Exhibit 10.1

Execution

Version

 

 

RECEIVABLES SALE AGREEMENT

 

DATED AS OF JUNE 30, 2009

 

AMONG

 

CONVERGYS CORPORATION,

AS ORIGINATOR

 

AND

 

CONVERGYS FUNDING INC.,

AS BUYER

 

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TABLE OF CONTENTS

 

          PAGE

ARTICLE I. AMOUNTS AND TERMS

   3

Section 1.1

  

[Reserved]

   3

Section 1.2

  

Sales of Receivables

   3

Section 1.3

  

Payment for the Purchases

   4

Section 1.4

  

Purchase Price Credit Adjustments

   5

Section 1.5

  

Payments and Computations, Etc.

   5

Section 1.6

  

Transfer of Records

   5

Section 1.7

  

Characterization

   6

ARTICLE II. REPRESENTATIONS AND WARRANTIES

   7

Section 2.1

  

Representations and Warranties of Originator

   7

ARTICLE III. CONDITIONS OF PURCHASE

   12

Section 3.1

  

Conditions Precedent to Initial Purchase

   12

Section 3.2

  

Conditions Precedent to Subsequent Payments

   12

Section 3.3

  

Reaffirmation of Representations and Warranties

   12

ARTICLE IV. COVENANTS

   13

Section 4.1

  

Affirmative Covenants of Originator

   13

Section 4.2

  

Negative Covenants of Originator

   18

ARTICLE V. TERMINATION EVENTS

   20

Section 5.1

  

Termination Events

   20

Section 5.2

  

Remedies

   21

ARTICLE VI. INDEMNIFICATION

   22

Section 6.1

  

Indemnities by Originator

   22

Section 6.2

  

Other Costs and Expenses

   24

ARTICLE VII. MISCELLANEOUS

   24

Section 7.1

  

Waivers and Amendments

   24

Section 7.2

  

Notices

   25

Section 7.3

  

Protection of Ownership Interests of Buyer

   25

Section 7.4

  

Confidentiality

   26

Section 7.5

  

Bankruptcy Petition

   26

Section 7.6

  

CHOICE OF LAW

   27

 

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Section 7.7

  

CONSENT TO JURISDICTION

   27

Section 7.8

  

WAIVER OF JURY TRIAL

   27

Section 7.9

  

Integration; Binding Effect; Survival of Terms

   28

Section 7.10

  

Counterparts; Severability; Section References

   28

 

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EXHIBITS AND SCHEDULES

 

Exhibit I

   -    Definitions

Exhibit II

   -    States of Organization; Chief Executive Offices; Locations of Records;
Federal Employer Identification Numbers; Organizational Identification Numbers;
Other Names

Exhibit III

   -    Lock-Boxes; Collection Accounts; Collection Banks

Exhibit IV

   -    [Form of] Compliance Certificate

Exhibit V

   -    Credit and Collection Policy

Exhibit VI

   -    [Form of] Subordinated Note

Exhibit VII

   -    [Form of] Receivables Report for the Originator

Schedule A

      List of Documents to Be Delivered to Buyer Prior to the initial Purchase

 

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RECEIVABLES SALE AGREEMENT

THIS RECEIVABLES SALE AGREEMENT, dated as of June 30, 2009, is by and among
Convergys Corporation, an Ohio corporation (the “Originator”), and Convergys
Funding Inc., a Kentucky corporation (“Buyer”). Unless defined elsewhere herein,
capitalized terms used in this Agreement shall have the meanings assigned to
such terms in Exhibit I hereto (or, if not defined in Exhibit I hereto, the
meanings assigned to such terms in Exhibit I to the Purchase Agreement
hereinafter defined).

PRELIMINARY STATEMENTS

The Originator now owns, and from time to time hereafter will own, Receivables.
The Originator wishes to sell and assign to Buyer, and Buyer wishes to purchase
from the Originator, all of the Originator’s right, title and interest in and to
its Receivables, together with the Related Security and Collections with respect
thereto.

Each of the Originator and Buyer intends the transactions contemplated hereby to
be true sales of the Receivables from the Originator to Buyer, providing Buyer
with the full benefits of ownership of the Receivables originated by the
Originator, and none of the Originator or Buyer intends these transactions to
be, or for any purpose to be characterized as, loans from Buyer to the
Originator.

Following the purchase of Receivables from the Originator, Buyer will sell
undivided interests in the Receivables and in the associated Related Security
and Collections pursuant to that certain Receivables Purchase Agreement dated as
of June 30, 2009 (as the same may from time to time hereafter be amended,
supplemented, restated or otherwise modified, the “Purchase Agreement”) among
Buyer, Convergys Corporation, an Ohio corporation (“Convergys”), as initial
Servicer, Liberty Street Funding LLC, a Delaware limited liability company,
(“Liberty Street” or the “Conduit”), The Bank of Nova Scotia, a Canadian
chartered bank acting through its New York Agency (“Scotiabank”), and its
assigns thereunder (collectively, the “Scotiabank Committed Purchasers” and,
together with Liberty Street, the “Scotiabank Group”), Wachovia Bank, National
Association (“Wachovia” and each of the Conduit, the Scotiabank Committed
Purchasers and Wachovia, a “Purchaser” and, collectively, the “Purchasers”),
Scotiabank, in its capacity as agent for the Scotiabank Group (the “Scotiabank
Group Agent”) and Wachovia, in its capacity as administrative agent for
Scotiabank Group, Wachovia and the Scotiabank Group Agent (in such capacity,
together with its successors and assigns, the “Administrative Agent”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

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ARTICLE I.

AMOUNTS AND TERMS

Section 1.1 [Reserved]

Section 1.2 Sales of Receivables.

(a) In consideration for payment of the Purchase Price in accordance with
Section 1.3 and upon the terms and subject to the conditions set forth herein,
effective on the Effective Date, the Originator hereby sells, assigns,
transfers, sets-over and otherwise conveys to Buyer, without recourse (except to
the extent expressly provided herein), and Buyer hereby agrees to purchase from
the Originator, all of the Originator’s right, title and interest in and to all
of the Originator’s Receivables existing on the Initial Cutoff Date and all
Receivables originated by the Originator on each day after the Initial Cutoff
Date through and including the Termination Date, together, in each case, with
all Related Security relating thereto and all Collections thereof. In connection
with the payment of the Purchase Price for any Receivables purchased hereunder,
Buyer may request that the Originator deliver, and the Originator shall deliver,
such approvals, opinions, information, reports or documents as Buyer may
reasonably request.

(b) It is the intention of the parties hereto that each Transfer of Receivables
made hereunder shall constitute a “sale of accounts” (as such term is used in
Article 9 of the UCC) or other outright conveyance, which Transfer is absolute
and irrevocable and provides Buyer with the full benefits of ownership of the
Receivables. Except for the Purchase Price Credits owed pursuant to Section 1.4,
the Transfers of Receivables hereunder are made without recourse to the
Originator; provided, however, that (i) the Originator shall be liable to Buyer
for all representations, warranties, covenants and indemnities made by the
Originator pursuant to the terms of the Transaction Documents to which the
Originator is a party, and (ii) such Transfers do not constitute and are not
intended to result in an assumption by Buyer or any assignee thereof of any
obligation of the Originator or any other Person arising in connection with the
Receivables, the related Contracts and/or other Related Security or any other
obligations of the Originator. In view of the intention of the parties hereto
that each Transfer of Receivables made hereunder shall constitute a sale or
other outright conveyance of such Receivables rather than a loan secured
thereby, the Originator agrees that it will, on or prior to the Effective Date
and in accordance with Section 4.1(e)(ii), mark its master data processing
records relating to the Receivables with a legend acceptable to Buyer and to the
Administrative Agent (as Buyer’s collateral assignee), evidencing that Buyer has
purchased such Receivables as provided in this Agreement and agrees to note in
its financial statements that its Receivables have been sold to Buyer. Upon the
request of Buyer or the Administrative Agent (as Buyer’s collateral assignee),
the Originator will execute and file such financing or continuation statements,
or amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate to perfect and maintain the
perfection of Buyer’s ownership interest in the Receivables originated by the

 

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Originator and the Related Security and Collections with respect thereto, or as
Buyer or the Administrative Agent (as Buyer’s collateral assignee) may
reasonably request.

Section 1.3 Payment for the Purchases.

(a) The Purchase Price for each Receivable purchased on the Effective Date shall
be due and owing in full by Buyer to the Originator or its designee on the
Effective Date, and thereafter the Purchase Price for each Receivable shall be
due and owing in full by Buyer to the Originator or its designee on the date
each such Receivable comes into existence (except that Buyer may, with respect
to any such Purchase Price, offset against such Purchase Price any amounts owed
by the Originator to Buyer hereunder and which have become due but remain
unpaid) and shall be paid to the Originator in the manner provided in the
following paragraphs (b), (c) and (d).

(b) With respect to any Receivables coming into existence after the Initial
Cutoff Date, on each Settlement Date, Buyer shall pay the Purchase Price
therefor to the Originator in accordance with Section 1.3(d) and in the
following manner:

first, by delivery of immediately available funds, to the extent of funds
available to Buyer from its subsequent sale of an interest in the Receivables to
the Administrative Agent for the benefit of the Purchasers under the Purchase
Agreement, or other cash on hand; and/or

second, by delivery of the proceeds of a subordinated loan from the Originator
to Buyer (a “Subordinated Loan”) in an amount not to exceed the lesser of
(A) the remaining unpaid portion of such Purchase Price, and (B) the maximum
Subordinated Loan that could be borrowed without rendering Buyer’s Net Worth
less than the Required Capital Amount. The Originator is hereby authorized by
Buyer to endorse on the schedule attached to its Subordinated Note an
appropriate notation evidencing the date and amount of each advance thereunder,
as well as the date of each payment with respect thereto, provided that the
failure to make such notation shall not affect any obligation of Buyer
thereunder.

Subject to the limitations set forth in clause second above, the Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the Termination Date. The Subordinated Loans shall be evidenced by, and
shall be payable in accordance with the terms and provisions of the Originator’s
Subordinated Note and shall be payable solely from funds which Buyer is not
required under the Purchase Agreement to set aside for the benefit of, or
otherwise pay over to, the Administrative Agent or the Purchasers.

(c) From and after the Termination Date, the Originator shall not be obligated
to (but may, at its option) sell its Receivables to Buyer, unless the Originator
reasonably determines that the Purchase Price therefor will be satisfied with
funds available to Buyer from sales of interests in the Receivables pursuant to
the Purchase Agreement, Collections, proceeds of Subordinated Loans, other cash
on hand or otherwise.

 

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(d) Although the Purchase Price for each Receivable existing on the Initial
Cutoff Date and all Receivables originated by the Originator on each day after
the Initial Cutoff Date through and including the Effective Date shall be due
and payable in full by Buyer to the Originator on the Effective Date and
thereafter the Purchase Price for each Receivable shall be due and payable in
full by Buyer to the Originator on the date such Receivable comes into
existence, settlement of the Purchase Price between Buyer and the Originator
shall be effected on a monthly basis on Settlement Dates with respect to all
Receivables coming into existence during the same Calculation Period and based
on the information contained in the Receivables Report delivered by the Servicer
pursuant to Article VIII of the Purchase Agreement for the Calculation Period
then most recently ended. Although settlement shall be effected on Settlement
Dates, increases or decreases in the amount owing under the applicable
Subordinated Note made pursuant to Section 1.3(b) shall be deemed to have
occurred and shall be effective as of the last Business Day of the Calculation
Period to which such settlement relates.

Section 1.4 Purchase Price Credit Adjustments. If on any day, the Originator is
deemed to have received a Deemed Collection with respect to any Receivable sold
by it to Buyer hereunder, then, in such event, Buyer shall be entitled to a
credit (each, a “Purchase Price Credit”) against the Purchase Price otherwise
payable to the Originator hereunder in an amount equal to such Deemed
Collection. If such Purchase Price Credit exceeds the original Outstanding
Balance of the Receivables originated by the Originator on such day, then the
Originator shall pay the remaining amount of such Purchase Price Credit in cash
within 10 Business Days thereafter; provided that if the Termination Date has
not occurred, the Originator shall be allowed to deduct the remaining amount of
such Purchase Price Credit from any indebtedness owed to it under its
Subordinated Note to the extent permitted thereunder.

Section 1.5 Payments and Computations, Etc. All amounts to be paid or deposited
by Buyer hereunder shall be paid or deposited in accordance with the terms
hereof on the day when due in immediately available funds to the account of the
Originator designated from time to time by the Originator or as otherwise
directed by the Originator. In the event that any payment owed by any Person
hereunder becomes due on a day that is not a Business Day, then such payment
shall be made on the next succeeding Business Day. If any Person fails to pay
any amount hereunder when due, such Person agrees to pay, on demand, interest
thereon at the Default Rate in respect thereof until paid in full; provided,
however, that such Default Rate shall not at any time exceed the maximum rate
permitted by applicable law. All computations of interest payable hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.

Section 1.6 Transfer of Records.

(a) In connection with each Transfer of a Receivable by the Originator
hereunder, the Originator hereby sells, transfers, assigns and otherwise conveys
to Buyer all of the Originator’s right and title to and interest in the Records
(other than the Specified Contracts) relating to such Receivable and, to the
extent provided by Section 9-

 

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404, 9-405, 9-406 or 9-408 of the UCC, the Specified Contracts relating to such
Receivable, in each case without the need for any further documentation in
connection with such Transfer. In connection with each such Transfer, the
Originator hereby grants to each of Buyer, the Administrative Agent and the
Servicer an irrevocable, non-exclusive license to use, without royalty or
payment of any kind, all software used by the Originator to account for the
Receivables originated or serviced by the Originator, to the extent necessary to
administer such Receivables, whether such software is owned by the Originator or
is owned by others and used by the Originator under license agreements with
respect thereto, provided that should the consent of any licensor of such
software be required for the grant of the license described herein, to be
effective, the Originator hereby agrees that upon the request of Buyer (or the
Administrative Agent, as Buyer’s collateral assignee), the Originator will use
its reasonable efforts to obtain the consent of such third-party licensor. The
license granted hereby shall be irrevocable until the indefeasible payment in
full of the Aggregate Unpaids, and shall terminate on the date this Agreement
terminates in accordance with its terms.

(b) The Originator (i) shall take such action requested by Buyer and/or the
Administrative Agent (as Buyer’s collateral assignee), from time to time
hereafter, that may be necessary or appropriate to ensure that Buyer has an
enforceable ownership interest in the Records (other than the Specified
Contracts) relating to the Receivables purchased from the Originator hereunder
and to the extent provided by Section 9-404, 9-405, 9-406 or 9-408 of the UCC,
the Specified Contracts relating to the Receivables purchased from the
Originator hereunder, and (ii) shall use its reasonable efforts to ensure that
Buyer, the Administrative Agent and the Servicer each has an enforceable right
(whether by license or sublicense or otherwise) to use all of the computer
software used to account for such Receivables and/or to recreate such Records.

Section 1.7 Characterization.

(a) If, notwithstanding the intention of the parties expressed in
Section 1.2(b), any sale by the Originator to Buyer of Receivables hereunder
shall be characterized as a secured loan and not a sale, or such sale shall for
any reason be ineffective or unenforceable, then this Agreement shall be deemed
to constitute a security agreement under the UCC and other applicable law. For
this purpose and without being in derogation of the parties’ intention that each
sale of Receivables hereunder shall constitute a true sale thereof, the
Originator hereby grants to Buyer a valid and perfected security interest in all
of the Originator’s right, title and interest in, to and under all Receivables
now existing and hereafter arising, and in all Collections and Related Security
with respect thereto (including, without limitation, each Lock-Box and
Collection Account), all other rights and payments relating to the Receivables
and all proceeds of the foregoing to secure the prompt and complete payment of a
loan deemed to have been made in an amount equal to the Purchase Price of the
Receivables originated by the Originator together with all other obligations of
the Originator hereunder, which security interest shall be prior to all other
Adverse Claims thereto. Buyer shall have, in

 

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addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided to a secured creditor under the UCC and
other applicable law, which rights and remedies shall be cumulative. The
Originator hereby authorizes Buyer (or the Administrative Agent, as Buyer’s
collateral assignee), within the meaning of Section 9-509 of any applicable
enactment of the UCC, as secured party, to file, without the signature of the
debtor, the UCC financing statements contemplated hereby.

(b) The Originator acknowledges that Buyer, pursuant to the Purchase Agreement,
shall collaterally assign to the Administrative Agent, for the benefit of the
Administrative Agent and the Purchasers thereunder, all of its rights, remedies,
powers and privileges under this Agreement and that the Administrative Agent may
further assign such rights, remedies, powers and privileges to the extent
permitted in the Purchase Agreement. The Originator agrees that the
Administrative Agent, as the collateral assignee of Buyer, shall, following the
occurrence and during the continuance of an Amortization Event, have the right
to enforce this Agreement and to exercise directly all of Buyer’s rights and
remedies under this Agreement (including, without limitation, the right to give
or withhold any consents or approvals of Buyer to be given or withheld
hereunder, and, in any case, without regard to whether specific reference is
made to Buyer’s assigns or collateral assignees in the provisions of this
Agreement which set forth such rights and remedies) and the Originator agrees to
cooperate fully with the Administrative Agent, the Scotiabank Group Agent and
the Purchasers in the exercise of such rights and remedies. The Originator
further agrees to give to the Administrative Agent copies of all notices it is
required to give to Buyer hereunder.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

Section 2.1 Representations and Warranties of Originator. The Originator hereby
represents and warrants to Buyer, as to the Originator and the Receivables
originated by it, that, as of the date of each Purchase:

(a) Corporate Existence and Power. The Originator is a corporation duly
organized, validly existing and in good standing under the laws of the state
mentioned after its name in the preamble to this Agreement, and is duly
qualified to do business and is in good standing as a foreign corporation, and
has and holds all corporate power and all governmental licenses, 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 the Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and the Originator’s use of the proceeds of
each Purchase made from it hereunder, are within its corporate powers and
authority and have been duly authorized by all necessary corporate action

 

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on its part. This Agreement and each other Transaction Document to which the
Originator is a party has been duly executed and delivered by the Originator.

(c) No Conflict; No Bulk Sale. The execution and delivery by the Originator 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) its certificate or articles of incorporation or by-laws or any
shareholder agreements, voting trusts, and similar arrangements applicable to
any of its authorized shares, (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 by which it 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 it or its property, and do
not result in the creation or imposition of any Adverse Claim on assets of the
Originator or its Subsidiaries (except as created hereunder) except, in any
case, where such contravention or violation could not reasonably be expected to
have a Material Adverse Effect. No transaction contemplated hereby with respect
to the Originator 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 the Originator 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. There are no actions, suits or proceedings pending, or to
the best of the Originator’s knowledge, threatened, against or affecting the
Originator, 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.
The Originator 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
the Originator is a party constitute the legal, valid and binding obligations of
the Originator enforceable against the Originator 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).

(g) Accuracy of Information. All information, other than Projections, heretofore
furnished by a Responsible Officer of the Originator to Buyer (or to the
Administrative Agent, as Buyer’s collateral assignee) 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 a Responsible Officer of the

 

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Originator to Buyer (or to the Administrative Agent, as Buyer’s collateral
assignee) 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.

(h) Use of Proceeds. No proceeds of any Purchase from the Originator hereunder
will be used (i) for a purpose that violates, or would be inconsistent with, any
law, rule or regulation applicable to the Originator 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 from the Originator
hereunder, the Originator (i) is the legal and beneficial owner of the
Receivables which are to be the subject of such Purchase and (ii) is the legal
and beneficial owner of the Related Security with respect thereto or possesses a
valid and perfected security interest therein, in each case, free and clear of
any Adverse Claim, except as created by the Transaction Documents.

(j) Perfection. This Agreement, together with the filing of the financing
statements contemplated hereby, is effective to transfer to Buyer (and Buyer
shall acquire from the Originator) (i) legal and equitable title to, with the
right to sell and encumber each Receivable, whether now existing or hereafter
arising, together with the Collections with respect thereto, and (ii) all of the
Originator’s right, title and interest in the Related Security associated with
each such Receivable, in each case, free and clear of any Adverse Claim, except
as created by the Transaction Documents. There have been duly filed (or
delivered to the Administrative Agent (as Buyer’s collateral assignee) in form
suitable for filing) all financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Buyer’s ownership interest in the Receivables
originated by the Originator, the Related Security and the Collections.

(k) Places of Business and Locations of Records. The state of organization and
chief executive office of the Originator and the offices where it keeps all of
its Records are located at the address(es) listed on Exhibit II or such other
locations of which Buyer has been notified in accordance with Section 4.2(a) in
jurisdictions where all action required by Section 4.2(a) has been taken and
completed. The Originator’s Federal Employer Identification Number and
organizational identification number are correctly set forth on Exhibit II.

(l) Collections. The conditions and requirements set forth in Section 4.1(i)
have at all times been satisfied and duly performed. The names and addresses of
all Collection Banks, together with the account numbers of the Collection
Accounts of the Originator at each Collection Bank and the post office box
number of each Lock-Box, are listed on Exhibit III. The Originator has not
granted any Person, other than Buyer (and, to the extent contemplated by the
Purchase Agreement, the Servicer and the Administrative Agent, as Buyer’s
collateral assignee) 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.

 

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(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, the Originator has not used any corporate
names, trade names or assumed names other than the name in which it has executed
this Agreement and as listed on Exhibit II.

(o) Ownership of Originator. Convergys owns, directly or indirectly, 100% of the
issued and outstanding shares of capital stock of the Originator, free and clear
of any Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of the Originator or similar rights or agreements pursuant to which
such Originator may be required to issue, sell, repurchase or redeem any of its
capital stock.

(p) Not an Investment Company. The Originator 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. The Originator 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. The Originator has complied in
all material respects with its 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 the Originator. With respect to each Receivable transferred
hereunder by the Originator to Buyer, the Purchase Price received by the
Originator constitutes reasonably equivalent value in consideration therefor and
such transfer was not made for or on account of an antecedent debt. No transfer
by the Originator of any Receivable hereunder 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 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 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

 

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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) Nature of Receivables. Each Receivable is an “account” under and as defined
in the UCC of all applicable jurisdictions.

(v) Accounting. The manner in which the Originator accounts for the transactions
contemplated by this Agreement does not jeopardize the true sale analysis.

(w) Purpose. The Originator has determined that, from a business viewpoint, its
sales of Receivables to Buyer and the other transactions contemplated herein and
in the Purchase Agreement are in the best interests of the Originator.

(x) Eligible Receivables. Each Receivable that was included on any Receivables
Report as an Eligible Receivable was an Eligible Receivable on the date on which
it was sold to Buyer hereunder.

(y) Financial Information. All balance sheets, all statements of income and of
cash flow and all other financial information of the Originator or its
Subsidiaries (other than Projections) furnished to the Administrative Agent or
any Purchaser 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 Buyer 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 the Originator or by any Responsible Officer of the Originator to
the Administrative Agent or any of the 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 Originator believes
to be reasonable and fair in light of conditions and facts known to the
Originator at such time and reflect the good faith, reasonable and fair
estimates by the Originator of the future performance of the Originator and the
other information projected therein for the periods set forth therein.

(z) OFAC. Neither the Originator nor any Subsidiary of the 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 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.

 

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(aa) Patriot Act. The Originator and each Subsidiary of the 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

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

ARTICLE III.

CONDITIONS OF PURCHASE

Section 3.1 Conditions Precedent to Initial Purchase. The initial Purchase from
the Originator under this Agreement is subject to the conditions precedent that
(a) Buyer shall have received on or before the date of such Purchase those
documents listed on Schedule A and (b) all of the conditions to the initial
purchase under the Purchase Agreement shall have been satisfied or waived in
accordance with the terms thereof.

Section 3.2 Conditions Precedent to Subsequent Payments. Buyer’s obligation to
pay the Originator for Receivables coming into existence after the Initial
Cutoff Date shall be subject to the further conditions precedent that: (a) the
Facility Termination Date shall not have occurred; (b) Buyer (or the
Administrative Agent, as Buyer’s collateral assignee) shall have received such
other opinions or documents as it may reasonably request pursuant to Section 6.2
of the Purchase Agreement, and (c) on the date such Receivable came into
existence, the following statements shall be true (and acceptance of the
proceeds of any payment for such Receivable shall be deemed a representation and
warranty by the Originator that such statements are then true):

(i) the representations and warranties of the Originator set forth in Article II
are true and correct on and as of the date such Receivable came into existence
as though made on and as of such date; and

(ii) no event has occurred and is continuing that will constitute a Termination
Event or a Potential Termination Event.

Section 3.3 Reaffirmation of Representations and Warranties. The Originator, by
accepting the Purchase Price related to each Purchase of the Originator’s
Receivables and Related Security, shall be deemed to have certified that the
representations and warranties of the Originator contained in Article II are
true and correct as to the Originator on and as of the date of such Purchase,
with the same effect as though made on and as of such day, and that each of the

 

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applicable conditions precedent set forth in this Article III has been satisfied
as of the date of such purchase.

ARTICLE IV.

COVENANTS

Section 4.1 Affirmative Covenants of Originator. Until the date on which this
Agreement terminates in accordance with its terms, the Originator hereby
covenants as set forth below:

(a) Financial Reporting. The Originator will maintain, for itself and each of
its Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish to Buyer (or to the Administrative Agent, as
Buyer’s collateral assignee):

(i) Annual Reporting. Within 90 days after the end of each fiscal year of the
Originator, consolidated statements of income, shareholders’ equity and cash
flows of Convergys and its Subsidiaries for such year and the related
consolidated balance sheet as at the end of such year, setting forth in each
case in comparative form the corresponding figures for the preceding fiscal
year, and accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state that said
consolidated financial statements fairly present in all material respects the
consolidated financial condition and results of operations of the Originator and
its Subsidiaries as at the end of, and for, such fiscal year (it being agreed
that the furnishing of 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 4.1(a)(i)).

(ii) Quarterly Reporting. Within 45 days after the end of each fiscal quarter of
the Originator other than the last fiscal quarter in each fiscal year,
consolidated statements of income, shareholders’ equity and cash flows of
Convergys and its Subsidiaries for such fiscal quarter and for the portion of
the fiscal year ended at the end of such fiscal quarter, and the related
consolidated balance sheet as at the end of such fiscal quarter, accompanied, in
each case, by a certificate of a Senior Officer, which certificate shall state
that said consolidated financial statements fairly present in all material
respects the consolidated financial condition and results of operations of
Convergys in accordance with GAAP, consistently applied, as at the end of, and
for, such period (subject to normal year-end audit adjustments) (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 4.1(a)(ii)).

 

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

(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) SEC Filings. Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports (other than
SEC Forms 10-K and 10-Q filed by Convergys and delivered in accordance with
Sections 4.1(a)(i) and (ii) and other than SEC Forms 3, 4 or 5) which Convergys
or any of its Subsidiaries files with the SEC.

(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 Person other than
Buyer, any of the Agents or any of the Purchasers, copies of the same.

(vii) Change in Credit and Collection Policy. At least thirty (30) days prior to
the effectiveness of any material change in or material amendment to the
Originator’s Credit and Collection Policy, a copy of its Credit and Collection
Policy then in effect and a notice (A) indicating such change or amendment, and
(B) if such proposed change or amendment would be reasonably likely to adversely
affect the collectibility of the Receivables or decrease the credit quality of
any newly created Receivables, requesting Buyer’s (and the Administrative
Agent’s, as Buyer’s assignee) consent thereto.

(viii) Other Information. Promptly, from time to time, such other information,
documents, records or reports relating to the Receivables or the condition or
operations, financial or otherwise, of the Originator as Buyer (or the
Administrative Agent, as Buyer’s collateral assignee) may from time to time
reasonably request in order to protect the interests of Buyer (and the
Administrative Agent, as Buyer’s collateral assignee) under or as contemplated
by this Agreement.

(b) Notices. The Originator will notify the Buyer (and the Administrative Agent,
as Buyer’s collateral assignee) 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:

 

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(i) Termination Events or Potential Termination Events. The occurrence of each
Termination Event and each Potential Termination Event, by a statement of an
Authorized Officer of the Originator.

(ii) Judgment and Proceedings. (1) The entry of any judgment or decree against
the Originator or any of its Subsidiaries in excess of $15,000,000 and (2) the
institution of any litigation, arbitration proceeding or governmental proceeding
against the Originator which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.

(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 involving Indebtedness or a line
of credit in excess of $5,000,000 pursuant to which the Originator is a debtor
or an obligor.

(v) Downgrade of Convergys. Any downgrade in the rating of any Indebtedness of
Convergys by Standard and Poor’s Ratings Group or by Moody’s Investors Service,
Inc., setting forth the Indebtedness affected and the nature of such change.

(c) Compliance with Laws and Preservation of Corporate Existence. The Originator
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. The Originator will preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where its business is conducted, except
where the failure to so qualify or remain in good standing could not reasonably
be expected to have a Material Adverse Effect.

(d) Audits. The Originator will furnish to Buyer (and to the Administrative
Agent and each Purchaser, as Buyer’s collateral assignees) from time to time
such information with respect to it and the Receivables originated or serviced
by it as Buyer (or the Administrative Agent or any of the Purchasers) may
reasonably request. The Originator will, from time to time during regular
business hours as requested by Buyer (or the Administrative Agent or any of the
Purchasers), upon reasonable notice and at the sole cost of the Originator,
permit Buyer and the Administrative Agent and each of the Purchasers or their
respective agents or representatives: (i) to examine and make copies of and
abstracts from all Records (other than Excluded Contracts) in the possession or
under the control of the Originator relating to such Receivables and the Related
Security (other than 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 the Originator for the purpose of
examining such materials described in clause (i)

 

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above, and to discuss matters relating to the Originator’s financial condition
or such Receivables and the Related Security or the Originator’s performance
under any of the Transaction Documents or the Originator’s performance under the
Contracts and, in each case, with any of the officers or employees of the
Originator having knowledge of such matters (each of the foregoing examinations
and visits, a “Review”); provided, however, that, except in connection with an
Extension Request under and as defined in the Purchase Agreement, so long as no
Amortization Event or Potential Amortization Event (each, as defined in the
Purchase Agreement) has occurred, the Originator 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 Originator will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate records
evidencing Receivables originated by it 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
such Receivables (including, without limitation, records adequate to permit the
immediate identification of each such new Receivable and all Collections of and
adjustments to each such existing Receivable). The Originator will give Buyer
(and the Administrative Agent and each Purchaser, as Buyer’s collateral
assignees) notice of any material change in the administrative and operating
procedures referred to in the previous sentence other than a change in the type
of software used by the Originator.

(ii) The Originator will: (A) on or prior to the Effective Date, mark its master
data processing records and other books and records relating to the Receivables
originated by it with a legend, acceptable to Buyer (and to the Administrative
Agent, as Buyer’s collateral assignee), describing Buyer’s ownership interests
in such Receivables and further describing the Receivables Interests of the
Administrative Agent (on behalf of the Purchasers) under the Purchase Agreement
and (B) upon the request of Buyer (or the Administrative Agent or any of the
Purchasers, as Buyer’s collateral assignees) following the occurrence of a
Termination Event or an Amortization Event (as defined in the Purchase
Agreement: (x) mark each Contract with a legend describing Buyer’s ownership
interests in such Receivables and further describing the Receivables Interests
of the Administrative Agent (on behalf of the Purchasers) and (y) deliver to
Buyer (or, following the occurrence and during the continuance of an
Amortization Event, to the Administrative Agent, as Buyer’s collateral assignee)
all Contracts (including, without limitation, all multiple originals of any such
Contract that constitutes an instrument, a certificated security or chattel
paper under the UCC but excluding Excluded Contracts) and all Invoices
(including, without limitation, all multiple originals of any such Invoice that
constitutes an

 

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instrument, a certificated security or chattel paper under the UCC) relating to
such Receivables.

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

(g) Ownership. The Originator will take all necessary action to establish and
maintain, irrevocably in Buyer, (i) legal and equitable title to the Receivables
originated by the Originator and the associated Collections and (ii) all of the
Originator’s right, title and interest in the Related Security associated with
such Receivables, in each case, free and clear of any Adverse Claims other than
Adverse Claims in favor of Buyer (and the Administrative Agent, as Buyer’s
collateral assignee) (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 Buyer’s interest
in such Receivables, Related Security and Collections and such other action to
perfect, protect or more fully evidence the interest of Buyer as Buyer (or the
Administrative Agent, as Buyer’s collateral assignee) may reasonably request).

(h) Purchasers’ Reliance. The Originator acknowledges that the Administrative
Agent and the Purchasers are entering into the transactions contemplated by the
Purchase Agreement in reliance upon Buyer’s identity as a legal entity that is
separate from the Originator and any Affiliates thereof. Therefore, from and
after the date of execution and delivery of this Agreement, the Originator will
take all reasonable steps including, without limitation, all steps that Buyer
(or the Administrative Agent, as Buyer’s collateral assignee) may from time to
time reasonably request to maintain Buyer’s identity as a separate legal entity
and to make it manifest to third parties that Buyer is an entity with assets and
liabilities distinct from those of the Originator and any Affiliates thereof and
not just a division of the Originator or any such Affiliate. Without limiting
the generality of the foregoing and in addition to the other covenants set forth
herein, the Originator (i) will not hold itself out to third parties as liable
for the debts of Buyer nor purport to own the Receivables and other assets
acquired by Buyer, (ii) will take all other actions necessary on its part to
ensure that Buyer is at all times in compliance with the covenants set forth in
Section 7.1(i) of the Purchase Agreement and (iii) will cause all tax
liabilities arising in connection with the transactions contemplated herein or
otherwise to be allocated between the Originator and Buyer on an arm’s-length
basis and in a manner consistent with the procedures set forth in U.S. Treasury
Regulations §§1.1502-33(d) and 1.1552-1.

(i) Collections. The Originator shall direct all Obligors to make payments of
the Originator’s Receivables directly to a Lock Box or Collection Account that
has been transferred into the name of the Buyer (or the Administrative Agent, as
Buyer’s collateral assignee) and is the subject of a Collection Account
Agreement at a Collection Bank. If, notwithstanding the foregoing, any Obligor
makes payment to the Originator, the Originator further agrees to remit any
Collections (including any security deposits applied to the

 

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Outstanding Balance of any Receivable) that it receives on such Receivables
directly to a Collection Bank for deposit into a Collection Account within two
(2) Business Days after receipt thereof, and agrees that all such Collections
shall be deemed to be received in trust for Buyer (and the Administrative Agent,
as Buyer’s collateral assignee); provided that, to the extent permitted pursuant
to Section 1.3, the Originator may retain such Collections as a portion of the
Purchase Price then payable to or apply such Collections to the reduction of the
outstanding balance of its Subordinated Note.

(j) Taxes. Except to the extent that the Originator is included in consolidated
tax returns or reports filed by Convergys, the Originator will file all tax
returns and reports required by law to be filed by it and will promptly pay all
taxes and governmental charges at any time owing, except any such taxes which
are not yet delinquent or are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books. The Originator will also pay when due
any taxes payable in connection with the Receivables originated by it, exclusive
of taxes on or measured by income or gross receipts of Buyer and its assigns.

(k) Insurance. The Originator will maintain in effect, at the Originator’s
expense, such casualty and liability insurance as the Originator deems
appropriate in its good faith business judgment. The Originator will pay the
premiums therefor. The foregoing requirements shall not be construed to negate,
reduce or modify, and are in addition to, the Originator’s obligations
hereunder.

(l) Reports. The Originator shall prepare the following reports and forward to
the Servicer (i) on the 20th day of each month or if such date is not a Business
Day, the next Business Day, and at such times as the Servicer shall request (the
“Receivables Reporting Date”), a Receivables Report and (ii) at such times as
the Servicer shall reasonably request, a listing by Obligor of all Receivables
originated by the Originator together with an aging of such Receivables.

Section 4.2 Negative Covenants of Originator. Until the date on which this
Agreement terminates in accordance with its terms, the Originator hereby
covenants that:

(a) Name Change, Offices and Records. The Originator will not (i) change its
name (within the meaning of Section 9-507(c) of any applicable enactment of the
UCC), identity, corporate structure or location of books and records unless, at
least fifteen (15) Business Days prior to the effective date of any such name
change, change in corporate structure or change in location of books and
records, the Originator notifies Buyer thereof and delivers to Buyer (or to the
Administrative Agent, as Buyer’s collateral assignee) such financing statements
(Forms UCC-1 and UCC-3) executed by the Originator (if required under applicable
law) which Buyer (or the Administrative Agent, as Buyer’s collateral assignee)
may reasonably request to reflect such name change, location change or change in
corporate structure, together with such other documents and instruments that
Buyer (or the Administrative Agent, as Buyer’s collateral assignee) may
reasonably request in connection therewith and has taken all other steps to
ensure

 

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that Buyer continues to have an exclusive perfected ownership or security
interest in the Receivables originated by it, the Related Security related
thereto and any Collections thereon, or (ii) change its jurisdiction of
organization unless Buyer (and the Administrative Agent, as Buyer’s collateral
assignee) shall have received from the Originator, prior to such change,
(A) those items described in clause (i) hereof, and (B) if Buyer (or the
Administrative Agent, as Buyer’s collateral assignee) shall so request, an
opinion of counsel, in form and substance reasonably satisfactory to such
Person, as to such organization and the Originator’s valid existence and good
standing and the perfection and priority of Buyer’s ownership or security
interest in the Receivables originated by the Originator and the Related
Security and the Collections related thereto.

(b) Change in Payment Instructions to Obligors. The Originator will not add or
terminate any bank as a Collection Bank, or make any change in the instructions
to Obligors regarding payments to be made to any Lock-Box or Collection Account,
unless Buyer (and the Administrative Agent, as Buyer’s collateral assignee)
shall have received, at least ten (10) days before the proposed effective date
therefor, (i) written notice of such addition, termination or change and
(ii) with respect to the addition of a Collection Bank or a Collection Account
or Lock-Box, an executed Collection Account Agreement with respect to the new
Collection Account or Lock-Box; provided, however, that the Originator may make
changes in instructions to Obligors regarding payments if such new instructions
require such Obligor to make payments to another existing Collection Account.

(c) Modifications to Contracts and Credit and Collection Policy. The Originator
will not make any change to its Credit and Collection Policy that could
adversely affect the collectibility of the Receivables originated or serviced by
the Originator or decrease the credit quality of any such newly created
Receivables. Except as otherwise permitted in its capacity as a permitted
sub-Servicer pursuant to Article VIII of the Purchase Agreement, the Originator
will not extend, amend or otherwise modify the terms of any Receivable
originated or serviced by it or any Contract related thereto in any material
respect other than in accordance with its Credit and Collection Policy.

(d) Sales, Liens. Except pursuant to the Transaction Documents, the Originator
will not sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any option with respect to, or create or suffer to exist any
Adverse Claim upon (including, without limitation, the filing of any financing
statement) or with respect to, any Receivable originated by it or the associated
Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or assign
any right to receive income with respect thereto (other than, in each case, the
creation of the interests therein in favor of Buyer provided for herein), and
the Originator will defend the right, title and interest of Buyer in, to and
under any of the foregoing property, against all claims of third parties
claiming through or under the Originator. The Originator shall not create or
suffer to exist any mortgage, pledge, security interest, encumbrance, lien,
charge or other similar arrangement on any of its inventory.

 

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(e) Accounting for Purchase. The Originator will not, and will not permit any
Affiliate to, account for the transactions contemplated hereby in any manner
other than as a sale by the Originator to Buyer of Receivables originated by the
Originator and the associated Collections and Related Security.

ARTICLE V.

TERMINATION EVENTS

Section 5.1 Termination Events. The occurrence of any one or more of the
following events shall constitute a “Termination Event” with respect to the
Originator:

(a) The Originator shall fail to make any payment or deposit required hereunder
on or within one (1) Business Day after the date on which the same is required
to be made.

(b) The Originator or Performance Guarantor shall fail to perform or observe any
covenant contained in Section 4.1(l) or any provision of Section 4.2.

(c) (i) The Originator or Performance Guarantor shall fail to perform or observe
any other covenant, agreement or other obligation hereunder (other than as
referred to in another paragraph of this Section 5.1) or any other Transaction
Document to which it is a party and such failure shall continue for three
(3) consecutive Business Days following the earlier to occur of (i) notice from
Buyer (or the Administrative Agent or any Purchaser, as its collateral assignee)
of such non-performance or non-observance, or (ii) the date on which a
Responsible Officer of the Originator (or Performance Guarantor, as the case may
be) otherwise becomes aware of such non-performance or non-observance.

(d) Any representation, warranty, certification or statement made by the
Originator in this Agreement, any other Transaction Document or in any other
document required to be delivered pursuant hereto or thereto shall prove to have
been incorrect or misleading when made or deemed made in any material respect,
provided that the materiality threshold in this subsection shall not be
applicable with respect to any representation or warranty which itself contains
a materiality threshold.

(e) The Originator shall default, or the Performance Guarantor or any of its
Subsidiaries (other than the Originator) shall default, in the payment when due
of any principal or of or interest on any Material Indebtedness or shall fail to
observe or perform any other agreement or condition relating to any such
Material Indebtedness and such default has not been waived by the applicable
lenders before the expiration of any applicable grace periods; or any other
event or condition shall occur which results in a default under any such
Material Indebtedness.

(f) (i) The Originator, Performance Guarantor or any of their respective
Subsidiaries shall generally not pay its debts as such debts become due or shall
admit in

 

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writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors; or (ii) any proceeding shall be
instituted by or against the Originator, Performance Guarantor or any of their
respective Subsidiaries 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, and in the case
of any such proceeding instituted against (but not instituted by) it, either
such proceeding shall remain undismissed or unstayed for a period of 30 days, or
any of the actions sought in such proceeding (including, without limitation, 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) shall occur or
(iii) the Originator, Performance Guarantor or any of their respective
Subsidiaries shall take any corporate action to authorize any of the actions set
forth in the foregoing clauses (i) or (ii) of this subsection (f).

(g) A Change of Control or a Credit Agreement Change of Control shall occur with
respect to the Originator or Performance Guarantor.

(h) One or more final judgments for the payment of money in an amount in excess
of $15,000,00, individually or in the aggregate, shall be entered against the
Originator or Performance Guarantor on claims not covered by insurance or as to
which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for thirty (30) consecutive days
without a stay of execution.

Section 5.2 Remedies. Upon the occurrence and during the continuation of a
Termination Event, Buyer may take any of the following actions: (i) declare the
Termination Date to have occurred, whereupon the Termination Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Originator; provided, however, that
upon the occurrence of a Termination Event described in Section 5.1(f), or of an
actual or deemed entry of an order for relief with respect to Performance
Guarantor or the Originator under the Federal Bankruptcy Code, the Termination
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Originator and (ii) to the
fullest extent permitted by applicable law, declare that the Default Fee shall
accrue with respect to any amounts then due and owing by the Originator to
Buyer. The aforementioned rights and remedies shall be without limitation and
shall be in addition to all other rights and remedies of Buyer (or the
Administrative Agent, as Buyer’s collateral assignee) otherwise available under
any other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which rights
shall be cumulative.

 

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ARTICLE VI.

INDEMNIFICATION

Section 6.1 Indemnities by Originator. Without limiting any other rights that
Buyer may have hereunder or under applicable law, the Originator hereby agrees
to indemnify (and pay upon demand to) Buyer and its assigns, officers,
directors, agents and employees (each, an “Indemnified Party”) from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys’ fees (which attorneys
may be employees of Buyer or any such assign) and disbursements (all of the
foregoing being collectively referred to as “Indemnified Amounts”) awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables originated by the Originator, excluding, however, in
all of the foregoing cases:

(a) Indemnified Amounts to the extent a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts resulted from gross negligence
or willful misconduct on the part of the Indemnified Party seeking
indemnification;

(b) Indemnified Amounts to the extent the same includes losses in respect of
Receivables that are uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor; or

(c) taxes imposed by the United States, the Indemnified Party’s jurisdiction of
organization (or, in the case of an individual, primary residence) or any other
jurisdiction in which such Indemnified Party has established a taxable nexus
other than in connection with the transactions contemplated hereby and by the
Purchase Agreement on or measured by the overall net income of such Indemnified
Party to the extent that the computation of such taxes is consistent with the
Intended Characterization;

provided, however, that nothing contained in this sentence shall limit the
liability of the Originator or limit the recourse of Buyer to the Originator for
amounts otherwise specifically provided to be paid by the Originator under the
terms of this Agreement. Without limiting the generality of the foregoing
indemnification, but subject to the exclusions in clauses (a), (b) and
(c) above, the Originator shall indemnify Buyer for Indemnified Amounts
(including, without limitation, losses in respect of uncollectible Receivables,
regardless of whether reimbursement therefor would constitute recourse to the
Originator) relating to or resulting from:

(i) any representation or warranty made by the Originator (or any of its
officers) under or in connection with this Agreement, any other Transaction
Document to which the Originator is a party or any other information or report
required to be delivered by any such Person pursuant hereto or thereto, which
shall have been false or incorrect when made or deemed made;

 

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(ii) the failure by the Originator to comply with any applicable law, rule or
regulation with respect to any Receivable originated by it, or any Contract
related thereto, or the nonconformity of any such Receivable or Contract with
any such applicable law, rule or regulation or any failure of the Originator to
keep or perform any of its obligations, express or implied, with respect to any
such Contract;

(iii) any failure of the Originator to perform its duties, covenants or other
obligations in accordance with the provisions of this Agreement or any other
Transaction Document to which it is a party;

(iv) any products liability, environmental liability, personal injury or damage
suit, or other similar claim arising out of or in connection with goods that are
the subject of any Contract or any Receivable originated by the Originator;

(v) any dispute, claim, offset or defense (other than discharge in bankruptcy of
the Obligor) of the Obligor to the payment of any Receivable originated by the
Originator (including, without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other claim
resulting from the sale of goods or services related to such Receivable or the
furnishing or failure to furnish such goods or services;

(vi) the commingling of Collections of such Receivables at any time with other
funds;

(vii) any investigation, litigation or proceeding related to or arising from
this Agreement or any other Transaction Document to which the Originator is a
party, the transactions contemplated hereby, the use by the Originator of the
proceeds of any purchase from it hereunder or any other investigation,
litigation or proceeding relating to the Originator in which any Indemnified
Party becomes involved as a result of any of the transactions contemplated
hereby;

(viii) any inability to litigate any claim against any Obligor in respect of any
such Receivable as a result of such Obligor being immune from civil and
commercial law and suit on the grounds of sovereignty or otherwise from any
legal action, suit or proceeding;

(ix) (A) failure of the Originator generally to pay its debts as such debts
become due or admission by the Originator in writing of its inability to pay its
debts generally or any making by the Originator of a general assignment for the
benefit of creditors; or (B) the institution of any proceeding by or against the
Originator 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

 

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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 (C) the taking by the Originator of any
corporate action to authorize any of the actions set forth in clauses (A) or
(B) above in this clause (ix);

(x) any failure to vest and maintain vested in Buyer, or to transfer to Buyer,
legal and equitable title to, and ownership of, an exclusive perfected ownership
interest in the Receivables originated by the Originator and the associated
Related Security and Collections, free and clear of any Adverse Claim (except as
created by the Transaction Documents);

(xi) the failure to have filed, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any such Receivable, the
Related Security and Collections with respect thereto, and the proceeds of any
thereof, whether at the time of sale to Buyer or at any subsequent time; and

(xii) any action or omission by the Originator which reduces or impairs the
rights of Buyer with respect to any Receivable or the value of any such
Receivable.

Section 6.2 Other Costs and Expenses. In addition to the obligations of the
Originator under Section 6.1, the Originator agrees to pay on demand:

(a) all reasonable costs and expenses, including attorneys’ fees, in connection
with the enforcement against the Originator of this Agreement and the other
Transaction Documents executed by the Originator; and

(b) all stamp duties and other similar filing or recording taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing and recording of this Agreement or the other Transaction Documents
executed by the Originator, and agrees to indemnify Indemnified Parties against
any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.

ARTICLE VII.

MISCELLANEOUS

Section 7.1 Waivers and Amendments.

(a) No failure or delay on the part of Buyer (or, following the occurrence and
during the continuance of an Amortization Event, the Administrative Agent, as
Buyer’s collateral assignee) in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power,

 

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right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.

(b) No provision of this Agreement may be amended, supplemented, modified or
waived except in writing signed by the Originator and Buyer and, to the extent
required under the Purchase Agreement, the Agents and/or the Purchasers.

Section 7.2 Notices. All communications and notices provided for hereunder shall
be in writing (including bank wire, telecopy or electronic facsimile
transmission or similar writing) and shall be given to the other parties hereto
at their respective addresses or telecopy numbers set forth on the signature
pages hereof or at such other address or telecopy number as such Person may
hereafter specify for the purpose of notice to each of the other parties hereto.
Each such notice or other communication shall be effective (a) if given by
telecopy, upon the receipt thereof, (b) if given by mail, three (3) Business
Days after the time such communication is deposited in the mail with first class
postage prepaid or (c) if given by any other means, when received at the address
specified in this Section 7.2.

Section 7.3 Protection of Ownership Interests of Buyer.

(a) The Originator agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that Buyer (or the
Administrative Agent, as Buyer’s collateral assignee) may request, to perfect,
protect or more fully evidence the interest of Buyer hereunder and the
Receivables Interests, or to enable Buyer (or, following the occurrence and
during the continuance of an Amortization Event, the Administrative Agent, as
Buyer’s collateral assignee) to exercise and enforce its (or their) rights and
remedies hereunder. At any time, Buyer may, at the Originator’s sole cost and
expense, direct the Originator to notify the Obligors of Receivables originated
or serviced by it of the ownership interests of Buyer under this Agreement and
may also direct that payments of all amounts due or that become due under any or
all Receivables be made directly to Buyer or its designee.

(b) If the Originator fails to perform any of its obligations hereunder, Buyer
may (but shall not be required to) perform, or cause performance of, such
obligation, and Buyer’s costs and expenses incurred in connection therewith
shall be payable by the Originator as provided in Section 6.2. The Originator
irrevocably authorizes Buyer (and, from and after the occurrence and during the
continuance of an Amortization Event, the Administrative Agent, as Buyer’s
collateral assignee) at any time and from time to time in the sole discretion of
Buyer (or the Administrative Agent), and appoints Buyer (and, from and after the
occurrence and during the continuance of an Amortization Event, the
Administrative Agent) as its attorney(ies)-in-fact, to act on behalf of the
Originator (i) to

 

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execute on behalf of the Originator as debtor and to file financing statements
necessary or desirable in Buyer’s sole discretion to perfect and to maintain the
perfection and priority of the ownership interest of Buyer in the Receivables
and (ii) to file a carbon, photographic or other reproduction of this Agreement
or any financing statement with respect to the Receivables as a financing
statement in such offices as Buyer (or, as applicable, the Administrative Agent)
in its sole discretion deem necessary or desirable to perfect and to maintain
the perfection and priority of Buyer’s interests in the Receivables. This
appointment is coupled with an interest and is irrevocable.

Section 7.4 Confidentiality.

(a) Each of the parties hereto shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of the Fee Letters and
the other confidential or proprietary information with respect to the Originator
(including, without limitation, confidential information with respect to its
Obligors), the Administrative Agent, the Purchasers and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such party and its officers and employees may disclose such information (i) to
such party’s external accountants and attorneys and (ii) as required by any
applicable law, regulation or order of any judicial or administrative proceeding
provided that each party shall use commercially reasonable efforts to ensure, to
the extent permitted given the circumstances, that any such information which is
so disclosed is kept confidential.

(b) Anything herein to the contrary notwithstanding, the Originator hereby
consents to the disclosure of any nonpublic information with respect to it
(i) to the Administrative Agent and each of the Purchasers, (ii) to any
prospective or actual assignee or participant of the Administrative Agent or any
of the Purchasers, and (iii) to any rating agency, Commercial Paper dealer or
provider of a surety, guaranty or credit or liquidity enhancement to a Purchaser
or any entity organized for the purpose of purchasing, or making loans secured
by, financial assets for which any of the Purchasers acts as the administrative
agent or administrator and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided each such Person is
advised of the confidential nature of such information and, in the case of a
Person described in clause (ii) above, agrees to be bound by the provisions of
this Section 7.4. In addition, the Administrative Agent and each Purchaser may
disclose any such nonpublic information pursuant to any law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings (whether or not having the force or effect of law)
although each of them shall use commercially reasonable efforts to ensure, to
the extent permitted given the circumstances, that any such information which is
so disclosed is kept confidential.

Section 7.5 Bankruptcy Petition.

 

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The Originator covenants and agrees that, prior to the date that is one year and
one day after the payment in full of all Aggregate Unpaids under the Purchase
Agreement, it will not institute against, or join any other Person in
instituting against, Buyer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.

Section 7.6 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK.

Section 7.7 CONSENT TO JURISDICTION. THE ORIGINATOR HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE ORIGINATOR
PURSUANT TO THIS AGREEMENT, AND THE ORIGINATOR HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST THE ORIGINATOR
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE
ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE ORIGINATOR
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW
YORK.

Section 7.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY THE
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.

 

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Section 7.9 Integration; Binding Effect; Survival of Terms.

(a) This Agreement and each other Transaction Document contain the final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.

(b) This Agreement shall be binding upon and inure to the benefit of the
Originator, Buyer and their respective successors and permitted assigns
(including any trustee in bankruptcy). The Originator may not assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may pledge and assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of the Originator, and hereby notifies the Originator that it has
pledged and collaterally assigned its right, title and interest hereunder with
respect to each Receivable in which the Purchasers have acquired any interest
under the Receivables Purchase Agreement to the Administrative Agent, for the
benefit of the Administrative Agent and each Purchaser under the Purchase
Agreement. This Agreement shall create and constitute the continuing obligation
of each of the parties hereto in accordance with its terms and shall remain in
full force and effect until terminated in accordance with its terms; provided,
however, that the rights and remedies with respect to (i) any breach of any
representation and warranty made by the Originator pursuant to Article II;
(ii) the indemnification and payment provisions of Article VI; and
(iii) Section 7.5 shall be continuing and shall survive any termination of this
Agreement.

Section 7.10 Counterparts; Severability; Section References. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which, taken together, shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and
sections of, and schedules and exhibits to, this Agreement.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date hereof.

 

CONVERGYS CORPORATION By:  

/s/ Timothy M. Wesolowski

  Senior Vice President and Controller

Address:   201 East Fourth Street   Cincinnati, Ohio 45202   Attention: Karen R.
Bowman   Fax: (513) 784-5610

CONVERGYS FUNDING INC. By:  

/s/ Timothy M. Wesolowski

  President

Address:   Circleport II Business Park   1101 Pacific Avenue   Erlanger, KY
41018   Attention: Kevin C. O’Neil

 

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