Subordinated Note - Dell Receivables LP and Dell Direct Sales LP
DELL RECEIVABLES L.P.
SUBORDINATED NOTE
Due: December 31, 2014 No. 1
DELL RECEIVABLES L.P. (the "Issuer"), for value received, hereby
promises to pay to DELL DIRECT SALES L.P. (the "Holder"), or its registered
assigns, at its address for payments set forth in Section 8.09 of the
Receivables Purchase Agreement hereinafter referred to, all principal sums owing
from time to time under Section 2.02 of the Receivables Purchase Agreement, upon
the earliest to occur of (i) December 31, 2014, (ii) the date upon which the
aggregate Invested Amount for each series is zero (the "Stated Maturity"),
unless earlier prepaid pursuant to the provisions for repayment referred to
herein, and (iii) any date agreed to by the Issuer and the Holder, and to pay
interest (computed on the basis of a 360-day year and the actual number of days
in each calendar year) on the unpaid principal sum from the date such principal
sum is advanced, such interest being payable on (i) November 30, 1995 and the
last day of each month thereafter and (ii) on the earlier of (1) the date of
prepayment and (2) Stated Maturity at a rate per annum equal to the one-month
London Interbank Offered Rate plus 0.75%, as published in The Wall Street
Journal on the last Business Day of the preceding month, until the principal
hereof is paid in full. The Holder shall enter on Schedule A information
reflecting the date and amount of each advance and the amount of any payments
made hereon. Notwithstanding anything contained herein to the contrary, the
principal sum hereof and all accrued interest thereon shall not exceed forty
percent (40%) of the excess of the Net Receivables Balance over the Trust
Invested Amount at any given time.
Payments of the principal of and interest on this Subordinated Note
(this "Note") will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts by check mailed to, or wire transfer in federal funds to the
account of, the Holder as directed by the Holder. If any payment on this Note
shall remain unpaid on the due date thereof, the same shall thereafter be
payable with interest thereon (to the extent permitted by law) at the Class A
Certificate Rate, from such due date to the date of payment thereof.
This Note is issued under the Receivables Purchase Agreement, dated as
of November 21, 1995, between the Issuer and the Holder (the "Receivables
Purchase Agreement"). This Note represents all or a portion of the Purchase
Price for Receivables
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purchased by the Issuer pursuant to the terms of the Receivables Purchase
Agreement. Each capitalized term used herein which is defined in the Receivables
Purchase Agreement or the Pooling and Servicing Agreement, dated as of November
21, 1995, among the Issuer, as Transferor, Dell USA L.P., as Servicer and
Norwest Bank Minnesota, National Association, as Trustee (the "Pooling and
Servicing Agreement") shall have the meaning ascribed to it in the Receivables
Purchase Agreement or the Pooling and Servicing Agreement, as the case may be.
This Note may be prepaid in whole or in part at the option of the
Issuer at any time without a premium.
The payment of this Note is hereby expressly subordinated in right of
payment to the payment and performance of the "Senior Debt" of the Issuer, which
is any indebtedness in respect of borrowed money as evidenced by bonds, notes,
debentures or similar instruments or letters of credit and any obligations of
the Issuer under the Pooling and Service Agreement, the Receivables Purchase
Agreement and any Supplement ("Indebtedness") of the Issuer, and all renewals,
extensions, refinancings or refundings thereof, except any such Indebtedness
that expressly provides that it is not senior or superior in right of payment
hereto, to the extent and in the manner set forth in this paragraph:
(a) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Issuer,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency, receivership or other similar proceedings, or upon
an assignment for the benefit of creditors, or any other marshalling of the
assets and liabilities of the Issuer or any sale of all or substantially
all of the assets of the Issuer except pursuant to the Pooling and
Servicing Agreement (such proceedings being herein collectively called
"Bankruptcy Proceedings" and individually called a "Bankruptcy
Proceeding"), the Senior Debt shall first be paid and performed in full and
in cash before the Holder of this Note shall be entitled to receive and to
retain any payment or distribution in respect of this Note. In order to
implement the foregoing; (x) all payments and distributions of any kind or
character in respect of this Note to which the Holder of this Note would be
entitled except for this clause (a) shall be made directly to the Trustee
(for the benefit of the holder of the Senior Debt); (y) if a Bankruptcy
Proceeding has been commenced, the holder of this Note shall promptly file
a claim or claims, in the form required in any Bankruptcy Proceedings, for
the full outstanding amount of this Note, and shall use reasonable efforts
to cause said claim or claims to be approved and all payments and other
distributions in respect thereof to be made directly to the Trustee (for
the benefit of the Holders of the Senior Debt until the Senior Debt shall
have been paid and performed in full and in cash; and (z) the Holder of
this Note hereby irrevocably agrees that the Trust
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(or the Trustee acting on the Trust's behalf), in the name of the Holder of
this Note 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 Holder of this Note relating to this Note, in each case until
the Senior Debt shall have been paid and performed in full and in cash.
(b) In the event that the Holder of this Note receives any payment or
other distribution of any kind or character from the Issuer or from any
other source whatsoever in respect of this Note after the commencement of
any Bankruptcy Proceeding, such payment or other distribution shall be
received in trust for the Holders of the Senior Debt and shall be turned
over by the Holder of this Note to the Trustee (for the benefit of the
Holders of the Senior Debt) forthwith, until all Senior Debt shall have
been paid and performed in full and in cash. All payments and distributions
received by the Trustee in respect of this Note, to the extent received in
or converted into cash, may be applied by the Trustee (for the benefit of
the Holders of the Senior Debt) first to the payment of any and all
reasonable expenses (including reasonable attorneys fees and legal
expenses) paid or incurred by the Trustee or the Holders of the Senior Debt
in enforcing these subordination provisions, or in endeavoring to collect
or realize upon this Note, and any balance thereof shall, solely as between
the Holder of this Note and the Holders of the Senior Debt, be applied by
the Trustee toward the payment of the Senior Debt in a manner determined by
the Trustee to be in accordance with the Pooling and Servicing Agreement;
but as between the Issuer and its creditors no such payments or
distributions of any kind or character shall be deemed to be payments or
distributions in respect of the Senior Debt.
(c) Upon the final payment in full and in cash of all Senior Debt, the
Holder of this Note shall be subrogated to the rights of the Holders of the
Senior Debt to receive payments or distributions from the Issuer that are
applicable to the Senior Interests until this Note is paid in full.
(d) These subordination provisions are intended solely for the purpose
of defining the relative rights of the Holder of this Note, on the one
hand, and the Holders of the Senior Debt, on the other hand. Nothing
contained in these subordination provisions or elsewhere in this Note is
intended to or shall impair, as between the Issuer, its creditors (other
than the Holders of the Senior Debt) and the Holder of this Note, the
Issuer's obligation, which is unconditional and absolute, to pay this Note
as and when the same shall become due and payable in accordance with the
terms hereof and of the Receivables Purchase Agreement or to affect the
relative rights of the Holder of this Note and creditors of the Issuer
(other than the Holders of the Senior Debt).
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(e) The Holder of this Note shall not, until the Senior Debt has been
finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign or commence legal proceedings to enforce or collect, or
subordinate to any obligation of the Issuer, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, or now or
hereafter existing, or due or to become due, other than the Senior Debt or
any rights in respect hereof or (ii) convert this Note into an equity
interest in the Issuer unless, in the case of each clauses (i) and (ii)
above, the Holder of this Note shall have received the prior written
consent of the Trustee in each case.
(f) The Holder of this Note shall not, without the advance written
consent of the Trustee, commence, or join with any other Person in
commencing, any Bankruptcy Proceedings with respect to the Issuer until at
least one year and one day shall have passed since the Senior Debt shall
have been finally paid and performed in full and in cash.
(g) If, at any time, any payment (in whole or in part) made with
respect to the Senior Debt is rescinded or must be restored or returned by
a Holder of the Senior Debt (whether in connection with any Bankruptcy
Proceedings or otherwise), these subordination provisions shall continue to
be effective or shall be reinstated, as the case may be, as though such
payment has not been made.
(h) As between the Holder of this Note and the Holders of the Senior
Debt, each of the Holders of the Senior Debt may, from time to time, at its
sole discretion, without notice to the Holder of this Note, and without
waiving any of its rights under these subordination provisions, take any or
all of the following actions: (i) retain or obtain an interest in any
property to secure any of the Senior Debt; (ii) retain or obtain the
primary or secondary obligations of any other obligor or obligors with
respect to any of the Senior Debt; (iii) extend or renew for one or more
periods (whether or not longer than the original period), alter, increase
or exchange any of the Senior Debt, or release or compromise any obligation
of any nature with respect to any of the Senior Debt; (iv) amend,
supplement, amend and restate, or otherwise modify any Transaction
Documents; and (v) release its security interest in, or surrender, release
or permit any substitution or exchange for all or any part of any rights or
property; securing any of the Senior Debt, or extend or renew for one or
more periods (whether or not longer than the original period), or release
compromise, alter or exchange any obligations of any nature of any obligor
with respect to any such rights or property.
(i) By its acceptance hereof, the Holder of this Note hereby waives;
(i) notice of acceptance of these subordination provisions by any of the
Holders of the Senior Debt; (ii)
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notice of the existence, creation, non-payment or non-performance of all or
any of the Senior Debt; and (iii all diligence in enforcement, collection
or protection of, or realization upon, the Senior Debt, or any thereof, or
any security therefor.
(j) These subordination provisions constitute a continuing offer from
the Issuer to all Persons who become the holders of, or who continue to
hold, Senior Debt and these subordination provisions are made for the
benefit of the Holders of the Senior Debt, and the Trustee may proceed to
enforce such provisions on behalf of each of such Persons.
The Holder of this Note, by its acceptance hereof, hereby covenants and
agrees that it will not at any time institute against the Issuer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed manually by its undersigned officer duly authorized thereunto.
Dated: November 30, 1995.
DELL RECEIVABLES L.P.
by DELL RECEIVABLES GEN. P. CORP,
as its general partner
By: /s/ Thomas Meredith
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Name: Thomas Meredith
Title: Cheif Executive Officer and President
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SCHEDULE A
Principal Interest Principal Interest
Date Advanced Paid Paid Rate
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