RECEIVABLES PURCHASE AGREEMENT

Exhibit 10.2

Execution

Version

 

RECEIVABLES PURCHASE AGREEMENT

THIS RECEIVABLES PURCHASE AGREEMENT dated as of June 30, 2009, is among:

(a) Convergys Funding Inc., a Kentucky corporation ( “Seller” ),

(b) Convergys Corporation, an Ohio corporation ( “Convergys” ), as initial Servicer,

(c) Liberty Street Funding LLC, a Delaware limited liability company ( “Liberty Street” or the “Conduit” ),

(d) The Bank of Nova Scotia, a Canadian chartered bank acting through its New York Agency ( “Scotiabank” ), and its assigns hereunder (collectively, the “Scotiabank Committed Purchasers” and, together with Liberty Street, the “Scotiabank Group” ),

(e) Wachovia Bank, National Association ( “Wachovia” ),

(f) The Bank of Nova Scotia, a Canadian chartered bank acting through its New York Agency, in its capacity as agent for the Scotiabank Group (the “Scotiabank Group Agent” ), and

(g) Wachovia Bank, National Association, in its capacity as administrative agent for the Scotiabank Group, Wachovia and the Scotiabank Group Agent (in such capacity, together with its successors and assigns, the “Administrative Agent” and, together with the Scotiabank Group Agent, the “Agents ” ).

Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I and if not defined therein shall have the meanings assigned thereto in the applicable Receivables Sale Agreement.

PRELIMINARY STATEMENTS

Seller desires to transfer and assign Receivables Interests to the Purchasers from time to time.

Wachovia shall purchase its Percentage of each Receivables Interest from Seller from time to time.

The Conduit may, in its absolute and sole discretion, purchase its Percentage of each Receivables Interest from Seller from time to time, and in the event that the Conduit declines to make any such purchase, the Scotiabank Committed Purchasers shall make such purchase, ratably in accordance with their respective Ratable Share.

The Bank of Nova Scotia, a Canadian chartered bank acting through its New York Agency has been requested and is willing to act as Scotiabank Group Agent on behalf of the Scotiabank Group in accordance with the terms hereof.

Wachovia Bank, National Association has been requested and is willing to act as Administrative Agent on behalf of the Purchasers in accordance with the terms hereof.

ARTICLE I.

PURCHASE ARRANGEMENTS

Section 1.1 Purchase Facility .

(a) On the terms and subject to the conditions set forth in this Agreement, Seller may from time to time prior to the Facility Termination Date, sell Receivables Interests to the Purchasers by delivering (or causing Servicer to deliver, on Seller’s behalf) a Purchase Notice to Wachovia and the Scotiabank Group Agent in accordance with Section 1.2. Upon receipt of a Purchase Notice,

(i) Wachovia agrees to purchase its Percentage of such Receivables Interest, on the terms and subject to the conditions hereof, provided that at no time may the aggregate Invested Amount of Wachovia at any one time outstanding exceed the lesser of (A) the amount of Wachovia’s Commitment hereunder, and (B) Wachovia’s Percentage of the difference between the Net Pool Balance and the Required Reserves (such lesser amount, the “Wachovia Allocation Limit” ); and

(ii) the Scotiabank Group Agent shall determine whether the Conduit will purchase its Percentage of such Receivables Interest, and in the event that the Conduit elects not to make any such purchase of its Percentage of such Receivables Interest, the Scotiabank Group Agent shall promptly notify Seller and the Scotiabank Committed Purchasers of such fact, whereupon each of the Scotiabank Committed Purchasers severally agrees to purchase its Ratable Share of such Percentage of such Receivables Interest, on the terms and subject to the conditions hereof, provided that at no time may the aggregate Invested Amount of the Scotiabank Group at any one time outstanding exceed the lesser of (A) the aggregate amount of Scotiabank Committed Purchasers’ Commitments hereunder, and (B) the Scotiabank Group’s Percentage of the difference between the Net Pool Balance and the Required Reserves (such lesser amount, the “Scotiabank Allocation Limit” ).

In no event shall the Aggregate Invested Amount outstanding hereunder exceed the lesser of (A) the Purchase Limit and (B) the difference between the Net Pool Balance and the Required Reserves. Each Committed Purchaser’s Commitment to Seller under this Agreement shall terminate on the Facility Termination Date.

 

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(b) Seller may, upon at least 10 Business Days’ notice to the Agents and Wachovia, terminate in whole or reduce in part, the unused portion of the Purchase Limit, provided that each partial reduction of the unused Purchase Limit shall be in an aggregate amount equal to $2,000,000 or a larger integral multiple of $1,000,000; provided , further , that (i) any partial reduction of the unused Purchase Limit on or prior to October 20, 2009 shall reduce only the amount of Wachovia’s Commitment hereunder, unless the amount of Wachovia’s Commitment is thereby reduced to less than $60,000,000 and (ii) otherwise each such partial reduction shall reduce the unused portion of the Purchase Limit ratably between Wachovia and the Scotiabank Group in accordance with their respective Percentages (and within the Scotiabank Group, ratably among the Scotiabank Committed Purchasers that are members thereof in accordance with their respective Ratable Shares), the unused portion of the Purchase Limit; provided, further , that no such partial reduction may reduce the Purchase Limit to an amount less than $75,000,000.

Section 1.2 Increases . Seller (or Servicer, on Seller’s behalf) shall provide Wachovia and the Scotiabank Group Agent with notice of each Incremental Purchase by 12:00 noon (New York City time) one (1) Business Day prior to each such Incremental Purchase in a form set forth as Exhibit II hereto (a “Purchase Notice” ). Each Purchase Notice shall be subject to Section 6.2 hereof and shall be irrevocable and shall specify the requested Purchase Price (which shall be at least $2,000,000 or a larger integral multiple of $100,000) and date of purchase (which shall be a Business Day) and, in the case of an Incremental Purchase to be funded by Wachovia and the Scotiabank Committed Purchasers, the requested Discount Rate and, in the case of Scotiabank Committed Purchasers, the requested Tranche Period. Following receipt of a Purchase Notice, the Scotiabank Group Agent will determine whether the Conduit agrees to make its purchase. If the Conduit declines to make a proposed purchase, the Incremental Purchase of the Scotiabank Group’s Percentage of such Receivables Interest will be made by the Scotiabank Committed Purchasers. In the event that any Purchase Notice is delivered later than 12:00 noon. (New York City time) one (1) Business Day prior to the date of such Incremental Purchase, the Purchasers shall make such Incremental Purchase on a best-efforts basis only. On the date of each Incremental Purchase, upon satisfaction of the applicable conditions precedent set forth in Article VI, the Conduit or the Scotiabank Committed Purchasers, as applicable, and Wachovia shall initiate a wire transfer to the Facility Account, of immediately available funds, no later than 2:00 p.m. (New York City time), in an amount equal to (i) in the case of the Conduit, its Percentage of the Purchase Price of the Receivables Interest then being purchased, (ii) in the case of a Scotiabank Committed Purchaser, such Scotiabank Committed Purchaser’s Ratable Share of the Scotiabank Group’s Percentage of the Receivables Interest then being purchased and (iii) in the case of Wachovia, its Percentage of the Purchase Price of the Receivables Interest then being purchased.

Section 1.3 Decreases . Seller (or Servicer, on Seller’s behalf) shall provide Wachovia and the Scotiabank Group Agent with prior written notice in conformity with the Required Notice Period (each, a “Reduction Notice” ) of any proposed reduction of Aggregate Invested Amount. Such Reduction Notice shall designate (i) the date upon which any such reduction of Aggregate Invested Amount shall occur (which date shall give effect to the applicable Required Notice Period), (ii) the amount of Aggregate Invested Amount to be reduced (the “Aggregate Reduction” ), (iii) each of Wachovia’s and the Scotiabank Group’s Percentage of such Aggregate Reduction, which shall be applied ratably to the Receivables Interests of each of Wachovia and,

 

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in the case of the Scotiabank Group, the Conduit and the Scotiabank Committed Purchasers, in accordance with the amount of Invested Amount (if any) owing to Wachovia, and in the case of the Scotiabank Group, the amount of Invested Amount (if any) owing to the Conduit, on the one hand, and the amount of Invested Amount (if any) owing to the Scotiabank Committed Purchasers (ratably, based on their respective Ratable Shares), on the other hand. Only one (1) Reduction Notice shall be outstanding at any time.

Section 1.4 Payment Requirements . All amounts to be paid or deposited by any Seller Party pursuant to any provision of this Agreement shall be paid or deposited in accordance with the terms hereof no later than 1:00 p.m. (New York City time) on the day when due in immediately available funds, and if not received by such time shall be deemed to be received on the next succeeding Business Day. If such amounts are payable to the Scotiabank Group Agent or to a member of the Scotiabank Group, they shall be paid to account no. 2158-13 at The Bank of Nova Scotia - New York Agency, ABA No. 026 – 002532, Account: Liberty Street Funding LLC, until otherwise notified by the Scotiabank Group Agent (the “Scotiabank Account” ). If such amounts are payable to the Administrative Agent or to Wachovia, they shall be paid to account no. 2070482789126 at Wachovia Bank, National Association, ABA No. 053000219, Reference: Convergys Funding Inc., until otherwise notified by Wachovia (the “Wachovia Account” ). All computations of Yield, per annum fees hereunder (including, in the case of the Conduit, per annum fees calculated as part of any CP Costs), and per annum fees under the Fee Letter shall be made on the basis of a year of 360 days for the actual number of days elapsed. If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day. After delivery of a Collection Notice, Collections transferred to the Administrative Agent from any Collection Bank shall be credited to the Aggregate Unpaids on the Business Day following the date of receipt, subject to Section 2.4 hereof.

Section 1.5 Extension of the Conduit’s Liquidity Termination Date . Provided that no Amortization Event or Potential Amortization Event has occurred, the Seller (or Servicer, on Seller’s behalf) may request an extension of the Liquidity Termination Date by submitting a request for an extension (each, an “Extension Request” ) to the Scotiabank Group Agent no more than 120 days and not less than 30 days prior to the then current Liquidity Termination Date. Upon receipt of such an Extension Request, the Scotiabank Group Agent shall notify the Scotiabank Group of the contents thereof and shall request each member of the Scotiabank Group to approve the Extension Request. Each member of the Scotiabank Group approving the Extension Request shall deliver its written approval to the Scotiabank Group Agent no later than thirty (30) days after the request (the “Response Date” ), whereupon the Scotiabank Group Agent shall notify the Administrative Agent, Wachovia and the Seller within one Business Day thereafter as to whether all members of the Scotiabank Group have approved the Extension Request. If all members of the Scotiabank Group have approved the Extension Request by the Response Date, the Conduit’s Liquidity Termination Date shall be extended to the date which is 364 days from the earlier to occur of the Response Date or the Administrative Agent’s receipt of notice from the Scotiabank Group Agent that the Scotiabank Group has unanimously approved the requested extension (such earlier date, the “Extension Date” ). If the members of the Scotiabank Group do not unanimously agree to an Extension Request, the Seller (or Servicer, on Seller’s behalf) shall have the right to require the members of the Scotiabank Group to assign all, but not less than all, of their Commitments and all, but not less than all, of their outstanding

 

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Aggregate Unpaids by entering into written assignment(s) with one or more Eligible Assignees (who shall, unless an Amortization Event or Potential Amortization Event shall exist and be continuing, be acceptable to Convergys, which consent shall not be unreasonably withheld or delayed) not later than the 10th Business Day after such Eligible Assignee(s) are identified. Each such assignment to an Eligible Assignee (including, if agreed by the members of the Scotiabank Group, to Wachovia) shall become effective on the Business Day following execution and delivery of the applicable written assignment; provided that the assigning Purchasers receive payment in full of their Aggregate Unpaids (it being understood that any breakage costs, expenses or other amounts which would be owing to such Purchaser pursuant to any indemnification provision hereof shall be payable by the Seller). If the members of the Scotiabank Group do not unanimously agree to an Extension Request and the assignment to an Eligible Assignee does not occur as provided herein, the Liquidity Termination Date shall remain unchanged.

ARTICLE II.

PAYMENTS AND COLLECTIONS

Section 2.1 Payments . Notwithstanding any limitation on recourse contained in this Agreement, Seller (or Servicer, on Seller’s behalf) shall immediately remit to each of Wachovia, for the account of itself, and the Scotiabank Group Agent, for the account of the Purchasers in the Scotiabank Group, when due, on a full recourse basis, all of the following (collectively, the “Obligations” ):

(i) such fees as set forth in the Fee Letter (which fees shall be sufficient to pay all fees owing to the Agents and the Purchasers under the Fee Letter),

(ii) all amounts payable as Yield (including all Yield accruing at the Default Rate),

(iii) all CP Costs,

(iv) all amounts payable as Deemed Collections (which shall be immediately due and payable by Seller and applied to reduce outstanding Aggregate Invested Amount hereunder in accordance with Sections 2.2 and 2.3 hereof),

(v) all amounts required pursuant to Section 2.6,

(vi) all amounts payable pursuant to Article X, if any,

(vii) all Servicer costs and expenses, including the Servicing Fee, in connection with servicing, administering and collecting the Receivables, and

(viii) all Broken Funding Costs.

If Seller fails to pay any of the Obligations when due, Seller agrees to pay, on demand, the Default Rate in respect thereof until paid. Notwithstanding the foregoing, no provision of this

 

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Agreement or the Fee Letter shall require the payment or permit the collection of any amounts hereunder in excess of the maximum permitted by applicable law. If at any time Seller receives any Collections or is deemed to receive any Collections, Seller (or Servicer, on Seller’s behalf) shall immediately pay such Collections or Deemed Collections to the Servicer for application in accordance with the terms and conditions hereof and, at all times prior to such payment, such Collections or Deemed Collections shall be held in trust by Seller for the exclusive benefit of the Purchasers and the Agents.

Section 2.2 Collections Prior to Amortization . Prior to the Amortization Date, any Collections and/or Deemed Collections received by the Servicer shall be set aside and held in trust by the Servicer for the payment of any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in this Section 2.2. If on any Business Day prior to the Amortization Date, any Collections are received by the Servicer after payment of any Obligations that are then due and owing, Seller hereby requests and the Purchasers hereby agree to make, simultaneously with such receipt, a reinvestment (each, a “Reinvestment” ) with that portion of the balance of each and every Collection received by the Servicer that is part of any Receivables Interest, such that after giving effect to such Reinvestment, the amount of Invested Amount of such Receivables Interest immediately after such receipt and corresponding Reinvestment shall be equal to the amount of Invested Amount immediately prior to such receipt. On each Settlement Date prior to the occurrence of the Amortization Date, the Servicer shall remit to the Scotiabank Account and the Wachovia Account, as applicable, each of the Conduit’s and Wachovia’s respective Percentage of the amounts set aside during the preceding Settlement Period that have not been subject to a Reinvestment and apply such amounts (if not previously paid in accordance with Section 2.1) to reduce the Obligations. Once such Obligations shall be reduced to zero, any additional Collections received by the Servicer (i) if applicable, shall be remitted to the Scotiabank Account and the Wachovia Account, as applicable, no later than 12:00 noon (New York City time) to the extent required to fund the Conduit’s and Wachovia’s respective Percentages of any Aggregate Reduction on such Settlement Date and (ii) any balance remaining thereafter shall be remitted from the Servicer to Seller on such Settlement Date.

Section 2.3 Collections Following Amortization . On the Amortization Date and on each day thereafter, the Servicer shall set aside and hold in trust, for the holders of each Receivables Interest, any Collections and/or Deemed Collections received on such day and an additional amount of the Seller’s funds for the payment of any accrued and unpaid Obligations owed by Seller and not previously paid by Seller in accordance with Section 2.1. On and after the Amortization Date, the Servicer shall, at any time upon the request from time to time by (or pursuant to standing instructions from) any Agent or Wachovia (i) remit to the Scotiabank Account and the Wachovia Account, as applicable, the Conduit’s and Wachovia’s respective Percentages of the amounts set aside pursuant to the preceding sentence, and (ii) apply such amounts to reduce the Scotiabank Group’s and Wachovia’s Invested Amount, as applicable, associated with each such Receivables Interest and any other Aggregate Unpaids.

Section 2.4 Application of Collections . If there shall be insufficient funds on deposit for the Servicer to distribute funds in payment in full of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the Servicer shall distribute funds:

 

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first, to the payment of the Servicer’s reasonably and properly documented out-of-pocket costs and expenses in connection with servicing, administering and collecting the Receivables, including the Servicing Fee, if Convergys or one of its Affiliates is not then acting as the Servicer,

second, to the reimbursement of the Administrative Agent’s costs of collection and enforcement of this Agreement,

third, ratably to the payment of all accrued and unpaid fees under the Fee Letter, CP Costs, Yield (including yield accruing at the Default Rate),

fourth, for the ratable payment of all other unpaid Obligations, provided that to the extent such Obligations relate to the payment of Servicer costs and expenses, including the Servicing Fee, when Convergys or one of its Affiliates is acting as the Servicer, such costs and expenses will not be paid until after the payment in full of all other Obligations,

fifth, unless the Amortization Date has occurred or a Reduction Notice has been delivered, to the making of a Reinvestment,

sixth, to the ratable reduction of the Aggregate Invested Amount, and

seventh, after the Aggregate Unpaids have been indefeasibly reduced to zero, to Seller.

Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.4, shall be shared ratably (within each priority) among the Agents and the Purchasers in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority.

Section 2.5 Payment Rescission . No payment of any of the Aggregate Unpaids shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. Seller shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to Wachovia and the Scotiabank Agent (for application to the Person or Persons who suffered such rescission, return or refund), as applicable, the full amount thereof, plus interest thereon at the Default Rate from the date of any such rescission, return or refunding.

Section 2.6 Maximum Receivables Interests and Invested Amount . Seller shall ensure that the Receivables Interests of the Purchasers shall at no time exceed in the aggregate 100% (any such excess, a “Receivables Interest Excess” ) and (ii) the aggregate Invested Amount of Wachovia shall at no time exceed the Wachovia Allocation Limit and the aggregate Invested Amount of the Scotiabank Group shall at no time exceed the Scotiabank Allocation Limit (any such excess, an ( “Investment Excess” ). If there is a Receivables Interest Excess or an Investment Excess, Seller shall pay to each of Wachovia and the Scotiabank Group Agent (to be allocated to the members of the Scotiabank Group by the Scotiabank Group Agent) within one

 

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(1) Business Day Wachovia’s and the Conduit’s respective Percentage of such Receivables Interest Excess or Investment Excess, as applicable.

Section 2.7 Clean Up Call . In addition to Seller’s rights pursuant to Section 1.3, Seller shall have the right (after providing written notice to Wachovia and the Scotiabank Group Agent in accordance with the Required Notice Period), at any time following the reduction of the Aggregate Invested Amount to a level that is less than 50% of the original Purchase Limit, to repurchase from the Purchasers all, but not less than all, of the then outstanding Receivables Interests. The purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids through the date of such repurchase, payable in immediately available funds. Such repurchase shall be without representation, warranty or recourse of any kind by, on the part of, or against any Purchaser or any Agent except for a representation and warranty that the reconveyance to Seller is being made free and clear of any Adverse Claim created by any Agent or any Purchaser.

ARTICLE III.

CONDUIT FUNDING

Section 3.1 CP Costs . Seller shall pay CP Costs with respect to the Invested Amount associated with each Receivables Interest of the Conduit for each day that any Invested Amount in respect of such Receivables Interest is outstanding. Each Receivables Interest funded substantially with Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon the percentage share the Invested Amount in respect of such Receivables Interest represents in relation to all assets held by the Conduit and funded substantially with related Pooled Commercial Paper.

Section 3.2 CP Costs Payments . On each Settlement Date, Seller shall pay to the Scotiabank Group Agent (for the benefit of the Conduit) an aggregate amount equal to all accrued and unpaid CP Costs in respect of the Invested Amount associated with all Receivables Interests of the Conduit for the immediately preceding Accrual Period in accordance with Article II.

Section 3.3 Calculation of CP Costs . Not later than the 3rd Business Day immediately preceding each Settlement Date, the Conduit shall calculate the aggregate amount of CP Costs allocated to the Invested Amount of its Receivables Interests for the applicable Accrual Period and shall notify Seller in writing of such aggregate amount.

ARTICLE IV.

COMMITTED PURCHASER FUNDING

Section 4.1 Committed Purchaser Funding . Each Receivables Interest shall accrue Yield (i) in the case of Wachovia, for each day at either LMIR or the Alternate Base Rate and (ii) in the case of the Scotiabank Committed Purchasers, for each during its Tranche Period at either the LIBO Rate or the Alternate Base Rate, in each case in accordance with the terms and

 

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conditions hereof. Until Seller gives notice to Wachovia or the Scotiabank Group Agent (as applicable) of another Discount Rate in accordance with Section 4.4, the initial Discount Rate for any Receivables Interest of Wachovia or, in the case of the Scotiabank Committed Purchasers, any Receivables Interest transferred by the Conduit to the Scotiabank Committed Purchasers pursuant to the terms and conditions of its Liquidity Agreement shall be the Alternate Base Rate (unless the Default Rate is then applicable). Each Receivables Interest acquired by a Scotiabank Committed Purchaser by assignment from the Conduit shall be deemed to have a new Tranche Period commencing on the date of any such assignment.

Section 4.2 Yield Payments . On the Settlement Date for each Receivables Interest of a Committed Purchaser, Seller shall pay to, as applicable, Wachovia and the Scotiabank Group Agent (for the ratable benefit of the Scotiabank Committed Purchasers) an aggregate amount equal to the accrued and unpaid Yield for the Calculation Period then most recently ended of each such Receivables Interest in accordance with Article II.

Section 4.3 Selection and Continuation of Tranche Periods .

(a) Seller (or Servicer, on Seller’s behalf) shall from time to time request Tranche Periods for the Receivables Interests of the Scotiabank Committed Purchaser, provided that if at any time the Scotiabank Committed Purchasers shall have a Receivables Interest, Seller shall always request Tranche Periods such that at least one Tranche Period shall end on the date specified in clause (A) of the definition of Settlement Date.

(b) Seller, Servicer (on Seller’s behalf) or the applicable Purchaser, upon notice to and consent by the other received at least three (3) Business Days prior to the end of a Tranche Period (the “Terminating Tranche” ) for any Receivables Interest, may, effective on the last day of the Terminating Tranche: (i) divide any such Receivables Interest into multiple Purchaser Interests, (ii) combine any such Receivables Interest with one or more other Receivables Interests that have a Terminating Tranche ending on the same day as such Terminating Tranche or (iii) combine any such Receivables Interest with a new Receivables Interest to be purchased on the day such Terminating Tranche ends.

Section 4.4 Discount Rates . Seller may select LMIR, the LIBO Rate, or the Alternate Base Rate for each Receivables Interest of any Committed Purchaser. Seller shall by 12:00 noon (New York City time): (i) at least three (3) Business Days prior to prior to the date such Discount Rate change is to take effect, give Wachovia or the Scotiabank Group Agent, as applicable, irrevocable notice of the new Discount Rate for the Receivables Interest associated with such Discount Rate. Until Seller gives notice to Wachovia or the Scotiabank Group Agent, as applicable, of another Discount Rate, the initial Discount Rate for any Receivables Interest purchased by Wachovia, and, in the case of the Scotiabank Committed Purchasers, any Receivables Interest transferred to the Scotiabank Committed Purchasers pursuant to the terms and conditions of the Liquidity Agreement shall be the Alternate Base Rate. From and after the occurrence and during the continuation of an Amortization Event, the sole Yield shall be the Alternate Base Rate (in addition to any Default Rate).

 

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Section 4.5 Suspension of the LIBO Rate or LMIR .

(a) If Wachovia determines, or, in the case of any Scotiabank Committed Purchase if any Scotiabank Committed Purchaser notifies the Scotiabank Group Agent that it has determined, that funding its Receivables Interests at, in the case of any Scotiabank Committed Purchaser, a LIBO Rate or, in the case of Wachovia, LMIR would violate any applicable law, rule, regulation, or directive of any governmental or regulatory authority, whether or not having the force of law, or that (i) deposits of a type and maturity appropriate to match fund its Receivables Interests at LIBO Rate or LMIR are not available or (ii) LIBO Rate or LMIR does not accurately reflect the cost of acquiring or maintaining a Receivables Interest at LIBO Rate or LMIR, then, as applicable, Wachovia or, in the case of such Committed Purchaser that is a Scotiabank Committed Purchaser, the Scotiabank Group Agent for the Scotiabank Group shall suspend the availability of LIBO Rate or LMIR, as the case may be, and require Seller to select the Alternate Base Rate for any of Wachovia’s Receivables Interests or Receivables Interests of the Scotiabank Group, as applicable, accruing Yield at LIBO Rate or LMIR.

(b) If less than all of the Scotiabank Committed Purchasers in the Scotiabank Group give a notice to Scotiabank Group Agent pursuant to Section 4.5(a), each Scotiabank Committed Purchaser which gave such a notice shall be obliged, at the request of Seller, the Conduit or the Scotiabank Group Agent, to assign all of its rights and obligations hereunder to (i) another Scotiabank Committed Purchaser or (ii) another funding entity reasonably acceptable to the Conduit and Seller and willing to participate in this Agreement through the Liquidity Termination Date in the place of such notifying Scotiabank Committed Purchaser; provided that (i) the notifying Scotiabank Committed Purchaser receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such notifying Scotiabank Committed Purchaser’s Ratable Share of the Invested Amount and Yield owing to all of the Scotiabank Committed Purchasers and all accrued but unpaid fees and other costs and expenses payable in respect of its Ratable Share of the Receivables Interests of such Scotiabank Committed Purchaser, and (ii) the replacement Scotiabank Committed Purchaser otherwise satisfies the requirements of Section 12.1(b).

Section 4.6 Default Rate . From and after the occurrence of an Amortization Event, all Receivables Interest funded by the Committed Purchasers shall accrue Yield at the Default Rate.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Section 5.1 Representations and Warranties of Seller . Seller hereby represents and warrants to the Agents and the Purchasers, as to itself or on its own behalf, as applicable, as of the date hereof and as of the date of each Incremental Purchase and the date of each Reinvestment that:

(a) Existence and Power . Such Seller Party is duly organized, validly existing and in good standing under the laws of its state of organization. Such Seller Party is duly qualified to do business and is in good standing as a foreign corporation or limited liability company, as applicable, and has and holds all corporate power and all governmental licenses,

 

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authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except where the failure to so qualify or so hold could not reasonably be expected to have a Material Adverse Effect.

(b) Power and Authority; Due Authorization, Execution and Delivery . The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, the performance of its obligations hereunder and thereunder and the use of the proceeds of purchases made hereunder, are within its corporate powers and authority and have been duly authorized by all necessary corporate or limited liability company action on its part. This Agreement and each other Transaction Document to which Seller Party is a party has been duly executed and delivered by such Seller Party.

(c) No Conflict . The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) such Seller Party’s certificate or articles of organization or by-laws or limited liability company agreement, as applicable, (ii) any law, rule or regulation applicable to such Seller Party, (iii) any restrictions under any agreement, contract or instrument to which such Seller Party is a party or by which such Seller Party or any of its property is bound (other than any breach of confidentiality of any Contract which results solely from disclosure of the existence of such Contract in an Invoice or Related Security relating to such Contract and which does not impair, restrict or any way affect the obligation of the applicable Obligor thereunder, including, without limitation, obligation to pay a specified sum of money thereunder), or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting such Seller Party or its property, and do not result in the creation or imposition of any Adverse Claim on its assets (except as created hereunder) except, in any case, where such contravention or violation could not reasonably be expected to have a Material Adverse Effect; and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.

(d) Governmental Authorization . Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.

(e) Actions, Suits . (i) there are no actions, suits or proceedings pending, or to the best of such Seller Party’s knowledge, threatened, against or affecting such Seller Party, or any of its properties, in or before any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect, and (ii) such Seller Party is not in default with respect to any order of any court, arbitrator or governmental body.

(f) Binding Effect . This Agreement and each other Transaction Document to which such Seller Party is a party constitute the legal, valid and binding obligations of such Seller Party enforceable against such Seller Party in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

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(g) Accuracy of Information . All information (other than projections) heretofore furnished by such Seller Party or by any Responsible Officer of an Originator to any of the Agents or Purchasers for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Seller Party or any such Responsible Officer to any of the Agents or Purchasers will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading. Servicer represents and warrants that each Receivables Report completed and compiled by it accurately aggregates the information received by it from the Originators and correctly computes the ratios and concentrations set forth therein based upon such aggregates based on the form of Receivables Report substantially in the form of Exhibit IX hereto.

(h) Use of Proceeds . Such Seller Party will not use the proceeds of any purchase hereunder (i) for a purpose that violates, or would be inconsistent with, Regulation T, U or X promulgated by the Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

(i) Good Title . Immediately prior to each purchase hereunder, Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents. Seller represents and warrants that there have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s ownership or security interest in each Receivable, its Collections and the Related Security.

(j) Perfection . This Agreement, together with the filing of the financing statements contemplated hereby, is effective to, and shall, upon each purchase hereunder, transfer to the Administrative Agent for the benefit of the relevant Purchaser or Purchasers (and the Administrative Agent for the benefit of such Purchaser or Purchasers shall acquire from Seller) a valid and perfected first priority undivided percentage ownership or security interest in each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Adverse Claim, except as created by the Transactions Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Administrative Agent’s (on behalf of the Purchasers) ownership or security interest in the Receivables, the Related Security and the Collections.

(k) Places of Business and Locations of Records . The principal places of business and chief executive office of Seller and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit III or such other locations of which the Agents and Wachovia have been notified in accordance with Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has been taken and completed. Seller’s Federal Employer Identification Number and Organizational Identification Number are correctly set forth on Exhibit III.

 

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(l) Collections . The conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and duly performed. Seller represents and warrants that the names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of Seller at each Collection Bank and the post office box number of each Lock-Box, are listed on Exhibit IV. Seller represents and warrants that Seller has not granted any Person, other than the Administrative Agent as contemplated by this Agreement, dominion and control of any Lock-Box or Collection Account, or the right to take dominion and control of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event. Notwithstanding the foregoing, Seller confirms that it has granted the Servicer a right of access to the Lock-Boxes and Collection Accounts to the extent permitted in the Collection Account Agreements.

(m) Material Adverse Effect . Since December 31, 2008, no event has occurred that would have a Material Adverse Effect.

(n) Names . In the past five (5) years, such Seller Party has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement.

(o) Ownership of Seller . Convergys and the Originators, collectively, own, directly or indirectly, 100% of the issued and outstanding Equity Interest of all classes of Seller, free and clear of any Adverse Claim. There are no options, warrants or other rights to acquire securities of Seller or similar rights or agreements pursuant to which Seller may be required to issue, sell, repurchase or redeem any of its membership interests.

(p) Not an Investment Company . Seller is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute.

(q) Compliance with Law . Such Seller Party has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Receivable, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation, except where such contravention or violation could not reasonably be expected to have a Material Adverse Effect.

(r) Compliance with Credit and Collection Policy . Seller has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any material change to such Credit and Collection Policy.

(s) Payments to Applicable Originator . With respect to each Receivable transferred to Seller under the Receivables Sale Agreements, Seller has given reasonably equivalent value to the applicable Originator in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by any Originator of any Receivable

 

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under its Receivables Sale Agreement is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq.), as amended.

(t) Enforceability of Contracts . Each Contract with respect to each Eligible Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Eligible Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(u) Eligible Receivables . Each Receivable included in the Net Pool Balance as an Eligible Receivable was an Eligible Receivable on the date so included.

(v) Net Pool Balance . Seller has determined that, immediately after giving effect to each purchase hereunder, the Net Pool Balance is at least equal to the sum of (i) the Aggregate Invested Amount, plus (ii) the Required Reserves.

(w) Accounting . The manner in which Seller accounts for the transactions contemplated by this Agreement and the Receivables Sale Agreements does not jeopardize the true sale analysis.

(x) Financial Information . All balance sheets, all statements of income and of cash flow and all other financial information of Seller and each of Convergys and its Subsidiaries (other than projections) furnished to any of the Agents or Purchasers and described in Section 7.1 have been and will be prepared in accordance with GAAP consistently applied, and do or will present fairly the consolidated financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended; provided that unaudited financial statements of Seller and each of Convergys and its Subsidiaries have been prepared without footnotes, without reliance on any physical inventory and are subject to year-end adjustments. Any projections furnished by Seller or by any Responsible Officer of an Originator to any of the Agents or Purchasers for purposes of or in connection with this Agreement shall be, at the time so furnished, based upon estimates and assumptions stated therein, all of which the Seller and the Originators believe to be reasonable and fair in light of conditions and facts known to the Seller and the Originators at such time and reflect the good faith, reasonable and fair estimates by the Seller and the Originators of the future performance of Seller and/or the Originators and the other information projected therein for the periods set forth therein. Projections listed on Schedule B have been prepared in good faith based upon assumptions believed by Convergys and its Subsidiaries to be reasonable at the time made, it being understood that such Projections are subject to contingencies beyond Convergys or its Subsidiaries’ control and that actual results may vary materially from the Projections.

(y) OFAC . Neither Seller nor any Originator nor any Subsidiary of any Originator (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2

 

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of such executive order, or is otherwise associated with any such person in any manner violative of Section 2, or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

(z) Patriot Act . Each of Seller and the Originators and each Subsidiary of any Originator are in compliance, in all material respects, with the USA Patriot Act (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act” ). No part of the proceeds of the purchases hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

(aa) ERISA . Each of Seller and each affiliate that is a member of the same Controlled Group as Seller is in compliance in all material respects with ERISA, and no lien exists in favor of the PBGC on any of the Receivables.

Section 5.2 Scotiabank Committed Purchasers Representations and Warranties . Each Scotiabank Committed Purchaser hereby represents and warrants to the Scotiabank Group Agent and the Conduit that:

(a) Existence and Power . Such Scotiabank Committed Purchaser is a corporation or a banking association duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all corporate power to perform its obligations hereunder.

(b) No Conflict . The execution and delivery by such Scotiabank Committed Purchaser of this Agreement and the performance of its obligations hereunder are within its corporate powers, have been duly authorized by all necessary corporate action, do not contravene or violate (i) its certificate or articles of incorporation or association or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on its assets. This Agreement has been duly authorized, executed and delivered by such Scotiabank Committed Purchaser.

(c) Governmental Authorization . No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Scotiabank Committed Purchaser of this Agreement and the performance of its obligations hereunder.

(d) Binding Effect . This Agreement constitutes the legal, valid and binding obligation of such Scotiabank Committed Purchaser enforceable against such Scotiabank Committed Purchaser in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting

 

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creditors’ rights generally and by general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law).

ARTICLE VI.

CONDITIONS OF PURCHASES

Section 6.1 Conditions Precedent to Initial Incremental Purchase . The initial Incremental Purchase of a Receivables Interest under this Agreement is subject to the conditions precedent that (a) the Administrative Agent shall have received on or before the date of such purchase those documents listed on Schedule B, and (b) each Agent and each of the Purchasers shall have received all fees and expenses required to be paid on such date pursuant to the terms of this Agreement, the applicable Fee Letter or otherwise.

Section 6.2 Conditions Precedent to All Purchases and Reinvestments . Each purchase of a Receivables Interest and each Reinvestment shall be subject to the further conditions precedent that (a) in the case of each such purchase or Reinvestment: (i) the Servicer shall have delivered to Wachovia and the Scotiabank Group Agent on or prior to the date of such purchase, in form and substance satisfactory to each of Wachovia and the Scotiabank Group Agent, all Receivables Reports as and when due under Section 8.5 and (ii) upon either Wachovia’s or the Scotiabank Group Agent’s reasonable request, the Servicer shall have delivered to Wachovia and the Scotiabank Group Agent at least one (1) Business Day prior to such purchase or Reinvestment an interim Receivables Report showing the amount of Eligible Receivables; (b) the Facility Termination Date shall not have occurred; (c) the Agents and the Purchasers shall have received such other approvals, opinions or documents as it may reasonably request and (d) on the date of each such Incremental Purchase or Reinvestment, the following statements shall be true (and acceptance of the proceeds of such Incremental Purchase or Reinvestment shall be deemed a representation and warranty by Seller that such statements are then true):

(i) the representations and warranties set forth in Section 5.1 are true and correct on and as of the date of such Incremental Purchase or Reinvestment as though made on and as of such date;

(ii) no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that will constitute an Amortization Event, and no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that would constitute a Potential Amortization Event;

(iii) the Aggregate Invested Amount does not exceed the Purchase Limit and the aggregate Receivables Interests do not exceed 100%; and

(iv) the conditions to each purchase set forth in Section 1.1(a) hereof shall have been satisfied.

It is expressly understood that each Reinvestment shall, unless otherwise directed by any Agent or any Purchaser, occur automatically on each day that the Servicer shall receive any Collections

 

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without the requirement that any further action be taken on the part of any Person and notwithstanding the failure of Seller to satisfy any of the foregoing conditions precedent in respect of such Reinvestment. The failure of Seller to satisfy any of the foregoing conditions precedent in respect of any Reinvestment shall give rise to a right of Wachovia and the Scotiabank Group Agent, which right may be exercised at any time on demand of Wachovia or the Scotiabank Group Agent, to rescind the related purchase and direct Seller to pay to Wachovia and to the Scotiabank Group Agent (for the benefit of the Purchasers in the Scotiabank Group), their respective Percentages of the Collections prior to the Amortization Date that shall have been applied to the affected Reinvestment.

ARTICLE VII.

COVENANTS

Section 7.1 Affirmative Covenants of the Seller Parties . Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party covenants for itself or on its own behalf, as applicable:

(a) Financial Reporting . Such Seller Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Agents and Wachovia:

(i) Annual Reporting . Within 90 days after the end of each fiscal year of Convergys, (A) the audited annual consolidated financial statements of Convergys and its Subsidiaries required to be delivered under Section 4.1(a)(i) of the Receivables Sale Agreements, together with (B) unaudited annual financial statements of Seller other than cash flow statements (it being agreed that the furnishing of the Convergy’s annual report on Form 10-K for such year containing such financial statements, as filed with the SEC and posted on the SEC’s website at www.sec.gov , will satisfy the obligation to deliver such annual financials under this Section 7.1(a)(i)(A)).

(ii) Quarterly Reporting . Within 45 days after the end of each fiscal quarter of Convergys, (A) the quarterly financial statements of Convergys and its Subsidiaries required to be delivered under Section 4.1(a)(ii) of the Receivables Sale Agreements, together with (B) unaudited quarterly financial statements of Seller other than cash flow statements (it being agreed that the furnishing of the Convergy’s quarterly report on Form 10-Q for such quarter containing such financial statements, as filed with the SEC and posted on the SEC’s website at www.sec.gov , will satisfy the obligation to deliver such quarterly financials under this Section 7.1(a)(ii)(A)).

(iii) Compliance Certificate . Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit V signed by the applicable Seller Party’s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.

 

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(iv) Shareholders Statements and Reports . Promptly upon the furnishing thereof to the shareholders of Convergys, copies of all financial statements, reports and proxy statements so furnished.

(v) S.E.C. Filings . Promptly upon the filing thereof, copies of all registration statements (other than any registration statements on Form S-8 or its equivalent) and any reports which Convergys files with the Securities and Exchange Commission.

(vi) Copies of Notices . Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Originator, the Performance Guarantor or any Collection Bank, copies of the same.

(vii) Other Information . Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the financial condition, operations, prospects or business of such Seller Party as any of the Agents or any Purchaser may from time to time reasonably request in order to protect the interests of the Agents and the Purchasers under or as contemplated by this Agreement.

(b) Notices . Such Seller Party will notify the Agents and Wachovia in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

(i) Amortization Events or Potential Amortization Events . The occurrence of each Amortization Event and each Potential Amortization Event hereunder, the occurrence of a “Termination Event” or “Potential Termination Event” (as defined in the CCM Receivables Sale Agreement), and the occurrence of a “Termination Event” or “Potential Termination Event” (as defined in the Convergys Receivables Sale Agreement) by a statement of an Authorized Officer of such Seller Party.

(ii) Judgment and Proceedings . (A) (1) The entry of any judgment or decree against the Servicer or any of its respective Subsidiaries if the aggregate amount of all judgments and decrees outstanding against the Servicer and its Subsidiaries exceeds $15,000,000 and (2) the institution of any litigation, arbitration proceeding or governmental proceeding against the Servicer which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; and (B) the entry of any judgment or decree or the institution of any litigation, arbitration proceeding or governmental proceeding against Seller.

(iii) Material Adverse Effect . The occurrence of any event or condition that has had, or could reasonably be expected to have, a Material Adverse Effect.

(iv) Defaults Under Other Agreements . The occurrence of a default or an event of default under any other financing arrangement relating to a line of credit or Indebtedness in excess of $10 million in aggregate principal amount pursuant to which any Originator is a debtor or an obligor.

 

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(v) Termination Date . The occurrence of the “Termination Date” under and as defined in the CCM Receivables Sale Agreement or the occurrence of the “Termination Date” under and as defined in the Convergys Receivables Sale Agreement.

(c) Compliance with Laws and Preservation of Corporate Existence . Such Seller Party will comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Such Seller Party will preserve and maintain its corporate or limited liability company existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign corporation or limited liability company in each jurisdiction where its business is conducted, except where the failure to so preserve and maintain or qualify could not reasonably be expected to have a Material Adverse Effect.

(d) Audits . Such Seller Party will furnish to the Agents and Wachovia from time to time such information with respect to it and the Receivables as any of the Agents or Wachovia may reasonably request. Such Seller Party will, from time to time during regular business hours as requested by any the Agents or Wachovia upon reasonable notice and at the sole cost of such Seller Party, permit each of the Agents and Wachovia, or their respective agents or representatives (and shall cause each Originator to permit each of the Agents and Wachovia or their respective agents or representatives): (i) to examine and make copies of and abstracts from all Records (other than the Excluded Contracts) in the possession or under the control of such Person relating to the Receivables and the Related Security (other than the Excluded Contracts), including, without limitation, the related Contracts (other than Excluded Contracts) and the related Invoices, and (ii) to visit the offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Person’s financial condition or the Receivables and the Related Security or any Person’s performance under any of the Transaction Documents or any Person’s performance under the Contracts and, in each case, with any of the officers or employees of Seller or the Servicer having knowledge of such matters (each of the foregoing examinations and visits, a “Review” ); provided, however, that, except in connection with an Extension Request, so long as no Amortization Event or Potential Amortization Event has occurred, the Seller Parties shall only be responsible for the costs and expenses of two (2) Reviews in any one calendar year.

(e) Keeping and Marking of Records and Books.

(i) The Servicer will (and will cause each Originator to) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). The Servicer will (and will cause each Originator to) give each of the Agents and Wachovia notice of any material change in the administrative and operating procedures referred to in the previous sentence.

 

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(ii) Servicer will (and will cause each Originator to) (A) on or prior to the date hereof, mark its master data processing records and other books and records relating to the Receivables Interests with a legend, acceptable to each of the Agents and Wachovia, describing the Receivables Interests and (B) upon the request of any of the Agents or Wachovia following the occurrence of an Amortization Event, deliver to the Administrative Agent all Invoices (including, without limitation, all multiple originals of any Invoice) relating to the Receivables.

(f) Compliance with Contracts and Credit and Collection Policy . Such Seller Party will (and will cause each Originator to) timely and fully (i) perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.

(g) Performance and Enforcement of Receivables Sale Agreements and Performance Undertaking . Seller will, and will require each of the Originators to, perform each of their respective obligations and undertakings under and pursuant to their respective Receivables Sale Agreements, will purchase Receivables thereunder in strict compliance with the terms thereof and will vigorously enforce the rights and remedies accorded to Seller under the Receivables Sale Agreements. Seller will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agents and the Purchasers as assignees of Seller) under the Receivables Sale Agreements as any Agent or Wachovia may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in any of the Receivables Sale Agreements. In addition, Seller will vigorously enforce the rights and remedies accorded to Seller under the Performance Undertaking.

(h) Ownership . Seller will (or will cause each Originator to) take all necessary action to (i) vest legal and equitable title to the Receivables, the Related Security and the Collections purchased under the Receivables Sale Agreements irrevocably in Seller, free and clear of any Adverse Claims other than Adverse Claims in favor of the Administrative Agent and the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Seller therein as any Agent or Wachovia may reasonably request), and (ii) establish and maintain, in favor of the Administrative Agent, for the benefit of the Purchasers, a valid and perfected first priority undivided percentage ownership interest (and/or a valid and perfected first priority security interest) in all Receivables, Related Security and Collections to the full extent contemplated herein, free and clear of any Adverse Claims other than Adverse Claims in favor of the Administrative Agent for the benefit of the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Administrative Agent’s (for the benefit of the Purchasers) interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of the

 

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Administrative Agent for the benefit of the Purchasers as any Agent or Wachovia may reasonably request).

(i) Separateness; Purchasers’ Reliance . Seller acknowledges that the Agents and the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon Seller’s identity as a legal entity that is separate from each of the Originators, the Performance Guarantor and their respective other Affiliates (collectively, the “Convergys Group” ). Therefore, from and after the date of execution and delivery of this Agreement, Seller shall take all reasonable steps, including, without limitation, all steps that any Agent or Wachovia may from time to time reasonably request, to maintain Seller’s identity as a separate legal entity and to make it manifest to third parties that Seller is an entity with assets and liabilities distinct from those of the members of the Convergys Group t