COMPUTER SCIENCES CORPORATION (NASDAQ:CSC) Files An 8-K Entry into a Material Definitive Agreement

COMPUTER SCIENCES CORPORATION (NASDAQ:CSC) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01 Entry into a Material Definitive Agreement.

On December 21, 2016, Computer Sciences Corporation (the Company)
entered into a Purchase and Sale Agreement (PSA) among the Company
(in such capacity, the Contributing Originator), Alliance-One
Services, Inc., CSC Agility Platform, Inc., CSC Consulting, Inc.,
CSC Cybertek Corporation, Mynd Corporation and PDA Software
Services LLC, as originators (collectively, the Originators), the
Company, as initial servicer (in such capacity, the Servicer), and
CSC Receivables LLC, a Delaware special purpose limited liability
company, all of the issued and outstanding membership interests of
which are owned by the Company (the SPE).
On December 21, 2016, the Company also entered into a Receivables
Purchase Agreement (RPA), among the Servicer, the SPE, as seller,
the persons from time to time party thereto as purchasers (the
Purchasers) and group agents, PNC Bank, National Association, as
administrative agent (the Administrative Agent), and PNC Capital
Markets LLC, as structuring agent.
The PSA and RPA establish a committed, one-year facility (the
Facility) with a facility limit of $250,000,000 (the Facility
Limit), based on the satisfaction of certain conditions. The
Facility Limit may be reduced or increased from time to time to the
terms of the RPA. The RPA also provides for one or more optional
extensions of the Facility’s term, if agreed to by the Purchasers,
for an additional one-year duration. Such extensions may be
requested as early as 210 days prior to, and not less than 60 days
prior to, the then current Scheduled Termination Date.
to the PSA, the Originators will sell and/or, in the case of the
Contributing Originator, contribute, all of their accounts
receivables except for certain excluded receivables (the
Receivables) and the related rights thereto (the Related Rights”)
to the SPE. The structured transaction results in the continuous
non-recourse true sale of Receivables.
to the RPA, the SPE will sell the Receivables to the Purchasers in
return for payments of capital. Each Purchasers investment under
the RPA will bear interest at the applicable adjusted LIBOR or LMIR
as selected by such Purchaser. Additionally, each Purchaser will be
entitled to receive a drawn fee payable monthly in arrears at a
rate of 0.75% per annum based on the aggregate outstanding
investment of such Purchaser. In addition, each Purchaser will be
entitled to receive an undrawn fee payable monthly in arrears at a
rate of 0.375% per annum (if the aggregate outstanding investment
made by all Purchasers is greater than or equal to 75% of the
Facility Limit) or 0.55% per annum (if the aggregate outstanding
investment made by all Purchasers is less than 75% of the Facility
Limit) based on the excess (if any) of such Purchasers commitment
over the aggregate outstanding investment of such Purchaser.
The securitization program agreements contain certain customary
representations and warranties and affirmative covenants, including
as to the eligibility of the Receivables being sold, and contain
customary program termination events and non-reinvestment events.
Certain obligations of the Originators and the Servicer are
guaranteed by the Company under a Performance Guaranty, dated as of
December 21, 2016, made by the Company in favor of the
Administrative Agent for the benefit of the Purchasers (Performance
Guaranty). However, the Performance Guaranty does not cover the
SPEs obligations to pay any yield, fees or invested amounts to the
Administrative Agent or any of the Purchasers. Subject to the
satisfaction of certain conditions including the delivery of
assignment documentation and legal opinions satisfactory to the
Administrative Agent, the Company is obligated to assign the
Performance Guaranty (including all of the Companys obligations and
duties to perform thereunder) to Everett SpinCo, Inc. (Everett)
promptly upon consummation by the Company of a merger transaction,
in accordance with the Form S-4 filed by Everett with the SEC,
which results in the Company being a wholly-owned subsidiary of
Everett. The Form S-4 was initially filed by Everett on November 2,
2016, and amended on December 7, 2016, and may be further amended.
The Originators are obligated to: (i) repurchase any Receivables
that were not eligible as represented when sold and (ii) fund any
short-falls in collections for specified non-credit related reasons
after sale. Apart from these obligations, any recourse to the
Company, the Servicer or any of the Originators for credit-related
losses under the securitization program will be limited to the
deferred portion of the purchase price for the Receivables that is
payable by the SPE to the Originators under subordinated notes
issued by the SPE to each Originator.
The Company expects to use the proceeds from Receivables sales
under the Facility for general corporate purposes.
The foregoing description of the Facility is qualified in its
entirety by reference to the PSA, RPA and Performance Guaranty,
which are filed as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3
hereto, respectively, and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation of an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03.
Item>9.01. Financial Statements and Exhibits
(d) The following exhibits are filed herewith.
Exhibit No.
Description
10.1
Purchase and Sale Agreement dated as of December 21,
2016, among Computer Sciences Corporation, as
Contributing Originator and Servicer, Alliance-One
Services, Inc., CSC Agility Platform, Inc., CSC
Consulting, Inc., CSC Cybertek Corporation, Mynd
Corporation and PDA Software Services LLC, as
Originators, and CSC Receivables LLC, as Buyer
10.2
Receivables Purchase Agreement dated as of December 21,
2016, among Computer Sciences Corporation, as Servicer,
CSC Receivables LLC, as seller, the persons from time
to time party thereto as Purchasers and group agents,
PNC Bank, National Association, as Administrative Agent
and PNC Capital Markets LLC, as structuring agent
10.3
Performance Guaranty dated as of December 21, 2016,
made by Computer Sciences Corporation, as guarantor, in
favor of PNC Bank, National Association, as
Administrative Agent, for the benefit of the purchasers


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