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
<PAGE>
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
i
<PAGE>
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
ii
<PAGE>
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
iii
<PAGE>
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
<PAGE>
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.
2
<PAGE>
"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.
3
<PAGE>
"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.
"Bill of Sale"
means the Bill 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
4
<PAGE>
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 Bill of Sale.
"Code" means the Internal Revenue Code of
1986, as amended.
"Collateral" has the meaning specified in
Section 2.11.
5
<PAGE>
"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:
6
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<TABLE>
<CAPTION>
<S>
<C>
<C>
--------------------------------------
------------------------------------------
Obligor's Debt
Rating
Concentration Limit
--------------------------------------
------------------------------------------
At least AA- by S&P and Aa3
by 10.0% of the Net
Eligible Receivables
Moody's
Outstanding Balance
--------------------------------------
------------------------------------------
At least BBB by S&P and Baa2
by 7.5% of the Net
Eligible Receivables
Moody's
Outstanding Balance
--------------------------------------
------------------------------------------
At least BBB- by S&P and Baa3
by 5.0% of the Net
Eligible Receivables
Moody's
Outstanding Balance
--------------------------------------
------------------------------------------
</TABLE>
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 Moody's 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.
7
<PAGE>
"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 Moody's 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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<PAGE>
(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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<PAGE>
"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
<PAGE>
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;
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<PAGE>
(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;
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<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
"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
<PAGE>
"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 Moody's 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.
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<PAGE>
"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
<PAGE>
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
<PAGE>
"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
<PAGE>
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
<PAGE>
(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 McGraw-Hill 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
<PAGE>
"Seller's Account" means the special
account (ABA 101000695, Account Number
9871868869, Account Name: Fountain City Finance, LLC)
of the Seller maintained
at the office of UMB Bank, NA at 1010 Grand, Kansas City, MO
64106.
"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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
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"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)
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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
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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.
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(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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<PAGE>
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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<PAGE>
(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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<PAGE>
(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&
