EXHIBIT 10.1
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 21, 2009
Among
FOUNTAIN CITY FINANCE, LLC
as the Seller
and
ENTERPRISE FUNDING COMPANY LLC
as an Investor
and
BANK OF AMERICA, NATIONAL ASSOCIATION
as a Bank and the Agent
and
DST SYSTEMS, INC.
as the Parent and the Servicer
and
Each of the parties named on Schedule III
hereto as Originators
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................1
SECTION 1.01 Certain Defined Terms.............................1
SECTION 1.02 Other Terms......................................29
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES...............................29
SECTION 2.01 Purchase Facility................................29
SECTION 2.02 Making Purchases.................................31
SECTION 2.03 Receivable Interest Computation..................32
SECTION 2.04 Settlement Procedures............................32
SECTION 2.05 Fees.............................................34
SECTION 2.06 Payments and Computations, Etc...................35
SECTION 2.07 Dividing or Combining Receivable Interests.......35
SECTION 2.08 Increased Costs; Breakage Costs..................35
SECTION 2.09 Additional Yield on Receivable Interests
Bearing a Eurodollar Rate.....................36
SECTION 2.10 Taxes............................................37
SECTION 2.11 Security Interest................................39
SECTION 2.12 Sharing of Payments..............................40
SECTION 2.13 Right of Setoff..................................40
ARTICLE III CONDITIONS OF PURCHASES.........................................40
SECTION 3.01 Conditions Precedent to Initial Purchase.........40
SECTION 3.02 Conditions Precedent to All Purchases and
Reinvestments.................................42
ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................43
SECTION 4.01 Representations and Warranties of the Seller.....43
SECTION 4.02 Representations and Warranties of the Servicer...47
SECTION 4.03 Representations and Warranties of the Parent.....49
ARTICLE V COVENANTS.........................................................50
SECTION 5.01 Covenants of the Seller..........................50
SECTION 5.02 Covenants of the Seller, the Originators and
the Parent; Audits............................57
ARTICLE VI ADMINISTRATION AND COLLECTION OF RECEIVABLES.....................58
SECTION 6.01 Designation of Servicer..........................58
SECTION 6.02 Duties of Servicer...............................58
SECTION 6.03 Certain Rights of the Agent......................60
SECTION 6.04 Rights and Remedies..............................60
SECTION 6.05 Further Actions Evidencing Purchases.............61
SECTION 6.06 Covenants of the Servicer and the Originators....61
SECTION 6.07 Indemnities by the Servicer......................62
ARTICLE VII EVENTS OF TERMINATION...........................................63
SECTION 7.01 Events of Termination............................63
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ARTICLE VIII THE AGENT......................................................67
SECTION 8.01 Authorization and Action.........................67
SECTION 8.02 Agent's Reliance, Etc............................67
SECTION 8.03 Bank of America and Affiliates...................68
SECTION 8.04 Bank's Purchase Decision.........................68
SECTION 8.05 Indemnification of Agent.........................68
ARTICLE IX INDEMNIFICATION..................................................68
SECTION 9.01 Indemnities by the Seller, the Parent and
the Originators...............................68
SECTION 9.02 Accounting Based Consolidation Event.............71
ARTICLE X MISCELLANEOUS.....................................................71
SECTION 10.01 Amendments, Etc..................................71
SECTION 10.02 Notices, Etc.....................................72
SECTION 10.03 Assignability....................................73
SECTION 10.04 Costs and Expenses...............................77
SECTION 10.05 No Proceedings; Waiver of Consequential
Damages.......................................77
SECTION 10.06 Confidentiality..................................77
SECTION 10.07 GOVERNING LAW....................................79
SECTION 10.08 Execution in Counterparts; Integration...........79
SECTION 10.09 Survival of Termination..........................79
SECTION 10.10 Consent to Jurisdiction..........................80
SECTION 10.11 WAIVER OF JURY TRIAL.............................80
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SCHEDULES
SCHEDULE I - Deposit Accounts and Lock-Boxes
SCHEDULE II - Credit and Collection Policy
SCHEDULE III - Addresses
SCHEDULE IV - UCC Information
SCHEDULE V - Persons deemed not to be Affiliates
ANNEXES
ANNEX A-1 - Form of Monthly Report
ANNEX A-2 - Form of Weekly Report
ANNEX B - Form of Deposit Account Control Agreement
ANNEX C - Form of Opinion of Counsel to the Seller
ANNEX D - Form of Assignment and Acceptance
ANNEX E - Form of Compliance Certificate
ANNEX F - Specific Definitions for Section 7.01(n)
ANNEX G - Form of Purchase Request
ANNEX H - Origination Practices
ANNEX I - Scope of Agreed Upon Procedures
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RECEIVABLES PURCHASE AGREEMENT
Dated as of May 21, 2009
FOUNTAIN CITY FINANCE, LLC, a Delaware limited liability company (the
"Seller"), ENTERPRISE FUNDING COMPANY LLC, a Delaware limited liability company
("Enterprise Funding"), as an Investor, BANK OF AMERICA, NATIONAL ASSOCIATION, a
national banking association ("Bank of America"), as agent (the "Agent") for the
Investors and the Banks (as defined herein), DST SYSTEMS, INC., a Delaware
corporation, as the Parent and the Servicer, and each of the parties named on
Schedule III hereto as Originators, agree as follows:
PRELIMINARY STATEMENT
The Seller will acquire, Receivables from DST Systems, Inc., either by
purchase or by contribution to the capital of the Seller, as determined from
time to time by the Seller and DST Systems, Inc. The Seller is prepared to sell
undivided fractional ownership interests (referred to herein as "Receivable
Interests" and further defined below) in the Receivables. Enterprise Funding
may, in its sole discretion, purchase such Receivable Interests, and the Banks
shall purchase such Receivable Interests, in each case on the terms and
conditions set forth herein. Accordingly, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Accounting Based Consolidation Event" means solely to the extent an entity
is not consolidated with an Indemnified Party on or prior to the date hereof,
the consolidation, for financial and/or regulatory accounting purposes, of all
or any portion of the assets and liabilities of any Investor that is the subject
of this Agreement or any other Transaction Document with all or any portion of
the assets and liabilities of the Agent or any Bank or any of their Affiliates
as the result of the occurrence of any change after the date hereof in
accounting standards or the issuance of any pronouncement, interpretation or
release, by any accounting body or any other Official Body charged with the
promulgation or administration of accounting standards, including the Financial
Accounting Standards Board, the International Accounting Standards Board, the
American Institute of Certified Public Accountants, the Federal Reserve Board of
Governors and the SEC. For the purposes hereof, an Accounting Based
Consolidation Event shall be deemed to have occurred as of the date that the
related consolidation shall have been required.
"Adjusted Eurodollar Rate" means, for any Fixed Period, an interest rate
per annum equal to the rate per annum obtained by dividing (a) the Eurodollar
Base Rate for such
Fixed Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Fixed Period.
"Adverse Claim" means a lien, security interest (other than a security
interest created under a Transaction Document), mortgage, pledge, assignment or
other charge or encumbrance, or any other type of preferential arrangement.
"Affected Person" has the meaning specified in Section 2.08(a).
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person.
"Affiliated Obligor" means any Obligor that is an Affiliate of another
Obligor.
"Agent" has the meaning specified in the Preamble.
"Agent's Account" means the special account (ABA 021 001 033, Account
Number 01 476 289, Account Name: DTBCA as Agent for Enterprise Funding,
Reference: Fountain City Finance, LLC/ [Wire Description]) of the Agent
maintained at the office of Deutsche Bank (New York, NY).
"Aggregate Capital" means, at any time, for any designated group of
Receivable Interests, the sum of the Capital for all such Receivable Interests
at such time.
"Aggregate Loss and Dilution Reserve" means, on any day, an amount equal to
the product of (a) the Aggregate Loss and Dilution Reserve Percentage on such
date multiplied by (b) the Net Receivables Pool Balance on such date.
"Aggregate Loss and Dilution Reserve Percentage" means, as of any day, the
greater of (a) the sum of (i) the Dynamic Loss Reserve Percentage as of such
date plus (ii) the Dynamic Dilution Reserve Percentage as of such date and (b)
the sum of (i) the Loss Reserve Floor Percentage as of such date plus (ii) the
Dilution Reserve Floor Percentage as of such date.
"Aggregate Outstanding Balance" means, at any time, for any designated
group of Receivables, the sum of the Outstanding Balances for all such
Receivables at such time.
"Aggregate Paydown Amount" means, on any day, the sum of the Paydown
Amounts on such day.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of (i)
the aggregate unpaid Yield accrued and to accrue to maturity with respect to all
Fixed Periods at such time, (ii) the Aggregate Capital at such time and (iii)
all other amounts owed (whether or not then due and payable) hereunder and under
the other Transaction Documents by the Seller, the Parent, the Servicer and the
Originators to the Agent, the Investors, the Banks or the Indemnified Parties at
such time.
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"Agreement" means this Receivables Purchase Agreement, as it may be
amended, modified or restated from time to time.
"Alternate Base Rate" means, for any day, a fluctuating rate per annum
equal to the highest of (a) the Federal Funds Rate for such day, plus 1.50%, (b)
the rate of interest in effect for such day as publicly announced from time to
time by the Agent as its "prime rate" plus 2.00% and (c) the Adjusted Eurodollar
Rate for such day, plus 3.00%. For purposes hereof, the "prime rate" is a rate
set by the Agent based upon various factors including the Agent's costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in the prime rate announced by the Agent shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Alternate Rate" means, for any Fixed Period and any Receivable Interest,
an interest rate per annum equal to 3.00% per annum above the Adjusted
Eurodollar Rate for such Fixed Period; provided, however, that in case of:
(i) any Fixed Period which commences on a date other than a Settlement
Date (Yield and Fees) or which commences prior to the Agent receiving at
least three (3) Business Days notice thereof, or;
(ii) any Fixed Period for a Receivable Interest the Capital of which
allocated to the Investors or the Banks is less than $2,000,000; or
the "Alternate Rate" for each day in such Alternate Fixed Period shall be an
interest rate per annum equal to the Alternate Base Rate in effect on such day.
The Alternate Rate for any date on or after the declaration or automatic
occurrence of the Facility Termination Date pursuant to Section 7.01 shall be an
interest rate equal to the Default Rate in effect on such day.
"Approved Replacement Financing" means one or more financing arrangements
entered into by the Parent to replace the financing provided to it under the
Credit Agreement, which replacement financing arrangements shall be in an
aggregate amount equal to or greater than $400,000,000.
"Argus" means Argus Health Systems, Inc., a Delaware corporation.
"Argus Receivable" means any Receivable originated by Argus prior to the
Closing Date.
"Asset Purchase Agreement" means (a) in the case of any Bank other than
Bank of America, the asset purchase agreement or similar liquidity agreement
entered into by such Bank concurrently with the Assignment and Acceptance
pursuant to which it became party to this Agreement and (b) in the case of Bank
of America, the secondary market agreement, asset purchase agreement or other
similar liquidity agreement entered into by Bank of America for the benefit of
Enterprise Funding, to the extent relating to the sale or transfer of interests
in Receivable Interests.
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"Assignment and Acceptance" means an assignment and acceptance agreement
entered into by a Bank, an Eligible Assignee and the Agent, pursuant to which
such Eligible Assignee may become a party to this Agreement, in substantially
the form of Annex D.
"Audit" means any third party audits, inspections and verifications of the
Receivables, the Related Security and the related books and records and
collection systems of the Seller or any Originator in accordance with the
customary procedures for securitization transactions adopted by the Agent.
"Bank Commitment" means, on any day, (a) with respect to Bank of America,
$178,500,000 or such amount as reduced or increased by any Assignment and
Acceptance entered into between Bank of America and other Banks; or (b) with
respect to a Bank that has entered into an Assignment and Acceptance, the amount
set forth therein as such Bank's Bank Commitment, in each case as such amount
may be reduced or increased by an Assignment and Acceptance entered into between
such Bank and an Eligible Assignee, and as may be further reduced (or
terminated) pursuant to the next sentence. Any reduction (or termination) of the
Purchase Limit pursuant to the terms of this Agreement shall reduce ratably (or
terminate) each Bank's Bank Commitment.
"Bank of America" has the meaning specified in the Preamble.
"Banks" means Bank of America and each Eligible Assignee that shall become
a party to this Agreement pursuant to Section 10.03.
"Billed Receivable" means a Receivable with respect to which the applicable
Originator has performed its obligations under the related Contract and has
generated and sent to the related Obligor an invoice.
"Xxxx of Sale" means the Xxxx of Sale, dated May 21, 2009, between
Fountainview and the Parent.
"Business Day" means any day on which (i) banks are not authorized or
required to close in New York, New York or Charlotte, North Carolina and (ii) if
this definition of "Business Day" is utilized in connection with the Adjusted
Eurodollar Rate, dealings are carried out in the London interbank market.
"Capital" of any Receivable Interest means on any day an amount equal to
the original amount paid to the Seller for such Receivable Interest at the time
of its purchase by the Investors or the Banks pursuant to Section 2.02 of this
Agreement, or such amount divided or combined in accordance with Section 2.07,
in each case reduced from time to time by Collections distributed on account of
such Capital pursuant to Section 2.04(d); provided that if such Capital shall
have been reduced by any distribution and thereafter all or a portion of such
distribution is rescinded or must otherwise be returned for any reason, such
Capital shall be increased by the amount of such rescinded or returned
distribution, as though it had not been made.
"Capital Stock" means (i) in the case of a corporation, capital stock, (ii)
in the case of an association or business entity, any and all shares, interests,
participation, rights or
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other equivalents (however designated) of capital stock, (iii) in the case of a
partnership, partnership interests (whether general or limited), (iv) in the
case of a limited liability company, membership interests and (v) 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, the issuing Person.
"Change of Control" means, with respect to any Person, an event or series
of events by which: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit
plan of such person or its subsidiaries , and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person or group shall be deemed to have "beneficial
ownership" of all securities that such person or group has the right to acquire
(for purposes of this definition, an "Option Right"), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the equity securities of such Person entitled to
vote for members of the board of directors or equivalent governing body of such
Person on a fully-diluted basis (and taking into account all such securities
that such Person or group has the right to acquire pursuant to any Option
Right); (b) during any period of twelve (12) consecutive months, a majority of
the members of the board of directors or other equivalent governing body of such
Person cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and (iii) above, any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors; or (c) there shall have occurred under any
indenture or other instrument evidencing Indebtedness in excess of $20,000,000,
any "change of control" (as defined in such indenture or other evidence of
Indebtedness) obligating such Person to repurchase, redeem or repay all or any
part of the Indebtedness or Capital Stock provided for therein.
"Charged-off Receivable" means, on any day, any Receivable that is, or
should have been, charged-off in accordance with the Credit and Collection
Policy.
"Closing Date" means May 21, 2009.
"Closing Date Receivable" means each Receivable transferred by Fountainview
to the Parent pursuant to the Xxxx of Sale.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning specified in Section 2.11.
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"Collections" means, with respect to any Receivable, all cash collections
and other cash proceeds of such Receivable, including, without limitation, all
finance charges and all cash proceeds of Related Security with respect to such
Receivable, and any Collection of such Receivable deemed to have been received
pursuant to Section 2.04.
"Commercial Paper" means the promissory notes, if any, issued by an
Investor (or its related commercial paper issuer if the Investor does not itself
issue commercial paper) in the commercial paper market.
"Commitment Termination Date" means the earliest of (a) May 20, 2010,
unless, prior to such date (or the date so extended pursuant to this clause),
upon the Seller's request, made not more than forty-five (45) days prior to the
then Commitment Termination Date, one or more Banks having Bank Commitments
equal to at least 100% of the Purchase Limit shall in their sole discretion
consent, which consent shall be given not more than thirty (30) days prior to
the then Commitment Termination Date, to the extension of the Commitment
Termination Date to a date occurring not more than 364 days after the then
Commitment Termination Date; provided, however, that any failure of any Bank to
respond to the Seller's request for such extension shall be deemed a denial of
such request by such Bank, (b) the Facility Termination Date, (c) the date
determined pursuant to Section 7.01, and (d) the date the Purchase Limit reduces
to zero pursuant to Section 2.01(b).
"Compliance Certificate" means a certificate in substantially the form set
forth on Annex E signed by the Seller's or the Parent's, as applicable, chief
financial officer stating that (a) the financial statements attached to (or with
respect to the Parent for so long as the Parent is required to file its
financial statements with the SEC, incorporated by reference into) such
Compliance Certificate has been prepared in accordance with GAAP and accurately
reflects the financial condition of the Seller or the Parent and its
Subsidiaries, as applicable, and (B) to the best of such Person's knowledge, no
Event of Termination or Incipient Event of Termination exists, or if any Event
of Termination or Incipient Event of Termination Event exists, stating the
nature and status thereof.
"Concentration Limit" means, on any day, the following:
(a) with respect to the percentage of the Net Eligible Receivables
Outstanding Balance comprised of the Aggregate Outstanding Balance of
Receivables for any Obligor and such Obligor's Subsidiaries and Affiliates,
taken together, 3.0%; provided, however, that concentration limits for the
percentage of the Net Eligible Receivables Outstanding Balance of all Eligible
Receivables comprised of the Aggregate Outstanding Balance of Receivables for
any Obligor, taken individually, may exceed 3.0%, subject to specific Obligor
debt ratings as set forth below:
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-------------------------------------- ------------------------------------------
Obligor's Debt Rating Concentration Limit
-------------------------------------- ------------------------------------------
At least AA- by S&P and Aa3 by 10.0% of the Net Eligible Receivables
Xxxxx'x Outstanding Balance
-------------------------------------- ------------------------------------------
At least BBB by S&P and Baa2 by 7.5% of the Net Eligible Receivables
Xxxxx'x Outstanding Balance
-------------------------------------- ------------------------------------------
At least BBB- by S&P and Baa3 by 5.0% of the Net Eligible Receivables
Xxxxx'x Outstanding Balance
-------------------------------------- ------------------------------------------
provided that in the case of an Obligor with any Affiliated Obligor, the
Concentration Limit shall be calculated as if such Obligor and such Affiliated
Obligor are one Obligor; and provided further that if on any date, an Obligor is
split-rated, then the applicable Concentration Limit shall be calculated on the
lower of the S&P or Xxxxx'x rating;
(b) with respect to the percentage of the Net Eligible Receivables
Outstanding Balance comprised of the Aggregate Outstanding Balance of all
Receivables the Obligors of which do not have a billing address in the United
States (or Puerto Rico), 3.0% of the Net Eligible Receivables Outstanding
Balance;
(c) with respect to the percentage of the Net Eligible Receivables
Outstanding Balance comprised of the Aggregate Outstanding Balance of all
Unbilled Receivables, 25.0% of the Net Eligible Receivables Outstanding Balance;
and
(d) with respect to the percentage of the Net Eligible Receivables
Outstanding Balance comprised of the Aggregate Outstanding Balance of the Deemed
Non-Affiliate Receivables of any single Deemed Non-Affiliate, 3.0% and, with
respect to the percentage of the Net Eligible Receivables Outstanding Balance
comprised of the Aggregate Outstanding Balance of all Deemed Non-Affiliate
Receivables, 5.0%.
"Contract" means, in relation to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes, or other writings pursuant to
which such Receivable arises or which evidence such Receivable or under which a
Person becomes or is obligated to make payment in respect of such Receivable.
"CP Fixed Period Date" means, for any Fixed Period and any Receivable
Interest, the date of purchase of such Receivable Interest and thereafter the
last day of each calendar month or any other day as shall have been agreed to in
writing by the Agent and the Seller prior to the last day of such Fixed Period.
"Credit Agreement" means the Credit Agreement, dated as of June 28, 2005,
among the Parent, as borrower, the co-documentation agents, joint lead arrangers
and joint book runners named therein, the lenders named therein and Bank of
America, N.A., as administrative agent, swing line lender and issuer of letters
of credit, as the same has been and may be further amended, supplemented,
restated or otherwise modified.
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"Credit and Collection Policy" means the receivables credit and collection
policies and practices of the Originators in effect on the date of this
Agreement as set forth in Schedule II hereto, as modified in compliance with
this Agreement.
"Days Sales Outstanding" means, for any calendar month, the number of
calendar days equal to the product of (a) 91 and (b) the amount computed by
dividing (i) the Aggregate Outstanding Balance of Receivables as of the last day
of the immediately preceding calendar month by (ii) the aggregate amount of
sales by the Originators giving rise to Receivables during the three consecutive
calendar months immediately preceding the Report Date for such calendar month.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services, (iv)
obligations as lessee under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, and (v) obligations under
direct or indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (i) through (iv) above.
"Debt Rating" means, for any Person, the rating by S&P or Xxxxx'x of such
Person's long-term public senior unsecured non-credit enhanced debt.
"Deemed Non-Affiliate" means, on any day, with respect to each Person
listed on Schedule V under the heading "Applicable Person", each corresponding
Person listed under the heading `Deemed Non-Affiliate" on such day.
"Deemed Non-Affiliate Receivable" means, any Receivable the Obligor of
which is a Deemed Non-Affiliate of the Originator of such Receivable.
"Default Rate" means, on any day, a rate per annum equal to 2.0% plus the
Alternate Base Rate on such day.
"Default Ratio" means, for any calendar month, a ratio (expressed as
percentage) computed by dividing (a) the sum of (i) the Aggregate Outstanding
Balance of Receivables which were 91 - 120 days past due as of the last day of
such calendar month plus (ii) (without duplication) the Aggregate Outstanding
Balance of all Receivables which became Charged-off Receivables during such
calendar month, by (b) the Aggregate Outstanding Balance (in each case, at the
time of creation) of Receivables created during the fourth preceding calendar
month.
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof, remains unpaid for 91 or
more days from the original due date for such payment;
(ii) as to which an Event of Bankruptcy has occurred and is continuing
with respect to the Obligor thereof;
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(iii) as to which the Obligor thereof or any other Person obligated
thereon or owning any Related Security in respect thereof has taken any
action, or suffered any event to occur, of the type described in Section
7.01(g); or
(iv) which is a Charged-off Receivable.
"Deferred Revenue Amount" means, on any day, the amount of any Receivable
treated as "deferred revenue" under GAAP.
"Delinquency Ratio" means, for any calendar month, the ratio (expressed as
a percentage) computed as of the last day of the immediately preceding calendar
month by dividing (i) the Aggregate Outstanding Balance of all Receivables that
were Delinquent Receivables on the last day of the immediately preceding
calendar month by (ii) the Aggregate Outstanding Balance of all Receivables
created by the Originators during the third preceding month.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and:
(i) as to which any payment, or part thereof, remains unpaid for 61-90
days from the original due date for such payment; or
(ii) which, consistent with the Credit and Collection Policy, would be
classified as delinquent by the applicable Originator or the Seller.
"Deposit Account" means an account maintained at a Deposit Bank pursuant to
a Deposit Account Control Agreement into which (i) Collections in the form of
checks and other items are deposited that have been sent to one or more
Lock-Boxes by Obligors and/or (ii) Collections in the form of electronic funds
transfers and other items are paid directly by Obligors.
"Deposit Account Control Agreement" means an agreement, in substantially
the form of Annex B.
"Deposit Bank" means any of the banks holding one or more Deposit Accounts.
"Diluted Receivable" means that portion (and only that portion) of any
Receivable which is either (a) reduced or canceled as a result of (i) any
defective, rejected or returned merchandise or services or any failure by an
Originator to deliver any merchandise or provide any services or otherwise to
perform under the underlying Contract, (ii) any change in the terms of or
cancellation of, a Contract or any cash discount, discount for quick payment or
other adjustment by an Originator which reduces the amount payable by the
Obligor on the related Receivable (except any such change or cancellation
resulting from or relating to the financial inability to pay or insolvency of
the Obligor of such Originator Receivable) or (iii) any set-off by an Obligor in
respect of any claim by such Obligor as to amounts owed by it on the related
Receivable (whether such claim arises out of the same or a related transaction
or an unrelated transaction) or (b) subject to any specific dispute, offset,
counterclaim or defense whatsoever (except the discharge in bankruptcy of the
Obligor thereof).
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"Dilution Horizon Ratio" means, as of any date, the ratio (expressed as a
percentage) computed by dividing (i) the Aggregate Outstanding Balance (in each
case, on the date of creation) of all Receivables created by the Originators
during the two most recently ended calendar months by (ii) the Net Eligible
Receivables Outstanding Balance as at the last day of the most recently ended
calendar month.
"Dilution Ratio" means, as of any date, the ratio (expressed as a
percentage) computed for the most recently ended calendar month by dividing (i)
the Aggregate Outstanding Balance of all Receivables which became Diluted
Receivables during such calendar month by (ii) the Aggregate Outstanding Balance
(in each case, on the date of creation) of all Receivables created during the
calendar month immediately preceding such date; provided that for the purposes
of calculating clause (i) above, Diluted Receivables relating to intercompany
Receivables and customer postage deposits shall be excluded.
"Dilution Reserve Floor Percentage" means, as of any date, the product of
(a) the Dilution Horizon Ratio on such date multiplied by (b) the average of the
Dilution Ratios for each of the twelve most recently ended months.
"Dilution Volatility Ratio" means, as of any date, the ratio (expressed as
a percentage) equal to the product of (a) the highest two-month rolling average
Dilution Ratio calculated for each of the twelve most recently ended calendar
months minus the average of the Dilution Ratios for each of the twelve most
recently ended calendar months, multiplied by (b) a ratio (expressed as a
percentage) calculated by dividing the highest two-month rolling average
Dilution Ratio calculated for each of the twelve most recently ended calendar
months by the average of the Dilution Ratios for each of the twelve most
recently ended calendar months.
"Dynamic Dilution Reserve Percentage" means, as of any date, the product of
(a) the sum of (i) the product of (x) 2.25, multiplied by (y) the average of the
Dilution Ratios for each of the twelve most recently ended calendar months, plus
(ii) the Dilution Volatility Ratio as at the last day of the most recently ended
calendar month, multiplied by (b) the Dilution Horizon Ratio as of such date.
"Dynamic Loss Reserve Percentage" means, as of any date, the product of (i)
2.25, multiplied by (ii) the Loss Horizon Ratio as of such date multiplied by
(iii) the highest of the Three-Month Loss Ratios calculated for each of the
twelve most recently ended calendar months.
"E-Mail Servicer Report" has the meaning specified in Section 6.02(g).
"Effective Date" means the earlier to occur of (i) the date of the initial
purchase of a Receivable Interest under this Agreement and (ii) the date on
which the conditions precedent specified in Section 3.01 are satisfied.
"Eligible Assignee" means (i) Bank of America or any of its Affiliates,
(ii) any Person administered by Bank of America or any of its Affiliates
(including, for the avoidance of doubt, any special purpose entity administered
by Bank of America or any of its Affiliates that finances its activities
directly or indirectly through asset backed commercial paper and is designated
by Bank of America from time to time to accept an assignment from the Investor
of
10
all or a portion of the Receivable Interests), (iii) any Bank party hereto or
any of its Affiliates, or (iv) any financial or other institution acceptable to
the Agent and approved by the Seller (which approval by the Seller shall not be
unreasonably withheld, delayed or conditioned and shall not be required if an
Event of Termination or an Incipient Event of Termination has occurred and is
continuing).
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which either (A) has a billing address in the
United States (including, without limitation, Puerto Rico), or (B) does not
have a billing address in the United States (including, without limitation,
Puerto Rico); provided that, in the case of a Receivable with an Obligor
that does not have a billing address the United States (or Puerto Rico),
the Outstanding Balance of such Receivable when added to the Aggregate
Outstanding Balance of all Receivables the Obligors of which do not have a
billing address in the United States or Puerto Rico does not exceed the
percentage set forth in clause (b) of the definition of "Concentration
Limit" above;
(ii) the Obligor is not (A) an Affiliate or employee of any Originator
or the Seller or any of the their respective Affiliates (other than a
Deemed Non-Affiliate) or (B) a government or a governmental subdivision or
agency;
(iii) which, if an Affiliate of any Originator or the Seller
originated such Receivable, is a Deemed Non-Affiliate Receivable;
(iv) which is not a Defaulted Receivable or an Unearned Revenue
Receivable;
(v) the Obligor of which is not the Obligor of any Defaulted
Receivables the Aggregate Outstanding Balance of which constitutes 10.0% or
more of the Aggregate Outstanding Balance of all Receivables of such
Obligor;
(vi) which is a Billed Receivable or an Unbilled Receivable;
(vii) which represents a bona fide obligation of the Obligor of such
Receivable to pay (A) in the case of a Billed Receivable, the stated amount
or (B) in the case of an Unbilled Receivable, the amount calculated in the
manner set forth in the related Contract as the amount due with respect
thereto;
(viii) as to which the applicable Originator has satisfied and fully
performed all obligations with respect to such Receivable required to be
fulfilled by it, and no further action (other than, in the case of an
Unbilled Receivable, generating and sending of an invoice) is required to
be performed by any Person with respect thereto other than payment thereon
by the applicable Obligor;
(ix) which, according to the Contract related thereto, is required (or
with respect to any Unbilled Receivable, will be required) to be paid in
full within sixty (60) days of the original billing date therefor;
11
(x) which is an "eligible asset" as defined in Rule 3a-7 under the
Investment Company Act of 1940, as amended;
(xi) which is an "account" within the meaning of Article 9 of the UCC
of the applicable jurisdictions governing the perfection of the interest
created by a Receivable Interest;
(xii) which is denominated and payable only in U.S. dollars in the
United States;
(xiii) (A) which arises under a Contract which, together with such
Receivable, is in full force and effect and constitutes the legal, valid
and binding obligation of the Obligor of such Receivable, (B) which arises
under a Contract originated and maintained in accordance with the
Origination Practices (as defined in Annex H, which is incorporated by
reference herein), (C) as to which the Seller has good and marketable
title, and (D) which is not subject to any Adverse Claim or any dispute,
offset, counterclaim or defense whatsoever (except the potential discharge
in bankruptcy of such Obligor);
(xiv) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, consumer protection, truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which none of the
Seller, any Originator, the Servicer or the Obligor is in violation of any
such law, rule or regulation in any material respect;
(xv) which arises under a Contract which (A) does not contain a
legally enforceable provision requiring the Obligor thereunder to consent
to the transfer, sale or assignment of the rights of the Seller or the
applicable Originator thereunder and (B) does not contain a confidentiality
provision that purports to restrict the ability of the Agent, the Investors
or the Banks to exercise their rights under this Agreement, including,
without limitation, their right to review the Contract;
(xvi) which was generated in the ordinary course of the applicable
Originator's business;
(xvii) which has not been extended, rewritten or otherwise modified
from the original terms thereof (except as permitted by Section 6.02(c));
(xviii) the transfer, sale or assignment of which does not contravene
any applicable law, rule or regulation;
(xix) which (A) satisfies all applicable requirements of the Credit
and Collection Policy and (B) complies with such other criteria and
requirements (other than those relating to the collectibility of such
Receivable) as the Agent may from time to time specify to the Seller upon
thirty (30) days' notice;
12
(xx) as to which, on or prior to the later of the date of this
Agreement and the date such Receivable is created, the Agent has not given
at least three (3) Business Days' notice to the Seller that such
Receivable, or any Receivable owing from the Obligor of such Receivable, is
no longer acceptable for purchase by the Investors and the Banks hereunder;
(xxi) which (together with the Related Security and other items of
Collateral related thereto) has been the subject of the grant of a first
priority perfected security interest therein by the Seller to the Agent, on
behalf of the Investors, of all of the Seller's right, title and interest
therein;
(xxii) the Obligor of which has been directed by the Seller, the
Servicer or the related Originator, as applicable, to make all payments to
a Deposit Account (or a related Lock-Box) established and maintained
pursuant to a Deposit Account Control Agreement; provided that, until the
date that occurs thirty (30) days from the Closing Date, (a) any Argus
Receivable the Obligor of which has not been directed by the Seller or the
Servicer, as the case may be, to make all payments to a Deposit Account (or
a related Lock-Box) established and maintained pursuant to a Deposit
Account Control Agreement and (b) any Receivable the Obligor of which has
not been notified of a name change on the Deposit Account (or a related
Lock-Box) to which it has been directed to make payments, shall be deemed
an "Eligible Receivable" for the purposes hereof; and
(xxvi) (A) which (in the case of any Receivable that is not a Closing
Date Receivable) has been sold to the Parent pursuant to the Initial
Purchase Agreement in a "true sale" transaction and (B) which has been sold
or contributed by the Parent to the Seller pursuant to the Secondary
Purchase Agreement in a "true sale" or "true contribution" transaction;
provided, however, that an Unbilled Receivable that is otherwise an Eligible
Receivable shall cease to be an Eligible Receivable on the thirtieth (30th) day
after the date of the shipment of the related goods or the completion of the
related service.
"Enterprise Funding" has the meaning specified in the Preamble.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Parent, Seller or any Originator within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the
Code for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Parent, Seller or any Originator or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Parent, Seller or
any Originator or any ERISA Affiliate from a Multiemployer Plan or notification
that a
13
Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Sections
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Parent, Seller or any Originator or any ERISA Affiliate.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Base Rate" means, for any Fixed Period in respect of which
Yield for any Receivable Interest is computed by reference to the Adjusted
Eurodollar Rate:
(i) the rate per annum (carried out to the fifth decimal place) equal
to the rate determined by the Agent to be the offered rate that appears on
the page of the Reuters Screen that displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number
LIBOR01) for deposits in U.S. dollars (for delivery on the first day of
such Fixed Period) with a term equivalent to such Fixed Period, determined
as of approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Fixed Period, or
(ii) in the event the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall cease
to be available, the rate per annum (carried to the fifth decimal place)
equal to the rate determined by the Agent to be the offered rate on such
other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in U.S. dollars (for
delivery on the first day of such Fixed Period) with a term equivalent to
such Fixed Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Fixed Period, or
(iii) in the event the rates referenced in the preceding subsections
(a) and (b) are not available, the rate per annum determined by the Agent
as the rate of interest at which U.S. dollar deposits (for delivery on the
first day of such Fixed Period) in same day funds in the approximate amount
of the Receivable Interest to be funded by reference to the Adjusted
Eurodollar Rate and with a term equivalent to such Fixed Period would be
offered by its London branch to major banks in the offshore U.S. dollar
market at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Fixed Period.
"Eurodollar Rate Reserve Percentage" means for any day during any Fixed
Period in respect of which Yield for any Receivable Interest is computed by
reference to the Adjusted Eurodollar Rate, the reserve percentage (expressed as
a decimal, rounded upward to the next 1/100th of 1%) in effect on such day,
whether or not applicable to the Investor, under regulations issued from time to
time by the Board of Governors of the Federal Reserve System for determining the
maximum reserve requirement (including, without limitation, any emergency,
14
supplemental or other marginal reserve requirement) with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities.
"Event of Bankruptcy" means with respect to any Person, (i) that such
Person (A) shall generally not pay its debts as such debts become due or (B)
shall admit in writing its inability to pay its debts generally or (C) shall
make a general assignment for the benefit of creditors; (ii) any proceeding
shall be instituted by or against such Person seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial part of
its property; or (iii) such Person shall take any corporate, partnership or
other similar appropriate action to authorize any of the actions set forth in
the preceding clauses (i) or (ii).
"Event of Termination" has the meaning specified in Section 7.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Facility Termination Date" means the earliest of (a) the Commitment
Termination Date or (b) the date determined pursuant to Section 7.01 or (c) the
date the Purchase Limit reduces to zero pursuant to Section 2.01(b).
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on the next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate charged to the Agent
on such day on such transactions as determined by it.
"Fee Agreement" has the meaning specified in Section 2.05(b).
"Fees" has the meaning specified in Section 2.05(b).
"Fixed Period" means, with respect to any Receivable Interest:
(a) in the case of any Fixed Period in respect of which Yield is
computed by reference to the Investor Rate, each successive period
commencing on each CP Fixed Period Date for such Receivable Interest and
ending on the next succeeding CP Fixed Period Date for such Receivable
Interest; and
(b) in the case of any Fixed Period in respect of which Yield is
computed by reference to the Alternate Rate, each successive period (i)
initially commencing on (and including) the date of the initial purchase of
such Receivable Interest and ending on (but excluding) the next following
Settlement Date (Yield and Fees), and (ii) after the date of the initial
purchase of such Receivable Interest, commencing on (and including) a
Settlement Date (Yield and
15
Fees) and ending on (but excluding) the next following Settlement Date
(Yield and Fees);
provided, however, that:
-------- -------
(i) if Yield in respect of such Fixed Period is computed by
reference to the Adjusted Eurodollar Rate, and such Fixed Period would
otherwise end on a day which is not a Business Day, and there is no
subsequent Business Day in the same calendar month as such day, such
Fixed Period shall end on the next preceding Business Day);
(ii) in the case of any Fixed Period for any Receivable Interest
which commences before the Facility Termination Date for such
Receivable Interest and would otherwise end on a date occurring after
such Facility Termination Date, such Fixed Period shall end on such
Facility Termination Date and the duration of each Fixed Period which
commences on or after the Facility Termination Date for such
Receivable Interest shall be of such duration as shall be selected by
the Agent; and
(iii) any Fixed Period in respect of which Yield is computed by
reference to the Investor Rate may be terminated at the election of
the Agent at any time, in which case the related Receivable Interest
shall be allocated by the Agent to a new Fixed Period commencing on
(and including) the date of such termination and ending on (but
excluding) the next following Settlement Date (Yield and Fees), and
shall accrue Yield at the Alternate Rate.
"Fountainview" means Fountainview Finance, LLC.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board in effect from time to time.
"Incipient Event of Termination" means an event that but for notice or
lapse of time or both would constitute an Event of Termination.
"Indemnified Party" has the meaning specified in Section 9.01.
"Initial Purchase Agreement" means the Originator Purchase Agreement dated
as of the date of this Agreement among the Originators (other than the Parent),
as sellers, and the Parent, as purchaser and servicer, as the same may be
amended, modified or restated from time to time.
"Investors" means Enterprise Funding and all other owners by assignment or
otherwise of a Receivable Interest originally purchased by Enterprise Funding
and, to the extent of the undivided interests so purchased, shall include any
participants.
16
"Investor Rate" means for any Fixed Period for any Receivable Interest the
per annum rate equivalent to the weighted average cost (as determined by the
Agent and which shall include commissions of placement agents and dealers,
incremental carrying costs incurred with respect to Commercial Paper issued by
the Investors (or any related commercial paper issuer, if such Investor does not
itself issue commercial paper) that is maturing on dates other than those on
which corresponding funds are received by the Investors, other borrowings by the
Investors (other than under any Program Support Agreement) and any other costs
associated with the issuance of Commercial Paper related to the Investors) of or
related to the issuance of Commercial Paper related to the Investors (or any
related commercial paper issuer, if such Investor does not itself issue
commercial paper) allocated, in whole or in part, by such Investor or the Agent
to fund or maintain any Receivable Interest (and which may be also allocated in
part to the funding of other assets of such Investor); provided, however, that
if any component of such rate is a discount rate, in calculating the "Investor
Rate" for such Receivable Interest for such Fixed Period, an Investor (or its
related commercial paper issuer, if such Investor does not itself issue
commercial paper) shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum.
"Law" means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree, judgment or award
of any Official Body.
"Liquidation Fee" means, for (i) any Fixed Period for which Yield is
computed by reference to the Investor Rate and a reduction of Capital is made
for any reason on any day or (ii) any Fixed Period for which Yield is computed
by reference to the Eurodollar Rate and a reduction of Capital is made for any
reason on any day other than the last day of such Fixed Period, the amount, if
any, by which (A) the additional Yield (calculated without taking into account
any Liquidation Fee or any shortened duration of such Fixed Period pursuant to
clause (iii) of the definition thereof) which would have accrued from the date
of such repayment to the last day of such Fixed Period (or, in the case of
clause (i) above, the maturity of the underlying commercial paper tranches) on
the reductions of Capital of the Receivable Interest relating to such Fixed
Period had such reductions remained as Capital, exceeds (B) the income, if any,
received by the Investors or the Banks which hold such Receivable Interest from
the investment of the proceeds of such reductions of Capital.
"Liquidity Agreement" means any agreement entered into by any related
Investor (or any commercial paper issuer that finances such Investor) providing
for the sale by such Investor (or any commercial paper issuer that finances such
Investor) of interests in its investment in the Receivable Interest and the
portion of the Capital funded by such Investor (or its commercial paper issuer
that finances such Investor) (or portions thereof), or the making of loans or
other extensions of credit to such Investor (or any commercial paper issuer that
finances such Investor) secured by security interests such Investor's (or any
commercial paper issuer that finances such Investor) interest in the Receivable
Interest and the portion of the Capital funded by such Investor, to support all
or part of such Investor's (or any commercial paper issuer that finances such
Investor) payment obligations under its Commercial Paper or to provide an
alternate means of funding such Investor's investments in accounts receivable or
other financial assets, in each case as amended, modified, supplemented,
restated or replaced from time to time.
17
"Liquidity Bank" means includes the various financial institutions that
are, or may become, parties to a Liquidity Agreement, as a purchaser or lender
thereunder.
"Lock-Box" means each post office box listed on Schedule I and administered
by a Deposit Bank for the purpose of receiving Collections.
"Loss Horizon Ratio" means, as of any date, a ratio (expressed as a
percentage) computed by dividing (i) the sum of (a) the Aggregate Outstanding
Balance (in each case, at the time of creation) of all Receivables created
during the five most recently ended calendar months by (ii) the Net Eligible
Receivables Outstanding Balance as of the last day of the most recently ended
calendar month.
"Loss Reserve Floor Percentage" means, as of any date, 15%.
"Majority Banks" means, at any time, Banks having Bank Commitments that
aggregate more than 50% of the Purchase Limit or, if the Bank Commitments have
been terminated, Banks either holding Receivable Interests (or interests
therein) or obligated to purchase interests in Receivable Interests pursuant to
the Asset Purchase Agreement which aggregate more than 50% of all outstanding
Receivable Interests.
"Material Adverse Effect" means a material adverse effect on (i) the
collectibility of the Receivables or any significant portion thereof, (ii) the
ability of the Seller, the Servicer, the Parent or any Originator to perform any
of its respective material obligations under the Transaction Documents to which
it is a party, (iii) the legality, validity or enforceability of the Transaction
Documents (including, without limitation, the validity, enforceability or
priority of the ownership or security interests granted thereunder) or the
rights of the Agent, the Investors or the Banks under the Transaction Documents
or (iv) the business, operations, property, prospects or financial or other
condition of the Parent and its Subsidiaries taken as a whole.
"Maximum Percentage Factor" means 100% or, if Weekly Reports are required
to be delivered pursuant to Section 6.02(g)(ii), 97%.
"Monthly Report" means a report in substantially the form of Annex A-1
hereto setting forth the calculation of the Net Receivables Pool Balance, the
calculations of each of the Aggregate Loss and Dilution Reserve and the Yield
and Fee Reserve, the Percentage Factor (as of the date of such report) and
providing Receivable performance and program documentation compliance
information for the previous calendar month, and containing such additional
information as the Agent may reasonably request from time to time, furnished by
the Servicer pursuant to Section 6.02(g)(i).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Parent, Seller or any Originator or
any ERISA Affiliate makes or is obligated to make contributions, or during the
preceding five plan years, has made or been obligated to make contributions.
18
"Net Eligible Receivables Outstanding Balance" means, on any day, an amount
equal to (i) the Aggregate Outstanding Balance of all Eligible Receivables on
such date, less (ii) the sum of (a) the Unapplied Cash/Credit Memo Amount on
such date, (b) Sales Tax on such date, (c) the Deferred Revenue Amount and (d)
the aggregate of all set-off amounts representing amounts owed under the
applicable Contract by any Originator to any Obligor as of such date (provided
that if the related Contract expressly states that such Obligor waives its right
of set-off, amounts owed by the applicable Originator to such Obligor shall not
be considered a potential set-off for the purposes hereof).
"Net Receivables Pool Balance" means, on any day, (i) the Net Eligible
Receivables Outstanding Balance on such day, minus (ii) the Aggregate
Outstanding Balance on such day related to the portion of Eligible Receivables
that exceeds the applicable Concentration Limits on such day.
"Non-Lockbox Receivable" means any Receivable the Collections related to
which are paid by the related Obligor in any manner other than through the
Lockbox; provided, however, that (i) for the period beginning on the Closing
Date and ending on July 1, 2009, 0% of Argus Receivables shall be considered
Non-Lockbox Receivables; (ii) for the period beginning on July 2, 2009 and
ending on August 1, 2009, up to 80% of all Argus Receivables (if any Argus
Receivables exist on such date) shall be deemed Non-Lockbox Receivables; and
(iii) for the period beginning on August 2, 2009 and ending on the Facility
Termination Date, up to 100% of all Argus Receivables (if any Argus Receivables
exist on such day) shall be deemed Non-Lockbox Receivables.
"Non-Lockbox Receivable Ratio" means, on any day, a ratio (expressed as a
percentage) calculated by dividing (a) the Aggregate Outstanding Balance for all
Non-Lockbox Receivables as of the last day of the immediately preceding month by
(b) the Aggregate Outstanding Balance of all Eligible Receivables as of the last
day of the immediately preceding month.
"Obligations" has the meaning specified in Section 2.11.
"Obligor" means with respect to any Receivable, the Person obligated to
make payments in respect of such Receivable.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"OPA Discount" means in respect of each Purchase (for purposes of this
definition, as defined under the Initial Purchase Agreement) under the Initial
Purchase Agreement, 1% multiplied by the Aggregate Outstanding Balance of the
Receivables (for purposes of this definition, as defined under the Initial
Purchase Agreement) that are the subject of such Purchase; provided, however,
the foregoing OPA Discount may be revised prospectively by request of the
Parent, as purchaser under the Initial Purchase Agreement, or any of the other
Originators, as seller under the Initial Purchase Agreement, reasonably and in
good faith to
19
reflect changes in recent experience with respect to write-offs,
timing and costs of Collections and cost of funds, provided, further, that such
revision is consented to by the Parent, as purchaser under the Initial Purchase
Agreement, and the other Originators, as seller under the Initial Purchase
Agreement (it being understood that each party agrees to duly consider such
request but shall have no obligation to give such consent).
"Originator" means each of the Persons designated as such on Schedule III
(which includes, for the avoidance of doubt, the Parent).
"Other Companies" means the Originators and all of their Subsidiaries
except the Seller.
"Other Taxes" has the meaning specified in Section 2.10(b).
"Outstanding Balance" of any Receivable at any time means (i) in the case
of a Billed Receivable, the then outstanding principal balance thereof and (ii)
in the case of an Unbilled Receivable, an amount calculated as the product of
the applicable Originator's fees or charges for the related goods or services at
the time such goods or services are provided multiplied by the actual amounts of
such goods or services actually provided to the related Obligor or via an
alternate method of calculation as agreed upon by the Agent, the Originators and
the Seller from time to time.
"Parent" means DST Systems, Inc., a Delaware corporation.
"Participant" has the meaning specified in Section 10.03(h).
"Paydown Amount" means, with respect to any Receivable Interest on any day,
an amount equal to the sum of (i) the Capital of such Receivable Interest, plus
(ii) the aggregate of accrued and unpaid Yield as of such date for such
Receivable Interest.
"Paydown Date" means any Settlement Date (Yield and Fees) occurring at
least the Required Notice Days after the date of the Seller's notice to the
Agent.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA or any entity succeeding to all or any of its functions
under ERISA.
"PCA Discount" means, in respect of each Purchase (for purposes of this
definition, as defined under the Secondary Purchase Agreement) or contribution
hereunder, 1% multiplied by the Aggregate Outstanding Balance of the Receivables
for purposes of this definition, as defined under the Secondary Purchase
Agreement) that are the subject of such Purchase or contribution; provided,
however, the foregoing Discount may be revised prospectively by request of
either the Parent, as seller under the Secondary Purchase Agreement, or the
Seller, as purchaser under the Secondary Purchase Agreement, reasonably and in
good faith to reflect changes in recent experience with respect to write-offs,
timing and costs of Collections and cost of funds, provided, further, that such
revision is consented to by the Parent, as seller under the Secondary Purchase
Agreement, and the Seller, as purchaser under the Secondary Purchase Agreement
(it being understood that each party agrees to duly consider such request but
shall have no obligation to give such consent).
20
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Parent,
Seller or any Originator or any ERISA Affiliate or to which the Parent, Seller
or any Originator or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.
"Percentage" of any Bank means, (a) with respect to Bank of America, the
percentage set forth on the signature page to this Agreement, or such amount as
reduced or increased by any Assignment and Acceptance entered into with an
Eligible Assignee, or (b) with respect to a Bank that has entered into an
Assignment and Acceptance, the amount set forth therein as such Bank's
Percentage, or such amount as reduced or increased by an Assignment and
Acceptance entered into between such Bank and an Eligible Assignee.
"Percentage Factor" means, at any time, a percentage equal to (i) the sum
of (a) the Aggregate Capital for all Receivable Interests as of such date plus
(b) the Required Reserves as of such date divided by (ii) the Net Receivables
Pool Balance on such date. For purposes of Section 6.07(ix), the Percentage
Factor is to be computed daily to reflect changes in the Net Receivables Pool
Balance and Aggregate Capital. Otherwise, the Percentage Factor is to be
calculated as of the last day of the reporting period covered by each Servicer
Report and shall be set forth in each Servicer Report.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Parent, Seller or any Originator or,
with respect to any such plan that is subject to Section 412 of the Code or
Title IV of ERISA, any ERISA Affiliate.
"Program Support Agreement" means any agreement, including any Liquidity
Agreement, entered into by any Program Support Provider providing for the
issuance of one or more letters of credit for the account of an Investor (or any
related commercial paper issuer that finances the Investor), the issuance of one
or more surety bonds for which any Investor (or such related issuer) is
obligated to reimburse the applicable Program Support Provider for any drawings
thereunder, the sale by any Investor (or such related issuer) to any Program
Support Provider of the Receivable Interests (or portions thereof or
participations therein) and/or the making of loans and/or other extensions of
credit to any Investor (or such related issuer) in connection with such
Investor's commercial paper program, together with any letter of credit, surety
bond or other instrument issued thereunder.
"Program Support Provider" means any Person, including any Liquidity Bank,
now or hereafter extending credit or having a commitment to extend credit to or
for the account of, or to make purchases from, any Investor (or any related
commercial paper issuer that finances the Investor) or issuing a letter of
credit, surety bond or other instrument to support any
21
obligations arising under or in connection with such Investor's (or such related
issuer's) commercial paper program.
"Purchase Limit" means, on any day, the lesser of (i) $175,000,000, as such
amount may be reduced pursuant to Section 2.01(b) or (ii) the sum of (a) the
Aggregate Capital of all Receivable Interests on such day plus (b) the Required
Reserves; provided that if, prior to December 31, 2009, the Parent has not
entered into an Approved Replacement Financing, the Purchase Limit from such
date through the Facility Termination Date shall be the lesser of (x)
$125,000,000, as such amount may be reduced pursuant to Section 2.01(b) or (y)
the sum of (i) the Aggregate Capital of all Receivable Interests on such day
plus (ii) the Required Reserves. References to the unused portion of the
Purchase Limit shall mean, at any time, the Purchase Limit, as then reduced
pursuant to Section 2.01(b), minus the Aggregate Capital of all Receivable
Interests on such day.
"Receivable" means any indebtedness of any Person to any Originator
(without giving effect to any transfer under the Initial Purchase Agreement or
the Secondary Purchase Agreement) and any right of the Seller to payment from or
on behalf of such Person whether constituting an account, chattel paper,
investment or general intangible, arising in connection with the sale of goods
or the rendering of services by the Originators, including the right to payment
of any interest, fees or finance charges and other obligations of such Person
with respect thereto; provided, that unless expressly stated otherwise, each
Closing Date Receivable shall be a "Receivable" for purposes of this Agreement.
"Receivable Interest" means, at any time, an undivided percentage ownership
interest in (i) all then outstanding Receivables arising prior to the time of
the most recent computation or recomputation of such undivided percentage
interest pursuant to Section 2.03, (ii) all Related Security with respect to
such Receivables, and (iii) all Collections with respect to, and other proceeds
of, such Receivables. Such undivided percentage interest shall be computed as:
C
---
AC
where:
C = the Capital of such Receivable Interest at the time
of computation.
AC = the Aggregate Capital of all Receivable Interests at
the time of computation.
Each Receivable Interest shall be determined from time to time pursuant to the
provisions of Section 2.03.
"Register" has the meaning specified in Section 10.03(c).
"Related Security" means with respect to any Receivable:
22
(i) all of the Seller's interest in any merchandise (including
returned merchandise) relating to any sale giving rise to such Receivable;
(ii) all 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, together
with all financing statements filed against an Obligor describing any
collateral securing such Receivable;
(iii) the Contract and all guaranties, indemnities, warranties,
insurance (and proceeds and premium refunds thereof) 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
(iv) all contracts and all other documents, purchase orders, invoices,
agreements, books, records and other information (including, without
limitation, computer programs, tapes, discs, punch cards, data processing
software and related property and rights) relating to such Receivable and
the related Obligor.
"Required Notice Days" means with respect to any reduction of the Aggregate
Capital pursuant to the provisions of Section 2.01(e), (i) two (2) Business Days
in the case of a reduction of Aggregate Capital in an amount less than
$10,000,000, and (ii) five (5) Business Days in the case of a reduction of
Aggregate Capital in an amount equal to or greater than $20,000,000.
"Reporting Date" has the meaning set forth in Section 6.02(g).
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the thirty (30) day notice period has been
waived.
"Required Reserves" means, on any day, an amount equal to the sum of (i)
Aggregate Loss and Dilution Reserve on such date of calculation plus (ii) the
Yield and Fee Reserve on such date of calculation.
"Revolving Period" means the period beginning on the date of the initial
purchase hereunder and terminating at the close of business on the Business Day
immediately preceding the Facility Termination Date.
"S&P" means Standard and Poor's, a division of The XxXxxx-Xxxx Companies,
Inc.
"Sales Tax" means, on any day, the aggregate amount of sales tax (if any)
included in the Aggregate Outstanding Balance of all Receivables on such day.
"SEC" means the Securities and Exchange Commission.
"Secondary Purchase Agreement" means the Purchase and Contribution
Agreement dated as of the date of this Agreement between the Parent, as seller
and servicer, and the Seller, as purchaser, as the same may be amended, modified
or restated from time to time.
23
"Seller's Account" means the special account (ABA 000000000, Account Number
9871868869, Account Name: Fountain City Finance, LLC) of the Seller maintained
at the office of UMB Bank, NA at 0000 Xxxxx, Xxxxxx Xxxx, XX 00000.
"Servicer" means at any time the Person then authorized pursuant to Section
6.01 to administer and collect Receivables.
"Servicer Default" means the occurrence of any of the following:
(a) The Servicer (i) shall fail to perform or observe any term, covenant or
agreement under this Agreement (other than as referred to in clause (ii), (iii),
(iv) or (v) of this subsection (a)) and such failure shall remain unremedied for
five (5) Business Days or (ii) shall fail to observe any term, covenant or
agreement contained in the first sentence of Section 6.06(b) or (iii) shall fail
to make when due any payment or deposit to be made by it under this Agreement
with respect to Capital on the date due or (iv) shall fail to make when due any
payment or deposit to be made by it under this Agreement other than with respect
to Capital within one Business Day of the date due or (v) shall fail to deliver
any Servicer Report when required and such failure shall remain unremedied for
one Business Day; or
(b) Any representation or warranty (unless such representation or warranty
relates solely to one or more specific Receivables incorrectly characterized as
Eligible Receivables and either (i) immediately following the removal of such
Receivables from the Net Receivables Pool Balance, the Percentage Factor is not
greater than the Maximum Percentage Factor or (ii) the Seller shall have made
any required deemed Collection payment pursuant to Section 2.04(e) with respect
to such Receivables) made or deemed made by the Servicer (or any of its
officers) under or in connection with this Agreement or any other Transaction
Document or any information or report delivered by the Servicer pursuant to this
Agreement or any other Transaction Document shall prove to have been incorrect
or untrue in any material respect when made or deemed made or delivered;
provided that if a breach of the representation and warranty set forth in
Section 4.02(i) shall occur, no Servicer Default shall occur if such breach of
representation and warranty shall be cured (without any adverse impact on the
Agent, the Investors or the Banks or the collectibility of the Receivables)
within five (5) Business Days; or
(c) The Servicer or any Originator shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Servicer seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of sixty (60) days,
or any of the actions sought in such proceeding (including,
24
without limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Servicer shall take any
corporate or other action to authorize any of the actions set forth above in
this clause (c); or
(d) The Servicer shall fail to pay any principal of or premium or interest
on any of its Debt which is outstanding in a principal amount of at least
$20,000,000 in the aggregate when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable cure or grace period, if any,
specified in the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable cure or grace
period, if any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof (other than with respect to "Convertible Senior
Debentures" as defined in the Credit Agreement); or
(e) In the reasonable judgment of the Agent, (i) there shall have occurred
any event which would materially and adversely affect the ability of the
Servicer to collect Receivables or otherwise perform its obligations under this
Agreement and the other Transaction Documents or (ii) any provision of any
Transaction Document applicable to the Servicer shall cease to be effective and
valid and binding on the Servicer; or
(f) One or more judgments for the payment of money in an aggregate amount
in excess of $20,000,000 (except to the extent covered by insurance as to which
the insurer has acknowledged such coverage in writing) shall be rendered against
the Servicer or any of its Subsidiaries or any combination thereof, and the same
shall remain undischarged for a period of sixty (60) consecutive days during
which execution shall not be effectively stayed, or any action shall be taken by
a judgment creditor to attach or levy upon any assets of the Servicer or any of
its Subsidiaries to enforce any such judgment; or
(g) The occurrence of any Event of Termination; or
(h) (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Servicer under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $20,000,000,
or (ii) the Servicer or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable cure or grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $20,000,000;
25
provided, however, that solely for the purposes of the foregoing, any reference
to the Parent, the Originators or the Seller in the definitions of ERISA
Affiliate, ERISA Event, Pension Plan or Multiemployer Plan shall mean and be
deemed a reference to the Servicer.
"Servicer Fee" has the meaning specified in Section 2.05(a).
"Servicer Report" means a Monthly Report or a Weekly Report.
"Servicer Fee Reserve" means, at any time, an amount equal to the product
of (i) the Servicer Fee at such time, multiplied by (ii) a fraction, the
numerator of which is the Days Sales Outstanding on such date of calculation,
and the denominator of which is 360, multiplied by and (iii) the Aggregate
Outstanding Balance of all Receivables on such date of calculation.
"Settlement Date (Capital)" means the second Business Day following the
date on which each Monthly Report or Weekly Report, as the case may be, is
required to be delivered to the Agent hereunder or such other day as the Seller
and the Agent may from time to time mutually agree; provided, however, that if
the Facility Termination Date shall occur, the Settlement Date (Capital) shall
be the date(s) selected by the Agent (it being understood that the Agent may
select such Settlement Date (Capital) to occur as frequently as daily) or, in
the absence of any such selection, the "Settlement Date (Capital)" shall be each
Business Day.
"Settlement Date (Yield and Fees)" means for any Receivable Interest the
last day of each Fixed Period for such Receivable Interest or such other day as
the Seller and the Agent may from time to time mutually agree; provided,
however, that if Yield with respect to such Receivable Interest is computed by
reference to the Investor Rate and the Capital of such Receivable Interest has
not been reduced to zero on the last day of a Fixed Period for such Receivable
Interest, the Settlement Date (Yield and Fees) for such Receivable Interest for
such Fixed Period shall be the second Business Day after the last day of such
Fixed Period.
"Special Indemnified Amounts" has the meaning specified in Section 6.07.
"Special Indemnified Party" has the meaning specified in Section 6.07.
"Solvent" means, when used with respect to any Person, that, as of any date
of determination, (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise," as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond its abilities to pay such debts and
liabilities as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim," and (ii) "claim" means any (x) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is
26
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Subsidiary" means any corporation or other entity of which securities
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by the Seller or an Originator, as the case may be, or by one
or more Subsidiaries, or by the Seller or an Originator, as the case may be, and
one or more Subsidiaries.
"Taxes" has the meaning specified in Section 2.10(a).
"Three-Month Loss Ratio" means, for any calendar month, the average of the
Default Ratios for such calendar month and the two immediately preceding
calendar months.
"Transaction" means the transaction contemplated by this Agreement and the
other Transaction Documents.
"Transaction Document" means any of this Agreement, the Initial Purchase
Agreement, the Secondary Purchase Agreement, the Deposit Account Control
Agreements, the Fee Agreement, all amendments and waivers to any of the
foregoing and all other agreements and documents delivered and/or related hereto
or thereto.
"Transfer Event" means the occurrence of any of the following events:
(a) a Servicer Default; or
(b) an event that but for notice or lapse of time or both would
constitute a Servicer Default of the type described in clause (c) of the
definition thereof; or
(c) an Event of Termination or Incipient Event of Termination.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
"Unapplied Cash/Credit Memo Amount" means, on any day, the sum of (i) the
aggregate amount of Collections on hand at such time for payment on account of
any Eligible Receivables, which Collections have not been applied to the related
Eligible Receivable because either the related Obligor or the Related Originator
has not been identified as of such date, plus (ii) the Aggregate Outstanding
Balance of all Receivables in respect of which any credit memo issued by the
applicable Originator or the Seller is outstanding at such time to the extent
deemed Collections have not been paid pursuant to Section 2.04(e).
"Unbilled Receivable" means a Receivable that is not a Billed Receivable
and with respect to which (i) there is a written payment obligation on behalf of
the related Obligor to pay such Receivable, (ii) the applicable Originator has
satisfied and fully performed all obligations with respect to such Receivable
required to be fulfilled by it, and (iii) the applicable Originator has not
generated and sent an invoice to the related Obligor.
27
"Unearned Revenue Receivable" means, on any date, any Receivable with
respect to which the related Contract has been executed by the related Obligor
and an Originator, but under such Contract, no services have been provided/goods
delivered by the Originator and no payment obligation has arisen for the
Obligor.
"Weekly Report" means a report in substantially the form of Annex A-2
hereto setting forth the calculation of the Net Receivables Pool Balance, the
Percentage Factor and containing such additional information as the Agent may
reasonably request from time to time, furnished by the Servicer pursuant to
Section 6.02(g)(ii).
"Weekly Reporting Event" means the occurrence of either of the following
events: (a) the Consolidated Leverage Ratio of the Parent as of the end of the
first six months following the date hereof shall exceed 3.1 and as of the end of
any fiscal quarter thereafter 3.0; or (b) the Consolidated Interest Coverage
Ratio of the Parent as of the end of any fiscal quarter shall be less than 4.25;
provided that each of the terms "Consolidated Leverage Ratio" and "Consolidated
Interest Coverage Ratio", together with each of the capitalized terms used to
define such terms, shall have the respective meanings specified in Annex F.
"Yield" means for each Receivable Interest for each Fixed Period:
(i) for each day during each Fixed Period to the extent each Investor
will be funding its portion of such Receivable Interest through the
issuance of Commercial Paper (directly or indirectly through a related
commercial paper issuer),
IR x C x ED
-----------
360
(ii) for each day during such Fixed Period to the extent (x) an
Investor will not be funding its portion of such Receivable Interest
through the issuance of Commercial Paper (directly or indirectly through a
related commercial paper issuer), or (y) a Bank will be funding its portion
of such Receivable Interest,
AR x C x ED
-----------
360
where:
AR = the Alternate Rate for such Receivable Interest for
such Fixed Period
C = the weighted average of the Capital of such
Receivable Interest during such Fixed Period
IR = the Investor Rate for such portion of such Receivable
Interest for such Fixed Period (as determined by the
Agent on or prior to the fifth Business Day of the
calendar month next following such Fixed Period)
28
ED = the actual number of days elapsed during such Fixed
Period
provided that no provision of this Agreement shall require the payment or
permit the collection of Yield in excess of the maximum permitted by
applicable Law; and provided, further, that at all times after the
declaration or automatic occurrence of the Facility Termination Date
pursuant to Section 7.01, Yield for all Receivable Interests shall be the
Default Rate; provided, however, that Yield for any Receivable Interest
shall not be considered paid by any distribution to the extent that at any
time all or a portion of such distribution is rescinded or must otherwise
be returned for any reason.
"Yield and Fee Reserve" means, on any day, an amount equal to:
(YR) + (SFR) + AUYF
where:
YR = the Yield Reserve on such date.
AUYF = accrued and unpaid Yield, Servicer Fee and Fees on
such date, for all Receivable Interests.
SFR = the Servicer Fee Reserve on such date.
Yield Reserve: means, at any time, an amount equal to (a) the product of
(i) (A) 2.25 multiplied by (B) the Days Sales Outstanding as of such date of
calculation, multiplied by (ii) the Default Rate in effect on such date of
calculation, divided by (b) the product of (i) 360 multiplied by (ii) the Net
Receivables Pool Balance as of such date of calculation.
SECTION 1.02 Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9. References to any Section, Schedule or
Exhibit are references to Sections, Schedules and Exhibits in or to this
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 and each Section, Schedule or Exhibit
and all paragraphs, subsections, clauses or other subdivisions, respectively.
For the avoidance of doubt, all Schedules and Exhibits hereto and all
paragraphs, subsections, clauses or other subdivisions are incorporated by
reference herein and made a part hereof.
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01 Purchase Facility. (a) On the terms and conditions hereinafter
set forth, each Investor may, in its sole discretion, and the Banks shall,
ratably in accordance with their respective Bank Commitments, purchase
Receivable Interests from the
29
Seller from time to time during the period from the date hereof to the Facility
Termination Date (in the case of the Investors) and to the Commitment
Termination Date (in the case of the Banks). Under no circumstances shall the
Investors make any such purchase, or the Banks be obligated to make any such
purchase, if after giving effect to such purchase (i) the Aggregate Capital of
all Receivable Interests would exceed the Purchase Limit or (ii) the Percentage
Factor would exceed the Maximum Percentage Factor.
(b) The Seller may at any time upon at least five (5) Business Days' notice
to the Agent, terminate the facility provided for in this Agreement in whole or
reduce in part the unused portion of the Purchase Limit; provided that each
partial reduction shall be in an amount of at least $1,000,000 or an integral
multiple thereof.
(c) Until the Agent gives the Seller the notice provided in Section
3.02(c)(iii), the Agent, on behalf of the Investors which own Receivable
Interests, may have the Collections attributable to such Receivable Interests
automatically reinvested pursuant to Section 2.04 in additional undivided
percentage interests in the Receivables by making an appropriate readjustment of
such Receivable Interests. The Agent, on behalf of the Banks which own
Receivable Interests, shall have the Collections attributable to such Receivable
Interests automatically reinvested pursuant to Section 2.04 in additional
undivided percentage interests in the Receivables by making an appropriate
readjustment of such Receivable Interests.
(d) Notwithstanding any provision contained in this Agreement to the
contrary, the Agent shall not, and shall not be obligated (whether on behalf of
the Investors or the Banks), to pay any amount to the Seller as the purchase
price of any Receivable Interest pursuant to subsection (c) above except to the
extent of Collections related to such Receivable Interest are available to the
Agent for distribution to the Seller in accordance with this Agreement. Any
amount which the Agent (whether on behalf of the Investors or the Banks) does
not pay pursuant to the preceding sentence shall not constitute a claim (as
defined in Section 101 of the Bankruptcy Code) against, or corporate obligation
of, the Agent for any such insufficiency unless and until such amount becomes
available for distribution to the Seller under Section 2.04.
(e) (i) The Seller may, on any Paydown Date, reduce all or any portion of
the Aggregate Capital on such date (together with any accrued and unpaid Yield
on such date on the Receivable Interests related thereto and, in connection with
a reduction of all of the Aggregate Capital, together with all other Aggregate
Unpaids). Any such reduction made pursuant to this Section 2.01(e)(i) shall be
accomplished by payment from the Seller to the Agent, in reduction of the
Aggregate Capital, of the Aggregate Paydown Amount (and, in connection with a
reduction of all of the Aggregate Capital, together with all other Aggregate
Unpaids); provided that the Aggregate Paydown Amount for such date shall be in
an amount equal to at least $1,000,000 or an integral multiple thereof.
(ii) If the Purchase Limit has been reduced to $125,000,000 as a
result of the Parent's failure to enter into an Approved Replacement
Financing prior to December 31, 2009, then the Seller shall pay to the
Agent's Account on December 31, 2009 in immediately available funds the
amount by which the Aggregate Capital on such date exceeds $125,000,000.
30
(iii) In addition, during the Revolving Period, on each Settlement
Date (Capital) following delivery of a Servicer Report which shows that (A)
the Percentage Factor on the last day of the applicable reporting period
was greater than the Maximum Percentage Factor, or (B) the Aggregate
Capital of all Receivable Interests on such date exceeds the Purchase
Limit, and on each Business Day thereafter until such condition no longer
exists, the Servicer shall deposit into the Agent's Account Collections to
pay down Aggregate Capital an amount necessary to (I) reduce the Percentage
Factor so that the Percentage Factor is equal to or less than the Maximum
Percentage Factor or (II) reduce the Aggregate Capital of all Receivable
Interests so that the Aggregate Capital of all Receivable Interests is
equal to or less than the Purchase Limit; provided that the aggregate
amount deposited pursuant to this sentence with respect to any Servicer
Report shall not exceed an amount such that, after giving effect to the
application of such amount to the reduction of Aggregate Capital with
respect to the Receivable Interests shown in that Servicer Report, the
Percentage Factor is equal to the Maximum Percentage Factor.
(iv) All amounts to be paid or deposited by the Seller or the Servicer
hereunder shall be paid or deposited in accordance with Section 2.06 to an
account designated by the Agent, until otherwise notified by the Agent. All
amounts paid or deposited under this Section 2.01(e) shall be applied by
the Agent to reduce the Capital of the Receivable Interests as determined
by the Agent. The Seller shall, to the extent permitted by Law, pay to the
Agent, for the benefit of the Investors, upon demand, interest on all
amounts not paid or deposited when due hereunder at a rate equal to the
Default Rate. Any computations by the Agent of amounts payable by the
Seller hereunder shall be binding upon the Seller absent manifest error.
SECTION 2.02 Making Purchases. (a) Each incremental purchase by the
Investors or the Banks shall be made on at least three (3) Business Days' notice
from the Seller to the Agent; provided that no more than five (5) purchases
shall be made in any one calendar month. Each such notice of an incremental
purchase shall be in the form attached hereto as Annex G and shall specify (i)
the amount requested to be paid to the Seller (such amount of the incremental
purchase (which shall not be less than $5,000,000, being referred to herein as
the initial "Capital" of the Receivable Interest then being purchased), and (ii)
the date of such incremental purchase (which shall be a Business Day). The Agent
shall promptly thereafter notify the Seller whether any or all of the Investors
have determined to make such purchase and, if so, whether all of the terms
specified by the Seller are acceptable to such Investors.
If an Investor has determined not to make a proposed purchase, the Agent
shall promptly send notice of the proposed purchase to all of the Banks
concurrently by telecopier or other electronic means specifying the date of such
purchase, each Bank's Percentage multiplied by the Capital of the Receivable
Interest being purchased, whether the Yield for the Fixed Period for such
Receivable Interest is calculated based on the Adjusted Eurodollar Rate (which
may be selected only if such notice is given at least three (3) Business Days
prior to the purchase date) or the Alternate Base Rate, and the duration of the
Fixed Period for such Receivable Interest (which shall be one day if the Seller
has not selected another period).
(b) On the date of each such purchase of a Receivable Interest, the
Investors or the Banks, as the case may be, shall, upon satisfaction of the
applicable conditions set forth in
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Article III, make available to the Seller in same day funds an amount equal to
the initial Capital of such Receivable Interest, at the Seller's Account.
(c) Effective on the date of each purchase pursuant to this Section 2.02
and each reinvestment pursuant to Section 2.04, the Seller hereby sells and
assigns to the Agent, for the benefit of the parties making such purchase, an
undivided percentage ownership interest, to the extent of the Receivable
Interest then being purchased, in each Receivable then existing and in the
Related Security and Collections with respect thereto.
(d) Notwithstanding the foregoing, a Bank shall not be obligated to make
purchases under this Section 2.02 at any time in an amount which would exceed an
amount equal to (i) such Bank's Bank Commitment divided by 1.02, less (ii) such
Bank's ratable share of the Aggregate Capital of the Receivable Interests held
by the Investors (whether or not any portion thereof has been assigned under the
Asset Purchase Agreement), after giving effect to any reductions of the
Aggregate Capital of the Receivable Interests held by the Investors to be made
on the date of such purchase (whether from the distribution of Collections or
from the proceeds of purchases by the Banks). Each Bank's obligation shall be
several, such that the failure of any Bank to make available to the Seller any
funds in connection with any purchase shall not relieve any other Bank of its
obligation, if any, hereunder to make funds available on the date of such
purchase, but no Bank shall be responsible for the failure of any other Bank to
make funds available in connection with any purchase.
SECTION 2.03 Receivable Interest Computation. Each Receivable Interest
shall be initially computed on its date of purchase. Thereafter until the
Receivable Interest is equal to zero, such Receivable Interest shall be
automatically recomputed (or deemed to be recomputed) on each day other than a
Paydown Date. Any Receivable Interest, as computed (or deemed recomputed) as of
the day immediately preceding the date on which the Receivable Interest is equal
to zero, shall thereafter remain constant. Each Receivable Interest shall equal
zero when Capital thereof and Yield thereon shall have been paid in full, and
all Fees and other amounts owed by the Seller hereunder to the Investors, the
Banks or the Agent are paid and the Servicer shall have received the accrued
Servicer Fee thereon.
SECTION 2.04 Settlement Procedures. (a) Collection of the Receivables shall
be administered by the Servicer, in accordance with the terms of Article VI of
this Agreement. The Seller shall provide to the Servicer (if other than the
Seller) on a timely basis all information needed for such administration,
including notice of any Paydown Date and current computations of each Receivable
Interest.
(b) The Servicer shall, on each day on which Collections of Receivables are
received into a Deposit Account, with respect to each Receivable Interest:
(i) set aside and hold in trust (and, at the request of the Agent,
segregate) for the Investors or the Banks that hold such Receivable
Interest, out of the percentage of such Collections represented by such
Receivable Interest, an amount equal to the Yield, Fees and Servicer Fee
accrued through such day for such Receivable Interest and not previously
set aside;
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(ii) reinvest with the Seller on behalf of the Investors or the Banks
that hold such Receivable Interest the percentage of such Collections
represented by such Receivable Interest, to the extent representing a
return of Capital, by recomputation of such Receivable Interest pursuant to
Section 2.03; and
(iii) during such times as amounts are required to be reinvested in
accordance with subsection (ii) above, deposit in the Seller's Account any
Collections in excess both of such amounts and of the amounts that are
required to be set aside pursuant to subsection (i) above.
(c) On each Settlement Date (Yield and Fees), the Servicer shall withdraw
from the Deposit Account and deposit into the Agent's Account an amount equal to
the Collections held for the Agent and/or the Investors or the Banks pursuant to
Section 2.04(b) that relate to the Receivable Interests owned by such Investors
and Banks.
(d) Upon receipt of funds deposited into the Agent's Account, the Agent
shall distribute them as follows:
(i) if such distribution occurs on a day that is not a Paydown Date,
first to the Investors or the Banks that hold the relevant Receivable
Interest and to the Agent in payment in full of all accrued Yield and Fees
and then to the Servicer in payment in full of all accrued Servicer Fee; or
(ii) if such distribution occurs on a Paydown Date, to the extent the
Agent is then holding funds deposited pursuant to Section 2.04(c), to the
Investors or the Banks that hold the relevant Receivable Interest in
reduction of Capital and then in accordance with clause (iii) below; and
(iii) if such distribution occurs on a Paydown Date, after any
payments required in accordance with clause (ii) above, first to the Agent
in payment of any amounts owed by the Seller to the Agent pursuant to
Section 10.04(a) in connection with out-of-pocket costs and expenses
incurred by the Agent, second to the Servicer (if the Servicer is not the
Parent or an Affiliate of the Parent) in payment in full of all accrued
Servicer Fees, third to the Investors or the Banks that hold the relevant
Receivable Interest and to the Agent in payment in full of all accrued
Yield, Fees and Liquidation Fees, fourth to such Investors or Banks in
reduction to zero of all Capital, fifth to such Investors, Banks or the
Agent in payment of any other amounts owed by the Seller hereunder which
have not been paid pursuant to clauses first through fourth above, and
sixth to the Servicer (if the Servicer is the Parent or an Affiliate of the
Parent) in payment in full of all accrued Servicer Fees
After the Capital, Yield, Fees, Liquidation Fees and Servicer Fee with
respect to a Receivable Interest, and any other amounts payable by the Seller to
the Investors, the Banks or the Agent hereunder or under any other Transaction
Document have been paid in full, all additional Collections with respect to such
Receivable Interest shall be paid to the Seller's Account.
(e) For the purposes of this Section 2.04:
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(i) if on any day any Receivable becomes (in whole or in part) a
Diluted Receivable, the Seller shall be deemed to have received on such day
a Collection of such Receivable in the amount of such Diluted Receivable;
(ii) if on any day any of the representations or warranties contained
in Section 4.01(h) is no longer true with respect to any Receivable, the
Seller shall be deemed to have received on such day a Collection of such
Receivable in full;
(iii) except as provided in subsection (i) or (ii) of this Section
2.04(e), or as otherwise required by applicable Law or the relevant
Contract, all Collections received from an Obligor of any Receivables shall
be applied to the Receivables of such Obligor in the order of the age of
such Receivables, starting with the oldest such Receivable, unless such
Obligor designates its payment for application to specific Receivables; and
(iv) if and to the extent the Agent, the Investors or the Banks shall
be required for any reason to pay over to an Obligor any amount received on
its behalf hereunder, such amount shall be deemed not to have been so
received but rather to have been retained by the Seller and, accordingly,
the Agent, the Investors or the Banks, as the case may be, shall have a
claim against the Seller for such amount, payable when and to the extent
that any distribution from or on behalf of such Obligor is made in respect
thereof.
(f) Within one Business Day after the end of each Fixed Period in respect
of which Yield is computed by reference to the Investor Rate, the Agent shall
furnish the Seller with an invoice setting forth the amount of the accrued and
unpaid Yield and Fees for such Fixed Period with respect to the Receivable
Interests held by the Investors and the Banks.
SECTION 2.05 Fees. The Servicer shall be paid a fee (the "Servicer Fee") of
1.0% per annum on the average daily Aggregate Outstanding Balance of all
Receivables, in accordance with Section 2.04(d), payable on each Settlement Date
(Yield and Fees) for such Receivable Interest following purchase date of such
Receivable Interest until the date on which the Capital for such Receivable
Interest is reduced to zero. The Servicer Fee shall be payable only from
Collections pursuant to, and subject to the priority of payment set forth in,
Section 2.04. Upon three (3) Business Days' prior written notice to the Agent,
the Servicer (if the Servicer is not the Parent, an Originator, the Seller or
its designee or an Affiliate of the Seller) may revise the percentage used to
calculate the Servicer Fee, so long as use of the revised percentage will not
result in a Servicer Fee that exceeds 110% of the reasonable costs and expenses
of the Servicer incurred in connection with administering and collecting the
Receivables; provided, however, that at any time after the Percentage Factor
exceeds the Maximum Percentage Factor, any compensation to the Servicer in
excess of the Servicer Fee initially provided for herein shall be an obligation
of the Seller and shall not be payable, in whole or in part, from Collections
allocated to the Investors. So long as the Parent is acting as the Servicer
hereunder, amounts paid as the Servicer Fee pursuant to this Section 2.05(a)
shall reduce, on a dollar-for-dollar basis, the obligation of the Seller to pay
the "Servicer Fee" pursuant to Section 6.03 of the Secondary Purchase Agreement;
provided that such obligation of the Seller shall in no event be reduced below
zero.
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(b) The Seller shall pay to the Agent certain fees (collectively, the
"Fees") in the amounts and on the dates set forth in a separate fee agreement to
be dated as of May 21, 2009 between the Seller and the Agent, as the same may be
amended or restated from time to time (the "Fee Agreement").
SECTION 2.06 Payments and Computations, Etc. (a) All amounts to be paid or
deposited by the Seller or the Servicer hereunder (including, but not limited
to, amounts paid under Sections 2.01(b) and (c), shall be paid or deposited no
later than 11:00 A.M. (New York City time) on the day when due in immediately
available funds to the Agent's Account.
(b) All computations of Yield, fees, and other amounts 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. Whenever any payment or deposit
to be made hereunder shall be due on a day other than a Business Day, such
payment or deposit shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of such payment or
deposit.
SECTION 2.07 Dividing or Combining Receivable Interests. Either the Seller
or the Agent may, following notice to the other party received at least three
(3) Business Days prior to the last day of any Fixed Period in the case of the
Seller giving notice, or on or before the last day of such Fixed Period in the
case of the Agent giving notice, either (i) divide any Receivable Interest into
two or more Receivable Interests having, in aggregate, Capital equal to the
Capital of such divided Receivable Interest immediately prior to such division,
or (ii) combine any two or more Receivable Interests originating on such last
day or having Fixed Periods ending on such last day into a single Receivable
Interest having Capital equal to the aggregate of the Capital of such Receivable
Interests immediately prior to such combination; provided, however, that no
Receivable Interest owned by the Investors may be combined with a Receivable
Interest owned by any Bank.
SECTION 2.08 Increased Costs; Breakage Costs. If Bank of America, any
Investor, any Bank, any entity which purchases or enters into a commitment to
purchase Receivable Interests or interests therein, or any of their respective
Affiliates (each an "Affected Person") determines that compliance with any Law
or any guideline or request from any Official Body (whether or not having the
force of law) affects or would affect the amount of the capital required or
expected to be maintained by such Affected Person and such Affected Person
determines that the amount of such capital is increased by or based upon the
existence of any commitment to make purchases of or otherwise to maintain the
investment in Receivables or interests therein related to this Agreement or to
the funding thereof and other commitments of the same type, then, upon demand by
such Affected Person (with a copy to the Agent), the Seller shall immediately
pay to the Agent for the account of such Affected Person (as a third-party
beneficiary), from time to time as specified by such Affected Person, additional
amounts sufficient to compensate such Affected Person in the light of such
circumstances, to the extent that such Affected Person reasonably determines
such increase in capital to be allocable to the existence of any of such
commitments. A certificate as to such amounts submitted to the Seller and the
Agent by such Affected Person shall be conclusive and binding for all purposes,
absent manifest error.
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(b) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements referred to in
Section 2.09) in or in the interpretation of any Law or (ii) compliance with any
guideline or request from any Official Body (whether or not having the force of
law), there shall be any increase in the cost to any Investor or Bank of
agreeing to purchase or purchasing, or maintaining the ownership of Receivable
Interests in respect of which Yield is computed by reference to the Adjusted
Eurodollar Rate, then, upon demand by such Investor or Bank (with a copy to the
Agent), the Seller shall immediately pay to the Agent, for the account of such
Investor or Bank (as a third-party beneficiary), from time to time as specified
by such Investor or Bank, additional amounts sufficient to compensate such
Investor or Bank for such increased costs. A certificate as to such amounts
setting forth in reasonable detail the reason for charging such additional
amounts submitted to the Seller and the Agent by such Investor or Bank shall be
conclusive and binding for all purposes, absent manifest error.
(c) The Seller shall pay the Agent for the account of the Investors and the
Banks, as applicable, on demand, such amount or amounts as shall compensate the
Investors and the Banks for any loss (including loss of profit), cost or expense
incurred by the Investors and the Banks (as reasonably determined by the Agent)
as a result of any reduction of any incremental purchase other than on the
maturity date of the Commercial Paper (or other financing source) funding such
incremental purchase, such compensation to be (i) limited to an amount equal to
any loss or expense suffered by the Investors and the Banks during the period
from the date of receipt of such repayment to (but excluding) the maturity date
of such Commercial Paper (or other financing source) and (ii) net of the income,
if any, received by the recipient of such reductions from investing the proceeds
of such reductions of such incremental purchase. The determination by the Agent
of the amount of any such loss or expense shall be set forth in a written notice
to the Seller in reasonable detail and shall be conclusive, absent manifest
error.
SECTION 2.09 Additional Yield on Receivable Interests Bearing a Eurodollar
Rate.
(a) The Seller shall pay to any Investor or Bank, so long as such Investor
or Bank shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional Yield on
the unpaid Capital of each Receivable Interest of such Investor or Bank during
each Fixed Period in respect of which Yield is computed by reference to the
Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all times
during such Fixed Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Fixed Period from (ii) Adjusted Eurodollar Rate for
such Fixed Period, payable on each date on which Yield is payable on such
Receivable Interest. Such additional Yield shall be determined by such Investor
or Bank and notice thereof given to the Seller through the Agent within thirty
(30) days after any Yield payment is made with respect to which such additional
Yield is requested. A certificate as to such additional Yield setting forth in
reasonable detail the calculation of such additional Yield submitted to the
Seller and the Agent by such Investor or Bank shall be conclusive and binding
for all purposes, absent manifest error.
(b) If the Agent is unable to obtain on a timely basis the information
necessary to determine the Adjusted Eurodollar Rate for any Fixed Period, then
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(i) the Agent shall forthwith notify the Investor, the Banks and the
Seller that the Adjusted Eurodollar Rate cannot be determined for such
Fixed Period, and
(ii) while such circumstances exist, the Investor, the Banks and the
Agent shall not allocate or reallocate any Receivable Interest to a Fixed
Period with respect to which Yield is calculated by reference to the
Adjusted Eurodollar Rate.
(c) If, with respect to any outstanding Fixed Period, any Investor or any
Bank is unable to obtain matching deposits in the London interbank market to
fund its purchase or maintenance of such Receivable Interest or the Adjusted
Eurodollar Rate applicable to such Receivable Interest will not adequately
reflect the cost to the Person of funding or maintaining such Receivable
Interest for such Fixed Period, then (A) the Agent shall forthwith so notify the
Investors, the Banks and the Seller and (B) upon such notice and thereafter
while such circumstances exist the Investors, the Banks and the Agent shall not
allocate or reallocate any Receivable Interest to a Fixed Period with respect to
which Yield is calculated by reference to the Adjusted Eurodollar Rate and all
Receivable Interests that have been allocated to a Fixed Period to which the
Adjusted Eurodollar Rate applies shall be automatically allocated to a new Fixed
Period to which the Alternate Base Rate applies and the Fixed Period to which
such Adjusted Eurodollar Rate applied terminated on such day.
(d) Notwithstanding any other provision of this Agreement, if any Investor
or any Bank, as applicable, shall notify the Agent that such Person has
determined (or has been notified by any Program Support Provider) that the
introduction of or any change in or in the interpretation of any Law makes it
unlawful (for any Investor, the Banks, or such Program Support Provider, as
applicable), or any central bank or other Official Body asserts that it is
unlawful, for the Investors, the Banks or such Program Support Provider, as
applicable, to fund the purchases or maintenance of any Receivable Interest
accruing Yield calculated by reference to the Adjusted Eurodollar Rate, then (A)
as of the effective date of such notice from such Person to the Agent, the
obligation or ability of the Investors or the Banks, as applicable, to fund the
making or maintenance of any Receivable Interest accruing Yield calculated by
reference to the Adjusted Eurodollar Rate shall be suspended until such Person
notifies the Agent that the circumstances causing such suspension no longer
exist and (B) each Receivable Interest made or maintained by such Person
accruing Yield calculated by reference to the Adjusted Eurodollar Rate shall be
deemed to accrue Yield at the Alternate Base Rate from the effective date of
such notice until the end of such Fixed Period.
SECTION 2.10 Taxes. Any and all payments and deposits required to be made
hereunder or under any other Transaction Document by the Servicer or the Seller
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding net income taxes that are imposed on
an Affected Person by the United States and franchise taxes and net income taxes
that are imposed on an Affected Person by the state or foreign jurisdiction
under the laws of which such Affected Person is organized or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Seller or the Servicer shall be required by Law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Transaction Document to
any Affected Person, (i) the Seller shall make an additional payment to such
37
Affected Person, in an amount sufficient so that, after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.10), such Affected Person receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Seller or the
Servicer, as the case may be, shall make such deductions and (iii) the Seller or
the Servicer, as the case may be, shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Law. Within thirty (30) days after the date of any such payment of Taxes, the
Seller or the Servicer, as the case may be, will furnish to such Affected Person
the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Seller agrees to pay any present or future stamp.
recordation, or other documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any other Transaction Document or from the execution, delivery or registration
of, performance under, or otherwise with respect to, this Agreement or any other
Transaction Document (hereinafter referred to as "Other Taxes").
(c) The Seller will indemnify each Affected Person for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 2.10) paid by
such Affected Person and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto whether or not such Taxes or
Other Taxes were correctly or legally asserted. This indemnification shall be
made within thirty (30) days from the date the Affected Person makes written
demand therefor (and a copy of such demand shall be delivered to the Agent). A
certificate as to the amount of such indemnification submitted to the Seller and
the Agent by such Affected Person, setting forth, in reasonable detail, the
basis for and the calculation thereof, shall be conclusive and binding for all
purposes absent manifest error.
(d) Each Affected Person which is organized outside the United States and
which is entitled to an exemption from, or reduction of, withholding tax under
the Laws of the United States as in effect on the date hereof (or, in the case
of any Person which becomes an Affected Person after the date hereof, on the
date on which it so becomes an Affected Person with respect to any payments
under this Agreement) shall, on or prior to the date hereof (or, in the case of
any Person who becomes an Affected Person after the date hereof, on or prior to
the date on which it so becomes an Affected Person), and to the extent legally
entitled to do so, deliver to the Seller such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including Internal Revenue Service Form W-8BEN, Form W-8ECI, Form
W8-IMY (and appropriate attachment) and any other certificate or statement of
exemption required by applicable Treasury Regulations, properly completed and
duly executed by such Affected Person. Each such Affected Person shall from time
to time thereafter, upon written request from the Seller (such request to be
accompanied by a reasonable explanation of the requirement and a form of the
certificate, document or other evidence to be delivered), deliver to the Seller
any new certificates, documents or other evidence as described in the preceding
sentence as will permit payments under this Agreement to be made without
withholding or at a reduced rate (but only so long as such Affected Person is
legally entitled to do so).
(e) The Seller shall not be required to pay any amounts to any Affected
Person in respect of Taxes and Other Taxes pursuant to paragraphs (a), (b) and
(c) above if the
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obligation to pay such amounts is attributable to the failure by such Affected
Person to comply with the provisions of paragraph (d) above (except if such
failure is caused by Seller's failure to comply with its obligations under this
Section 2.10) and should an Affected Person become subject to Taxes because of
Seller's failure to deliver a form required hereunder, the Seller shall take
such steps as such Affected Person shall reasonably request to assist such
Affected Person to recover such Taxes.
(f) Nothing contained in this Section 2.10 shall require an Affected Person
to make available any of its tax returns or any other information relating to
its taxes which such Person deems to be confidential.
SECTION 2.11 Security Interest. To secure the performance by the Seller of
all the terms, covenants and agreements on the part of the Seller (whether as
Seller or otherwise) to be performed under this Agreement or any document
delivered in connection with this Agreement in accordance with the terms
thereof, including the punctual payment when due of all obligations of the
Seller hereunder or thereunder, whether for indemnification payments, Yield,
Capital, Liquidation Fee, Fees, expenses or otherwise (all of the foregoing,
collectively, the "Obligations"), the Seller hereby assigns to the Agent for its
benefit and the ratable benefit of the Investors and the Banks, and hereby
grants to the Agent for its benefit and the ratable benefit of the Investors and
the Banks, a security interest in, all of the Seller's right, title and interest
in and to the following (collectively, the "Collateral"): (A) the Secondary
Purchase Agreement, including, without limitation, (i) all rights of the Seller
to receive moneys due or to become due under or pursuant to the Secondary
Purchase Agreement, (ii) all security interests and property subject thereto
from time to time purporting to secure payment of monies due or to become due
under or pursuant to the Secondary Purchase Agreement, (iii) all rights of the
Seller to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Secondary Purchase Agreement, (iv) claims of the Seller for
damages arising out of or for breach of or default under the Secondary Purchase
Agreement, and (v) the right of the Seller to compel performance and otherwise
exercise all remedies thereunder; (B) the Initial Purchase Agreement, including,
without limitation, (i) all rights of the purchaser thereunder (which rights
have been pledged or assigned to the Seller pursuant to the Secondary Purchase
Agreement) to receive moneys due or to become due under or pursuant to the
Initial Purchase Agreement, (ii) all security interests and property subject
thereto from time to time purporting to secure payment of monies due or to
become due under or pursuant to the Initial Purchase Agreement (which interests
of purchaser thereunder have been pledged or assigned to the Seller pursuant to
the Secondary Purchase Agreement), (iii) all rights of the purchaser thereunder
to receive proceeds of any insurance, indemnity, warranty or guaranty with
respect to the Initial Purchase Agreement (which rights of the purchaser
thereunder have been pledged or assigned to the Seller pursuant to the Secondary
Purchase Agreement), (iv) claims of the purchaser thereunder for damages arising
out of or for breach of or default under the Initial Purchase Agreement (which
claims and rights of the purchaser thereunder have been pledged or assigned to
the Seller pursuant to the Secondary Purchase Agreement), and (v) the right of
the Seller to compel performance and otherwise exercise all remedies thereunder
(which rights of the purchaser thereunder have been pledged or assigned to the
Seller pursuant to the Secondary Purchase Agreement); (C) all Receivables,
whether now owned and existing or hereafter acquired or arising, the Related
Security with respect thereto and the Collections and all other assets,
including, without limitation, accounts, chattel paper, instruments and general
intangibles (as those terms are
39
defined in the UCC), including undivided interests in any of the foregoing; (D)
the Lock-Boxes and Deposit Accounts and the funds deposited in such accounts;
and (E) to the extent not included in the foregoing, all proceeds of any and all
of the foregoing.
SECTION 2.12 Sharing of Payments. If any Investor or any Bank (for purposes
of this Section 2.12 only, referred to as a "Recipient") shall obtain payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of the Capital of, or Yield on, any Receivable Interest or
portion thereof owned by it in excess of its ratable share of payments made on
account of the Capital of, or Yield on, all of the Receivable Interests owned by
the Investors and the Banks (other than as a result of different methods for
calculating Yield), such Recipient shall forthwith purchase from the Investors
or the Banks which received less than their ratable share participations in the
Receivable Interests owned by such Persons as shall be necessary to cause such
Recipient to share the excess payment ratably with each such other Person;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such Recipient, such purchase from each such other
Person shall be rescinded and each such other Person shall repay to the
Recipient the purchase price paid by such Recipient for such participation to
the extent of such recovery, together with an amount equal to such other
Person's ratable share (according to the proportion of (a) the amount of such
other Person's required payment to (b) the total amount so recovered from the
Recipient) of any interest or other amount paid or payable by the Recipient in
respect of the total amount so recovered.
SECTION 2.13 Right of Setoff. Without in any way limiting the provisions of
Section 2.12, the Agent and each Investor and each Bank is hereby authorized (in
addition to any other rights it may have) at any time after the occurrence and
during the continuance of an Event of Termination or an Incipient Event of
Termination to set-off, appropriate and apply (without presentment, demand,
protest or other notice which are hereby expressly waived) any deposits and any
other indebtedness held or owing by the Agent or such Investor or such Bank to,
or for the account of, the Seller, the Servicer or any Originator against any
amount owing by the Seller, the Servicer or any Originator, as the case may be,
to such Person or to the Agent on behalf of such Person (even if contingent or
unmatured).
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01 Conditions Precedent to Initial Purchase. The initial purchase
of a Receivable Interest under this Agreement is subject to the conditions
precedent that the Agent shall have received on or before the date of such
purchase the following, each (unless otherwise indicated) dated such date, in
form and substance satisfactory to the Agent:
(a) Certified copies of the resolutions (or similar authorization, if not a
corporation) of the Board of Directors (or similar governing body or Persons, if
not a corporation) of the Seller and the Originators approving this Agreement,
the Secondary Purchase Agreement, the Initial Purchase Agreement and any other
Transaction Documents to which it is a party and certified copies of all
documents evidencing other necessary corporate or limited liability company
action, as the case may be, and governmental approvals, if any, with respect to
40
this Agreement, the Secondary Purchase Agreement, the Initial Purchase Agreement
and any such other Transaction Documents.
(b) A certificate of the Secretary or Assistant Secretary of the Seller and
the Originators certifying the names and true signatures of the officers of the
Seller and the Originators authorized to sign this Agreement, the Secondary
Purchase Agreement, the Initial Purchase Agreement and the other documents to be
delivered by it hereunder and thereunder.
(c) Acknowledgment copies (or other evidence of filing satisfactory to the
Agent) of proper financing statements and financing statement amendments or
terminations, as applicable, duly filed on or before the date of such initial
purchase under the UCC of all jurisdictions that the Agent may deem necessary or
desirable in order to perfect the ownership and security interests contemplated
by this Agreement, the Secondary Purchase Agreement and the Initial Purchase
Agreement.
(d) Acknowledgment copies (or other evidence of filing satisfactory to the
Agent) of proper financing statements and financing statements amendments or
terminations, as applicable, necessary to release or assign all security
interests and other rights of any Person in (i) the Receivables, Contracts or
Related Security previously granted by the Seller or the Originators and (ii)
the collateral security referred to in Section 2.11 previously granted by the
Seller.
(e) Completed requests for information, dated on or before the date of such
initial purchase, listing all effective financing statements filed in the
jurisdictions referred to in subsection (c) above and in any other jurisdiction
reasonably requested by the Agent that name the Seller or any Originator as
debtor, together with copies of such financing statements (none of which shall
cover any Receivables, Contracts, Related Security or the collateral security
referred to in Section 2.11).
(f) Duly executed copies of all Deposit Account Control Agreements and all
necessary amendments thereto.
(g) Favorable opinions of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel
for the Seller and the Originators, and of Xxxxxxx X. Xxxxx, General Counsel of
the Parent, substantially in the form of Annex C hereto and as to such other
matters as the Agent may reasonably request.
(h) A duly executed copy of the Fee Agreement.
(i) [Reserved.]
(j) A duly executed copy of the (i) Initial Purchase Agreement and (ii) the
Secondary Purchase Agreement.
(k) A copy of the by-laws, the limited liability company agreement,
operating agreement or regulations (as applicable), and any amendments thereto,
of the Seller and each of the Originators, certified by the Secretary or
Assistant Secretary of the Seller or such Originator, as the case may be.
41
(l) A copy of the certificate or articles of incorporation or the
certificate of formation, as applicable, and any amendments thereto, of the
Seller and each Originator, certified as of a recent date by the Secretary of
State or other appropriate official of the state of its organization, and a
certificate as to the good standing of the Seller and each Originator from such
Secretary of State or other official, dated as of a recent date.
(m) The pro forma balance sheet of the Seller referred to in Section
4.01(e).
(n) Evidence of the termination of the existing receivables securitization
facility and assignment of all Liens related thereto in form and substance
acceptable to the Agent in its sole discretion.
(o) Payment of the Commitment Fee and the Rating Agency Fee, as set forth
in the Fee Agreement.
(p) Payment of all other related costs and expenses (including costs and
expenses related to the Audit described in clause (q) below and all reasonable
attorney's fees and costs) incurred by the Agent, the Investors and/or the Banks
as of the date hereof.
(q) Satisfactory results of a review and audit of the Originator's
collection, operating and reporting systems, Credit and Collection Policy,
historical receivables data and accounts, including satisfactory results of a
review of the Originator's operating location(s) and satisfactory review and
approval of the Eligible Receivables in existence on the date of the initial
purchase under the First Tier Agreement and Second Tier Agreement and a written
outside audit report as to such matters of a nationally recognized independent
audit and consulting firm with in the scope of the agreed upon procedures set
forth in Annex I.
(r) A Monthly Report as of April 30, 2009 after giving effect to the
initial purchase of Receivable Interests by the Investors and the Banks, as
applicable, hereunder.
(s) Such other approvals, opinions or documents as the Agent may reasonably
request.
SECTION 3.02 Conditions Precedent to All Purchases and Reinvestments. Each
purchase (including the initial purchase) and each reinvestment shall be subject
to the further conditions precedent that (a) in the case of each purchase, the
Servicer shall have delivered to the Agent at least one Business Day prior to
such purchase, in form and substance satisfactory to the Agent, a completed
Servicer Report covering the most recently ended reporting period for which a
Servicer Report is required to be delivered pursuant to Section 6.02(g) and
demonstrating that, after giving effect to such purchase, no Event of
Termination or Incipient Event of Termination under Section 7.01(e) would occur,
(b) in the case of each reinvestment, the Servicer shall have delivered to the
Agent on or prior to the date of such reinvestment, in form and substance
satisfactory to the Agent, a completed Servicer Report covering the most
recently ended reporting period for which a Servicer Report is required to be
delivered pursuant to Section 6.02(g), (c) on the date of such purchase or
reinvestment the following statements shall be true, except that the statement
in clause (iii) below is required to be true only if such purchase or
reinvestment is by an Investor (and acceptance of the proceeds of
42
such purchase or reinvestment shall be deemed a representation and warranty by
the Seller, the Servicer and the Parent (each as to itself) that such statements
are then true):
(i) The representations and warranties contained in Sections 4.01,
4.02 and 4.03 are correct on and as of the date of such purchase or
reinvestment as though made on and as of such date;
(ii) No event has occurred and is continuing, or would result from
such purchase or reinvestment, that constitutes an Event of Termination or
an Incipient Event of Termination;
(iii) The Agent shall not have given the Seller at least one Business
Day's notice that the Investors have terminated the reinvestment of
Collections in Receivable Interests;
(iv) No Originator (other than the Parent) shall have stopped selling
or contributing to the Parent, pursuant to the Initial Purchase Agreement,
all Receivables originated by it and arising on or prior to such date; and
(v) The Parent shall not have stopped selling or contributing to the
Seller, pursuant to the Secondary Purchase Agreement, all Receivables
originated by it and arising on or prior to such date or transferred to it
by another Originator pursuant to the Initial Purchase Agreement on or
prior to such date;
(vi) The Non-Lockbox Receivable Ratio does not exceed 5%; and
(d) The Agent shall have received such other approvals, opinions or
documents as it may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Seller. The Seller
hereby represents and warrants as follows:
(a) The Seller (i) is a limited liability company duly formed, validly
existing and in good standing under the laws of the jurisdiction set forth in
Schedule IV hereto (as such Schedule IV may be amended from time to time
pursuant to Section 5.01(b)) and (ii) is duly qualified to do business, and is
in good standing, in every jurisdiction where the nature of its business
requires it to be so qualified.
(b) The execution, delivery and performance by the Seller of the
Transaction Documents to which it is a party and the other documents to be
delivered by it hereunder, including the Seller's use of the proceeds of
purchases and reinvestments, (i) are within the Seller's limited liability
company powers, (ii) have been duly authorized by all necessary limited
liability company action, (iii) do not contravene (1) the Seller's certificate
of formation or limited liability company agreement, (2) any Law applicable to
the Seller, (3) any contractual
43
restriction binding on or affecting the Seller or its property or (4) any order,
writ, judgment, award, injunction or decree binding on or affecting the Seller
or its property, and (iv) do not result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect to any of
its properties (except for the interest created pursuant to this Agreement).
Each of the Transaction Documents to which the Seller is a party has been duly
executed and delivered by the Seller.
(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Seller of the Transaction
Documents to which it is a party or any other document to be delivered
thereunder, except for the filing of UCC financing statements which are referred
to therein.
(d) Each of the Transaction Documents to which the Seller is a party
constitutes the legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar Laws affecting the rights of
creditors generally and general equitable principles (whether considered in a
proceeding at law or in equity).
(e) The pro forma balance sheet of the Seller as of March 31, 2009 giving
effect to the initial purchase to be made under this Agreement, a copy of which
has been furnished to the Agent, fairly presents the financial condition of the
Seller as at such date, in accordance with GAAP, and since May 15, 2009 there
has been no material adverse change in the business, operations, property,
prospects or financial or other condition of the Seller.
(f) The Seller is not in violation of any order of any Official Body. There
is no pending or threatened action, investigation or proceeding affecting the
Seller before any Official Body which may materially adversely affect the
financial condition or operations of the Seller or the ability of the Seller to
perform its obligations under the Transaction Documents, or which purports to
affect the legality, validity or enforceability of any Transaction Documents.
(g) No proceeds of any purchase or reinvestment will be used (i) to acquire
any security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act, (ii) to acquire any equity security of a class which is
registered pursuant to Section 12 of the Securities Exchange Act of 1934 or
(iii) for the purpose, whether immediate, incidental or ultimate, that violates
applicable Law, including Regulation U or X issued by the Board of Governors of
the Federal Reserve System of the United States.
(h) Immediately prior to the purchase by the Investors or the Banks, as the
case may be, the Seller is the legal and beneficial owner of the Receivables and
Related Security free and clear of any Adverse Claim; the Agent, on behalf of
the Investors and the Banks, as the case may be, shall acquire on the Effective
Date and thereafter shall continue to have a valid and perfected first priority
security interest in each Receivable then existing or thereafter arising and in
the Related Security and Collections with respect thereto free and clear of any
Adverse Claim (other than any Adverse Claim arising under the Transaction
Documents). No effective financing statement or other instrument similar in
effect covering any Contract or any Receivable or the Related Security or
Collections with respect thereto is on file in any recording office,
44
except those filed in favor of the Agent relating to this Agreement, those filed
by the Seller pursuant to the Secondary Purchase Agreement, and those filed by
the Parent pursuant to the Initial Purchase Agreement. Each Receivable
characterized in any Servicer Report or other written statement made by or on
behalf of the Seller as an Eligible Receivable or as included in the Net
Receivables Pool Balance is, as of the date of such Servicer Report or other
statement, an Eligible Receivable or properly included in the Net Receivables
Pool Balance.
(i) Each Servicer Report (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied by
the Seller or an Affiliate), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by or
on behalf of the Seller to the Agent, the Investors or the Banks in connection
with this Agreement is or will be accurate in all material respects as of its
date or (except as otherwise disclosed to the Agent, Investors or the Banks, as
the case may be, at such time) as of the date so furnished, or, as applicable,
as of a date certain specified in such report, and no such document contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
(j) The principal place of business and chief executive office of the
Seller and the office where the Seller keeps its records concerning the
Receivables are located at the address or addresses referred to in Section
5.01(b). The Seller is located in the jurisdiction of organization set forth in
Schedule IV hereto for purposes of Section 9-307 of the UCC as in effect in the
State of New York; and the office in the jurisdiction of organization of the
Seller in which a UCC financing statement is required to be filed in order to
perfect the security interest granted by the Seller hereunder is set forth in
Schedule IV hereto (in each case as such Schedule IV may be amended from time to
time pursuant to Section 5.01(b)).
(k) The names and addresses of all the Deposit Banks, together with the
post office boxes and account numbers of the Lock-Boxes and Deposit Accounts of
the Seller at such Deposit Banks, are as specified in Schedule I hereto, as such
Schedule I may be amended from time to time pursuant to Section 5.01(g). The
Lock-Boxes and Deposit Accounts are the only post office boxes and accounts into
which Collections of Receivables are deposited or remitted. The Seller has
delivered to the Agent a fully executed Deposit Account Control Agreement with
respect to each Deposit Account and any associated Lock-Boxes. On the Closing
Date, all Obligors (other than Obligors related to the Argus Receivables) have
been instructed to make payment to a Lock-Box and Deposit Account; provided that
the name for such Deposit Account as included in such instruction shall have
been "Fountainview Finance, LLC". On any date occurring on or after the
thirtieth (30th) day after the Closing Date, all Obligors have been instructed
to make payment to a Deposit Account held in the name of "Fountain City Finance,
LLC" or have received updated instructions, as necessary, indicating that the
name for the Deposit Account has changed to "Fountain City Finance, LLC". Only
Collections are deposited into the Deposit Accounts.
(l) The Seller is not, and is not controlled by, an "investment company"
within the meaning of the Investment Company Act of 1940, or is exempt from all
provisions of such act.
45
(m) The Seller is not known by and does not use any tradename or
doing-business-as name.
(n) The Seller was formed on May 15, 2009, and the Seller did not engage in
any business activities other than those permitted under its governing documents
prior to the date of this Agreement. The Seller has no Subsidiaries.
(o) On the date of each purchase hereunder by the Investors or the Banks,
the Seller is Solvent before and will be Solvent after giving effect to such
purchase.
(p) With respect to each Receivable, the Seller (i) shall have received
such Receivable as a contribution to the capital of the Seller by the Parent or
(ii) shall have purchased such Receivable from the Parent in exchange for
payment (made by the Seller to the Parent in accordance with the provisions of
the Secondary Purchase Agreement) of cash in an amount which constitutes fair
consideration and reasonably equivalent value. Each such sale referred to in
clause (ii) of the preceding sentence shall not have been made for or on account
of an antecedent debt owed by the Parent to the Seller.
(q) The Seller has (i) timely filed all federal tax returns required to be
filed, (ii) timely filed all other material state and local tax returns and
(iii) paid or made adequate provision for the payment of all taxes, assessments
and other governmental charges (other than any tax, assessment or governmental
charge which is being contested in good faith and by proper proceedings, and
with respect to which the obligation to pay such amount is adequately reserved
against in accordance with GAAP).
(r) No event has occurred and is continuing and no condition exists, or
would result from any incremental purchase or application of proceeds therefrom,
which constitutes an Event of Termination or an Incipient Event of Termination.
(s) No transaction contemplated hereby or by the Secondary Purchase
Agreement requires compliance with any bulk sales act or similar Law.
(s) Since May 24, 2007, there have been no material changes in the Credit
and Collection Policy other than in accordance with this Agreement. It has at
all times complied with the Credit and Collection Policy in all material
respects with regard to each Receivable.
(t) Each employee benefit plan sponsored, maintained or contributed to by
the Seller or any ERISA Affiliate which plan is tax qualified under Section
401(a) of the Code is in compliance in all respects with the applicable
provisions of ERISA, the Code and any regulations and published interpretations
thereunder or, if not, any such non-compliance does not have a Material Adverse
Effect. Neither the Seller nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability to the Pension Benefit Guaranty Corporation
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA) that would have a Material
Adverse Effect. Neither the Seller nor any ERISA Affiliate sponsors, maintains,
makes contributions to, is obligated to make contributions to, or, during the
preceding six (6) plan years, has made or been obligated to make contributions
to, a Multiemployer Plan.
46
(u) The Seller has at all times complied with the covenants and obligations
set forth in its governing documents and herein (including but not limited to
Section 4.02).
(v) (i) The transactions contemplated by the Transaction Documents
constitute a "Permitted Securitization Transaction" (as defined in the Credit
Agreement), and are not prohibited by the Credit Agreement or by any provision
of the documentation related to any Approved Replacement Facility, in each case
as may be in effect on each date as of which this representation is made and
(ii) it has not entered into any transactions which are prohibited by the Credit
Agreement or by the documentation related to any Approved Replacement Facility,
as the case may be, as in effect on each date as of which this representation is
made.
(w) Each of the representations and warranties made by the Seller contained
in the Transaction Documents (other than this Agreement) is true, complete and
correct in all respects and it hereby makes each such representation and
warranty to, and for the benefit of, the Agent, the Investors and the Banks as
if the same were set forth in full herein.
SECTION 4.02 Representations and Warranties of the Servicer. The Servicer
hereby represents and warrants as follows:
(a) The Servicer (i) is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware, (ii) has all corporate power
and, unless the failure to do so would not have a Material Adverse Effect, has
all licenses, authorizations, consents and approvals of all Official Bodies
required to carry on its business in each jurisdiction in which its business is
now and proposed to be conducted, and (iii) is duly qualified to do business,
and is in good standing, in every jurisdiction where the nature of its business
requires it to be so qualified unless the failure to so qualify would not have a
Material Adverse Effect.
(b) The execution, delivery and performance by the Servicer of this
Agreement and any other documents to be delivered by it hereunder (i) are within
the Servicer's corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene (1) the Servicer's charter or by-laws,
(2) any Law applicable to the Servicer, (3) any contractual restriction binding
on or affecting the Servicer or its property or (4) any order, writ, judgment,
award, injunction or decree binding on or affecting the Servicer or its
property, and (iv) do not result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect to any of
its properties. This Agreement has been duly executed and delivered by the
Servicer.
(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Servicer of this Agreement or any
other document to be delivered by it hereunder.
(d) This Agreement constitutes the legal, valid and binding obligation of
the Servicer enforceable against the Servicer in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar Laws
affecting the rights of creditors generally and general equitable principles
(whether considered in a proceeding at law or in equity).
47
(e) The principal place of business and chief executive office of the
Servicer and the office where the Servicer keeps its records concerning the
Receivables are located at the address or addresses referred to in Schedule III.
(f) The Servicer is not in violation of any order of any Official Body.
There is no pending or threatened action, investigation or proceeding affecting
the Servicer or any of its Subsidiaries before any Official Body which could
reasonably be expected to result in a Material Adverse Effect.
(g) Each Receivable characterized in any Servicer Report as an Eligible
Receivable or as included in the Net Receivables Pool Balance is, as of the last
day of the reporting period covered by such Servicer Report, an Eligible
Receivable or properly included in the Net Receivables Pool Balance.
(h) Each Servicer Report (if prepared by the Servicer or one of its
Affiliates, or to the extent that information contained therein is supplied by
the Servicer or an Affiliate), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by the
Servicer to the Agent, the Investors or the Banks in connection with this
Agreement is or will be accurate in all material respects as of its date or
(except as otherwise disclosed to the Agent, Investors or the Banks, as the case
may be, at such time) as of the date so furnished, or, as applicable, as of a
date certain specified in such report, and no such document contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading.
(i) The Servicer has (i) timely filed all federal tax returns required to
be filed, (ii) timely filed all other material state and local tax returns and
(iii) paid or made adequate provision for the payment of all taxes, assessments
and other governmental charges (other than any tax, assessment or governmental
charge which is being contested in good faith and by proper proceedings, and
with respect to which the obligation to pay such amount is adequately reserved
against in accordance with GAAP).
(j) No event has occurred and is continuing and no condition exists, or
would result from an incremental purchase in respect of the Receivable Interest,
or from the application of the proceeds therefrom, which constitutes a Servicer
Default.
(k) The Servicer is not, and is not controlled by, an "investment company"
within the meaning of the Investment Company Act of 1940, or is exempt from all
provisions of such act.
(l) The Servicer will promptly notify the Agent of any amendment,
modification or supplement to the Credit Agreement and, following the execution
thereof any similar agreements with respect to any Approved Replacement
Financing.
(m) Each of the representations and warranties made by the Servicer
contained in the Transaction Documents (other than this Agreement) is true,
complete and correct in all respects and it hereby makes each such
representation and warranty to, and for the benefit of, the Agent, the Investors
and the Banks as if the same were set forth in full herein.
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SECTION 4.03 Representations and Warranties of the Parent. The Parent
hereby represents and warrants as follows:
(a) For purposes of Section 9-307 of the UCC as in effect in the State of
New York, each Originator is located in the jurisdiction of its respective
organization set forth in Schedule IV hereto; and the office in the jurisdiction
of organization of each Originator in which a financing statement is required to
be filed in order to perfect the security interest granted by such Originator
(other than the Parent) under the Initial Purchase Agreement and the Parent
under the Secondary Purchase Agreement is set forth in Schedule IV hereto. The
principal place of business and chief executive office of each Originator and
the office where each Originator keeps its records concerning the Receivables
are located (and have been located for the five years prior to the date of this
Agreement) at the address or addresses set forth in Schedule IV hereto. No
Originator has changed its name during the five years prior to the date of this
Agreement, except as set forth in Schedule IV hereto.
(b) On the date of each purchase or reinvestment, (i) Parent shall have
sold or contributed to Seller all Receivables owned by Parent, whether generated
by Parent or acquired by Parent from another Originator pursuant to the Initial
Purchase Agreement, and (ii) each Originator shall have sold to Parent all
Receivables owned by such Originator.
(c) With respect to each Receivable purchased by Seller from Parent or
acquired by Seller from Parent as a contribution to the capital of the Seller,
in each case, pursuant to the Secondary Purchase Agreement, the Parent shall
have (i) generated such Receivable itself or (ii) purchased such Receivable from
the Originator thereof (or, in the case of the Closing Date Receivables, from
Fountainview) in exchange for payment (made by the Parent to such Originator in
accordance with the provisions of the Initial Purchase Agreement and, with
respect to the Closing Date Receivables, made by the Parent to Fountainview in
accordance with the Xxxx of Sale) of cash or a return of capital in an amount
which constitutes fair consideration and reasonably equivalent value. Each such
sale referred to in clause (ii) of the preceding sentence shall not have been
made for or on account of an antecedent debt owed by such Originator to the
Parent.
(d) (i) The balance sheets of the Parent and its Subsidiaries as at the
later of (A) December 31, 2008, and (I) the date of the most recent audited
annual financial statements of the Parent delivered pursuant to Section
5.01(l)(ii), in each case, together with the related statements of income and
retained earnings of the Parent and its Subsidiaries for the fiscal year then
ended, copies of which have been furnished to the Agent, fairly present the
financial condition of the Parent and its Subsidiaries as at such date and the
results of the operations of the Parent and its Subsidiaries for the period
ended on such date, all in accordance with GAAP consistently applied, and (B)
since such date there has been no material adverse change in the business,
operations, property, prospects or financial or other condition of the Parent;
it being understood that a breach of this clause (B) shall occur if the audited
annual financial statements for any year shall show such a material adverse
change from the audited annual financial statements for the immediately prior
year.
(e) Each of the representations and warranties made by the Parent contained
in the Transaction Documents (other than this Agreement) is true, complete and
correct in all
49
respects and it hereby makes each such representation and warranty to, and for
the benefit of, the Agent, the Investors and the Banks as if the same were set
forth in full herein.
ARTICLE V
COVENANTS
SECTION 5.01 Covenants of the Seller. Until the latest of the Facility
Termination Date or the date on which all Obligations are paid in full:
(a) Compliance with Laws, Etc. The Seller will comply in all material
respects with all applicable Laws and preserve and maintain its limited
liability company existence, rights, franchises, qualifications, and privileges
except to the extent that the failure so to comply with such Laws or the failure
so to preserve and maintain such rights, franchises, qualifications, and
privileges would not impair the collectibility of the Receivables or the ability
of the Seller to perform its obligations under the Transaction Documents.
(b) Offices, Records, Name and Organization. The Seller will keep its
principal place of business and chief executive office and the office where it
keeps its records concerning the Receivables at the address of the Seller set
forth on Schedule III hereto or, upon thirty (30) days' prior written notice to
the Agent, at any other locations within the United States. The Seller will not
change its name or its state of organization, unless (i) the Seller shall have
provided the Agent with at least thirty (30) days' prior written notice thereof,
together with an updated Schedule IV, and (ii) no later than the effective date
of such change, all actions, documents and agreements reasonably requested by
the Agent to protect and perfect the Agent's interest in the Receivables, the
Related Security and the other assets of the Seller in which a security interest
is granted hereunder have been taken and completed. Upon confirmation by the
Agent to the Seller of the Agent's receipt of any such notice (together with an
updated Schedule IV) and the completion or receipt of the actions, agreements
and documents referred to in clause (ii) of the preceding sentence, Schedule IV
hereto shall, without further action by any party, be deemed to be amended and
replaced by the updated Schedule IV accompanying such notice. The Seller also
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables and
related Contracts in the event of the destruction of the originals thereof), and
keep and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the daily identification of each
Receivable and all Collections of and adjustments to each existing Receivable).
(c) Performance and Compliance with Contracts and Credit and Collection
Policy. The Seller will, at its expense, timely and fully perform and comply
with all material provisions, covenants and other promises required to be
observed by it under the Contracts related to the Receivables, and timely and
fully comply in all material respects with the Credit and Collection Policy in
regard to each Receivable and each related Contract.
(d) Sales, Liens, Etc. Except for the ownership and security interests
created hereunder in favor of the Agent, the Seller will not sell, assign (by
operation of law or otherwise)
50
or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Collateral, or upon or with respect to any account to which
any Collections of any Receivable are sent, or assign any right to receive
income in respect thereof.
(e) Extension or Amendment of Receivables. Except as provided in Section
6.02(c), the Seller will not (and will not permit the Servicer or any Originator
to) extend, amend or otherwise modify the terms of any Receivable, or amend,
modify or waive any term or condition of any Contract related thereto.
(f) Change in Business and Credit and Collection Policy. The Seller will
not make any change in the character of its business or in the Credit and
Collection Policy that would, in either case, impair the collectibility of the
Receivables or the ability of the Seller to perform its obligations under this
Agreement.
(g) Change in Payment Instructions to Obligors. The Seller will not add or
terminate any bank, post office box or bank account as a Deposit Bank, Lock-Box
or Deposit Account from those listed in Schedule I hereto, or make any change in
its instructions to Obligors regarding payments to be made to the Seller or
payments to be made to any Lock-Box or Deposit Account, unless the Agent shall
have received prior notice of such addition, termination or change (including an
updated Schedule I) and a fully executed Deposit Account Control Agreement with
each new Deposit Bank or with respect to each new Lock-Box or Deposit Account.
Upon confirmation by the Agent to the Seller of the Agent's receipt of any such
notice and the related documents, Schedule I hereto shall, without further
action by any party, be deemed to be amended and replaced by the updated
Schedule I accompanying such notice.
(h) Deposits to Lock-Boxes and Deposit Accounts. The Seller will (or will
cause the Servicer or the Originators to) instruct all Obligors to remit all
their payments in respect of Receivables to Lock-Boxes or Deposit Accounts. If
the Seller shall receive any Collections directly, it shall immediately (and in
any event within two Business Days) deposit the same to a Lock-Box or Deposit
Account. The Seller will not deposit or otherwise credit, or cause or permit to
be so deposited or credited, to any Lock-Box or Deposit Account cash or cash
proceeds other than Collections of Receivables. Each Deposit Account shall at
all times be subject to a Deposit Account Control Agreement.
(i) Amendment to Initial Purchase or Secondary Purchase Agreement. The
Seller will not and will not permit the Parent or any Originator to amend,
modify, or supplement the Initial Purchase Agreement or the Secondary Purchase
Agreement or waive any provision thereof, in each case except with the prior
written consent of the Agent.
(j) Marking of Records. At its expense, the Seller will xxxx its master
data processing records evidencing Receivables with a legend or similar notation
evidencing that Receivable Interests related to such Receivables have been sold
in accordance with this Agreement.
(k) Further Assurances. (i) The Seller agrees from time to time, at its
expense, promptly to execute and deliver all further instruments and documents,
and to take all
51
further actions, that may be necessary or desirable, or that the Agent may
reasonably request, to perfect, protect or more fully evidence the Receivable
Interests purchased under this Agreement, or to enable the Investors, the Banks
or the Agent to exercise and enforce their respective rights and remedies under
this Agreement.
(ii) The Seller authorizes the Agent to file financing or continuation
statements, and amendments thereto and assignments thereof, relating to the
Receivables and the Related Security and the Collections with respect
thereto, which financing statements may describe the collateral covered
thereby as "all assets of the Seller," "all personal property of the
Seller" or words of similar effect.
(l) Reporting Requirements. The Seller maintains a system of accounting
established and administered in accordance with GAAP and will provide to the
Agent (in multiple copies, if requested by the Agent) the following:
(i) as soon as available, but in any event within the earlier of (i)
the 60th day after the end of each of the first three fiscal quarters of
each fiscal year of the Parent and (ii) the day that is five (5) Business
Days after the date the Parent's quarterly report on Form 10-Q is required
to be filed with the SEC (including any extensions of such date granted by
the SEC or automatically effective upon the filing of a notice with the
SEC), a balance sheet of the Parent and its Subsidiaries as of the end of
such quarter and a statement of income and retained earnings of the Parent
and its Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter prepared in accordance
with GAAP, certified by a Compliance Certificate signed by the chief
financial officer of the Parent;
(ii) as soon as available, but in any event within the earlier of (i)
the 105th day after the end of each fiscal year of the Parent and (ii) the
day that is five (5) Business Days after the date the Parent's annual
report on Form 10-K is required to be filed with the SEC (including any
extensions of such date granted by the SEC or automatically effective upon
the filing of a notice with the SEC), a copy of the annual report for such
year for the Parent and its Subsidiaries, containing consolidated financial
statements for such year audited by PriceWaterhouseCoopers or other
independent public accountants acceptable to the Agent prepared in
accordance with GAAP, all certified by a Compliance Certificate signed by
the chief financial officer of the Parent;
(iii) as soon as available and in any event concurrently with the
delivery of the financial information required pursuant to clause (i) above
and clause (ii) above, a balance sheet of the Seller as of the end of such
quarter or year and a statement of income and retained earnings of the
Seller for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter or year, certified by a Compliance
Certificate signed by the chief financial officer of the Seller;
(iv) as soon as possible and in any event within five (5) days after
the occurrence of each Event of Termination or Incipient Event of
Termination, a statement of the chief financial officer of the Seller
setting forth details of such Event of Termination or Incipient Event of
Termination and the action that the Seller has taken and proposes to take
with respect thereto;
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(v) promptly after the sending or filing thereof, copies of all
reports that the Parent sends to any of its security holders, and copies of
all reports and registration statements that the Parent or any of its
Subsidiaries files with the SEC or any national securities exchange;
(vi) promptly after the filing or receiving thereof, copies of all
reports and notices that the Seller or any Affiliate files under ERISA with
the Internal Revenue Service or the PBGC or the U.S. Department of Labor or
that the Seller or any Affiliate receives from any of the foregoing or from
any multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA)
to which the Seller or any Affiliate is or was, within the preceding five
years, a contributing employer, in each case in respect of the assessment
of withdrawal liability or an event or condition which could, in the
aggregate, result in the imposition of liability on the Seller and/or any
such Affiliate in excess of $20,000,000;
(vii) at least thirty (30) days prior to any change in the name or
jurisdiction of organization of any Originator or the Seller, a notice
setting forth the new name or jurisdiction of organization and the
effective date thereof;
(viii) promptly after the Seller obtains knowledge thereof, notice of
any "Event of Termination" or "Facility Termination Date" under the Initial
Purchase Agreement or the Secondary Purchase Agreement;
(ix) so long as any Capital shall be outstanding, as soon as possible
and in any event no later than the day of occurrence thereof, notice that
(A) any Originator (other than the Parent) has stopped selling to the
Parent, pursuant to the Initial Purchase Agreement, all newly arising
Receivables, or (B) the Parent has stopped selling or contributing to the
Seller, pursuant to the Secondary Purchase Agreement, all newly arising
Receivables generated or acquired by the Parent;
(x) promptly after receipt thereof, copies of all notices received by
the Seller from the Parent under the Secondary Purchase Agreement and all
notices received by the Parent from the Originators under the Initial
Purchase Agreement;
(xi) within ten (10) Business Days after the date any material change
in or amendment to the Credit and Collection Policy is made, a copy of the
Credit and Collection Policy then in effect indicating such change or
amendment. Within five (5) Business Days after the earlier of the date on
which the Seller knows or the date on which the Seller receives notice of
any change in the Servicer's, the Seller's or any Originator's public or
private debt ratings by any Rating Agency, if any, a written notice
disclosing the Servicer's, the Seller's or such Originator's public or
private debt ratings as communicated to the Seller after giving effect to
any such change;
(xii) within five (5) Business Days of any change in the independent
public accountants or any material change (other than as a result of the
application of a change in standards by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants or GAAP) in
accounting policy of the Seller, the Parent or the Originators,
53
written notice of such change providing reasonable detail regarding any
replacement independent public accountants or such material change in
accounting policy;
(xiii) promptly upon request from the Agent therefor, financial
statements (if any) for each Deemed Non-Affiliate for the most recently
ended fiscal year of each such Deemed Non-Affiliate audited by
PriceWaterhouseCoopers or other independent public accountants acceptable
to the Agent prepared in accordance with GAAP; provided that the Seller
shall only be required to provide to the Agent financial statements for any
Deemed Non-Affiliate under this clause (xiii) if and when such financial
statements are prepared;
(xiv) such other information respecting the Receivables, related
Contracts or the condition or operations, financial or otherwise, of the
Seller as the Agent may from time to time reasonably request; and
(xv) the information set forth in Annex H (which is incorporated by
reference herein).
Reports and financial statements required to be delivered pursuant to
clauses (i), (ii) and (v) of this Section 5.01(l) shall be deemed to have
been delivered on the date on which the Parent posts such reports, or
reports containing such financial statements, on the Parent's website on
the Internet at xxx.xxxxxxxxxx.xxx or when such reports, or reports
containing such financial statements, are posted on the SEC's website at
xxx.xxx.xxx; provided that the Seller shall deliver paper copies of the
reports and financial statements referred to in clauses (i), (ii) and (v)
of this Section 5.01(l) to the Agent or any Investor or Bank who requests
the Seller to deliver such paper copies until written notice to cease
delivering paper copies is given by the Agent or such Investor or Bank, as
applicable.
(m) Sale Treatment. The Seller shall not (i) record in its books
(other than for accounting and tax purposes), or otherwise treat the
transactions contemplated by the Secondary Purchase Agreement in any manner
other than as a sale of Receivables by the Parent to the Seller, or (ii)
record in its books (other than for tax or accounting purposes) or
otherwise treat (other than for tax purposes) the transactions contemplated
hereby in any manner other than as a sale of the Receivables by the Seller
to the Agent on behalf of the Investors and the Banks. In addition, the
Seller shall disclose (in a footnote or otherwise) in all of its financial
statements (including any such financial statements consolidated with any
other Persons' financial statements) the existence and nature of the
transaction contemplated hereby and by the Secondary Purchase Agreement and
the interest of the Seller (in the case of any Originator's financial
statements) and the Agent, on behalf of the Investors and the Banks.
Notwithstanding anything to the contrary herein, each of the parties hereto
hereby understands and agrees that for accounting purposes, the Seller may
be consolidated with any Affiliates of the Parent.
(n) Separateness. (i) The Seller shall at all times maintain at least
one independent director who (w) is not currently and has not been during
the five years preceding the date of this Agreement an officer, director or
employee of an Affiliate of the Seller, Originator or any Other Company
(other than a special purpose finance company that is a Subsidiary of the
Parent), (x) is not a current or former officer or employee of the Seller,
(y) is
54
not a stockholder of Parent or any Other Company or any of their respective
Affiliates, and (z) is reasonably acceptable to the Agent.
(ii) The Seller shall not direct or participate in the management of
any of the Other Companies' operations or of any other Person's operations.
(iii) The Seller shall conduct its business from an office separate
from that of the Other Companies and any other Person (but which may be
located in the same facility as one or more of the Other Companies). The
Seller shall have stationery and other business forms and a mailing address
and, if applicable, a telephone number separate from that of the Other
Companies and any other Person.
(iv) The Seller shall at all times be adequately capitalized in light
of its contemplated business.
(v) The Seller shall at all times provide for its own operating
expenses and liabilities from its own funds.
(vi) The Seller shall maintain its assets and transactions separately
from those of the Other Companies and any other Person and reflect such
assets and transactions in financial statements separate and distinct from
those of the Other Companies and any other Person and evidence such assets
and transactions by appropriate entries in books and records separate and
distinct from those of the Other Companies and any other Person. The Seller
shall hold itself out to the public under the Seller's own name as a legal
entity separate and distinct from the Other Companies and any other Person.
The Seller shall not hold itself out as having agreed to pay, or as being
liable, primarily or secondarily, for, any obligations of the Other
Companies or any other Person.
(vii) The Seller shall not maintain any joint account with any Other
Company or any other Person or become liable as a guarantor or otherwise
with respect to any Debt or contractual obligation of any Other Company or
any other Person.
(viii) The Seller shall not make any payment or distribution of assets
with respect to any obligation of any Other Company or any other Person or
grant an Adverse Claim on any of its assets to secure any obligation of any
Other Company or any other Person.
(ix) The Seller shall not make loans, advances or otherwise extend
credit to any of the Other Companies or any other Person.
(x) The Seller shall hold regular duly noticed meetings of its Board
of Directors and make and retain minutes of such meetings.
(xi) The Seller shall have bills of sale (or similar instruments of
assignment) and, if appropriate, UCC-1 financing statements and amendments
thereto, with respect to all assets purchased from any of the Other
Companies.
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(xii) The Seller shall not engage in any transaction with any of the
Other Companies or any other Person, except as permitted by this Agreement
and as contemplated by the Secondary Purchase Agreement.
(xiii) The Seller shall comply with (and cause to be true and correct)
(A) each of the facts and assumptions contained in the section captioned
"Assumptions of Fact" of the non-substantive consolidation opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, and (B) each of the facts and
assumptions in the section captioned "Facts and Assumptions" of the DST
Systems, Inc. Transaction - True Sale opinion of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, each delivered pursuant to Section 3.01(g) and
designated as Annex C to this Agreement.
(o) Secondary Purchase Agreement. The Seller will not amend, waive or
modify any provision of the Secondary Purchase Agreement or waive the occurrence
of any "Event of Termination" under the Secondary Purchase Agreement or consent
to any assignment by the Parent of its rights and obligations thereunder,
without in each case the prior written consent of the Agent. The Seller will
perform all of its obligations under the Secondary Purchase Agreement in all
material respects and will promptly enforce the Secondary Purchase Agreement in
accordance with its terms in all material respects and deliver consents,
approvals, directions, notices, waivers and take other actions under the
Secondary Purchase Agreement as may be directed by the Agent.
(p) Ownership Interest, Etc. The Seller shall, at its expense, take all
action necessary or desirable to establish and maintain a valid and enforceable
ownership or security interest in the Receivables, the Related Security and
proceeds with respect thereto, and a first priority perfected security interest
in the Receivable Interest, in each case free and clear of any Adverse Claim, in
favor of the Agent for the benefit of the Investors and the Banks, including
taking such action to perfect, protect or more fully evidence the interest of
the Agent, as the Agent may reasonably request.
(q) Nature of Business. The Seller will not engage in any business other
than the purchase or acquisition of Receivables, Related Security and
Collections from the Parent and the transactions contemplated by this Agreement.
The Seller will not create or form any Subsidiary.
(r) Mergers, Etc. The Seller will not merge with or into or consolidate
with or into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions), all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets or capital stock or other ownership interest of,
or enter into any joint venture or partnership agreement with, any Person, other
than as contemplated by this Agreement and the Secondary Purchase Agreement.
(s) Distributions, Etc. The Seller will not declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any shares of any class of membership interests of
the Seller, or return any capital to its members as such, or purchase, retire,
defease, redeem or otherwise acquire for value or make any payment in respect of
any class of membership interests of the Seller or any warrants, rights or
options to acquire any such membership interests, now or hereafter outstanding;
provided,
56
however, that the Seller may declare and pay cash distributions on its
membership interests to its members so long as (i) no Event of Termination or
Incipient Event of Termination shall then exist or would occur as a result
thereof, (ii) such distributions are in compliance with all applicable Law
including the limited liability company law of the state of Seller's formation,
(iii) such distributions have been approved by all necessary and appropriate
limited liability company action of the Seller, and (iv) after giving effect to
such distribution, the Seller will be Solvent and the payment of such
distribution will not delay or impair the ability of the Seller to pay the
Obligations.
(t) Debt. The Seller will not incur any Debt, other than any Debt incurred
pursuant to this Agreement.
(u) Acquisition of Receivables. The Seller will not acquire any Receivables
other than through, under, and pursuant to the terms of, the Secondary Purchase
Agreement.
(v) Notice of Amendment. The Seller will promptly notify the Agent of any
amendment, modification or supplement to the Credit Agreement and, following the
execution thereof any similar agreements with respect to any Approved
Replacement Financing.
(w) Limited Liability Company Agreement. For so long as this Agreement is
in effect, the Seller will not amend its limited liability company agreement
without the prior written consent of the Agent.
SECTION 5.02 Covenants of the Seller, the Originators and the Parent;
Audits. (a) Until the latest of the Facility Termination Date or the date on
which no Capital of or Yield on any Receivable Interest shall be outstanding or
the date all other amounts owed by the Seller hereunder to the Investors, the
Banks or the Agent are paid in full, the Seller and each Originator will, at
their respective expense, from time to time during regular business hours as
requested by the Agent, permit the Agent or its agents or representatives (such
as independent audit and consulting firms specializing in securitization
transactions), (i) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in the possession or under the control of the Seller or such Originator, as the
case may be, relating to Receivables and the Related Security, including,
without limitation, the Contracts, and (ii) to visit the offices and properties
of the Seller or such Originator, as the case may be, for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to Receivables and the Related Security or the Seller's or such
Originator's performance under the Transaction Documents or under the Contracts
with any of the officers or employees of the Seller or such Originator, as the
case may be, having knowledge of such matters.
(b) The Parent, on its own behalf and on behalf of the Agent and the
Investors, will promptly enforce all covenants and obligations of each
Originator contained in the Initial Purchase Agreement. The Parent will deliver
consents, approvals, directions, notices, waivers and take other actions under
the Initial Purchase Agreement as may be directed by the Agent.
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(c) Upon the Agent's request from time to time, the Servicer, on behalf of
the Seller, will appoint an independent audit and consulting firm specializing
in securitization transactions selected by the Agent to conduct an Audit and
prepare and deliver to the Agent a written report with respect to the
Receivables and the Credit and Collection Policy (including, in each case, the
systems, procedures and records relating thereto) in a form reasonably requested
by the Agent and within the scope of the agreed upon procedures set forth on
Annex I. The expense of one Audit in each calendar year shall be borne by the
Seller; provided, however, that after the occurrence and during the continuance
of an event which but for notice or lapse of time or both would constitute a
Servicer Default, or after the occurrence and during the continuance of an
Incipient Event of Termination or an Event of Termination, or following an audit
report indicating an audit deficiency, the expense of any additional Audits as
the Agent shall deem necessary under the circumstances shall be borne by the
Servicer.
(d) Within three (3) Business Day after the earlier of the date on which
the Servicer or an Originator knows or the date on which the Servicer or such
Originator receives notice of any change in the Servicer's or such Originator's
public or private debt ratings by any Rating Agency, if any, the Servicer or
such Originator shall provide to the Seller a written notice disclosing the
Servicer's or such Originator's public or private debt ratings as communicated
to them after giving effect to any such change.
(e) Within one (1) Business Day after the revision of the OPA Discount or
the PCA Discount in accordance with the terms of the Initial Purchase Agreement
or the Secondary Purchase Agreement, respectively, the Parent shall provide to
the Agent a written notice disclosing such revision and the reason for such
revision.
ARTICLE VI
ADMINISTRATION AND COLLECTION
OF RECEIVABLES
SECTION 6.01 Designation of Servicer. The servicing, administration and
collection of the Receivables shall be conducted by the Servicer so designated
hereunder from time to time. Until the Agent gives notice to the Seller of the
designation of a new Servicer following a Servicer Default, the Parent is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms hereof. The Agent may, upon the occurrence of a
Servicer Default, designate as Servicer any Person (including itself) to succeed
the Parent or any successor Servicer, if such Person shall consent and agree to
the terms hereof. The Servicer may, with the prior consent of the Agent,
subcontract with any other Person for the servicing, administration or
collection of the Receivables. Any such subcontract shall not affect the
Servicer's liability for performance of its duties and obligations pursuant to
the terms hereof, and any such subcontract shall automatically terminate upon
designation of a successor Servicer.
SECTION 6.02 Duties of Servicer. (a) The Servicer shall take or cause to be
taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable Laws, with
reasonable care and diligence, and in
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accordance with the Credit and Collection Policy. The Seller and the Agent
hereby appoint the Servicer, from time to time designated pursuant to Section
6.01, as agent for themselves and for the Investors and the Banks to enforce
their respective rights and interests in the Receivables, the Related Security
and the Collections with respect thereto. In performing its duties as Servicer,
the Servicer shall exercise the same care and apply the same policies as it
would exercise and apply if it owned such Receivables and shall act in
accordance with the Credit and Collection Policy.
(b) The Servicer shall administer the Collections in accordance with the
procedures described in Section 2.04.
(c) If no Event of Termination or Incipient Event of Termination shall have
occurred and be continuing, the Parent, while it is the Servicer, may, in
accordance with the Credit and Collection Policy, extend the maturity or adjust
the Outstanding Balance of any Receivable as the Parent deems appropriate to
maximize Collections thereof, or otherwise amend or modify other terms of any
related Contract; provided that the classification of any such Receivable as a
Delinquent Receivable or Defaulted Receivable shall not be affected by any such
extension or Contract amendment or modification.
(d) The Servicer shall hold in trust for the Seller and each Investor and
Bank, in accordance with their respective interests, all documents, instruments
and records (including, without limitation, computer tapes or disks) which
evidence or relate to Receivables. The Servicer shall xxxx the Seller's master
data processing records evidencing the Receivables with a legend or other
similar notation, acceptable to the Agent, evidencing that Receivable Interests
therein have been sold and that the Agent has an interest therein.
(e) The Servicer shall, as soon as practicable (an in any event within two
Business Days) following receipt, identify, remove from any Deposit Account and
turn over to the Person entitled thereto any cash collections or other cash
proceeds received that are not otherwise allocable to any Receivable.
(f) The Servicer shall, from time to time at the request of the Agent,
furnish to the Agent (promptly after any such request) a calculation of the
amounts set aside for the Investors and the Banks pursuant to Section 2.04.
(g) Prior to the fifteenth (15th) Business Day of each month (each a
"Reporting Date"), the Servicer shall prepare and forward to the Agent a Monthly
Report relating to the Receivable Interests outstanding on the last day of the
immediately preceding month.
(ii) At any time during the occurrence of a Weekly Reporting Event,
the Servicer shall prepare and forward to the Agent a Weekly Report which
shall contain information related to the Receivables and which updates the
most recently delivered Monthly Report. Each such Weekly Report shall be
prepared and forwarded to the Agent on or prior to the close of business on
the second Business Day of each calendar week, such Weekly Report to
contain information related to the Receivables as of the close of business
on the last Business Day of the preceding calendar week.
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The Servicer shall transmit Servicer Reports to the Agent concurrently by
facsimile and by electronic mail (each an "E-Mail Servicer Report"). Each E-Mail
Servicer Report shall be (A) formatted as the Agent may designate from time to
time and shall be digitally signed and (B) sent to the Agent at an electronic
mail address designated by the Agent.
SECTION 6.03 Certain Rights of the Agent. (a) The Seller hereby transfers
to the Agent control of the Lock-Boxes and Deposit Accounts to which the
Obligors of Receivables shall make payments. The tax identification number
associated with the Deposit Accounts shall be that of the Seller.
(b) At any time following the occurrence and during the continuance of a
Transfer Event the Agent is authorized to deliver instructions to the Deposit
Banks regarding disposition of funds in the Deposit Accounts, and in addition,
the Agent may notify the Obligors of Receivables, at the Seller's expense, of
the ownership of Receivable Interests under this Agreement.
(c) At any time following (x) the designation of a Servicer other than the
Parent pursuant to Section 6.01 or (y) an Incipient Event of Termination of the
type described in Section 7.01(g) or (z) any Event of Termination:
(i) The Agent may direct the Obligors of Receivables that all payments
thereunder be made directly to the Agent or its designee.
(ii) At the Agent's request and at the Seller's expense, the Seller
shall notify each Obligor of Receivables of the ownership of Receivable
Interests under this Agreement and direct that payments be made directly to
the Agent or its designee.
(iii) At the Agent's request and at the Seller's expense, the Seller
and the Servicer shall (A) assemble all of the documents, instruments and
other records (including, without limitation, computer tapes and disks)
that evidence or relate to the Receivables and the related Contracts and
Related Security, or that are otherwise necessary or desirable to collect
the Receivables, and shall make the same available to the Agent at a place
selected by the Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Agent and,
promptly upon receipt, remit all such cash, checks and instruments, duly
indorsed or with duly executed instruments of transfer, to the Agent or its
designee.
(iv) The Seller authorizes the Agent to take any and all steps in the
Seller's name and on behalf of the Seller that are necessary or desirable,
in the determination of the Agent, to collect amounts due under the
Receivables, including, without limitation, endorsing the Seller's name on
checks and other instruments representing Collections of Receivables and
enforcing the Receivables and the Related Security and related Contracts.
SECTION 6.04 Rights and Remedies. (a) If the Servicer fails to perform any
of its obligations under this Agreement, the Agent may (but shall not be
required to) itself perform, or cause performance of, such obligation; and the
Agent's costs and expenses incurred in connection therewith shall be payable by
the Servicer.
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(b) The Seller and the Originators shall perform their respective
obligations under the Contracts related to the Receivables to the same extent as
if Receivable Interests had not been sold and the exercise by the Agent on
behalf of the Investors and the Banks of their rights under this Agreement shall
not release the Servicer or the Seller from any of their duties or obligations
with respect to any Receivables or related Contracts. Neither the Agent, the
Investors nor the Banks shall have any obligation or liability with respect to
any Receivables or related Contracts, nor shall any of them be obligated to
perform the obligations of the Seller thereunder.
(c) In the event of any conflict between the provisions of Article VI of
this Agreement and Article VI of the Initial Purchase Agreement or the Secondary
Purchase Agreement, the provisions of Article VI of this Agreement shall
control.
SECTION 6.05 Further Actions Evidencing Purchases. Each Originator agrees
from time to time, at its expense, to promptly execute and deliver all further
instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Agent may reasonably request, to perfect,
protect or more fully evidence the Receivable Interests purchased hereunder, or
to enable the Investors, the Banks or the Agent to exercise and enforce their
respective rights and remedies hereunder. Without limiting the foregoing, each
Originator will (i) upon the request of the Agent, execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments and documents, that may be reasonably necessary or desirable, or
that the Agent may reasonably request, to perfect, protect or evidence such
Receivable Interests; and (ii) xxxx its master data processing records
evidencing the Receivables with a legend or other notation acceptable to the
Agent, evidencing that Receivable Interests therein have been sold. Each
Originator authorizes the Seller or the Agent to file financing statements with
respect to the Initial Purchase Agreement as permitted by the UCC. Parent
authorizes the Seller or the Agent to file financing statements with respect to
the Secondary Purchase Agreement as permitted by the UCC.
SECTION 6.06 Covenants of the Servicer and the Originators. (a) Audits. The
Servicer will, from time to time during regular business hours as requested by
the Agent, permit the Agent, or its agents or representatives (such as
independent audit and consulting firms specializing in securitization
transactions), (i) to conduct periodic audits of the Receivables, the Related
Security and the related books and records and collections systems of the
Servicer, (ii) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in the possession or under the control of the Servicer relating to Receivables
and the Related Security, including, without limitation, the Contracts, and
(iii) to visit the offices and properties of the Servicer for the purpose of
examining such materials described in clause (ii) above, and to discuss matters
relating to Receivables and the Related Security or the Servicer's performance
hereunder with any of the officers or employees of the Servicer having knowledge
of such matters.
(b) Change in Credit and Collection Policy. Neither the Servicer nor any
Originator will make any change in the Credit and Collection Policy that would
impair the collectibility of any Receivable or the ability of any Originator (if
such Originator is acting as Servicer) to perform its obligations under this
Agreement. In the event that the Servicer or any Originator makes any change to
the Credit and Collection Policy, it shall, contemporaneously
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with such change, provide the Agent with an updated Credit and Collection Policy
and a summary of all material changes.
(c) Invoices. From and after the date of this Agreement, no Originator
shall generate an invoice that contains a confidentiality provision that
purports to restrict the right of the Agent, the Investors or the Banks to
review such invoice.
(d) Amendments to Other Agreements. (i) The Servicer ( for so long as DST
Systems, Inc. is Servicer or, alternatively, not the Servicer, then the Parent)
will provide to the Agent copies of any proposed credit facility or Credit
Agreement amendments, modifications or supplements. (ii) The Servicer and each
of the Originators will not, for so long as the Agreement is in effect, without
the Agent's prior written consent (which consent shall not be unreasonably
withheld, conditioned or delayed), agree to, or agree to permit the Seller or
any other Affiliate to, amend, or agree to permit any such Person to amend or
consent to the amendment of (A) the definitions of "Permitted Securitization
Transaction" and "Securitization Transaction" in Section 1.01 of the Credit
Agreement or similar provisions (if any) of documentation related to an Approved
Replacement Facility so that the all or any part of the transaction contemplated
by the Transaction Documents would be prohibited by the Credit Agreement or the
documentation related to any Approved Replacement Facility or (B) the Credit
Agreement or any agreement with respect to any Approved Replacement Facility in
a manner that would cause the Servicer, any Originator or the Seller to breach
any representation, warranty or covenant under this Agreement or any other
Transaction Document.
SECTION 6.07 Indemnities by the Servicer. Without limiting any other rights
that the Agent, any Investor, any Bank, any of their respective Affiliates or
members or any of their respective officers, directors, employees or advisors
(each, a "Special Indemnified Party") may have hereunder or under applicable
Law, and in consideration of its appointment as Servicer, the Servicer hereby
agrees to indemnify each Special Indemnified Party from and against any and all
claims, losses and liabilities (including reasonable attorneys' fees) (all of
the foregoing being collectively referred to as "Special Indemnified Amounts")
arising out of or resulting from any of the following (excluding, however, (a)
Special Indemnified Amounts to the extent resulting from gross negligence or
willful misconduct on the part of such Special Indemnified Party, (b) recourse
for Receivables which are not collected, not paid or uncollectible on account of
the insolvency, bankruptcy or financial inability to pay of the applicable
Obligor or (c) any income taxes or any other tax or fee measured by income
incurred by such Special Indemnified Party arising out of or as a result of this
Agreement or the ownership of Receivable Interests or in respect of any
Receivable or any Contract):
(i) any representation or warranty made or deemed made by the Servicer
pursuant to Section 4.02(g) hereof which shall have been incorrect in any
respect when made or any other representation or warranty or statement made
or deemed made by the Servicer under or in connection with this Agreement
which shall have been incorrect in any material respect when made;
(ii) the failure by the Servicer to comply with any applicable Law
with respect to any Receivable or Contract; or the failure of any
Receivable or Contract to conform to any such applicable law, rule or
regulation;
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(iii) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable Laws with respect to any item
of Collateral, whether at the time of any purchase or reinvestment or at
any subsequent time;
(iv) any failure of the Servicer to perform its duties or obligations
in accordance with the provisions of this Agreement;
(v) the commingling of Collections of Receivables at any time by the
Servicer with other funds;
(vi) any action or omission by the Servicer reducing or impairing the
rights of the Investors or the Banks with respect to any Receivable or the
value of any Receivable;
(vii) any Servicer Fees or other costs and expenses payable to any
replacement Servicer retained in accordance with Article VI, to the extent
in excess of the Servicer Fees payable to the Servicer hereunder;
(viii) any claim brought by any Person other than a Special
Indemnified Party arising from any activity by the Servicer or its
Affiliates (other than the Seller) in servicing, administering or
collecting any Receivable; or
(ix) the occurrence of any purchase or reinvestment under this
Agreement on any date on which (after giving effect to such purchase or
reinvestment) the Percentage Factor is greater than the Maximum Percentage
Factor.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01 Events of Termination. If any of the following events ("Events
of Termination") shall occur and be continuing:
(a) The Seller shall fail to make (i) any payment required under Section
2.04( ) or (ii) any payment of Capital required to be made by it under this
Agreement or (iii) any payment of Yield or Fees required to be made by it under
this Agreement and any such failure referred to in this clause (iii) shall not
be remedied within one Business Day of the due date; or
(b) Any representation or warranty (unless such representation or warranty
relates solely to one or more specific Receivables incorrectly characterized as
Eligible Receivables and either (i) immediately following the removal of such
Receivables from the Net Receivables Pool Balance the Percentage Factor is not
greater than the Maximum Percentage Factor and the Aggregate Capital does not
exceed the Purchase Limit or (ii) the Seller shall have made any required deemed
Collection payment pursuant to Section 2.04( ) with respect to such Receivables)
made or deemed made by the Seller or any Originator (or any of their respective
officers) under or in connection with this Agreement or any other Transaction
Document or any
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information or report delivered by the Seller or any Originator pursuant to this
Agreement or any other Transaction Document shall prove to have been incorrect
or untrue in any material respect when made or deemed made or delivered; or
(c) The Seller or any Originator shall fail to perform or observe (i) any
term, covenant or agreement contained in this Agreement (other than as referred
to in Section 7.01(a) or clauses (ii) and (iii) of this Section 7.01(c)) or any
other Transaction Document on its part to be performed or observed and any such
failure shall remain unremedied for ten (10) days after written notice thereof
shall have been given to the Seller by the Agent, (ii) any covenant applicable
to it contained in Sections 5.01(d), 5.01(g), 5.01(h), 5.01(i), 5.01(o) (first
sentence only), 5.01(p), 5.01(q), 5.01(r), 5.01(s), 5.01(t) or 5.01(u) or (iii)
any covenant or agreement contained in Section 5.02 on its part to be performed
or observed and any such failure referred to in this clause (iii) shall remain
unremedied for five (5) Business Days; or
(d) The Seller or any Originator shall fail to pay any principal of or
premium or interest on any of its Debt which, in the case of the Seller, is
outstanding in any principal amount, and in the case of an Originator, is
outstanding in a principal amount of at least $20,000,000 in the aggregate, when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable notice, cure or grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Debt and shall continue after the applicable notice, cure or grace period, if
any, specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to repay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the stated
maturity thereof (other than with respect to "Convertible Senior Debentures" as
defined in the Credit Agreement); or
(e) Any Servicer Default; or
(f) This Agreement shall for any reason (other than pursuant to the terms
hereof) cease to create, or any Receivable Interest shall for any reason cease
to be, a valid and perfected first priority undivided percentage ownership
interest to the extent of the pertinent Receivable Interest in each applicable
Receivable and the Related Security and Collections with respect thereto; or the
security interest created pursuant to Section 2.11 shall for any reason cease to
be a valid and perfected first priority security interest in the Collateral; or
(g) The Seller or any Originator shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Seller or any Originator
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any Law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
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the case of any such proceeding instituted against it (but not instituted by
it), either such proceeding shall remain undismissed or unstayed for a period of
sixty (60) days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Seller or any Originator
shall take any corporate or limited liability company action, as applicable, to
authorize any of the actions set forth above in this subsection (g); or
(h) As of the last day of any calendar month, either (i) the 3-month
rolling average Default Ratio shall exceed 2.0%, (ii) the 3-month rolling
average Delinquency Ratio shall exceed 3.0%, (iii) the 3-month rolling average
Dilution Ratio shall exceed 8.0%, or (iv) the 3-month rolling average DSO shall
exceed 65 days; or
(i) The Percentage Factor shall on any Business Day be greater than the
Maximum Percentage Factor as of such date, unless the Percentage Factor shall be
reduced to an amount less than or equal to the Maximum Percentage Factor within
(i) if the Servicer is not then required to deliver Weekly Reports pursuant to
Section 6.02(g)(ii), two Business Days, or, (ii) if the Servicer is then
required to deliver Weekly Reports pursuant to Section 6.02(g)(ii), the lesser
of (A) two Business Days and (B) the date that the next Weekly Report is
required to be delivered; or
(j) In the Agent's reasonable judgment, there shall have occurred any event
which would be reasonably likely to materially and adversely affect the
collectibility of the Receivables or the ability of the Seller or any Originator
to collect Receivables or otherwise perform its respective obligations under
this Agreement and the other Transaction Documents; or
(k) An "Event of Termination" or "Facility Termination Date" shall occur
under the Initial Purchase Agreement or the Secondary Purchase Agreement, or any
other "default" shall occur under any other Transaction Document (after giving
effect to any applicable cure or grace periods), or the Initial Purchase
Agreement, the Secondary Purchase Agreement or any other Transaction Document
shall cease to be in full force and effect (or the Seller or any Originator
shall state in writing that this Agreement, the Initial Purchase Agreement, the
Secondary Purchase Agreement or any other Transaction Document shall cease to be
in full force and effect or any provision thereof shall cease to be the valid
and binding obligation of the Seller or any Originator, as the case may be); or
(l) All of the outstanding membership interests of the Seller shall cease
to be owned, directly or indirectly, by the Parent; or all of the outstanding
capital stock and membership interests of any Originator shall cease to be
owned, directly or indirectly, by the Parent; or
(m) One or more judgments for the payment of money shall be rendered
against (i) the Seller, in any amount, or (ii) any Originator or any of its
Subsidiaries (other than the Seller) or any combination thereof, in an aggregate
amount in excess of $20,000,000 (except, in each case, to the extent covered by
insurance as to which the insurer has acknowledged such coverage in writing),
and, in each case, the same shall remain undischarged for a period of 60
consecutive days during which execution shall not be effectively stayed, or any
action shall be
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taken by a judgment creditor to attach or levy upon any assets of the Seller or
any Originator or any of their respective Subsidiaries to enforce any such
judgment; or
(n) (i) The Consolidated Leverage Ratio as of the end of any fiscal quarter
of the Parent shall be greater than 3.25; or (ii) the Consolidated Interest
Coverage Ratio as of the end of any fiscal quarter of the Parent shall be less
than 4.00; provided that for each of clauses (i) and (ii) of this Section
7.01(n), the terms "Consolidated Leverage Ratio" and "Consolidated Interest
Coverage Ratio", together with each of the capitalized terms used to define such
terms, shall have the meaning specified in Annex F; or
(o) (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Seller or any Originator under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$20,000,000, or (ii) the Parent or any ERISA Affiliate fails to pay when due,
after the expiration of any applicable cure or grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of $20,000,000; or
(p) A Change of Control occurs with respect to the Parent or any other
Event of Default under the Credit Agreement or any document related to an
Approved Replacement Facility occurs (after the giving of any required notice
and the expiration of any applicable cure or grace period); or
(q) The Seller shall become required to register as an "investment company"
under the Investment Company Act of 1940, as amended, or the arrangements
contemplated by the Transaction Documents shall require registration as an
"investment company" within the meaning of the Investment Company Act of 1940;
or
(r) (i) Any action or proceeding is commenced by any party to the Credit
Agreement or any documentation related to an Approved Replacement Financing
claiming or asserting that the transactions contemplated by the Transaction
Documents are prohibited by the Credit Agreement or by any provision of the
documentation related to any Approved Replacement Facility, as applicable, or
(ii) the Parent has entered into any transactions which are prohibited by the
Credit Agreement or by any provision of the documentation related to any
Approved Replacement Facility, as the case may be;
then, and in any such event, any or all of the following actions may be taken by
notice to the Seller: (x) the Investors or the Agent may declare the Facility
Termination Date to have occurred (in which case the Facility Termination Date
shall be deemed to have occurred), (y) the Agent may declare the Commitment
Termination Date to have occurred (in which case the Commitment Termination Date
shall be deemed to have occurred), and (z) without limiting any right under this
Agreement to replace the Servicer, if such Event of Termination is a Servicer
Default, the Agent may designate another Person to succeed the Parent as the
Servicer; provided, that, automatically upon the occurrence of any event
(without any requirement for the passage of time or the giving of notice)
described in Sections 7.01(f), 7.01(g) and 7.01(q), the Facility Termination
Date and the Commitment Termination Date shall be deemed to have automatically
occurred. Upon any such declaration or designation or upon such automatic
termination, the
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Investors, the Banks and the Agent shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies
provided after default under the UCC and under other applicable Law, which
rights and remedies shall be cumulative. Upon the occurrence of the Facility
Termination Date, (i) no incremental purchases shall be made by the Investors or
the Banks (ii) all Collections shall be applied to reduce the Aggregate Capital
in accordance with Section 2.04 and (iii) the Yield for all Receivable Interests
shall accrue interest at the Default Rate.
ARTICLE VIII
THE AGENT
SECTION 8.01 Authorization and Action. Each Investor and each Bank hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Transaction Documents
as are delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto. The Agent reserves the right, in
its sole discretion (subject to Section 10.01), to agree to any amendment,
modification or waiver of the provisions of this Agreement or any instrument or
document delivered pursuant hereto, and also to exercise any rights and remedies
available under this Agreement and the other Transaction Documents or pursuant
to applicable Law. As to any matters not expressly provided for by this
Agreement or the other Transaction Documents (including, without limitation,
enforcement of this Agreement or the other Transaction Documents), the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Banks
and such instructions shall be binding upon all Banks; provided, however, that
the Agent shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement, the other Transaction
Documents or applicable Law.
SECTION 8.02 Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them as Agent under or in connection with this
Agreement (including, without limitation, the Agent's servicing, administering
or collecting Receivables as Servicer) or any other Transaction Document, except
for its or their own gross negligence or willful misconduct. Without limiting
the generality of the foregoing, the Agent: (a) may consult with legal counsel
(including counsel for the Seller, any Originator and the Servicer), independent
certified public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (b) makes no
warranty or representation to any Investor or Bank (whether written or oral) and
shall not be responsible to any Investor or Bank for any statements, warranties
or representations (whether written or oral) made in or in connection with this
Agreement or any other Transaction Document; (c) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the Seller, any
Originator or the Servicer or to inspect the property (including the books and
records) of the Seller, any Originator or the Servicer; (d) shall not be
responsible to any Investor or Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and
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(e) shall incur no liability under or in respect of this Agreement or any other
Transaction Document by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by telecopier
or telex) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 8.03 Bank of America and Affiliates. The obligation of Bank of
America to purchase Receivable Interests under this Agreement may be satisfied
by Bank of America or any of its Affiliates. With respect to any Receivable
Interest or interest therein owned by it, Bank of America shall have the same
rights and powers under this Agreement as any Bank and may exercise the same as
though it were not the Agent. Bank of America and any of its Affiliates may
generally engage in any kind of business with the Seller, the Servicer, any
Originator or any Obligor, any of their respective Affiliates and any Person who
may do business with or own securities of the Seller, the Servicer any
Originator or any Obligor or any of their respective Affiliates, all as if Bank
of America were not the Agent and without any duty to account therefor to the
Investors or the Banks.
SECTION 8.04 Bank's Purchase Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent, any of its Affiliates or any
other Bank and based on such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into this Agreement.
Each Bank also acknowledges that it will, independently and without reliance
upon the Agent, any of its Affiliates or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under this Agreement.
SECTION 8.05 Indemnification of Agent. Each Bank agrees to indemnify the
Agent (to the extent not reimbursed by the Seller, the Servicer or any
Originator), ratably according to the amount of its Bank Commitment (or, if the
Bank Commitments have been terminated, then ratably according to the respective
amounts of Capital of the Receivable Interests (or interests therein) owned by
it or which it may be required to purchase under the Asset Purchase Agreement),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or the
other Transaction Documents or any action taken or omitted by the Agent under
this Agreement or the other Transaction Documents; provided that no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01 Indemnities by the Seller, the Parent and the Originators.
Without limiting any other rights that the Agent, the Investor, the Banks, any
of their respective Affiliates or members or any of their respective officers,
directors, employees or advisors (each, an "Indemnified Party") may have
hereunder or under applicable Law, the Seller, the Parent and each Originator,
as applicable, hereby agrees to indemnify severally but not jointly each
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Indemnified Party from and against any and all claims, losses and liabilities
(including reasonable attorneys' fees) (all of the foregoing being collectively
referred to as "Indemnified Amounts") arising out of or resulting from this
Agreement or the other Transaction Documents or the use of proceeds of purchases
or reinvestments or the ownership of Receivable Interests or in respect of any
Receivable or any Contract, excluding, however, (a) Indemnified Amounts to the
extent found in a final non-appealable judgment of a court of competent
jurisdiction to have resulted from gross negligence or willful misconduct on the
part of such Indemnified Party, (b) recourse (except as otherwise specifically
provided in this Agreement) for Receivables which are not collected, not paid or
uncollectible on account of the insolvency, bankruptcy or financial inability to
pay of the applicable Obligor or (c) any taxes excluded from indemnification
under Section 2.10 of this Agreement. Without limiting or being limited by the
foregoing, the Seller, the Parent and each Originator, as applicable, shall pay
within ten (10) days of demand to each Indemnified Party any and all amounts
necessary to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to it or resulting from its action or failure to
act as follows:
(i) the characterization in any Servicer Report or other written
statement made by or on behalf of the Seller of any Receivable as an
Eligible Receivable or as included in the Net Receivables Pool Balance
which, as of the date of such Servicer Report or other statement, is not an
Eligible Receivable or should not be included in the Net Receivables Pool
Balance;
(ii) any representation or warranty or statement made or deemed made
by the Seller, the Parent (including, the Parent or any of its Affiliates
in the capacity as the Servicer) or any Originator (or any of their
respective officers) under or in connection with this Agreement or any of
the other Transaction Documents which shall have been incorrect in any
material respect when made;
(iii) the failure by the Seller, the Parent (including, the Parent or
any of its Affiliates in the capacity as the Servicer) or any Originator to
comply with any applicable Law with respect to any Receivable or the
related Contract; or the failure of any Receivable or the related Contract
to conform to any such applicable Law; or the sale of any Receivable under
this Agreement in violation of any applicable Law;
(iv) the failure to vest in the Agent, for the benefit of the
Investors and the Banks, a perfected security interest in the Collateral
free and clear of any Adverse Claim;
(v) the failure to have filed, or any delay in filing, financing
statements or amendments or termination statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or
other applicable Laws with respect to any item of Collateral, whether at
the time of any purchase or reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or services related to
such Receivable or
69
the furnishing or failure to furnish such merchandise or services or
relating to collection activities with respect to such Receivable (if such
collection activities were performed by the Seller acting as Servicer);
(vii) any failure of the Seller or the Servicer to perform its duties
or obligations in accordance with the provisions hereof and of the other
Transaction Documents, or to perform its duties or obligations (if any)
under the Contracts;
(viii) any products liability or other claim arising out of or in
connection with merchandise, insurance or services which are the subject of
any Contract;
(ix) the commingling of Collections of Receivables by the Seller at
any time with other funds;
(x) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of purchases or reinvestments or the
ownership of Receivable Interests or in respect of any Receivable or
Related Security or Contract (including, without limitation, in connection
with the preparation of a defense or appearing as a third party witness in
connection therewith and regardless of whether such investigation,
litigation or proceeding is brought by the Seller, an Indemnified Party or
any other Person or an Indemnified Party is otherwise a party thereto);
(xi) any failure of the Seller to comply with its covenants contained
in this Agreement or any other Transaction Document; or
(xii) any claim brought by any Person other than an Indemnified Party
arising from any activity by the Seller in servicing, administering or
collecting any Receivable; or
(xiii) the transfer of an interest in any Receivable other than an
Eligible Receivable;
(xiv) the failure of the Seller, any Originator or the Parent to pay
when due any sales, excise or personal property taxes payable in connection
with any of the Receivables;
(xv) any repayment by any Indemnified Party of any amount previously
distributed in reduction of Capital which such Indemnified Party believes
in good faith is required to be made;
(xvi) failure of any Deposit Bank to remit any amounts held in the
Deposit Accounts or any related Lock-Boxes pursuant to the instructions of
the Servicer, the Seller, any Originator or the Agent (to the extent such
Person is entitled to give such instructions in accordance with the terms
hereof and of any applicable Deposit Account Control Agreement) whether by
reason of the exercise of set off rights or otherwise;
(xvii) any inability to obtain any judgment in or utilize the court or
other adjudication system of, any state in which an Obligor may be located
as a result of the failure of
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the Seller, any Originator or the Parent to qualify to do business or file
any notice of business activity report or any similar report in such state;
(xviii) any attempt by any Person to void, rescind or set aside any
transfer by any Originator to the Parent or the Parent to the Seller of any
Receivable or Related Security under statutory provisions or common law or
equitable action, including any provision of the Bankruptcy Code or other
insolvency law;
(xix) any action taken by the Seller, any Originator, or the Servicer
(if such action is performed by the Parent acting as the Servicer or any
Affiliate or designee of the Parent) or any of their Affiliates in the
enforcement or collection of any Receivable; or
(xx) the use of the proceeds of any purchase or reinvestment by the
Seller.
SECTION 9.02 Accounting Based Consolidation Event.
If an Accounting Based Consolidation Event shall at any time occur, then,
within ten (10) days after demand in writing by the Indemnified Party affected
thereby, through the Agent, the Seller shall pay to the Agent, for the benefit
of such Indemnified Party, such amounts as such Indemnified Party reasonably
determines will compensate or reimburse the Indemnified Party for any resulting
(i) fee, expense or increased cost charged to, incurred or otherwise suffered by
such Indemnified Party or (ii) regulatory capital charge, internal capital
charge or other imputed cost determined by such Indemnified Party to be
allocable to the transactions contemplated under this Agreement or any
Transaction Document in connection therewith. Amounts under this Section 9.6 may
be demanded at any time without regard to the timing of issuance of any
financial statement by any Indemnified Party. A certificate as to the amount of
such indemnification submitted to the Seller and the Agent by such Indemnified
Party, setting forth, in reasonable detail, the basis for and the calculation
thereof, shall be conclusive and binding for all purposes absent manifest error.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or consent to any departure by the Seller, any Originator or the
Servicer therefrom shall be effective unless in a writing signed by the Agent,
as agent for the Investors and the Banks (and, in the case of any amendment,
also signed by the Seller and the Originators; provided, however, that the
signatures of the Seller and the Originators shall not be required for the
effectiveness of any amendment which modifies the representations, warranties,
covenants or responsibilities of the Servicer at any time when the Servicer is
not an Originator or an Affiliate of an Originator or a successor Servicer is
designated by the Agent pursuant to Section 6.01), and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by the Servicer in addition to
the Agent,
71
affect the rights or duties of the Servicer under this Agreement; and provided,
further, that the Agent shall not:
(a) without the prior written consent of each Bank:
(i) amend the definitions of Eligible Receivable, Delinquent
Receivable or Defaulted Receivable or increase the then existing
Concentration Limit; or
(ii) amend, modify or waive any provision of this Agreement in any way
which would:
(A) reduce the amount of Capital or Yield that is payable on
account of any Receivable Interest or delay any scheduled date for
payment thereof; or
(B) impair any rights expressly granted to an assignee or
participant under the Agreement; or
(C) reduce fees payable by the Seller to the Agent or to Bank of
America which relate to payments to the Banks or delay the dates on
which such fees are payable; or
(D) modify any provisions relating to the Aggregate Loss and
Dilution Reserve or the Yield and Fee Reserve so as to reduce the
amount of such Reserves; or
(iii) agree to a different Alternate Rate pursuant to the final
proviso in the definition of Alternate Rate in the Agreement; or
(iv) amend or waive the Event of Termination relating to the
bankruptcy of the Seller or any Originator or amend or waive the Servicer
Default relating to the bankruptcy of the Servicer; or
(v) amend this Agreement to extend the Commitment Termination Date; or
(b) increase the Bank Commitment of any Bank without the prior written
consent of such Bank.
Notwithstanding any other provision of this Section 10.01, Schedules I and IV
hereto may be amended in accordance with the procedures set forth in Sections
5.01(g) and 5.01(b), respectively. No failure on the part of the Investors, the
Banks or the Agent to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right.
SECTION 10.02 Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile
72
communication) and faxed or delivered, to each party hereto, at its address set
forth on Schedule III hereto or at such other address as shall be designated by
such party in a written notice to the other parties hereto. Notices and
communications by facsimile shall be effective when sent (and shall be followed
by hard copy sent by regular mail), and notices and communications sent by other
means shall be effective when received.
SECTION 10.03 Assignability. (a) This Agreement and the Investors' rights
and obligations herein (including ownership of each Receivable Interest) shall
be assignable by the Investors and their successors and assigns (including,
without limitation, pursuant to an Asset Purchase Agreement) with the Seller's
consent, which shall not be unreasonably withheld, delayed or conditioned;
provided, that the Seller's consent shall not be required (i) if the assignment
shall be to an Eligible Assignee (or any related commercial paper issuer, if
such Eligible Assignee does not itself issue commercial paper) pursuant to an
Asset Purchase Agreement, (ii) if there shall exist an Event of Termination or
(iii) if the assignment is by an Investor or a Bank to a receivables investment
company administered or sponsored by the Agent or any of its Affiliates. Each
assignor of a Receivable Interest or any interest therein shall notify the Agent
and the Seller of any such assignment. Each assignor of a Receivable Interest or
any interest therein may, in connection with any such assignment, disclose to
the assignee or potential assignee any information relating to the Seller,
Servicer or any Originator, including the Receivables, furnished to such
assignor by or on behalf of the Seller, Servicer, any Originator or by the
Agent; provided that, prior to any such disclosure, the assignee or potential
assignee agrees to preserve the confidentiality of any such information which is
confidential in accordance with the provisions of Section 10.06 hereof.
Upon and to the extent of such assignment by an Investor to an Eligible
Assignee, (i) such Eligible Assignee shall be the owner of the assigned portion
of the Capital, (ii) the related administrator for such Eligible Assignee will
act as the administrator for such Eligible Assignee, with all corresponding
rights and powers, express or implied, granted to the administrator hereunder or
under the other Transaction Documents, (iii) such Eligible Assignee (and any
related commercial paper issuer, if such Eligible Assignee does not itself issue
commercial paper) and their respective liquidity support provider(s) and credit
support provider(s) and other related parties shall have the benefit of all the
rights and protections provided to an Investor and its Program Support
Provider(s) herein and in the other Transaction Documents (including any
limitation on recourse against such Eligible Assignee or related parties, any
agreement not to file or join in the filing of a petition to commence an
insolvency proceeding against such Eligible Assignee, and the right to assign to
another Eligible Assignee as provided in this paragraph), (iv) such Eligible
Assignee shall assume all (or the assigned or assumed portion) of an Investor's
obligations, if any, hereunder or any other Transaction Document, and an
Investor shall be released from such obligations, in each case to the extent of
such assignment, and the obligations of an Investor and such Eligible Assignee
shall be several and not joint, (v) all distributions in respect of the Capital
shall be made to the applicable agent or administrator, as applicable, on behalf
of an Investor and such Eligible Assignee on a pro rata basis according to their
respective interests, (vi) the definition of the term "Investor Rate" with
respect to the portion of the Capital funded with commercial paper issued by an
Investor from time to time shall be determined in the manner set forth in the
definition of "Investor Rate" applicable to an Investor on the basis of the
interest rate or discount applicable to commercial paper issued by such Eligible
Assignee (or the related commercial paper issuer, if such Eligible
73
Assignee does not itself issue commercial paper) rather than an Investor, (vii)
the defined terms and other terms and provisions of this Agreement and the other
Transaction Documents shall be interpreted in accordance with the foregoing, and
(viii) if requested by the Agent or the administrator with respect to the
Eligible Assignee, the parties will execute and deliver such further agreements
and documents and take such other actions as the Agent or such administrator may
reasonably request to evidence and give effect to the foregoing. No assignment
by an Investor to an Eligible Assignee of all or any portion of the Capital
shall in any way diminish the related Banks' obligation under Section 2.02 to
fund any purchase not funded by an Investor or such Eligible Assignee or to
acquire from an Investor or such Eligible Assignee all or any portion of the
Capital pursuant to Section 2.02.
(b) Each Bank may assign to any Eligible Assignee or to any other Bank all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Bank Commitment and any Receivable
Interests or interests therein owned by it); provided, however, that:
(i) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement;
(ii) the amount being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance Agreement with
respect to such assignment) shall in no event be less than the lesser of
(x) $20,000,000 and (y) all of the assigning Bank's Bank Commitment;
(iii) the parties to each such assignment shall execute and deliver to
the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance Agreement, together with a processing and recordation fee of
$2,500; and
(iv) concurrently with such assignment, such assignor Bank shall
assign to such assignee Bank or other Eligible Assignee an equal percentage
of its rights and obligations under the Asset Purchase Agreement (or, if
such assignor Bank is Bank of America, it shall arrange for such assignee
Bank or other Eligible Assignee to become a party to the Asset Purchase
Agreement for a maximum Capital amount equal to the assignee's Bank
Commitment).
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance Agreement, (x) the
assignee thereunder shall be a party to this Agreement and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance Agreement, have the rights and obligations of a Bank
hereunder and (y) the assigning Bank shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance Agreement, relinquish such rights and be released from such
obligations under this Agreement (and, in the case of an Assignment and
Acceptance Agreement covering all or the remaining portion of an assigning
Bank's rights and obligations under this Agreement, such Bank shall cease to be
a party hereto).
(c) The Agent shall maintain at its address referred to in Section 10.02 of
this Agreement a copy of each Assignment and Acceptance Agreement delivered to
and accepted by
74
it and a register for the recordation of the names and addresses of the Banks
and the Bank Commitment of, and aggregate outstanding Capital of Receivable
Interests or interests therein owned by, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Seller, the Originators, the Agent and
the Banks may treat each person whose name is recorded in the Register as a Bank
under this Agreement for all purposes of this Agreement. The Register shall be
available for inspection by the Seller, the Originators or any Bank at any
reasonable time and from time to time upon reasonable prior notice. Upon its
receipt of an Assignment and Acceptance Agreement executed by an assigning Bank
and an Eligible Assignee, the Agent shall, if such Assignment and Acceptance
Agreement has been completed, (i) accept such Assignment and Acceptance
Agreement, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Seller.
(d) Notwithstanding any other provision of this Section 10.03, any Bank may
at any time pledge or grant a security interest in all or any portion of its
rights (including, without limitation, rights to payment of Capital and Yield)
under this Agreement or under the Asset Purchase Agreement to secure obligations
of such Bank to a Federal Reserve Bank, without notice to or consent of the
Seller or the Agent; provided that no such pledge or grant of a security
interest shall release a Bank from any of its obligations hereunder or under the
Asset Purchase Agreement, as the case may be, or substitute any such pledgee or
grantee for such Bank as a party hereto or to the Asset Purchase Agreement, as
the case may be.
(e) Each Bank may sell participations, to one or more banks or other
entities, in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Bank
Commitment and the Receivable Interests or interests therein owned by it);
provided, however, that:
(i) such Bank's obligations under this Agreement (including, without
limitation, its Bank Commitment to the Seller hereunder) shall remain
unchanged;
(ii) such Bank shall remain solely responsible to the other parties to
this Agreement for the performance of such obligations; and
(iii) concurrently with such participation, the selling Bank shall
sell to such bank or other entity a participation in an equal percentage of
its rights and obligations under the Asset Purchase Agreement.
The Agent, the other Banks and the Seller shall have the right to continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement.
(f) This Agreement and the rights and obligations of the Agent herein shall
be assignable by the Agent and its successors and assigns; provided, however,
that the Agent agrees that it will not assign such rights and obligations to any
Person other than an Affiliate of Bank of America unless:
75
(i) the Agent determines that continued service by it (or its
Affiliate) as Agent hereunder would be inconsistent with, or otherwise
disadvantageous under, applicable legal, tax or regulatory restrictions; or
(ii) there shall have occurred (x) an Incipient Event of Termination
of the type described in Section 7.01(g) or (y) any Event of Termination,
which shall be continuing; or
(iii) the Seller shall have consented to such assignment (such consent
not to be unreasonably withheld or delayed).
(g) Neither the Seller nor any of the Originators may assign their
respective rights or obligations hereunder or any interest herein without the
prior written consent of the Agent.
(h) The Investors may, without the consent of the Seller, sell
participations to one or more banks or other entities (each, a "Participant") in
all or a portion of its rights and obligations hereunder (including the
outstanding Receivable Interests); provided that following the sale of a
participation under this Agreement (i) the obligations of the Investors shall
remain unchanged, (ii) the Investors shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Seller, the Agent, and the Banks shall continue to deal solely and directly with
the Investors in connection with the Investor's rights and obligations under
this Agreement. Any agreement or instrument pursuant to which the Investors
sells such a participation shall provide that the Participant shall not have any
right to direct the enforcement of this Agreement or the other Transaction
Documents or to approve any amendment, modification or waiver of any provision
of this Agreement or the other Transaction Documents; provided that such
agreement or instrument may provide that the Investors will not, without the
consent of the Participant, agree to any amendment, modification or waiver that
(i) reduces the amount of Capital or Yield that is payable on account of any
Receivable Interest or delays any scheduled date for payment thereof or (ii)
reduces any fees payable by the Seller to the Agent (to the extent relating to
payments to the Participant) or delays any scheduled date for payment of such
fees. The Seller acknowledges and agrees that the Investor's source of funds may
derive in part from its Participants. Accordingly, references in Sections 2.08,
2.09, 2.10, 6.07, 9.01, 9.02 and 10.04 and the other terms and provisions of
this Agreement and the other Transaction Documents to determinations, reserve
and capital adequacy requirements, expenses, increased costs, reduced receipts
and the like as they pertain to the Investors shall be deemed also to include
those of its Participants; provided that the Seller shall not be required to pay
higher costs, expenses and indemnification amounts pursuant to this sentence
than would be required to be paid by the Seller in the absence of the sale of
any participation by the Investors to a Participant as contemplated by this
Section 10.03(h). The Investors or the Agent may, in connection with any such
participation, disclose to Participants and potential Participants any
information relating to the Seller, Servicer or any Originator, including the
Receivables, furnished to the Investors or the Agent by or on behalf of the
Seller; provided that, prior to any such disclosure, such Participant or
potential Participant agrees to preserve the confidentiality of any such
information which is confidential in accordance with the provisions of Section
10.06 hereof. Any interest sold by the Investors to a Bank or its designee under
the Asset Purchase
76
Agreement shall not be considered a participation for the purpose of this
Section 10.03(h) (and neither such Bank nor its designee shall be considered a
Participant as a result thereof).
SECTION 10.04 Costs and Expenses. In addition to the rights of
indemnification granted under Sections 9.01 and 9.02 hereof, the Seller agrees
to pay on demand (i) all reasonable costs and expenses incurred in connection
with periodic auditing and the other activities contemplated pursuant to Section
5.02, (ii) all reasonable costs and expenses incurred in connection with the
preparation, execution, delivery and administration of this Agreement, any Asset
Purchase Agreement and the other Transaction Documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Agent, the Investors and the Banks with respect thereto and with respect to
advising the Agent, the Investors and the Banks as to their rights and remedies
under this Agreement, (iii) all reasonable pre-closing due-diligence expenses,
and (iv) all costs and expenses (including reasonable counsel fees and expenses)
of the Agent, the Investors and the Banks in connection with the enforcement of
this Agreement and the other Transaction Documents.
(b) In addition, the Seller shall pay (i) to the extent not included in the
calculation of Yield, any and all commissions of placement agents and dealers in
respect of Commercial Paper issued to fund the purchase or maintenance of any
Receivable Interest, (ii) any and all costs and expenses of any issuing and
paying agent or other Person responsible for the administration of the
Investor's Commercial Paper program in connection with the preparation,
completion, issuance, delivery or payment of Commercial Paper issued to fund the
purchase or maintenance of any Receivable Interest, and (iii) any and all
Liquidation Fees.
SECTION 10.05 No Proceedings; Waiver of Consequential Damages. (a)Each of
the Seller, the Agent, the Servicer, each Originator, each Investor, each Bank,
each assignee of a Receivable Interest or any interest therein and each entity
which enters into a commitment to purchase Receivable Interests or interests
therein hereby agrees that it will not institute against, or join any other
Person in instituting against, the Investors (or its related commercial paper
issuer) any proceeding of the type referred to in Section 7.01(g) so long as any
Commercial Paper or other senior indebtedness issued by the Investors (or its
related commercial paper issuer) shall be outstanding or there shall not have
elapsed one year plus one day since the last day on which any such Commercial
Paper or other senior indebtedness shall have been outstanding.
(b) Each of the Servicer, the Seller and each Originator agree that no
Indemnified Party shall have any liability to them or any of their
securityholders or creditors in connection with this Agreement, the other
Transaction Documents or the transactions contemplated thereby on any theory of
liability for any special, indirect, consequential or punitive damages
(including, without limitation, any loss of profits, business or anticipated
savings).
SECTION 10.06 Confidentiality. (a) The Seller, the Originators and the
Servicer each agrees not to disclose to any person or entity the terms of this
Agreement, the Fee Agreement and the related Transaction Documents (including,
without limitation, the amount or terms of any fees payable to Bank of America
or its Affiliates in connection with the Transaction), the proposal or structure
of the Transaction, any related structures developed by
77
Bank of America for the Seller or the Originators, any related analyses,
computer models, information or documents, any written or oral reports from Bank
of America or its Affiliates to the Seller, the Originators or the Servicer or
any related written information concerning the Transaction (collectively, the
"Product Information"), except that such Product Information may be disclosed
(i) to its and its Affiliates' officers, directors, employees, agents,
accountants, legal counsel and other representatives (collectively, the
"Applicable Sell Side Representatives") who have a need to know the Product
Information in connection with the transaction and who either (A) agree to be
bound by the provisions of this Section 10.06 or (B) owe a duty of trust or
confidentiality to the Seller, the Originators or the Servicer, (ii) in
connection with any action or proceeding related to, or the exercise of any
remedies under, the transaction, this Agreement or the other Transaction
Documents, (iii) to the extent required by applicable Law, subpoena or other
legal process or (iv) to any other person or entity with Bank of America's prior
written consent; provided, that Product Information shall not include
information that (x) is or becomes publicly available other than through a
breach of this Agreement or any other Transaction Document, or (y) was or
becomes available to the receiving party on a non-confidential basis from a
source that is not known to such receiving party to be subject to a
confidentiality agreement with Bank of America or its Affiliates. Each of the
Seller, the Originators and the Servicer will be responsible for any failure of
any of their Applicable Sell Side Representatives to comply with the provisions
of this Section 10.06.
(b) Each Investor, each Bank and the Agent agrees not to disclose to any
person or entity the confidential or proprietary information of the Seller,
Originators or the Servicer furnished to such Investor, such Bank or the Agent
in connection with the Transaction (the "Sell Side Information"), except (i) to
its and its Affiliates' officers, directors, employees, agents, accountants,
legal counsel and other representatives (collectively, the "Applicable Investor
Side Representatives") who have a need to know the Sell Side Information in
connection with the Transaction or to properly manage each Investor, each Bank
or the Agent and their respective Affiliates' banking relationships with the
Seller, Originators or the Servicer and their respective Affiliates and who
either (a) agree to be bound by the provisions in this Section 10.06 or (b) owe
a duty of trust or confidentiality to such Investor, such Bank or the Agent,
(ii) in connection with any action or proceeding related to, or the exercise of
any remedies under, the Transaction, such banking relationships, this Agreement
or the other Transaction Documents, (iii) to the extent required by applicable
Law, subpoena or other legal process, (iv) to the extent requested by any
governmental or regulatory authority having jurisdiction over such Investor,
such Bank or the Agent or such Applicable Investor Side Representative, (v) to
the rating agencies, (vi) to any actual or potential subordinated investor in
any conduit or liquidity provider if such investor or liquidity provider, as the
case may be, has signed a confidentiality agreement substantially on the terms
of this Section 10.06, (vii) to dealers and investors in respect of promissory
notes of any conduit and credit enhancers in accordance with the customary
practices of such conduit for disclosures to dealers, investors or credit
enhancers, as the case may be, it being understood that any such disclosure to
dealers or investors will not identify the Seller, any Originator or the
Servicer or any of their respective Affiliates by name and (viii) to any other
person or entity with the Seller's prior written consent; provided that Sell
Side Information shall not include information that (i) is or becomes publicly
available other than through a breach of this Agreement or any other Transaction
Document, or (ii) was or becomes available to the receiving party on a
non-confidential basis from a source that is not known to such receiving party
to be subject to a confidentiality agreement with the Seller. The Investor,
78
the Banks or the Agent will be responsible for any failure of any of their
Applicable Investor Side Representatives to comply with the provisions of this
Section 10.06.
(c) Notwithstanding any other provision herein or in any other Transaction
Document, each Investor, each Bank and the Agent hereby confirms that the
Seller, each Originator and the Servicer (and each employee, representative or
other agent of each such party) may disclose to any and all Persons, without
limitation of any kind, the U.S. tax treatment and U.S. tax structure of the
Transaction.
SECTION 10.07 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF OTHER THAN SECTION 5 1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW). EACH OF THE SELLER, EACH ORIGINATOR
AND THE SERVICER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE SELLER,
THE SERVICER AND EACH ORIGINATOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 10.07 SHALL AFFECT THE RIGHT
OF THE INVESTORS TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE SELLER,
ANY ORIGINATOR OR THE SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS
OF OTHER JURISDICTIONS.
SECTION 10.08 Execution in Counterparts; Integration. (a) This Agreement
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken together shall
constitute one and the same agreement. Delivery by a party hereto of an executed
counterpart of this Agreement by facsimile or similar electronic means shall be
deemed effective as delivery of the original executed counterpart by such party
for purposes of execution hereof.
(b) This Agreement contains the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire Agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.
SECTION 10.09 Survival of Termination. The provisions of Sections 2.08,
2.09, 2.10, 6.07, 9.01, 9.02, 10.04, 10.05 and 1.02 shall survive any
termination of this Agreement.
79
SECTION 10.10 Consent to Jurisdiction. (a) Each party hereto hereby
irrevocably submits to the non-exclusive jurisdiction of any New York State or
Federal court sitting in New York City in any action or proceeding arising out
of or relating to this Agreement or the other Transaction Documents, and each
party hereto hereby irrevocably agrees that all claims in respect of such action
or proceeding may be heard and determined in such New York State court or, to
the extent permitted by law, in such Federal court. The parties hereto hereby
irrevocably waive, to the fullest extent they may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
parties hereto agree 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.
(b) Each of the Seller, the Servicer and the Originators consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to it at its address specified in Section 10.02.
Nothing in this Section 1.06 shall affect the right of the Investors, any Bank
or the Agent to serve legal process in any other manner permitted by law.
SECTION 10.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED OR DELIVERED PURSUANT HERETO.
[Signature pages follow]
80
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
SELLER: FOUNTAIN CITY FINANCE, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Treasurer
PARENT: DST SYSTEMS, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Vice President & Chief Accounting
Officer
SERVICER: DST SYSTEMS, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Vice President & Chief Accounting
Officer
ORIGINATORS: DST SYSTEMS, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Vice President & Chief Accounting
Officer
DST HEALTH SOLUTIONS, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST OUTPUT, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
[Signature Page to Receivables Purchase Agreement]
81
DST OUTPUT CENTRAL, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST OUTPUT EAST, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST OUTPUT WEST, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST OUTPUT GRAPHICS, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST TECHNOLOGIES, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST STOCK TRANSFER, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
[Signature Page to Receivables Purchase Agreement]
82
DST GLOBAL SOLUTIONS NORTH AMERICA LTD.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST HEALTH SOLUTIONS, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST MAILING SERVICES, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Treasurer
ISPACE SOFTWARE TECHNOLOGIES, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
ARGUS HEALTH SYSTEMS, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST DIRECT, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
[Signature Page to Receivables Purchase Agreement]
83
DST OUTPUT ELECTRONIC SOLUTIONS, INC.
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST TASS, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST WORLDWIDE SERVICES, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DSTI MOSIKI, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
DST RETIREMENT SOLUTIONS, LLC
By: /s/ Xxxxx Xx. Xxxxxx
------------------------------------------
Name: Xxxxx Xx. Xxxxxx
Title: Assistant Treasurer
[Signature Page to Receivables Purchase Agreement]
84
INVESTOR: ENTERPRISE FUNDING COMPANY LLC
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X.Xxxxxx
Title: Vice President
AGENT: BANK OF AMERICA, NATIONAL ASSOCIATION,
as Agent
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice-President
BANK: BANK OF AMERICA, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice-President
[Signature Page to Receivables Purchase Agreement]
85
