EXHIBIT 10.2
------------
================================================================================
FORM OF
RECEIVABLES SALE AGREEMENT
DATED AS OF AUGUST 16, 2002
BETWEEN
BOSTON SCIENTIFIC CORPORATION AND EACH OF ITS DIRECT OR INDIRECT
WHOLLY-OWNED SUBSIDIARIES THAT HEREAFTER BECOMES A SELLER
HEREUNDER,
as the Sellers,
AND
BOSTON SCIENTIFIC FUNDING CORPORATION,
as the Buyer
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I. CAPITALIZATION OF THE BUYER AND AMOUNTS AND TERMS
OF THE PURCHASES....................................................2
SECTION 1.1 CAPITALIZATION OF THE BUYER............................2
SECTION 1.2 PURCHASES OF RECEIVABLES...............................2
SECTION 1.3 PAYMENT FOR THE PURCHASES..............................3
SECTION 1.4 PURCHASE PRICE CREDIT ADJUSTMENTS......................4
SECTION 1.5 PAYMENTS AND COMPUTATIONS, ETC.........................5
SECTION 1.6 TRANSFER OF RECORDS....................................5
SECTION 1.7 CHARACTERIZATION; GRANTING CLAUSE......................6
ARTICLE II. REPRESENTATIONS AND WARRANTIES.....................................6
SECTION 2.1 REPRESENTATIONS OF THE SELLERS.........................6
(A) FINANCIAL CONDITION..............................................6
(B) NO CHANGE........................................................7
(C) OWNERSHIP OF SUCH SELLER.........................................7
(D) CORPORATE EXISTENCE; COMPLIANCE WITH LAW.........................7
(E) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS..........7
(F) NO LEGAL BAR.....................................................8
(G) NO MATERIAL LITIGATION...........................................8
(H) NO DEFAULT.......................................................8
(I) INTENTIONALLY OMITTED............................................8
(J) TAXES............................................................8
(K) FEDERAL REGULATIONS..............................................9
(L) ERISA............................................................9
(M) INVESTMENT COMPANY ACT; OTHER REGULATIONS........................9
(N) DISCLOSURE.......................................................9
(O) VALID AND PERFECTED SECURITY INTEREST...........................10
(P) NATURE OF RECEIVABLES...........................................10
(Q) TITLE TO RECEIVABLES AND QUALITY OF TITLE.......................10
(R) OFFICES.........................................................11
(S) COLLECTION ACCOUNTS.............................................11
(T) ELIGIBLE RECEIVABLES............................................11
(U) NAMES...........................................................11
(V) CREDIT AND COLLECTION POLICY....................................11
(W) PAYMENTS TO SELLERS.............................................12
(X) RELIANCE ON SEPARATE LEGAL IDENTITY.............................12
ARTICLE III. CONDITIONS OF PURCHASES..........................................12
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE..............12
SECTION 3.2 CONDITIONS PRECEDENT TO ALL PURCHASES (INCLUDING
THE PURCHASE FROM EACH SELLER ON ITS APPLICABLE
CLOSING DATE).......................................13
SECTION 3.3 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES.......14
ARTICLE IV. COVENANTS.........................................................14
SECTION 4.1 AFFIRMATIVE COVENANTS.................................14
(A) CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE................14
(B) AUDITS..........................................................14
(C) KEEPING OF RECORDS AND BOOKS OF ACCOUNT.........................15
(D) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS.......15
(E) LOCATION OF RECORDS.............................................15
(F) CREDIT AND COLLECTION POLICIES..................................16
i
(G) SEPARATE CORPORATE EXISTENCE OF THE BUYER.......................16
(H) COLLECTIONS.....................................................16
(I) FURTHER ASSURANCES..............................................16
SECTION 4.2 REPORTING REQUIREMENTS................................16
(A) FINANCIAL STATEMENTS............................................16
(B) CERTIFICATES; OTHER INFORMATION.................................17
(C) PROCEEDINGS.....................................................17
(D) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY..............18
(E) SALE TERMINATION DATE...........................................18
(F) OTHER...........................................................18
(G) TAXES...........................................................18
SECTION 4.3 NEGATIVE COVENANTS....................................18
(A) SALES, LIENS, ETC...............................................18
(B) EXTENSION OR AMENDMENT OF RECEIVABLES...........................19
(C) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY..............19
(D) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS......................19
(E) DEPOSITS TO COLLECTION ACCOUNTS.................................19
(F) CHANGES TO OTHER DOCUMENTS......................................19
(G) NAME CHANGE, OFFICES, RECORDS AND BOOKS OF ACCOUNTS.............19
(H) MERGERS, CONSOLIDATIONS AND ACQUISITIONS........................20
(I) DISPOSITION OF RECEIVABLES AND RELATED SECURITY.................21
(J) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES.............21
(K) ACCOUNTING FOR PURCHASES........................................21
ARTICLE V. JOINDER OF ADDITIONAL SELLERS......................................21
SECTION 5.1 ADDITION OF NEW SELLERS...............................21
SECTION 5.2 DOCUMENTATION.........................................21
ARTICLE VI. ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES...22
SECTION 6.1 RIGHTS OF THE BUYER...................................22
SECTION 6.2 RESPONSIBILITIES OF THE SELLERS.......................22
(A) COLLECTION PROCEDURES...........................................22
(B) SERVICING.......................................................22
(C) POWER OF ATTORNEY...............................................22
(D) PERFORMANCE UNDER CONTRACTS.....................................23
SECTION 6.3 FURTHER ACTION EVIDENCING PURCHASES...................23
SECTION 6.4 APPLICATION OF COLLECTIONS............................23
ARTICLE VII. INDEMNIFICATION..................................................24
SECTION 7.1 INDEMNITIES BY THE SELLERS............................24
SECTION 7.2 CONTRIBUTION..........................................26
ARTICLE VIII. MISCELLANEOUS...................................................26
SECTION 8.1 WAIVERS AND AMENDMENTS................................26
SECTION 8.2 NOTICES, ETC..........................................26
SECTION 8.3 CUMULATIVE REMEDIES...................................27
SECTION 8.4 BINDING EFFECT; ASSIGNABILITY.........................27
SECTION 8.5 GOVERNING LAW.........................................27
SECTION 8.6 COSTS, EXPENSES AND TAXES.............................28
SECTION 8.7 SUBMISSION TO JURISDICTION............................28
SECTION 8.8 WAIVER OF JURY TRIAL..................................29
SECTION 8.9 CAPTIONS AND CROSS REFERENCES;
INCORPORATION BY REFERENCE..........................29
SECTION 8.10 EXECUTION IN COUNTERPARTS.............................29
SECTION 8.11 ACKNOWLEDGMENT AND AGREEMENT..........................29
SECTION 8.12 NO PROCEEDINGS........................................29
SECTION 8.13 CONFIDENTIALITY.......................................29
ii
SECTION 8.14 LOANS BY BUYER TO ORIGINATOR..........................30
SECTION 8.15 NO RECOURSE AGAINST OTHER PARTIES.....................30
ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A - DEFINITIONS.........................................................32
EXHIBIT A - FORM OF PURCHASE REPORT...........................................39
EXHIBIT B - FORM OF SUBORDINATED NOTE.........................................41
EXHIBIT C - CREDIT AND COLLECTION POLICIES....................................48
EXHIBIT D - FORM OF JOINDER AGREEMENT.........................................49
SCHEDULE 2.1(R) - ORGANIZATIONAL ID NUMBERS; JURISIDICTIONS OF
ORGANIZATION; CHIEF EXECUTIVE OFFICE ADDRESSES; LOCATION(S) WHERE
RECORDS ARE KEPT...........................................................51
iii
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT (as amended, supplemented,
restated or otherwise modified from time to time,
this "Agreement"), dated as of August 16, 2002, is entered into by and between:
(1) Boston Scientific Corporation, a Delaware corporation
("BSX"), and each of the direct or indirect, wholly-owned domestic
subsidiaries of BSX that hereafter becomes a party hereto by
executing a joinder agreement in the form of Exhibit D hereto (each,
a "Joinder Agreement"), as sellers (each, a "Seller" and
collectively, the "Sellers"), and
(2) Boston Scientific Funding Corporation, a Delaware
corporation, as purchaser (the "Buyer").
Unless otherwise indicated, capitalized terms used in this Agreement are defined
in ANNEX A hereto or, if not defined therein, in that certain Credit and
Security Agreement dated as of August 16, 2002, by and among the Buyer, as
"Borrower," BSX, as "Initial Servicer," Blue Ridge Asset Funding Corporation,
Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi Ltd., New York
Branch, individually and as "Victory Agent," and Wachovia Bank, National
Association, individually, as "Blue Ridge Agent" and as "Administrative Agent"
(as amended, supplemented, restated, joined or otherwise modified from time to
time in accordance with the terms thereof, the "Credit and Security Agreement").
In addition ANNEX A sets forth certain rules of interpretation that are
applicable to this Agreement and the other Transaction Documents.
W I T N E S S E T H :
WHEREAS, BSX owns, directly or indirectly all of the issued
and outstanding Equity Interests of each of the other Sellers (if
any);
WHEREAS, the Buyer is a limited purpose corporation, all of
the issued and outstanding Equity Interests of which are owned by
BSX;
WHEREAS, BSX desires to contribute to the Buyer's capital
all of its Receivables in existence as of the Initial Cut-Off Date,
together with all Related Security associated therewith;
WHEREAS, the Sellers desire to sell Receivables and Related
Security owned from time to time by the Sellers to the Buyer, and the
Buyer is willing, on the terms and subject to the conditions set
forth herein, to purchase Receivables and Related Security from the
Sellers;
WHEREAS, the Buyer intends to pledge the Receivables and
Related Security received from the Sellers hereunder to secure
Obligations under the Credit and Security Agreement, including,
without limitation, its obligations to repay Loans made thereunder;
and
WHEREAS, at the request of the Buyer and its assigns, BSX
has agreed to continue to act as Servicer for the Receivables;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
CAPITALIZATION OF THE BUYER AND AMOUNTS
AND TERMS OF THE PURCHASES
Section 1.1 CAPITALIZATION OF THE BUYER. Effective on the Initial
Closing Date, BSX does hereby contribute to the Buyer's capital, in exchange for
all of the Buyer's Equity Interests all of BSX's Receivables existing as of the
Initial Cutoff Date and all Related Security and proceeds with respect thereto
(such Receivables, the "Initial Contributed Receivables").
Section 1.2 Purchases of Receivables.
(a).......Effective on the Applicable Closing Date for each
Seller, in consideration for the Purchase Price and upon the terms and subject
to the conditions set forth herein, each such Seller does hereby sell to the
Buyer, without recourse (except to the extent expressly provided herein), and
the Buyer does hereby purchase from such Seller, all of such Seller's right,
title and interest in and to such Seller's Receivables, the Related Security and
all proceeds received subsequent to the Seller's Applicable Cut-Off Date of the
foregoing (other than any such assets contributed to Buyer pursuant to Section
1.1 above), in each case, whether now existing or hereafter arising or acquired.
(b).......Each Seller's Receivables existing as of such
Seller's Applicable Cut-Off Date are hereby sold or
contributed, as applicable, to Buyer on such Seller's Applicable Closing Date.
Each of such Seller's Receivables arising after such Seller's Applicable Cut-Off
Date and on or prior to its Sale Termination Date shall be deemed to have been
sold to Buyer immediately (and without further action by any Person) upon the
creation of such Receivable. The Related Security with respect to each
Receivable (and proceeds of such Receivable and Related Security) shall be sold
at the same time as such Receivable together with all related proceeds received
on or after the Seller's Applicable Cut-Off Date.
(c).......It is the intention of the parties hereto that
each conveyance of Receivables made under this
Agreement shall constitute an outright "sale of accounts" (as such terms are
used in Article 9 of the UCC) or other absolute transfer, which is absolute and
irrevocable and shall provide the Buyer with the full benefits of ownership of
the Receivables and the associated Related Security. Except for the Purchase
Price Credits owed pursuant to Section 1.4, each conveyance of Receivables
hereunder is made without recourse to the applicable Seller; provided, however,
that (i) each Seller will be liable to the Buyer for all representations,
warranties, covenants and indemnities made by such Seller pursuant to the terms
of the Transaction Documents to which such Seller is a party, and (ii) such
conveyance does not constitute and is not intended to result in an assumption by
the Buyer or any assignee thereof of any obligation of such Seller or any other
Person arising in connection with the Receivables, the
2
related Contracts and/or other Related Security or any other obligations of such
Seller. In view of the intention of the parties hereto that the conveyances of
Receivables made hereunder shall constitute outright sales of such Receivables
rather than loans secured thereby, each Seller agrees that it will, on or prior
to its Applicable Closing Date, mark its summary aged trial balance reports with
the legend required by Section 3.1(i) hereof.
(d).......Nothing herein shall be deemed to preclude BSX
from contributing to the Buyer's capital, in lieu of
selling, Receivables originated by BSX in addition to the Initial Contributed
Receivables together with the Related Security associated therewith, and any
such contribution is made with the intention that each such contribution, if
any, will be made with the same intentions as are set forth in Section 1.2(c)
above. No Purchase Price shall be payable in respect of any contributed
Receivable or its associated Related Security.
Section 1.3 Payment for the Purchases.
(a).......The Purchase Price for each purchase of
Receivables (other than Initial Contributed Receivables) and Related Security
from any Seller will be payable in full by the Buyer to such Seller on its date
of sale or deemed sale in accordance with Section 1.2(b) (except that the Buyer
may, with respect to any such purchase, offset against such Purchase Price any
amounts due and owing from such Seller to the Buyer hereunder), and shall be
paid to such Seller in one or both of the following manners:
(i) by delivery of immediately available funds, to the
extent of the Buyer's Available Funds; and
(ii) solely to the extent such Available Funds are
insufficient to pay the full amount of Purchase Price then due and
owing, by delivery of a Subordinated Note made by the Buyer to the
applicable Seller (and making a notation of a Subordinated Loan
thereunder), so long as the aggregate principal amount of
Subordinated Loans outstanding at any one time under such
Subordinated Notes does not exceed the lesser of (A) the aggregate
remaining unpaid portion of such Purchase Price, and (B) the maximum
Subordinated Loan that could be borrowed without rendering the
Buyer's Net Worth less than the Required Capital Amount.
(b).......Subject to the limitations set forth in Section
1.3(a)(ii), each of the Sellers irrevocably agrees
to advance each Subordinated Loan requested by the Buyer on or prior to such
Seller's Sale Termination Date. The Subordinated Loans owing to each Seller will
be evidenced by, and shall be payable in accordance with the terms and
provisions, of its Subordinated Note and shall be payable solely from Available
Funds at the time of each such payment. Each Seller is hereby authorized by the
Buyer to endorse on the schedule attached to its Subordinated Note an
appropriate notation evidencing the date and amount of each Subordinated Loan
thereunder, as well as the date of each payment with respect thereto, provided
that the failure to make such notation shall not affect any obligation of the
Buyer thereunder.
(c).......On each Monthly Reporting Date after its
Applicable Closing Date, each Seller will (or shall require
the Servicer to) deliver to the Buyer and the Agents a report in substantially
the form of Exhibit A hereto (each such report being herein called a "Purchase
3
Report") with respect to the Receivables sold by such Seller to the Buyer during
the Settlement Period then most recently ended. Each such Purchase Report shall
list the applicable Seller separately and shall specify, as applicable: (i) the
Receivables sold by such Seller during the Settlement Period then most recently
ended, and (ii) the amount of the Receivables described in the foregoing clause
(i) that were Eligible Receivables on the date they were acquired by the Buyer.
(d).......Although the Purchase Price for each purchase of
Receivables and Related Security shall be due and
payable in full by the Buyer to the applicable Seller on the date of such
purchase, settlement of the Purchase Price between the Buyer and such Seller
will be effected on Settlement Dates with respect to all purchases within the
same Settlement Period and based on the information contained in the Purchase
Report delivered for such Settlement Period pursuant to Section 1.3(c). Although
cash settlements shall be effected on Settlement Dates, increases or decreases
in the Subordinated Loans shall be deemed to have occurred and shall be
effective as of the last Business Day of the Settlement Period to which such
settlement relates.
Section 1.4 Purchase Price Credit Adjustments. If on any day:
(a).......the aggregate Outstanding Balance of the
Receivables originated by any Seller as reflected in the preceding Purchase
Report (net of any positive adjustments) has been reduced or canceled for any of
the following reasons:
(i) as a result of any rejected, defective or returned
services or merchandise, any cash discount or any other adjustment by
the applicable Seller or any Affiliate thereof (regardless of whether
the same is treated by such Seller or Affiliate as a write-off), or
as a result of any surcharge or other governmental or regulatory
action, or
(ii) as a result of any setoff or breach of the underlying
agreement in respect of any claim by the Obligor thereof against the
applicable Seller, Buyer or any Affiliate of the foregoing (whether
such claim arises out of the same or a related or an unrelated
transaction), or
(iii) on account of the obligation of the applicable Seller
or any Affiliate thereof to pay to the related Obligor any rebate or
refund, or
(iv) as a result of any Outstanding Balance of any
Receivable on the date of its sale or contribution proving to have
been less on such date than the amount reflected on the applicable
Purchase Report, or
(b).......any of the representations or warranties of the
applicable Seller set forth in Section 2.1(a), (k) or (s) was not true when made
with respect to any Receivable originated by it, or any of the representations
or warranties of the applicable Seller set forth in Section 2.1(t) is no longer
true with respect to any Receivable originated by it,
then, in such event, the Buyer shall be entitled to a credit (each, a "Purchase
Price Credit") against the Purchase Price otherwise payable hereunder equal to
(A) the amount of such reduction, cancellation or overstatement, in the case of
the preceding clauses (a)(i), (a)(ii), (a)(iii)
4
and (a)(iv), and (B) in the full amount of the Outstanding Balance of such
Receivable in the case of the preceding clause (b). If such Purchase Price
Credit exceeds the original Outstanding Balance of the Receivables to be sold by
the applicable Seller on the date of a purchase, then the applicable Seller will
pay to the Buyer the remaining amount of such Purchase Price Credit in cash not
later than the next Business Day; provided that if such Seller's Sale
Termination Date has not occurred, such Seller will be allowed to deduct the
remaining amount of such Purchase Price Credit from any Indebtedness owed to it
under its Subordinated Note.
Section 1.5 Payments and Computations, Etc. All amounts to be paid or
deposited by the Buyer hereunder shall be paid or deposited in accordance with
the terms hereof on the day when due in immediately available funds to the
account of the applicable Seller designated from time to time by such Seller or
as otherwise directed by such Seller. In the event that any payment owed by any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand,
interest on the past due amount at the Default Rate until paid in full;
provided, however, that such interest shall not at any time exceed the maximum
rate permitted by applicable law. All computations of interest payable hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.
Section 1.6 Transfer of Records.
(a).......In connection with the purchases of Receivables
hereunder, each Seller hereby sells, transfers, assigns and otherwise conveys to
the Buyer all of such Seller's right and title to and interest in the Records
relating to all Receivables sold hereunder, without the need for any further
documentation in connection with any purchase. In connection with such transfer,
each Seller hereby agrees that following any replacement of BSX (or one of its
Affiliates) as the Servicer, it will promptly grant access to Administrative
Agent or to the new Servicer, as the case may be, to all data embedded in or
created by all software used by such Seller to account for its Receivables,
including, without limitation, any print outs of such data,.
(b).......In addition to the requirements of Section 6.3,
each Seller (i) shall take such action requested by
the Buyer and/or any of the Agents, from time to time hereafter, that may be
necessary or reasonably appropriate to ensure that the Buyer has an enforceable
ownership interest in the Records relating to the Receivables purchased from
such Seller hereunder, and (ii) shall use its reasonable efforts to ensure that
the Buyer and the Servicer each has an enforceable right (whether by license or
sublicense or otherwise) to use all of the computer software used to account for
the Receivables and/or to recreate such Records.
Section 1.7 Characterization; Granting Clause.
(a).......If, notwithstanding the intention of the parties
expressed in Section 1.2(c), any sale by any of the Sellers to the Buyer of
Receivables hereunder shall be characterized as a secured loan and not a sale,
then this Agreement shall be deemed to constitute a security agreement under the
UCC and other applicable law. For this purpose and without being in derogation
of the parties' intention that each sale of Receivables hereunder shall
constitute a true sale thereof, each of the Sellers hereby grants to the Buyer a
duly perfected security interest in all
5
of such Seller's right, title and interest in, to and under all of such Seller's
Receivables now existing and hereafter arising, and in all Related Security with
respect thereto, which security interest shall be prior to all other Liens
thereto. After the occurrence of a Seller's Sale Termination Event, the Buyer
and its assigns shall have as against the applicable Seller, in addition to the
rights and remedies which they may have under this Agreement, all other rights
and remedies provided to a secured creditor after default under the UCC and
other applicable law, which rights and remedies shall be cumulative.
(b).......Each Seller hereby covenants and agrees to do all
things necessary under each of its Contracts to
facilitate collection of the Receivables arising thereunder by the Buyer and its
assigns, and to secure its obligations under this Section 1.7(b.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS OF THE SELLERS. In order to induce the
Buyer to enter into this Agreement and to make purchases and accept the
contributions hereunder, each Seller hereby makes the following representations
and warranties, as to itself, as of the date of each sale or contribution by it
hereunder; provided, however, that so long as each of the Liquidity Banks
remains a party to the BSX Credit Agreement, no Seller will be required to
"date-down" its representation in Section 2.1(b) or 2.1(g) hereof:
(a) Financial Condition. The consolidated balance sheet of BSX and
its consolidated Subsidiaries as at December 31, 2001 and December 31, 2000 and
the related consolidated statements of operations and of cash flows for the
fiscal years ended on such dates, reported on by Ernst & Young LLP, copies of
which have heretofore been furnished to Buyer and Lenders, are complete and
correct and present fairly the consolidated financial condition of BSX as at
such dates, and the consolidated results of its operations and its consolidated
cash flows for the fiscal years then ended. The unaudited consolidated balance
sheet of BSX and its consolidated Subsidiaries as at March 31, 2002 or, if later
and prior to the Initial Closing Date, the date of BSX's most recent publicly
available Form 10-Q and the related unaudited consolidated statements of
operations and of cash flows for the fiscal period ended on such date, certified
by an Authorized Officer, copies of which have heretofore been furnished to
Buyer and each Lender, are complete and materially correct and present fairly
(subject to normal year-end audit adjustments) the consolidated financial
condition of BSX and its consolidated Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
fiscal period then ended. All such annual financial statements, including the
related schedules and notes thereto, were, as of the date prepared, prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or an Authorized Officer, as the case
may be, and as disclosed therein). The quarterly financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X under the Securities Act of 1933. Accordingly, such quarterly
statements do not include all of the information and footnotes required by GAAP
for complete financial statements. In the opinion of BSX, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation have been included. Neither BSX nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet referred to
above, any material
6
Guarantee Obligation, material contingent liability or material liability for
taxes, or any material long-term lease or material unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or in the notes thereto.
(b) No Change. Since December 31, 2001 there has been no development
or event which has had or could reasonably be expected to have a Seller Material
Adverse Effect.
(c) Ownership of Such Seller. BSX owns, directly or indirectly, all
the issued and outstanding Equity Interests of (i) the Buyer and (ii) each of
the other Sellers (if any), and all of such Equity Interests are fully paid and
non-assessable.
(d) Corporate Existence; Compliance with Law. Each Seller and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate or other
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law, except to the extent that
the failure of the foregoing clauses (a), (c) and (d) to be true and correct
could not, in the aggregate, reasonably be expected to have a Seller Material
Adverse Effect.
(e) Corporate Power; Authorization; Enforceable Obligations. Each
Seller has the corporate or other power and authority, and the legal right, to
make, deliver and perform its obligations under each Transaction Document to
which it is a party and to consummate the transactions herein and therein
contemplated and has taken all necessary corporate action to authorize the
consummation of the transactions herein and therein contemplated and to
authorize the execution, delivery and performance of the Transaction Documents
to which it is a party. No consent or authorization of, filing with, notice to
or other act by or in respect of, any Governmental Authority or any other Person
is required with respect to such Seller or any of its Subsidiaries in connection
with the transactions hereunder or with the execution, delivery, performance,
validity or enforceability of the Transaction Documents to which such Seller is
a party. This Agreement and each other Transaction Document to which such Seller
is, or is to become, a party has been or will be, as applicable, duly executed
and delivered on behalf of such Seller. This Agreement and each other
Transaction Document to which such Seller is, or is to become, a party
constitutes or will constitute, as applicable, a legal, valid and binding
obligation of such Seller enforceable against such Seller in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(f) No Legal Bar. The execution, delivery and performance of the
Transaction Documents and transactions contemplated hereunder will not violate
any Requirement of Law or Contractual Obligation of such Seller or of any of its
Subsidiaries which could reasonably be expected to have a Seller Material
Adverse Effect and will not result in, or require, the creation
7
or imposition of any Lien (except for any Lien permitted by or created pursuant
to any of the Transaction Documents) on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation which could reasonably be expected to have a Material Adverse Effect.
(g) No Material Litigation. Except as disclosed in BSX's Form 10-K
dated December 31, 2001 or BSX's Form 10-Q dated March 31, 2002 or, if later and
prior to the Initial Closing Date, the date of BSX's most recent publicly
available Form 10-Q, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of such
Seller, threatened by or against such Seller or any of its Subsidiaries or
against any of its or its respective properties or revenues (a) with respect to
any of the Transaction Documents or any of the transactions contemplated hereby,
or (b) which could reasonably be expected to have a Seller Material Adverse
Effect.
(h) No Default. Neither such Seller nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in excess of
$100,000,000. No Unmatured Amortization Event or Amortization Event has occurred
and is continuing.
(i) Intentionally Omitted.
(j) Taxes. Each of such Seller and its Subsidiaries has filed or
caused to be filed all tax returns which, to the knowledge of such Seller, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of such Seller or its Subsidiaries, as the case may be),
except to the extent that the failure to do so could not reasonably be expected
to result in a Seller Material Adverse Effect.
(k) Federal Regulations. The use of all funds obtained by such Seller
under this Agreement or any other Transaction Document to which it is a party
will not violate Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect.
(l) ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan other than a
Multiemployer Plan, and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code, where the liability which could be
reasonably expected to result could have a Seller Material Adverse Effect;
provided, however, that with respect to any Multiemployer Plan, such
representation is made only to the knowledge of such Seller. No termination of a
Single Employer Plan pursuant to Section 4041(c) or 4042 of ERISA has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither such Seller nor
8
any Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan and to the knowledge of such Seller, neither such Seller nor
any Commonly Controlled Entity would become subject to any liability under ERISA
if such Seller or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made which
liability could be reasonably expected to result could have a Seller Material
Adverse Effect. No such Multiemployer Plan is in Reorganization or Insolvent.
(m) Investment Company Act; Other Regulations. Such Seller is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. Such
Seller is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board) which limits its ability to
incur Indebtedness.
(n) Disclosure. The statements and information contained herein and
in any of the information provided to the Agents or the Lenders (other than
financial projections) in connection with this Agreement, taken as a whole, do
not contain any untrue statement of any material fact, or omit to state a fact
necessary in order to make such statements or information not misleading in any
material respect, in each case in light of the circumstances under which such
statements were made or information provided as of the date so provided. Each
Purchase Report delivered by such Seller pursuant to this Agreement was true and
accurate in every material respect on the date specified in such report and did
not contain any material misstatement of fact or omit to state a material fact
or any fact necessary to make the statements contained therein not misleading.
(o) Valid and Perfected Security Interest. Each such Receivable
originated by such Seller has been transferred to the Buyer free and clear of
any Lien except as created hereby or by the other Transaction Documents. Without
limiting the foregoing, such Seller has delivered to the Administrative Agent
(as the Buyer's assignee) in form suitable for filing all financing statements
or other similar instruments or documents necessary under the UCC of all
appropriate jurisdictions to perfect the Buyer's ownership interest in such
Receivable and the Administrative Agent's collateral assignment thereof. This
Agreement creates a valid security interest in each such Receivable and its
Related Security in favor of the Buyer, and, upon filing of the financing
statements described in the preceding sentence, together with UCC termination
statements delivered hereunder, such security interest will be a first priority
perfected security interest.
(p) Nature of Receivables. Each Receivable constitutes an "Account"
as defined in the UCC in effect in the State of New York.
(q) Title to Receivables and Quality of Title.
(i) Upon issuance of its shares of capital stock to BSX (in the case
of Initial Contributed Receivables and any Receivables that BSX, in its
sole discretion, may elect to contribute thereafter) and payment of the
applicable Purchase Price for each purchased Receivable in one or both of
the manners permitted by this Agreement, the Buyer will have irrevocably
obtained all legal and equitable title to such Receivable and its Related
9
Security (other than any Related Asset constituting a Contract that
contains a prohibition on assignment, in which case the Buyer has obtained
a valid and perfected first priority perfected security interest in the
applicable Seller's right to receive payments thereunder to the extent
contemplated by Section 9-406 of the UCC of the applicable jurisdiction),
and the Buyer has the legal right to sell and encumber, each such
Receivable and its Related Security. Without limiting the foregoing, there
have been duly filed all financing statements or other similar instruments
or documents necessary under the UCC of all appropriate jurisdictions to
perfect the Buyer's ownership interest in such Receivable.
(ii) No financing statement or other instrument similar in effect
covering any portion of the Collateral is on file in any recording office
except such as may be filed (A) in favor of a Seller in accordance with the
Contracts, (B) in favor of the Buyer and its assigns in connection with
this Agreement, (C) in favor of the Administrative Agent in accordance with
the Credit and Security Agreement, (D) in connection with any Lien arising
solely as the result of any action taken by the Administrative Agent or one
of the Secured Parties, or (E) which shall be terminated or amended
pursuant to the UCC termination statements or amendments delivered
hereunder.
(r) Offices. The chief executive office of such Seller is located at
the address set forth for it on Schedule 2.1(r) hereto or its Joinder Agreement,
as applicable, and the offices where such Seller keep all books, records and
documents evidencing the Receivables originated by it (other than books, records
and documents that are stored off-site with respect to Receivables which are no
longer outstanding or which have been written-off), the related material
Contracts and all purchase orders and other agreements related to such
Receivables are located at the addresses specified in Schedule 2.1(r) hereto or
its Joinder Agreement (or at such other locations, notified to the Buyer in
accordance with Section 4.3(g), in jurisdictions where all action required by
Section 4.3(g) has been taken and completed). As of the date hereof, such Seller
is a "registered organization" (within the meaning of Section 9-102 of the UCC
as in effect in its jurisdiction of organization). Since the date of this
Agreement, such Seller has not changed its jurisdiction of organization.
(s) Collection Accounts. Such Seller has instructed all Obligors
thereon to pay all Collections either directly by mail addressed to a Lockbox
listed on Exhibit IV to the Credit and Security Agreement which is subject to a
Collection Account Agreement, or by wire transfer or other electronic funds
transfer directly to a Collection Account listed on Exhibit IV to the Credit and
Security Agreement which is subject to a Collection Account Agreement. The Buyer
will cause each of the Collection Accounts that is currently in the name of a
Seller to be transferred to it and into its own name within a reasonable period
of time after the initial Advance under the Credit and Security Agreement, and
each Seller agrees to cooperate fully with the Buyer in effecting such
transfers.
(t) Eligible Receivables. Each Receivable originated by such Seller
that is included as an Eligible Receivable on any Purchase Report was an
Eligible Receivable on the date on which it was sold or contributed to the Buyer
pursuant hereto.
10
(u) Names. Except as set forth on Schedule 2.1(r), since January 1,
1997, such Seller has not used any legal names, trade names or assumed names
other than the name in which it has executed this Agreement.
(v) Credit and Collection Policy. With respect to the Receivables
originated by such Seller, such Seller has complied in all material respects
with its applicable Credit and Collection Policy, and no change has been made to
such Credit and Collection Policy since the date of this Agreement which would
be reasonably likely to materially and adversely affect the collectibility of
the Receivables originated by such Seller or decrease the credit quality of any
newly created Receivables originated by such Seller except for such changes as
to which each of the Agents has received the notice required under Section
7.1(a)(vii) of the Credit and Security Agreement and has given its prior written
consent thereto (which consent shall not be unreasonably withheld or delayed).
(w) Payments to Sellers. With respect to each Receivable sold or
contributed to the Buyer by such Seller under this Agreement, the Buyer has
given reasonably equivalent value to such Seller in consideration for such
Receivable and the Related Security with respect thereto and no such transfer is
or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C. ss.ss.101 et seq.), as amended.
(x) Reliance on Separate Legal Identity. Such Seller is aware that
the Lenders, the Liquidity Banks and the Agents are entering into the
Transaction Documents in reliance upon the Buyer's identity as a legal entity
separate from such Seller and any of its other Affiliates.
ARTICLE III.
CONDITIONS OF PURCHASES
Section 3.1 Conditions Precedent to Initial Purchase. The initial
purchase from each Seller hereunder is subject to the conditions precedent that
(1) BSX shall have contributed the Initial Contributed Receivables and the
associated Related Security to the Buyer, and the Buyer shall have issued 100%
of its authorized outstanding Equity Interests to BSX, (2) the Buyer shall have
executed and delivered a Subordinated Note in favor of such Seller, and (3) the
Buyer shall have received, on or before such Seller's Applicable Closing Date,
the following, each (unless otherwise indicated) dated such Seller's Applicable
Closing Date, and each in form, substance and date reasonably satisfactory to
the Buyer and the Agents:
(a).......A copy of the resolutions of such Seller's board
of directors, board of managers, general partners or analogous Persons of such
Seller approving the Transaction Documents to be delivered by it and the
transactions contemplated hereby and thereby, certified by a Responsible Officer
of such Seller;
(b).......A good standing certificate for such Seller
issued as of a recent date by the Secretary of State of the state of its
formation;
(c).......A certificate of a Responsible Officer of such
Seller certifying the names and true signatures of the officers, partners,
managers or members authorized on such Seller's behalf to sign the Transaction
Documents to be delivered by it, on which certificate the Buyer and the Servicer
(if the Servicer is not such Seller) may conclusively rely until such time as
the
11
Buyer and the Servicer shall receive from such Seller a revised certificate
meeting the requirements of this subsection (c);
(d).......Recently certified copies of such Seller's
Organic Documents;
(e).......Copies of the proper financing statements (Form
UCC-1) that have been duly executed by such Seller, naming such Seller as
seller, the Buyer as the purchaser, and the Administrative Agent as assignee of
the Buyer, in each case, describing in reasonable detail the Receivables and the
Related Security to be sold by such Seller to the Buyer pursuant to this
Agreement or other similar instruments or documents, as may be necessary under
the UCC of all appropriate jurisdictions or any comparable law of all
appropriate jurisdictions to perfect the Buyer's ownership interest in such
Receivables and Related Security;
(f).......A written search report from a Person
satisfactory to the Servicer and the Administrative Agent listing all effective
UCC financing statements that name such Seller as debtor, seller or assignor and
that are filed in the jurisdictions in which filings were made pursuant to the
foregoing subsection (e), together with copies of such financing statements
(none of which, except for those described in the foregoing subsection (e) shall
cover any Receivable or any Related Asset related to any Receivable) which is to
be sold or contributed by such Seller to the Buyer hereunder, and tax and
judgment lien search reports from a Person satisfactory to the Servicer and the
Administrative Agent showing no evidence of such liens filed against such
personal property other than those liens for which UCC termination statements
have been delivered hereunder;
(g).......Evidence (i) of the execution and delivery by
each of the parties thereto of each of the other Transaction Documents to be
executed and delivered in connection herewith and (ii) that each of the
conditions precedent to the execution, delivery and effectiveness of such other
Transaction Documents has been satisfied to the Buyer's satisfaction;
(h).......An opinion of such Seller's counsel covering such
matters as Buyer or Administrative Agent (as Buyer's assignee) may reasonably
request; and
(i).......A certificate from an officer of such Seller to
the effect that the Servicer and such Seller have placed on the most recent, and
have taken all steps reasonably necessary to ensure that there shall be placed
on subsequent, summary aged trial balance reports the following legend (or the
substantive equivalent thereof):
"PROPERTY OF BOSTON SCIENTIFIC FUNDING CORPORATION"
Section 3.2 Conditions Precedent to All Purchases (including the
Purchase from Each Seller on its Applicable Closing Date). Each purchase shall
be subject to the further conditions precedent that:
(a).......such Seller's Sale Termination Date shall not
have occurred;
(b).......the Buyer (or its assigns) shall have received
such other approvals, opinions or documents as it may reasonably request; and
12
(c).......on the date of such purchase, each of the
representations and warranties of such Seller set forth in Article II hereof are
true and correct in all material respects on and as of the date of such purchase
(and after giving effect thereto) as though made on and as of such date (and
shall be deemed to have been made on and as of such Date; except for
representations and warranties stated to refer to a specific earlier date, in
which case such representations and warranties are true and correct as of such
earlier date); provided, however, that the preceding materiality standard shall
not apply to those representations and warranties which themselves contain
materiality standards; and provided, further, that so long as each of the
Liquidity Banks remains a party to the BSX Credit Agreement, no Seller will be
required to "date-down" its representation in Section 2.1(b) or 2.1(g) hereof.
Section 3.3 Reaffirmation of Representations and Warranties. Subject
to the proviso in Section 3.2(c) above, each Seller, by accepting the Purchase
Price related to each purchase of such Seller's Receivables and Related
Security, shall be deemed to have certified that the representations and
warranties of such Seller contained in Article II are true and correct as to
such Seller on and as of the day of such purchase, with the same effect as
though made on and as of such day.
ARTICLE IV.
COVENANTS
Section 4.1 Affirmative Covenants. From each Seller's Applicable
Closing Date until the later of the Final Payout Date or the cessation of the
purchases of the Buyer hereunder, unless the Buyer and the Agents shall
otherwise consent in writing each Seller will:
(a) Conduct of Business and Maintenance of Existence. (i)
Continue to engage in business of the same general type as conducted by it on
the Initial Closing Date, (ii) preserve, renew and keep in full force and effect
its corporate existence and (except as could not in the aggregate reasonably be
expected to have a Seller Material Adverse Effect), (iii) take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business (except as could not be reasonably
expected to have a Seller Material Adverse Effect) and (iv) comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, be reasonably expected
to have a Seller Material Adverse Effect.
(b) Audits. Such Seller will, subject to compliance with
all Contractual Obligations and Requirements of Law: (i) at any time and from
time to time upon not less than ten (10) Business Days' notice (unless an or
Amortization Event has occurred and is continuing, in which case, not more than
one (1) Business Day's notice shall be required) during regular business hours,
permit the Buyer, the Agents or any of their agents or representatives: (A) to
examine and make copies of and abstracts from all Records, Contracts and
Invoices in the possession or under the control of such Seller, and (B) to visit
the offices and properties of such Seller for the purpose of examining such
Records, Contracts and Invoices and to discuss matters relating to Receivables
or such Seller's performance hereunder with any of the officers or employees of
such Seller having knowledge of such matters; and (ii) without limiting the
provisions of clause (i) above, from time to time, at the expense of such
Seller, permit certified public accountants or auditors acceptable to the Agents
to conduct a review of such Seller's
13
Contracts, Invoices and Records (each, a "Review"); provided, however, that, so
long as no Amortization Event has occurred and is continuing, such Seller will
only be responsible for the costs and expenses of one (1) such Review under this
Section in any one calendar year unless (1) the first such Review in such
calendar year resulted in negative findings (in which case such Seller will be
responsible for the costs and expenses of two (2) such Reviews in such calendar
year), or (2) the Buyer delivers an Extension Request under the Credit and
Security Agreement and the applicable Response Date is more than 3 calendar
months after the first Review in such calendar year. Notwithstanding the
foregoing, if (1) such Seller requests the approval of a new Eligible Originator
who is a Material Proposed Addition or (2) any Material Acquisition is
consummated by such Seller, such Seller will be responsible for the costs and
expenses of one additional Review per proposed Material Proposed Addition or per
Material Acquisition in the calendar year in which such Material Proposed
Addition is expected to occur or such Material Acquisition is expected to be
consummated if such additional Review is requested by the Buyer or any of the
Agents.
(c) Keeping of Records and Books of Account. Such Seller
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate essential Records evidencing the
Receivables originated by such Seller in the event of the destruction of the
originals thereof and backing up on at least a daily basis on a separate
computer from which electronic file copies can be readily produced), and keep
and maintain, all Contracts, Records and other information necessary or
reasonably advisable for the collection of all such Receivables (including,
without limitation, Records adequate to permit the identification as of any
Business Day when required of Outstanding Balances by Obligor and related debit
and credit details of the Receivables).
(d) Performance and Compliance with Receivables and
Contracts. Such Seller will, at its expense, timely and fully perform and comply
with all provisions, covenants and other promises, if any, required to be
observed by it under the Contracts and/or Invoices related to the Receivables
originated by such Seller and all agreements related to such Receivables except
for such failures to fully perform and comply as would not, individually or in
the aggregate, have a Seller Material Adverse Effect.
(e) Location of Records. Such Seller will keep its Records
and material Contracts (and, to the extent that any of the foregoing constitute
instruments, chattel paper or negotiable documents, all originals thereof), at
its addresses referred to in Schedule 2.1(r) hereto, or, upon 30 days' prior
written notice to the Agents, at such other locations in jurisdictions where all
action required by Section 4.3(g) (if any) shall have been taken and completed.
(f) Credit and Collection Policies. Such Seller will timely
and fully comply with its Credit and Collection Policy in regard to the
Receivables originated by it.
(g) Separate Corporate Existence of the Buyer. Each Seller
will take such actions as shall be required in order to maintain the separate
identity of the Buyer separate and apart from such Seller and its other
Affiliates, including those actions set forth in Section 7.1(l) of the Credit
and Security Agreement.
14
(h) Collections. Such Seller will instruct all Obligors
thereon to pay all Collections either directly by mail addressed to a Lockbox
listed on Exhibit IV to the Credit and Security Agreement which is subject to a
Collection Account Agreement, or by wire transfer or other electronic funds
transfer directly to a Collection Account listed on Exhibit IV to the Credit and
Security Agreement which is subject to a Collection Account Agreement. Such
Seller will cooperate fully with the Buyer in transferring each of the
Collection Accounts to the Buyer and, to the extent that such Collection Account
is not already in the Buyer's name, into the Buyer's name within a reasonable
period of time after the initial Advance under the Credit and Security
Agreement.
(i) Further Assurances. Such Seller will take all necessary
action to establish and maintain in favor of the Buyer, a valid and perfected
ownership interest in the Receivables and Related Security.
Section 4.2 Reporting Requirements. From such Seller's Applicable
Closing Date until the later of the Final Payout Date or the cessation of the
purchases of the Buyer hereunder, such Seller will furnish to the Buyer and the
Agents:
(a) Financial Statements.
(i) as soon as available, but in any event within 110 days
after the end of each fiscal year of BSX, a copy of the consolidated
balance sheet of BSX and its consolidated Subsidiaries as at the end
of such year and the related consolidated statements of operations
and stockholders' equity and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous
year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
Ernst & Young LLP or other independent certified public accountants
of nationally recognized standing;
(ii) as soon as available, but in any event not later than
60 days after the end of each of the first three quarterly periods of
each fiscal year of BSX, the unaudited consolidated balance sheet of
BSX and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of operations for
such quarter and the portion of the fiscal year through the end of
such quarter and of cash flows of BSX and its consolidated
Subsidiaries for the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal
year-end audit adjustments); and
(iii) all such financial statements shall be complete and
correct in all material respects and shall be prepared in reasonable
detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and
disclosed therein); provided that it is hereby acknowledged that the
quarterly financial statements delivered pursuant to paragraph (b)
above may not include all of the information and footnotes required
by GAAP for complete annual financial statements.
15
Any financial statement required to be furnished pursuant to this Section 4.2(a)
shall be deemed to have been furnished on the date on which the Lenders receive
notice that BSX has posted such financial statement on the Intralinks website on
the Internet at www.intralinks.com; provided that BSX shall give notice of any
such posting to the Administrative Agent (who shall then give notice of any such
posting to the Lenders). Notwithstanding the foregoing, BSX shall deliver paper
copies of any financial statement referred to in this Section 4.2(a) to the
Administrative Agent if the Administrative Agent or any Lender requests BSX to
furnish such paper copies until written notice to cease delivering such paper
copies is given by the Administrative Agent.
(b) Certificates; Other Information.
(i) Concurrently with the delivery of the financial
statements referred to in Section 4.2(a), a certificate of a
Responsible Officer of BSX stating that such Responsible Officer has
obtained no knowledge of any Unmatured Amortization Event or
Amortization Event that has occurred and is continuing except as
specified in such certificate;
(ii) Within ten days after the same are sent, copies of all
financial statements and reports which BSX sends to its stockholders,
and within five days after the same are filed, copies of all
financial statements and reports which BSX may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
Governmental Authority, and promptly after the same are issued,
copies of all press releases issued by BSX, or advise that such
filings have been made; and
(iii) Promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
(c) Proceedings. As soon as possible and in any event
within five Business Days after any Authorized Officer of such Seller obtains
knowledge thereof, notice of (i) any litigation, investigation or proceeding
which may exist at any time which would reasonably be expected to have a Seller
Material Adverse Effect and (ii) any development in previously disclosed
litigation which development would reasonably be expected to have a Seller
Material Adverse Effect;
(d) Change in Business or Credit and Collection Policy.
Prompt written notice of any material change in the character of such Seller's
business prior to the occurrence of such change, and not less than 30 days'
prior written notice of any material change in such Seller's Credit and
Collection Policy (together with a copy of such proposed change);
(e) Sale Termination Date. Prompt written notice of the
Sale Termination Date; and
(f) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the Receivables originated
by such Seller, the condition, operations, financial or otherwise, of such
Seller or such Seller's performance hereunder that the Buyer or any of the
Agents may from time to time reasonably request in order to protect the
interests of the Buyer and the Administrative Agent, on behalf of the Secured
Parties, under or as contemplated by the Transaction Documents.
16
(g) Taxes. Such Seller 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. Each Seller will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of any Agent or any Lender.
Section 4.3 Negative Covenants. From such Seller's Applicable Closing
Date until the later of the Final Payout Date or the cessation of the purchases
of the Buyer hereunder, unless the Buyer and the Agents shall otherwise consent
in writing, such Seller will not:
(a) Sales, Liens, Etc. (i) Except as otherwise provided
herein and in the other Transaction Documents, sell, assign (by operation of law
or otherwise) or otherwise dispose of, or create or suffer to exist any Lien
upon or with respect to, any Receivables originated by it, or any account to
which any Collections are sent, or any right to receive income or proceeds from
or in respect of any of the foregoing (except, prior to the execution of
Collection Agreements, set-off rights of any bank at which any such account is
maintained), or (ii) assert any interest in the Receivables, except as Servicer
(or a designated sub-servicer for the Servicer).
(b) Extension or Amendment of Receivables. Except as
permitted in the Credit and Collection Policy, extend, amend or otherwise modify
the terms of any Receivable originated by it, or amend, modify or waive any term
or condition of any Contract or Invoice related thereto in any way that
adversely affects the collectibility of the Receivables originated by such
Originator, taken as a whole, or any material part thereof, or the Buyer's
rights therein.
(c) Change in Business or Credit and Collection Policy.
Make or permit to be made any change in the character of its business or in the
Credit and Collection Policy, which change would, in either case, impair the
collectibility of any significant portion of the Receivables originated by it or
otherwise materially and adversely affect the interests or remedies of the Buyer
and its assigns under this Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. Add or
terminate any bank as a Collection Bank from those listed in Exhibit IV to the
Credit and Security Agreement or, after the Collection Account has been
established, make any change in its instructions to Obligors regarding payments
to be made to the Buyer or the Servicer or payments to be made to any Collection
Bank (except for a change in instructions solely for the purpose of directing
Obligors to make such payments to another existing Collection Bank and where
such change is immaterial and does not adversely affect the interests of the
Administrative Agent, on behalf of the Lenders, in any respect), unless (i) the
Agents shall have received prior written notice of such addition, termination or
change and (ii) the Administrative Agent shall have received duly executed
copies of Collection Agreements in a form reasonably acceptable to the Agents
with each new Collection Bank.
(e) Deposits to Collection Accounts. Deposit or authorize
the deposit to any Collection Account of any cash or cash proceeds other than
Collections of Receivables.
17
(f) Changes to Other Documents. Enter into any amendment or
modification of, or supplement to (i) such Seller's Organic Documents which
could reasonably be expected to be materially adverse to the Buyer, (ii) this
Agreement, or (iii) the Subordinated Notes.
(g) Name Change, Offices, Records and Books of Accounts.
Change its name, identity, jurisdiction of organization or corporate structure
(within the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable
jurisdictions) or relocate its chief executive office, principal place of
business or any office where Records are kept unless it shall have: (i) given
Buyer and the Agents at least forty-five (45) days' prior written notice thereof
and (ii) delivered to the Administrative Agent all financing statements,
instruments and other documents requested by Buyer or any of the Agents in
connection with such change or relocation..
(h) Mergers, Consolidations and Acquisitions. Enter into
any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, except:
(i) any Subsidiary of any Seller may be merged or
consolidated with or into such Seller (provided that such Seller
shall be the continuing or surviving corporation) or with or into any
one or more wholly owned Subsidiaries of such Seller (provided that
the wholly owned Subsidiary or Subsidiaries shall be the continuing
or surviving corporation);
(ii) any Seller or any wholly owned Subsidiary of such
Seller may sell, lease, transfer or otherwise dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to such
Seller or any other wholly owned Subsidiary, and, so long as no
Unmatured Amortization Event or Amortization Event shall have
occurred and be continuing or would occur as a result thereof, such
Seller or any Subsidiary of the Seller may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to any non-wholly owned Subsidiary of such
Seller for fair market value;
(iii) any non-wholly owned Subsidiary of any Seller may
sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to such Seller or
any wholly owned Subsidiary of such Seller for fair market value or
may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to any other
non-wholly owned Subsidiary of such Seller; and
(iv) any Seller or any Subsidiary of such Seller may be
merged or consolidated with or into another Person; provided that
such Seller or such Subsidiary shall be the continuing or surviving
corporation and no Unmatured Amortization Event or Amortization Event
shall have occurred and be continuing or would occur as a result
thereof (and, in the case of any such transaction involving a
Subsidiary, such Subsidiary shall continue to be a Subsidiary or the
Seller shall have received fair market value therefor as determined
by the Board of Directors of the Seller); and provided further that
the Seller may not be merged or consolidated with or into any
Subsidiary,
18
provided that, in each of the foregoing cases:
(A) in the case of any consolidation or merger in which the
successor or surviving entity is not a Seller, the Agents and the Buyer receive
prior written notice of such consolidation or merger, and the successor or
surviving entity (if not a Seller) unconditionally assumes such Seller's (or
Sellers') respective obligations under the Transaction Documents to which it is
(or they are) a party immediately prior to giving effect to such consolidation
or merger;
(B) all UCC financing statements necessary to maintain the
validity and perfection of the Buyer's ownership interest in the Receivables and
Related Security acquired or to be acquired from such Seller or Sellers under
this Agreement, and the Administrative Agent's security interest therein on
behalf of the Secured Parties, have been duly executed and filed in all
necessary jurisdictions; and
(C) if the surviving entity in such transaction(s) is not
an existing Seller under this Agreement, all other documents required to be
delivered in connection with a Joinder Agreement hereunder have been duly
executed and delivered substantially contemporaneously with such transaction(s).
(i) Disposition of Receivables and Related Security. Except
pursuant to this Agreement, sell, lease, transfer, assign or otherwise dispose
of (in one transaction or in a series of transactions) any Receivables and
Related Security.
(j) Receivables Not to be Evidenced by Promissory Notes.
Take any action to cause or permit any Receivable generated by it to become
evidenced by any "instrument" (as defined in the applicable UCC), except in
connection with the collection of overdue Receivables, provided that the
original of any such instrument is delivered to the Buyer for immediate delivery
to the Administrative Agent, duly endorsed.
(k) Accounting for Purchases. Account for the transactions
contemplated hereby in any manner other than as a sale or contribution of
Receivables and the Related Security by such Seller to the Buyer.
ARTICLE V.
JOINDER OF ADDITIONAL SELLERS
Section 5.1 Addition of New Sellers. From time to time upon not less
than 60 days' prior written notice to the Buyer and the Agents (or such shorter
period of time as the Agents may mutually agree upon), BSX may propose that one
or more of its existing or hereafter acquired wholly-owned Subsidiaries become a
Seller hereunder. No such addition shall become effective (a) if such addition
constitutes a Material Proposed Addition, without the written consent of each of
the Agents and each of the rating agencies who is then rating Commercial Paper
of Blue Ridge or Victory but may become effective prior to such 60th day if such
written consent is given more promptly and (b) unless all conditions precedent
to such addition required by Section 5.2 below are satisfied prior to such
date).
Section 5.2 Documentation. In the event that the Buyer and the Agents
consent to the addition of a New Seller, such New Seller will execute a Joinder
Agreement and shall deliver
19
each of the documents, certificates and opinions required to be delivered under
Section 3.1, together with such updated schedules and exhibits hereto as may be
necessary to ensure that after giving effect to the addition of such New Seller,
each of the representations and warranties of such New Seller under Article II
hereof will be true and correct as of such New Seller's Closing Date, and the
Buyer will deliver a Subordinated Note to such New Seller.
ARTICLE VI.
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
Section 6.1 Rights of the Buyer. Each Seller hereby authorizes the
Buyer and the Servicer (if other than such Seller) or their respective designees
to take any and all steps in such Seller's name necessary or desirable, in their
respective determination, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing such Seller's name on
checks and other instruments representing Collections and enforcing such
Receivables, the Invoices and the provisions of the related Contracts that
concern payment and/or enforcement of rights to payment.
Section 6.2 Responsibilities of the Sellers. Anything herein to the
contrary notwithstanding:
(a) Collection Procedures. Each Seller agrees to direct all
Obligors to make payments of such Seller's Receivables directly to a Collection
Account that is the subject of a Collection Account Agreement at a Collection
Bank. Each Seller further agrees to transfer any Collections (including any
security deposits applied to the Outstanding Balance of any Receivable) that it
receives on such Receivables directly to the Servicer (if other than such
Seller) within one (1) Business Day after receipt thereof, and agrees that all
such Collections shall be deemed to be received in trust for the Buyer; provided
that, to the extent permitted pursuant to Section 1.3, each Seller may retain
such Collections as a portion of the Purchase Price then payable to it or apply
such Collections to the reduction of the outstanding balance of its Subordinated
Note.
(b) Servicing. BSX shall be responsible for the servicing,
administration and collection of the Receivables, all on the terms set out in
(and subject to any rights to terminate BSX as Servicer pursuant to) the Credit
and Security Agreement.
(c) Power of Attorney. Each Seller hereby grants to
Servicer (if other than such Seller) an irrevocable power of attorney, with full
power of substitution, coupled with an interest, to take in the name of such
Seller all steps which are necessary or advisable to endorse, negotiate,
enforce, or otherwise realize on any writing or other right of any kind held or
transmitted by such Seller or transmitted or received by such Seller in
connection with any Receivable or under the Related Security (including the
Records).
(d) Performance under Contracts. Each Seller will perform
all of its obligations under the Contracts generated by it to the same extent as
if the Receivables had not been sold or contributed, as applicable, hereunder
and the exercise by Buyer, Servicer, any of the Agents or
20
any designee of the foregoing of its rights hereunder or under the Credit and
Security Agreement shall not relieve such Seller from such obligations.
Section 6.3 Further Action Evidencing Purchases. (a) Each Seller
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action that
the Buyer may reasonably request in order to perfect, protect or more fully
evidence the Buyer's ownership of the Receivables generated by such Seller (and
the Related Security) purchased by the Buyer hereunder, or to enable the Buyer
to exercise or enforce any of its rights hereunder or under any other
Transaction Document. Without limiting the generality of the foregoing, upon the
request of the Buyer, each Seller will:
(i) ......Execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate; and
(ii)......Mark the summary aged trial balance report with
the legend set forth in Section 3.1(i).
(b) ......Each Seller hereby authorizes the Buyer or its
designee to file one or more financing or continuation statements, and
amendments thereto and assignment thereof, relative to all or any of the
Receivables (and the Related Security) now existing or hereafter sold by such
Seller. If such Seller fails to perform any of its agreements or obligations
under this Agreement, the Buyer or its designee may (but shall not be required
to) itself perform, or cause performance of, such agreement or obligation, and
the expenses of the Buyer or its designee incurred in connection therewith shall
be payable by such Seller.
(c) ......Without limiting the generality of the foregoing,
each Seller will, not earlier than six months and not later than three months
prior to the fifth anniversary of the date of filing of the financing statements
filed in connection with its Applicable Closing Date or any other financing
statement filed pursuant to this Agreement, if the Final Payout Date shall not
have occurred: (i) execute (if required) and deliver and file or cause to be
filed appropriate continuation statements; and (ii) deliver or cause to be
delivered to Agent an opinion of Shearman & Sterling (or other counsel for such
Seller reasonably satisfactory to Buyer), in form and substance reasonably
satisfactory to Buyer, confirming and updating the opinion delivered in
connection with such Applicable Closing Date relating to the validity,
perfection and priority of Buyer's interests in the Receivables.
Section 6.4 Application of Collections. Except as otherwise specified
by such Obligor or required by the underlying Contract or law: any payment by an
Obligor in respect of any indebtedness owed by it to such Seller or to the Buyer
shall be applied first, as a Collection of any Receivable or Receivables then
outstanding of such Obligor in the order of the age of such Receivables,
starting with the oldest of such Receivables (unless another reasonable basis
for allocation of such payments to the Receivables of such Obligor exists), and
second, to any other indebtedness of such Obligor.
21
ARTICLE VII.
INDEMNIFICATION
Section 7.1 Indemnities by the Sellers. Without limiting any other
rights which any such Person may have hereunder or under applicable law, each of
the Sellers hereby agrees to indemnify the Buyer, its assigns, and each of their
respective Affiliates, and all successors, transferees, participants and assigns
and all officers, directors, shareholders, controlling persons, employees and
agents (each, a "Seller Indemnified Party"), forthwith on demand, from and
against any and all damages, taxes, losses, claims, liabilities and reasonable
related out-of-pocket costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively referred to as
"Seller Indemnified Amounts") awarded against or incurred by any of them arising
out of or relating to this Agreement, any of the other Transaction Documents to
which such Seller is a party, the Receivables and Related Security, and/or the
actions of such Seller, excluding, however, (i) Seller Indemnified Amounts to
the extent determined by a court of competent jurisdiction to have resulted from
bad faith, gross negligence or willful misconduct on the part of such Seller
Indemnified Party, (ii) taxes imposed by the jurisdiction in which such Seller
Indemnified Party's principal executive office is located, on or measured by the
overall net income of such Seller Indemnified Party; and (iii) recourse (except
as otherwise specifically provided in this Agreement) for Seller Indemnified
Amounts to the extent the same includes losses in respect of Receivables that
were Eligible Receivables on the date such Receivables were purchased by Buyer
hereunder but which prove to be uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor. Without limiting
the foregoing, each of the Sellers shall indemnify each Seller Indemnified Party
for Seller Indemnified Amounts arising out of or relating to:
(A) the creation of any Lien on, or transfer by such Seller
of any interest in, its Receivables and Related Security other than
(1) the sales and contributions of Receivables and Related Security
pursuant hereto, and (2) the Lien granted by the Buyer pursuant to
the Credit and Security Agreement;
(B) any representation or warranty made by such Seller (or
any of its officers) under or in connection with any Transaction
Document or any Purchase Report delivered by (or on behalf of) such
Seller pursuant hereto, which shall have been false, incorrect or
misleading in any respect when made or deemed made or delivered, as
the case may be (regardless of whether the breach of such
representation or warranty is material);
(C) the failure by such Seller to comply with the terms of
any Transaction Document or any applicable law, rule or regulation
with respect to any of its Receivables or the related Contracts or
Invoices, or the nonconformity of any of such Seller's Receivables or
the related Contracts or Invoices with any such applicable law, rule
or regulation;
(D) the failure to vest and maintain vested in the Buyer, a
valid and perfected ownership interest in the Receivables and Related
Security sold or contributed by such Seller hereunder, free and clear
of any other Lien, other than a Lien arising solely as a result of
the Buyer, now or at any time thereafter;
22
(E) [Intentionally Deleted];
(F) any dispute, claim, offset or defense of the Obligor to
the payment of any Receivable originated by such Seller (including,
without limitation, a defense based on such Receivable or the related
Contract or Invoice 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 services related to
such Receivable or the furnishing or failure to furnish such services
(provided that this clause (F) shall not be applied to provide credit
recourse in respect of the portion of the Outstanding Balance of any
Receivable which has been discharged in the bankruptcy of the Obligor
thereon);
(G) any matter described in Section 1.4;
(H) any failure of such Seller to perform its duties or
obligations in accordance with the provisions of this Agreement or
the other Transaction Documents to which it is a party;
(I) any claim relating to a breach by such Seller of any
related Contract or Invoice with respect to any Receivable;
(J) any sales or use tax payable in connection with the
transactions giving rise to any Receivable originated by such Seller,
and any documentary stamp taxes or recording taxes associated with
the perfection of the Buyer's ownership in the Receivables and
Related Security;
(K) the commingling by such Seller of Collections of
Receivables at any time with other funds;
(L) any investigation, litigation or proceeding related to
or arising from this Agreement or any other Transaction Document to
which such Seller is a party, the transactions contemplated hereby or
thereby, the use of the proceeds of any sale, the Buyer's ownership
interest in the Receivables and Related Security originated by such
Seller or any other investigation, litigation or proceeding relating
to such Seller or the Receivables and Related Security originated by
it in which any Seller Indemnified Party becomes involved as a result
of any of the transactions contemplated hereby or thereby;
(M) any products or professional 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 Invoice or any Receivable originated by
such Seller;
(N) any inability to litigate any claim against any Obligor
in respect of any Receivable originated by such Seller 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; or
23
(O) the occurrence of any Event of Bankruptcy with respect
to such Seller or BSX.
In addition to BSX's obligations under the foregoing indemnity with respect to
itself as a Seller and the Receivables originated by it, BSX hereby agrees to be
jointly and severally liable with each other Seller for such other Seller's
indemnity obligations set forth above.
Section 7.2 Contribution. If for any reason the indemnification
provided above in Section 7.1 is unavailable to a Seller Indemnified Party or is
insufficient to hold a Seller Indemnified Party harmless, then the applicable
Seller(s) shall contribute to the amount paid or payable by such Seller
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Seller Indemnified Party on the one hand and the applicable Seller(s) on
the other hand but also the relative fault of such Seller Indemnified Party as
well as any other relevant equitable considerations.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1 Waivers and Amendments. The provisions of this Agreement
may from time to time be amended, restated, otherwise modified or waived, if
such amendment, modification or waiver is in writing and consented to by each
Seller, the Buyer, the Agents and the Servicer (if the Servicer is not a
Seller); provided, however, that material amendments, modifications and waivers
may require the prior written consent of the nationally recognized rating
agencies who are then rating Commercial Paper of either Conduit. No failure or
delay on the part of the Buyer, the Servicer, any Seller or any third party
beneficiary in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. No notice to or demand on the Buyer, the Servicer or any Seller
in any case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by the Buyer or the Servicer under this
Agreement shall, except as may otherwise be stated in such waiver or approval,
be applicable to subsequent transactions. No waiver or approval under this
Agreement shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
Section 8.2 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
express mail or courier or by certified mail, postage-prepaid, or by facsimile,
to the intended party (a) in the case of any Seller, in care of BSX at the
address or facsimile number of the initial Servicer set forth on Schedule 14.2
of the Credit and Security Agreement, and (b) in the case of Buyer, at the
address or facsimile number of the Borrower set forth on Schedule 14.2 of the
Credit and Security Agreement, or at such other address or facsimile number as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, (i) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (ii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
24
Section 8.3 Cumulative Remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. No failure on the
part of Buyer or any Seller Indemnified Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The rights and remedies herein provided are
cumulative and not exclusive 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. Without limiting the foregoing, each
of the Seller Indemnified Parties is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Seller Indemnified
Party to or for the credit to the account of any Seller, now or hereafter
existing under this Agreement, against any Seller Indemnified Amounts owing to
such Seller Indemnified Party hereunder.
Section 8.4 Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Buyer, each Seller and their
respective successors and permitted assigns. Except as permitted in Section
4.3(h), no Seller may assign its rights hereunder or any interest herein without
the prior written consent of the Buyer and each of the Agents; subject to
Section 8.11, the Buyer may not assign its rights hereunder or any interest
herein except to the Administrative Agent, in each of the foregoing cases,
without the prior written consent of each of the Sellers and the Agents. 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
as to each Seller until the date after such Seller's Sale Termination Date on
which such Seller has received indefeasible payment in full for all Receivables
and Related Security conveyed by it to the Buyer hereunder and shall have paid
and performed all of its obligations hereunder in full. The rights and remedies
with respect to any breach of any representation and warranty made by any Seller
pursuant to Article II and the indemnification and payment provisions of Article
VII and Section 8.6 shall be continuing and shall survive any termination of
this Agreement.
Section 8.5 Governing Law. Each Transaction Document shall be
governed by, and construed in accordance with, the law of the State of New York,
without regard to the principles of conflicts of laws thereof OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW (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 INTERESTS OR SECURITY
INTERESTS OF THE BUYER OR THE ADMINISTRATIVE AGENT, ON BEHALF OF THE SECURED
PARTIES, IN ANY COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF NEW YORK.
Section 8.6 Costs, Expenses and Taxes. In addition to the obligations
of each Seller under Article VII, each of the Sellers agrees to pay on demand:
25
(a).......all reasonable costs and expenses, including
attorneys' fees, in connection with the enforcement against such Seller of this
Agreement and the other Transaction Documents executed by such Seller; and
(b).......all stamp duties and other similar filing or
recording taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of this Agreement or the other
Transaction Documents, and agrees to indemnify each Seller Indemnified Party
against any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
Section 8.7 Submission to Jurisdiction. EACH PARTY HERETO HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE
OR UNITED STATES FEDERAL COURT SITTING IN THE STATE OF NEW YORK, OVER ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN
SECTION 8.2; AND (e) TO THE EXTENT ALLOWED BY LAW, AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS SECTION 8.7 SHALL AFFECT BUYER'S RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY SELLER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
Section 8.8 Waiver of Jury Trial. EACH PARTY HERETO EXPRESSLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR UNDER ANY
AMENDMENT, INSTRUMENT, JOINDER AGREEMENT OR DOCUMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED BY IT OR ON ITS BEHALF IN CONNECTION HEREWITH OR ARISING
FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
Section 8.9 Captions and Cross References; Incorporation by
Reference. The various captions (including, without limitation, the table of
contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any underscored Section or Exhibit are to such
Section or Exhibit of this Agreement, as the case may be. The Exhibits hereto
are hereby incorporated by reference into and made a part of this Agreement.
26
Section 8.10 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 8.11 Acknowledgment and Agreement. By execution below, each
Seller expressly acknowledges and agrees that all of the Buyer's rights, title,
and interests in, to, and under this Agreement shall be pledged and/or
collaterally assigned by the Buyer to the Administrative Agent for the benefit
of the Secured Parties pursuant to the Credit and Security Agreement (and the
Administrative Agent may further assign such rights in accordance with the
Credit and Security Agreement), and each Seller consents to such assignment.
Each of the parties hereto acknowledges and agrees that the Agents and the
Lenders are third party beneficiaries of the rights of the Buyer arising
hereunder and under the other Transaction Documents to which any Seller is a
party.
Section 8.12 No Proceedings. Each Seller agrees that it shall not
institute against the Buyer or any Conduit, or join any other Person in
instituting against the Buyer or any Conduit, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Event of Bankruptcy)
as long as there shall not have elapsed one year plus one day after the Final
Payout Date. The foregoing shall not limit any Seller's right to file any claim
in or otherwise take any action with respect to any insolvency proceeding that
was instituted by any Person other than a Seller.
Section 8.13 Confidentiality. Each party hereto agrees to comply with
the confidentiality provisions of Section 14.5 of the Credit and Security
Agreement with the same force and effect as if it were a direct party thereto.
Section 8.14 Loans by Buyer to Originator. Buyer may make Demand
Advances to BSX from time to time to the extent provided in, and in accordance
with the terms of, the Credit and Security Agreement.
Section 8.15 No Recourse Against Other Parties. No recourse under any
obligation, covenant or agreement of any party contained in this Agreement shall
be had against any stockholder, employee, officer, director, incorporator or
organizer of such Party, provided, however, that nothing in this Section 8.15
shall relieve any of the foregoing Persons from any liability which such Person
may otherwise have for its gross negligence or willful misconduct.
[signature pages follow]
27
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered as of the date
first above written.
BOSTON SCIENTIFIC CORPORATION
By:
---------------------------------------------
Name:
Title:
Boston Scientific Funding Corporation
By:
---------------------------------------------
Name:
Title:
28
ANNEX A
DEFINITIONS
A. Incorporation of Credit and Security Agreement
Definitions. Unless otherwise defined herein, terms that are capitalized and
used in this Agreement are used as defined in the Credit and Security Agreement
described in the preamble to this Agreement.
B. Certain Defined Terms. The following terms have the
respective meanings indicated herein below:
"Applicable Closing Date" means (i) with respect to the
Original Seller, the Initial Closing Date, and (ii) with respect to each New
Seller, its New Seller Closing Date.
"Applicable Cut-Off Date" means (i) with respect to the
Original Seller, the Initial Cut-Off Date, (ii) with respect to each New Seller,
its New Seller Cut-Off Date, and (iii) with respect to all Sellers, each Cut-Off
Date after the applicable date in the preceding clause (i) or clause (ii).
"Available Funds" means, on any date of determination,
monies then held by or on behalf of the Buyer after deduction of (a) all
Obligations, if any, that are due and owing under the Credit and Security
Agreement, (b) all Servicer's Fees that are then due and owing, and (c) in the
Buyer's discretion, the accrued and unpaid portion of all current expenses of
the Buyer (whether or not then due and owing), in each of the foregoing cases,
whether or not the same have actually been paid as of the time of determination.
"Buyer" has the meaning set forth in the preamble.
"Collections" means, with respect to any Receivable, all
funds which are received from or on behalf of any related Obligor in payment of
any amounts owed (including, without limitation, purchase prices, finance
charges, interest and all other charges) in respect of such Receivable, or
applied to such amounts owed by such Obligor (including, without limitation,
payments that the Buyer, the applicable Seller or the Servicer receives from
third party payors and applies in the ordinary course of its business to amounts
owed in respect of such Receivable and net proceeds of sale or other disposition
of repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable and available
to be applied thereon).
"Commonly Controlled Entity" means, an entity, whether or
not incorporated, which is under common control with a Seller within the meaning
of Section 4001 of ERISA or is part of a group which includes a Seller and which
is treated as a single employer under Section 414 of the Code.
"Contract" means, with respect to any Receivable, any
requisition, purchase order, agreement, contract, Invoice or other writing with
respect to the provision of services by a Seller to an Obligor.
29
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound.
"Credit and Security Agreement" has the meaning set forth
in the recitals.
"Discount Factor" means a percentage calculated to provide
the Buyer with a reasonable return on its investment in the Receivables acquired
from each Seller after taking account of (i) the time value of money based upon
the anticipated dates of collection of the Receivables and the cost to the Buyer
of financing its investment in such Receivables during such period and (ii) the
risk of nonpayment by the Obligors. Each Seller and the Buyer may agree from
time to time to change the Discount Factor applicable to purchases from such
Seller based on changes in one or more of the items affecting the calculation
thereof, provided that any change to the Discount Factor shall take effect as of
the commencement of a Calculation Period commencing no earlier than the last day
of the current Calculation Period, and shall apply only prospectively.
"Equity Interests" means, with respect to any Person, any
and all shares, interests, participations or other equivalents, including
membership interests (however designated, whether voting or non-voting), of
capital of such Person, including, if such Person is a partnership, partnership
interests (whether general or limited) and any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership, whether outstanding on the
date hereof or issued after the date of this Agreement.
"ERISA" means, the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Excluded Receivables" means any Receivable originated by a
Person with whom any Seller merges or consolidates, prior to the latest to occur
of (i) the approval , in writing, by each of the Co-Agents of such Receivables
and (ii) the integration by such Seller of the Receivables into the software
systems used by such Seller to administer its Receivables, which integration
shall occur not later than 120 days after the completion of such merger or
consolidation.
"GAAP" means, generally accepted accounting principles in
the United States of America consistent with those utilized in preparing the
audited financial statements referred to in Section 2.1(a).
"Governmental Authority" means, any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation" means, as to any Person (the
"guaranteeing person"), any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any letter of
credit) as to which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary
30
obligations") of any other unrelated third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's reasonably anticipated
liability in respect thereof as determined by BSX in good faith.
"Indebtedness" means, of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of such Person's business and payable in accordance with customary practices and
earn-outs and other similar obligations in respect of acquisition and other
similar agreements), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all capital lease obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
redeemable preferred Equity Interests of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation, and (j) net liabilities under interest rate swap, exchange or cap
agreements. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor.
"Initial Closing Date" means the date on which the initial
Advance is made under the Credit and Security
Agreement.
31
"Initial Cut-Off Date" means the Cut-Off Date immediately
preceding the Initial Closing Date.
"Initial Contributed Receivables" has the meaning set forth
in Section 1.1.
"Invoice" means, with respect to any Receivable, any paper
or electronic bill, statement or invoice for services rendered by a Seller to an
Obligor.
"Joinder Agreement" has the meaning set forth in the
preamble.
"Material Acquisition" has the meaning set forth in the
Credit and Security Agreement.
"Multiemployer Plan" means, a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"New Seller" means any direct or indirect wholly-owned
Subsidiary of BSX that hereafter becomes a Seller under this Agreement by
executing a Joinder Agreement and complying with the provisions of Article V
hereof.
"New Seller Closing Date" means, as to any New Seller, the
Business Day on which each of the conditions set
forth in Article V has been satisfied.
"New Seller Cut-Off Date" means, with respect to each New
Seller, the Cut-Off Date immediately preceding its
New Seller Closing Date.
"Original Seller" means Boston Scientific Corporation, a
Delaware corporation.
"PBGC" means, the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Person" means, an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan" means, at a particular time, any employee benefit
plan which is covered by ERISA and in respect of which a Seller or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Purchase Price" means, with respect to any purchase of
Receivables and their Related Security from a Seller on any date, the aggregate
price to be paid therefor by the Buyer to the applicable Seller in accordance
with Section 1.3 of this Agreement on such date, which price shall equal (i) the
product of (x) the Outstanding Balance of such Receivables as of the Applicable
Cut-Off Date, multiplied by (y) one minus the Discount Factor then in effect,
minus (ii) any Purchase Price Credits to be credited against the Purchase Price
otherwise payable in accordance with Section 1.4 of the Agreement.
32
"Purchase Price Credit" shall have the meaning provided in
Section 1.4 hereof.
"Purchase Report" shall have the meaning provided in
Section 1.3(c) hereof.
"Receivable" means any right to payment arising from the
sale to any Domestic Person of medical products, devices or services by a
Seller, including, without limitation, the right to payment of any interest or
finance charges and other amounts with respect thereto, other than Excluded
Receivables. Rights to payment arising from any one transaction, including,
without limitation, rights to payment represented by an individual invoice,
shall constitute a Receivable separate from a Receivable consisting of the
rights to payment arising from any other transaction.
"Records" means, collectively, all Invoices and all other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to any Receivable, Related Security and/or
Obligor other than (i) any Contract related thereto, and (ii) any confidential
patient information including, without limitation, test results.
"Related Security" means, collectively, all of the
following with respect to each Receivable:
(a) all Contracts (provided, however, that to the extent
that any Contract includes a prohibition on assignment, such interest shall be
limited to a security interest in the applicable Seller's right to receive
payment thereunder to the extent contemplated by Sections 9-406 and 9-408 (as
applicable) of the UCC of the applicable jurisdiction);
(b) all right, title and interest in and to the following:
(i) all Collections; (ii) all Records; (iii) all Collection Accounts and all
cash, balances and instruments therein from time to time therein; (iv) all
right, title and interest in and to (A) the goods (including returned or
repossessed goods), if any, the sale of which by a Seller gave rise to such
Receivable and all insurance contracts with respect thereto, (B) all security
deposits and other security interests or liens and property subject thereto from
time to time purporting to secure payment of such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise, (C) all UCC financing
statements covering any collateral securing payment of such Receivable, and (D)
all guarantees and other agreements or arrangements of whatever character from
time to time supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise; and
(c) all proceeds and insurance proceeds of the foregoing.
"Reportable Event" means, any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or
..35 of PBGC Reg.ss. 4043.
"Required Capital Amount" means $2,180,000.
"Responsible Officer" means, with respect to each Seller,
any of its chief executive officer, president, vice president-finance, treasurer
or secretary, acting singly.
33
"Sale Termination Date" means, as to any Seller, the
earliest to occur of the following:
(i) the date designated by such Seller to the Buyer upon
not less than 15 Business Days' prior written notice,
(ii) the date on which an Event of Bankruptcy occurs with
respect to such Seller;
(iii) the date on which such Seller is unable to satisfy
the applicable conditions precedent to each purchase set forth in
Article III hereof;
(iv) the date on which a Change in Control occurs with
respect to BSX, the Buyer or such Seller; and
(v) the occurrence of the Termination Date under clause (a)
or (b) of the definition of such term in the Credit and Security
Agreement.
"Seller" means an Original Seller or a New Seller.
"Seller Indemnified Amounts" shall have the meaning
provided in Section 7.1 hereof.
"Seller Indemnified Party" shall have the meaning provided
in Section 7.1 hereof.
"Seller Material Adverse Effect" means, with respect to any
Seller, a material adverse effect on (i) the financial condition or operations
of BSX and its Subsidiaries taken as a whole, (ii) the ability of such Seller to
perform its obligations under this Agreement, (iii) the legality, validity or
enforceability of this Agreement or any other Transaction Document, (iv) the
Buyer's ownership interest in the Receivables acquired from such Seller
generally or in any material portion of such Receivables or the proceeds
thereof, or (v) the collectibility of the Receivables acquired from such Seller
generally or of any material portion of such Receivables.
"Single Employer Plan" means, any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Subordinated Loan" means a subordinated revolving loan
from a Seller to the Buyer which is evidenced by a Subordinated Note.
"Subordinated Note" means a subordinated promissory note in
the form of Exhibit B hereto issued by the Buyer to a Seller, as it may be
amended, supplemented, endorsed or otherwise modified from time to time in
substitution therefor or renewal thereof in accordance with the Transaction
Documents.
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
34
B. Other Interpretive Matters. All accounting terms defined directly or by
incorporation in this Agreement or the other Transaction Documents shall have
the defined meanings when used in any certificate or other document delivered
pursuant thereto unless otherwise defined therein. For purposes of this
Agreement, the other Transaction Documents and all such certificates and other
documents, unless the context otherwise requires: (a) accounting terms not
otherwise defined in such agreement, and accounting terms partly defined in such
agreement to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC and not otherwise defined in such agreement are used as
defined in such Article; (c) references to any amount as on deposit or
outstanding on any particular date means such amount at the close of business on
such day; (d) the words "hereof," "herein" and "hereunder" and words of similar
import refer to such agreement (or the certificate or other document in which
they are used) as a whole and not to any particular provision of such agreement
(or such certificate or document); (e) references to any Section, Schedule or
Exhibit are references to Sections, Schedules and Exhibits in or to such
agreement (or the certificate or other document in which the reference is made),
and references to any paragraph, subsection, clause or other subdivision within
any Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (f) the term "including" means
"including without limitation"; (g) references to any law refer to that law as
amended from time to time and include any successor law; (h) references to any
agreement refer to that agreement as from time to time amended or supplemented
or as the terms of such agreement are waived or modified in accordance with its
terms; (i) references to any Person include that Person's successors and
assigns; (j) headings are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof; (k) unless
otherwise provided, in the calculation of time from a specified date to a later
specified date, the term "from" means "from and including", and the terms "to"
and "until" each means "to but excluding"; (l) terms in one gender include the
parallel terms in the neuter and opposite gender; and (m) the preamble and
recitals shall constitute a part of this Agreement.
35
EXHIBIT A
PURCHASE REPORT
of
[Insert Seller Name], as Seller
For the CALCULATION period beginning [date] and ending [date]
TO: THE BUYER AND THE AGENTS
- ------------------------------------------- --------------- --------------- ----
Aggregate Outstanding Balance
of all Receivables sold by
Seller during the period: $____________ A
- ------------------------------------------- --------------- --------------- ----
Aggregate Outstanding Balance
of all Receivables sold during
such period which were not
Eligible Receivables on the date
when sold ("Ineligible Receivables"): ($____________) (B)
- ------------------------------------------- --------------- --------------- ----
Equals: Aggregate Outstanding
Balance of all Eligible Receivables
sold during the period (A - B): $____________ =C
- ------------------------------------------- --------------- --------------- ----
Aggregate Outstanding Balance of all
Receivables (if any) contributed
during the period: $____________ D
- ------------------------------------------- --------------- --------------- ----
Aggregate Outstanding Balance of all
Receivables (if any) contributed during
such period which were not Eligible
Receivables on the date when sold: ($____________) (E)
- ------------------------------------------- --------------- --------------- ----
Equals: Aggregate Outstanding Balance
of all Eligible Receivables (if any)
contributed during the period (D - E): $____________ =F
- ------------------------------------------- --------------- --------------- ----
The amount specified in Line F $____________ G
Multiplied By: One minus the Discount
Factor then in effect: ($____________) (H)
- ------------------------------------------- --------------- --------------- ----
Equals: Gross amount payable during
the period with respect to
such Eligible Receivables (G - H) $____________ =I
- ------------------------------------------- --------------- --------------- ----
The amount specified in Line E $____________ J
Multiplied By: One minus the
Discount Factor then in effect: ($____________) (K)
- ------------------------------------------- --------------- --------------- ----
Equals: Gross amount payable during
the period with respect to such
Ineligible Receivables (J - K) $____________ =L
- ------------------------------------------- --------------- --------------- ----
Sum of (I) + (L) $____________ M
- ------------------------------------------- --------------- --------------- ----
Less: Total Purchase Price Credits
arising during the Period: ($____________) (N)
- ------------------------------------------- --------------- --------------- ----
36
- --------------------------------------------------------------------------------
Equals: Purchase Price payable
during the Period (M - N): $____________ =O
- ------------------------------------------- --------------- --------------- ----
Less: Cash Purchase Price Paid to
Seller during the Period: $____________ P
- ------------------------------------------- --------------- --------------- ----
Less: Subordinated Loans made by
Seller during the Period: $____________ Q
- ------------------------------------------- --------------- --------------- ----
Equals: Purchase Price owed to
BSX for the period (O - P - Q): $____________ =S
- ------------------------------------------- --------------- --------------- ----
Less: Demand Advances made by
Borrower to BSX during the Period: ($____________) T
- ------------------------------------------- --------------- --------------- ----
Plus: Demand Advances re-paid to
Borrower by BSX during the Period: $____________ U
- ------------------------------------------- --------------- --------------- ----
Equals: Cash to be paid by Borrower
to BSX $____________ V
- --------------------------------------------------------------------------------
37
EXHIBIT B
SUBORDINATED NOTE
(Non-Negotiable)
[Date]
FOR VALUE RECEIVED, the undersigned, Boston Scientific
Funding Corporation, a Delaware corporation (the "Buyer"), promises to pay to
_______________, a _____________ (the "Seller"), to the extent of the Buyer's
Available Funds and on the terms and subject to the limitations and conditions
set forth herein and in the Sale Agreement referred to below, the principal sum
of the aggregate unpaid Purchase Price of all Receivables purchased from time to
time by the Buyer from the Seller pursuant to such Sale Agreement, as such
unpaid Purchase Price is shown in the records of the Seller.
1. Sale Agreement. This promissory note (this "Subordinated
Note") is one of the Subordinated Notes described in, and is subject to the
terms and conditions set forth in, that certain Receivables Sale Agreement dated
as of August 16, 2002 (as the same may be amended or otherwise modified from
time to time, the "Sale Agreement"), by and between the Seller and certain of
its affiliates and the Buyer. Reference is hereby made to the Sale Agreement for
a statement of certain other rights and obligations of the Seller and the Buyer.
2. Definitions. Capitalized terms used (but not defined)
herein have the meanings attributed thereto in the Sale Agreement or, to the
extent not defined therein, in the Credit and Security Agreement dated as of
August 16, 2002 among Boston Scientific Corporation, as initial Servicer, the
Buyer, as borrower, Blue Ridge Asset Funding Corporation, Victory Receivables
Corporation, The Bank of Tokyo-Mitsubishi, Ltd., New York Branch, individually
and as Victory Agent, and Wachovia Bank, National Association, individually, as
Blue Ridge Agent and as Administrative Agent (as amended, restated or otherwise
modified from time to time, the "Credit and Security Agreement"). In addition,
as used herein, the following terms have the following meanings:
"Bankruptcy Proceedings": As defined in clause (b) of
paragraph 9 hereof.
"Bloomberg CP Rate": For each day in a calendar month, the
rate per annum determined on the CD equivalent yield basis equal to
the composite broker/dealer offered rate for 30-day "A1/P1/F1" rated
U.S. asset-backed commercial paper, which rate appears on a Bloomberg
L.P. terminal, displayed under the address "ACPB030Y {Index} {Go}"
effective as of 10:00 a.m., New York time, on the first Business Day
of such month, provided that if no such offered rates appear on such
page, the Bloomberg CP Rate for such month will be the arithmetic
average (rounded upwards, if necessary, to the next higher 1/100th of
1%) of CP Rates being paid by the Buyer under the Credit and Security
Agreement as of the first Business Day of such month.
38
"Final Maturity Date": The forty-fifth (45th) day following
the Final Payout Date.
"Senior Interest": All Obligations (under and as defined in
the Credit and Security Agreement).
"Senior Interest Holders": Collectively, the Agents, the
Lenders, the other Affected Parties and the Indemnified Parties.
3. Interest. Prior to the Final Payout Date, the aggregate
unpaid Purchase Price owing to the Seller under the Sale Agreement from time to
time outstanding shall bear interest at a rate per annum equal to the sum of the
Bloomberg CP Rate plus 1%, and from (and including) the Final Payout Date to
(but excluding) the date on which the entire aggregate unpaid Purchase Price
owing to the Seller under the Sale Agreement is fully paid, the aggregate unpaid
Purchase Price owing to the Seller under the Sale Agreement from time to time
outstanding shall bear interest at a rate per annum equal to the sum of the
Bloomberg CP Rate plus 2%; provided, however, that in no event in excess of the
maximum rate permitted by law. In the event that, contrary to the intent of the
Seller and the Buyer, the Buyer pays interest hereunder and it is determined
that such interest rate was in excess of the then legal maximum rate, then that
portion of the interest payment representing an amount in excess of the then
legal maximum rate shall be deemed a payment of principal and applied against
the principal then due hereunder.
4. Interest Payment Dates. Subject to the provisions set
forth below, the Buyer shall pay accrued interest on this Subordinated Note from
Available Funds (a) on each Settlement Date, and (b) on the date of each
principal payment made in cash on a date other than a Settlement Date.
5. Basis of Computation. Interest accrued hereunder shall
be computed for the actual number of days elapsed on the basis of a 360-day
year.
6. Principal Payment Dates. Subject to the provisions set
forth below, payments of the principal amount of this Subordinated Note shall be
made from Available Funds as follows:
(a) The principal amount of this Subordinated Note shall be
reduced from time to time in accordance with Section 1.3 of the
Receivables Sale Agreement;
(b) The entire remaining Outstanding Balance of this
Subordinated Note shall be paid on the Final Maturity Date.
Subject to the provisions set forth below, the principal amount of and accrued
interest on this Subordinated Note may be prepaid from Available Funds on any
Business Day prior to the Seller's Sale Termination Date without premium or
penalty.
7. Payments. All payments of principal and interest
hereunder are to be made in lawful money of the United States of America.
39
8. Enforcement Expenses. In addition to and not in
limitation of the foregoing, but subject to the provisions set forth below and
to any limitation imposed by applicable law, the Buyer agrees to pay all
expenses, including reasonable attorneys' fees and legal expenses, incurred by
the Seller in seeking to collect any amounts payable hereunder which are not
paid when due.
9. Provisions Regarding Restrictions on Payment. The Buyer
covenants and agrees, and the Seller, by its acceptance of this Subordinated
Note, likewise covenants and agrees on behalf of itself and any holder of this
Subordinated Note, that the payment of the principal amount of, and interest on,
this Subordinated Note is hereby expressly subject to certain restrictions set
forth in the following clauses of this paragraph 9:
(a) No payment or other distribution of the Buyer's assets
of any kind or character, whether in cash, securities, or other
rights or property, shall be made on account of this Subordinated
Note except to the extent such payment or other distribution is
permitted under the Sale Agreement and the Credit and Security
Agreement and is made from Available Funds;
(b) In the event of (i) the occurrence of such Seller's
Sale Termination Date, or (ii) any dissolution, winding up,
liquidation, readjustment, reorganization or other similar event
relating to the Buyer, whether voluntary or involuntary, partial or
complete, and whether in bankruptcy, insolvency or receivership
proceedings, or upon an assignment for the benefit of creditors, or
any other marshaling of the assets and liabilities of the Buyer or
any sale of all or substantially all of the assets of the Buyer (such
proceedings being herein collectively called "Bankruptcy
Proceedings"), the Senior Interest shall first be paid and performed
in full and in cash before the Seller will be entitled to receive and
to retain any payment or distribution in respect to this Subordinated
Note. In order to implement the foregoing, the Seller hereby
irrevocably agrees that the Administrative Agent, in the name of the
Seller or otherwise, may demand, sue for, collect, receive and
receipt for any and all such payments or distributions, and file,
prove and vote or consent in any such Bankruptcy Proceedings with
respect to any and all claims of the Seller relating to this
Subordinated Note, in each case until the Senior Interests shall have
been paid and performed in full and in cash;
(c) In the event that the Seller receives any payment or
other distribution of any kind or character from the Buyer or from
other source whatsoever, in respect of this Subordinated Note, other
than as expressly permitted by the terms of this Subordinated Note,
such payment or other distribution shall be received for the sole
benefit of the Senior Interest Holders and shall be turned over by
the Seller to the Administrative Agent (for the benefit of the Senior
Interest Holders) forthwith;
(d) Notwithstanding any payments or distributions received
by the Senior Interest Holders in respect of this Subordinated Note,
while any Bankruptcy Proceedings are pending, the Seller will not be
subrogated to the then existing rights of the Senior Interest Holders
in respect of the Senior Interests
40
until the Senior Interests have been paid and performed in full and
in cash. Upon the occurrence of the Final Payout Date, the Seller
will be subrogated to the then existing rights of the Senior Interest
Holders, if any;
(e) The provisions set forth in this Section 9 are intended
solely for the purpose of defining the relative rights of the Seller,
on the one hand, and the Senior Interest Holders, on the other hand.
Nothing contained in this Subordinated Note is intended to or shall
impair, as between the Buyer, its creditors (other than the Senior
Interest Holders) and the Seller, the Buyer's obligation, which is
unconditional and absolute, to pay the Seller the principal of and
interest on this Subordinated Note as and when the same shall become
due and payable in accordance with the terms hereof or to affect then
relative rights of the Seller and creditors of the Buyer (other than
the Senior Interest Holders);
(f) The Seller will not, until the Senior Interests have
been paid and performed in full and in cash, transfer, pledge or
assign, or commence legal proceedings to enforce or collect this
Subordinated Note or any rights in respect hereof;
(g) The Seller will not, without the advance written
consent of each of the Agents, commence, or join with any other
Person in commencing, any Bankruptcy Proceedings with respect to the
Buyer until at least one year and one day shall have passed since the
Final Payout Date shall have occurred;
(h) If, at any time, any payment (in whole or in part) of
any Senior Interest is rescinded or must be restored or returned by a
Senior Interest Holder (whether in connection with Bankruptcy
Proceedings or otherwise), these provisions shall continue to be
effective or shall be reinstated, as the case may be, as though such
payment had not been made;
(i) The Seller hereby waives; (i) notice of acceptance of
these provisions by any of the Senior Interest Holders; (ii) notice
of the existence, creation, non-payment or non-performance of all or
any of the Senior Interests; and (iii) all diligence in enforcement,
collection or protection of, or realization upon, the Senior
Interests, or any thereof, or any security therefor;
(j) These provisions constitute a continuing offer from the
holder of this Subordinated Note to all Persons who become holders
of, or who continue to hold, Senior Interests; and these provisions
are made for the benefit of the Senior Interest Holders, and the
Administrative Agent may proceed to enforce such provisions on behalf
of each of such Persons.
41
10. General.
(a) No failure or delay on the part of the Seller in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Subordinated Note shall in any event be effective unless (i)
the same shall be in writing and signed and delivered by the Buyer and the
Seller and (ii) all consent required for such actions under the Transaction
Documents shall have been received by the appropriate Persons.
(b) The Seller hereby agrees that it will not (i) institute
against, join any other Person in instituting against or take any action, direct
or indirect, in furtherance or contemplation of instituting against, the Buyer
any bankruptcy, insolvency, winding up, dissolution, receivership,
conservatorship or other similar proceeding or action or (ii) exercise any right
of set-off or recoupment, or assert any counterclaim, against the Buyer, in each
case so long as there shall not have elapsed one year and one day since the
Final Payout Date has occurred.
(c) The Seller expressly recognizes and agrees that the
obligations represented by this Subordinated Note are not secured by any
interest in any of the assets of the Buyer, including, without limitation, any
Receivables or Related Security.
11. No Negotiation. This Subordinated Note is not
negotiable and may not be pledged except to a Person
who covenants in writing, with the Buyer and the Agents, that such Person will
agree not to initiate or join any proceeding of the type described in Section
8.12 of the Sale Agreement. Any purported sale, transfer, assignment, pledge or
negotiation of this Subordinated Note shall be void without the prior written
consent of each of the Agents under the Credit and Security Agreement.
12. Governing Law. THIS PROMISSORY NOTE SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
13. Captions. Paragraph captions used in this Subordinated
Note are for convenience only and shall not
affect the meaning or interpretation of any provision of this Subordinated Note.
42
14. Attached Schedule. The Seller is hereby authorized by
the Buyer to endorse on the schedule attached to this Subordinated Note an
appropriate notation evidencing the date and amount of each Subordinated Loan
hereunder, as well as the date of each payment with respect thereto, provided
that the failure to make such notation shall not affect any obligation of the
Buyer hereunder.
Boston Scientific Funding Corporation
By:
---------------------------------
Name:
Title:
43
SCHEDULE TO SUBORDINATED NOTE OF
BOSTON SCIENTIFIC FUNDING CORPORATION
- --------------------------------------------------------------------------------
Amount of Amount of Unpaid
Subordinated Principal Principal Notation
Date Loan Paid Balance made by
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
- --------------- --------------- --------------- --------------- ----------------
44
EXHIBIT C
CREDIT AND COLLECTION POLICIES
45
EXHIBIT D
FORM OF JOINDER AGREEMENT
--------
JOINDER AGREEMENT
THIS JOINDER AGREEMENT is executed and delivered by
_______________________, a _______________ ("New Seller") in favor of Boston
Scientific Funding Corporation, a Delaware corporation, as purchaser (the
"Buyer"), with respect to that certain Receivables Sale Agreement dated as of
August 16, 2002 by and between Boston Scientific Corporation and certain of its
wholly-owned subsidiaries from time to time party thereto as "Sellers" and the
Buyer (as amended, supplemented, joined, restated and/or otherwise modified from
time to time, the "Sale Agreement"). Capitalized terms used and not otherwise
defined herein are used with the meanings attributed thereto in the Sale
Agreement.
Subject to receipt of counterparts hereof signed by the
Administrative Agent and the Buyer, by its signature
below, New Seller hereby absolutely and unconditionally agrees to become a party
to the Sale Agreement as a Seller thereunder and to be bound by the provisions
thereof, including, without limitation, the provisions of Section 8.12 thereof.
Attached hereto [is/are] [an] amended and restated
version[s] of [Exhibit C and] Schedule 2.1(r) to the Sale
Agreement. After giving effect to the amendment[s] and restatement[s] embodied
therein, each of the representations and warranties contained in Article II of
the Sale Agreement will be true and correct as to New Seller.
The "Responsible Officers" of the New Seller will be any of
its __________, _________ or ______________, acting singly.
Delivered herewith are each of the documents, certificates
and opinions required to be delivered by New Seller pursuant to Article V of the
Sale Agreement.
The provisions of Article VIII of the Sale Agreement are
incorporated in this Joinder Agreement by this reference with the same force and
effect as if set forth in full herein except that references in such Article
VIII to "this Agreement" shall be deemed to refer to "this Joinder Agreement and
to the Sale Agreement as modified by this Joinder Agreement."
Please acknowledge your consent to New Seller's joinder in
the Sale Agreement by signing the enclosed copy hereof in the appropriate space
provided below and faxing a copy of such counterpart to (a) the Administrative
Agent, at fax no. (404) 332-5152, Attention: Elizabeth R. Wagner, and (b) to New
Seller at the fax no. set forth below its signature hereto.
46
IN WITNESS WHEREOF, New Seller has executed this Joinder
Agreement as of the ___ day of _______________.
__________________________________
By: ______________________________
Title:
[Address for Notices, including fax no.]
Each of the undersigned hereby consents
to New Seller's joinder in the Sale Agreement:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent
By:________________________________
Title:
BOSTON SCIENTIFIC FUNDING CORPORATION, as Buyer
By:________________________________
Title:
47
SCHEDULE 2.1(r)
SELLERS' ORGANIZATIONAL ID NUMBERS; JURISDICTIONS OF
ORGANIZATION; CHIEF EXECUTIVE OFFICE ADDRESSES; LOCATION(S)
WHERE RECORDS ARE KEPT
- ----------------------------------------------------------------------------------------------------------
Legal Name Prior Organizational Jurisdiction Chief Locations of Records
of Seller Legal ID of Organization Executive and material Contracts
Name, Office
Trade Name
or Assumed
Name
- -------------- -------------- ------------------ ----------------- --------------- -----------------------
Boston None 0874815 Delaware One Boston One Boston Scientific
Scientific Scientific Place, Natick,
Corporation Place, Massachusetts 01760
Natick,
Massachusetts Maple Grove,
01760 Minnesota 55311
500 Commander Shea
Blvd., Quincy,
Massachusetts 02171
- ----------------------------------------------------------------------------------------------------------