fair share of all such costs;
(xvii) not make any loans to any person or entity (other than such intercompany loans between Borrower and each Originator contemplated by this Agreement) or buy or hold any indebtedness issued by any other person or entity (except for cash and investment-grade securities);
(xviii) conduct its own business in its own name;
(xix) hold all of its assets in its own name;
(xx) maintain an arm’s-length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis;
38
(xxi) not pledge its assets for the benefit of any other Person;
(xxii) not identify itself as a division or department of any other entity;
(xxiii) maintain adequate capital in light of its contemplated business operations and in no event less than the Required Capital Amount (as defined in the Receivables Sale Agreement) and refrain from making any dividend, distribution, redemption of capital stock or payment of any subordinated indebtedness which would cause the Required Capital Amount to cease to be so maintained;
(xxiv) conduct transactions between Borrower and third parties in the name of Borrower and as an entity separate and independent from each of its Affiliates;
(xxv) cause representatives and agents of Borrower to hold themselves out to third parties as being representatives or agents, as the case may be, of Borrower;
(xxvi) not enter into or be a party to, any transaction with its members or Affiliates except in the ordinary course of its business and on terms which are intrinsically fair and are substantially similar to those which would be obtained in a comparable arm’s-length transaction with an unrelated third party;
(xxvii) not acquire or assume the obligations or acquire the securities of its Affiliates or owners, including partners of its Affiliates; provided, however, that notwithstanding the foregoing, Borrower is authorized to engage in and consummate each of the transactions contemplated by each Transaction Document and each Monetization Document and Borrower is authorized to perform its obligations under each Transaction Document; (xxviii) maintain its limited liability company status in conformity with this Agreement, such that (A) it does not amend, restate, supplement or otherwise modify its Certificate of Formation or Limited Liability Company Agreement in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 7.1(i) of this Agreement; and (B) its corporate charter requires that the Board of Directors of the Borrower shall at all times include at least one “Independent Director” as such term is defined herein.
(xxix) maintain its corporate separateness such that it does not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, nor at any time create, have, acquire, maintain or hold any interest in any Subsidiary; and
(xxx) take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by ▇▇▇▇▇ ▇▇▇▇▇▇▇ US LLP, as
39
counsel for ▇▇▇▇▇▇▇▇, issued as of the date hereof and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times.
(j) Collections. Such Loan Party will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and Collection Account (other than any FX Collection Account and the related Lock-Boxes) to be subject at all times to a Collection Account Agreement that is in full force and effect; provided, that amounts received in respect of any Excluded Receivables shall not be deposited in any Lock-Box or Collection Account. In the event any payments relating to the Collateral are remitted directly to Borrower or any Affiliate of Borrower, Borrower will remit (or will cause all such payments to be remitted) directly to a Collection Bank and deposit into a Collection Account within two (2) Business Days following receipt thereof, and, at all times prior to such remittance, Borrower will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Agents and the Lenders. Borrower or, solely (i) on and prior to the Post-Closing Date, Smithfield Support or Smithfield Direct, LLC or (ii) with respect to each FX Collection Account and the related Lock-Boxes, Smithfield Support, will maintain exclusive ownership, dominion and control (subject to the terms of this Agreement) of each Lock-Box and Collection Account and shall not grant the right to take dominion and control of any Lock-Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to the Administrative Agent as contemplated by this Agreement, and except for access granted to Servicer prior to delivery of Collection Notices. Notwithstanding anything to the contrary in this Agreement, Monetized Receivable Collections may be deposited in a Lock-Box or a Collection Account so long as the Monetization Intercreditor Agreement is in full force and effect.
(k) Taxes. Such Loan Party will file all Tax returns and reports required by law to be filed by it and will promptly pay all Taxes and governmental charges at any time owing, except any such Taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. Borrower will pay when due any and all present and future stamp, documentary, and other similar Taxes and governmental charges payable in connection with the Receivables, and hold each of the Indemnified Parties harmless from and against any and all liabilities (including penalties, interest and expenses) with respect to or resulting from any delay or omission to pay such Taxes and governmental charges.
(l) Payment to Applicable Originator. With respect to any Receivable purchased by Borrower from any Originator, such sale shall be effected under, and in strict compliance with the terms of, the Receivables Sale Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to such Originator in respect of the purchase price for such Receivable.
(m) Notice of Ratio of Consolidated Funded Debt to Consolidated Capitalization. Concurrently with the delivery of a certificate of Smithfield pursuant to Section 6.01(c) of the Parent Credit Agreement, the Servicer shall provide to the Administrative Agent
40
written notice of the ratio of Consolidated Funded Debt to Consolidated Capitalization as calculated pursuant to the terms of the Parent Credit Agreement as amended, restated or otherwise modified from time to time.
(n) Sanctions and other Anti-Terrorism Laws; Anti-Corruption Laws. Such Loan Party covenants and agrees that:
(i) it shall immediately notify each of the Agents in writing upon the occurrence of a Reportable Compliance Event;
(ii) if, at any time, any Collateral becomes Embargoed Property, then, in addition to all other rights and remedies available to each of the Agents, upon request by any of the Agents, such Loan Party shall (or shall cause the Borrower to) provide substitute Collateral acceptable to the Administrative Agent that is not Embargoed Property; and
(iii) it shall, and shall require each other Covered Entity to, conduct its business in compliance with all Anti-Corruption Laws and maintain policies and procedures reasonably designed to ensure compliance with such Laws.
(o) Notice of Certain Amendments to the Parent Credit Agreement. Regardless of whether the Administrative Agent is also a party to the Parent Credit Agreement, Smithfield or the Borrower shall provide the Administrative Agent with notice of (i) any change to the definition of “Event of Default” pursuant to the Parent Credit Agreement and (ii) any amendment, restatement, waiver or other modification to the Parent Credit Agreement given effect pursuant to the definition of “Parent Credit Agreement” within ten (10) calendar days of such amendment, restatement, waiver or other modification.
(p) Beneficial Ownership Rule. Promptly following any change in the information included in the Beneficial Ownership Certification that would result in a change to the list of beneficial owners or control parties identified in parts (c) or (d) of such certification, the Borrower shall execute and deliver to the Administrative Agent an updated Beneficial Ownership Certification.
Promptly following any request therefor, the Borrower shall deliver to the Administrative Agent all documentation and other information required by bank regulatory authorities requested by a Committed Lender for purposes of compliance with applicable “know your customer” requirements under the Patriot Act, the Beneficial Ownership Rule or other applicable anti-money laundering laws, rules and regulations.
(q) Monetization Documents. Promptly following the amendment, restatement, modification, waiver or termination of any Monetization Document, the Borrower shall provide (or cause the Servicer to provide) a copy thereof to each Agent.
41
Section 7.2. Negative Covenants of the Loan Parties. Until the Final Payout Date, each Loan Party hereby covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Loan Party will not change its name, identity or structure (within the meaning of any applicable enactment of the UCC) or jurisdiction of organization, unless it shall have: (i) given the Agents at least ten (10) Business Days’ prior written notice thereof and (ii) delivered to the Administrative Agent all financing statements, instruments and other documents requested by any Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be required by the Administrative Agent pursuant to Section 8.2(b), such Loan Party will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection Account, unless the Administrative Agent shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account (other than any FX Collection Account) or Lock-Box (other than any Lock-Box associated with an FX Collection Account), an executed Collection Account Agreement with respect to the new Collection Account or Lock-Box; provided, however, that the Servicer may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account, including any Collection Account relating to Smithfield Support.
(c) Modifications to Contracts and Credit and Collection Policy. Such Loan Party will not, and will not permit any Originator to, make any change to the Credit and Collection Policy (other than any change expressly permitted by the Receivables Sale Agreement). Except as provided in Section 8.2(d), the Servicer will not, and will not permit any Originator to, extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Borrower will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any of the Collateral, or assign any right to receive income with respect thereto (other than, in each case, (i) the creation of a security interest therein in favor of the Administrative Agent as provided for herein or, (ii) with respect to the Monetized Receivables and Related Monetized Assets, in favor of the Receivables Agent for the benefit of the Receivables Buyers pursuant to the Monetization Documents), and Borrower will defend the right, title and interest of the Secured Parties in, to and under any of the foregoing property, against all claims of third parties claiming through or under Borrower or any Originator.
(e) Use of Proceeds. Borrower will not use the proceeds of the Advances for any purpose other than (i) paying for Receivables and Related Security under and in accordance with the Receivables Sale Agreement, including without limitation, making payments on the Subordinated Notes to the extent permitted thereunder and under the Receivables Sale
42
Agreement, (ii) paying its ordinary and necessary operating expenses when and as due, and (iii) making Restricted Junior Payments to the extent permitted under this Agreement.
(f) Termination Date Determination. Borrower will not designate the Termination Date, or send any written notice to any Originator in respect thereof, without the prior written consent of the Agents, except with respect to the occurrence of a Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
(g) Restricted Junior Payments. Borrower will not make any Restricted Junior Payment if after giving effect thereto, Borrower’s Net Worth (as defined in the Receivables Sale Agreement) would be less than the Required Capital Amount (as defined in the Receivables Sale Agreement).
(h) Borrower Debt. Borrower will not incur or permit to exist any Debt or liability on account of deposits except: (i) the Obligations, (ii) the Subordinated Loans, and (iii) other current accounts payable arising in the ordinary course of business and not overdue.
(i) Merger; Consolidation. Subject to the limitations of Section 7.1(i), no Loan Party will, nor will it permit any of its Non-Excluded Subsidiaries to, merge into, amalgamate with or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets, or all or substantially all of the stock of any of its Non-Excluded Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing:
(i) any Subsidiary (other than the Borrower) may merge, consolidate or amalgamate with the Servicer in a transaction in which the Servicer is the surviving entity pursuant to documentation reasonably satisfactory to the Administrative Agent;
(ii) any other Person (other than the Borrower) may merge into or amalgamate or consolidate with the Servicer in a transaction in which the Servicer is the surviving corporation, or, concurrently with the consummation of such transaction, the surviving entity becomes the Servicer;
(iii) any Non-Excluded Subsidiary that is not a Loan Party may merge into or amalgamate or consolidate with any of the following: (A) any other Non-Excluded Subsidiary that is not a Loan Party and (B) any other Person (other than a Loan Party) if permitted under Section 7.03(a) of the Parent Credit Agreement;
(iv) any Non-Excluded Subsidiary may sell, transfer, lease or otherwise dispose of its assets, including all or substantially all of the stock of any of its Non-Excluded Subsidiaries, to the Servicer or another Non-Excluded Subsidiary; provided that if any such transferor is a Loan Party, such transferee shall be a Loan Party;
43
(v) any Non-Excluded Subsidiary may liquidate or dissolve if the Servicer determines in good faith that such liquidation or dissolution is in the best interests of the Servicer and is not materially disadvantageous to the Lenders; and
(vi) the Servicer or any Non-Excluded Subsidiary may sell, transfer, lease or otherwise dispose of (including pursuant to any merger, amalgamation or consolidation) its assets (including for the avoidance of doubt any Excluded Receivable and all or substantially all of the stock of any of its Non-Excluded Subsidiaries) in any manner expressly permitted by any Transaction Document or if permitted under Section 7.06 or Section 7.07 of the Parent Credit Agreement.
(j) Excluded Originators. The Borrower shall not designate any Originator as an Excluded Originator pursuant to Section 1.8 of the Receivables Sale Agreement unless and until (i) the Servicer shall have prepared and forwarded to the Administrative Agent and the Lenders a restated Monthly Report for each of the twelve (12) prior Monthly Reporting Dates occurring since the date hereof, which such restated Monthly Report shall be prepared on the basis of the exclusion from the Collateral of the Receivables relating to such Originator and (ii) the Administrative Agent shall have provided its prior written consent to such designation; provided, however, that neither restated Monthly Reports nor consent of the Administrative Agent shall be required in the case of an Originator that had originated Receivables with an aggregate Outstanding Balance as the Calculation Period immediately preceding the Calculation Period in which the Effective Date occurs that is less than 2.5% of Outstanding Balance of all Receivables as of the Calculation Period immediately preceding the Calculation Period in which the Effective Date occurs. Any restated Monthly Report provided pursuant to this Section 7.2(j) shall be subject to the representations and warranties contained in Section 5.1(g).
(k) Sanctions and other Anti-Terrorism Laws; Anti-Corruption Laws. Such Loan Party covenants and agrees that:
(i) it and its Subsidiaries will not: (A) take any action that could reasonably be expected to result in it becoming a Sanctioned Person or allow any employees, officers, directors, affiliates or agents acting on its behalf in connection with this Agreement to become a Sanctioned Person; (B) directly, or indirectly through a third party, engage in any transactions or other dealings with or for the benefit of any Sanctioned Person or Sanctioned Jurisdiction in violation of Anti-Terrorism Laws, including any use of the proceeds of the Advances to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Person or Sanctioned Jurisdiction in violation of Anti-Terrorism Laws; (C) pay or repay any Obligations with Embargoed Property or funds derived from any unlawful activity; (D) permit any Collateral to become Embargoed Property; or (E) cause any Agent, Conduit or Committed Lender to violate any Anti-Terrorism Law; and
(ii) it will not, and will not permit any its Subsidiaries to, directly or indirectly, use the Advances or any proceeds thereof for any purpose which would breach any Anti-Corruption Laws in any jurisdiction in which any Covered Entity conducts business.
44
(l) Liquidity Coverage Ratio. The Borrower shall not issue any LCR Security.
(m) Tax Status. The Loan Parties shall ensure that the Borrower does not (i) become treated other than as a “disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3 that is wholly owned by a “United States person” within the meaning of Section 7701(a)(30) of the Tax Code for U.S. federal income tax purposes or (ii) become an association taxable as a corporation or a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.
Section 7.3. Restructuring Transactions.
(a) The parties acknowledge that Smithfield and certain of its Affiliates undertook, or caused to be undertaken, prior to the date hereof, the Restructuring Transactions.
(b) Notwithstanding any other provision contained herein to the contrary, the parties agree that the undertaking by Smithfield or its Affiliates of the Restructuring Transaction, and the consummation thereof, did not cause and shall not be deemed to have constituted (i) a breach of any representation, warranty or covenant contained herein, (ii) a Material Adverse Effect, (iii) an Event of Default, or (iv) an Unmatured Event of Default.
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1. Designation of Servicer.
(a) The servicing, administration and collection of the Receivables shall be conducted by such Person (the “Servicer”) so designated from time to time in accordance with this Section 8.1. Smithfield is hereby designated as, and ▇▇▇▇▇▇ agrees to perform the duties and obligations of, the Servicer pursuant to the terms of this Agreement. After the occurrence of an Event of Default, the Administrative Agent, at the direction of the Required Committed Lenders, may at any time designate as Servicer any Person domiciled in the United States to succeed ▇▇▇▇▇▇▇▇▇▇ or any successor Servicer; provided that the Rating Agency Condition (if applicable) is satisfied.
(b) Smithfield may at any time and from time to time delegate any or all of its duties and obligations as Servicer hereunder to one or more Persons domiciled in the United States. Notwithstanding the foregoing, so long as ▇▇▇▇▇▇▇▇▇▇ remains the Servicer hereunder: (i) Smithfield shall be and remain liable to the Agents and the Lenders for the full and prompt performance of all duties and responsibilities of the Servicer hereunder and (ii) the Agents and the Lenders shall be entitled to deal exclusively with Smithfield in matters relating to the discharge by the Servicer of its duties and responsibilities hereunder.
Section 8.2. Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable from time to time, all in accordance with
45
applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy.
(b) The Servicer will instruct (i) all Obligors in respect of Receivables other than Excluded Receivables to pay all Collections directly to a Lock-Box or Collection Account and (ii) all Obligors in respect of Excluded Receivables to pay all Collections to a designated account that is not a Lock-Box or Collection Account. The Servicer shall effect a Collection Account Agreement with each bank party to a Collection Account (other than any FX Collection Account) at any time. In the case of any remittances received in any Lock-Box or Collection Account that shall have been identified, to the satisfaction of the Servicer, to not constitute either Collections or other proceeds of the Receivables or the Related Security or the Monetized Receivables Collections or other proceeds of the Monetized Receivables, the Servicer shall promptly remit such items to the Person identified to it as being the owner of such remittances. From and after the date the Administrative Agent delivers to any Collection Bank a Collection Notice pursuant to Section 8.3, the Administrative Agent may request that the Servicer, and the Servicer thereupon promptly shall instruct all Obligors with respect to the Receivables, to remit all payments thereon to a new depositary account specified by the Administrative Agent and, at all times thereafter, Borrower and the Servicer shall not deposit or otherwise credit, and shall not permit any other Person to deposit or otherwise credit to such new depositary account any cash or payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance with the procedures described herein and in Article II. The Servicer shall set aside and hold in trust for the account of ▇▇▇▇▇▇▇▇ and the Lenders their respective shares of the Collections in accordance with Article II. The Servicer shall, upon the request of any Agent, segregate, in a manner acceptable to the Agents, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of the Servicer or Borrower prior to the remittance thereof in accordance with Article II. If the Servicer shall be required to segregate Collections pursuant to the preceding sentence, the Servicer shall segregate and deposit with a bank designated by the Administrative Agent such allocable share of Collections of Receivables set aside for the Lenders on the first Business Day following receipt by the Servicer of such Collections, duly endorsed or with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and Collection Policy, extend the maturity of any Receivable or adjust the Outstanding Balance of any Receivable as the Servicer determines to be appropriate to maximize Collections thereof; provided, however, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable or Defaulted Receivable or limit the rights of the Agents or the Lenders under this Agreement. Notwithstanding anything to the contrary contained herein, from and after the occurrence of an Event of Default, the Administrative Agent shall have the absolute and unlimited right to direct the Servicer to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any Related Security.
(e) The Servicer shall hold in trust for Borrower and the Lenders all Records that (i) evidence or relate to the Receivables, the related Contracts and Related Security or (ii) are
46
otherwise necessary or desirable to collect the Receivables and shall, as soon as practicable upon demand of the Administrative Agent following the occurrence of an Event of Default, deliver or make available to the Administrative Agent all such Records, at a place selected by the Administrative Agent. The Servicer shall, as soon as practicable following receipt thereof turn over to Borrower any cash collections or other cash proceeds received with respect to Debt not constituting Receivables or proceeds of Collateral. The Servicer shall, from time to time at the request of any Lender, furnish to the Lenders (promptly after any such request) a calculation of the amounts set aside for the Lenders pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed by it to Originator or Borrower shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Administrative Agent, be applied as a Collection of any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor.
Section 8.3. Collection Notices. The Administrative Agent is authorized at any time after the occurrence of an Event of Default to date and to deliver to the Collection Banks the Collection Notices. Borrower hereby transfers to the Administrative Agent for the benefit of the Secured Parties, the exclusive ownership and control of each Lock-Box and Collection Account; provided, however, that Borrower shall retain the right to direct the disposition of funds from each such Collection Account until the Administrative Agent (at the direction of any Co-Agent) delivers the applicable Collection Notice. In case any authorized signatory of Borrower whose signature appears on a Collection Account Agreement shall cease to have such authority before the delivery of such notice, such Collection Notice shall nevertheless be valid as if such authority had remained in force. Borrower hereby authorizes the Administrative Agent, and agrees that the Administrative Agent shall be entitled (i) at any time after delivery of the Collection Notices, to endorse ▇▇▇▇▇▇▇▇’s name on checks and other instruments representing Collections, (ii) at any time after the occurrence of an Event of Default, to enforce the Receivables, the related Contracts and the Related Security, and (iii) at any time after the occurrence of an Event of Default, to take such action as shall be necessary or desirable to cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of the Administrative Agent rather than Borrower.
Section 8.4. Responsibilities of Borrower. Anything herein to the contrary notwithstanding, the exercise by the Administrative Agent on behalf of the Secured Parties of their rights hereunder shall not release the Servicer, any Originator or Borrower from any of their duties or obligations with respect to any Receivables or under the related Contracts. The Lenders shall have no obligation or liability with respect to any Receivables or related Contracts, nor shall any of them be obligated to perform the obligations of Borrower. Moreover, the ultimate responsibility for the servicing of the Receivables shall be borne by Borrower.
Section 8.5. Pool Reports. The Servicer shall prepare and forward to the Lenders (i) on each Monthly Reporting Date, a Monthly Report in substantially the form of Exhibit VI-A hereto and an electronic file of the data contained therein, and (ii) at such times as any Co-Agent shall
47
reasonably request, a listing by Obligor of all Receivables together with an aging of such Receivables. After a Ratings Trigger Event, the Servicer shall prepare and forward to the Lenders on a weekly basis, a Weekly Report in substantially the form of Exhibit VI-B hereto and an electronic file of the data contained therein. On and after the date on which any Receivable is designated an Excluded Receivable under the Receivables Sale Agreement, each Pool Report shall exclude any such Excluded Receivables. On and after the date on which any Originator is designated an Excluded Originator under the Receivables Sale Agreement, each Pool Report shall exclude any such Excluded Originator.
Section 8.6. Servicing Fee. As compensation for the Servicer’s servicing activities on their behalf, Borrower shall pay the Servicer the Servicing Fee, which fee shall be paid from Collections in arrears on each Settlement Date in accordance with Sections 2.2 and 2.3 herein.
ARTICLE IX.
EVENTS OF DEFAULT
Section 9.1. Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default:
(a) any Loan Party or Performance Guarantor shall fail to make any payment or deposit required to be made by it under the Transaction Documents when due and, for any such payment or deposit which is not in respect of principal, such failure continues for two consecutive Business Days;
(b) any representation, warranty, certification or statement made by Performance Guarantor or any Loan Party in any Transaction Document to which it is a party or in any other document delivered pursuant thereto shall prove to have been materially incorrect when made or deemed made; provided that the materiality threshold in the preceding clause shall not be applicable with respect to any representation or warranty that itself contains a materiality threshold;
(c) any Loan Party shall fail to perform or observe any covenant contained in Section 7.1(n), 7.2 or 8.5 when due;
(d) any Loan Party or Performance Guarantor shall fail to perform or observe any other covenant or agreement under any Transaction Documents and such failure shall remain unremedied for 15 days after the earlier of (i) an Executive Officer of any of such Persons obtaining knowledge thereof, or (ii) written notice thereof shall have been given to any Loan Party or Performance Guarantor by any of the Agents;
(e) failure of Borrower to pay any Debt (other than the Obligations) when due or the default by Borrower in the performance of any term, provision or condition contained in any agreement under which any such Debt was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Debt to cause, such Debt to become due prior to its stated maturity; or any such Debt of Borrower shall be declared to be due and payable or
48
required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof;
(f) failure of Performance Guarantor or the Servicer or any of their respective Subsidiaries (other than the Borrower, any Non-Material Subsidiary and any Excluded Subsidiary) shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(g) a regulatory, tax or accounting body has ordered that the activities of the Borrower or any Affiliate of the Borrower contemplated hereby be terminated or, as a result of any other event or circumstance, the activities of the Borrower or any Affiliate of the Borrower contemplated hereby may reasonably be expected to cause the Borrower or any of its respective Affiliates to suffer materially adverse regulatory, accounting or tax consequences;
(h) any Person who does not satisfy the requirements of an “Independent Director” shall be appointed as an independent director of the Borrower;
(i) any change in the Credit and Collection Policy prohibited by Section 7.2(c) occurs, without the prior written consent of the Administrative Agent;
(j) an Event of Bankruptcy shall occur with respect to Performance Guarantor, any Originator or any Loan Party;
(k) as at the end of any Calculation Period:
(i) the three-month rolling average Delinquency Ratio shall exceed three percent (3)%,
(ii) the three-month rolling average Default Ratio shall exceed one percent (1)%,
(iii) the three-month rolling average Dilution Ratio shall exceed five percent (5)%, or
(iv) Days’ Sales Outstanding shall exceed 35 days;
(l) a Change of Control shall occur or the Borrower shall enter into any merger;
(m) one or more judgments for the payment of money in an aggregate amount in excess of $150,000,000 (to the extent not adequately covered by insurance as to which the insurer has not denied or contested coverage) shall be rendered against the Performance Guarantor, any Subsidiary of Performance Guarantor (other than any Excluded Subsidiary), any Loan Party, any Subsidiary of a Loan Party (other than any Excluded Subsidiary) or any combination thereof and the same shall remain unpaid or undischarged for a period of 45 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Performance
49
Guarantor, any Subsidiary of Performance Guarantor, any Loan Party or any Subsidiary of any Loan Party (other than any Excluded Subsidiary) to enforce any such judgment, or the Performance Guarantor, any Subsidiary of Performance Guarantor (other than any Excluded Subsidiary), any Loan Party or any Subsidiary of any Loan Party (other than any Excluded Subsidiary) shall fail within 45 days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;
(n) (i) the “Termination Date” shall occur under the Receivables Sale Agreement as to any Originator or any Originator shall for any reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be incapable of transferring Receivables to Borrower under the Receivables Sale Agreement or (ii) (x) an “Event of Default” (as such term is defined in the Parent Credit Agreement) shall have occurred and be continuing under the Parent Credit Agreement and (y) to the extent that the Administrative Agent is also a party to the Parent Credit Agreement, such Event of Default has not been waived or cured in accordance with the terms of the Parent Credit Agreement;
(o) this Agreement shall terminate in whole or in part (except in accordance with its terms), or shall cease to be effective or to be the legally valid, binding and enforceable obligation of Borrower, or any Obligor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability, or the Administrative Agent for the benefit of the Lenders shall cease to have a valid and perfected first priority security interest in the Collateral;
(p) the Aggregate Principal shall exceed the Borrowing Limit for 2 consecutive Business Days;
(q) the Performance Undertaking shall cease to be effective or to be the legally valid, binding and enforceable obligation of Performance Guarantor, or Performance Guarantor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability of any of its obligations thereunder;
(r) the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Tax Code with regard to any of the Collateral and such lien shall not have been released within fifteen (15) days, or the PBGC shall, or shall indicate its intention to, file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the Collateral;
(s) (i) an ERISA Event shall have occurred or (ii) such other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) and (ii) such event or condition, when taken together with all other such events or conditions, if any, that have occurred, is reasonably likely to result in a Material Adverse Effect;
(t) any event shall occur which (i) materially and adversely impairs the ability of the Originators to originate Receivables of a credit quality that is, on average, at least equal to
50
the average credit quality of the Receivables sold or contributed to Borrower on the date of this Agreement or (ii) has, or would be reasonably expected to have, a Material Adverse Effect;
(u) a Subordinated Lender shall fail to make any Subordinated Loan under the applicable subordinated loan agreement following the Borrower’s request therefor;
(v) any Collection Account (other than any FX Collection Account) fails to be subject to a Collection Account Agreement at any time;
(w) on or after the Legal Final Maturity Date, the Outstanding Balance of all Eligible Receivables is greater than zero;
(x) Smithfield (or any successor borrower or guarantor under the Parent Credit Agreement) shall permit (i) the ratio of Consolidated Funded Debt to Consolidated Capitalization to be equal to or greater than 0.00 to 0.50 (or such other ratio as required by the Parent Credit Agreement as amended, restated or other modified in accordance with the definition of Parent Credit Agreement) or (ii) ratio of Consolidated EBITDA to Consolidated Interest Expense to be equal to or greater than 3.50 to 0.00 (or such other ratio as required by the Parent Credit Agreement as amended, restated or other modified in accordance with the definition of Parent Credit Agreement). For purposes of this clause (x) terms used (including all defined terms used within such terms) shall have the respective meaning assigned to such terms in the Parent Credit Agreement as amended, restated or other modified in accordance with the definition of Parent Credit Agreement; or
(y) any Loan Party shall breach Section 5.1(x).
Section 9.2. Remedies. Upon the occurrence of an Event of Default: (i) the Administrative Agent, upon the direction of the Required Committed Lenders, shall replace the Person then acting as Servicer, (ii) the Administrative Agent may (and, upon direction of the Required Committed Lenders, the Administrative Agent shall) declare the Commitment Termination Date to have occurred, whereupon the Aggregate Commitment shall immediately terminate and the Commitment Termination Date shall forthwith occur, all without demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party; provided, however, that upon the occurrence of an Event of Default described in Section 9.1(j), the Commitment Termination Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by each Loan Party, (iii) the Administrative Agent may (and, upon the direction of the Required Committed Lenders, shall) deliver the Collection Notices to the Collection Banks, (iv) the Administrative Agent may (and, upon the direction of the Required Committed Lenders, shall) exercise all rights and remedies of a secured party upon default under the UCC and other applicable laws, and (v) the Administrative Agent may (and, upon the direction of the Required Committed Lenders, shall) notify Obligors of the Administrative Agent’s security interest in the Receivables and other Collateral and instruct them to make future payments into accounts designated by the Administrative Agent. The aforementioned rights and remedies shall be without limitation, and shall be in addition to all other rights and remedies of the Agents and the Lenders otherwise available under any other provision of this Agreement, by operation of law, at equity or
51
otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative.
ARTICLE X.
INDEMNIFICATION
Section 10.1. Indemnities by the Loan Parties. Without limiting any other rights that the Administrative Agent or any Lender may have hereunder or under applicable law, (A) Borrower hereby agrees to indemnify (and pay within 15 days of demand (together with a reasonably detailed invoice therefor) to) each of the Agents, each of the Conduits, each of the Committed Lenders, each of the Letter of Credit Issuers, each of the L/C Participants and each of the respective assigns, officers, directors, agents and employees of the foregoing (each, an “Indemnified Party”) from and against any and all damages, losses, claims, Taxes, liabilities, costs, expenses and for all other amounts payable (but in the case of attorneys’ fees, limited to reasonable attorneys’ fees actually incurred and disbursements of one primary counsel for the Indemnified Parties (taken as a whole) (and, if necessary, one local counsel in each material jurisdiction for the Indemnified Parties (taken as a whole) and, solely in the case of a conflict of interest, one additional counsel as necessary to the Indemnified Parties actually affected by such conflict (taken as a whole))) and, to the extent the Borrower does not timely pay such indemnity, any additional liability (including penalties, interest and expenses) arising from or with respect to any of the foregoing (all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded against or incurred by any of them arising out of or as a result of this Agreement, any Letter of Credit or the acquisition, either directly or indirectly, by a Lender of an interest in the Receivables, and (B) the Servicer hereby agrees to indemnify (and pay within 15 days of demand (together with a reasonably detailed invoice therefor) to) each Indemnified Party for Indemnified Amounts awarded against or incurred by any of them arising out of the Servicer’s activities as Servicer hereunder excluding, however, in all of the foregoing instances under the preceding clause (A):
(a) Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from gross negligence, bad faith or willful misconduct on the part of the Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor or the intentional non-payment of amounts due by the related Obligor in breach of its obligations in respect of such Receivable; or
(c) (i) taxes imposed on or measured by such Indemnified Party’s net income, and franchise taxes and branch profit taxes imposed on it, by the jurisdiction under the laws of which such Indemnified Party is organized or any political subdivision thereof, (ii) taxes imposed on or measured by such Indemnified Party’s net income, and franchise taxes and branch profit taxes imposed on it, by the jurisdiction in which such Indemnified Party’s principal executive office is located or any political subdivision thereof and (iii) in the case of a Foreign Lender, any U.S. federal withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new
52
lending office), except to the extent that such Foreign Lender was entitled at the time of designating a new lending office, to receive additional amounts with respect to such withholding tax pursuant to this Section 10.1 (all of the foregoing contained in clauses (i), (ii) and (iii) collectively, “Excluded Taxes”);
provided, however, that nothing contained in this sentence shall limit the liability of any Loan Party or limit the recourse of the Lenders to any Loan Party for amounts otherwise specifically provided to be paid by such Loan Party under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, Borrower shall indemnify the Agents and the Lenders for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to such Loan Party) relating to or resulting from:
(i) any representation or warranty made by any Loan Party or any Originator (or any officers of any such Person) under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by any such Person pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made;
(ii) the failure by Borrower, the Servicer or any Originator to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of any Originator to keep or perform any of its obligations, express or implied, with respect to any Contract;
(iii) any failure of Borrower, the Servicer or any Originator to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit, or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than a defense related to the financial condition, or discharge in bankruptcy, of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services or any reduction of the Outstanding Balance of any Receivable due to PASA;
(vi) the commingling of Collections of Receivables at any time with other funds, including any commingling with any Monetized Receivable Collections;
53
(vii) any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of any Advance, the Collateral or any other investigation, litigation or proceeding relating to Borrower, the Servicer or any Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;
(viii) any Regulatory Change which increases the cost of, or lowers the Yield, to any Indemnified Party;
(ix) any inability to litigate any claim against any Obligor in respect of any Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding;
(x) any Event of Default;
(xi) any failure of Borrower to acquire and maintain legal and equitable title to, and ownership of any of the Collateral from the applicable Originator, free and clear of any Adverse Claim (other than as created hereunder); or any failure of Borrower to give reasonably equivalent value to any Originator under the Receivables Sale Agreement in consideration of the transfer by such Originator of any Receivable, or any attempt by any Person to void such transfer under statutory provisions or common law or equitable action;
(xii) any failure to vest and maintain vested in the Administrative Agent for the benefit of the Lenders, or to transfer to the Administrative Agent for the benefit of the Secured Parties, a valid first priority perfected security interests in the Collateral, free and clear of any Adverse Claim (other than Adverse Claims in favor of the Administrative Agent, for the benefit of the Secured Parties);
(xiii) the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Collateral, and the proceeds thereof, whether at the time of any Advance or at any subsequent time;
(xiv) any action or omission by any Loan Party which reduces or impairs the rights of the Administrative Agent or the Lenders with respect to any Collateral or the value of any Collateral;
(xv) any attempt by any Person to void any Advance or the Administrative Agent’s security interest in the Collateral under statutory provisions or common law or equitable action;
(xvi) any civil penalty or fine assessed by OFAC against, and all reasonable costs and expenses (including counsel fees and disbursements) incurred in
54
connection with defense thereof by the Administrative Agent or any Lender as a result of the funding of the Commitments or the acceptance of payments due under the Transaction Documents;
(xvii) the failure of any Receivable included in the calculation of the Net Pool Balance as an Eligible Receivable to be an Eligible Receivable at the time so included; and
(xviii) any In-Transit Receivable included in the calculation of the Net Pool Balance as an Eligible Receivable ceasing to be deemed to be an Eligible Receivable.
Notwithstanding the foregoing, (A) the foregoing indemnification is not intended to, and shall not, constitute a guarantee of the collectability or payment of the Receivables; and (B) except as provided in clause (xviii) above solely in relation to In-Transit Receivables, nothing in this Section 10.1 shall require Borrower to indemnify the Indemnified Parties for Receivables which are not collected, not paid or otherwise uncollectible on account of the insolvency, bankruptcy, credit-worthiness or financial inability to pay of the applicable Obligor.
Section 10.2. Increased Cost and Reduced Return
(a) Increased Costs Generally.
(i) If after the Closing Date, any Affected Entity shall be charged any fee, expense or increased cost on account of any Regulatory Change (1) that subjects such Affected Entity to any charge or withholding on or with respect to any Funding Agreement or such Affected Entity’s obligations under any Funding Agreement, or on or with respect to the Receivables, or changes the basis of taxation of payments to such Affected Entity of any amounts payable under any Funding Agreement (except for changes in the rate of tax on the overall net income of such Affected Entity or Excluded Taxes) or (2) that imposes, modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of such Affected Entity, or credit extended by such Affected Entity pursuant to any Funding Agreement or (3) that imposes any other condition the result of which is to increase the cost to such Affected Entity of performing its obligations under any Funding Agreement, or to reduce the rate of return on such Affected Entity’s capital as a consequence of its obligations under any Funding Agreement, or to reduce the amount of any sum received or receivable by such Affected Entity under any Funding Agreement or to require any payment calculated by reference to the amount of interests or loans held or interest received by it, then, upon demand by the applicable Co-Agent, on behalf of such Affected Entity, and receipt by Borrower of a certificate as to such amounts (to be conclusive absent manifest error), Borrower shall pay to such Co-Agent, as applicable, for the benefit of such Affected Entity, such amounts charged to such Affected Entity or such amounts to otherwise compensate such Affected Entity for such increased
55
cost or such reduction. Notwithstanding anything in this Agreement to the contrary, (x) the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder, issued in connection therewith or in implementation thereof (whether or not having the force of law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of law), in each case pursuant to Basel III, shall be deemed to be adopted and effective after the Closing Date regardless of the date enacted, adopted, issued, promulgated or implemented (including for purposes of Section 10.1 and this Section 10.2).
(ii) Failure or delay on the part of any Affected Entity to demand compensation pursuant to clause (i) above shall not constitute a waiver of such Affected Entity’s right to demand such compensation, provided that the Borrower shall not be required to compensate an Affected Entity pursuant to clause (i) above for any increased costs incurred or reductions suffered more than nine months prior to the date that the applicable Co-Agent, on behalf of such Affected Entity, notifies the Borrower of the Regulatory Change giving rise to such increased costs or reductions and of such Affected Entity’s intention to claim compensation therefor (except that, if the Regulatory Change giving rise to such increased costs or reductions is retroactive, then the nine month period referred to above shall be extended to include the period of retroactive effect thereof).
(iii) Notwithstanding anything else to the contrary in this Section 10.2, no Affected Entity shall request that the Borrower pay any additional amount pursuant to this Section 10.2 unless it generally is, or shall be making, similar requests from other similarly situated borrowers from whom such Affected Entity is permitted, under contract and applicable law, to seek similar amounts.
(b) Indemnified Taxes.
(i) Without limiting the generality of the foregoing, if Borrower or the Administrative Agent shall be required by applicable law to deduct any Indemnified Taxes from any payments made to any Affected Entity, then (a) the sum payable shall be increased as necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 10.2), such Affected Entity receives an amount equal to the sum it would have received had no such deductions been made, (b) Borrower or the Administrative Agent shall make such deductions and (c) Borrower or the Administrative Agent shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. As soon as practicable, but in no event more than 30 days after any payment of such Indemnified Taxes by Borrower to a Governmental Authority, Borrower shall
56
deliver to the Administrative Agent and the applicable Co-Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent or such Co-Agent, as the case may be.
(ii) In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Transaction Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Transaction Document (hereinafter referred to as “Other Taxes”). The Borrower shall not be required to make payment under this Section 10.2(b)(ii) to the extent paid under Section 10.1.
(iii) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Transaction Document to any Indemnified Party, the Borrower shall also pay to such Indemnified Party at the time interest is paid, such additional amount that such Indemnified Party specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) that such Indemnified Party would have received if such Taxes or Other Taxes had not been imposed. The Borrower shall not be required to make payment under this Section 10.2(b)(iii) to the extent paid under Section 10.1, 10.2(b)(i) or 10.2(b)(ii).
(c) In connection with the foregoing, the Borrower and the Servicer agree to cooperate with the Administrative Agent to take any action or provide any information (including any Required Data) reasonably requested by the Administrative Agent to mitigate any cost, expense or condition described above. Also, each Lender shall deliver to the Administrative Agent, at the time or times reasonably requested by the Administrative Agent, such properly completed and executed documentation reasonably requested by the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to withholding, backup withholding or information reporting requirements. Notwithstanding the preceding sentence, other than in the case of an IRS Form W-9 or W-8, the completion, execution and submission of such documentation shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(d) The Servicer and the Borrower acknowledge that, in connection with the funding of the Loan, or any portion thereof, by a Conduit, the Administrative Agent may be required to obtain commercial paper ratings affirmation(s). Each of the Servicer and the Borrower agrees that it will (i) cooperate with the Administrative Agent and any rating agency
57
involved in the issuance of such rating, (ii) amend and/or supplement the terms of this Agreement and the other Transaction Documents that define, employ or relate to the term “ARM Dilution Reserve,” “Borrowing Base,” “Concentration Reserve Percentage,” “Eligible Receivable,” “Loss Reserve,” “Dilution Reserve,” “Interest and Servicing Reserve,” “Minimum Dilution Reserve Percentage,” “PASA Reserve Amount,” “Servicing Fee Rate” or “Required Reserve”, or any defined term utilized in the definitions of such terms, in each case, as required by such rating agency in connection with the issuance of such rating (as so amended or supplemented, the “Revised Documents”), and (iii) take all actions required to ensure that (A) it is in compliance with all material provisions, representation, warranties and covenants of the Revised Documents applicable to it, (B) no Unmatured Event of Default, Event of Default, or any event that, with the giving of notice or the lapse of time, or both, would constitute a Unmatured Event of Default or Event of Default exists under the Revised Documents and (C) all other requirements under the Revised Documents relating to the funding of the Loan or the ownership of any Receivable have been complied with. The Borrower shall pay in immediately available funds to the Administrative Agent, all costs and expenses in connection with this Section 10.2, including, without limitation, the initial fees payable to such rating agency or agencies in connection with providing such rating and all ongoing fees payable to the rating agency or agencies for their continued monitoring of such rating.
Section 10.3. Other Costs and Expenses. Subject to Section 7.1(d), Borrower shall pay to the Agents and the Conduits within 15 days of demand (together with a reasonably detailed invoice therefor) all reasonable and documented costs and out-of-pocket expenses in connection with the preparation, execution, delivery and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder, including without limitation, the reasonable fees and out-of-pocket expenses of legal counsel for the Agents and the Conduits with respect thereto and with respect to advising the Agents and the Conduits as to their respective rights and remedies under this Agreement. Borrower shall pay to the Agents on demand any and all costs and expenses of the Agents and the Lenders, if any, including reasonable counsel fees and expenses actually incurred in connection with the enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following an Event of Default. Notwithstanding anything to the contrary contained herein, so long as no Event of Default exists, the parties hereto agree that in no event shall the Borrower be obligated to pay the fees and expenses of more than one legal counsel in respect of the Lenders, Agents, the Receivables Buyers and the Receivables Agent (taken as a whole), which counsel shall be counsel for the Administrative Agent.
ARTICLE XI.
THE AGENTS
Section 11.1. Authorization and Action.
(a) Each Committed Lender in any Lender Group hereby designates the Person designated herein as Co-Agent for such Lender Group, as applicable, as agent for such Person hereunder and authorizes such Person to take such actions as agent on its behalf and to
58
exercise such powers as are delegated to the Co-Agent for such Person by the terms of this Agreement together with such powers as are reasonably incidental thereto. Each Secured Party hereby irrevocably designates and appoints PNC Bank, National Association as Administrative Agent hereunder and under the Transaction Documents to which the Administrative Agent is a party, and each Lender and each Co-Agent that becomes a party to this Agreement hereafter ratifies such designation and appointment and authorizes the Administrative Agent to take such action on its behalf under the provisions of the Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of the Transaction Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, none of the Agents or the Letter of Credit Issuers shall have any duties or responsibilities, except those expressly set forth in the Transaction Documents to which it is a party, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of such Agent shall be read into any Transaction Document or otherwise exist against such Agent. In addition, the Administrative Agent is hereby authorized by each Lender, each Letter of Credit Issuer and each Co-Agent to consent to any amendments or restatements to the Certificate of Incorporation of Borrower to the extent such amendments or restatements are not prohibited by Section 7.1(i)(xxix).
(b) The provisions of this Article XI are solely for the benefit of the Agents, the Letter of Credit Issuers and the Lenders, and none of the Loan Parties shall have any rights as a third-party beneficiary or otherwise under any of the provisions of this Article XI, except that this Article XI shall not affect any obligations which any of the Agents or Lenders may have to any of the Loan Parties under the other provisions of this Agreement.
(c) In performing its functions and duties hereunder, (i) each Co-Agent shall act solely as agent for its related Committed Lender or the Lenders in its Lender Group, as applicable, and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any of the Loan Parties or any other Lenders or any of their respective successors or assigns, and (ii) the Administrative Agent shall act solely as the agent of the Secured Parties and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any of the Loan Parties or any of their respective successors and assigns.
Section 11.2. Delegation of Duties. Each of the Agents may execute any of its duties under any Liquidity Agreement to which it is a party and each Transaction Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Each Letter of Credit Issuer may execute any of its duties under each Transaction Document to which it is a party by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. None of the Agents or the Letter of Credit Issuers shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.
Section 11.3. Exculpatory Provisions. None of the Agents or the Letter of Credit Issuers or any of their directors, officers, agents or employees shall be (i) liable for any action lawfully
59
taken or omitted to be taken by it or them under or in connection with this Agreement or any other Transaction Document (except for its, their or such Person’s own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Lenders or other Agents for any recitals, statements, representations or warranties made by any Loan Party contained in this Agreement, any other Transaction Document or any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement, or any other Transaction Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, or any other Transaction Document or any other document furnished in connection herewith or therewith, or for any failure of any Loan Party to perform its obligations hereunder or thereunder, or for the satisfaction of any condition specified in Article VI, or for the perfection, priority, condition, value or sufficiency of any collateral pledged in connection herewith. None of the Agents or the Letter of Credit Issuers shall be under any obligation to any other Agent or any Lender to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Loan Parties. None of the Agents or the Letter of Credit Issuers shall be deemed to have knowledge of any Event of Default or Unmatured Event of Default unless such Agent has received notice from Borrower, another Agent or a Lender.
Section 11.4. Reliance by Agents.
(a) Each of the Agents and the Letter of Credit Issuers shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to Borrower), independent accountants and other experts selected by such Agent or Letter of Credit Issuer. Each of the Agents and the Letter of Credit Issuers shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of such of the Lenders or Committed Lenders in its Lender Group as it deems appropriate and it shall first be indemnified to its satisfaction by the Committed Lenders in its Lender Group against any and all liability, cost and expense which may be incurred by it by reason of taking or continuing to take any such action; provided that unless and until an Agent or a Letter of Credit Issuer shall have received such advice, such Agent or Letter of Credit Issuer may take or refrain from taking any action, as such Agent shall deem advisable and in the best interests of the Lenders.
(b) The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of the Required Committed Lenders or all of the Lenders, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.
(c) Any action taken by any of the Agents or Letter of Credit Issuers in accordance with Section 11.4 shall be binding upon all of the Agents, the Letter of Credit Issuers and the Lenders, as applicable.
60
Section 11.5. Non-Reliance on Other Agents and Other Lenders. Each Lender expressly acknowledges that none of the Agents, the Letter of Credit Issuers or other Lenders, nor any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates, has made any representations or warranties to it and that no act by any Agent, any Letter of Credit Issuer or any other Lender hereafter taken, including, without limitation, any review of the affairs of any Loan Party, shall be deemed to constitute any representation or warranty by such Agent or such other Lender. Each Lender represents and warrants to each Agent and each Letter of Credit Issuer that it has made and will make, independently and without reliance upon any Agent, any Letter of Credit Issuer or any other Lender and based on such documents and information as it has deemed appropriate, its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of Borrower and made its own decision to enter into its Liquidity Agreement (if applicable), the Transaction Documents and all other documents related thereto.
Section 11.6. Reimbursement and Indemnification. Each of the Committed Lenders agree to reimburse and indemnify (a) its applicable Co-Agent, (b) each Letter of Credit Issuer and (c) the Administrative Agent and its officers, directors, employees, representatives and agents ratably in accordance with their respective Commitments, to the extent not paid or reimbursed by the Loan Parties (i) for any amounts for which such Agent, acting in its capacity as Agent, or such Letter of Credit Issuer is entitled to reimbursement by the Loan Parties hereunder and (ii) (A) with respect to such Agent, for any other expenses incurred by such Agent, in its capacity as Agent and acting on behalf of the Lenders, in connection with the administration and enforcement of its Liquidity Agreements and the Transaction Documents and (B) with respect to such Letter of Credit Issuer, for any other expenses incurred in its capacity as a Letter of Credit Issuer, in connection with the administration and enforcement of the Transaction Documents.
Section 11.7. Agents in their Individual Capacities. Each of the Agents and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with Borrower or any Affiliate of Borrower as though such Agent were not an Agent hereunder. With respect to the making of Loans pursuant to this Agreement, each of the Agents shall have the same rights and powers under any Liquidity Agreement to which it is a party and the Transaction Documents in its individual capacity as any Lender and may exercise the same as though it were not an Agent, and the terms “Committed Lender,” “Lender,” “Committed Lenders” and “Lenders” shall include each of the Agents in its individual capacity.
Section 11.8. Conflict Waivers. Each Co-Agent acts, or may in the future act: (i) as administrative agent for such Co-Agent’s Conduit, (ii) as issuing and paying agent for such Conduit’s Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for such Conduit’s Commercial Paper and (iv) to provide other services from time to time for such Conduit (collectively, the “Co-Agent Roles”). Without limiting the generality of Sections 11.1 and 11.8, each of the other Agents and the Lenders hereby acknowledges and consents to any and all Co-Agent Roles and agrees that in connection with any Co-Agent Role, a Co-Agent may take, or refrain from taking, any action which it, in its discretion, deems appropriate, including, without limitation, in its role as administrative agent for its Conduit, the
61
giving of notice to the Committed Lenders in its Lender Group of a mandatory purchase pursuant to the applicable Liquidity Agreement for such Lender Group, and hereby acknowledges that neither the applicable Co-Agent nor any of its Affiliates has any fiduciary duties hereunder to any Lender (other than its Conduit) arising out of any Co-Agent Roles.
Section 11.9. UCC Filings. Each of the Secured Parties hereby expressly recognizes and agrees that the Administrative Agent may be listed as the assignee or secured party of record on the various UCC filings required to be made under the Transaction Documents in order to perfect their respective interests in the Collateral, that such listing shall be for administrative convenience only in creating a record or nominee holder to take certain actions hereunder on behalf of the Secured Parties and that such listing will not affect in any way the status of the Secured Parties as the true parties in interest with respect to the Collateral. In addition, such listing shall impose no duties on the Administrative Agent other than those expressly and specifically undertaken in accordance with this Article XI.
Section 11.10. Successor Administrative Agent and Letter of Credit Issuer. The Administrative Agent or any Letter of Credit Issuer, upon five (5) days’ notice to the Loan Parties, the other Agents and the Lenders, may voluntarily resign and may be removed at any time, with or without cause, by Committed Lenders holding in the aggregate at least sixty-six and two-thirds percent (66 2/3%) of the Aggregate Commitment and the Borrower. If the Administrative Agent or any Letter of Credit Issuer shall voluntarily resign or be removed as Agent or Letter of Credit Issuer under this Agreement, then the Required Committed Lenders during such five-day period shall appoint, with the consent of the Borrower from among the remaining Committed ▇▇▇▇▇▇▇, a successor Administrative Agent or a successor Letter of Credit Issuer, whereupon such successor Administrative Agent or such successor Letter of Credit Issuer shall succeed to the rights, powers and duties of the Administrative Agent or the applicable Letter of Credit Issuer, respectively. The term “Administrative Agent” shall mean such successor agent, effective upon its appointment, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement. The term “Letter of Credit Issuer” shall mean such successor Letter of Credit Issuer, effective upon its appointment, and the former Letter of Credit Issuer’s rights, powers and duties as Letter of Credit Issuer shall be terminated, without any other or further act or deed on the part of such former Letter of Credit Issuer or any of the parties to this Agreement. Upon resignation or replacement of any Agent in accordance with this Section 11.10, the retiring Administrative Agent shall execute such UCC-3 assignments and amendments, and assignments and amendments of any Liquidity Agreement to which it is a party and the Transaction Documents, as may be necessary to give effect to its replacement by a successor Administrative Agent. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent or retiring Letter of Credit Issuer’s resignation hereunder as Letter of Credit Issuer, the provisions of this Article XI and Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent or Letter of Credit Issuer, respectively, under this Agreement. In addition, the resigning Letter of Credit Issuer shall retain all rights and obligations of a Letter of Credit Issuer hereunder with respect to all of its Letters of Credit outstanding as of the effective date of the resignation and all Letter of Credit Liability with respect thereto (including the right
62
to require the Lenders to fund payment of any amount drawn under a Letter of Credit issued by it pursuant to Section 1.8 and the right to have any such Letter of Credit Liability cash collateralized as provided herein).
Section 11.11. Erroneous Payments.
(a) If the Administrative Agent notifies a Lender or other Secured Party, or any Person who has received funds on behalf of a Lender or other Secured Party (any Lender, Secured Party or other recipient, a “Payment Recipient”) that the Administrative Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding clause (b)) that any funds received by such Payment Recipient from the Administrative Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Lender, other Secured Party or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Administrative Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Administrative Agent, and such Lender or other Secured Party shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two Business Days thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent in same day funds at the greater of the Overnight Bank Funding Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error.
(b) Without limiting immediately preceding clause (a), each Lender or other Secured Party, or any Person who has received funds on behalf of a Lender or other Secured Party, hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates), or (z) that such Lender or other Secured Party, or other such recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) in each case:
(i) (A) in the case of immediately preceding clauses (x) or (y), an error shall be presumed to have been made (absent written confirmation from the
63
Administrative Agent to the contrary) or (B) an error has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and
(ii) such Lender or other Secured Party shall (and shall cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one Business Day of its knowledge of such error) notify the Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Administrative Agent pursuant to this Section 11.11(b).
(c) Each Lender or other Secured Party hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to such Lender or other Secured Party under any Transaction Document, or otherwise payable or distributable by the Administrative Agent to such Lender or other Secured Party from any source, against any amount due to the Administrative Agent under immediately preceding clause (a) or under the indemnification provisions of this Agreement.
(d) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any reason, after demand therefor by the Administrative Agent in accordance with immediately preceding clause (a), from any Lender that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Administrative Agent’s notice to such Lender at any time, (i) such Lender shall be deemed to have assigned its Loans (but not its Commitments) in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Loans (but not Commitments), the “Erroneous Payment Deficiency Assignment”) at par plus any accrued and unpaid interest (with the assignment fee to be waived by the Administrative Agent in such instance), and is hereby (together with the Borrower) deemed to execute and deliver an Assignment and Assumption with respect to such Erroneous Payment Deficiency Assignment, (ii) the Administrative Agent as the assignee Lender shall be deemed to acquire the Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, the Administrative Agent as the assignee Lender shall become a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender shall cease to be a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Lender and (iv) the Administrative Agent may reflect in the Register its ownership interest in the Loans subject to the Erroneous Payment Deficiency Assignment. The Administrative Agent may, in its discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender shall be reduced by the net proceeds of the sale of such Loan (or portion thereof), and the Administrative Agent shall retain all other rights, remedies and claims against such Lender (and/or against any recipient that receives funds on its respective behalf).
64
For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Lender and such Commitments shall remain available in accordance with the terms of this Agreement. In addition, each party hereto agrees that, except to the extent that the Administrative Agent has sold a Loan (or portion thereof) acquired pursuant to an Erroneous Payment Deficiency Assignment, and irrespective of whether the Administrative Agent may be equitably subrogated, the Administrative Agent shall be contractually subrogated to all the rights and interests of the applicable Lender or other Secured Party under the Transaction Documents with respect to each Erroneous Payment Return Deficiency (the “Erroneous Payment Subrogation Rights”).
(e) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations or any other obligations owed by any Borrower-Related Party; provided that this Section 11.11 shall not be interpreted to increase (or accelerate the due date for), or have the effect of increasing (or accelerating the due date for), the obligations of the Borrower relative to the amount (and/or timing for payment) of the obligations that would have been payable had such Erroneous Payment not been made by the Administrative Agent; provided, further, that for the avoidance of doubt, this clause (e) shall not apply to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from any Borrower-Related Party for the purpose of making such Erroneous Payment.
(f) To the extent permitted by applicable Law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.
(g) Each party’s obligations, agreements and waivers under this Section 10.13 shall survive the resignation or replacement of the Administrative Agent, the termination of the Commitments and/or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Transaction Document.
ARTICLE XII.
ASSIGNMENTS; PARTICIPATIONS
Section 12.1. Assignments.
(a) Each of the Agents, the Letter of Credit Issuers, the Loan Parties and the Committed Lenders hereby agrees and consents to the complete or partial assignment by each Conduit of all or any portion of its rights under, interest in, title to and obligations under this Agreement to the Committed Lenders in its Lender Group pursuant to its Liquidity Agreement.
(b) Any Lender may at any time and from time to time assign to one or more Eligible Assignees (each, a “Purchasing Lender”) all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement substantially in the form set forth in
65
Exhibit V hereto (an “Assignment Agreement”) executed by such Purchasing Lender and such selling Lender; provided, however, that any assignment of a Lender’s rights and obligations hereunder shall include a pro rata assignment of its rights and obligations under the applicable Liquidity Agreement (if any). The consent of the applicable Conduit shall be required prior to the effectiveness of any such assignment by a Lender in such Conduit’s Lender Group. Each assignee of a Lender must (i) be (x) an Eligible Assignee or (y) an assignee with respect to which the Borrower and the Letter of Credit Issuers have provided prior written consent (such consent not to be unreasonably withheld or delayed) and (ii) agree to deliver to the applicable Co-Agent, as the case may be, promptly following any request therefor by such Person, an enforceability opinion in form and substance satisfactory to such Person. Upon delivery of an executed Assignment Agreement to the applicable Co-Agent, such selling Lender shall be released from its obligations hereunder and, if applicable, under its Liquidity Agreement to the extent of such assignment. Thereafter the Purchasing Lender shall for all purposes be a Lender party to this Agreement and, if applicable, its Lender Group’s Liquidity Agreement and shall have all the rights and obligations of a Lender hereunder and thereunder to the same extent as if it were an original party hereto and thereto and no further consent or action by Borrower, the Lenders or the Agents shall be required.
(c) (i) Notwithstanding anything to the contrary contained herein, each of the Committed ▇▇▇▇▇▇▇ agrees that in the event that it shall become a Defaulting Lender, then until such time as such Committed Lender is no longer a Defaulting Lender, to the extent permitted by applicable law, such Defaulting Lender’s right to vote in respect of any amendment, consent or waiver of the terms of this Agreement or any other Transaction Document or to direct any action or inaction of the Administrative Agent or to be taken into account in the calculation of the Required Committed Lenders shall be suspended at all times that such Committed Lender remains a Defaulting Lender; provided, however, that, except as otherwise set forth in this Section 12.1(c), the foregoing suspension shall not empower Lenders that are not Defaulting Lenders to increase a Defaulting Lender’s Commitment, decrease the rate of interest or fees applicable to, or extend the maturity date of such Defaulting Lender’s Advances or other Obligations owing to such Lender, in each case, without such Lender’s consent. No Commitment of any Committed Lender shall be increased or otherwise affected, and except as otherwise expressly provided in this Section 12.1(c), performance by the Borrower of its obligations hereunder and under the other Transaction Documents shall not be excused or otherwise modified, as a result of the operation of this Section 12.1(c).
(ii) To the extent that any Committed Lender is a Defaulting Lender with respect to an Advance, the Borrower may deliver a notice to the Lenders specifying the date of such Advance, the identity of the Defaulting Lender and the portion of such Advance that the Defaulting Lender failed to fund, which notice shall be deemed to be an additional Borrowing Notice in respect of such unfunded portion of such Advance, and each Committed Lender (or its related Conduit, if applicable, and acting in its sole discretion) shall, to the extent of its remaining unfunded Commitment and subject to the continued fulfillment of all applicable conditions precedent set forth herein with respect to such Advance, fund its
66
Percentage (recomputed by excluding the Commitment of Defaulting Lenders from the Aggregate Commitment) of such unfunded portion of such Advance not later than 2:30 p.m. (New York City time) on the Business Day following the date of such notice. To the extent that any Committed Lender is a Defaulting Lender on any date that the Letter of Credit Liability is greater than zero, each Committed Lender shall, automatically and without further action of any kind upon such date, acquire an increased participation interest in the Letters of Credit outstanding, along with all accompanying rights and obligations described in Sections 1.7 through 1.14, equal to the lessor of (x) its Percentage (recomputed by excluding the Commitment of Defaulting Lenders from the Aggregate Commitment) of such Defaulting Lender’s Percentage of the Letter of Credit Liability and (y) its remaining unfunded Commitment.
(iii) Until the Defaulting Lender Excess of a Defaulting Lender has been reduced to zero, any payment of the principal of any Loan to a Defaulting Lender shall, unless the Required Committed Lenders agree otherwise, be applied first (1) ratably, to the reduction of the Loans or the Letter of Credit Liability funding any defaulted portion of Advances or the Letter of Credit Liability pursuant to Section 12.1(c)(ii) and then (2) ratably to reduce the Loans of each of the Lenders that are not Defaulting Lenders in accordance with the principal amount (if any) thereof. Subject to the preceding sentence, any amount paid by or on behalf of the Borrower for the account of a Defaulting Lender under this Agreement or any other Transaction Document will not be paid or distributed to such Defaulting Lender, but will instead be applied to the making of payments from time to time in the following order of priority until such Defaulting Lender has ceased to be a Defaulting Lender as provided below: first, to the funding of any portion of any Advance or the Letter of Credit Liability in respect of which such Defaulting Lender has failed to fund as required by this Agreement, as determined by the Administrative Agent; second, held in a segregated subaccount of any Collection Account (other than any FX Collection Account) as cash collateral for future funding obligations of the Defaulting Lender in respect of Advances or the Letter of Credit Liability under this Agreement; and third, after the termination of the Commitments and payment in full of all Obligations, to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.
(iv) During any period that a Committed Lender is a Defaulting Lender, the Borrower shall not accrue or be required to pay, and such Defaulting Lender shall not be entitled to receive, the Unused Fee (as defined in the Fee Letter) otherwise payable to such Defaulting Lender under this Agreement at any time, or with respect to any period, that such Committed Lender is a Defaulting Lender.
(v) During any period that a Committed Lender is a Defaulting Lender, the Borrower may, by giving written notice thereof to the Administrative Agent and such Defaulting Lender, require such Defaulting Lender, at the cost and expense of the Borrower, to assign and delegate, without recourse (in accordance with and
67
subject to the restrictions contained in, and consents required by, this Article XII), (i) all and not less than all of its interests, rights and obligations under this Agreement and the Transaction Documents to an assignee or assignees that shall assume such obligations (which assignee may be another Lender, if such other Lender accepts such assignment) in whole or (ii) all of its interests, rights and obligations under this Agreement and the Transaction Documents with respect to all prospective Commitments, including any unfunded Commitment as of the date of such assignment. No party hereto shall have any obligation whatsoever to initiate any such complete or partial replacement or to assist in finding an assignee. In connection with any such complete or partial assignment, such Defaulting Lender shall promptly execute all documents reasonably requested to effect such assignment, including an appropriate Assignment Agreement. No such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, (A) to the extent that the assignee is assuming all of the interests, rights and obligations of the Defaulting Lender, the parties to the assignment shall make such additional payments in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable Percentage of Advances previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Borrower or any Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) the Loans made by such Defaulting Lender or members of such Defaulting Lender Group, as applicable, (B) to the extent that the assignee is assuming all of the interests, rights and obligations of the Defaulting Lender, such Defaulting Lender or members of such Defaulting Lender Group, as applicable, shall have received payment of an amount equal to all of its Loans outstanding, accrued interest thereon, accrued fees (subject to Section 12.1(c)(iv)) and all other amounts, including any Breakage Costs, payable to it and its Affected Entities hereunder and the other Transaction Documents through (but excluding) the date of such assignment from the assignee or the Borrower, and (C) such assignment does not conflict with applicable law. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
(vi) If the Borrower, Servicer, and the Administrative Agent agree in writing in their discretion that a Committed Lender that is a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the Lenders and the Co-Agents, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, such
68
Committed Lender will, to the extent applicable, purchase such portion of outstanding Advances of the other Lenders and make such other adjustments as the Administrative Agent may reasonably determine to be necessary to cause the interest of the Lenders in the Aggregate Principal to be on a pro rata basis in accordance with their respective Percentages, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower or forfeited pursuant to Section 12.1(c)(iv), while such Committed Lender was a Defaulting Lender; and provided further that, except to the extent otherwise expressly agreed by the affected parties, no cure by a Committed Lender under this subsection of its status as a Defaulting Lender will constitute a waiver or release of any claim or any party hereunder arising from such Committed Lender having been a Defaulting Lender.
(vii) The rights and remedies of the Borrower, any Agent or the other Lenders against a Defaulting Lender under this Section 12.1(c) are in addition to any other rights and remedies the Borrower, the Agents and the other Lender may have against such Defaulting Lender under this Agreement, any of the other Transaction Documents, applicable law or otherwise.
(viii) Any Committed Lender that fails to timely fund a Loan shall be obligated to promptly (but in any event not later than 10:00 a.m. (New York City time) on the Business Day after the date of the related Advance) notify the Borrower and the Administrative Agent if any such failure is the result of an administrative error or omission by such Committed Lender or force majeure, computer malfunction, interruption of communication facilities, labor difficulties or other causes, in each case to the extent beyond such Committed Lender’s reasonable control. If (i) the Administrative Agent had been notified by the Borrower or the affected Committed Lender that a Committed Lender has failed to timely fund a Loan, (ii) an Authorized Officer of the Administrative Agent has actual knowledge or has written notice that such Committed Lender is the subject of an Event of Bankruptcy or has publicly announced that it does not intend to comply with its funding obligations under this Agreement or (iii) the Administrative Agent had been notified by the affected Committed Lender that a Committed ▇▇▇▇▇▇ has failed timely to deliver the written confirmation contemplated by clause (a)(iii) of the definition of “Defaulting Lender”, the Administrative Agent shall promptly provide notice to the Borrower and the Co-Agents of such occurrence.
(d) No Loan Party may assign any of its rights or obligations under this Agreement without the prior written consent of each of the Agents and each of the Lenders and without satisfying the Rating Agency Condition, if applicable.
Section 12.2. Participations. Any Committed Lender may, in the ordinary course of its business at any time sell to one or more Persons (each, a “Participant”) participating interests in its Pro Rata Share of its Lender Group’s Percentage of Aggregate Commitment, its Loans, its
69
Letters of Credit, its Liquidity Commitment (if applicable) or any other interest of such Committed Lender hereunder or, if applicable, under its Liquidity Agreement. Notwithstanding any such sale by a Committed Lender of a participating interest to a Participant, such Committed Lender’s rights and obligations under this Agreement and, if applicable, such Liquidity Agreement shall remain unchanged, such Committed Lender shall remain solely responsible for the performance of its obligations hereunder and, if applicable, under its Liquidity Agreement, and the Loan Parties, the Lenders and the Agents shall continue to deal solely and directly with such Committed Lender in connection with such Committed Lender’s rights and obligations under this Agreement and, if applicable, its Liquidity Agreement. Each Committed ▇▇▇▇▇▇ agrees that any agreement between such Committed Lender and any such Participant in respect of such participating interest shall not restrict such Committed Lender’s right to agree to any amendment, supplement, waiver or modification to this Agreement, except for any amendment, supplement, waiver or modification described in Section 14.1(b)(i).
Section 12.3. Register. The Administrative Agent (as agent for the Borrower) shall maintain at its office referred to in Section 14.2 a copy of each Assignment Agreement delivered to and accepted by it and register (the “Register”) for the recordation of the names and addresses of the Lenders and the Pro Rata Share of, outstanding principal amount of all Advances owing to and Interest of, each Lender from time to time, which Register shall be available for inspection by the Borrower at any reasonable time and from time to time upon reasonable prior notice. No assignment under this Article XII shall be effective until the entries described in the preceding sentence have been made in the Register. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Servicer, the Lenders, the Co-Agents, the Letter of Credit Issuers and the Administrative Agent may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.
Section 12.4. Federal Reserve and Security Trustee. Notwithstanding any other provision of this Agreement to the contrary, any Lender may at any time pledge or grant a security interest in all or any portion of its rights (including, without limitation, any Loan and any rights to payment of principal or interest thereon) under this Agreement (i) to secure obligations of such Lender to a Federal Reserve Bank, or (ii) to a collateral agent or a security trustee in connection with the funding by such Lender of the Loan, without notice to or consent of Borrower, Servicer or any Agent; provided that no such pledge or grant of a security interest shall release such Lender from any of its obligations hereunder, or substitute any such pledgee or grantee for such Lender as a party hereto.
ARTICLE XIII.
SECURITY INTEREST
Section 13.1. Grant of Security Interest. To secure the due and punctual payment of the Obligations, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, including, without limitation, all Indemnified Amounts, in each case pro rata according to the respective amounts thereof, Borrower hereby grants to the Administrative Agent, for the benefit of the Secured Parties, a security interest in, all of Borrower’s right, title and interest, whether now owned and existing or hereafter arising in and to all of the
70
Receivables, the Related Security, the Collections, the Lock-Boxes and Collection Accounts (other than any FX Collection Account) and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing such Lock-Boxes, Collection Accounts (other than any FX Collection Account) and amounts on deposit therein, each L/C Collateral Account and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing such L/C Collateral Account and amounts on deposit therein, and all proceeds of the foregoing (collectively, the “Collateral”). Borrower hereby authorizes the Administrative Agent to file a financing statement naming Borrower as debtor or seller that describes the collateral as “all assets of the debtor whether now existing or hereafter arising” or words of similar effect.
Section 13.2. Termination after Final Payout Date. Each of the Secured Parties hereby authorizes the Administrative Agent, and the Administrative Agent ▇▇▇▇▇▇ agrees, promptly after the Final Payout Date to execute and deliver to Borrower such UCC termination statements as may be necessary to terminate the Administrative Agent’s security interest in and lien upon the Collateral, all at Borrower’s expense. Upon the Final Payout Date, all right, title and interest of the Administrative Agent and the other Secured Parties in and to the Collateral shall terminate.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1. Waivers and Amendments.
(a) No failure or delay on the part of any Agent or any Lender in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified or waived except in writing in accordance with the provisions of this Section 14.1(b). The Loan Parties, the Required Committed Lenders and the Administrative Agent may enter into written modifications or waivers of any provisions of this Agreement; provided, however, that no such modification or waiver shall:
(i) without the consent of each affected Lender, (A) extend the Scheduled Termination Date or the date of any payment or deposit of Collections by Borrower or the Servicer, (B) reduce the rate or extend the time of payment of Interest or any CP Costs (or any component of Interest or CP Costs), (C) reduce any fee payable to any Agent for the benefit of the Lenders, (D) except pursuant to Article XII hereof, change the amount of the principal of any Lender, any Committed Lender’s Pro Rata Share or any Committed Lender’s Commitment, (E) amend, modify or waive any provision of the definition of Required Committed Lenders or this Section 14.1(b), (F) consent to or permit the
71
assignment or transfer by Borrower of any of its rights and obligations under this Agreement, or (G) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (F) above in a manner that would circumvent the intention of the restrictions set forth in such clauses;
(ii) without the written consent of any affected Agent, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of such Agent, or
(iii) without the consent of the Required Committed Lenders, change the definition of “ARM Dilution Reserve,” “Borrowing Base,” “Concentration Reserve Percentage,” “Eligible Receivable,” “Loss Reserve,” “Dilution Reserve,” “Interest and Servicing Reserve,” “Minimum Dilution Reserve Percentage,” “PASA Reserve Amount,” “Servicing Fee Rate” or “Required Reserve,”
and any material amendment, waiver or other modification of this Agreement shall require satisfaction of the Rating Agency Condition, to the extent the Rating Agency Condition is required of any Conduit. Notwithstanding the foregoing, (i) without the consent of the Committed Lenders, but with the consent of Borrower, any Co-Agent may direct the Administrative Agent to amend this Agreement solely to add additional Persons as Committed Lenders in respect of the related Lender Group hereunder and (ii) the Agents, the Required Committed Lenders and the Conduits may enter into amendments to modify any of the terms or provisions of Article XI, Article XII, Section 14.13 or any other provision of this Agreement without the consent of Borrower; provided that such amendment has no negative impact upon Borrower. Any modification or waiver made in accordance with this Section 14.1 shall apply to each of the Lenders equally and shall be binding upon Borrower, the Lenders and the Agents.
Section 14.2. Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile to the relevant party as specified on the signature pages hereof. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given and received (i) when personally delivered, or delivered by same-day courier; (ii) on the third business day after mailing by registered or certified mail, postage prepaid; or (iii) upon delivery when sent by prepaid overnight express delivery service (e.g., FedEx, UPS); notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications, to the extent provided in paragraph (b) below, shall be effective as provided in such paragraph (b).
72
(b) Electronic Communications. Notices and other communications to the Administrative Agent, the Co-Agents, each L/C Participant, each Letter of Credit Issuer and each Lender hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
(c) Change of Address, etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.
Section 14.3. Ratable Payments. If (a) any Lender, whether by setoff or otherwise, has payment made to it with respect to any portion of the Obligations owing to such Lender (other than payments received pursuant to Section 10.2 or 10.3) in a greater proportion than that received by any other Lender in such Lender’s Lender Group entitled to receive a ratable share of such Obligations, such Lender agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of such Obligations held by the other Lenders in such Lender’s Lender Group so that after such purchase each Lender in such Lender Group will hold its Pro Rata Share of such Obligations and (b) any Lender Group, whether by set off or otherwise, has payment made to such Lender Group (other than payments received pursuant to Section 10.2 or 10.3) in a greater proportion than that received by any other Lender Group entitled to receive a ratable share of such Obligations, the Lenders in such Lender Group agree, promptly upon demand, to purchase for cash without recourse or warranty a portion of such Obligations held by the other Lender Groups so that after such purchase each Lender in such Lender Group, taken together, will hold its Lender Group’s Percentage of such Obligations; provided that in the case of the preceding clauses (a) and (b), if all or any portion of such excess amount is thereafter recovered from such Lender or Lender Group, as applicable, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.
Section 14.4. Protection of Administrative Agent’s Security Interest.
(a) ▇▇▇▇▇▇▇▇ agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or
73
desirable, or that any of the Agents may request, to perfect, protect or more fully evidence the Administrative Agent’s security interest in the Collateral, or to enable the Agents or the Lenders to exercise and enforce their rights and remedies hereunder. At any time after the occurrence of an Event of Default, the Administrative Agent may, or the Administrative Agent may direct Borrower or the Servicer to, notify the Obligors of Receivables, at Borrower’s expense, of the ownership or security interests of the Lenders under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to the Administrative Agent or its designee. Borrower or the Servicer (as applicable) shall, at any Lender’s request, withhold the identity of such Lender in any such notification.
(b) If any Loan Party fails to perform any of its obligations hereunder, the Administrative Agent or any Lender may (but shall not be required to) perform, or cause performance of, such obligations, and the Administrative Agent’s or such ▇▇▇▇▇▇’s costs and expenses incurred in connection therewith shall be payable by ▇▇▇▇▇▇▇▇ as provided in Section 10.3. Each Loan Party irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent, and appoints the Administrative Agent as its attorney-in-fact, to act on behalf of such Loan Party (i) to execute on behalf of Borrower as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the interest of the Lenders in the Receivables and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, for the benefit of the Secured Parties. This appointment is coupled with an interest and is irrevocable.
Section 14.5. Confidentiality.
(a) Each Loan Party and each Lender shall maintain and shall cause each of its employees and officers to maintain the confidentiality of the Fee Letter, the Agent Fee Letter and the other confidential or proprietary information with respect to the Agents and the Conduits and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Loan Party and such Lender and its officers and employees may disclose such information to such Loan Party’s and such ▇▇▇▇▇▇’s external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding.
(b) Each of the Lenders and each of the Agents shall maintain and shall cause each of its officers, directors, employees, investors, potential investors, credit enhancers, outside accountants, attorneys and other advisors to maintain the confidentiality of, and not disclose to any other Person, any nonpublic information with respect to the Originators and the Loan Parties, except that any of the foregoing may disclose such information (i) to any party to this Agreement, (ii) to any provider of a surety, guaranty or credit or liquidity enhancement to any Conduit, (iii) to its Affiliates and its insurers and reinsurers (iv) to the outside accountants, attorneys and other advisors of any Person described in clause (i) or (ii) above, (v) to any
74
prospective or actual assignee or participant of any of the Agents or any Lender, (vi) to any rating agency who rates the Commercial Paper, to any Commercial Paper dealer, (vii) to any other entity organized for the purpose of purchasing, or making loans secured by, financial assets for which any Co-Agent (or one of its Affiliates) acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of each of the foregoing; provided that each Person described in the foregoing clause (ii) through (vii) is informed of the confidential nature of such information and, in the case of a Person described in clauses (ii) or (iii) is subject to customary obligations of confidentiality, and in the case of a Person described in clause (v), agrees in writing to maintain the confidentiality of such information in accordance with this Section 14.5(b); (viii) as required pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law) and (ix) in connection with the exercise of any remedies hereunder or under any other Transaction Document or any action or proceeding relating to this Agreement or any other Transaction Document or the enforcement of rights hereunder or thereunder. Notwithstanding the foregoing, (x) each Conduit and its officers, directors, employees, investors, potential investors, credit enhancers, outside accountants, attorneys and other advisors shall be permitted to disclose Receivables performance information and details concerning the structure of the facility contemplated hereby in summary form and in a manner not identifying the Originators, Borrower, the Servicer, the Performance Guarantor, or the Obligors to prospective investors in Commercial Paper issued by such Conduit, and (y) the Conduits, the Agents and the Lenders shall have no obligation of confidentiality in respect of any information which may be generally available to the public or becomes available to the public through no fault of theirs or their respective Affiliates.
(c) Notwithstanding any other express or implied agreement to the contrary, the parties hereto hereby agree and acknowledge that each of them and each of their employees, representatives, and other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to any of them relating to such tax treatment and tax structure, except to the extent that confidentiality is reasonably necessary to comply with U.S. federal or state securities laws. For purposes of this Section 14.5(c), the terms “tax treatment” and “tax structure” have the meanings specified in Treasury Regulation section 1.6011-4(c).
Section 14.6. Bankruptcy Petition. Borrower, the Servicer, the Agents and each Committed Lender hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any Conduit, it will not institute against, or join any other Person in instituting against, such Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.
Section 14.7. Limitation of Liability. Except with respect to any claim arising out of the willful misconduct, bad faith or gross negligence of any Conduit, the Agents or any Committed Lender, no claim may be made by any Loan Party or any other Person against any Conduit, the Agents or any Committed Lender or their respective Affiliates, directors, officers, employees,
75
attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Loan Party hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
The obligations of each Conduit under this Agreement shall be payable solely out of the funds of such Conduit available for such purpose and shall be solely the corporate obligations of such Conduit. No recourse shall be had for the payment of any amount owing in respect of this Agreement or for the payment of any fee hereunder or for any other obligation or claim arising out of or based upon this Agreement against any Agent, any Affiliate of any of the foregoing, or any stockholder, employee, officer, director, incorporator or beneficial owner of any of the foregoing. Notwithstanding any provisions contained in this Agreement to the contrary, no Conduit shall, nor shall be obligated to, pay any amount pursuant to this Agreement unless (a) such Conduit has received funds which may be used to make such payment and which funds are not required to repay its Commercial Paper and advances under its Liquidity Agreement when due and (b) after giving effect to such payment, either (i) there is sufficient liquidity availability (determined in accordance with the Liquidity Agreement), under all of the liquidity facilities for such Conduit's Commercial Paper program, to pay the "Face Amount" (as defined below) of all outstanding Commercial Paper and advances under its Liquidity Agreement when due or (ii) all Commercial Paper and advances under the Liquidity Agreement are paid in full. Any amount which a Conduit does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in § 1 01 of the Bankruptcy Code) against or limited liability company obligation of such Conduit for any such insufficiency unless and until such payment may be made in accordance with clauses (a) and (b) above. The agreements in this Section shall survive termination of this Agreement and payment of all obligations hereunder. As used in this Section, the term “Face Amount" means, with respect to outstanding Commercial Paper or advances under Conduit’s Liquidity Agreement, (x) the face amount of any such Commercial Paper issued on a discount basis, and (y) the principal amount of, plus the amount of all interest accrued and to accrue thereon to the stated maturity date of, any such Commercial Paper issued on an interest-bearing basis or any such advances under its Liquidity Agreement.
Section 14.8. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF (EXCEPT IN THE CASE OF THE OTHER TRANSACTION DOCUMENTS, TO THE EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTEREST OF BORROWER OR THE SECURITY INTEREST OF THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, IN ANY OF THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 14.9. CONSENT TO JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
76
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF ANY AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY LOAN PARTY AGAINST ANY AGENT OR ANY LENDER OR ANY AFFILIATE OF ANY AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH LOAN PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
Section 14.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY LOAN PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11. Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy). This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; provided, however, that the rights and remedies with respect to (i) any breach of any representation and warranty made by any Loan Party pursuant to Article V, (ii) the indemnification and payment provisions of Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any termination of this Agreement.
Section 14.12. Counterparts; Severability; Section References. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Any provisions of this Agreement which
77
are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and sections of, and schedules and exhibits to, this Agreement.
Section 14.13. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Transaction Document or in any other agreement, arrangement or understanding among the respective parties thereto, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Transaction Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b) the effects of any Bail-in Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, any such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Funding Agreement; or
(iii) the variation of the terms of any such liability.
Section 14.14. Patriot Act. Each Agent hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name, address, tax identification number and other information that will allow such Agent to identify the Borrower in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act.
Section 14.15. Amendment and Restatement. The parties hereto acknowledge and agree that this Agreement does not constitute a novation or termination of the existing obligations under the Original Agreement and that such obligations, including the grant of the security interest in respect of the Collateral, are in all respects continued and outstanding as obligations under this Agreement with only the terms being modified from and after the date hereof as provided herein.
78
Section 14.16. Intercreditor Agreement. Each Lender hereby acknowledges that it has received and reviewed the Intercreditor Agreement and agrees to be bound by the terms thereof. Each Lender (and each Person that becomes a Lender under this Agreement after the date hereof) hereby authorizes and directs the Administrative Agent to enter into the Intercreditor Agreement on behalf of such ▇▇▇▇▇▇ and agrees that the Administrative Agent may take such actions on its behalf as is contemplated by the terms of the Intercreditor Agreement. To the extent that any terms or provisions herein are inconsistent with any terms or provisions of the Intercreditor Agreement, the Intercreditor Agreement shall govern. In addition, each Lender and the Administrative Agent acknowledge and agree that the rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Transaction Documents are subject to the Intercreditor Agreement.
Section 14.17. Post-Closing Covenants.
(a) On or prior to the Post-Closing Date, the Borrower and the Servicer shall deliver to the Administrative Agent written confirmation that the ownership of each Lock-Box and Collection Account (other than any FX Collection Account and the related Lock-Boxes) has been assigned or otherwise novated to the Borrower.
(b) On or prior to the Post-Closing Date, the Borrower and the Servicer shall deliver to the Administrative Agent a fully executed Collection Account Agreement with respect to the Collection Accounts (other than any FX Collection Account), in form and substance reasonably satisfactory to the Administrative Agent.
(c) On or prior to the Post-Closing Date, the Borrower and the Servicer shall deliver to the Administrative Agent a written opinion of counsel to the Borrower and the Servicer, in form and substance reasonably satisfactory to the Administrative Agent, covering general corporate, enforceability and security interest perfection matters with respect to the Collection Account Agreements referenced in clause (a) above.
(d) Notwithstanding anything to the contrary set forth in this Agreement or any other Transaction Document, the failure of the Borrower or the Servicer to timely perform its respective obligations under this Section 14.17 shall constitute an immediate Event of Default under this Agreement with no grace period.
<signature pages follow>
79
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof.
SMITHFIELD RECEIVABLES FUNDING LLC, AS BORROWER
By: SFFC, Inc., its managing member
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||||
| Title: President, Assistant Treasurer and Assistant Secretary | ||||||||
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
Wilmington, DE 19810
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to:
c/o Smithfield Foods, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Smithfield, VA 23430,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
SMITHFIELD FOODS, INC., AS SERVICER
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ | |||||||
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇ | ||||||||
| Title: Vice President and Corporate Treasurer | ||||||||
Address:
Smithfield Foods, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Smithfield, VA 23430
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
and ▇▇▇▇ ▇▇▇▇
5th A&R Credit and Security Agreement (Smithfield)
COÖPERATIEVE RABOBANK, U.A., NEW YORK BRANCH, AS A LETTER OF CREDIT ISSUER
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ | ||||||||||
| Name: | ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ | ||||||||||
| Title: | Managing Director | ||||||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ | ||||||||||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇ | ||||||||||
| Title: | Executive Director | ||||||||||
Address: Securitization - Transaction Management
Rabobank International
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
New York, NY 10167
COÖPERATIEVE RABOBANK, U.A., AS A COMMITTED LENDER AND L/C PARTICIPANT IN THE RABOBANK LENDER GROUP
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ | ||||||||||
| Name: | ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ | ||||||||||
| Title: | ATTORNEY IN FACT | ||||||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ | ||||||||||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇ | ||||||||||
| Title: | Attorney in Fact | ||||||||||
Address: Securitization - Transaction Management
Rabobank International
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
New York, NY 10167
5th A&R Credit and Security Agreement (Smithfield)
NIEUW AMSTERDAM RECEIVABLES CORPORATION B.V.,
AS A CONDUIT IN THE RABOBANK LENDER GROUP
Intertrust Management B.V. - Managing Director
| By: | /s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ | ||||||||||
| Name: | ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ | ||||||||||
| Title: | Proxyholder | ||||||||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | ||||||||||
| Name: | ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | ||||||||||
| Title: | Proxyholder | ||||||||||
Address: Nieuw Amsterdam Receivables Corporation B.V.
c/o Global Securitization Services, LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Melville, NY 11747
Attention: ▇▇ ▇▇▇▇▇▇
With a copy to:
Address: InterTrust Group
c/o Nieuw Amsterdam Receivables Co.
▇▇▇▇▇▇▇▇ ▇▇
1043 AP Amsterdam
The Netherlands
Attention: The Directors
5th A&R Credit and Security Agreement (Smithfield)
PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT AND A LETTER OF CREDIT ISSUER
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||||
| Name: | ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||||
| Title: | Senior Vice President | ||||||||||
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||||
| Name: | ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||||
| Title: | Senior Vice President | ||||||||||
Address: PNC Bank, National Association
The Tower at PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Pittsburgh, PA 15222
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
5th A&R Credit and Security Agreement (Smithfield)
PNC BANK, NATIONAL ASSOCIATION, AS A COMMITTED LENDER AND L/C PARTICIPANT IN THE PNC LENDER GROUP
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||||
| Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||||||
| Title: Senior Vice President | |||||||||||
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||||
| Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||||||
| Title: Senior Vice President | |||||||||||
Address: PNC Bank, National Association
The Tower at PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Pittsburgh, PA 15222
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
5th A&R Credit and Security Agreement (Smithfield)
PNC CAPITAL MARKETS LLC, AS STRUCTURING AGENT
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||||
| Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||||||
| Title: Managing Director | |||||||||||
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||||
| Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||||||
| Title: Managing Director | |||||||||||
Address: PNC Bank, National Association
The Tower at PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Pittsburgh, PA 15222
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
5th A&R Credit and Security Agreement (Smithfield)
EXHIBIT I
DEFINITIONS
As used in the Agreement and the Exhibits and Schedules thereto, capitalized terms have the meanings set forth in this Exhibit I (such meanings to be equally applicable to the singular and plural forms thereof). Any references in the Agreement or this Exhibit I to any Person includes such Persons successors and permitted assigns. The words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement. The term “including” means “including without limitation”. References to any agreement refer to that agreement as from time to time amended or restated.
As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Accrual Adjusted Net Pool Balance” means, at any time of determination: (a) the Net Pool Balance at such time, minus (b) the Volume Rebate Accrual Amount at such time.
“Adjusted Dilution Ratio” means, at any time, the rolling average of the Dilution Ratio for the 12 Calculation Periods then most recently ended.
“Adjusted Federal Funds Rate” means, for each Settlement Period, the weighted daily average of (a) a rate per annum equal to the Federal Funds Rate on each day of such Settlement Period, plus (b) the Market Spread per annum on each day of such Settlement Period. For purposes of determining the Adjusted Federal Funds Rate for any day, changes in the Federal Funds Rate shall be effective on the date of each such change.
“Adjusted Federal Funds Rate Loan” means a Loan which bears interest at the Adjusted Federal Funds Rate.
“Adjusted Federal Funds Rate Option” means the option of the Borrower to have Loans bear Interest at a fluctuating rate per annum equal to the Adjusted Federal Funds Rate, such interest rate to change automatically from time to time effective as of the effective date of each change in the Adjusted Federal Funds Rate.
“Adjusted Letter of Credit Liability” means, at any time, the Letter of Credit Liability less the amount of cash collateral held in the L/C Collateral Account at such time.
“Administrative Agent” has the meaning provided in the preamble to this Agreement.
“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent to each Lender.
“Advance” means a borrowing hereunder consisting of the aggregate amount of the several Loans made on the same Borrowing Date.
“Adverse Claim” has the meaning provided in the Receivables Sale Agreement.
“Affected Entity” means (i) any Funding Source, (ii) any agent, administrator or manager of a Conduit, or (iii) any bank holding company in respect of any of the foregoing.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person. A Person shall be deemed to control another Person if (a) the controlling Person owns 10-50% of any class of voting securities of the controlled Person only if it also possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise, or (b) if the controlling Person owns more than 50% of any class of voting securities of the controlled Person.
“Agent Fee Letter” means that certain Structuring Agent and Administrative Agents Fee Letter, dated as of December 22, 2022, among the Borrower, the Structuring Agent, the Administrative Agent, the Receivables Agent and the Structuring Agent, as it may be amended or modified and in effect from time to time.
“Agents” has the meaning provided in the preamble to this Agreement.
“Aggregate Commitment” means, on any date of determination, the aggregate amount of the Committed Lenders’ Commitments to make Loans and the L/C Credit Extensions hereunder. As of the Closing Date, the Aggregate Commitment is $275,000,000.
“Aggregate Principal” means, on any date of determination, the sum of (i) the aggregate outstanding principal amount of all Advances (other than in respect of Loans relating to Letters of Credit) outstanding on such date and (ii) the Letter of Credit Liability on such date.
“Aggregate Reduction” has the meaning provided in Section 1.3.
“Agreement” means this Fifth Amended and Restated Credit and Security Agreement, as it may be amended or modified and in effect from time to time.
“Alternate Base Rate” means for any day, the rate per annum equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half of one percent (0.50%) above the Federal Funds Rate. For purposes of determining the Alternate Base Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall be effective on the date of each such change. In addition, the Alternate Base Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
“Alternate Base Rate Loan” means a Loan which bears interest at the Alternate Base Rate or the Default Rate.
“Alternate Base Rate Option” means the option of the Borrower to have Loans bear Interest at a fluctuating rate per annum equal to the Alternate Base Rate, such interest rate to change automatically from time to time effective as of the effective date of each change in the Alternate Base Rate.
5th A&R Credit and Security Agreement (Smithfield)
“Anti-Corruption Laws” means the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, and any other similar anti-corruption Laws or regulations administered or enforced in any jurisdiction in which Smithfield or any of its Subsidiaries conduct business.
“Anti-Terrorism Law” means any Law in force or hereinafter enacted related to terrorism, money laundering, or economic sanctions, including the Bank Secrecy Act, 31 U.S.C. § 5311 et seq., the USA PATRIOT Act, any such Law administered or enforced by the Netherlands, the International Emergency Economic Powers Act, 50 U.S.C. 1701, et seq., the Trading with the Enemy Act, 50 U.S.C. App. 1, et seq., 18 U.S.C. § 2332d, and 18 U.S.C. § 2339B.
“Approved Currency” means Dollars, Australian Dollars, Canadian Dollars and Yen, and any other currency that is the lawful currency of an Approved Obligor Jurisdiction that is approved in writing by the Administrative Agent.
“Approved Obligor Jurisdiction” means any country which is a member of the Organization for Economic Cooperation and Development, excluding (a) the province of Quebec in the country of Canada or (b) any country whose Governmental Authority (i) shall have admitted in writing its inability to pay its debts as the same become due, (ii) shall have declared a moratorium on the payment of its debts or the debts of any Governmental Authority of such country or (iii) shall have ceased to be a member of the International Monetary Fund or ceased to be eligible to use the resources of the International Monetary Fund or (c) any country with respect to which the U.S. shall have imposed economic sanctions.
“ARM Dilution Reserve” means, on any day, an amount equal to: (a) the aggregate Outstanding Balance of Monetized Receivables at the close of business on such day multiplied by (b) the Minimum Dilution Reserve Percentage.
“Article 7 Transparency and Reporting Requirements” means the reporting requirements set out in Article 7(1) of the EU Securitization Regulation, together with any relevant technical standards adopted by the European Commission in relation thereto, any relevant regulations and technical standards applicable in relation thereto pursuant to any transitional arrangements made pursuant to the EU Securitization Regulation, and, in each case relevant guidance published in relation thereto as may be effective from time to time.
“Assignment Agreement” has the meaning provided in Section 12.1(b).
“Australian Dollars” and the sign “A$” means the lawful currency of Australia.
“Authorized Officer” means, with respect to any Person, its president, corporate controller, treasurer, chief financial officer or any other officer of such Person, or any other individual having express authority to act on behalf of such Person as designated by the board of directors or other managing authority or officer of such Person, as identified to the Administrative Agent in an incumbency certificate that has been certified by such Person’s
5th A&R Credit and Security Agreement (Smithfield)
secretary or assistant secretary or the secretary or assistant secretary of the managing member of such Person.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Bankruptcy Code” means the Bankruptcy Code of 1978, as amended and in effect from time to time (11 U.S.C. § 101 et seq.) and any successor statute thereto.
“Basel III” means (a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, (b) the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text” published by the Committee on Banking Supervision in November 2011, and (c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Rule.
“Beneficial Ownership Rule” means 31 C.F.R. § 1010.230.
“Borrower” has the meaning provided in the preamble to this Agreement.
“Borrowing Base” means, on any date of determination, the Accrual Adjusted Net Pool Balance as of the last day of the period covered by the most recent Pool Report, minus the Required Reserve as of the last day of the period covered by the most recent Pool Report, and minus Deemed Collections that have occurred since the most recent Cut-Off Date to the extent that such Deemed Collections exceed the Dilution Reserve.
“Borrowing Date” means a Business Day on which an Advance is made hereunder.
“Borrowing Limit” means, at any time of determination, the lesser of (x) the Aggregate Commitment less the Letter of Credit Liability at such time and (y) the Borrowing Base at such time.
“Borrowing Notice” has the meaning provided in Section 1.2.
5th A&R Credit and Security Agreement (Smithfield)
“Borrowing Tranche” means specified portions of Loans outstanding as follows: (a) any Loans (or portions thereof) for which the applicable Interest Rate is determined by reference to the Term SOFR Rate and which have the same Interest Period shall constitute one Borrowing Tranche, (b) all Loans (or portions thereof) for which the applicable Interest Rate is determined by reference to Daily 1M SOFR shall constitute one Borrowing Tranche, (c) all Loans (or portions thereof) for which Interest is determined by reference to the Alternate Base Rate shall constitute one Borrowing Tranche and (d) all Loans (or portions thereof) for which Interest is determined by reference to the Adjusted Federal Funds Rate shall constitute one Borrowing Tranche.
“Broken Funding Costs” means for any CP Rate Loan or Term SOFR Rate Loan which: (a) in the case of a CP Rate Loan, has its principal reduced without compliance by Borrower with the notice requirements hereunder, (b) in the case of a CP Rate Loan or a Term SOFR Rate Loan, does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice, (c) in the case of a CP Rate Loan, is assigned under the applicable Liquidity Agreement or (d) in the case of a Term SOFR Rate Loan, is terminated or reduced prior to the last day of its Interest Period, whether voluntarily or due to the occurrence of the Commitment Termination Date, an amount equal to the excess, if any, of (i) the CP Costs or Interest (as applicable) that would have accrued during the remainder of the Interest Periods or the tranche periods for Commercial Paper determined by the Administrative Agent to relate to such Loan (as applicable) subsequent to the date of such reduction, assignment or termination (or in respect of clause (b) above, the date such Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of the principal of such Loan if such reduction, assignment or termination had not occurred or such Reduction Notice had not been delivered, over (ii) the sum of (x) to the extent all or a portion of such principal is allocated to another Loan, the amount of CP Costs or Interest actually accrued during the remainder of such period on such principal for the new Loan, and (y) to the extent such principal is not allocated to another Loan, the income, if any, actually received during the remainder of such period by the holder of such Loan from investing the portion of such principal not so allocated. In the event that the amount referred to in clause (ii) exceeds the amount referred to in clause (i), the relevant Lender or Lenders agree to pay to Borrower the amount of such excess.
“Business Day” means any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed, or are in fact closed, for business in Pittsburgh, Pennsylvania (or, if otherwise, the Lending Office of the Administrative Agent); provided that, when used in connection with an amount that bears interest at a rate based on SOFR or any direct or indirect calculation or determination of SOFR, the term “Business Day” means any such day that is also a U.S. Government Securities Business Day.
“Calculation Period” means each fiscal calendar month of Smithfield or portion thereof which elapses during the term of the Agreement. The first Calculation Period shall commence on the date of the initial Advance hereunder and the final Calculation Period shall terminate on the Final Payout Date.
“Canadian Dollars” and the sign “C$” means the lawful currency of Canada.
5th A&R Credit and Security Agreement (Smithfield)
“Change of Control” has the meaning provided in the Receivables Sale Agreement.
“Closing Date” means June 9, 2011.
“Co-Agent” means with respect to each Lender, the agent appointed to act on behalf of such Lender in the applicable Lender Supplement.
“Collateral” has the meaning provided in Section 13.1.
“Collection Account” means collectively, (i) each account listed on Part A of Schedule D to this Agreement (as such schedule may be modified from time to time in connection with the closing or opening of any Collection Account in accordance with the terms hereof) (in each case, on and after the Post-Closing Date, in the name of the Borrower) and maintained at a bank or other financial institution acting as a Collection Bank pursuant to a Collection Account Agreement for the purpose of receiving Collections, and (ii) any FX Collection Account.
“Collection Account Agreement” means each agreement among the Borrower (or, on or prior to the Post-Closing Date, Smithfield Direct, LLC, Smithfield Specialty Foods Group, LLC and Smithfield Support), the Servicer (if applicable), the Administrative Agent and a Collection Bank, governing the terms of one or more Collection Accounts (other than any FX Collection Account) that provides the Administrative Agent with “control” (within the meaning of the UCC) over such Collection Account(s).
“Collection Bank” means any of the banks or other financial institutions holding one or more Collection Accounts.
“Collection Notice” means a notice from the Administrative Agent to a Collection Bank in the form attached to each Collection Account Agreement.
“Collections” means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including all Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable; provided, however, that the term “Collections” shall not include any payment made for the account of the Servicer, a third-party service provider or sub-contractor whose services were not included in the amount invoiced for the applicable Receivable; provided, further, that the term “Collections” shall not include Monetized Receivable Collections.
“Commencement Date” has the meaning provided in the Receivables Sale Agreement.
“Commercial Paper” means promissory notes of any Conduit issued by such Conduit, in each case, in the commercial paper market.
“Commitment” means, for each Committed Lender or L/C Participant, the commitment of such Committed Lender to make Loans hereunder or such L/C Participant to pay hereunder on account of all drawings under all Letters of Credit, on a combined basis, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Committed Lender’s or L/C Participant’s name on Schedule A to this Agreement.
5th A&R Credit and Security Agreement (Smithfield)
“Commitment Termination Date” means the earliest to occur of (i) the day on which any of the conditions precedent set forth in Section 6.2 (other than Section 6.2(e)(ii)(B)) are not satisfied, (ii) the Business Day immediately prior to the occurrence of an Event of Default described in Section 9.1(j), (iii) the Business Day specified in a written notice from the Administrative Agent following the occurrence of any other Event of Default, and (iv) the date which is ten (10) days after the Administrative Agent’s receipt of written notice from the Borrower that it wishes to terminate the facility evidenced by this Agreement.
“Committed Lenders” means (i) each Unaffiliated Committed Lender and (ii) with respect to each Lender Group without an Unaffiliated Committed Lender, the banks or other financial institutions and their respective successors and permitted assigns under each Lender Group’s Liquidity Agreement.
“Concentration Reserve Percentage” means, at any time, the largest of: (a) the sum of the four (4) largest Obligor Percentages of the Group D Obligors, (b) the sum of the two (2) largest Obligor Percentages of the Group C Obligors, (c) the largest Obligor Percentage of the Group B Obligors and (d) the largest Obligor Percentage of the Group A Obligors.
“Conduit” means any Lender that is designated as the Conduit in the Lender Supplement or in the Assignment Agreement pursuant to which it became a party to this Agreement, and any assignee of such Lender to the extent of the portion of such Percentage assumed by such assignee pursuant to its respective Assignment Agreement.
“Conforming Changes” means, with respect to Daily 1M SOFR, the Term SOFR Rate or any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Accrual Period,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters) that the Administrative Agent decides in consultation with the Borrower may be appropriate to reflect the adoption and implementation of Daily 1M SOFR, the Term SOFR Rate or such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of Daily 1M SOFR, the Term SOFR Rate or the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides in consultation with the Borrower is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents).
“Consolidated Capitalization” has the meaning provided in the Parent Credit Agreement.
“Consolidated EBITDA” has the meaning provided in the Parent Credit Agreement.
“Consolidated Funded Debt” has the meaning provided in the Parent Credit Agreement.
5th A&R Credit and Security Agreement (Smithfield)
“Consolidated Interest Expense” has the meaning provided in the Parent Credit Agreement.
“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or application for a letter of credit.
“Contract” has the meaning provided in the Receivables Sale Agreement.
“Covered Entity” means (a) each of Smithfield, the Borrower, the Originators, the Servicer, the Performance Guarantor and their respective Subsidiaries and (b) each Person that, directly or indirectly, controls a Person described in clause (a) above. For purposes of this definition, control of a Person means the direct or indirect (x) ownership of, or power to vote, 25% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract or otherwise.
“CP Costs” means:
(a) for a Pool Funded Conduit, for each day, the sum of, without duplication, (i) discount or interest accrued on such Conduit’s Pooled Commercial Paper at the applicable CP Rate on such day, plus (ii) any and all accrued commissions in respect of its placement agents and its Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Conduit’s Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase or financing facilities which are funded by such Conduit’s Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received by or on behalf of such Conduit on such day from investment of collections received under all receivable purchase or financing facilities funded substantially with such Conduit’s Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of such Conduit’s Broken Funding Costs related to the prepayment of any investment of such Conduit pursuant to the terms of any receivable purchase or financing facilities funded substantially with its Pooled Commercial Paper. In addition to the foregoing costs, if Borrower (or the Servicer, on Borrower’s behalf) shall request any Advance during any period of time determined by a Co-Agent in its sole discretion to result in incrementally higher CP Costs applicable to its Conduit’s Loan included in such Advance, the principal associated with any such Loan of such Conduit shall, during such period, be deemed to be funded by such Conduit in a special pool (which may include capital associated with other receivable purchase or financing facilities) for purposes of determining such additional CP Costs applicable only to such special pool and charged each day during such period against such principal; and
5th A&R Credit and Security Agreement (Smithfield)
(b) for a Conduit that is not a Pool Funded Conduit, for each day, the sum of (x) discount or interest accrued on its Related Commercial Paper at the applicable CP Rate on such day, plus (y) any and all accrued commissions and fees of placement agents, dealers and issuing and paying agents incurred in respect of such Related Commercial Paper for such day, plus (z) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled Commercial Paper for such day.
“CP Rate” means, for any CP Tranche Period of any Conduit,
(a) for any CP Rate Loans funded by a Pool Funded Conduit, a rate per annum that, when applied to the outstanding principal balance of such CP Rate Loans for the actual number of days elapsed in such CP Tranche Period, would result in an amount of accrued interest equivalent to such Conduit’s CP Costs for such CP Tranche Period; and
(b) for any CP Rate Loans funded by a Conduit that is not a Pool Funded Conduit, a rate per annum equal to the sum of (i) the rate or, if more than one rate, the weighted average of the rates, determined by converting to an interest-bearing equivalent rate per annum the discount rate (or rates) at which such Conduit’s Related Commercial Paper outstanding during such CP Tranche Period has been or may be sold by any placement agent or commercial paper dealer selected by such Conduit’s Co-Agent, plus (ii) the commissions and charges charged by such placement agent or commercial paper dealer with respect to such Related Commercial Paper, expressed as a percentage of the face amount thereof and converted to an interest-bearing equivalent rate per annum.
“CP Rate Loan” means, for each Loan of a Conduit prior to the time, if any, when (i) it is refinanced with a Liquidity Funding pursuant to the Liquidity Agreement, or (ii) the occurrence of an Event of Default and the commencement of the accrual of Interest thereon at the Default Rate.
“CP Tranche Period” means with respect to any Loan of any Conduit that is not funded with Pooled Commercial Paper, a period of days from 1 Business Day up to the number of days (not to exceed 60 days) necessary to extend such period to include the next Settlement Date, commencing on a Business Day, which period is either (i) requested by ▇▇▇▇▇▇▇▇ and agreed to by such Conduit or such Conduit’s Co-Agent or (ii) in the absence of such request and agreement, selected by such Conduit or such Conduit’s Co-Agent (it being understood that the goal shall be to select a period which ends on or as close to the next Settlement Date as possible).
“Credit and Collection Policy” has the meaning provided in the Receivables Sale Agreement.
“Cut-Off Date” means the last day of a Calculation Period.
“Daily 1M SOFR” means, for any day, the rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, at the Administrative Agent’s discretion, to the nearest 1/100th of 1%) (a) the Term SOFR Reference Rate for such day for a one (1) month period, as published by the Term SOFR Administrator, by (b) a number
5th A&R Credit and Security Agreement (Smithfield)
equal to 1.00 minus the SOFR Reserve Percentage; provided, that if Daily 1M SOFR, determined as provided above, would be less than the SOFR Floor, then Daily 1M SOFR shall be deemed to be the SOFR Floor. Such rate of interest will be adjusted automatically as of each Business Day based on changes in Daily 1M SOFR without notice to the Borrower.
“Daily 1M SOFR Loan” means a Loan which bears interest at Daily 1M SOFR.
“Daily 1M SOFR Option” means the option of the Borrower to have Loans bear Interest at a fluctuating rate per annum equal to Daily 1M SOFR, such interest rate to change automatically from time to time effective as of the effective date of each change in Daily 1M SOFR.
“Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, at the Administrative Agent’s discretion, to the nearest 1/100th of 1%) (A) SOFR for the day (the “SOFR Determination Date”) that is two (2) Business Days prior to (i) such SOFR Rate Day if such SOFR Rate Day is a Business Day or (ii) the Business Day immediately preceding such SOFR Rate Day if such SOFR Rate Day is not a Business Day, by (B) a number equal to 1.00 minus the SOFR Reserve Percentage, in each case, as such SOFR is published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇, or any successor source identified by the Federal Reserve Bank of New York or its successor administrator for the secured overnight financing rate from time to time. If Daily Simple SOFR as determined above would be less than the SOFR Floor, then Daily Simple SOFR shall be deemed to be the SOFR Floor. If SOFR for any SOFR Determination Date has not been published or replaced with a Benchmark Replacement by 5:00 p.m. (Pittsburgh, Pennsylvania time) on the second Business Day immediately following such SOFR Determination Date, then SOFR for such SOFR Determination Date will be SOFR for the first Business Day preceding such SOFR Determination Date for which SOFR was published in accordance with the definition of “SOFR”; provided that SOFR determined pursuant to this sentence shall be used for purposes of calculating Daily Simple SOFR for no more than 3 consecutive SOFR Rate Days. If and when Daily Simple SOFR as determined above changes, any applicable rate of interest based on Daily Simple SOFR will change automatically without notice to the Borrower, effective on the date of any such change.
“Days’ Sales Outstanding” means, as of any day, an amount equal to the product of (x) 91, multiplied by (y) the amount obtained by dividing (i) the aggregate outstanding balance of Receivables as of the most recent Cut-Off Date, by (ii) the aggregate amount of Receivables created during the three (3) Calculation Periods including and immediately preceding such Cut-Off Date.
“Debt” has the meaning provided in the Receivables Sale Agreement.
“Deemed Collections” means Collections deemed received by Borrower under Section 1.4(a).
5th A&R Credit and Security Agreement (Smithfield)
“Default Horizon Ratio” means, as of any Cut-Off Date, the ratio (expressed as a decimal) computed by dividing (i) the aggregate Outstanding Balance of Receivables created during the five (5) Calculation Periods ending on such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off Date.
“Default Rate” means a rate per annum equal to the sum of (i) the Prime Rate plus (ii) 2.00%, changing when and as the Prime Rate changes; provided, however, that such Default Rate shall not at any time exceed the maximum rate permitted by applicable law.
“Default Ratio” means, as of any Cut-Off Date, the ratio (expressed as a percentage) computed by dividing (x) the total amount of Receivables which became Defaulted Receivables during the Calculation Period that includes such Cut-Off Date, by (y) the aggregate Outstanding Balance of Receivables created during the Calculation Period occurring four (4) months prior to the Calculation Period ending on such Cut-Off Date.
“Defaulted Receivable” means a Receivable: (i) as to which the Obligor thereof has suffered an Event of Bankruptcy; (ii) which, consistent with the Credit and Collection Policy, would be written off ▇▇▇▇▇▇▇▇’s books as uncollectible; or (iii) as to which any payment, or part thereof, remains unpaid for 91 days or more from the date such payment was due and payable.
“Defaulting Lender” means (a) any Committed Lender that (i) has failed to perform any of its funding obligations hereunder within one Business Day of the date required to be funded by it hereunder (other than failures to fund solely as a result of (A) a bona fide dispute as to whether the conditions to borrowing were satisfied on the relevant Advance date, but only for such time as such Committed Lender is continuing to engage in good faith discussions regarding the determination or resolution of such dispute, (B) a failure to disburse due to an administrative error or omission by such Committed Lender, or (C) a failure to disburse due to force majeure, computer malfunctions, interruption or communication facilities, labor difficulties or other causes, in each case to the extent beyond such Committed Lender’s reasonable control), (ii) has notified the Borrower or the Administrative Agent that it does not intend to comply with its funding obligations under this Agreement, or (iii) has failed to confirm in writing that it intends to comply with its funding obligation under this Agreement, by the date requested by the Administrative Agent in writing following the Administrative Agent’s determination that it has a reasonable basis to believe that such Committed Lender will not comply with its funding obligations under this Agreement, (b) any Committed Lender that is (or that has a direct or indirect parent company that is) the subject of an Event of Bankruptcy a Bail-In Action or (c) any assignee of a Defaulting Lender under applicable law as contemplated in the last sentence of Section 12.1(c)(v). Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (c) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Servicer, the Borrower and each other Lender promptly following such determination.
“Defaulting Lender Excess” means, with respect to any Defaulting Lender at any time, the excess, if any, at such time of (i) an amount equal to such Defaulting Lender’s Percentage
5th A&R Credit and Security Agreement (Smithfield)
multiplied by the Aggregate Principal (calculated as if any other Defaulting Lenders had funded all of their respective Loans) over (ii) the aggregate principal amount of all Loans made by such Defaulting Lender.
“Defaulting Lender Group” means any Lender Group that includes a Defaulting Lender.
“Delinquency Ratio” means, at any time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were Delinquent Receivables at such time divided by (ii) the aggregate Outstanding Balance of all Receivables at such time.
“Delinquent Receivable” means a Receivable, (i) as to which any payment, or part thereof, remains unpaid for 91 days or more from the date such payment was due and payable and (ii) which is not a Defaulted Receivable.
“Dilution” means the amount of any reduction or cancellation of the Outstanding Balance of a Receivable as described in Section 1.4(a).
“Dilution Horizon Ratio” means, as of any Cut-Off Date, a ratio (expressed as a decimal), computed by dividing (i) the aggregate sales generated by the Originators during the Calculation Period ending on such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off Date.
“Dilution Ratio” means, as of any Cut-Off Date, a ratio (expressed as a percentage), computed by dividing (i) the total amount of decreases in Outstanding Balances due to Dilutions (other than cash discounts), which included returns, adjustments, rebates, discounts or retropricing during the Calculation Period ending on such Cut-Off Date, by (ii) the aggregate Outstanding Balance of Receivables created during the Calculation Period ending on such Cut-Off Date.
“Dilution Reserve” means, for any Calculation Period, the product (expressed as a percentage) of:
(a) the sum of (i) 2.00 times the Adjusted Dilution Ratio as of the immediately preceding Cut-Off Date, plus (ii) the Dilution Volatility Component as of the immediately preceding Cut-Off Date, times
(b) the Dilution Horizon Ratio as of the immediately preceding Cut-Off Date.
“Dilution Volatility Component” means the product (expressed as a percentage) of (i) the difference between (a) the highest Dilution Ratio over the past 12 Calculation Periods and (b) the Adjusted Dilution Ratio, and (ii) a fraction, the numerator of which is equal to the amount calculated in (i)(a) of this definition and the denominator of which is equal to the amount calculated in (i)(b) of this definition.
“Dollars” and the sign “$” means lawful currency of the United States of America.
“Drawing Date” has the meaning specified in Section 1.10(b).
5th A&R Credit and Security Agreement (Smithfield)
“EBA” means European Banking Authority (including any successor or replacement organization thereto).
“EEA Financial Institution” means (x) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority; (y) any entity established in an EEA Member Country which is a parent of an institution described in clause (x) of this definition, or (x) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (x) or (y) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” has the meaning provided in the Receivables Sale Agreement.
“EIOPA” means The European Insurance and Occupational Pensions Authority (including any successor or replacement organization thereto).
“Eligible Assignee” means a commercial bank having a combined capital and surplus of at least $250,000,000 with a rating of its (or its parent holding company’s) short-term securities equal to or higher than (i) A-1 by S&P and (ii) P-1 by ▇▇▇▇▇’▇.
“Eligible Government Receivable” means an Eligible Receivable that is a Government Receivable.
“Eligible Receivable” means, at any time, a Receivable:
(a) the Obligor of which (i) is not an Affiliate of any of the parties hereto, (ii) is not an individual, (iii) is not a government or a governmental subdivision or agency if the addition of such Receivable shall cause the Government Receivable Excess to be greater than zero, (iv) is not insolvent or has not entered into any insolvency proceedings and (v) is a resident of an Approved Obligor Jurisdiction,
(b) (i) which by its terms is due and payable not greater than 120 days from the original invoice date thereof and (ii) which is not a Defaulted Receivable,
(c) which is not owing from an Obligor (together with any affiliated Obligors) as to which more than 50% of the aggregate Outstanding Balance of all Receivables owing from such Obligor (together with any affiliated Obligors) are Defaulted Receivables,
(d) which is an “account” within the meaning of Article 9 of the UCC of all applicable jurisdictions,
5th A&R Credit and Security Agreement (Smithfield)
(e) which is either (i) denominated and payable only in Dollars or an Approved Currency (provided, that to the extent it is denominated and payable in an Approved Currency (other than Dollars) the Collections related thereto are promptly converted to Dollars, and the Obligor with respect to which has been instructed to remit Collections in respect thereof directly to a Lock-Box or Collection Account in the United States of America or (ii) denominated and payable only in an Approved Currency, and the Obligor with respect to which has been instructed to remit Collections in respect thereof directly to a Lock-Box or Collection Account,
(f) which arises under a Contract which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms subject to no offset, counterclaim or other defense,
(g) which arises under a Contract which (A) (i) does not require the Obligor under such Contract to consent to the transfer, sale, pledge or assignment of the rights and duties of the applicable Originator or any of its assignees under such Contract or (ii) for which consent to the transfer, sale, pledge or assignment of the rights and duties of the applicable Originator or any of its assignees under such Contract has been obtained from the Obligor under such Contract and (B) does not contain a confidentiality provision that purports to restrict the ability of any Lender to exercise its rights under this Agreement, including, without limitation, its right to review the Contract,
(h) which arises under a Contract that contains an obligation to pay a specified sum of money, contingent only upon the sale of goods or the provision of services by the applicable Originator,
(i) which, together with the Contract related thereto, does not contravene any law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation,
(j) which satisfies all applicable requirements of the Credit and Collection Policy,
(k) which was generated in the ordinary course of the applicable Originator’s business,
(l) which (i) arises solely from the sale of goods or the provision of services to the related Obligor by the applicable Originator, and not by any other Person (in whole or in part) and (ii) does not constitute sales tax, finance charges, service charges or similar charges (other than GST or VAT) (it being understood that only the portion of such Receivable so constituted shall not be eligible),
(m) which is not subject to any dispute, counterclaim, right of rescission, set-off, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor against the applicable Originator or any other Adverse Claim, and the
5th A&R Credit and Security Agreement (Smithfield)
Obligor thereon holds no right as against such Originator to cause such Originator to repurchase the goods or merchandise the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Contract, or defective goods returned in accordance with the terms of the Contract),
(n) as to which the applicable Originator has satisfied and fully performed all obligations on its part with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor,
(o) as to which each of the representations and warranties contained in Sections 5.1(i), (j), (r), (s), (t) and (u) is true and correct,
(p) all right, title and interest to and in which has been validly transferred by the applicable Originator directly to Borrower under and in accordance with the Receivables Sale Agreement, and Borrower has good and marketable title thereto free and clear of any Adverse Claim,
(q) which is not originated on a “billed but not shipped,” “bill and hold,” “guaranteed sale,” “sale and return,” “sale on approval,” “progress billed,” “consignment” or similar basis,
(r) is an “eligible asset” under and as defined in Rule 3a-7 under the Investment Company Act, and
(s) is not a Permitted Monetized Receivable.
provided, that, so long as the long term unsecured senior debt ratings assigned to Smithfield by S&P and Moody’s are at least “BB-” and “Ba3”, respectively, a Receivable that relates to In-Transit Collateral shall be deemed to satisfy any clause of this definition of “Eligible Receivable” to the extent that such clause is reasonably expected to be satisfied at the time such In-Transit Collateral is delivered to the related Obligor.
“Embargoed Property” means any property; (a) 50% or more beneficially owned, directly or indirectly, by a Sanctioned Person; (b) that is due to or from a Sanctioned Person; (c) in which a Sanctioned Person otherwise holds any property interest; (d) that is located in a Sanctioned Jurisdiction; or (e) that otherwise would cause any actual violation by any Agent, Conduit or Committed Lender of any applicable Anti-Terrorism Law if any Agent, Conduit or Committed Lender were to obtain an encumbrance on, lien on, pledge of, or security interest in such property, or provide services in consideration of such property.
“Equity Interests” has the meaning provided in the Receivables Sale Agreement.
“ERISA” has the meaning provided in the Receivables Sale Agreement.
“ERISA Affiliate” has the meaning provided in the Receivables Sale Agreement.
5th A&R Credit and Security Agreement (Smithfield)
“ERISA Event” means (a) any Reportable Event; (b) the existence with respect to any Plan of a non-exempt Prohibited Transaction; (c) any failure by any Plan to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Tax Code or Section 302 of ERISA) applicable to such Plan, whether or not waived; (d) the filing pursuant to Section 412 of the Tax Code or Section 303 of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, the failure to make by its due date a required installment under Section 430(j) of the Tax Code with respect to any Plan, or the failure by any Loan Party or any of its ERISA Affiliates to make any required contribution to a Multiemployer Plan; (e) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, including but not limited to the imposition of any lien in favor of the PBGC or any Plan; (f) a determination that any Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430 of the Tax Code or Title IV of ERISA); (g) the receipt by any Loan Party or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (h) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (i) the receipt by any Loan Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Loan Party or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent (within the meaning of Section 4245 of ERISA), Reorganization, or in endangered or critical status (within the meaning of Section 432 of the Tax Code or Section 305 or Title IV of ERISA).
“ESMA” means The European Securities and Markets Authority (including any successor or replacement organization thereto).
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“EU Securitization Regulation” means Regulation (EU) 2017/2402.
“EU Securitization Rules” means: (a) the EU Securitization Regulation; together with (b) any relevant technical standards adopted by the European Commission in relation thereto, any relevant regulations and technical standards applicable in relation thereto pursuant to any transitional arrangements made pursuant to the EU Securitization Regulation, and, in each case relevant guidance published in relation thereto by the European Supervisory Authorities as may be effective from time to time.
“European Supervisory Authorities” means, together, the EBA, ▇▇▇▇ and EIOPA.
“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,
5th A&R Credit and Security Agreement (Smithfield)
dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets, or any similar action with respect to such Person under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee (other than a trustee under a deed of trust, indenture or similar instrument), custodian, sequestrator (or other similar official) for, such Person or for any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall be adjudicated insolvent, or admit in writing its inability to pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors shall vote to implement any of the foregoing.
“Event of Default” has the meaning specified in Article IX.
“Excluded Originator” has the meaning provided in the Receivables Sale Agreement.
“Excluded Receivable” has the meaning provided in the Receivables Sale Agreement.
“Excluded Subsidiary” has the meaning provided in the Receivables Sale Agreement.
“Excluded Taxes” has the meaning provided in Section 10.1(c).
“Executive Officer” has the meaning provided in the Receivables Sale Agreement.
“Executive Order” has the meaning provided in Section 5.1(x).
“Existing Letter of Credit” means each of the letters of credit letter identified on Exhibit IX.
“Extended Payment Term Excess” means, as of any date of determination, the amount, if any, by which the aggregate Outstanding Balance of all Eligible Receivables that by their terms are due and payable more than 30 days but not greater than 120 days from the original invoice date thereof exceeds 7.5% of the aggregate Outstanding Balance of all Eligible Receivables.
“Facility Termination Date” means the earliest to occur of (i) the Scheduled Termination Date and (ii) the Commitment Termination Date.
“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum for each day during such period equal to (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds
5th A&R Credit and Security Agreement (Smithfield)
brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York in the Composite Closing Quotations for U.S. Government Securities; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:30 a.m. (New York City time) for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.
“Fee Letter” means that certain ▇▇▇▇▇▇ ▇▇▇ Letter, dated as of December 22, 2022, among Performance Guarantor, the Borrower, the Letter of Credit Issuers, the Structuring Agent and the Agents, as it may be amended or modified and in effect from time to time.
“Final Payout Date” means the date on which (i) all Obligations have been paid in full and the Aggregate Commitment has been terminated and (ii) all other amounts owing by the Borrower to the Receivables Agent and the Receivables Buyers under the Monetization Documents have been paid in full.
“Finance Charges” means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Contract.
“Financial Officer” has the meaning provided in the Receivables Sale Agreement.
“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“Foreign Receivable” means any Eligible Receivable, the Obligor of which is organized under the laws of, or has its chief executive office in, any jurisdiction other than the United States (or any political subdivision thereof).
“Foreign Receivable Excess” means (i) prior to a Ratings Trigger Event, the amount, if any, by which the aggregate Outstanding Balance of all Foreign Receivables that constitute Eligible Receivables exceeds 20.0% of the aggregate Outstanding Balance of all Eligible Receivables or (ii) after a Ratings Trigger Event, the amount, if any, by which the aggregate Outstanding Balance of all Foreign Receivables that constitute Eligible Receivables exceeds any lower percentage determined by the Administrative Agent in its sole discretion (which percentage may be 0.0%) of the Outstanding Balance of all Eligible Receivables.
“Funding Agreement” means (i) this Agreement, (ii) the Liquidity Agreement and (iii) any other agreement or instrument executed by any Funding Source with or for the benefit of a Conduit.
“Funding Source” means (i) each Committed Lender and (ii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or back-up purchase support or facilities to a Conduit.
5th A&R Credit and Security Agreement (Smithfield)
“FX Collection Account” means each account listed on Part B of Schedule D to this Agreement (as such schedule may be modified from time to time in connection with the closing or opening of any FX Collection Account in accordance with the terms hereof) (in each case, in the name of the Borrower or Smithfield Support) and maintained at a bank or other financial institution acting as a Collection Bank and in which any Collections denominated in Canadian Dollars, Yen, or Australian Dollars are collected or deposited.
“FX Excess” means (i) prior to a Ratings Trigger Event, the amount, if any, by which the aggregate Outstanding Balance of all Eligible Receivables that are denominated in a currency other than Dollars exceeds 2.5% of the aggregate Outstanding Balance of all Eligible Receivables or (ii) after a Ratings Trigger Event, the amount, if any, by which the aggregate Outstanding Balance of all Eligible Receivables that are denominated in a currency other than Dollars exceeds any lower percentage determined by the Administrative Agent in its sole discretion (which percentage may be 0.0%) of the Outstanding Balance of all Eligible Receivables.
“GAAP” means generally accepted accounting principles in effect in the United States of America as of the date of this Agreement.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).
“Government Receivable” means any Receivable, the Obligor of which is a government or governmental subdivision or agency of the United States (or any political subdivision thereof).
“Government Receivable Excess” means (i) prior to a Ratings Trigger Event, the amount, if any, by which the aggregate Outstanding Balance of all Eligible Government Receivables exceeds 5.0% of the Outstanding Balance of all Eligible Receivables or (ii) after a Ratings Trigger Event, the amount, if any, by which the aggregate Outstanding Balance of all Eligible Government Receivables exceeds any lower percentage determined by the Administrative Agent in its sole discretion (which percentage may be 0.0%) of the Outstanding Balance of all Eligible Receivables.
“Group A Obligor” means any Obligor with an Obligor Concentration Limit of 20.00% as determined according to the chart set forth in the definition thereof.
“Group B Obligor” means any Obligor with an Obligor Concentration Limit of 15.00% as determined according to the chart set forth in the definition thereof.
5th A&R Credit and Security Agreement (Smithfield)
“Group C Obligor” means any Obligor with an Obligor Concentration Limit of 10.00% as determined according to the chart set forth in the definition thereof.
“Group D Obligor” means any Obligor with an Obligor Concentration Limit of 5.00% as determined according to the chart set forth in the definition thereof.
“GST” means all goods and services tax payable under Part IX of the Excise Tax Act (Canada) and harmonized sales tax in any participating province payable under the Excise Tax Act (Canada), as such statutes may be amended, supplemented or replaced from time to time.
“In-Transit Collateral” means, as of any date of determination, any inventory of an Originator that (i) is in the process of being transported by such Originator to an Obligor pursuant to a Contract that is then expected to be delivered within five (5) or fewer calendar days, (ii) is covered by insurance in accordance with the applicable Originator’s normal business practices, and (iii) upon its receipt and acceptance by such Obligor, will give rise to an amount payable by such Obligor to such Originator under such Contract.
“In-Transit Receivable” means any Eligible Receivable relating to In-Transit Collateral. For the avoidance of doubt, an In-Transit Receivable shall no longer be deemed to be an Eligible Receivable on the date that any related inventory that at one time satisfied the definition of “In-Transit Collateral” fails to satisfy the definition of “In-Transit Collateral” except solely as a result of the delivery and acceptance of such inventory by the related Obligor.
“In-Transit Receivable Excess” means, as of any date of determination, the amount, if any, by which the aggregate Outstanding Balance of all In-Transit Receivables exceeds 20.0% of the Outstanding Balance of all Eligible Receivables.
“Indemnified Amounts” has the meaning specified in Section 10.1.
“Indemnified Party” has the meaning specified in Section 10.1.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Independent Director” means a director of ▇▇▇▇▇▇▇▇ who (A) is not at the time of initial appointment or at any time during the continuation of his or her appointment as an Independent Director and has not been at any time during the five (5) years preceding such appointment: (i) an equity holder, director (other than an Independent Director), officer, employee, member, manager, attorney or partner of Borrower or any of its Affiliates; (ii) a customer, supplier or other Person who derives more than 1% of its purchases or revenues from its activities with Borrower or any of its Affiliates; (iii) a Person or other entity controlling or under common control with any such equity holder, partner, member, customer, supplier or other Person; (iv) a member of the immediate family of any such equity holder, director, officer, employee, member, manager, partner, customer, supplier or other person; or (v) a trustee in bankruptcy for Borrower or any of its Affiliates and (B) has, (i) prior experience as an Independent Director for a corporation or limited liability company whose charter documents required the unanimous consent of all “independent directors” thereof before such corporation or limited liability
5th A&R Credit and Security Agreement (Smithfield)
company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, LLC, National Registered Agents, Inc., Wilmington Trust Company, Lord Securities Corporation or, if none of those companies is then providing professional “independent directors”, another nationally recognized company reasonably approved by the Administrative Agent. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership of voting securities, by contract or otherwise.
“Initial Contributed Assets” has the meaning provided in the Receivables Sale Agreement.
“Initial Purchased Assets” has the meaning provided in the Receivables Sale Agreement.
“Interest” means, for each Loan and any Interest Period or Interest Accrual Period (or portion thereof), the amount of interest accrued on the Principal of such Loan during such Interest Period or Interest Accrual Period (or portion thereof) in accordance with this Agreement.
“Interest Accrual Period” means, with respect to any Loan, (a) before the Termination Date: (i) initially, the period commencing on the date such Loan is funded hereunder (or in the case of any fees payable hereunder, commencing on the Closing Date) and ending on (but not including) the next Settlement Date and (ii) thereafter, each period commencing on a Settlement Date and ending on (but not including) the next Settlement Date and (b) on and after the Termination Date, such period (including a period of one day) as shall be selected from time to time by the Administrative Agent or, in the absence of any such selection, each period commencing on a Settlement Date and ending on (but not including) the next Settlement Date.
“Interest and Servicing Reserve” means at any time:
1.50 x DSO x (ABR + SFR)
360
where:
ABR = the Alternate Base Rate at such time;
DSO = the Days’ Sales Outstanding for the most recently ended
Calculation Period; and
SFR = the Servicing Fee Rate.
5th A&R Credit and Security Agreement (Smithfield)
“Interest Period” means, with respect to any Loan held by a Committed Lender:
(a) if Interest for such Loan is calculated on the basis of Term SOFR, a period of time selected by the Borrower in connection with (and to apply to) any election permitted hereunder by the Borrower to have Loans accrue Interest under the Term SOFR Rate Option. Subject to the last sentence of this clause (a), such period shall be one or three Months. Such Interest Period shall commence on the effective date of such Term SOFR Rate Option, which shall be (i) the date of the related Advance if the Borrower is requesting the Lenders fund new Advances, or (ii) the date of renewal of or conversion to the Term SOFR Rate Option if the Borrower is renewing or converting to the Term SOFR Rate Option applicable to outstanding Loans. Notwithstanding the second sentence hereof: (A) any Interest Period which would otherwise end on a date which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (B) the Borrower shall not select, convert to or renew an Interest Period for any portion of the Loans that would end after the Scheduled Termination Date; and
(b) if Interest for such Loan is calculated on the basis of Daily 1M SOFR, the Alternate Base Rate or the Adjusted Federal Funds Rate, a period of one (1) day.
“Interest Rate” means, subject to Sections 4.4 and 4.5, means,
(a) with respect to any Loan (or any portion thereof) accruing Interest under the Term SOFR Rate Option or the Daily 1M SOFR Rate Option for any day in any Interest Accrual Period, the sum of (i) either (x) if the Borrower has elected for such Loan (or any portion thereof) to accrue interest by reference to the Term SOFR Rate during such Interest Accrual Period in accordance with Section 4.3(a), the Term SOFR Rate for such day, or (y) in any other case (including if no such election has been made), Daily 1M SOFR plus (ii) the SOFR Adjustment;
(b) with respect to any Loan (or any portion thereof) accruing Interest under the Adjusted Federal Funds Rate Option, the Adjusted Federal Funds Rate; and
(c) with respect to any Loan (or any portion thereof) accruing Interest under the Alternate Base Rate Option, the Alternate Base Rate.
“Interest Rate Option” means any Term SOFR Rate Option, Daily 1M SOFR Option, Adjusted Federal Funds Rate Option or Alternate Base Rate Option.
“Investment Company Act” means the Investment Company Act of 1940, as amended, or any successor statute.
“Law” means any law(s) (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, issued guidance, release, ruling, order, executive order, injunction, writ, decree, bond, judgment, authorization or approval, lien or award of or any settlement arrangement, by agreement, consent or otherwise, with any Governmental Authority, foreign or domestic.
5th A&R Credit and Security Agreement (Smithfield)
“L/C Collateral Account” means the account designated as the L/C Collateral Account established and maintained by the Administrative Agent (for the benefit of the Letter of Credit Issuers and the L/C Participants), or such other account as may be so designated as such by the Administrative Agent.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.
“L/C Participant” means any Person that is designated as the L/C Participant for each Lender Group in the Lender Supplement or in the Assignment Agreement pursuant to which it became a party to this Agreement.
“LCR Security” means any commercial paper or security (other than equity securities issued to any Person that is a consolidated subsidiary of Smithfield under GAAP) within the meaning of Paragraph __.32(e)(viii) of the final rules titled Liquidity Coverage Ratio: Liquidity Risk Measurement Standards, 79 Fed. Reg. 197, 61440 et seq. (October 10, 2014).
“Legal Final Maturity Date” means the date occurring one-hundred and ten (110) calendar days after the Scheduled Termination Date.
“Lender” means each Conduit, each Committed Lender, each L/C Participant and each Letter of Credit Issuer.
“Lender Group” means, collectively, (A) with respect to any Conduit or Conduits, (i) such Conduit or Conduits, as the case may be, (ii) the Committed Lenders with respect to such Conduit or Conduits and (iii) the applicable Co-Agent for such Conduit or Conduits and, (B) with respect to any Unaffiliated Committed Lender, (i) such Unaffiliated Committed Lender and (ii) the applicable Co-Agent for such Unaffiliated Committed Lender.
“Lender Group Commitment” means, with respect to any Lender Group the amount set forth as the Lender Group Commitment for such Lender Group on Schedule A to this Agreement. The parties hereto acknowledge and agree that any such Lender Group Commitment may be less than the sum of the Commitments of the Lenders within the relevant Lender Group.
“Lender Group Exposure” means, with respect to any Lender Group, the sum of (a) the aggregate outstanding principal amount of all Loans held by the Lenders in such Lender Group, plus (b) the related L/C Participant’s Ratable LC Share of the Letter of Credit Liability.
“Lender Group Exposure Percentage” means, with respect to any Lender Group, a fraction, expressed as a percentage, (a) the numerator of which is such Lender Group’s Lender Group Exposure and (b) the denominator of which is the sum of (i) the Aggregate Principal plus (ii) the Letter of Credit Liability.
“Lender Supplement” means, with respect to any Lender, the information set forth in Schedule C to this Agreement in respect of such Lender, as it may be amended or otherwise modified from time to time by such Lender or the Lenders named therein.
5th A&R Credit and Security Agreement (Smithfield)
“Lending Office” means, as to the Administrative Agent or any Lender, the office or offices of such Person described as such in such ▇▇▇▇▇▇’s Administrative Questionnaire, or such other office or offices as such Person may from time to time notify the Borrower and the Administrative Agent.
“Letter of Credit” means either (a) a standby letter of credit issued in Dollars by a Letter of Credit Issuer pursuant to Section 1.7, or (b) an Existing Letter Credit, in each case, either as originally issued or as the same may, from time to time, be amended or otherwise modified or extended.
“Letter of Credit Application” has the meaning specified in Section 1.8(a).
“Letter of Credit Fees” has the meaning specified in Section 1.17.
“Letter of Credit Issuer” means each of (i) PNC in its capacity as issuer of Letters of Credit hereunder and (ii) Rabobank in its capacity as issuer of Letters of Credit hereunder.
“Letter of Credit Liability” means, at any time, the excess, if any, of (a) aggregate face amount of the outstanding Letters of Credit at such time over (b) the amount of any drawings made under such Letters of Credit.
“Liquidity Agreement” means the liquidity asset purchase agreement between the Conduit of any Lender Group and the Committed Lenders of such Lender Group.
“Liquidity Commitment” means, as to each Committed Lender in any Lender Group, its commitment to such Lender Group’s Conduit under the Liquidity Agreements, (which shall equal 102% of such Lender Group’s Percentage of the Aggregate Commitment hereunder).
“Liquidity Funding” means (a) a purchase made by any Committed Lender pursuant to its Liquidity Commitment of all or any portion of, or any undivided interest in, an applicable Conduit’s Loans, or (b) any Loan made by a Committed Lender.
“Loan” means any loan made by a Lender to Borrower pursuant to this Agreement (including, without limitation, any Liquidity Funding). Each Loan shall either be a CP Rate Loan, an Alternate Base Rate Loan, an Adjusted Federal Funds Rate Loan, a Daily 1M SOFR Loan or a Term SOFR Rate Loan, selected in accordance with the terms of this Agreement.
“Loan Parties” has the meaning provided in the preamble to this Agreement.
“Lock-Box” means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Schedule D hereto.
“Loss Reserve” means, for any Calculation Period, the product (expressed as a percentage) of (a) 2.00, times (b) the highest three-month rolling average Default Ratio during
5th A&R Credit and Security Agreement (Smithfield)
the 12 Calculation Periods ending on the immediately preceding Cut-Off Date, times (c) the Default Horizon Ratio as of the immediately preceding Cut-Off Date.
“Market Spread” means, on any date of determination, the positive difference between (i) the Federal Funds Rate on such date of determination, and (ii) the 1-month Term SOFR Rate effective as of 11:00 a.m. (New York City time) on such date of determination (and not as in effect two Business Days prior thereto), plus the SOFR Adjustment.
“Material Adverse Effect” means (i) any material adverse effect on the business, assets, operations, property or financial condition of the Performance Guarantor and its Non-Excluded Subsidiaries, taken as a whole, (ii) any material adverse effect on the abilities of the Loan Parties, taken as a whole, to perform their obligations under the Transaction Documents to which they are a party, (iii) any material adverse effect on the legality, validity or enforceability of the Agreement or any other Transaction Document, (iv) any material adverse effect on the Administrative Agent’s interest (on behalf of itself and the Secured Parties) in the Receivables generally or in any significant portion of the Receivables, the Related Security or Collections with respect thereto, (v) any material adverse effect on the collectability of the Receivables generally or of any material portion of the Receivables and (vi) material adverse effect on the rights of or benefits available to the Administrative Agent, the Letter of Credit Issuers, the Co-Agents or the Lenders.
“Material Subsidiary” has the meaning provided in the Parent Credit Agreement.
“Minimum Dilution Reserve Percentage” means, at any time, the product (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) of (a) the Adjusted Dilution Ratios for the most recent Calculation Period, multiplied by (b) the Dilution Horizon Ratio.
“Monetization Documents” means the Receivables Purchase Agreement, the Monetization Intercreditor Agreement and all other certificates, instruments, reports, notices, agreements and documents executed or delivered under or in connection with the Receivables Purchase Agreement, in each case the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Monetization Intercreditor Agreement” means the Intercreditor Agreement, dated as of December 22, 2022, by and among, inter alia, the Administrative Agent and the Receivables Agent.
“Monetized Receivable” has the meaning set forth in Section 1.1(d).
“Monetized Receivable Collections” means, with respect to any Monetized Receivable, all cash collections and other cash proceeds in respect of such Monetized Receivable, including all Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Monetized Assets; provided, however, that the term “Monetized Receivable Collections” shall not include any payment made for the account of the Servicer, a third-party
5th A&R Credit and Security Agreement (Smithfield)
service provider or sub-contractor whose services were not included in the amount invoiced for the applicable Monetized Receivable.
“Month” means, with respect to an Interest Period for Loans accruing Interest under the Term SOFR Rate Option, the interval between the days in consecutive calendar months numerically corresponding to the first day of such Interest Period. If any Interest Period for Loans accruing Interest under the Term SOFR Rate Option begins on a day of a calendar month for which there is no numerically corresponding day in the month in which such Interest Period is to end, the final Month of such Interest Period shall be deemed to end on the last Business Day of such final month.
“Monthly Report” means a report, in substantially the form of Exhibit VI-A hereto (appropriately completed), furnished by the Servicer to the Administrative Agent pursuant to Section 8.5.
“Monthly Reporting Date” means the second (2nd) Business Day preceding each Settlement Date.
“▇▇▇▇▇’▇” means ▇▇▇▇▇’▇ Investors Service, Inc. and any successors thereto.
“Multiemployer Plan” means a multiemployer benefit plan as defined in Section 4001(a)(3) of ERISA.
“Net Pool Balance” means, at any time, the aggregate Outstanding Balance of all Eligible Receivables at such time reduced by the sum of (i) the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Obligor Concentration Limit for such Obligor, (ii) the Foreign Receivable Excess, (iii) the Government Receivables Excess, (iv) the In-Transit Receivable Excess, (v) the Extended Payment Term Excess and (vi) the FX Excess.
“Non-Excluded Subsidiary” has the meaning provided in the Receivables Sale Agreement.
“Non-Material Subsidiary” means a Subsidiary that is not a Material Subsidiary.
“Notice Date” has the meaning specified in Section 1.8(b).
“Obligations” means, at any time, any and all obligations of either of the Loan Parties to any of the Secured Parties arising under or in connection with the Transaction Documents, whether now existing or hereafter arising, due or accrued, absolute or contingent, including, without limitation, obligations in respect of Aggregate Principal, CP Costs, Interest, fees under the Fee Letter, Agent Fee Letter, Broken Funding Costs and Indemnified Amounts.
“Obligor” has the meaning provided in the Receivables Sale Agreement.
“Obligor Concentration Limit” means, at any time, in relation to the aggregate Outstanding Balance of Receivables owed by any single Obligor and its Affiliates (if any), the
5th A&R Credit and Security Agreement (Smithfield)
applicable concentration limit set forth below for Obligors who have short term unsecured debt ratings currently assigned to them by S&P and Moody’s (or in the absence thereof, the long term unsecured senior debt ratings set forth below):
| Short Term Rating (S&P/▇▇▇▇▇’▇) | Long Term Rating (S&P/▇▇▇▇▇’▇) | Maximum Allowable % of Eligible Receivables | |||||||||
| A-1/P-1 or higher | AA- to A+/ Aa3 to A1 or higher | 20.00% | |||||||||
| A-2/P-2 | A to BBB / A2 to Baa2 | 15.00% | |||||||||
| A-3 / P-3 | BBB- / Baa3 | 10.00% | |||||||||
lower than A-3 / lower than P-3 (Non-Investment Grade) | BB+ or lower / Ba1 or lower (Non-Investment Grade) | 5.00% | |||||||||
; provided, however, that (a) if any Obligor has only received a short term rating or long term rating from one of S&P and ▇▇▇▇▇’▇, such short term rating or long term rating, as applicable, shall apply, (b) if any Obligor has a split short term rating by S&P and ▇▇▇▇▇’▇ or a split long term rating by S&P and ▇▇▇▇▇’▇, the applicable short term rating or long term rating, as applicable, will be the lower of the two, (c) if any Obligor is not rated by either S&P or ▇▇▇▇▇’▇, the applicable Obligor Concentration Limit shall be the one set forth in the last line of the table above, and (d) subject to satisfaction of the Rating Agency Condition, upon ▇▇▇▇▇▇▇▇’s request from time to time, the Agents may agree to a higher percentage of Eligible Receivables for a particular Obligor and its Affiliates (each such higher percentage, a “Special Concentration Limit”), it being understood that any Special Concentration Limit may be cancelled by any Agent on not less than two (2) Business Days’ written notice to the Loan Parties.
“Obligor Percentage” means, at any time, for each Obligor, a fraction, expressed as a percentage, (a) the numerator of which is the aggregate Outstanding Balance of the Eligible Receivables of such Obligor and its Affiliates less the amount (if any) by which the Outstanding Balance of all Eligible Receivables of such Obligor and its Affiliates exceeds the Obligor Concentration Limit for such Obligor and (b) the denominator of which is the aggregate Outstanding Balance of all Eligible Receivables at such time.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Original Agreement” has the meaning provided in the preamble to this Agreement.
“Originator” has the meaning provided in the Receivables Sale Agreement, and such term excludes, for the purposes of this Agreement, any Excluded Originator.
5th A&R Credit and Security Agreement (Smithfield)
“Outstanding Balance” of any Receivable at any time means the then outstanding principal balance thereof or, in the case of any Receivable described in clause (ii) of the definition of “Receivable” herein, the principal amount to become due and payable under the relevant Contract in respect of the relevant In-Transit Collateral.
“Overnight Bank Funding Rate” means for any day, the rate comprised of both overnight federal funds and overnight eurocurrency borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the Federal Reserve Bank of New York, as set forth on its public website from time to time, and as published on the next succeeding Business Day as the overnight bank funding rate by the Federal Reserve Bank of New York (or by such other recognized electronic source (such as Bloomberg) selected by the Administrative Agent for the purpose of displaying such rate); provided, that if such day is not a Business Day, the Overnight Bank Funding Rate for such day shall be such rate on the immediately preceding Business Day; provided, further, that if such rate shall at any time, for any reason, no longer exist, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error). If the Overnight Bank Funding Rate determined as above would be less than zero, then such rate shall be deemed to be zero. The rate of interest charged shall be adjusted as of each Business Day based on changes in the Overnight Bank Funding Rate without notice to the Borrower.
“Parent Credit Agreement” means that certain Second Amended and Restated Credit Agreement, dated as of May 21, 2021, by and among Smithfield, certain subsidiaries of Smithfield party thereto pursuant to Section 2.14 thereof, each lender from time to time party thereto, each joint lead arranger, joint bookrunner and documentation agent from time to time party thereto and Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, as in effect as of the date hereof notwithstanding anything to the contrary set forth in the rules of interpretation set forth in the Receivables Sale Agreement; provided, however, “Parent Credit Agreement” shall mean such agreement after giving effect to any amendment, restatement, waiver or other modification to which each Committed Lender or its Affiliate, in its capacity as a party to the Parent Credit Agreement, has given its consent; provided, further, that for purposes of Section 9.1(x), “Parent Credit Agreement” shall mean as amended, restated and modified so long as PNC and Rabobank (or their Affiliates) are lenders thereunder.
“Participant” has the meaning provided in Section 12.2.
“PASA” means the Packers and Stockyards Act of 1921, as amended.
“PASA Reserve Amount” means (a) prior to a Ratings Trigger Event, (i) 0.50 times (ii) the amount of all outstanding trade payables of Smithfield and its Subsidiaries, which are entitled to the benefits of the trust created under the Packers and Stockyards Act of 1921, as amended; or (b) after a Ratings Trigger Event, the amount of all outstanding trade payables of Smithfield and its Subsidiaries, which are entitled to the benefits of the trust created under the Packers and Stockyards Act of 1921, as amended.
5th A&R Credit and Security Agreement (Smithfield)
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
“Payment Account” means, with respect to each Co-Agent, the account designated by such Co-Agent for receipt of payments hereunder and identified on the Lender Supplement.
“PBGC” has the meaning provided in the Receivables Sale Agreement.
“Percentage” means for each Lender Group, the ratio (expressed as a percentage) of the aggregate Commitments of the Committed Lenders in such Lender Group to the Aggregate Commitment.
“Performance Guarantor” means Smithfield.
“Performance Undertaking” means that certain Seventh Amended and Restated Performance Undertaking, dated as of December 22, 2022, by Performance Guarantor in favor of Borrower, substantially in the form of Exhibit VII, as the same may be amended, restated or otherwise modified from time to time.
“Permitted Monetization Receivable” means any Receivable the Obligor of which is set forth on Schedule E attached hereto.
“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Tax Code or Section 302 of ERISA, and in respect of which any Loan Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4062 or Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“PNC” has the meaning provided in the preamble to this Agreement.
“PNC Lender Group” means the Lender Group with respect to which PNC is the Co-Agent.
“Pool Report” means each Monthly Report and each Weekly Report, as applicable, required to be delivered pursuant to Section 8.5.
“Pooled Commercial Paper” means, for each of the Pool Funded Conduits, the Commercial Paper of such Pool Funded Conduit subject to any particular pooling arrangement by such Conduit, but excluding Related Commercial Paper issued by any Pool Funded Conduit for a tenor and in an amount specifically requested by any Person with any agreement effected by such Pool Funded Conduit.
5th A&R Credit and Security Agreement (Smithfield)
“Pool Funded Conduits” means, at any time, the Conduits that have notified the Loan Parties that they will be pool-funding their Loans.
“Post-Closing Date” means the date occurring ninety (90) days following the Closing Date (or such later date (if any) consented to in writing by the Administrative Agent in its sole discretion).
“Prime Rate” means the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime commercial lending rate or base rate in effect at its principal office for loans in the United States of America, with each change in the Prime Rate being effective on the date such change is publicly announced as effective (it being understood and agreed that the Prime Rate is a reference rate used by the Administrative Agent in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit by the Administrative Agent to any debtor).
“Prohibited Transaction” has the meaning assigned to such term in Section 406 of ERISA and Section 4975(f)(3) of the Tax Code.
“Pro Rata Share” means, with respect to each Lender Group on any date of determination, the ratio which the Liquidity Commitment of a Committed Lender in such Lender Group bears to the sum of the Liquidity Commitments of all Committed Lenders in such Lender Group.
“Proposed Reduction Date” has the meaning provided in Section 1.3.
“Purchasing Lender” has the meaning provided in Section 12.1(b).
“Rabobank” has the meaning provided in the preamble to this Agreement.
“Raboank Lender Group” means the Lender Group with respect to which Rabobank is the Co-Agent.
“Ratable LC Share” means, as to any L/C Participant, a fraction, the numerator of which equals the Commitment of such L/C Participant at such time and the denominator of which equals the aggregate of the Commitments of all L/C Participants at such time.
“Rating Agency Condition” means, if applicable, that a Conduit has received written notice from S&P or ▇▇▇▇▇’▇ or any other rating agency then rating such Conduit’s Commercial Paper that the execution and delivery of, or an amendment, a change or a waiver of, this Agreement or the Receivables Sale Agreement will not result in a withdrawal or downgrade of the then current ratings on such Conduit’s Commercial Paper or, if applicable, the conditions required for post-closing review as described in a letter or letters from S&P or ▇▇▇▇▇’▇ or such other rating agency.
“Ratings Trigger Event” means, as of any date of determination, the lowering with regard to the Performance Guarantor of (i) S&P’s Corporate Credit Rating to below BB-, or (ii) ▇▇▇▇▇’▇ Long Term Corporate Family Rating to below Ba3.
5th A&R Credit and Security Agreement (Smithfield)
“Receivable” has the meaning provided in the Receivables Sale Agreement, and such term excludes, for the purposes of this Agreement, any Excluded Receivable and any Monetized Receivable.
“Receivables Agent” means PNC, in its capacity as administrative agent under the Receivables Purchase Agreement.
“Receivables Buyer” means each buyer under the Receivables Purchase Agreement.
“Receivables Purchase Agreement” means the Receivables Purchase Agreement, dated as of December 22, 2022, by and among the Borrower, as seller, the Servicer, the Receivables Buyers and the Receivables Agent.
“Receivables Sale Agreement” means that certain Fifth Amended and Restated Receivables Sale Agreement, dated as of the date hereof, among Smithfield, SFFC, the Originators and the Borrower, as the same may be amended, restated or otherwise modified from time to time.
“Records” has the meaning provided in the Receivables Sale Agreement.
“Reduction Notice” has the meaning provided in Section 1.3.
“Register” has the meaning provided in Section 12.3.
“Regulatory Change” means any change after the date of this Agreement in United States (federal, state or municipal) or foreign laws, regulations (including Regulation D) or accounting principles or the adoption or making after such date of any interpretations, directives or requests of or under any United States (federal, state or municipal) or foreign laws, regulations (whether or not having the force of law) or accounting principles by any court, governmental or monetary authority, or accounting board or authority (whether or not part of government) charged with the establishment, interpretation or administration thereof. For the avoidance of doubt, any change in accounting standards or the issuance of any other pronouncement, release or interpretation (or revisions to the foregoing) that causes or requires the consolidation of all or a portion of the assets and liabilities of a Conduit or Borrower with the assets and liabilities of any Agent, any Committed Lender or any other Affected Entity shall constitute a Regulatory Change.
“Reimbursement Obligation” has the meaning specified in Section 1.10(b).
“Related Commercial Paper” means, for any period with respect to either Conduit, any Commercial Paper of such Conduit issued or deemed issued for purposes of financing or maintaining any Loan by such Conduit (including any discount, yield, or interest thereon) outstanding on any day during such period.
“Related Monetized Assets” means with respect to any Monetized Receivables, (i) all Related Security with respect to such Monetized Receivable, (ii) all Monetized Receivable
5th A&R Credit and Security Agreement (Smithfield)
Collections relating thereto and (iii) all proceeds of, and all amounts received or receivable under any or all of, the foregoing.
“Related Security” means, with respect to any Receivable:
(i) all of ▇▇▇▇▇▇▇▇’s interest in the Related Security (under and as defined in the Receivables Sale Agreement),
(ii) all of ▇▇▇▇▇▇▇▇’s right, title and interest in, to and under the Receivables Sale Agreement in respect of such Receivable,
(iii) all of ▇▇▇▇▇▇▇▇’s right, title and interest in, to and under the Performance Undertaking,
(iv) all rights, remedies, powers, privileges, title and interest (but not obligations) in and to each Lock-Box and Collection Account (other than any FX Collection Account), into which any Collections or other proceeds with respect to such Receivable may be deposited, and any related investment property acquired with any such Collections or other proceeds (as such term is defined in the applicable UCC), and
(v) all proceeds of any of the foregoing.
“Reorganization” means, with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.
“Reportable Compliance Event” means that: (a) any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint, or similar charging instrument, arraigned, custodially detained, penalized or the subject of an assessment for a penalty, or enters into a settlement with a Governmental Authority in connection with any economic sanctions or other Anti-Terrorism Law or Anti-Corruption Law, or any predicate crime to any Anti-Terrorism Law or Anti-Corruption Law, or has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of its operations represents a material violation of any Anti-Terrorism Law or Anti-Corruption Law; (b) any Covered Entity engages in a transaction that has caused or may cause any Agent, Conduit or Committed Lender to be in violation of any Anti-Terrorism Laws, including a Covered Entity’s use of any proceeds of the facilities provided hereunder to fund any operations in, finance any investments or activities in, or, make any payments to, directly or indirectly, a Sanctioned Person or Sanctioned Jurisdiction in violation of Anti-Terrorism Laws; (c) any Collateral becomes Embargoed Property; or (d) any Covered Entity otherwise violates, or reasonably believes that it will violate, any of the representations, warranties or covenants set forth in Section 5.1(x), 7.1(n) or 7.2(k) of this Agreement.
“Reportable Event” means any "reportable event," as defined in Section 4043 of ERISA or the regulations issued thereunder, other than those events as to which the 30-day notice period referred to in Section 4043(c) of ERISA has been waived, with respect to a Plan (other than a
5th A&R Credit and Security Agreement (Smithfield)
Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Tax Code).
“Required Committed Lenders” means Committed Lenders holding in the aggregate more than fifty percent (50%) of the Aggregate Commitment; provided, that at any time when there are two or fewer Committed Lenders, “Required Committed Lenders” shall mean all of the Committed Lenders.
“Required Data” means ongoing information regarding the Collateral required to be provided by the Borrower or the Servicer to the Administrative Agent at the request of the Administrative Agent, including in connection with any Lender’s regulatory capital requirements.
“Required Reserve” means, on any day during a Calculation Period, the sum of:
(a) the product of (i) the Accrual Adjusted Net Pool Balance on such day, multiplied by (ii) the sum of (x) the Interest and Servicing Reserve, plus (y) the greater of (A) the sum of (I) the Loss Reserve, plus (II) the Dilution Reserve and (B) the sum of the Concentration Reserve Percentage and the Minimum Dilution Reserve Percentage, plus
(b) the PASA Reserve, plus
(c) the ARM Dilution Reserve.
“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of capital stock of Borrower now or hereafter outstanding, except a dividend payable solely in shares of that class of stock or in any junior class of stock of Borrower, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of Borrower now or hereafter outstanding, (iii) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to the Subordinated Loans (as defined in the Receivables Sale Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of Borrower now or hereafter outstanding, and (v) any payment of management fees by Borrower (except for reasonable management fees to any Originator or its Affiliates in reimbursement of actual management services performed).
“Restructuring Transactions” has the meaning provided in the Receivables Sale Agreement.
“S&P” means S&P Global Ratings and any successor thereto.
“Sanctioned Jurisdiction” means any country, territory, or region that is the subject of comprehensive country- or territory-wide sanctions administered by OFAC.
5th A&R Credit and Security Agreement (Smithfield)
“Sanctioned Person” means (a) a Person that is the subject of sanctions administered by OFAC or the U.S. Department of State (“State”), including by virtue of being (i) named on OFAC’s list of “Specially Designated Nationals and Blocked Persons”; (ii) organized under the Laws of, ordinarily resident in, or physically located in a Sanctioned Jurisdiction; (iii) owned or controlled 50% or more in the aggregate, by one or more Persons that are the subject of sanctions administered by OFAC; (b) a Person that is the subject of sanctions maintained by the European Union (“E.U.”), including by virtue of being named on the E.U.’s “Consolidated list of persons, groups and entities subject to E.U. financial sanctions” or other, similar lists; (c) a Person that is the subject of sanctions maintained by the United Kingdom (“U.K.”), including by virtue of being named on the “Consolidated List Of Financial Sanctions Targets in the U.K.” or other, similar lists; or (d) a Person that is the subject of sanctions imposed by any Governmental Authority of a jurisdiction whose Laws apply to this Agreement.
“Scheduled Termination Date” means December 22, 2025.
“Secured Parties” means the Indemnified Parties.
“Servicer” means at any time the Person domiciled in the United States (which may be the Administrative Agent) then authorized pursuant to Article VIII to service, administer and collect Receivables.
“Servicing Fee” means, for each day in a Calculation Period:
(a) an amount equal to (i) the Servicing Fee Rate (or, at any time while Smithfield or one of its Affiliates is the Servicer, such lesser percentage as may be agreed between Borrower and the Servicer on an arms’ length basis based on then prevailing market terms for similar services), times (ii) the Outstanding Balance of all Receivables at the close of business on the Cut-Off Date immediately preceding such Calculation Period, times (iii) 1/360; or
(b) on and after the Servicer’s reasonable request made at any time when Smithfield or one of its Affiliates is no longer acting as Servicer hereunder, an alternative amount specified by the successor Servicer not exceeding (i) 110% of such Servicer’s reasonable costs and expenses of performing its obligations under this Agreement during the preceding Calculation Period, divided by (ii) the number of days in the current Calculation Period.
“Servicing Fee Rate” means 1.0% per annum.
“Settlement Date” means the 25th day of each month (or if any such day is not a Business Day, the next succeeding Business Day thereafter).
“Settlement Period” means the immediately preceding Calculation Period (or portion thereof).
“SFFC” means SFFC, Inc., a Delaware corporation.
“Smithfield” has the meaning provided in the preamble to this Agreement.
5th A&R Credit and Security Agreement (Smithfield)
“Smithfield Support” has the meaning provided in the Receivables Sale Agreement.
“SOFR” means, for any day, a rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Adjustment” means 0.10%.
“SOFR Floor” means a rate of interest per annum equal to 0.00%.
“SOFR Reserve Percentage” means, for any day, the maximum effective percentage in effect on such day, if any, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to SOFR funding.
“Specified Days’ Sales Outstanding” means, as of any day, an amount equal to the sum of (I) the product of (x) 91, times (y) the amount obtained by dividing (i) the aggregate Outstanding Balance of Receivables as of the most recent Cut-Off Date, by (ii) the aggregate amount of Receivables created during the three (3) Calculation Periods including and immediately preceding such Cut-Off Date, times (z) 0.85, and (II) the product of (x) 120, times (y) the amount obtained by dividing (i) the aggregate Outstanding Balance of Receivables as of the most recent Cut-Off Date, by (ii) the aggregate amount of Receivables created during the three(3) Calculation Periods including and immediately preceding such Cut-Off Date, times (z) 0.15.
“Structuring Agent” means PNC Capital Markets LLC, a Pennsylvania limited liability company.
“Subordinated Lender” has the meaning provided in the Receivables Sale Agreement.
“Subordinated Loan” has the meaning provided in the Receivables Sale Agreement.
“Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited liability company, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.
“Tax Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time.
“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
5th A&R Credit and Security Agreement (Smithfield)
“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term SOFR Rate” means, with respect to any amount for which the Term SOFR Reference Rate applies, for any day in any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, at the Administrative Agent’s discretion, to the nearest 1/100th of 1%) (A) the Term SOFR Reference Rate for a term equal to such Interest Period on the day (the “Term SOFR Determination Date”) that is two (2) Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator, by (B) a number equal to 1.00 minus the SOFR Reserve Percentage. If the Term SOFR Reference Rate for the applicable tenor has not been published or replaced with a Benchmark Replacement by 5:00 p.m. (Pittsburgh, Pennsylvania time) on the Term SOFR Determination Date, then the Term SOFR Reference Rate, for purposes of clause (A) in the preceding sentence, shall be the Term SOFR Reference Rate for such tenor on the first Business Day preceding such Term SOFR Determination Date for which such Term SOFR Reference Rate for such tenor was published in accordance herewith, so long as such first preceding Business Day is not more than three (3) Business Days prior to such Term SOFR Determination Date. If the Term SOFR Rate, determined as provided above, would be less than the SOFR Floor, then the Term SOFR Rate shall be deemed to be the SOFR Floor.
“Term SOFR Rate Loan” means a Loan which bears interest at the Term SOFR Rate.
“Term SOFR Rate Option” means the option of the Borrower to have Loans bear Interest at a rate per annum equal to the Term SOFR Rate as determined for each applicable Interest Period.
“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.
“Termination Date” has the meaning provided in the Receivables Sale Agreement.
“Transaction Documents” means, collectively, this Agreement, each Borrowing Notice, the Receivables Sale Agreement, the Monetization Intercreditor Agreement, each Collection Account Agreement, the Performance Undertaking, any Letter of Credit, the Fee Letter, the Agent Fee Letter, each Subordinated Note (as defined in the Receivables Sale Agreement) and all other instruments, documents and agreements executed and delivered in connection herewith.
“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.
“Unaffiliated Committed Lender” means each Committed Lender that is not related to a Conduit.
“Unmatured Event of Default” means an event which, with the passage of time or the giving of notice, or both, would constitute an Event of Default.
5th A&R Credit and Security Agreement (Smithfield)
“U.S. Government Securities Business Day” means any day except for (a) a Saturday or Sunday or (b) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Volume Rebate” means, with respect to any Receivable, any terms discount, indirect rebate, direct rebate (net of any direct rebate recovery), promotional program or similar arrangement that reduces the Outstanding Balance of any Receivable. For the avoidance of doubt, to the extent the Borrower has, or will be deemed to have, received a Collection of such Receivable under Section 1.4(c) and the Outstanding Balance has been reduced by the amount of such Collection, such amount shall no longer constitute a Volume Rebate.
“Volume Rebate Accrual Amount” means, on any date of determination, the aggregate amount of all Volume Rebates that have accrued as of or on such date of determination.
“Weekly Report” means a report, in substantially the form of Exhibit VI-B hereto (appropriately completed), furnished by the Servicer to the Administrative Agent pursuant to Section 8.5.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
“Yen” and the sign “¥” means the lawful currency of Japan.
“Yield” means, the amounts described in Section 2.1.
All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.
5th A&R Credit and Security Agreement (Smithfield)