Exhibit 10.2

 

 

 

 

RECEIVABLES PURCHASE AGREEMENT

 

Dated as of April 17, 2020

 

by and among

 

StarTek Receivables Funding, LLC,
as Seller,

 

REGIONS BANK,
as Purchaser,

 

and

 

StarTek, Inc.,
as initial Master Servicer,

 

 

 

 

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TABLE OF CONTENTS

 

Page

 

ARTICLE I DEFINITIONS 1           Section 1.01.   Certain Defined Terms  1  
Section 1.02. Other Interpretative Matters 24         ARTICLE II TERMS OF THE
PURCHASES AND INVESTMENTS 24           Section 2.01. Purchase Facility   24  
Section 2.02.  Making Investments; Return of Capital.  26   Section 2.03. Yield
and Fees  27   Section 2.04 Records of Investments and Capital 27        
ARTICLE III seller guaranty 28           Section 3.01.   Guaranty of Payment  28
  Section 3.02.  Unconditional Guaranty  28   Section 3.03.  Modifications   29
  Section 3.04. Waiver of Rights 30   Section 3.05. Reinstatement   30   Section
3.06.  Remedies  31   Section 3.07.  Subrogation   31   Section 3.08.
Inducement   31   Section 3.09.   Security Interest  31   section 3.10. Further
Assurances   32         ARTICLE IV SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS
32           Section 4.01.  Settlement Procedures   32   Section 4.02.  Payments
and Computations, Etc.  36         ARTICLE V INCREASED COSTS; FUNDING LOSSES;
TAXES; ILLEGALITY AND BACK-UP SECURITY INTEREST  36           Section 5.01. 
Increased Costs.  36   Section 5.02. [Reserved]. 37   SECTION 5.03. Taxes 38  
Section 5.04.   Inability to Determine or LIR; Change in Legality.   41  
Section 5.05.  Back-Up Security Interest.  41   Section 5.06.  Successor LIR 42
        ARTICLE VI CONDITIONS to Effectiveness and INVESTMENTS 43          
Section 6.01. Conditions Precedent to Effectiveness and the Initial Investment  
43   Section 6.02.  Conditions Precedent to All Investments 43

 

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  Section 6.03.  Conditions Precedent to All Releases   44         ARTICLE VII
REPRESENTATIONS AND WARRANTIES 45           Section 7.01.  Representations and
Warranties of the Seller  45   Section 7.02.   Representations and Warranties of
the Master Servicer 51         ARTICLE VIII COVENANTS 56           Section
8.01.  Covenants of the Seller  56   Section 8.02.  Covenants of the Master
Servicer  63   Section 8.03. Separate Existence of the Seller  69        
ARTICLE IX SERVICING OF RECEIVABLES 72           Section 9.01.  Appointment of
the Master Servicer  72   Section 9.02.  Duties of the Master Servicer.   73  
Section 9.03. Collection Account Arrangements   74   Section 9.04. Enforcement
Rights.   74   Section 9.05. Responsibilities of the Seller. 75   Section 9.06. 
Servicing Fee    76         ARTICLE X EVENTS OF TERMINATION 76           Section
10.01. Events of Termination  76         ARTICLE XI INDEMNIFICATION 79          
Section 11.01.  Indemnities by the Seller. 79   Section 11.02.  Indemnification
by the Master Servicer. 82         ARTICLE XII MISCELLANEOUS 83          
Section 12.01. Amendments, Etc.  83   Section 12.02.  Notices, Etc  83   Section
12.03.  Participations and Assignments.  83   Section 12.04.  Costs and
Expenses  85   Section 12.05.  No Proceedings; Limitation on Payments   85  
Section 12.06.  Confidentiality. 85   Section 12.07. GOVERNING LAW   87  
Section 12.08. Execution in Counterparts  87   Section 12.09 Integration;
Binding Effect; Survival of Termination  87   Section 12.10.  CONSENT TO
JURISDICTION   87   Section 12.11. WAIVER OF JURY TRIAL   88   Section 12.12.  
[Reserved]  88   Section 12.13.   Limitation of Liability   88   Section 12.14.
Intent of the Parties  88   Section 12.15.  USA Patriot Act   88   Section
12.16. Right of Setoff  89

  Section 12.17.   Severability  89   Section 12.18.   Mutual Negotiations 89  
Section 12.19.     Captions and Cross References 89

 

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This RECEIVABLES PURCHASE AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) is entered into as of
April 17, 2020, by and among the following parties:

 

(i)     StarTek Receivables Funding, LLC, a Delaware limited liability company,
as Seller (together with its successors and assigns, the “Seller”);

 

(ii)     REGIONS BANK (“Regions”), as purchaser (in such capacity, together with
its successors and assigns in such capacity, the “Purchaser”); and

 

(iii)     STARTEK, INC., a Delaware corporation, in its individual capacity
(“StarTek”) and as initial Master Servicer (in such capacity, together with its
successors and assigns in such capacity, the “Master Servicer”).

 

PRELIMINARY STATEMENTS

 

The Seller has acquired, and will acquire from time to time, Receivables from
any Originators pursuant to the RSCA. The Seller desires to sell certain of the
Receivables to the Purchaser and, in connection therewith, has requested that
the Purchaser make Investments from time to time, on the terms, and subject to
the conditions set forth herein.

 

In consideration of the mutual agreements, provisions and covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

ARTICLE I     

DEFINITIONS

 

Section 1.01.     Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

 

“Adjusted Dilution Ratio” means, at any time, the rolling average of the
Dilution Ratio for the 12 Calculation Periods then most recently ended.

 

“Adjusted Replacement Index” has the meaning set forth in Section 5.06(a).

 

“Adverse Claim” means any claim of ownership or any Lien; it being understood
that any such claim or Lien in favor of, or assigned to, the Purchaser (for the
benefit of the Secured Parties) under the Transaction Documents shall not
constitute an Adverse Claim.

 

“Advisors” has the meaning set forth in Section 12.06(c).

 

“Affected Person” means the Purchaser and its Affiliates.

 

“Affiliate” means, as applied to any Person, any other Person who Controls, is
Controlled by, or is under common Control with, such Person.

 

“Agreement” has the meaning set forth in the preamble to this Agreement.

 

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“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction from time to time concerning or relating to bribery or corruption,
including the United States Foreign Corrupt Practices Act of 1977, 15 U.S.C.
Sections 78dd-1 et seq., and the rules and regulations thereunder and the U.K.
Bribery Act 2010 and the rules and regulations thereunder.

 

“Anti-Money Laundering Laws” means any and all laws, statutes, regulations or
obligatory government orders, decrees, ordinances or rules related to terrorism
financing, money laundering, any predicate crime to money laundering, including
any applicable provision of the Patriot Act and The Currency and Foreign
Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§
5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

 

“Applicable Margin” has the meaning specified in the Fee Letter.

 

“Assignment and Acceptance Agreement” means an assignment and acceptance
agreement entered into by an Eligible Assignee and the Purchaser, and, if
required, the Seller, pursuant to which such Eligible Assignee may become a
party to this Agreement, in substantially the form of Exhibit C hereto.

 

“Attorney Costs” means and includes all fees, costs, expenses and disbursements
of any law firm or other external counsel and all disbursements of internal
counsel.

 

“Available Liquidity” means the sum of (a) unencumbered cash, cash equivalents
and temporary investments of the Master Servicer, plus (b) the difference of (i)
the lesser of the Facility Limit and the Capital Coverage Amount, minus (ii)
Capital outstanding (after curing any Capital Coverage Deficit) plus (c) any
unused availability of StarTek under any other revolving liquidity facility of
the Master Servicer (if any).

 

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time.

 

“Base Rate” means, for any day, a fluctuating interest rate per annum as shall
be in effect from time to time, which rate shall be at all times equal to the
higher of:

 

(a)     the Prime Rate; and

 

(b)     0.50% per annum above the latest Federal Funds Rate.

 

In no event shall the Base Rate be less than zero percent (0%) per annum.

 

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership Regulation” means 31 CFR § 1010.230.

 

“Billed Receivable” means a Pool Receivable for which the applicable Originator
has sent the applicable Obligor an Invoice.

 

“Board of Directors” shall mean, with respect to any person, (a) in the case of
any corporation, the board of directors of such person, (b) in the case of any
limited liability company, the board of managers of such person, (c) in the case
of any partnership, the board of directors of the general partner of such person
and (d) in any other case, the functional equivalent of the foregoing.

 

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“Business Day” means any day (other than a Saturday or Sunday) on which: (a)
banks are not authorized or required to close in Birmingham, Alabama, Atlanta,
Georgia, or New York, New York and (b) if this definition of “Business Day” is
utilized in connection with LIR, dealings are carried out in the London
interbank market.

 

“Calculation Period” means each calendar month.

 

“Capital” means the aggregate amount paid to, or on behalf of, the Seller in
connection with Investments made by the Purchaser pursuant to Article II, as
reduced from time to time by Collections distributed and applied on account of
reducing, returning or repaying such Capital pursuant to Section 2.02(d) or
4.01; provided that if such Capital shall have been reduced by any distribution
and thereafter all or a portion of such distribution is rescinded or must
otherwise be returned for any reason, such Capital shall be increased by the
amount of such rescinded or returned distribution as though it had not been
made.

 

“Capital Coverage Amount” means, at any time of determination, the amount equal
to (a) the Net Pool Balance at such time, plus (b) the balances at such time
that are in Collection Accounts subject to Control Agreements in favor of the
Purchaser, minus (c) the Required Reserve at such time.

 

“Capital Coverage Deficit” means, at any time of determination, the amount, if
any, by which (a) the aggregate Capital outstanding at such time, exceeds (b)
the Capital Coverage Amount at such time.

 

“Capital Distribution Amount” means, with respect to any Settlement Date, an
amount equal to the Capital Coverage Deficit.

 

“Capital Stock” means, with respect to any Person, any and all common shares,
preferred shares, interests, participations, rights in or other equivalents
(however designated) of such Person’s capital stock, partnership interests,
limited liability company interests, membership interests or other equivalent
interests and any rights (other than debt securities convertible into or
exchangeable for capital stock), warrants or options exchangeable for or
convertible into such capital stock or other equity interests.

 

“Change in Control” means the occurrence of any of the following:

 

(a)     the Contributing Originator ceases to own, directly, 100% of the issued
and outstanding Capital Stock of the Seller free and clear of all Adverse Claims
(other than involuntary Adverse Claims which have been of record for less than
45 days and which the Contributing Originator is actively contesting by
appropriate proceedings or regulatory procedures and as to which the holder of
such Adverse Claim has not commenced realizing on the encumbered Capital Stock);

 

(b)     StarTek ceases to own, directly or indirectly, beneficially and of
record, 100% of the issued and outstanding Capital Stock of any Originator or
the Master Servicer;

 

(c)     any Subordinated Note shall at any time cease to be owned by the
applicable Originator, free and clear of all Adverse Claims (other than
involuntary Adverse Claims which have been of record for less than 45 days and
which the Contributing Originator is actively contesting by appropriate
proceedings or regulatory procedures and as to which the holder of such Adverse
Claim has not commenced realizing on the encumbered Subordinated Note); or

 

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(d)     any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, but excluding CSP Alpha Holdings Parent Pte Ltd. and
any employee benefit plan of StarTek or its Subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-4 and 13d-6 under the Exchange Act, except that a person or group
shall be deemed to have “beneficial ownership” of all securities that such
person or group has the right to acquire (such right, an “option right”),
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of 20% or more of the Capital Stock of StarTek on
a fully-diluted basis (and taking into account all such Capital Stock that such
person or group has the right to acquire pursuant to any option right).

 

“Change in Law” means the occurrence, after the Closing Date, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (w) the final rule titled Risk-Based Capital Guidelines; Capital
Adequacy Guidelines; Capital Maintenance: Regulatory Capital; Impact of
Modifications to Generally Accepted Accounting Principles; Consolidation of
Asset-Backed Commercial Paper Programs; and Other Related Issues, adopted by the
United States bank regulatory agencies on December 15, 2009, (x) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules,
guidelines or directives thereunder or issued in connection therewith and (y)
all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to the agreements reached by the Basel
Committee on Banking Supervision in “Basel III: A Global Regulatory Framework
for More Resilient Banks and Banking Systems” (as amended, supplemented or
otherwise modified or replaced from time to time), shall in each case be deemed
to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Charged-Off Receivable” means (without duplication) a Pooled Receivable: (a) as
to which the Obligor thereof has taken any action to authorize, or otherwise
suffered, an Insolvency Proceeding; (b) as to which the Obligor thereof, if a
natural person, is known to be deceased; (c) which, consistent with the Credit
and Collection Policy, would be written off the Seller’s books as uncollectible;
or (d) which has been identified by the Seller as uncollectible.

 

“Closing Date” means April 17, 2020.

 

“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

 

“Collection Account” means the Settlement Account and each concentration
account, depositary account, lock-box clearing account or similar account (in
each case, in the name of the Seller) in which any Collections are collected or
deposited and which is listed on Schedule II hereto.

 

“Collection Account Bank” means, at any time, any bank at which a Collection
Account or Lock-Box is maintained.

 

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“Collections” means, with respect to any Pool Receivable: (a) all funds that are
received by any Originators, the Seller, the Master Servicer or any other Person
on their behalf in payment of any amounts owed in respect of such Pool
Receivable (including purchase price, service charges, finance charges,
interest, fees and all other charges), or applied to amounts owed in respect of
such Pool Receivable (including insurance payments, proceeds of drawings under
supporting letters of credit and net proceeds of the sale or other disposition
of repossessed goods or other collateral or property of the related Obligor or
any other Person directly or indirectly liable for the payment of such Pool
Receivable and available to be applied thereon), (b) all Deemed Collections, (c)
all proceeds of all Related Security with respect to such Pool Receivable and
(d) all other proceeds of such Pool Receivable.

 

“Commitment” means the Purchaser’s obligation to fund Investments hereunder in
accordance with this Agreement in the amount of $35,000,000, as such amount may
be increased or decreased from time to time in accordance with the terms of this
Agreement.

 

“Concentration Percentage” means, at any time, with respect any single Obligor
and its Affiliates (if any) considered collectively, the applicable
concentration percentage shall be determined as follows for such Obligors who
have short term unsecured debt ratings currently assigned to them by S&P and
Moody’s (or in the absence thereof, the equivalent long term unsecured senior
debt ratings):

 

S&P Rating

Moody’s Rating

Concentration

Percentage

A-1+

P-1

15.00%

A-1

P-1

15.00%

A-2

P-2

12.00%

A-3

P-3

6.00%

Below A-3 or Not Rated by

either S&P or Moody’s

Below P-3 or Not Rated

by either S&P or Moody’s

3.00%

; provided, however, that (a) if any Obligor has a split rating, the applicable
rating will be the lower of the two and (b) if any Obligor is a Non-Rated
Obligor, the applicable Concentration Percentage shall be the one set forth in
the last line of the table above, and (c) upon the Seller’s request from time to
time, the Purchaser may agree to a higher percentage of Eligible Receivables for
a particular Obligor and its Affiliates or class of Receivables (each such
higher percentage, a “Special Concentration Limit”), it being understood that
any Special Concentration Limit may be cancelled by the Purchaser in its
Permitted Discretion upon not less than five (5) Business Days’ written notice
to the Seller in which the applicable percentage from the table above will be
applicable.

 

“Consolidated” means the consolidation, in accordance with GAAP, of the
financial condition or operating results of such Person and its Subsidiaries.

 

“Contract” means, with respect to any Receivable, any and all instruments,
agreements or other writings pursuant to which such Receivable arises or which
evidences such Receivable other than an Invoice.

 

“Contributing Originator” has the meaning set forth in the RSCA.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto. Without
limiting the generality of the foregoing, a Person shall be deemed to be
Controlled by another Person if such other Person possesses, directly or
indirectly, power to vote 10% (or 30% with respect to StarTek) or more of the
securities having ordinary voting power for the election of directors, managing
general partners or the equivalent.

 

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“Control Agreement” means an agreement, in form reasonably acceptable to the
Purchaser, in which a Collection Account Bank agrees to take instructions from
the Purchaser, either directly or as assignee of the Seller, with respect to the
disposition of funds in a Collection Account without further consent of any
applicable StarTek Party; provided, however, that any such agreement shall allow
a StarTek Party to give instructions with respect to such Collection Account
prior to delivery of a Notice of Exclusive Control.

 

“Cross Payment Default” means the Event of Termination set forth in Section
10.01(i)(i).

 

“Cut-Off Date” means (i) for Receivables acquired by the Seller on the Closing
Date, the second Business Day prior thereto, (ii) for Receivables acquired by
the Seller on any Business Day other than the Closing Date, the second Business
Day prior to the date of acquisition, and (iii) for each Monthly Report or
monthly computation thereafter, the last day of the Calculation Period then most
recently ended.

 

“Credit and Collection Policy” means, as the context may require, those
receivables credit and collection policies and practices of any Originators in
effect on the Closing Date and described in Exhibit F, as modified in compliance
with this Agreement.

 

“Daily Report” means a report, in substantially the form of Exhibit D-1,
together with a listing of all Pool Receivables sold to the Purchaser as of the
date of such report.

 

“Days Sales Outstanding” means, as of any day, an amount equal to the product of
(a) 91, multiplied by (b) the amount obtained by dividing (i) the aggregate
Outstanding Balance of all Billed Receivables as of the most recent Cut-Off
Date, by (ii) the aggregate amount of Billed Receivables created during the
three (3) Calculation Periods including and immediately preceding such Cut-Off
Date.

 

“Debt” means, as to any Person at any time of determination, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any bonds, debentures, notes,
note purchase, acceptance or credit facility, or other similar instruments or
facilities, (iii) reimbursement obligations (contingent or otherwise) under any
letter of credit, (iv) any other transaction (including production payments
(excluding royalties), installment purchase agreements, forward sale or purchase
agreements, capitalized leases and conditional sales agreements) having the
commercial effect of a borrowing of money entered into by such Person to finance
its operations or capital requirements (but not including accounts payable
incurred in the ordinary course of such Person’s business payable on terms
customary in the trade), (v) all net obligations of such Person in respect of
interest rate or currency hedges or (vi) any Guaranty of any such Debt.

 

“Deemed Collections” has the meaning set forth in Section 4.01(i)(ii).

 

“Default Horizon Ratio” means, as of any Cut-Off Date, the ratio (expressed as a
decimal) computed by dividing (i) the aggregate sales in respect of Billed
Receivables that have been invoiced during three (3) months ending on such
Cut-Off Date plus one-half of those invoiced during the fourth month preceding
such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off Date with
respect to all Billed Receivables then outstanding.

 

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“Default Ratio” means, as of any Cut-Off Date, the ratio (expressed as a
percentage) computed by dividing (a) the total amount of Billed Receivables that
became Defaulted Receivables during the Calculation Period that includes such
Cut-Off Date, by (b) the aggregate sales giving rise to Billed Receivables
generated during the Calculation Period occurring five (5) Calculation Periods
prior to the Calculation Period ending on such Cut-Off Date.

 

“Defaulted Receivable” means a Receivable:

 

(a)     as to which the Obligor thereof has suffered an Insolvency Proceeding;

 

(b)     which, consistent with the Credit and Collection Policy, should be
written off as uncollectible;

 

(c)     that has been written off the applicable Originator’s or the Seller’s
books as uncollectible; or

 

(d)     as to which any payment, or part thereof, remains unpaid for more than
90 days from the original due date therefor.

 

“Delinquency Ratio” means, at any time, a percentage equal to (a) the aggregate
Outstanding Balance of all Pool Receivables that were Delinquent Receivables at
such time, divided by (b) the aggregate Outstanding Balance of all Pool
Receivables at such time.

 

“Delinquent Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for more than 60 days after the original due date
therefor.

 

“Determination Date” means, with respect to any Monthly Settlement Date, the
second (2nd) Business Day prior to such Monthly Settlement Date.

 

“Dilution” has the meaning set forth in Section 4.01(i)(i).

 

“Dilution Horizon Ratio” means, as of any Cut-Off Date, a ratio (expressed as a
decimal), computed by dividing (a) the aggregate sales giving rise to Billed
Receivables generated during the Calculation Period ending one (1) month prior
to such Cut-Off Date, by (b) the Net Pool Balance as of such Cut-Off Date with
respect to all Billed Receivables. Within thirty (30) days of the completion and
the receipt by the Purchaser of the results of any annual audit or field exam of
the Receivables and the servicing and origination practices of the Master
Servicer and any Originators, the numerator of the Dilution Horizon Ratio may be
adjusted by the Purchaser in its reasonable discretion upon not less than five
(5) Business Days’ prior written notice if such results show a material adverse
change in the weighted average dilution horizon calculation performed by the
auditors during such review.

 

“Dilution Ratio” means, as of any Cut-Off Date, a ratio (expressed as a
percentage), computed by dividing (a) the total amount of decreases in
Outstanding Balances of Billed Receivables due to Dilution during the
Calculation Period ending on such Cut-Off Date, by (b) the aggregate sales
giving rise to Billed Receivables generated during the Calculation Period ending
one (1) month prior to such Cut-Off Date.

 

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“Dilution Reserve” means, for any Calculation Period, the product (expressed as
a percentage) of: (a) the sum of (i) the Stress Factor, times the Adjusted
Dilution Ratio as of the immediately preceding Cut-Off Date, plus (ii) the
Dilution Volatility Component as of the immediately preceding Cut-Off Date,
times (b) the Dilution Horizon Ratio as of the immediately preceding Cut-Off
Date.

 

“Dilution Volatility Component” means, at any time, the product (expressed as a
percentage) of (i) the difference between (a) the highest three-month rolling
average Dilution Ratio over the 12-month period then most recently ended and (b)
the Adjusted Dilution Ratio, and (ii) a fraction, the numerator of which is
equal to the amount calculated in (i)(a) of this definition and the denominator
of which is equal to the amount calculated in (i)(b) of this definition.

 

“Dollar(s)” and “$” each mean the lawful currency of the United States of
America.

 

“Dynamic Reserve” means the sum of the Loss Reserve, the Yield Reserve, the
Dilution Reserve and the Servicing Reserve.

 

“Eligible Assignee” means (a) any Affiliate of the Purchaser, and (b) any bank
or other financial institution organized under the laws of the United States or
a political subdivision thereof having a combined capital and surplus of at
least U.S.$250,000,000.

 

“Eligible Receivable” means, at any time of determination, a Pool Receivable:

 

(a)     the Obligor of which (i) is not a Sanctioned Person, (ii) is not
actually known by the Seller or the Master Servicer to be an Affiliate of any
StarTek Party, (iii) is not a Governmental Authority, and (iv) is VODAFONE Group
PLC or a corporation, limited liability company or other business entity that is
organized under the laws of, and with a place of business in, the United States
of America or a political subdivision thereof;

 

(b)     which is not (i) a Delinquent Receivable or, without duplication, a
Defaulted Receivable, (ii) a Charged-Off Receivable, or (iii) owing from an
Obligor as to which more than 50% of the Aggregate Unpaid Balance of all
Receivables owing from such Obligor and its Affiliates, collectively, are
Defaulted Receivables;

 

(c)     which (unless such Pool Receivable is an Unbilled Receivable) has been
billed to the Obligor thereon and by its terms, is due and payable on or within
60 days of the original billing date therefor; provided, however, that if such
Pool Receivable is a Billed Receivables owing from AT&T or Aetna Inc., it may by
its terms, be due and payable on or within 90 days of the original billing date
therefor;

 

(d)     which (i) is an “account” or a “payment intangible” as defined in
section 9-102 of the UCC of all applicable jurisdictions and (ii) does not
constitute, or arise from the sale of, as-extracted collateral (as defined in
the UCC of any applicable jurisdiction);

 

(e)     which is denominated and payable only in United States dollars to a
Lock-Box or Collection Account located in the United States;

 

(f)     which arises under a Contract (or, unless such Pool Receivable is an
Unbilled Receivable, an Invoice) which, together with such Receivable, is in
full force and effect and constitutes the legal, valid and binding obligation of
the related Obligor enforceable against such 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);

 

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(g)     which arises under a Contract (and, unless such Pool Receivable is an
Unbilled Receivable, an Invoice) that contains an obligation to pay a specified
sum of money, contingent only upon the sale of goods or the provision of
services by the applicable Originator;

 

(h)     which, together with the Contract (and, unless such Pool Receivable is
an Unbilled Receivable, an Invoice) related thereto, does not contravene in any
material respect any Law, rule or regulation applicable thereto (including,
without limitation, usury laws, the Federal Truth in Lending Act, and Regulation
Z, Regulation D and Regulation B of the Federal Reserve Board, and applicable
judgments, decrees, injunctions, writs, orders, or line of action of any court,
arbitrator or other administrative, judicial, or quasi-judicial tribunal or
agency of competent jurisdiction) and with respect to which no part of the
Contract related thereto is in violation of any such Law, rule or regulation;

 

(i)     which satisfies at the time of its origination and at any time of
inclusion in the Net Pool Balance in all material respects all applicable
requirements of the Credit and Collection Policy;

 

(j)     which was generated in the ordinary course of the applicable
Originator’s business;

 

(k)     which arises solely from the sale of goods or the provision of services
to the related Obligor by the applicable Originator, and not by any other Person
(in whole or in part);

 

(l)     which is not subject to (A) any right of rescission or set-off, or (B)
any currently asserted counterclaim or other defense (including defenses arising
out of violation of usury laws) or any other Lien of the applicable Obligor
against the applicable Originator (i.e., the Obligor with the right, claim or
defense has such right claim or defense directly against the applicable
Originator rather than against an Affiliate of such Originator), and the Obligor
thereon holds no right as against the applicable Originator to cause such
Originator to repurchase the goods or merchandise the sale of which gave rise to
such Receivable (except with respect to sale discounts effected pursuant to the
Contract, or defective goods returned in accordance with the terms of the
Contract); provided, however, that if such rescission, set-off, counterclaim,
defense or repurchase right affects only a portion of the Outstanding Balance of
such Receivable, then such Receivable may be deemed an Eligible Receivable to
the extent of the portion of such Outstanding Balance which is not so affected
(i.e., the amount of the outstanding claim or the amount the Obligor is entitled
to set-off against the applicable Originator based on the amount which such
Originator owes the applicable Obligor) would be netted against the applicable
Receivable, but the excess of the Receivable over such outstanding claim or
set-off would be included as an Eligible Receivable);

 

(m)     as to which the applicable Originator has satisfied and fully performed
all obligations on its part with respect to such Receivable required to be
fulfilled by it, and no further action is required to be performed by any Person
with respect thereto other than payment thereon by the applicable Obligor;

 

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(n)     as to which all right, title and interest to and in which has been
validly transferred by the applicable Originator to Seller pursuant to the RSCA,
and Seller has good and marketable title thereto free and clear of any Lien
(other than Permitted Liens);

 

(o)     is required to be paid to a Lock-Box or Collection Account that is
subject to a Control Agreement;

 

(p)     for which no StarTek Party has established any offset or netting
arrangements with the related Obligor in connection with the ordinary course of
payment of such Receivable;

 

(q)     which does not relate to the sale of any consigned goods or finished
goods which have incorporated any consigned goods into such finished goods;

 

(r)     as to which none of the representations, warranties or covenants in this
Agreement or any other Transaction Document with respect to such Receivable (or
Receivables generally) is untrue, misleading or in default in any material
respect;

 

(s)     which is not owing by any Obligor (a) as to which any Insolvency
Proceeding has been commenced (by or against), or (b) which has failed, has
suspended or ceased doing business, is liquidating, dissolving, or winding up
its affairs, or is known by the Master Servicer to not be Solvent; and

 

(t)     which is not evidenced by any chattel paper or instrument of any kind
and has not been reduced to judgment.

 

“Eligible Unbilled Receivable” means, at any time, any Unbilled Receivable that
meets each of the requirements set forth in the definition of “Eligible
Receivable” other than any requirement in clause (c), (f), (g)or (h) thereof to
the extent it states that such Pool Receivable must have been billed or must be
evidenced by an Invoice), but only if (a) any Originator has recognized the
related revenue on its financial books and records under GAAP and (b) not more
than forty-five (45) days have elapsed since the date such Unbilled Receivable
arose. The Purchaser shall have the right, in its Permitted Discretion, to add
additional eligibility requirements or to impose a Concentration Percentage on
Eligible Unbilled Receivables.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and the
applicable regulations thereunder, each as amended or modified from time to
time.

 

“ERISA Affiliate” means any Person who together with any StarTek Party is
treated as a single employer within the meaning of Section 414(b) or (c) of the
Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Plan; (b) the
withdrawal of any StarTek Party or any ERISA Affiliate from a Plan subject to
Section 4063 of ERISA during a plan year in which such entity was a “substantial
employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by any StarTek Party or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is insolvent
(within the meaning of Section 4245 of ERISA); (d) the filing of a notice of
intent to terminate or the treatment of a Plan amendment as a termination under
Sections 4041 or 4041A of ERISA, respectively (other than a standard termination
under Section 4041(b) of ERISA), (e) the institution by the PBGC of proceedings
to terminate a Plan or Multiemployer Plan; (f) the imposition of any liability
under Sections 4062, 4063, 4064, 4069, 4201 or 4204 upon any StarTek Party or
any ERISA Affiliate; (g) the conditions for the imposition of a lien under
Section 430(k) of the Code or Section 303(k) of ERISA shall have been met with
respect to any Plan; (h) any Foreign Benefit Event or (i) any other similar
event or condition with respect to a Plan or Multiemployer Plan that would
reasonably be expected to result in material liability of any StarTek Party.

 

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“Event of Termination” has the meaning specified in Section 10.01.

 

“Excess Concentration” means, as of any date, the sum of the amounts calculated
for each of the Obligors equal to the excess (if any) of (i) the aggregate
Outstanding Balance of the Eligible Receivables of such Obligor and its
Affiliates (considered as if they were one and the same Obligor), over (ii) the
product of (x) such Obligor’s Concentration Percentage, multiplied by (y) the
aggregate Outstanding Balance of all Eligible Receivables then in the
Receivables Pool.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended or
otherwise modified from time to time.

 

“Excluded Obligor” means each of T-Mobile USA, Inc. and Charter Communications
Operating LLC, and such other Obligors as may be agreed by the Seller and the
Purchaser.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
an Affected Person or required to be withheld or deducted from a payment to an
Affected Person: (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes and branch profits Taxes, in each case, (i)
imposed as a result of such Affected Person being organized under the laws of,
or having its principal office or, in the case of the Purchaser, its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of
an assignee of the Purchaser or a purchaser that has changed its lending office,
U.S. federal withholding Taxes imposed on amounts payable to or for the account
of such assignee with respect to an applicable interest in its Capital or
Commitment pursuant to a law in effect on the date on which (i) such assignee
acquires an Investment or its Commitment or (ii) such Purchaser changes its
lending office, except in each case to the extent that amounts with respect to
such Taxes were payable either to the Purchaser immediately before such assignee
became a party hereto or to the Purchaser immediately before it changed its
lending office, (c) any U.S. federal withholding Taxes imposed pursuant to
FATCA, and (d) Taxes attributable to a failure by an Affected Party to comply
with Section 5.03(f).

 

“Facility Limit” means (a) on any date of determination prior to the Termination
Date, an amount equal to the Commitment, and (b) on any date of determination on
or after the Termination Date, an amount equal to the aggregate Capital
outstanding. References to the unused portion of the Facility Limit shall mean,
at any time of determination, an amount equal to (i) the Facility Limit at such
time, minus (ii) the aggregate outstanding Capital at such time.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental
agreement entered into between the United States and any other Governmental
Authority in connection with the implementation of the foregoing and any fiscal
or regulatory legislation, rules or official practices adopted pursuant to any
such intergovernmental agreement.

 

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“Federal Funds Rate” means, for any day, the greater of (a) 0% per annum and (b)
the per annum rate set forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the Federal Reserve Board
(including any such successor, “H.15(519)”) for such day opposite the caption
“Federal Funds (Effective).” If on any relevant day such rate is not yet
published in H. 15(519), the rate for such day will be the rate set forth in the
daily statistical release designated as the Composite 3:30 p.m. Quotations for
U.S. Government Securities, or any successor publication, published by the
Federal Reserve Bank of New York (including any such successor, the “Composite
3:30 p.m. Quotations”) for such day under the caption “Federal Funds Effective
Rate.” If on any relevant day the appropriate rate is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day
will be the arithmetic mean as determined by the Purchaser of the rates for the
last transaction in overnight Federal funds arranged before 9:00 a.m. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Purchaser.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

“Fee Letter” has the meaning specified in Section 2.03(a).

 

“Fees” has the meaning specified in Section 2.03(a).

 

“Final Payout Date” means the date on or after the Termination Date when (i) the
aggregate outstanding Capital has been reduced to zero and all accrued and
unpaid Yield has been paid in full, (ii) all other Seller Obligations have been
paid in full, (iii) all other amounts owing to the Purchaser and any other
Seller Indemnified Party or Affected Person hereunder and under the other
Transaction Documents have been paid in full and (iv) all accrued Servicing Fees
have been paid in full.

 

“Financial Officer” of any Person means, the chief financial officer, principal
accounting officer, treasurer, controller or V.P. Treasury of such Person.

 

“Foreign Benefit Event” means, with respect to any Foreign Plan, (a) the
existence of unfunded liabilities in excess of the amount permitted under any
applicable Law, or in excess of the amount that would be permitted absent a
waiver from a Governmental Authority, (b) the failure to make the required
contributions or payments, under any applicable Law, on or before the due date
for such contributions or payments, (c) the receipt of a notice by a
Governmental Authority relating to the intention to terminate any such Foreign
Plan or to appoint a trustee or similar official to administer any such Foreign
Plan, or alleging the insolvency of any such Foreign Plan, (d) the incurrence of
any liability by any StarTek Party or any of their applicable Subsidiaries under
applicable Law on account of the complete or partial termination of such Foreign
Plan or the complete or partial withdrawal of any participating employer therein
or (e) the occurrence of any transaction that is prohibited under any applicable
Law and that would reasonably be expected to result in the incurrence of any
liability by any StarTek Party or any of their Subsidiaries, or the imposition
on any StarTek Party or any of their Subsidiaries of, any fine, excise tax or
penalty resulting from any noncompliance with any applicable Law.

 

“Foreign Plan” means any benefit plan that is maintained or is contributed to by
a StarTek Party or any ERISA Affiliate that, under the applicable Law of any
jurisdiction other than the United States, is required to be funded through a
trust or other funding vehicle other than a trust or funding vehicle maintained
exclusively by a Governmental Authority.

 

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“GAAP” means generally accepted accounting principles in the United States of
America, consistently applied.

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank)
and any group or body charged with setting financial accounting or regulatory
capital rules or standards (including, without limitation, the Financial
Accounting Standards Board, the Bank for International Settlements or the Basel
Committee on Banking Supervision or any successor or similar authority to any of
the foregoing).

 

“Guaranteed Obligations” has the meaning set forth in Section 3.01.

 

“Guaranty” means, with respect to any Person, any obligation of such Person
guarantying or in effect guarantying any Debt, liability or obligation of any
other Person in any manner, whether directly or indirectly, including any such
liability arising by virtue of partnership agreements, including any agreement
to indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.

 

“Indemnification Guarantor” means StarTek, Inc., a Delaware corporation.

 

“Indemnification Guarantee” means the Indemnification Guarantee, dated as of the
Closing Date, by the Indemnification Guarantor in favor of the Purchaser for the
benefit of the Secured Parties.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Seller or any of its Affiliates under any Transaction Document and (b) to the
extent not otherwise described in clause (a) above, Other Taxes.

 

“Independent Manager” has the meaning set forth in Section 8.03(c).

 

“Initial Schedule of Sold Receivables” means the list identifying all Sold
Receivables as of the Closing Date, which list is attached as Schedule IV
hereto.

 

“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person,
composition, marshaling of assets for creditors of a Person, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, in each of clauses (a) and (b) undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.

 

“Intended Tax Treatment” has the meaning set forth in Section 12.14.

 

“Interim Settlement Date” means each Business Day after the Closing Date.

 

“Investment” means any payment of Capital to the Seller by the Purchaser
pursuant to Section 2.01(a) or 2.02.

 

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“Investment Company Act” means the Investment Company Act of 1940, as amended or
otherwise modified from time to time.

 

“Investment Request” means a letter in substantially the form of Exhibit A
hereto executed and delivered by the Seller to the Purchaser pursuant to Section
2.02(a).

 

“Invoice” means, with respect to any Receivable, any paper or electronic bill,
statement or invoice for goods sold or services rendered by any Originator to an
Obligor.

 

“IRS” means the Internal Revenue Service.

 

“Law” means any international, foreign, Federal, state and local statute,
treaty, rule, guideline, regulation, ordinance, code and administrative or
judicial precedent or authority, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and any applicable administrative
order, directed duty, request, license, authorization or permit of, or agreement
with, any Governmental Authority, in each case whether or not having the force
of law.

 

“LIBOR” means, on any date of determination, the rate per annum obtained by
dividing (a) (i) the rate per annum (rounded upward to the next whole multiple
of one-hundredth of one percent (1/100 of 1%)) equal to the London Interbank
Offered Rate or a comparable or successor rate, which rate is approved by the
Purchaser, as published on the applicable Reuters screen page or such other
commercially available source providing such quotations as may be designated by
the Purchaser from time to time for deposits in Dollars with a one-month term
(the “LIBOR Screen Rate”), determined as of approximately 11:00 a.m. (London,
England time) on such date of determination, or (ii) in the event the LIBOR
Screen Rate does not appear on such page or service or if such page or service
shall cease to be available, the rate per annum (rounded upward to the next
whole multiple of one-hundredth of one percent (1/100 of 1%)) equal to the rate
determined by the Purchaser to be the offered rate on such other page or other
service which displays an average settlement rate for deposits (for delivery on
the first day of such period) with a one-month term in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such determination date, or
(iii) in the event the rates referenced in the preceding clauses (i) and (ii)
are not available, the rate per annum (rounded upward to the next whole multiple
of one-hundredth of one percent (1/100 of 1%)) equal to quotation rate (or the
arithmetic mean of rates) offered to first class banks in the London interbank
market for one-month deposits in Dollars of amounts in same-day funds comparable
to the principal amount of the applicable Investment of the Purchaser, for which
LIBOR is then being determined as of approximately 11:00 a.m. (London, England
time) on such date of determination, by (b) an amount equal to the number one
minus the Applicable Reserve Requirement. Notwithstanding anything contained
herein to the contrary, LIBOR shall not be less than 0%. As used herein, the
“Applicable Reserve Requirement” means, the maximum rate, expressed as a
decimal, at which reserves (including any basic marginal, special, supplemental,
emergency or other reserves) are required to be maintained with respect to any
Investment against “Eurocurrency liabilities” (as such term is defined in
Regulation D of the Board of Governors of the federal Reserve System, as in
effect from time to time) under regulations issued from time to time by said
Board of Governors or other applicable banking regulator. Without limiting the
effect of the foregoing but without duplication of any existing or future
reserve, the Applicable Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (x) any category
of liabilities which includes deposits by reference to which LIBOR is to be
determined, or (y) any category of extensions of credit or other assets which
include the Investments bearing Yield at a Yield Rate determined by reference to
LIBOR. All Investments accruing Yield at the LIBOR Index Rate shall be deemed to
constitute Eurocurrency liabilities and, as such, shall be deemed subject to
reserve requirements without benefit of credit for pro ration, exception or
offsets that may be available from time to time to the Purchaser.

 

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“LIBOR Index Rate” or “LIR” means, on any date of determination, a per annum
rate equal to the greater of 0% or LIBOR determined with respect to an interest
period of one month. The LIBOR Index Rate shall be determined daily on each
Business Day and shall be increased or decreased, as applicable, automatically
and without notice to any Person on the date of each such determination. Upon
the Seller’s or the Master Servicer’s request from time to time, the Purchaser
will quote the current LIBOR Index Rate to them.

 

“LIBOR Termination Date” has the meaning set forth in Section 5.06(a).

 

“Lien” means, on any date, any mortgage, deed of trust, pledge, security
interest, hypothecation, charge, assignment, deposit arrangement, encumbrance,
lien (statutory or other), preference, priority or other security agreement,
preferential arrangement or similar agreement or arrangement in the nature of a
security interest of any kind or nature whatsoever, including any conditional
sale or other title retention agreement and any assignment, deposit arrangement
or lease intended as, or having the effect of, security and any filed financing
statement or other notice of any of the foregoing that remains effective on such
date that was filed with the debtor’s authorization or pursuant to a mortgage,
pledge agreement or security agreement signed by the debtor.

 

“LIR Investment” means any Investment while Yield is accruing thereon at the
LIBOR Index Rate.

 

“Lock-Box” means each locked postal box with respect to which a bank who has
executed a Control Agreement has been granted exclusive access for the purpose
of retrieving and processing payments made on the Receivables and which is
listed on Schedule II.

 

“Loss Reserve” means, for any Calculation Period, the product (expressed as a
percentage) of (a) the Stress Factor, times (b) the highest three-month rolling
average Default Ratio during the 12 Calculation Periods ending on the
immediately preceding Cut-Off Date, times (c) the Default Horizon Ratio as of
the immediately preceding Cut-Off Date.

 

“Master Servicer” has the meaning set forth in the preamble to this Agreement.

 

“Master Servicer Indemnified Amounts” has the meaning set forth in Section
11.02(a).

 

“Master Servicer Indemnified Party” has the meaning set forth in Section
11.02(a).

 

“Material Adverse Effect” means a material adverse change in, or material
adverse effect on, any of the following:

 

(a)     the operations, business, assets, properties, liabilities (actual or
contingent), or condition (financial or otherwise) of (i) the Seller; (ii) the
Master Servicer; or (iii) the Indemnification Guarantor and the Originators
considered as a whole;

 

(b)     the ability of the Seller, the Master Servicer, the Indemnification
Guarantor or any Originator to perform its obligations under this Agreement or
any other Transaction Document to which it is a party;

 

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(c)     the validity or enforceability of this Agreement or any other
Transaction Document, or the validity, enforceability, value or collectability
of any material portion of the Pool Receivables;

 

(d)     the status, perfection, enforceability or priority of the Purchaser’s
ownership or security interest in the Sold Assets or the Seller Collateral; or

 

(e)     the rights and remedies of the Purchaser under the Transaction Documents
or associated with its respective interest in the Sold Assets or the Seller
Collateral.

 

“Monthly Report” means a report in substantially the form of Exhibit D-2 hereto
(appropriately completed), furnished by the Master Servicer to the Purchaser
pursuant to Section 8.02(b)(vi); provided, however, that the reports delivered
for the partial month of [March 2020] may be in summary form reasonably
acceptable to the Purchaser and the Master Servicer.

 

“Monthly Reporting Date” means the 15th day of each calendar month after the
Closing Date (or if such day is not a Business Day, the next occurring Business
Day), beginning May 15, 2020.

 

“Monthly Settlement Date” means the second Business Day after each Monthly
Reporting Date.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized statistical rating organization.

 

“Multiemployer Plan” means a “multiemployer plan,” as defined in Section 3(37)
or 4001(a)(3) of ERISA, in respect of which any StarTek Party or any ERISA
Affiliate has any obligation or liability, contingent or otherwise.

 

“Net Pool Balance” means, at any time, (a) the aggregate Outstanding Balance of
all Eligible Receivables at such time in the Receivables Pool, minus (b) the
Excess Concentration at such time.

 

“Non-Rated Obligor” means any Obligor rated below A-3 or P-3 by S&P or Moody’s,
respectively, or which is not rated by either S&P or Moody’s.

 

“Notice of Exclusive Control” means, with respect to a Control Agreement, a
notice given by the Purchaser to the related Collection Account Bank in
substantially the form prescribed by or attached to such Control Agreement
pursuant to which the Purchaser exercises its exclusive right to direct the
disposition of funds on deposit in the applicable Collection Account(s) in
accordance with such Control Agreement.

 

“Obligor” means, with respect to any Receivable, the Person obligated to make
payments pursuant to the Contract relating to such Receivable.

 

“OFAC” means the U.S. Department of Treasury’s Office of Foreign Assets Control.

 

“Originator” has the meaning set forth in the RSCA, as the same may be modified
from time to time.

 

“Other Connection Taxes” means, with respect to any Affected Person, Taxes
imposed as a result of a present or former connection between such Affected
Person and the jurisdiction imposing such Tax (other than connections arising
from such Affected Person having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected
a security interest under, engaged in any other transaction pursuant to or
enforced any Transaction Document, or sold or assigned an interest in any
Capital or Transaction Document).

 

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“Other Taxes” means any and all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes or any other excise or property
Taxes, charges or similar levies or fees arising from any payment made hereunder
or from the execution, delivery, performance, filing, recording or enforcement
of, from the receipt or perfection of a security interest under, or otherwise in
respect of, this Agreement, the other Transaction Documents and the other
documents or agreements to be delivered hereunder or thereunder.

 

“Outstanding Balance” means, at any time of determination, with respect to any
Receivable, the then outstanding principal balance thereof.

 

“Participant” has the meaning set forth in Section 12.03(a).

 

“Participant Register” has the meaning set forth in Section 12.03(a).

 

“PATRIOT Act” has the meaning set forth in Section 12.15.

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Funding Rules” means the requirements relating to the minimum required
contributions (including any installment payments) to Plans and Multiemployer
Plans, as applicable, and set forth in Sections 412, 430, 431, 432 and 436 of
the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable business judgment (from the perspective of a secured,
non-recourse, asset-based lender extending credit of similar amounts and types
to similar special purpose sellers).

 

“Permitted Lien” means (a) any Lien arising under the RSCA in favor of the
Seller, and (b) any Lien arising under this Agreement in favor of the Purchaser
(for the benefit of the Secured Parties).

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or any Governmental Authority.

 

“Plan” means any “employee pension benefit plan” (other than a Multiemployer
Plan) within the meaning of Section 3(2) of ERISA that is maintained or is
contributed to by a StarTek Party or any ERISA Affiliate, or to which any
StarTek Party or any ERISA Affiliate is obligated to contribute or has any
liability, and is subject to Title IV of ERISA or the minimum funding standards
under Section 412 of the Code or Section 302 of ERISA.

 

“Pool Receivable” means a Receivable in the Receivables Pool. For the avoidance
of doubt, the Pool Receivables shall include both Sold Receivables and Unsold
Receivables and may include both Billed Receivables and Unbilled Receivables.

 

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“Prime Rate” means the greater of (a) 0% per annum and (b) the rate announced by
Regions from time to time as its prime rate which is one of several interest
rate bases used by Regions. Regions lends and invests at rates both above and
below its prime rate, and the Seller acknowledges that Regions’ prime rate is
not represented or intended to be the lowest or most favorable rate of interest
offered by Regions.

 

“Purchaser’s Account” means corporate clearing account no. 1102450400100 at
Regions Bank, Attention: Laurie Allen, ABA No. 062005690, Reference: StarTek
Receivables Funding, LLC, or any other account or accounts as the Purchaser may
indicate from time to time.

 

“Purchaser” means Regions Bank, and its successor and permitted assigns.

 

“Receivable” means any right to payment of a monetary obligation, whether or not
earned by performance, owed by an Obligor other than an Excluded Obligor to an
Originator or the Seller (as assignee of such Originator), whether constituting
an account, chattel paper, payment intangible, instrument or general intangible,
in each instance arising in connection with the sale of goods that have been or
are to be sold or for services rendered or to be rendered, and includes, without
limitation, the obligation to pay any service charges, finance charges,
interest, fees and other charges with respect thereto. Any such right to payment
arising from any one transaction, including, without limitation, any such right
to payment represented by an individual Invoice or agreement, shall constitute a
Receivable separate from a Receivable consisting of any such right to payment
arising from any other transaction.

 

“Receivables Pool” means, at any time of determination, all of the then
outstanding Receivables (including both Sold Receivables and Unsold Receivables)
transferred (or purported to be transferred) to the Seller pursuant to the RSCA
prior to the Termination Date.

 

“Records” means, with respect to any Receivable, all Contracts and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable, any Related Security
therefor and the related Obligor.

 

“Regions” has the meaning set forth in the preamble to this Agreement.

 

“Register” has the meaning set forth in Section 12.03(b).

 

“Registered Public Accounting Firm” has the meaning specified in the Securities
Laws and shall be independent of the Company as prescribed in the Securities
Laws.

 

“Related Rights” has the meaning set forth in Section 1.1 of the RSCA.

 

“Related Security” means, with respect to any Receivable:

 

(a)     all right, title and interest (if any) in the goods, the sale of which
gave rise to such Receivable, and any and all insurance contracts with respect
thereto;

 

(b)     all other Security Interests or Liens and property subject thereto from
time to time, if any, purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all financing statements and security agreements describing any collateral
securing such Receivable;

 

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(c)     all guaranties, letters of credit, insurance and other supporting
obligations, agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise;

 

(d)     all service contracts and other contracts and agreements associated with
such Receivable;

 

(e)     all Records related to such Receivable;

 

(f)     all of each Originator’s right, title and interest in each Lock-Box and
each Collection Account;

 

(g)     all of Seller’s rights and remedies under the Indemnification Guarantee
and the RSCA; and

 

(h)     all Collections and other proceeds (as defined in the UCC) of any of the
foregoing.

 

“Release” has the meaning set forth in Section 4.01(a).

 

“Replacement Index” has the meaning set forth in Section 5.06(a).

 

“Required Reserve” means, on any day during a month, the product of (a) the
greater of (i) the Reserve Floor and (ii) the Dynamic Reserve, times (b) the Net
Pool Balance as of the Cut-Off Date immediately preceding such month.

 

“Reportable Event” means any reportable event as defined in Section 4043(c) of
ERISA or the regulations issued thereunder with respect to a Plan.

 

“Representatives” has the meaning set forth in Section 12.06(c).

 

“Required Capital Amount” means $1,050,000.

 

“Reserve Floor” means, for any Calculation Period, the sum (expressed as a
percentage) of (i) the product of the Adjusted Dilution Ratio and the Dilution
Horizon Ratio, plus (ii) the Yield Reserve, plus (iii) the Servicing Reserve, in
each case, as of the immediately preceding Cut-Off Date, plus (iv) 12.00%.

 

“Restricted Payments” has the meaning set forth in Section 8.01(r).

 

“RSCA” means the Receivables Sale and Contribution Agreement, dated as of the
Closing Date, among any Originators, the Seller and the Master Servicer, as the
same may be amended, restated or otherwise modified from time to time.

 

“RSCA Termination Event” has the meaning set forth in the RSCA.

 

“S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial
Services LLC business, and any successor thereto that is a nationally recognized
statistical rating organization.

 

“Sale Date” means each of the following: (a) the last day of each fiscal quarter
of the Seller and (b) each Business Day on or after the Closing Date designated
as a “Sale Date” by the Seller in its discretion by prior written notice thereof
to the Purchaser; provided, however, that no Sale Date shall occur on or after
the Termination Date.

 

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“Sanctioned Country” means at any time, a country, region or territory which is
itself (or whose government is) the subject or target of any Sanctions
(including, as of the Closing Date, Cuba, Burma (Myanmar), Iran, North Korea,
Syria and Crimea).

 

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC (including
OFAC’s Specially Designated Nationals and Blocked Persons List and OFAC’s
Consolidated Non-SDN List), the U.S. Department of State, the United Nations
Security Council, the European Union, any European member state, Her Majesty’s
Treasury, or other relevant sanctions authority, (b) any Person operating,
organized or resident in a Sanctioned Country, (c) any Person owned or
controlled by, or acting or purporting to act for or on behalf of, directly or
indirectly, any such Person or Persons described in clauses (a) and (b),
including a Person that is deemed by OFAC to be a Sanctions target based on the
ownership of such legal entity by Sanctioned Person(s) or (d) any Person
otherwise a target of Sanctions, including vessels and aircraft, that are
designated under any Sanctions program.

 

“Sanctions” means any and all economic or financial sanctions, sectoral
sanctions, secondary sanctions, trade embargoes and restrictions and
anti-terrorism laws, including but not limited to those imposed, administered or
enforced from time to time by the U.S. government (including those administered
by OFAC or the U.S. Department of State), the United Nations Security Council,
the European Union, any European member state, Her Majesty’s Treasury, or other
relevant sanctions authority in any jurisdiction in which (a) any StarTek Party
or any of its Subsidiaries or Affiliates is located or conducts business, (b) in
which any of the proceeds of the Investments will be used, or (c) from which
repayment of the Seller Obligations will be derived.

 

“Scheduled Termination Date” means April 17, 2023.

 

“SEC” means the U.S. Securities and Exchange Commission or any governmental
agencies substituted therefor.

 

“Secured Parties” means, collectively, the Purchaser, each Seller Indemnified
Party and each Affected Person.

 

“Securities Act” means the Securities Act of 1933, as amended or otherwise
modified from time to time.

 

“Security Interest” has the meaning ascribed thereto in Article 9 of the UCC.

 

“Seller” has the meaning specified in the preamble to this Agreement.

 

“Seller Collateral” has the meaning set forth in Section 3.09(a).

 

“Seller Guaranty” has the meaning set forth in Section 3.01.

 

“Seller Indemnified Amounts” has the meaning set forth in Section 11.01(a).

 

“Seller Indemnified Party” has the meaning set forth in Section 11.01(a).

 

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“Seller Obligation Final Due Date” means the date that (i) is the Scheduled
Termination Date or (ii) such earlier date on which the aggregate Capital
outstanding becomes due and payable pursuant to Section 10.01.

 

“Seller Obligations” means all present and future indebtedness, reimbursement
obligations, and other liabilities and obligations (howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, or due or to
become due) of the Seller to the Purchaser, any Seller Indemnified Party and/or
any Affected Person, arising under or in connection with this Agreement or any
other Transaction Document or the transactions contemplated hereby or thereby,
and shall include, without limitation, all obligations of the Seller in respect
of the Seller Guaranty and the payment of all Capital, Yield, Fees and other
amounts due or to become due under the Transaction Documents (whether in respect
of fees, costs, expenses, indemnifications or otherwise), including, without
limitation, interest, fees and other obligations that accrue after the
commencement of any Insolvency Proceeding with respect to the Seller (in each
case whether or not allowed as a claim in such proceeding).

 

“Seller’s Net Worth” means, at any time of determination, an amount equal to (i)
the Outstanding Balance of all Pool Receivables at such time, minus (ii) the sum
of (A) the aggregate Capital outstanding at such time, plus (B) all accrued and
unpaid Yield at such time, plus (C) the aggregate accrued and unpaid Fees at
such time, plus (D) the aggregate outstanding principal balance of the
Subordinated Note at such time, plus (E) the aggregate accrued and unpaid
interest on the Subordinated Note at such time, plus (F) without duplication,
the aggregate accrued and unpaid other Seller Obligations at such time.

 

“Servicing Fee” means the fee referred to in Section 9.06(a) of this Agreement.

 

“Servicing Fee Rate” means the rate referred to in Section 9.06(a) of this
Agreement.

 

“Servicing Reserve” means, the product (expressed as a percentage) of (a) 1.0%,
times (b) a fraction, the numerator of which is the highest Days Sales
Outstanding for the most recent 12 months and the denominator of which is 360.

 

“Settlement Account” means account no. 4033973 in the name of the Seller, at BMO
Harris Bank, N.A., in Chicago, Illinois, ABA No. 071025661.

 

“Settlement Date” means a Monthly Settlement Date or an Interim Settlement Date.

 

“Sold Assets” has the meaning set forth in Section 2.01(b).

 

“Sold Receivables” means, collectively, (i) the Pool Receivables specified as
“Sold Receivables” on the Initial Schedule of Sold Receivables, (ii) all
additional Pool Receivables specified as “Sold Receivables” identified along
with the relevant Daily Report reflecting a subsequent Investment made hereunder
and (iii) all additional Pool Receivables designated as “Sold Receivables” and
transferred by the Seller pursuant to Section 2.01(b) in connection with a
Release as contemplated by the first paragraph in Section 4.01(a).

 

“Solvent” means, with respect to any Person and as of any particular date, (i)
the present fair market value (or present fair saleable value) of the assets of
such Person is not less than the total amount required to pay the probable
liabilities of such Person on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured, (ii)
such Person is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (iii) such Person is not incurring debts
or liabilities beyond its ability to pay such debts and liabilities as they
mature and (iv) such Person is not engaged in any business or transaction, and
is not about to engage in any business or transaction, for which its property
would constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged.

 

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“Special Concentration Limit” has the meaning set forth in the “Concentration
Percentage” definition.

 

“StarTek” has the meaning specified in the preamble to this Agreement.

 

“StarTek Group” means (i) StarTek, the Indemnification Guarantor and any
Originator, (ii) each person that directly or indirectly, owns or controls,
whether beneficially, or as a trustee, guardian or other fiduciary, five percent
(5%) or more of the Capital Stock in StarTek, (iii) each person that controls,
is controlled by or is under common control with StarTek and (iv) each of such
person’s officers, directors, managers, joint venturers and partners. For the
purposes of this definition, “control” of a person means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through the ownership of
voting securities, by contract or otherwise

 

“StarTek Party” means the Seller, the Master Servicer, each Sub-Servicer, any
Originator and the Indemnification Guarantor.

 

“Stress Factor” means 2.0.

 

“Subordinated Note” has the meaning set forth in the RSCA.

 

“Sub-Servicer” has the meaning set forth in Section 9.01(d).

 

“Subsidiary” means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority and all interest,
penalties, additions to tax and any similar liabilities with respect thereto.

 

“Termination Date” means the earliest to occur of (a) the Scheduled Termination
Date, (b) the date on which the “Termination Date” is declared or deemed to have
occurred under Section 10.01 and (c) the date selected by the Seller, upon three
(3) Business Days’ written notice to the Purchaser, on which the Commitment has
been reduced to zero pursuant to Section 2.02(e).

 

“Three-Month Average Default Ratio” means, as of the last day of any Calculation
Period, the average of the Default Ratio for such Calculation Period and each of
the two immediately preceding Calculation Periods.

 

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“Three-Month Average Delinquency Ratio” means, as of any Cut-Off Date, the
average of the Delinquency Ratios for the Calculation Period ended on such
Cut-Off Date and each of the two immediately preceding Calculation Periods.

 

“Three-Month Average Dilution Ratio” means, as of any Cut-Off Date, the average
of the Dilution Ratio for the Calculation Period ended on such Cut-Off Date and
each of the two immediately preceding Calculation Periods.

 

“Transaction Documents” means this Agreement, the RSCA, the Control Agreements,
the Fee Letter, the Subordinated Notes, the Indemnification Guarantee, each
Monthly Report, each Daily Report, and all compliance certificates, instruments
and notices executed or delivered by or on behalf of any StarTek Party under or
in connection with this Agreement.

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.

 

“Unbilled Receivable” means a Pool Receivable for which an Invoice has not yet
been sent to the applicable Obligor.

 

“Unmatured Event of Termination” means an event that but for notice or lapse of
time or both would constitute an Event of Termination.

 

“Unsold Receivables” means, at any time, all Pool Receivables that are not then
Sold Receivables.

 

“U.S. Person” means a United States person (within the meaning of Section
7701(a)(30) of the Code).

 

“U.S. Tax Compliance Certificate” has the meaning set forth in
Section 5.03(f)(ii)(B)(3).

 

“Volcker Rule” means Section 13 of the U.S. Bank Holding Company Act of 1956, as
amended, and the applicable rules and regulations thereunder.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Yield” means an amount payable to the Purchaser in respect of its Capital
accruing on each day when any Capital is outstanding in accordance with Section
2.03(b).

 

“Yield Period” means, (a) before the Termination Date: (i) initially, the period
commencing on the date of the Investment pursuant to which such Capital (or
portion thereof) is funded by the Purchaser to the Seller pursuant to Section
2.01 (or in the case of any fees payable hereunder, commencing on the Closing
Date) and ending on (but not including) the last day of the applicable
Calculation Period and (ii) thereafter, each Calculation Period and (b) on and
after the Termination Date, such period (including a period of one day) as shall
be selected from time to time by the Purchaser or, in the absence of any such
selection, each Calculation Period.

 

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“Yield Rate” means, for any day in any Yield Period for the Capital (or any
portion thereof), a rate per annum equal to the sum of LIR plus the Applicable
Margin; provided that the “Yield Rate” on any day while an Event of Termination
has occurred and is continuing shall be a rate per annum equal to the sum of
2.00% per annum plus the greater of (a) the applicable “Yield Rate” as set forth
above and (b) the Base Rate in effect on such day; provided, further, that (i)
no provision of this Agreement shall require the payment or permit the
collection of Yield in excess of the maximum permitted by applicable Law, and
(ii) Yield for any Capital (or such portion thereof) shall not be considered
paid by any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.

 

“Yield Reserve” means, for any Calculation Period, the greater of (a) 0.50% and
(b) the product (expressed as a percentage) of (i) the Stress Factor, times (ii)
the Base Rate as of the immediately preceding Cut-Off Date times (iii) a
fraction, the numerator of which is the highest Days Sales Outstanding for the
most recent 12 Calculation Periods and the denominator of which is 360.

 

Section 1.02.     Other Interpretative Matters. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. All
terms used in Article 9 of the UCC in the State of New York and not specifically
defined herein, are used herein as defined in such Article 9. Unless otherwise
expressly indicated, all references herein to “Article,” “Section,” “Schedule”,
“Exhibit” or “Annex” shall mean articles and sections of, and schedules,
exhibits and annexes to, this Agreement. For purposes of this Agreement, the
other Transaction Documents and all such certificates and other documents,
unless the context otherwise requires: (a) references to any amount as on
deposit or outstanding on any particular date means such amount at the close of
business on such day; (b) the words “hereof,” “herein” and “hereunder” and words
of similar import refer to such agreement (or the certificate or other document
in which they are used) as a whole and not to any particular provision of such
agreement (or such certificate or document); (c) references to any Article,
Section, Schedule, Exhibit or Annex are references to Articles, Sections,
Schedules, Exhibits and Annexes in or to such agreement (or the certificate or
other document in which the reference is made), and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (d) the term “including” means “including without limitation”; (e)
references to any applicable Law refer to that applicable Law as amended from
time to time and include any successor applicable Law; (f) references to any
agreement refer to that agreement as from time to time amended, restated or
supplemented or as the terms of such agreement are waived or modified in
accordance with its terms; (g) references to any Person include that Person’s
permitted successors and assigns; (h) headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof; (i) unless otherwise provided, in the calculation of time from
a specified date to a later specified date, the term “from” means “from and
including”, and the terms “to” and “until” each means “to but excluding”; (j)
terms in one gender include the parallel terms in the neuter and opposite
gender; (k) references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on such day and (l)
the term “or” is not exclusive.

 

ARTICLE II     

TERMS OF THE PURCHASES AND INVESTMENTS

 

Section 2.01.     Purchase Facility.

 

(a)     Investments. Upon a request by the Seller pursuant to Section 2.02, and
on the terms and subject to the conditions hereinafter set forth, the Purchaser
shall make payments of Capital to the Seller from time to time on Business Days
during the period from the Closing Date to (but excluding) the Termination Date.
Each such payment of Capital by the Purchaser to the Seller shall constitute an
Investment hereunder for all purposes. Under no circumstances shall the
Purchaser be obligated to make any Investment if, after giving effect thereto:

 

(i)     the aggregate Capital outstanding would exceed the Facility Limit at
such time; or

 

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(ii)     the aggregate Capital outstanding would exceed the Capital Coverage
Amount at such time.

 

(b)     Sale of Receivables and Other Sold Assets. In consideration of the
Purchaser’s agreement to make Investments in accordance with the terms hereof,
the Seller, on each Sale Date, hereby sells, assigns and transfers to the
Purchaser, all of the Seller’s right, title and interest in, to and under all of
the following, whether now or hereafter owned, existing or arising
(collectively, the “Sold Assets”): (i) all Sold Receivables, (ii) all Related
Security with respect to such Sold Receivables, (iii) all Collections with
respect to such Sold Receivables and (iv) all proceeds of the foregoing. Such
sales, assignments and transfers by the Seller shall, in each case, occur and be
deemed to occur for all purposes in accordance with the terms hereof
automatically without further action, notice or consent of any party.

 

(c)     Intended Characterization as a Purchase and Sale. It is the intention of
the parties to this Agreement that the transfer and conveyance of the Seller’s
right, title and interest in, to and under the Sold Assets to the Purchaser on
each Sale Date pursuant to this Agreement shall constitute a purchase and sale
and not a pledge for security, and such purchase and sale of the Sold Assets
hereunder shall be treated as a sale for all purposes (except as provided in
Sections 2.01(d) and 12.14). For the avoidance of doubt, this clause (c) shall
not be construed to limit or otherwise modify Section 5.05 or any rights,
interests, liabilities or obligations of any party thereunder.

 

(d)     Obligations Not Assumed. Notwithstanding any provision contained in this
Agreement or any other Transaction Document to the contrary, the foregoing
sales, assignments, transfers and conveyances set forth in Section 2.01(b) do
not constitute, and are not intended to result in, the creation or an assumption
by the Purchaser of any obligation or liability of the Seller, any Originator,
the Master Servicer, or any other Person under or in connection with all, or any
portion of, any Sold Assets, all of which shall remain the obligations and
liabilities of the Seller, the applicable Originator, the Master Servicer and
such other Persons, as applicable.

 

(e)     Selection, Designation and Reporting of Sold Receivables. The Seller (or
the Master Servicer on its behalf) shall select and identify from the Pool
Receivables all Sold Receivables to be sold pursuant to Section 2.01(b) in its
sole discretion; provided, however, that (i) the Seller shall ensure that each
Sold Receivable is a Pool Receivable on the date when first included as a Sold
Receivable, (ii) the Seller shall select Sold Receivables from the Pool
Receivables (other than Unbilled Receivables) on an Invoice-by-Invoice basis,
and the Seller shall transfer pursuant to Section 2.01(b) 100% of its interest
in any Invoice that reflects Sold Receivables, such that all Receivables
reflected or evidenced by such Invoice shall be included as Sold Receivables,
and (iii) the Seller shall not permit the aggregate Outstanding Balance of Sold
Receivables to exceed the aggregate Capital outstanding at any time and, to the
extent that such an excess occurs, re-designate sufficient Sold Receivables as
Unsold Receivables to eliminate such excess. The Seller shall maintain (or cause
the Master Servicer to maintain) books and records sufficient to readily
identify the Sold Receivables. The Seller and Master Servicer shall cause all
Sold Receivables to be identified on each Daily Report delivered hereunder.

 

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Section 2.02.     Making Investments; Return of Capital.

 

(a)     Each Investment hereunder shall be made on written request from the
Seller to the Purchaser delivered on a Business Day in the form of an Investment
Request attached hereto as Exhibit A. Each such request for an Investment shall
be made no later than 12:00 noon (New York City time) on the Business Day prior
to the proposed date of such Investment (it being understood that any such
request made after such time shall be deemed to have been made on the following
Business Day) and shall specify (i) the amount of Capital requested (which
amount shall not be less than $1,000,000) and (y) not cause the aggregate
Outstanding Balance of all Sold Receivables (after giving effect to the addition
of Pool Receivables to the Sold Receivables in connection with such Investment)
to exceed the aggregate Capital outstanding, (ii) the date such requested
Investment is to be made (which shall be a Business Day) and (iii) all Pool
Receivables that are or, effective upon the making of such Investment, will be,
Sold Receivables.

 

(b)     On the date of each Investment specified in the applicable Investment
Request, the Purchaser shall, upon satisfaction of the applicable conditions set
forth in Article VI and pursuant to the other conditions set forth in this
Article II, wire transfer to the account or accounts specified in such
Investment Request, immediately available funds in an aggregate amount equal to
the Capital requested.

 

(c)     [Reserved].

 

(d)     The Seller shall return all Capital outstanding on the Seller Obligation
Final Due Date. Prior thereto, the Seller shall, on each Settlement Date, reduce
aggregate Capital outstanding to the extent required under Section 4.01 and
otherwise in accordance with such Section 4.01 (subject to the priorities for
payment set forth therein) by paying the amount of such reduction to the
Purchaser in accordance with Section 4.02. Additionally, if on any Business Day
the Seller or the Master Servicer determines or is advised that a Capital
Coverage Deficit exists, the Seller shall within two (2) Business Days eliminate
such Capital Coverage Deficit. Notwithstanding the foregoing, the Seller, in its
discretion, shall have the right to reduce, in whole or in part by payment in
accordance with Section 4.02, the aggregate Capital outstanding on any Business
Day upon two (2) Business Days’ prior written notice thereof to the Purchaser in
the form of a Reduction Notice attached hereto as Exhibit B; provided, however,
that (i) each such reduction shall be in a minimum aggregate amount of
$1,000,000 or, if less, in the amount necessary to reduce any Capital Coverage
Deficit existing at such time to zero and (ii) any accrued Yield and Fees in
respect of the portion(s) of Capital so reduced shall be paid in full on the
immediately following Monthly Settlement Date.

 

(e)     The Seller may, at any time upon at least five (5) Business Days’ prior
written notice to the Purchaser, terminate the Commitment and the Facility Limit
in whole, or reduce the Commitment and the Facility Limit in part. Each partial
reduction in the Commitment and Facility Limit shall be in a minimum amount of
$5,000,000 or a larger integral multiple of $500,000 if in excess thereof, and
no such partial reduction shall reduce the Commitment and the Facility Limit to
an amount less than $15,000,000. In connection with any reduction of the
Commitment, the Seller shall remit to the Purchaser (i) instructions regarding
such reduction and (ii) cash in an amount sufficient to pay (A) Capital in
excess of the Commitment and Facility Limit as so reduced and (B) all other
outstanding Seller Obligations with respect to such reduction (determined based
on the ratio of the reduction of the Commitment being effected to the amount of
the Commitment prior to such reduction or, if the Purchaser reasonably
determines that any portion of the outstanding Seller Obligations is allocable
solely to that portion of the Commitment being reduced or has arisen solely as a
result of such reduction, all of such portion). Upon receipt of any such
amounts, the Purchaser shall apply such amounts first, to the reduction of the
outstanding Capital, and second, to the payment of the remaining outstanding
Seller Obligations with respect to such reduction. A notice of termination or
reduction of the Commitment and the Facility Limit may state that such notice is
conditioned upon the occurrence of any event specified therein, in which case
such notice may be revoked (by notice to the Purchaser on or prior to the
specified effective date) if such condition is not satisfied.

 

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(f)     The Seller may, at any time upon at least sixty (60) days’ prior written
notice to the Purchaser request an increase in the Commitment and the Facility
Limit to an aggregate amount not in excess of $50,000,000; provided, however,
(i) the Purchaser may not request an increase in the Commitment and Facility
Limit more than twice in any calendar year, (ii) the amount of any requested
increase shall not be less than $3,000,000 or a larger integral multiple of
$1,000,000 if in excess thereof, (ii) the Purchaser may determine in its sole
discretion whether to seek credit approval for all or any portion of the
requested increase, will promptly notify the Seller in writing if the Purchaser
in its sole discretion elects not to seek credit approval for the requested
increase, (iii) the Purchaser will promptly notify the Seller in writing of the
response of its credit committee in its sole discretion to any request for
increase for which that the Purchaser elects to seek credit approval, and (iv)
in the event that the Purchaser receives credit approval for all or any portion
of a requested increase, the parties shall enter into an amendment to this
Agreement and, as necessary the Fee Letter and other Transaction Documents, to
reflect the approved increase in the Commitment and Facility Limit and any
changes or conditions upon which such credit approval was predicated.

 

Section 2.03.     Yield and Fees.

 

(a)     The Seller shall pay to the Purchaser certain fees (collectively, the
“Fees”) in the amounts set forth in the fee letter agreement, dated as of the
Closing Date, between the Seller and the Purchaser (as amended, restated,
supplemented or otherwise modified from time to time, the “Fee Letter”). Capital
shall accrue Yield on each day when such Capital remains outstanding at the then
applicable Yield Rate for such Capital (or each applicable portion thereof).

 

(b)     On or prior to the fifth (5th) Business Day of each Calculation Period
after the Closing Date (commencing with May 5, 2020), each Purchaser will
provide to the Master Servicer and the Seller an invoice showing the amount of
Fees and Yield due to such Purchaser for the Calculation Period (or portion
thereof) then most recently ended. On each Monthly Settlement Date, the Seller
shall pay, in arrears, all Yield and Fees accrued during each Yield Period then
most recently ended.

 

(c)     For the avoidance of doubt, the Seller’s obligation to pay all Fees and
Yield hereunder when due shall not be contingent up the receipt or availability
of Collections and to the extent any such amount is not otherwise paid on the
related Monthly Settlement Date, such amount shall be paid on the following
Settlement Date in accordance with the terms and priorities for payment set
forth in Section 4.01.

 

Section 2.04.     Records of Investments and Capital. The Purchaser shall record
in its records, the date and amount of each Investment made by it hereunder, the
Yield Rate with respect to the related Capital (and each portion thereof), the
Yield accrued on the Capital and each repayment and payment thereof. Such
records shall be conclusive and binding absent manifest error. The failure to so
record any such information or any error in so recording any such information
shall not, however, limit or otherwise affect the obligations of the Seller
hereunder or under the other Transaction Documents to repay the Capital,
together with all Yield accruing thereon and all other Seller Obligations.

 

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ARTICLE III     

seller guaranty

 

Section 3.01.     Guaranty of Payment. The Seller hereby absolutely, irrevocably
and unconditionally guarantees to the Purchaser and the other Secured Parties
the prompt payment of the Sold Receivables by the related Obligors and all other
payment obligations included in the Sold Assets (collectively, the “Guaranteed
Obligations”), in each case, in full when due, whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise (such guaranty, the “Seller
Guaranty”). The Seller Guaranty is a guaranty of payment and not merely of
collection and is a continuing irrevocable guaranty and shall apply to all
Guaranteed Obligations whenever arising. To the extent the obligations of the
Seller hereunder in respect to the Seller Guaranty shall be adjudicated to be
invalid or unenforceable for any reason (including because of any applicable
state or federal Law relating to fraudulent conveyances or transfers), then such
obligations of the Seller shall be limited to the maximum amount that is
permissible under applicable Law (whether federal or state or otherwise and
including the Bankruptcy Code and any other applicable bankruptcy, insolvency,
reorganization or other similar laws). Payments under this Seller Guaranty will
be made to the extent of available funds in accordance with Section 4.01(c)
following demand therefor (or upon automatic acceleration thereof in the
circumstances provided in Article IX) notwithstanding any stay, injunction or
other prohibition preventing such demand.

 

Section 3.02.     Unconditional Guaranty. The obligations of the Seller under
the Seller Guaranty are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any Guaranteed
Obligations, any Contract, any Transaction Document or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
Law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
The Seller agrees that the Seller Guaranty may be enforced by the Purchaser
without the necessity at any time of resorting to or exhausting any other
security or collateral and without the necessity at any time of having recourse
to any of the other Transaction Documents or any collateral, including the Sold
Assets, hereafter securing the Guaranteed Obligations, the Seller Obligations or
otherwise, and the Seller hereby waives the right to require the Purchaser to
make demand on or proceed against any Obligor, any Originator, the Master
Servicer or the Indemnification Guarantor or any other Person or to require the
Purchaser to pursue any other remedy or enforce any other right. The Seller
further agrees that no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the Purchaser in connection
with monies received under or in respect of the Seller Guaranty. The Seller
further agrees that nothing contained herein shall prevent the Purchaser from
suing on any of the other Transaction Documents or foreclosing its or their, as
applicable, security interest in or lien on the Sold Assets or any other
collateral securing the Guaranteed Obligations or the Seller Obligations or from
exercising any other rights available to it or them, as applicable, under any
Transaction Document, or any other instrument of security and the exercise of
any of the aforesaid rights and the completion of any foreclosure proceedings
shall not constitute a discharge of the Seller’s obligations under the Seller
Guaranty; it being the purpose and intent of the Seller that its obligations
under the Seller Guaranty shall be absolute, independent and unconditional under
any and all circumstances. Neither the Seller Guaranty nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release, increase or
limitation of the liability of any Obligor, any Originator, the Master Servicer
or the Indemnification Guarantor or by reason of the bankruptcy or insolvency of
any Obligor, any Originator, the Master Servicer or the Indemnification
Guarantor. The Seller hereby waives any and all notice of the creation, renewal,
extension, accrual, or increase of any of the Guaranteed Obligations and notice
of or proof of reliance by the Purchaser on the Seller Guaranty or acceptance of
the Seller Guaranty. All dealings between any Obligor, any Originator, the
Master Servicer, the Indemnification Guarantor or the Seller, on the one hand,
and the Purchaser, on the other hand, shall be conclusively presumed to have
been had or consummated in reliance upon the Seller Guaranty. The Seller hereby
represents and warrants that it is, and immediately after giving effect to the
Seller Guaranty and the obligation evidenced hereby, will be, solvent. The
Seller Guaranty and the obligations of the Seller under the Seller Guaranty
shall be valid and enforceable and shall not be subject to any limitation,
impairment or discharge for any reason (other than payment in full of all
Guaranteed Obligations), including the occurrence of any of the following,
whether or not the Purchaser shall have had notice or knowledge of any of them:
(A) any failure to assert or enforce or agreement not to assert or enforce, or
the stay or enjoining, by order of court, by operation of law or otherwise, of
the exercise or enforcement of, any claim or demand or any right, power or
remedy with respect to the Sold Assets or the Guaranteed Obligations or any
agreement relating thereto, or with respect to any guaranty of or other security
for the payment of the Sold Assets or the Guaranteed Obligations, (B) any
waiver, amendment or modification of, or any consent to departure from, any of
the terms or provisions (including provisions relating to Termination Events) of
any Transaction Document or any agreement or instrument executed pursuant
thereto, or of any guaranty or other security for the Sold Assets or the
Guaranteed Obligations, (C) to the fullest extent permitted by applicable Law,
any of the Guaranteed Obligations, or any agreement relating thereto, at any
time being found to be illegal, invalid or unenforceable in any respect, (D) the
application of payments received from any source to the payment of Indebtedness
other than the Guaranteed Obligations, even though the Purchaser might have
elected to apply such payment to any part or all of the Guaranteed Obligations,
(E) any failure to perfect or continue perfection of a security interest in any
of the Sold Assets or other Seller Collateral, (F) any defenses, set-offs or
counterclaims which the Seller, any Originator, the Master Servicer, the
Indemnification Guarantor or any Obligor may allege or assert against the
Purchaser in respect of the Sold Assets or the Guaranteed Obligations, including
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury, and (G) any other act
or thing or omission, or delay to do any other act or thing, which may or might
in any manner or to any extent vary the risk of the Seller as an obligor in
respect of the Sold Assets or the Guaranteed Obligations.

 

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Section 3.03.     Modifications. The Seller agrees that: (a) all or any part of
any security interest, lien, collateral security or supporting obligation now or
hereafter held for any Guaranteed Obligation may be exchanged, compromised or
surrendered from time to time; (b) the Purchaser shall have no obligation to
protect, perfect, secure or insure any security interest or lien now or
hereafter held, if any, for the Guaranteed Obligations; (c) the time or place of
payment of any Guaranteed Obligation may be changed or extended, in whole or in
part, by the Master Servicer in accordance with this Agreement to a time certain
or otherwise, and may be renewed or accelerated, in whole or in part, by the
Master Servicer in accordance with this Agreement; (d) any Obligor, any
Originator, the Seller, the Master Servicer or the Indemnification Guarantor and
any other party (including any co-guarantor) liable for payment of any
Guaranteed Obligation may be granted indulgences generally; (e) any of the
provisions of Contracts or any other agreements or documents governing or giving
rise to any Guaranteed Obligation may be modified, amended or waived by the
Master Servicer in accordance with this Agreement; and (f) any deposit balance
for the credit of any Obligor, any Originator, the Master Servicer, the
Indemnification Guarantor or the Seller or any other party (including any
co-guarantor) liable for the payment of any Guaranteed Obligation or liable upon
any security therefor may be released, in whole or in part, at, before or after
the stated, extended or accelerated maturity of the Guaranteed Obligations, all
without notice to or further assent by the Seller, which shall remain bound
thereon, notwithstanding any such exchange, compromise, surrender, extension,
renewal, acceleration, modification, indulgence or release.

 

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Section 3.04.     Waiver of Rights. The Seller expressly waives to the fullest
extent permitted by applicable Law: (a) notice of acceptance of the Seller
Guaranty by the Purchaser; (b) presentment and demand for payment or performance
of any of the Guaranteed Obligations; (c) protest and notice of dishonor or of
default (except as specifically required in this Agreement) with respect to the
Guaranteed Obligations or with respect to any security therefor; (d) notice of
the Purchasers or the Purchaser obtaining, amending, substituting for,
releasing, waiving or modifying any security interest or lien, if any, hereafter
securing the Guaranteed Obligations, or the Purchasers or the Purchaser
subordinating, compromising, discharging or releasing such security interests or
liens, if any; (e) all other notices, demands, presentments, protests or any
agreement or instrument related to the Sold Assets or the Guaranteed Obligations
to which the Seller might otherwise be entitled; (f) any right to require the
Purchaser as a condition of payment or performance by the Seller, to (A) proceed
against any Obligor, any Originator, the Master Servicer, the Indemnification
Guarantor or any other Person, (B) proceed against or exhaust any other security
held from any Obligor, any Originator, the Master Servicer, the Indemnification
Guarantor or any other Person, (C) proceed against or have resort to any balance
of any deposit account, securities account or credit on the books of the
Purchaser, the Purchasers or any other Person, or (D) pursue any other remedy in
the power of the Purchaser or the Purchasers whatsoever; (g) any defense arising
by reason of the incapacity, lack of authority or any disability or other
defense of any Obligor, any Originator, the Master Servicer, the Indemnification
Guarantor or any other Person including any defense based on or arising out of
the lack of validity or the unenforceability of the Sold Assets or the
Guaranteed Obligations or any agreement or instrument relating thereto or by
reason of the cessation of the liability of any Obligor, any Originator, the
Master Servicer, the Indemnification Guarantor or any other Person from any
cause other than payment in full of the Sold Assets and the Guaranteed
Obligations; (h) any defense based upon any applicable Law which provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; (i) any defense based upon
the Purchaser’s errors or omissions in the administration of the Sold Assets or
the Guaranteed Obligations; (j) (A) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms of this
Agreement and any legal or equitable discharge of the Sold Assets or the
Guaranteed Obligations, (B) the benefit of any statute of limitations affecting
the Seller’s liability under the Seller Guaranty or the enforcement of the
Seller Guaranty, (C) any rights to set-offs, recoupments and counterclaims, and
(D) promptness, diligence and any requirement that the Purchaser and the
Purchasers protect, secure, perfect or insure any other security interest or
lien or any property subject thereto; and (k) to the fullest extent permitted by
applicable Law, any defenses or benefits that may be derived from or afforded by
applicable Law which limit the liability of or exonerate guarantors or sureties,
or which may conflict with the terms of this Agreement and the Seller Guaranty.

 

Section 3.05.     Reinstatement. Notwithstanding anything contained in this
Agreement or the other Transaction Documents, the obligations of the Seller
under this Article III shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of any Person in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Seller agrees that it will
indemnify the Purchaser to the extent of available funds in accordance with
Section 4.01 for all reasonable and documented costs and expenses (including
reasonable fees of counsel) incurred by such Person in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.

 

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Section 3.06.     Remedies. The Seller agrees that, as between the Seller, on
the one hand, and the Purchaser, on the other hand, the Guaranteed Obligations
may be declared to be forthwith due and payable as provided in Article IX (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Article IX) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Guaranteed
Obligations being deemed to have become automatically due and payable), such
Guaranteed Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Seller.

 

Section 3.07.     Subrogation. The Seller hereby waives all rights of
subrogation (whether contractual or otherwise) to the claims of the Purchaser
and the other Secured Parties against any Obligor, any Originator, the Master
Servicer, the Indemnification Guarantor or any other Person in respect of the
Guaranteed Obligations until such time as all Guaranteed Obligations have been
indefeasibly paid in full in cash and the Final Payout Date has occurred. The
Seller further agrees that, to the extent such waiver of its rights of
subrogation is found by a court of competent jurisdiction to be void or voidable
for any reason, any rights of subrogation shall be junior and subordinate to any
rights the Purchaser may have against any Obligor, any Originator, the Master
Servicer, the Indemnification Guarantor or any other Person in respect of the
Guaranteed Obligations.

 

Section 3.08.     Inducement. The Purchaser has been induced to make the
Investments under this Agreement in part based upon the Seller Guaranty which
the Seller desires be honored and enforced as a separate obligation of the
Seller should the Purchaser desire to do so.

 

Section 3.09.     Security Interest.

 

(a)     To secure the prompt payment and performance of the Guaranteed
Obligations, the Seller Guaranty and all other Seller Obligations, the Seller
hereby grants to the Purchaser (for its own benefit and for the benefit of the
other Secured Parties), a continuing security interest in and lien upon all
property and assets of the Seller, whether now or hereafter owned, existing or
arising and wherever located, including all of its right, title and interest in
the following (collectively, the “Seller Collateral”): (i) all Unsold
Receivables, (ii) all Related Security with respect to such Unsold Receivables,
(iii) all Collections with respect to such Unsold Receivables, (iv) the
Lock-Boxes and Collection Accounts and all amounts on deposit therein, and all
certificates and instruments, if any, from time to time evidencing such
Lock-Boxes and Collection Accounts and amounts on deposit therein, (v) all
rights (but none of the obligations) of the Seller under the RSCA; (vi) all
other personal and fixture property or assets of the Seller of every kind and
nature including, without limitation, all goods (including inventory, equipment
and any accessions thereto), instruments (including promissory notes),
documents, accounts, chattel paper (whether tangible or electronic), deposit
accounts, securities accounts, securities entitlements, letter-of-credit rights,
commercial tort claims, securities and all other investment property, supporting
obligations, money, any other contract rights or rights to the payment of money,
insurance claims and proceeds, and all general intangibles (including all
payment intangibles) (each as defined in the UCC) and (vii) all proceeds of, and
all amounts received or receivable under any or all of, the foregoing. The
Purchaser (for the benefit of the Secured Parties) shall have, with respect to
all the Seller Collateral, and in addition to all the other rights and remedies
available to the Purchaser (for the benefit of the Secured Parties), all the
rights and remedies of a secured party under any applicable UCC. The Seller
hereby authorizes the Purchaser to file financing statements describing the
collateral covered thereby as “all of the debtor’s personal property or assets”
or words to that effect, notwithstanding that such wording may be broader in
scope than the collateral described in this Agreement.

 

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(b)     Immediately upon the occurrence of the Final Payout Date, the Seller
Collateral shall be automatically released from the lien created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Purchaser shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the Seller
Collateral shall revert to the Seller; provided, however, that promptly
following written request therefor by the Seller delivered to the Purchaser
following any such termination, and at the expense of the Seller, the Purchaser
shall execute (if legally required) and deliver to the Seller UCC-3 termination
statements and such other documents as the Seller shall reasonably request to
evidence such termination.

 

(c)     For the avoidance of doubt, the grant of security interest pursuant to
this Section 3.09 shall be in addition to, and shall not be construed to limit
or modify, the sale of Sold Assets pursuant to Section 2.01(b) or the Seller’s
grant of security interest pursuant to Section 5.05.

 

Section 3.10.     Further Assurances. Promptly upon request, the Seller shall
deliver such instruments, assignments or other documents or agreements, and
shall take such actions, as the Purchaser reasonably deems appropriate to
evidence or perfect its security interest and lien on any of the Seller
Collateral, or otherwise to give effect to the intent of this Article III.

 

ARTICLE IV     

SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS

 

Section 4.01.     Settlement Procedures.

 

(a)     Settlement Account; Releases. The Master Servicer shall set aside and
hold in trust for the benefit of the Secured Parties in the Settlement Account,
for application in accordance with the priority of payments set forth below in
this Section 4.01, all Collections on Pool Receivables that are received by the
Master Servicer or the Seller or received in any Lock-Box or Collection Account;
provided, however, that so long as each of the conditions precedent set forth in
Section 6.03 is satisfied on such date:

 

(i)     the Master Servicer may release to the Seller from such Collections
received on Unsold Receivables the amount (if any) necessary to pay (A) the
purchase price for Receivables purchased by the Seller on such date in
accordance with the terms of the RSCA or (B) amounts owing by the Seller to any
Originators under their respective Subordinated Notes, and

 

(ii)     the Master Servicer may release to the Seller all or a portion of such
Collections received on Sold Receivables in exchange for the Seller designating
an equivalent amount (based on aggregate Outstanding Balances) of Unsold
Receivables as new Sold Receivables on Seller’s books and records pursuant to
Section 2.01(e), which new Sold Receivables will be automatically and
immediately sold by the Seller to the Purchaser pursuant to Section 2.01(b) upon
such release (each such release of Collections described in clauses (i) and (ii)
above, a “Release”).

 

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(b)     Interim Settlement Dates. On each Interim Settlement Date, the Master
Servicer shall apply Collections in the following order of priority:

 

(i)     first, to deposit such Collections into the Settlement Account until
such time as the amount on deposit is equal to the sum of (x) the amount of any
Capital Coverage Deficit that then exists plus the distributions anticipated by
the Master Servicer to make the payments contemplated by Section
4.01(c)(i)(A)-(C) and (E) on the following Monthly Settlement Date, in each case
to the extent accrued through such Interim Settlement Date; and

 

(ii)     second, with respect to any remaining Collections, at the option of the
Seller, either (1) to distribute to the Contributing Originator as a
distribution of capital, provided that after paying such amounts pursuant to
this Section 4.1(b)(ii), no Capital Coverage Deficit shall exist; or (2) to
deposit into the Settlement Account.

 

(c)     Distribution on the Monthly Settlement Dates.

 

(i)     On each Monthly Settlement Date, the Master Servicer shall apply
Collections in the Settlement Account as of the Determination Date as follows:

 

(A)     first, to pay to the Master Servicer the sum of (1) the Servicing Fee
for the preceding Calculation Period and (2) any unpaid Servicing Fee from prior
Calculation Periods;

 

(B)     second, to pay to the Purchaser any Yield due on such Monthly Settlement
Date pursuant to the provisions of Section 2.03(c);

 

(C)     third, to pay to each of the Purchasers in accordance with Section
2.02(d), the Capital Distribution Amount with respect to such Monthly Settlement
Date and any unpaid Capital Distribution Amount with respect to any prior
Monthly Settlement Date to be used, in each case, to reduce the aggregate
Capital outstanding;

 

(D)     fourth, if an Event of Termination has occurred and is continuing or the
Termination Date has occurred, to pay to the Purchaser amounts remaining to
reduce the aggregate Capital outstanding to zero ($0);

 

(E)     fifth, to pay any other Seller Obligations; and

 

(F)     sixth, with respect to any remaining Collections, to the account of the
Seller;

 

provided that any Collections allocated pursuant to clauses first through fifth
above shall be allocated first, from available Collections on Sold Receivables
and other Sold Assets, and second, solely to the extent Collections on Sold
Receivables are insufficient to satisfy the amount required to be paid pursuant
to clauses first through fifth above, from Collections on Unsold Receivables and
other Unsold Collateral. The Seller’s right to receive payments (if any) from
time to time pursuant to clause sixth above shall, to the extent arising from
Collections on Sold Receivables, constitute compensation to the Seller for the
Seller’s provision of the Seller Guaranty and the Purchaser’s interests in the
Seller Collateral.

 

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In the event that, in accordance with the terms of Section 9.03(a) and the
Control Agreements, the Purchaser delivers a Notice of Exclusive Control to each
Collection Bank, the Purchaser will direct or cause the direction of the
depositary bank in connection with the application of Collections in the
Settlement Account pursuant to this Section 4.01(c) and otherwise as required
under this Agreement.

 

(d)     The Seller may elect to cause a reduction of the aggregate Capital
outstanding in accordance with this Section 4.01(d). For the avoidance of doubt,
the Seller shall only be permitted to reduce the Capital from Collections and
other amounts on deposit in the Settlement Account. The Seller may do so as
follows:

 

(i)     the Seller shall deliver to the Purchaser and the Master Servicer
written notice in substantially the form of Exhibit B (a “Reduction Notice”) at
least one (1) Business Day prior to the commencement date for such reduction of
the aggregate Capital, which notice shall include the amount of such proposed
reduction (the “Investment Reduction Amount”) and the proposed date on which
such reduction will commence; and

 

on the proposed date of the commencement of such reduction and on each day
thereafter, the Master Servicer shall cause Collections to be applied to the
extent available under Section 4.01(c) to reduce the aggregate Capital until the
amount of the aggregate Capital shall equal the desired reduced aggregate
Capital; provided that (A) the amount of any such reduction (if not a reduction
to zero) shall be not less than $1,000,000 or an integral multiple of $100,000
in excess thereof; (B) the Seller shall choose a reduction amount, and the date
of commencement thereof, so that to the extent practicable such reduction shall
commence and conclude in the same Calculation Period; and (C) such reduction
shall be applied to reduce the aggregate Capital of each of the Purchasers
ratably in accordance with its respective Percentage. For the avoidance of
doubt, any such reduction in the aggregate Capital shall only be funded by
Collections and any other amounts on deposit in the Settlement Account and
available for distribution in accordance with Section 4.01(c).

 

(e)     All amounts payable to the Purchaser (i) in reduction of the aggregate
Capital outstanding pursuant to Section 4.01(d) shall be distributed by 2:00
p.m. (New York time) on the day such amounts are payable in immediately
available funds; and (ii) in payment of Yield or fees pursuant to Section
4.01(c) shall be distributed by 2:00 p.m. (New York time) on the day such
amounts are payable in same day funds based on the applicable Daily Report
delivered to the Purchaser pursuant to Section 8.02(b)(vi). Any payment received
after 2:00 p.m. (New York City time) pursuant to this Section 4.01(e) shall be
deemed to be received on the next Business Day.

 

(f)     [Reserved].

 

(g)     All payments or distributions to be made by the Master Servicer, the
Seller or any other Person to the Purchaser (or to related Affected Persons or
Seller Indemnified Parties), shall be paid or distributed to the Purchaser’s
Account and, upon receipt in the Purchaser’s Account of any such payments or
distributions, shall, if applicable, be distributed to the applicable Affected
Persons and the Seller Indemnified Parties ratably; provided that if the
Purchaser shall have received insufficient funds to pay all of the above amounts
in full on any such date, the Purchaser shall pay such amounts to the applicable
Affected Persons and the Seller Indemnified Parties in accordance with the
priority of payments forth above, and with respect to any such category above
for which there are insufficient funds to pay all amounts owing on such date,
ratably (based on the amounts in such categories owing to each such Person)
among all such Persons entitled to payment thereof.

 

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(h)     If and to the extent the Purchaser, any Affected Person or any Seller
Indemnified Party shall be required for any reason to pay over to any Person
(including any Obligor or any trustee, receiver, custodian or similar official
in any Insolvency Proceeding) any amount received on its behalf hereunder, such
amount shall be deemed not to have been so received but rather to have been
retained by the Seller and, accordingly, the Purchaser, such Affected Person or
such Seller Indemnified Party, as the case may be, shall have a claim against
the Seller for such amount.

 

(i)     For the purposes of this Section 4.01:

 

(i)     if on any day the Outstanding Balance of any Pool Receivable is reduced
or adjusted as a result of any defective, rejected, returned, repossessed or
foreclosed goods or services, or any revision, cancellation, allowance, rebate,
credit memo, discount or other adjustment made by the Seller, any Originator,
the Master Servicer or any Affiliate of the Master Servicer, or any setoff,
counterclaim or dispute between the Seller or any Affiliate of the Seller, any
Originator or any Affiliate of any Originator, or the Master Servicer or any
Affiliate of the Master Servicer, and an Obligor (any such reduction or
adjustment, a “Dilution”), the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in the amount of such reduction or
adjustment and shall immediately pay any and all such amounts in respect thereof
to a Collection Account for the benefit of the Purchaser Parties for application
pursuant to Section 4.01(a);

 

(ii)     if on any day any of the representations or warranties in Section 7.01
is not true with respect to any Pool Receivable, the Seller shall be deemed to
have received on such day a Collection of such Pool Receivable in full and shall
immediately pay the amount of such deemed Collection to a Collection Account for
application pursuant to Section 4.01(a) (Collections deemed to have been
received pursuant to this Section 4.01(i) are hereinafter sometimes referred to
as “Deemed Collections”);

 

(iii)     except as provided in clauses (i) or (ii) above or otherwise required
by applicable Law or the relevant Contract, all Collections received from an
Obligor of any Receivable shall be applied to the Receivables of such Obligor in
the order of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and

 

(iv)     if and to the extent the Purchaser, any Affected Person or any Seller
Indemnified Party shall be required for any reason to pay over to an Obligor (or
any trustee, receiver, custodian or similar official in any Insolvency
Proceeding) any amount received by it hereunder, such amount shall be deemed not
to have been so received by such Person but rather to have been retained by the
Seller and, accordingly, such Person shall have a claim against the Seller for
such amount, payable when and to the extent that any distribution from or on
behalf of such Obligor is made in respect thereof.

 

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Section 4.02.     Payments and Computations, Etc.

 

(a)     All amounts to be paid by the Seller or the Master Servicer to the
Purchaser or any Affected Person or Seller Indemnified Party hereunder shall be
paid no later than 12:00 noon (New York City time) on the day when due in same
day funds to the Purchaser’s Account.

 

(b)     Each of the Seller and the Master Servicer shall, to the extent
permitted by applicable Law, pay interest on any amount not paid or deposited by
it when due hereunder, at an interest rate per annum equal to 2.00% per annum
above the Base Rate, payable, in the case of the Seller, to the extent of
available funds in accordance with Section 4.01 following demand therefor, and
in the case of the Master Servicer, on demand.

 

(c)     All computations of interest and Yield shall be made on the basis of a
year of 360 days (or, in the case of amounts determined by reference to the Base
Rate, 365 or 366 days, as applicable) for the actual number of days (including
the first but excluding the last day) elapsed. All Fees shall be calculated on
the basis of a year of 365 or 366 days, as applicable. Whenever any payment or
deposit to be made hereunder shall be due on a day other than a Business Day,
such payment or deposit shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of such payment or
deposit.

 

ARTICLE V     

INCREASED COSTS; TAXES; ILLEGALITY AND BACK-UP SECURITY INTEREST

 

Section 5.01.     Increased Costs.

 

(a)     Increased Costs Generally. If any Change in Law shall:

 

(i)     impose, modify or deem applicable any reserve, special deposit,
liquidity, compulsory loan, insurance charge or similar requirement against
assets of, deposits with or for the account of, or credit extended or
participated in by, any Affected Person (other than the Applicable Reserve
Requirement);

 

(ii)     subject any Affected Person to any Taxes (except to the extent such
Taxes are (A) Indemnified Taxes for which relief is sought under Section 5.03,
(B) Taxes described in clause (b) or (c) of the definition of Excluded Taxes or
(C) Other Connection Taxes that are imposed on or measured by net income
(however denominated) or that are franchise Taxes or branch profits Taxes) on
its loans, loan principal, letters of credit, commitments or other obligations,
or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)     impose on any Affected Person any other condition, cost or expense
(other than Taxes) (A) affecting the Sold Assets, the Seller Collateral, this
Agreement, any other Transaction Document, any Capital or any participation
therein or (B) affecting its obligations or rights to make Investments or fund
or maintain Capital;

 

and the result of any of the foregoing shall be to increase the cost to such
Affected Person of (A) acting as the Purchaser hereunder with respect to the
transactions contemplated hereby, (B) making any Investment or funding or
maintaining any Capital (or any portion thereof) or (C) maintaining its
obligation to make any Investment or to fund or maintain any Capital (or any
portion thereof), or to reduce the amount of any sum received or receivable by
such Affected Person hereunder, then, upon request of such Affected Person, the
Seller shall pay to such Affected Person such additional amount or amounts as
will compensate such Affected Person for such additional costs incurred or
reduction suffered.

 

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(b)     Capital and Liquidity Requirements. If any Affected Person determines
that any Change in Law affecting such Affected Person or any lending office of
such Affected Person or such Affected Person’s holding company, if any,
regarding capital or liquidity requirements, has or would have the effect of (x)
increasing the amount of capital required to be maintained by such Affected
Person or Affected Person’s holding company, if any, (y) reducing the rate of
return on such Affected Person’s capital or on the capital of such Affected
Person’s holding company, if any, or (z) causing an internal capital or
liquidity charge or other imputed cost to be assessed upon such Affected Person
or Affected Person’s holding company, if any, in each case, as a consequence of
(A) this Agreement or any other Transaction Document, (B) the commitments of
such Affected Person hereunder or under any other Transaction Document, (C) the
Investments made by such Affected Person, or (D) any Capital (or portion
thereof), to a level below that which such Affected Person or such Affected
Person’s holding company would have achieved but for such Change in Law (taking
into consideration such Affected Person’s policies and the policies of such
Affected Person’s holding company with respect to capital adequacy and
liquidity), then from time to time, upon request of such Affected Person, the
Seller will pay to such Affected Person such additional amount or amounts as
will compensate such Affected Person or such Affected Person’s holding company
for any such increase, reduction or charge.

 

(c)     Adoption of Changes in Law. The Seller acknowledges that any Affected
Person may institute measures in anticipation of a Change in Law (including,
without limitation, the imposition of internal charges on such Affected Person’s
interests or obligations under any Transaction Document), and may commence
allocating charges to or seeking compensation from the Seller under this Section
5.01 in connection with such measures, in advance of the effective date of such
Change in Law, and the Seller agrees to pay such charges or compensation to such
Affected Person, following demand therefor in accordance with the terms of this
Section 5.01, without regard to whether such effective date has occurred.

 

(d)     Certificates for Reimbursement. A certificate of an Affected Person
setting forth the amount or amounts necessary to compensate such Affected Person
or its holding company, as the case may be, as specified in clause (a), (b) or
(c) of this Section and delivered to the Seller, shall be conclusive absent
manifest error. The Seller shall, subject to the priorities of payment set forth
in Section 4.01, pay such Affected Person the amount shown as due on any such
certificate no later than the first Settlement Date occurring at least ten (10)
days after the Seller’s receipt of such certificate.

 

(e)     Delay in Requests. Failure or delay on the part of any Affected Person
to demand compensation pursuant to this Section shall not constitute a waiver of
such Affected Person’s right to demand such compensation; provided that, Seller
shall not be required to compensate any Affected Person for amounts incurred
more than nine months prior to the date on which such Affected Person notifies
the Seller of the Change in Law giving rise to such increased costs or
reductions and of the Purchaser’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

 

Section 5.02.     [Reserved].

 

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Section 5.03.     Taxes.

 

(a)     Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Seller under any Transaction Document shall be made without
deduction or withholding for any Taxes, except as required by applicable Law. If
any applicable Law (as determined in the good faith discretion of the Seller,
the Purchaser, any Affected Person or any Seller Indemnified Party) requires the
deduction or withholding of any Tax from any such payment to the Purchaser, such
Affected Person or such Seller Indemnified Party, then the Seller shall make
such deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
Law, and, if such Tax is an Indemnified Tax, then the sum payable by the Seller
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section), the Purchaser, such Affected Person or such
Seller Indemnified Party receives an amount equal to the sum it would have
received had no such deduction or withholding been made.

 

(b)     Payment of Other Taxes by the Seller. The Seller shall timely pay to the
relevant Governmental Authority in accordance with applicable Law, or, at the
option of the Purchaser, timely reimburse the Purchaser for the payment of, any
Other Taxes.

 

(c)     Indemnification by the Seller. The Seller shall indemnify each Affected
Person, within ten (10) days after demand therefor, for the full amount of any
(I) Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Affected Person or required to be withheld or deducted from a payment to such
Affected Person and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority
and (II) Taxes that arise because an Investment or any Capital is not treated
for U.S. federal, state, local or franchise tax consistently with the Intended
Tax Treatment (such indemnification will include any U.S. federal, state or
local income and franchise taxes necessary to make such Affected Person whole on
an after-tax basis taking into account the taxability of receipt of payments
under this clause (II) and any reasonable expenses (other than Taxes) arising
out of, relating to, or resulting from the foregoing). The Affected Person shall
give prompt notice to the Seller of any Indemnified Taxes or Other Taxes imposed
or asserted on it; provided that failure to give such prompt notice shall not
constitute a defense to any claim for indemnification. A certificate as to the
amount of such payment or liability delivered to the Seller by an Affected
Person (with a copy to the Purchaser), or by the Purchaser on its own behalf or
on behalf of an Affected Person, shall be conclusive absent manifest error. The
Seller shall be entitled to contest, at its own expense, any Indemnified Taxes
or Other Taxes that it is obligated to pay, and the relevant Affected Parties
shall reasonably cooperate with any such contest.

 

(d)     Mitigation. If any Affected Person requests compensation pursuant to
Section 5.01, or if the Seller is required to pay any additional amounts to any
Affected Person or any Governmental Authority pursuant to Section 5.03, then
such Affected Person shall use reasonable efforts to designate a different
office or to assign its rights and obligations under this Agreement to another
of its offices, branches or affiliates, if, in the judgment of such Affected
Person, such designation or assignment would eliminate or reduce amounts payable
pursuant to Section 5.01 or Section 5.03, as the case may be, in the future and
would not otherwise be materially disadvantageous to such Affected Person. If
any Affected Person determines that it has received a refund of or credit
against any Taxes or Other Taxes as to which it has been indemnified by the
Seller or with respect to which the Seller has paid additional amounts pursuant
to this Section 5.03, such Affected Person shall pay over such refund or credit
to the Seller. Each Affected Person shall pursue any such refund or credit if
such Affected Person reasonably determines that it is likely to receive such
refund or credit.

 

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(e)     Evidence of Payments. As soon as practicable after any payment of Taxes
by the Seller to a Governmental Authority pursuant to this Section 5.03, the
Seller shall deliver to the Purchaser the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Purchaser.

 

(f)     Status of Affected Persons.

 

(i)     Any Affected Person that is entitled to an exemption from or reduction
of withholding Tax with respect to payments made under any Transaction Document
shall deliver to the Seller and the Purchaser, at the time or times reasonably
requested by the Seller or the Purchaser, such properly completed and executed
documentation reasonably requested by the Seller or the Purchaser as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Affected Person, if reasonably requested by the
Seller or the Purchaser, shall deliver such other documentation prescribed by
applicable Law or reasonably requested by the Seller or the Purchaser as will
enable the Seller or the Purchaser to determine whether or not such Affected
Person is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Sections 5.03(f)(ii)(A), 5.03(f)(ii)(B) and 5.03(g))
shall not be required if, in the Affected Person’s reasonable judgment, such
completion, execution or submission would subject such Affected Person to any
material unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Affected Person.

 

(ii)     Without limiting the generality of the foregoing:

 

(A)     an Affected Person that is a U.S. Person shall deliver to the Seller and
the Purchaser from time to time upon the reasonable request of the Seller or the
Purchaser, executed originals of Internal Revenue Service Form W-9 certifying
that such Affected Person is exempt from U.S. federal backup withholding tax;

 

(B)     any Affected Person that is not a U.S. Person shall, to the extent it is
legally entitled to do so, deliver to the Seller and the Purchaser (in such
number of copies as shall be requested by the Affected Person) from time to time
upon the reasonable request of the Seller or the Purchaser, whichever of the
following is applicable:

 

(1)     in the case of such an Affected Person claiming the benefits of an
income tax treaty to which the United States is a party, (x) with respect to
payments of interest under any Transaction Document, executed originals of
Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E,
as applicable, establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and (y)
with respect to any other applicable payments under any Transaction Document,
Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E,
as applicable, establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “business profits” or “other income” article of
such tax treaty;

 

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(2)     executed originals of Internal Revenue Service Form W-8ECI;

 

(3)     in the case of such an Affected Person claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate to the effect that such Affected Person is not a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
Seller within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed originals of Internal Revenue Service
Form W-8BEN or Internal Revenue Service Form W-8BEN-E, as applicable; or

 

(4)     to the extent such Affected Person is not the beneficial owner, executed
originals of Internal Revenue Service Form W-8IMY, accompanied by Internal
Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN or Internal
Revenue Service Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate,
Internal Revenue Service Form W-9, and/or other certification documents from
each beneficial owner, as applicable; provided that, if such Affected Person is
a partnership and one or more direct or indirect partners of such Affected
Person are claiming the portfolio interest exemption, such Affected Person may
provide a U.S. Tax Compliance Certificate on behalf of each such direct and
indirect partner; and

 

(C)     any Affected Person that is not a U.S. Person shall, to the extent it is
legally entitled to do so, deliver to the Seller and the Purchaser (in such
number of copies as shall be requested by the recipient), from time to time upon
the reasonable request of the Seller or the Purchaser, executed originals of any
other form prescribed by applicable Law as a basis for claiming exemption from
or a reduction in U.S. federal withholding Tax, duly completed, together with
such supplementary documentation as may be prescribed by applicable Law to
permit the Seller or the Purchaser to determine the withholding or deduction
required to be made.

 

(g)     Documentation Required by FATCA. If a payment made to an Affected Person
under any Transaction Document would be subject to U.S. federal withholding Tax
imposed by FATCA if such Affected Person were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in Section
1471(b) or 1472(b) of the Code, as applicable), such Affected Person shall
deliver to the Seller and the Purchaser at the time or times prescribed by
applicable Law and at such time or times reasonably requested by the Seller or
the Purchaser such documentation prescribed by applicable Law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Seller or the Purchaser as may be
necessary for the Seller and the Purchaser to comply with their obligations
under FATCA and to determine that such Affected Person has complied with such
Affected Person’s obligations under FATCA or to determine the amount to deduct
and withhold from such payment. Solely for purposes of this clause (g), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

 

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(h)     Survival. Each party’s obligations under this Section 5.03 shall survive
the resignation or replacement of the Purchaser or any assignment of rights by,
or the replacement of, the Purchaser or any other Affected Person, the
termination of the Commitments and the repayment, satisfaction or discharge of
all the Seller Obligations and the Master Servicer’s obligations hereunder.

 

(i)     Updates. Each Affected Person agrees that if any form or certification
it previously delivered pursuant to this Section 5.03 expires or becomes
obsolete or inaccurate in any respect, it shall update such form or
certification or promptly notify the Seller and the Purchaser in writing of its
legal inability to do so.

 

Section 5.04.     Inability to Determine or LIR; Change in Legality.

 

(a)     If the Purchaser shall have determined before the first day of any Yield
Period (or solely with respect to the LIBOR Index Rate, on any day) (which
determination shall be conclusive and binding upon the parties hereto absent
manifest error) that, by reason of circumstances affecting the interbank
Eurodollar market, that: (i) Dollar deposits in the relevant amounts and for the
relevant Yield Period or day, as applicable, are not available, (ii) adequate
and reasonable means do not exist for ascertaining LIR for such Yield Period or
day, as applicable, or (iii) LIR determined pursuant hereto does not accurately
reflect the cost to the applicable Affected Person of maintaining any portion of
Capital during such Yield Period or day, as applicable, the Purchaser shall
promptly give telephonic notice of such determination, confirmed in writing, to
the Seller on such day. Upon delivery of such notice: (i) no portion of Capital
shall be funded thereafter at LIR unless and until the Purchaser shall have
given notice to the Seller that the circumstances giving rise to such
determination no longer exist and (ii) subject to Section 5.06, with respect to
any outstanding portion of Capital then funded at LIR, such Yield Rate shall
immediately be converted to the Base Rate.

 

(b)     If on any day the Purchaser shall have been notified by any Affected
Person that such Affected Person has determined (which determination shall be
final and conclusive absent manifest error) that any Change in Law, or
compliance by such Affected Person with any Change in Law, shall make it
unlawful or impossible for such Affected Person to fund or maintain any portion
of Capital at or by reference to the LIBOR Index Rate, the Purchaser shall
notify the Seller thereof. Upon receipt of such notice, until the Purchaser
notifies the Seller and the Purchaser that the circumstances giving rise to such
determination no longer apply, (i) no portion of Capital shall be funded at or
by reference to LIR and (ii) the Yield for any outstanding portions of Capital
then funded at LIR shall automatically and immediately be converted to the Base
Rate.

 

Section 5.05.     Back-Up Security Interest.

 

(a)     If, notwithstanding the intent of the parties stated in Section 2.01(c),
the sale, assignment and transfer of any Sold Assets to the Purchaser hereunder
(including pursuant to Section 2.01(b)) is not treated as a sale for all
purposes (except as provided in Sections 2.01(d) and 12.14), then such sale,
assignment and transfer of such Sold Assets shall be treated as the grant of a
security interest by the Seller to the Purchaser to secure the payment and
performance of all the Seller’s obligations to the Purchaser and the other
Secured Parties hereunder and under the other Transaction Documents (including
all Seller Obligations). Therefore, as security for the performance by the
Seller of all the terms, covenants and agreements on the part of the Seller to
be performed under this Agreement or any other Transaction Document, including
the punctual payment when due of the aggregate Capital outstanding and all Yield
and all other Seller Obligations, the Seller hereby grants to the Purchaser for
its benefit and the ratable benefit of the Secured Parties, a continuing
security interest in, all of the Seller’s right, title and interest in, to and
under all of the Sold Assets, whether now or hereafter owned, existing or
arising.

 

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(b)     The Purchaser (for the benefit of the Secured Parties) shall have, with
respect to all the Sold Assets, and in addition to all the other rights and
remedies available to the Purchaser (for the benefit of the Secured Parties),
all the rights and remedies of a secured party under any applicable UCC. The
Seller hereby authorizes the Purchaser to file financing statements describing
the collateral covered thereby as “all of the debtor’s personal property or
assets” or words to that effect, notwithstanding that such wording may be
broader in scope than the collateral described in this Agreement.

 

(c)     For the avoidance of doubt, (i) the grant of security interest pursuant
to this Section 5.05 shall be in addition to, and shall not be construed to
limit or modify, the sale of Sold Assets pursuant to Section 2.01(b) or the
Seller’s grant of security interest pursuant to Section 3.09, (ii) nothing in
Section 2.01 shall be construed as limiting the rights, interests (including any
security interest), obligations or liabilities of any party under this Section
5.05, and (iii) subject to the foregoing clauses (i) and (ii), this Section 5.05
shall not be construed to contradict the intentions of the parties set forth in
Section 2.01(c).

 

Section 5.06.     Replacement Index for LIR

 

(a)     If the Purchaser determines (which determination shall be final and
conclusive, absent manifest error) that either (i) (A) the circumstances set
forth in Section 5.04 have arisen and are unlikely to be temporary, or (B) the
circumstances set forth in Section 5.04 have not arisen but the applicable
supervisor or administrator (if any) of LIBOR or a Governmental Authority having
jurisdiction over the Purchaser has made a public statement identifying the
specific date after which LIBOR shall no longer be used for determining interest
rates for loans (either such date, a “LIBOR Termination Date”), or (ii) a rate
other than LIBOR has become a widely recognized benchmark rate for newly
originated loans or receivables investments in Dollars in the U.S. market, the
Purchaser shall, in lieu of exercising its rights under Section 5.04 above, 
designate in place of the LIBOR Index Rate a substitute interest rate index
applicable to all LIR Investments then and thereafter outstanding (the
“Replacement Index”). If the Purchaser so designates a Replacement Index, the
Purchaser may also determine at such time or at any time or from time to time
thereafter that an index adjustment is necessary to produce a comparable
interest rate to the interest rate that would have applied to the Investments
based on the LIBOR Index Rate.  Upon such determination, the Purchaser will
designate the amount of such index adjustment (which may be a positive or a
negative number) and adjust the Replacement Index by that amount (the result
being the “Adjusted Replacement Index”). The Purchaser will provide notice to
the Seller of the Replacement Index and any Adjusted Replacement Index, as
applicable, and their respective effective dates. Thereafter, the Replacement
Index or, as applicable, the Adjusted Replacement Index shall be deemed to be
and shall become the operative interest rate index instead of the LIBOR Index
Rate for purposes of making (or continuing) LIR Investments under this
Agreement, and the Capital of all LIR Investments shall continue to accrue Yield
thereafter from the effective date of such designation(s) through repayment
thereof at the Replacement Index (or the Adjusted Replacement Index, as
applicable) plus the Applicable Margin (subject to increase if an Event of
Termination occurs and is continuing). The Replacement Index or, as applicable,
Adjusted Replacement Index will not be less than zero percent (0%) per annum in
any event.  The Replacement Index or, as applicable,  the Adjusted Replacement
Index, may not necessarily be the Purchaser’s most favorable lending rate or
interest rate index.  Any determination or designation made by the Purchaser
under this subsection (a) shall be made in the Purchaser’s sole and absolute
discretion and shall be conclusive and binding absent manifest error, and any
such determination or designation shall become effective at 5:00 p.m. (New York
time) on the fifth Business Day after the Purchaser shall have notified the
Seller of such determination or designation.   For avoidance of any doubt, the
institution (or adjustment) of any Replacement Index or any Adjusted Replacement
Index, as applicable, by the Purchaser shall not require the consent of, or
consultation with, the Seller.

 

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(b)     Selection of the replacement index, adjustments to the applicable
margins, and amendments to this Agreement (i) will be determined with due
consideration to the then-current market practices for determining and
implementing a rate of interest for newly originated loans in the United States
and loans converted from a rate based on LIR to a replacement index-based rate,
and (ii) may also reflect adjustments to account for (A) the effects of the
transition from LIR to the replacement index and (B) yield- or risk-based
differences between LIR and the replacement index.

 

(c)     Until an amendment reflecting a new replacement index in accordance with
this Section 5.06 is effective, any portion of Capital for which Yield is
determined by reference to LIR will continue to accrue Yield with reference to
LIR; provided however, that if the Purchaser determines (which determination
shall be final and conclusive, absent manifest error) that a LIR Termination
Date has occurred, then following the LIR Termination Date, all Portions of
Capital for which Yield would otherwise be determined with reference to LIR
shall automatically begin accruing Yield with reference to the Base Rate until
such time as an amendment reflecting a replacement index and related matters as
described above is implemented.

 

(d)     Notwithstanding anything to the contrary contained herein, if at any
time the replacement index is less than zero, at such times, such index shall be
deemed to be zero for purposes of this Agreement.

 

ARTICLE VI     

CONDITIONS to Effectiveness and INVESTMENTS

 

Section 6.01.     Conditions Precedent to Effectiveness and the Initial
Investment. This Agreement shall become effective as of the Closing Date when
(a) the Purchaser shall have received each of the documents, agreements (in
fully executed form), opinions of counsel, lien search results, UCC filings,
certificates and other deliverables listed on the Closing Documents Checklist
attached as Exhibit G hereto, in each case, in form and substance acceptable to
the Purchaser and (b) all fees and expenses payable by the Seller on the Closing
Date to the Purchaser have been paid in full in accordance with the terms of the
Transaction Documents.

 

Section 6.02.     Conditions Precedent to All Investments. Each Investment
hereunder on or after the Closing Date shall be subject to the conditions
precedent that:

 

(a)     the Seller shall have delivered to the Purchaser an Investment Request
for such Investment, in accordance with Section 2.02(a);

 

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(b)     the Master Servicer shall have delivered to the Purchaser the latest
Daily Report and latest Monthly Report required to be delivered hereunder;

 

(c)     the conditions precedent to such Investment specified in Section
2.01(a)(i) through (ii), shall be satisfied;

 

(d)     on the date of such Investment the following statements shall be true
and correct (and upon the occurrence of such Investment, the Seller and the
Master Servicer shall be deemed to have represented and warranted that such
statements are then true and correct):

 

(i)     the representations and warranties of the Seller and the Master Servicer
contained in Sections 7.01 and 7.02 are true and correct in all material
respects on and as of the date of such Investment as though made on and as of
such date unless such representations and warranties by their terms refer to an
earlier date, in which case they shall be true and correct in all material
respects on and as of such earlier date;

 

(ii)     no Event of Termination or Unmatured Event of Termination has occurred
and is continuing, and no Event of Termination or Unmatured Event of Termination
would result from such Investment;

 

(iii)     no Capital Coverage Deficit exists or would exist after giving effect
to such Investment; and

 

(iv)     the Termination Date has not occurred.

 

Section 6.03.     Conditions Precedent to All Releases. Each Release hereunder
on or after the Closing Date shall be subject to the conditions precedent that:

 

(a)     after giving effect to such Release, the Master Servicer shall be
holding in trust for the benefit of the Secured Parties an amount of Collections
sufficient to pay the sum of (x) all accrued and unpaid Servicing Fees, Yield
and Fees, in each case, through the date of such Release, (y) the amount of any
Capital Coverage Deficit and (z) the amount of all other accrued and unpaid
Seller Obligations through the date of such Release;

 

(b)     the Seller shall use the proceeds of such Release solely to pay the
purchase price for Receivables purchased by the Seller in accordance with the
terms of the RSCA and amounts owing by the Seller to any Originator under the
Subordinated Notes; and

 

(c)     on the date of such Release the following statements shall be true and
correct (and upon the occurrence of such Release, the Seller and the Master
Servicer shall be deemed to have represented and warranted that such statements
are then true and correct):

 

(i)     the representations and warranties of the Seller and the Master Servicer
contained in Sections 7.01 and 7.02 are true and correct in all material
respects on and as of the date of such Release as though made on and as of such
date unless such representations and warranties by their terms refer to an
earlier date, in which case they shall be true and correct in all material
respects on and as of such earlier date;

 

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(ii)     no Event of Termination or Unmatured Event of Termination has occurred
and is continuing, and no Event of Termination or Unmatured Event of Termination
would result from such Release;

 

(iii)     no Capital Coverage Deficit exists or would exist after giving effect
to such Release; and

 

(iv)     the Termination Date has not occurred.

 

ARTICLE VII     

REPRESENTATIONS AND WARRANTIES

 

Section 7.01.     Representations and Warranties of the Seller. The Seller
represents and warrants to the Purchaser as of the Closing Date and on the day
of each Investment and Release:

 

(a)     Organization and Good Standing. The Seller is a limited liability
company duly organized and validly existing in good standing under the laws of
the State of Delaware and has full power and authority under its constitutional
documents and under the laws of its jurisdiction to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted.

 

(b)     Due Qualification. The Seller is duly qualified to do business as a
limited liability company, is in good standing as a foreign limited liability
company, and has obtained all necessary licenses and approvals in all
jurisdictions in which the conduct of its business requires such qualification,
licenses or approvals, except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect.

 

(c)     Power and Authority; Due Authorization. The Seller (i) has all necessary
limited liability company power and authority to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party, (B)
perform its obligations under this Agreement and the other Transaction Documents
to which it is a party and (C) grant a security interest in the Sold Assets and
Seller Collateral to the Purchaser on the terms and subject to the conditions
herein provided and (ii) has duly authorized by all necessary limited liability
company action such grant and the execution, delivery and performance of, and
the consummation of the transactions provided for in, this Agreement and the
other Transaction Documents to which it is a party.

 

(d)     Binding Obligations. This Agreement and each of the other Transaction
Documents to which the Seller is a party constitutes the legal, valid and
binding obligations of the Seller, enforceable against the Seller in accordance
with their respective terms, except (i) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and (ii) as such
enforceability may be limited by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.

 

(e)     No Conflict or Violation. The execution, delivery and performance by the
Seller of, and the consummation of the transactions by the Seller contemplated
by, this Agreement and the other Transaction Documents to which the Seller is a
party, and the fulfillment by the Seller of the terms hereof and thereof, will
not (i) conflict with, result in any breach of any of the terms or provisions
of, or constitute (with or without notice or lapse of time or both) a default
under its organizational documents or any indenture, RSCA, credit agreement,
loan agreement, security agreement, mortgage, deed of trust, or other agreement
or instrument to which the Seller is a party or by which it or any of its
properties is bound, (ii) result in the creation or imposition of any Adverse
Claim upon any of the Sold Assets or Seller Collateral pursuant to the terms of
any such indenture, credit agreement, loan agreement, security agreement,
mortgage, deed of trust, or other agreement or instrument other than this
Agreement and the other Transaction Documents or (iii) conflict with or violate
any applicable Law, except to the extent that any such conflict, breach,
default, Adverse Claim or violation would not reasonably be expected to have a
Material Adverse Effect.

 

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(f)     Litigation and Other Proceedings. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of the Seller,
threatened, against the Seller before any Governmental Authority and (ii) the
Seller is not subject to any order, judgment, decree, injunction, stipulation or
consent order of or with any Governmental Authority that, in the case of either
of the foregoing clauses (i) and (ii), (A) asserts the invalidity of this
Agreement or any other Transaction Document, (B) seeks to prevent the grant of a
security interest in any Sold Assets or Seller Collateral by the Seller to the
Purchaser, the ownership or acquisition by the Seller of any Pool Receivables,
any other Sold Assets or any Seller Collateral or the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Document,
(C) seeks any determination or ruling that could materially and adversely affect
the performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement or any other Transaction Document or (D)
individually or in the aggregate for all such actions, suits, proceedings and
investigations would reasonably be expected to have a Material Adverse Effect.

 

(g)     Governmental Approvals. Except where the failure to obtain or make such
authorization, consent, order, approval or action would not reasonably be
expected to have a Material Adverse Effect, all authorizations, consents, orders
and approvals of, or other actions by, any Governmental Authority that are
required to be obtained by the Seller in connection with the grant of a security
interest in the Sold Assets or Seller Collateral to the Purchaser hereunder or
the due execution, delivery and performance by the Seller of this Agreement or
any other Transaction Document to which it is a party and the consummation by
the Seller of the transactions contemplated by this Agreement and the other
Transaction Documents to which it is a party have been obtained or made and are
in full force and effect.

 

(h)     Compliance with Law. The Seller has complied in all material respects
with all applicable Laws to which it may be subject.

 

(i)     Margin Regulations. The Seller is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of the Investments will be used to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.

 

(j)     Solvency. The Seller is, and after giving effect to the transactions
contemplated by this Agreement and the other Transaction Documents, will be,
Solvent.

 

(k)     Offices; Legal Name. The Seller’s sole jurisdiction of organization is
the State of Delaware and such jurisdiction has not changed within four months
prior to the date of this Agreement. The office of the Seller is set forth on
Schedule III hereto. The legal name of the Seller is StarTek Receivables
Funding, LLC.

 

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(l)     Investment Company Act; Volcker Rule. The Seller (i) is not, and is not
controlled by, an “investment company” registered or required to be registered
under the Investment Company Act and (ii) is not a “covered fund” under the
Volcker Rule. In determining that the Seller is not a “covered fund” under the
Volcker Rule, the Seller relies on, and is entitled to rely on, the exemption
from the definition of “investment company” set forth in Section 3(c)(5) of the
Investment Company Act.

 

(m)     No Material Adverse Effect. Since the date of formation of the Seller,
no event has occurred that would reasonably be expected to have a Material
Adverse Effect other than the reasonably foreseeable and expected impact on the
Seller, the Master Servicer, the Indemnification Guarantor and the Originators
as of the date of this Agreement (as are reasonably identifiable and factually
supportable) related to the declaration on March 13, 2020 of the national
emergency relating to COVID-19 and related measures.

 

(n)     Ownership of Seller. The Contributing Originator directly owns one
hundred percent (100%) of the issued and outstanding Capital Stock and all other
equity interests of the Seller, free and clear of any Adverse Claim. The
Seller’s membership interests are validly issued, and there are no options,
warrants or other rights to acquire membership interests of the Seller.

 

(o)     Payments to any Originator. With respect to each Pool Receivable, the
Seller has given reasonably equivalent value to any 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 under the RSCA is or may be
voidable under any section of the Federal Bankruptcy Code.

 

(p)     Accuracy of Information. All Daily Reports, Monthly Reports, Investment
Requests, certificates, reports, statements, documents and other information
furnished to the Purchaser by or on behalf of the Seller pursuant to any
provision of this Agreement or any other Transaction Document, or in connection
with or pursuant to any amendment or modification of, or waiver under, this
Agreement or any other Transaction Document, at the time the same are so
furnished, do not contain any material misstatement of fact or omit to state a
material fact necessary to make the statements contained therein not misleading;
provided that, with respect to projections, the Seller represents and warrants
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

 

(q)     Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions.

 

(i)     None of (i) the Seller, any Subsidiary of the Seller or, to the
knowledge of the Seller, any of their respective directors, officers, employees
or Affiliates, or (ii) to the knowledge of the Seller, any agent or
representative of the Seller or any Subsidiary of the Seller that will act in
any capacity in connection with or benefit from the Transaction Documents, (A)
is a Sanctioned Person or currently the subject or target of any Sanctions, (B)
has its assets located in a Sanctioned Country, (C) is under administrative,
civil or criminal investigation for an alleged violation of, or received notice
from or made a voluntary disclosure to any governmental entity regarding a
possible violation of, Anti-Corruption Laws, Anti-Money Laundering Laws or
Sanctions by a governmental authority that enforces Sanctions or any
Anti-Corruption Laws or Anti-Money Laundering Laws, or (D) directly or
indirectly derives revenues from investments in, or transactions with,
Sanctioned Persons.

 

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(ii)     Each of the Seller and its Subsidiaries has implemented and maintains
in effect policies and procedures designed to ensure compliance by the Seller
and its Subsidiaries and their respective directors, officers, employees, agents
and Affiliates with all Anti-Corruption Laws, Anti-Money Laundering Laws and
applicable Sanctions.

 

(iii)     Each of the Seller and its Subsidiaries, and to the knowledge of the
Seller, each director, officer, employee, agent and Affiliate of the Seller and
each such Subsidiary, is in compliance with all Anti-Corruption Laws, Anti-Money
Laundering Laws in all respects and applicable Sanctions.

 

(iv)     No proceeds of any Investment have been used, directly or indirectly,
by the Seller, any of its Subsidiaries or any of its or their respective
directors, officers, employees and agents in violation of Section 8.01(w).

 

(r)     Enforceability of Contracts. Each Contract with respect to each Pool
Receivable is effective to create, and has created, a valid and binding
obligation of the related Obligor to pay the Outstanding Balance of such
Receivable created thereunder and any accrued interest thereon, enforceable
against such 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).

 

(s)     Perfection Representations.

 

(i)     This Agreement creates a valid and continuing ownership or security
interest (as defined in the applicable UCC) in the Seller’s right, title and
interest in, to and under the Sold Assets and Seller Collateral which (A)
ownership or security interest has been perfected and is enforceable against
creditors of and purchasers from the Seller and (B) will be free of all Adverse
Claims in such Sold Assets and Seller Collateral.

 

(ii)     The Receivables constitute “accounts” or “general intangibles” within
the meaning of Section 9-102 of the UCC.

 

(iii)     Prior to the sale of, or grant of security interest in, the Sold
Assets and Seller Collateral hereunder, the Seller owns and has good and
marketable title to such Sold Assets and Seller Collateral free and clear of any
Adverse Claim of any Person. After giving effect to the sale of, or grant of
security interest in, the Sold Assets and Seller Collateral hereunder, the
Purchaser owns or has a first priority perfected security interest in the Sold
Assets and Seller Collateral free and clear of any Adverse Claim of any Person.

 

(iv)     All appropriate financing statements, financing statement amendments
and continuation statements have been filed in the proper filing office in the
appropriate jurisdictions under applicable Law in order to perfect (and continue
the perfection of) the sale and contribution of the Receivables and (solely to
the extent perfection may be achieved by filing a financing statement under the
UCC) Related Security from any Originator to the Seller pursuant to the RSCA and
the Seller’s sale of, and grant of a security interest in, the Sold Assets and
Seller Collateral (solely to the extent perfection may be achieved by filing a
financing statement under the UCC) to the Purchaser pursuant to this Agreement.

 

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(v)     Other than the security interest granted to the Purchaser pursuant to
this Agreement, the Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Sold Assets or Seller Collateral
except as permitted by this Agreement and the other Transaction Documents. The
Seller has not authorized the filing of and is not aware of any financing
statements filed against the Seller that include a description of collateral
covering the Sold Assets or Seller Collateral other than any financing statement
(i) in favor of the Purchaser or (ii) that has been terminated. The Seller is
not aware of any judgment lien, ERISA lien or tax lien filings against the
Seller.

 

Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations and warranties contained in this Section shall be
continuing and remain in full force and effect until the Final Payout Date.

 

(t)     The Lock-Boxes and Collection Accounts.

 

(i)     Nature of Collection Accounts. Each Collection Account constitutes a
“deposit account” within the meaning of the applicable UCC.

 

(ii)     Ownership. Each Lock-Box and Collection Account is in the name of the
Seller, and the Seller owns and has good and marketable title to the Collection
Accounts free and clear of any Adverse Claim.

 

(iii)     Control Agreements. Each of the Collection Accounts and the Settlement
Account is subject to a Control Agreement, and the Purchaser has “control” (as
defined in Section 9-104 of the UCC) over each such account. The Seller has not
granted any Person (other than the Purchaser, the Master Servicer and their
respective assigns) access to any Lock-Box, Collection Account or the Settlement
Account, or control of any Collection Account or the Settlement Account, or the
right to take dominion and control of any Collection Account or the Settlement
Account at a future time or upon the occurrence of a future event. To the extent
that funds other than Collections are deposited into any Collection Account or
the Settlement Account, the Seller or the Master Servicer can promptly trace and
identify which funds constitute Collections.

 

(u)     Bulk Sales Act. No transaction contemplated by this Agreement requires
compliance by it with any bulk sales act or similar law.

 

(v)     Eligible Receivables. Each Receivable included as an Eligible Receivable
in the calculation of the Net Pool Balance as of any date is an Eligible
Receivable as of such date.

 

(w)     ERISA Compliance.

 

(i)     Except as would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, (A) each Plan is in
compliance with the applicable provisions of ERISA, the Code and other
applicable Federal and state laws and (B) each Plan that is intended to be a
qualified plan under Section 401(a) of the Code may rely upon an opinion letter
for a prototype plan or has received a favorable determination letter from the
IRS to the effect that the form of such Plan is qualified under Section 401(a)
of the Code and the trust related thereto has been determined by the IRS to be
exempt from federal income tax under Section 501(a) of the Code, or an
application for such a letter will be submitted to the IRS within the applicable
required time period with respect thereto, and to the knowledge of any StarTek
Party, nothing has occurred that would prevent, or cause the loss of, such
tax-qualified status.

 

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(ii)     Except as would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, (A) each Foreign Plan is in
compliance in all material respects with all requirements of Law applicable
thereto and the respective requirements of the governing documents for such plan
and (B) with respect to each Foreign Plan, none of the StarTek Parties or any of
its Subsidiaries or any of their respective directors, officers, employees or
agents has engaged in a transaction that could subject any StarTek Party or any
such Subsidiary, directly or indirectly, to any tax or civil penalty.

 

(iii)     There are no pending or, to the knowledge of any StarTek Party,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no “prohibited transaction” within the meaning of
Section 4975 of the Code or Section 406 or 407 of ERISA and not otherwise exempt
under Section 408 of ERISA with respect to any Plan that has resulted or would
reasonably be expected to result in a Material Adverse Effect.

 

(iv)     (A) No ERISA Event has occurred and neither any StarTek Party nor, to
the knowledge of any StarTek Party, any ERISA Affiliate is aware of any fact,
event or circumstance that would reasonably be expected to constitute or result
in an ERISA Event, (B) any StarTek Party and each ERISA Affiliate has met all
applicable requirements under the Pension Funding Rules in respect of each Plan,
and no waiver of the minimum funding standards under such Pension Funding Rules
has been applied for or obtained, (C) as of the most recent valuation date for
any Plan, the present value of all accrued benefits under such Plan (based on
the actuarial assumptions used to fund such Plan) did not exceed the value of
the assets of such Plan allocable to such accrued benefits, (D) neither any
StarTek Party nor, to the knowledge of any StarTek Party, any ERISA Affiliate
knows of any facts or circumstances that would reasonably be expected to cause
the funding target attainment percentage (as defined in Section 430(d)(2) of the
Code) for any Plan, if applicable, to drop below 80% as of the most recent
valuation date, (E) neither any StarTek Party nor any ERISA Affiliate has
incurred any liability to the PBGC other than for the payment of premiums, and
there are no premium payments which have become due that are unpaid, (F) neither
any StarTek Party nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA and (G) no Plan has been
terminated by the plan administrator thereof or by the PBGC and no event or
circumstance has occurred or exists that would reasonably be expected to cause
the PBGC to institute proceedings under Title IV of ERISA to terminate any Plan
or Multiemployer Plan, except with respect to each of the foregoing clauses (A)
through (G), as would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.

 

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(x)     Taxes. The Seller has (i) timely filed all tax returns (federal, state
and local) required to be filed by it and (ii) paid, or caused to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP.

 

(y)     Tax Status. The Seller (i) is, and shall at all relevant times continue
to be, a “disregarded entity” within the meaning of U.S. Treasury Regulation §
301.7701-3 for U.S. federal income tax purposes that is wholly owned by a U.S.
Person and (ii) is not and will not at any relevant time become an association
(or publicly traded partnership) taxable as a corporation for U.S. federal
income tax purposes. The Seller is not subject to any Tax in any jurisdiction
outside the United States.

 

(z)     Subordinated Notes. Each of the Subordinated Notes is owned directly by
the applicable Originator, free and clear of any Adverse Claim.

 

(aa)     Opinions. The facts regarding the StarTek Parties, the Seller
Collateral and the related matters set forth or assumed in each of the opinions
of counsel delivered in connection with this Agreement and the Transaction
Documents are true and correct in all material respects.

 

(bb)     Beneficial Ownership Certification. As of the Closing Date, all of the
information included in the Beneficial Ownership Certification is true and
correct.

 

(cc)     Other Transaction Documents. Each representation and warranty made by
the Seller under each other Transaction Document to which it is a party is true
and correct in all material respects as of the date when made.

 

Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations and warranties contained in this Section shall be
continuing and remain in full force and effect until the Final Payout Date.

 

Section 7.02.     Representations and Warranties of the Master Servicer. The
Master Servicer represents and warrants to the Purchaser as of the Closing Date
and on the day of each Investment and Release:

 

(a)     Organization and Good Standing. The Master Servicer is a duly organized
and validly existing corporation in good standing under the laws of the State of
Delaware, with the power and authority under its organizational documents and
under the laws of the State of Delaware to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted.

 

(b)     Due Qualification. The Master Servicer is duly qualified to do business,
is in good standing as a foreign entity and has obtained all necessary licenses
and approvals in all jurisdictions in which the conduct of its business or the
servicing of the Pool Receivables as required by this Agreement requires such
qualification, licenses or approvals, except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect.

 

(c)     Power and Authority; Due Authorization. The Master Servicer has all
necessary corporate power and authority to (i) execute and deliver this
Agreement and the other Transaction Documents to which it is a party and (ii)
perform its obligations under this Agreement and the other Transaction Documents
to which it is a party and the execution, delivery and performance of, and the
consummation of the transactions provided for in, this Agreement and the other
Transaction Documents to which it is a party have been duly authorized by the
Master Servicer by all necessary action.

 

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(d)     Binding Obligations. This Agreement and each of the other Transaction
Documents to which it is a party constitutes legal, valid and binding
obligations of the Master Servicer, enforceable against the Master Servicer in
accordance with their respective terms, except (i) as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
(ii) as such enforceability may be limited by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.

 

(e)     No Conflict or Violation. The execution and delivery by the Master
Servicer of this Agreement and each other Transaction Document to which the
Master Servicer is a party, the performance of the transactions by the Master
Servicer contemplated by this Agreement and the other Transaction Documents and
the fulfillment of the terms of this Agreement and the other Transaction
Documents by the Master Servicer will not (i) conflict with, result in any
breach of any of the terms or provisions of, or constitute (with or without
notice or lapse of time or both) a default under, the organizational documents
of the Master Servicer or any indenture, RSCA, credit agreement, loan agreement,
security agreement, mortgage, deed of trust or other agreement or instrument to
which the Master Servicer is a party or by which it or any of its property is
bound, (ii) result in the creation or imposition of any Adverse Claim upon any
of the Sold Assets or Seller Collateral pursuant to the terms of any such
indenture, credit agreement, loan agreement, security agreement, mortgage, deed
of trust or other agreement or instrument, other than this Agreement and the
other Transaction Documents or (iii) conflict with or violate any applicable
Law, except to the extent that any such conflict, breach, default, Adverse Claim
or violation would not reasonably be expected to have a Material Adverse Effect.

 

(f)     Litigation and Other Proceedings. There is no action, suit, proceeding
or investigation pending, or to the Master Servicer’s knowledge threatened,
against the Master Servicer before any Governmental Authority: (i) asserting the
invalidity of this Agreement or any of the other Transaction Documents; (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Agreement or any other Transaction Document; (iii) seeking any
determination or ruling that could materially and adversely affect the
performance by the Master Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the other Transaction Documents or
(iv) individually or in the aggregate for all such actions, suits, proceedings
and investigations would reasonably be expected to have a Material Adverse
Effect.

 

(g)     Compliance with Laws. The Master Servicer has both (i) complied with all
applicable Laws, the non-compliance with which would reasonably be expected to
have a Material Adverse Effect and (ii) complied in all material respects with
all applicable Laws in connection with servicing the Pool Receivables.

 

(h)     No Consents. The Master Servicer is not required to obtain the consent
of any other party or any consent, license, approval, registration,
authorization or declaration of or with any Governmental Authority in connection
with the execution, delivery, or performance of this Agreement or any other
Transaction Document to which it is a party that has not already been obtained,
except where the failure to obtain such consent, license, approval,
registration, authorization or declaration would not reasonably be expected to
have a Material Adverse Effect.

 

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(i)     Accuracy of Information. All Daily Reports, Monthly Reports, Investment
Requests, certificates, reports, statements, documents and other information
furnished to the Purchaser by or on behalf of the Master Servicer pursuant to
any provision of this Agreement or any other Transaction Document, or in
connection with or pursuant to any amendment or modification of, or waiver
under, this Agreement or any other Transaction Document, at the time the same
are so furnished, do 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; provided that, with respect to projections, the Master
Servicer represents and warrants only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.

 

(j)     Location of Records. The offices where the initial Master Servicer keeps
all of its records relating to the servicing of the Pool Receivables are located
at the Master Servicer’s address specified on Schedule III.

 

(k)     Credit and Collection Policy. The Master Servicer has complied in all
material respects with the Credit and Collection Policy with regard to each Pool
Receivable and the related Contracts.

 

(l)     Eligible Receivables. Each Receivable included as an Eligible Receivable
in the calculation of the Net Pool Balance as of any date is an Eligible
Receivable as of such date.

 

(m)     ERISA Compliance.

 

(i)     Except as would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, (A) each Plan is in
compliance with the applicable provisions of ERISA, the Code and other
applicable Federal and state laws and (B) each Plan that is intended to be a
qualified plan under Section 401(a) of the Code may rely upon an opinion letter
for a prototype plan or has received a favorable determination letter from the
IRS to the effect that the form of such Plan is qualified under Section 401(a)
of the Code and the trust related thereto has been determined by the IRS to be
exempt from federal income tax under Section 501(a) of the Code, or an
application for such a letter will be submitted to the IRS within the applicable
required time period with respect thereto, and to the knowledge of any StarTek
Party, nothing has occurred that would prevent, or cause the loss of, such
tax-qualified status.

 

(ii)     Except as would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, (A) each Foreign Plan is in
compliance in all material respects with all requirements of Law applicable
thereto and the respective requirements of the governing documents for such plan
and (B) with respect to each Foreign Plan, none of the StarTek Parties or any of
its Subsidiaries or any of their respective directors, officers, employees or
agents has engaged in a transaction that could subject any StarTek Party or any
such Subsidiary, directly or indirectly, to any tax or civil penalty.

 

(iii)     There are no pending or, to the knowledge of any StarTek Party,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no “prohibited transaction” within the meaning of
Section 4975 of the Code or Section 406 or 407 of ERISA and not otherwise exempt
under Section 408 of ERISA with respect to any Plan that has resulted or would
reasonably be expected to result in a Material Adverse Effect.

 

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(iv)     (A) No ERISA Event has occurred and neither any StarTek Party nor, to
the knowledge of any StarTek Party, any ERISA Affiliate is aware of any fact,
event or circumstance that would reasonably be expected to constitute or result
in an ERISA Event, (B) any StarTek Party and each ERISA Affiliate has met all
applicable requirements under the Pension Funding Rules in respect of each Plan,
and no waiver of the minimum funding standards under such Pension Funding Rules
has been applied for or obtained, (C) as of the most recent valuation date for
any Plan, the present value of all accrued benefits under such Plan (based on
the actuarial assumptions used to fund such Plan) did not exceed the value of
the assets of such Plan allocable to such accrued benefits, (D) neither any
StarTek Party nor, to the knowledge of any StarTek Party, any ERISA Affiliate
knows of any facts or circumstances that would reasonably be expected to cause
the funding target attainment percentage (as defined in Section 430(d)(2) of the
Code) for any Plan, if applicable, to drop below 80% as of the most recent
valuation date, (E) neither any StarTek Party nor any ERISA Affiliate has
incurred any liability to the PBGC other than for the payment of premiums, and
there are no premium payments which have become due that are unpaid, (F) neither
any StarTek Party nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA and (G) no Plan has been
terminated by the plan administrator thereof or by the PBGC and no event or
circumstance has occurred or exists that would reasonably be expected to cause
the PBGC to institute proceedings under Title IV of ERISA to terminate any Plan
or Multiemployer Plan, except with respect to each of the foregoing clauses (A)
through (G), as would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.

 

(n)     Servicing Programs. No license or approval is required for the
Purchaser’s use of any software or other computer program used by the Master
Servicer, any Originator or any Sub-Servicer in the servicing of the Pool
Receivables, other than those which have been obtained and are in full force and
effect.

 

(o)     Servicing of Pool Receivables. Since the Closing Date there has been no
material adverse change in the ability of the Master Servicer to service and
collect the Pool Receivables.

 

(p)     Other Transaction Documents. Each representation and warranty made by
the Master Servicer under each other Transaction Document to which it is a party
(including, without limitation, the RSCA) is true and correct in all material
respects as of the date when made.

 

(i)     No Material Adverse Effect. Since December 31, 2019, no event has
occurred that would reasonably be expected to have a Material Adverse Effect
other than the reasonably foreseeable and expected impact on the Seller, the
Master Servicer, the Indemnification Guarantor and the Originators as of the
date of this Agreement (as are reasonably identifiable and factually
supportable) related to the declaration on March 13, 2020 of the national
emergency relating to COVID-19 and related measures.

 

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(q)     Investment Company Act. The Master Servicer is not an “investment
company,” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act.

 

(r)     Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions.

 

(i)     None of (i) the Master Servicer, any Subsidiary of the Master Servicer,
or to the knowledge of the Master Servicer, any of their respective directors,
officers, or, to the knowledge of the Master Servicer or such Subsidiary, any of
their respective employees or Affiliates, or (ii) to the knowledge of the Master
Servicer, any agent or representative of the Master Servicer or any Subsidiary
that will act in any capacity in connection with or benefit from the Transaction
Documents, (A) is a Sanctioned Person or currently the subject or target of any
Sanctions, (B) is controlled by or is acting on behalf of a Sanctioned Person,
(C) has its assets located in a Sanctioned Country, (D) is under administrative,
civil or criminal investigation for an alleged violation of, or received notice
from or made a voluntary disclosure to any governmental entity regarding a
possible violation of, Anti-Corruption Laws, Anti-Money Laundering Laws or
Sanctions by a governmental authority that enforces Sanctions or any
Anti-Corruption Laws or Anti-Money Laundering Laws, or (E) directly or
indirectly derives revenues from investments in, or transactions with,
Sanctioned Persons.

 

(ii)     Each of the Master Servicer and its Subsidiaries has implemented and
maintains in effect policies and procedures designed to ensure compliance by the
Master Servicer and its Subsidiaries and their respective directors, officers,
employees, agents and Affiliates with all Anti-Corruption Laws, Anti-Money
Laundering Laws and applicable Sanctions.

 

(iii)     Each of the Master Servicer and its Subsidiaries, and to the knowledge
of Master Servicer, each director, officer, employee, agent and Affiliate of the
Master Servicer and each such Subsidiary, is in compliance with all
Anti-Corruption Laws, Anti-Money Laundering Laws in all material respects and
applicable Sanctions.

 

(iv)     No proceeds of any Investment have been used, directly or indirectly,
by the Master Servicer, any of its Subsidiaries or any of its or their
respective directors, officers, employees and agents in violation of Section
8.01(w).

 

(s)     Financial Condition. The audited consolidated balance sheets of StarTek
and its consolidated Subsidiaries as of December 31, 2019 and the related
statements of income and shareholders’ equity of StarTek and its consolidated
Subsidiaries for the fiscal year then ended, copies of which have been furnished
to the Purchaser, present fairly in all material respects the consolidated
financial position of StarTek and its consolidated Subsidiaries for the period
ended on such date, all in accordance with GAAP.

 

(t)     Bulk Sales Act. No transaction contemplated by this Agreement requires
compliance by it with any bulk sales act or similar law.

 

(u)     Taxes. The Master Servicer has (i) timely filed all tax returns
(federal, state and local) required to be filed by it and (ii) paid, or caused
to be paid, all taxes, assessments and other governmental charges, if any, other
than taxes, assessments and other governmental charges being contested in good
faith by appropriate proceedings and as to which adequate reserves have been
provided in accordance with GAAP.

 

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(v)     Opinions. The facts regarding the StarTek Parties and the related
matters set forth or assumed in each of the opinions of counsel delivered in
connection with this Agreement and the Transaction Documents are true and
correct in all material respects.

 

(w)     Other Transaction Documents. Each representation and warranty made by
the Master Servicer under each other Transaction Document to which it is a party
is true and correct in all material respects as of the date when made.

 

Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations and warranties contained in this Section shall be
continuing, and remain in full force and effect until the Final Payout Date.

 

ARTICLE VIII

COVENANTS

 

Section 8.01.     Covenants of the Seller. At all times from the Closing Date
until the Final Payout Date:

 

(a)     Payment of Principal and Yield. The Seller shall duly and punctually pay
Capital, Yield, Fees and all other amounts payable by the Seller hereunder in
accordance with the terms of this Agreement.

 

(b)     Existence. The Seller shall keep in full force and effect its existence
and rights as a limited liability company under the laws of the State of
Delaware, and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the other Transaction Documents,
the Sold Assets and the Seller Collateral.

 

(c)     Financial Reporting. The Seller will maintain a system of accounting
established and administered in accordance with GAAP, and the Seller (or the
Master Servicer on its behalf) shall furnish to the Purchaser:

 

(i)     Annual Financial Statements of the Seller. Promptly upon completion and
in no event later than 120 days after the close of each fiscal year of the
Seller, annual unaudited financial statements of the Seller certified by a
Financial Officer of the Seller that they fairly present in all material
respects, in accordance with GAAP, the financial condition of the Seller as of
the date indicated and the results of its operations for the periods indicated.

 

(ii)     Daily Reports, Monthly Reports. Not later than 12:00 noon (New York
City time): (A) on the Closing Date and on each Business Day thereafter prior to
the Final Payout Date, the Seller shall cause the Master Servicer to deliver to
the Purchaser, a Daily Report as of the close of business on the second prior
Business Day, and (B) not later than 12:00 noon (New York City time) on each
Determination Date, the Seller shall cause the Master Servicer to deliver to the
Purchaser, a Monthly Report as of the last day of the Calculation Period then
most recently ended.

 

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(iii)     Other Information. Such other information (including non-financial
information) as the Purchaser may from time to time reasonably request.

 

(iv)     Know Your Customer. Promptly upon the request thereof, such other
information and documentation required under applicable “know your customer”
rules and regulations, the PATRIOT Act or any applicable Anti-Money Laundering
Laws or Anti-Corruption Laws, in each case as from time to time reasonably
requested by the Purchaser.

 

(d)     Notices. The Seller (or the Master Servicer on its behalf) will notify
the Purchaser in writing of any of the following events promptly upon (but in no
event later than three (3) Business Days after) a Financial Officer or other
officer learning of the occurrence thereof, with such notice describing the
same, and if applicable, the steps being taken by the Person(s) affected with
respect thereto:

 

(i)     Notice of Events of Termination or Unmatured Events of Termination. A
statement of a Financial Officer of the Seller setting forth details of any
Event of Termination or Unmatured Event of Termination that has occurred and is
continuing and the action which the Seller proposes to take with respect
thereto.

 

(ii)     Representations and Warranties. The failure of any representation or
warranty made or deemed to be made by the Seller under this Agreement or any
other Transaction Document to be true and correct in any material respect when
made.

 

(iii)     Litigation. The institution of any litigation, arbitration proceeding
or governmental proceeding with respect to any StarTek Party, which with respect
to any Person other than the Seller, would reasonably be expected to have a
Material Adverse Effect.

 

(iv)     Adverse Claim. (A) Any Person shall obtain an Adverse Claim upon the
Sold Assets or Seller Collateral or any portion thereof, (B) any Person other
than the Seller, the Master Servicer or the Purchaser shall obtain any rights or
direct any action with respect to any Collection Account (or related Lock-Box)
or (C) any Obligor shall receive any change in payment instructions with respect
to Pool Receivable(s) from a Person other than the Master Servicer or the
Purchaser.

 

(v)     Name Changes. At least five (5) Business Days before any change in any
Originator’s or the Seller’s name, jurisdiction of organization or any other
change requiring the amendment of UCC financing statements.

 

(vi)     Change in Accountants or Accounting Policy. Any change in (A) the
external accountants of any StarTek Party, (B) any accounting policy of the
Seller or (C) any material accounting policy of any Originator that is relevant
to the transactions contemplated by this Agreement or any other Transaction
Document (it being understood that any change to the manner in which any
Originator accounts for the Pool Receivables shall be deemed “material” for such
purpose).

 

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(vii)     Termination Event. The occurrence of an RSCA Termination Event.

 

(viii)     Material Adverse Change. Promptly after the occurrence thereof,
notice of any material adverse change in the operations, business, assets,
properties, liabilities (actual or contingent), or condition (financial or
otherwise) of the Seller, the Master Servicer, the Indemnification Guarantor or
any Originator.

 

(e)     Conduct of Business. The Seller will carry on and conduct its business
in substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted and will do all things necessary to
remain duly organized, validly existing and in good standing as a domestic
organization in its jurisdiction of organization and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted if the failure to have such authority would reasonably be expected to
have a Material Adverse Effect.

 

(f)     Compliance with Laws. The Seller will comply with all applicable Laws to
which it may be subject if the failure to comply would reasonably be expected to
have a Material Adverse Effect.

 

(g)     Furnishing of Information and Inspection of Receivables. The Seller will
furnish or cause to be furnished to the Purchaser from time to time such
information with respect to the Pool Receivables and the other Sold Assets and
the Seller Collateral as the Purchaser may reasonably request. The Seller will,
at the Seller’s expense, during regular business hours with prior written notice
(i) permit the Purchaser or their respective agents or representatives to (A)
examine and make copies of and abstracts from all books and records relating to
the Pool Receivables or other Sold Assets and the Seller Collateral, (B) visit
the offices and properties of the Seller for the purpose of examining such books
and records and (C) discuss matters relating to the Pool Receivables, the other
Sold Assets, the Seller Collateral or the Seller’s performance hereunder or
under the other Transaction Documents to which it is a party with any of the
officers, directors, employees or independent public accountants of the Seller
having knowledge of such matters and (ii) without limiting the provisions of
clause (i) above, during regular business hours, at the Seller’s expense, upon
prior written notice from the Purchaser, permit certified public accountants or
other auditors acceptable to the Purchaser to conduct a review of its books and
records with respect to such Pool Receivables and other Sold Assets and the
Seller Collateral; provided, that the Seller and the Master Servicer shall be
required to reimburse the Purchaser for only one (1) such review pursuant to
clause (ii) above and Section 8.02(f) in any twelve-month period, unless (x) an
Event of Termination has occurred and is continuing or (y) the prior review had
one or more material adverse findings.

 

(h)     Payments on Receivables, Collection Accounts. The Seller (or the Master
Servicer on its behalf) will, and will cause any Originator to, at all times,
instruct all Obligors to deliver payments on the Pool Receivables to a
Collection Account or a Lock-Box. The Seller (or the Master Servicer on its
behalf) will, and will cause any Originator to, at all times, maintain such
books and records necessary (i) to identify Collections received from time to
time on Pool Receivables and (ii) to segregate such Collections from other
property of the Master Servicer and any Originator. If any payments on the Pool
Receivables or other Collections are received by the Seller, the Master Servicer
or any Originator, it shall hold such payments in trust for the benefit of the
Purchaser and the other Secured Parties and promptly (but in any event within
one (1) Business Day after receipt) remit such funds into a Collection Account.
The Seller (or the Master Servicer on its behalf) will use commercially
reasonable efforts to cause each Collection Account Bank to comply with the
terms of each applicable Control Agreement. The Seller shall use commercially
reasonable efforts not to permit funds other than (i) Collections on Pool
Receivables and (ii) other Sold Assets and Seller Collateral to be deposited
into any Collection Account. If such funds are nevertheless deposited into any
Collection Account, the Seller (or the Master Servicer on its behalf) will
within two (2) Business Days identify and transfer such funds to the appropriate
Person entitled to such funds. The Seller will not, and will not permit the
Master Servicer, any Originator or any other Person to commingle Collections or
other funds to which the Purchaser or any other Secured Party is entitled, with
any other funds. The Seller shall only add a Collection Account (or a related
Lock-Box) or a Collection Account Bank to those listed on Schedule II to this
Agreement, if the Purchaser has received notice of such addition and an executed
and acknowledged copy of a Control Agreement (or an amendment thereto) in form
and substance acceptable to the Purchaser from the applicable Collection Account
Bank. The Seller shall only terminate a Collection Account Bank or close a
Collection Account (or a related Lock-Box) with the prior written consent of the
Purchaser. The Seller shall ensure that no disbursements are made from any
Collection Account, other than such disbursements that are made at the direction
and for the account of the Seller.

 

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(i)     Sales, Liens, etc. Except as otherwise provided herein (including the
making of Restricted Payments permitted hereunder), the Seller will not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Adverse Claim upon (including, without limitation, the
filing of any financing statement) or with respect to, any Pool Receivable, Sold
Assets or any Seller Collateral, or assign any right to receive income in
respect thereof.

 

(j)     Extension or Amendment of Pool Receivables. Except as otherwise
permitted in Section 9.02, the Seller will not, and will not permit the Master
Servicer to, alter the delinquency status or adjust the Outstanding Balance or
otherwise modify the terms of any Pool Receivable in any material respect, or
amend, modify or waive, in any material respect, any term or condition of any
related Contract. The Seller shall at its expense, timely and fully 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 Pool
Receivables, and timely and fully comply with the Credit and Collection Policy
with regard to each Pool Receivable and the related Contract.

 

(k)     Change in Credit and Collection Policy. The Seller will not make any
change in the Credit and Collection Policy that would reasonably be expected to
materially and adversely impact the validity, enforceability, value or
collectability of any material portion of the Pool Receivables, without the
prior written consent of the Purchaser. Promptly following any change in the
Credit and Collection Policy, the Seller (or the Master Servicer on its behalf)
will deliver a copy of the updated Credit and Collection Policy to the
Purchaser.

 

(l)     Fundamental Changes. The Seller shall not, without the prior written
consent of the Purchaser, permit itself (i) to merge or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to, any Person or
(ii) undertake any division of its rights, assets, obligations, or liabilities
pursuant to a plan of division or otherwise pursuant to applicable Law or
(iii) to be directly owned by any Person other than the Contributing Originator.
The Seller shall not, without at least five (5) Business Days’ prior notice to
the Purchaser, make any change in the Seller’s name, identity, legal structure
or location or make any other change in the Seller’s identity or legal structure
that could impair or otherwise render any UCC financing statement filed in
connection with this Agreement or any other Transaction Document “seriously
misleading” as such term (or similar term) is used in the applicable UCC.

 

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(m)     Books and Records. The Seller shall maintain and implement (or cause the
Master Servicer to maintain and implement) administrative and operating
procedures (including an ability to recreate records evidencing Pool Receivables
and related Contracts in the event of the destruction of the originals thereof),
and keep and maintain (or cause the Master Servicer to keep and maintain) all
documents, books, records, computer tapes and disks and other information
reasonably necessary or advisable for the collection of all Pool Receivables
(including records adequate to permit the daily identification of each Pool
Receivable and all Collections of and adjustments to each existing Pool
Receivable).

 

(n)     Identifying of Records. The Seller shall: (i) identify (or require the
Master Servicer to identify) its master data processing records relating to Pool
Receivables and related Contracts with a notation, header or footnote that
indicates that the Pool Receivables have been pledged in accordance with this
Agreement and (ii) require each Originator so to identify its master data
processing records with such a notation, header or footnote.

 

(o)     Change in Payment Instructions to Obligors. The Seller shall not (and
shall not permit the Master Servicer or any Sub-Servicer to) add, replace or
terminate any Collection Account (or any related Lock-Box) or make any change in
its (or their) instructions to the Obligors regarding payments to be made to the
Collection Accounts (or any related Lock-Box), other than any instruction to
remit payments to a different Collection Account (or any related Lock-Box),
unless the Purchaser shall have received (i) prior written notice of such
addition, termination or change and (ii) a signed and acknowledged Control
Agreement (or amendment thereto) with respect to such new Collection Accounts
(or any related Lock-Box).

 

(p)     Security Interest, Etc. The Seller shall (and shall cause the Master
Servicer to), at its expense, take all action necessary or reasonably desirable
to establish and maintain a valid and enforceable ownership or security interest
in the Sold Assets and Seller Collateral, and a first priority perfected
security interest in the Sold Assets and Seller Collateral, in each case free
and clear of any Adverse Claim, in favor of the Purchaser (on behalf of the
Secured Parties), including taking such action to perfect, protect or more fully
evidence the security interest of the Purchaser (on behalf of the Secured
Parties) as the Purchaser may reasonably request. In order to evidence the
security interests of the Purchaser under this Agreement, the Seller shall, from
time to time take such action, or execute and deliver such instruments as may be
necessary (including, without limitation, such actions as are reasonably
requested by the Purchaser) to maintain and perfect, as a first-priority
interest, the Purchaser’s security interest in the Receivables, Related Security
and Collections. The Seller shall, from time to time and within the time limits
established by law, prepare and present to the Purchaser for the Purchaser’s
authorization and approval, all financing statements, amendments, continuations
or initial financing statements in lieu of a continuation statement, or other
filings necessary to continue, maintain and perfect the Purchaser’s security
interest as a first-priority interest. The Purchaser’s approval of such filings
shall authorize the Seller to file such financing statements under the UCC
without the signature of the Seller, any Originator or the Purchaser where
allowed by applicable Law. Notwithstanding anything else in the Transaction
Documents to the contrary, the Seller shall not have any authority to file a
termination, partial termination, release, partial release, or any amendment
that deletes the name of a debtor or excludes any Sold Assets or Seller
Collateral of any such financing statements filed in connection with the
Transaction Documents, without the prior written consent of the Purchaser.

 

(q)     Certain Agreements. Without the prior written consent of the Purchaser,
the Seller will not (and will not permit any Originator or the Master Servicer
to) amend, modify, waive, revoke or terminate any Transaction Document to which
it is a party or any provision of the Seller’s organizational documents which
requires the consent of the “Independent Manager” (as such term is used in the
Seller’s Certificate of Formation and Limited Liability Company Agreement).

 

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(r)     Restricted Payments.

 

(i)     Except pursuant to clause (ii) below, the Seller will not: (A) purchase
or redeem any of its membership interests, (B) declare or pay any dividend or
set aside any funds for any such purpose, (C) prepay, purchase or redeem any
Debt, (D) lend or advance any funds or (E) repay any loans or advances to, for
or from any of its Affiliates (the amounts described in clauses (A) through (E)
being referred to as “Restricted Payments”).

 

(ii)     Subject to the limitations set forth in clause (iii) below, the Seller
may make Restricted Payments so long as such Restricted Payments are made only
in one or more of the following ways: (A) the Seller may make cash payments
(including prepayments) on the Subordinated Notes in accordance with their
respective terms and (B) the Seller may declare and pay dividends if, both
immediately before and immediately after giving effect thereto, the Seller’s Net
Worth is not less than the Required Capital Amount.

 

(iii)     The Seller may make Restricted Payments only out of the funds, if any,
it receives pursuant to Sections 4.01 of this Agreement; provided that the
Seller shall not pay, make or declare any Restricted Payment (including any
dividend) if, after giving effect thereto, any Event of Termination or Unmatured
Event of Termination shall have occurred and be continuing.

 

(s)     Other Business. The Seller will not: (i) engage in any business other
than the transactions contemplated by the Transaction Documents, (ii) create,
incur or permit to exist any Debt of any kind or cause or permit to be issued
for its account any letters of credit or bankers’ acceptances other than
pursuant to this Agreement or the Subordinated Notes or (iii) form any
Subsidiary or make any investments in any other Person.

 

(t)     Use of Collections Available to the Seller. The Seller shall apply the
Collections available to the Seller to make payments in the following order of
priority: (i) the payment of its obligations under this Agreement and each of
the other Transaction Documents (other than the Subordinated Notes), (ii) the
payment of accrued and unpaid interest on the Subordinated Notes and (iii) other
legal and valid purposes.

 

(u)     Further Assurances; Change in Name or Jurisdiction of Origination, etc.

 

(i)     The Seller hereby authorizes and hereby agrees from time to time, at its
own expense, promptly to execute (if necessary) and deliver all further
instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Purchaser may reasonably request, to
perfect, protect or more fully evidence the security interest granted pursuant
to this Agreement or any other Transaction Document, or to enable the Purchaser
(on behalf of the Secured Parties) to exercise and enforce the Secured Parties’
rights and remedies under this Agreement and the other Transaction Document.
Without limiting the foregoing, the Seller hereby authorizes, and will, upon the
request of the Purchaser, at the Seller’s own expense, execute (if necessary)
and file such financing statements or continuation statements, or amendments
thereto, and such other instruments and documents, that may be necessary or
desirable, or that the Purchaser may reasonably request, to perfect, protect or
evidence any of the foregoing.

 

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(ii)     The Seller authorizes the Purchaser to file financing statements,
continuation statements and amendments thereto and assignments thereof, relating
to the Receivables, the Related Security, the related Contracts, Collections
with respect thereto and the other Sold Assets and Seller Collateral without the
signature of the Seller. A photocopy or other reproduction of this Agreement
shall be sufficient as a financing statement where permitted by law.

 

(iii)     The Seller shall at all times be organized under the laws of the State
of Delaware and shall not take any action to change its jurisdiction of
organization.

 

(iv)     The Seller will not change its name, location, identity or corporate
structure unless (x) the Seller, at its own expense, shall have taken all action
necessary or appropriate to perfect or maintain the perfection of the security
interest under this Agreement (including, without limitation, the filing of all
financing statements and the taking of such other action as the Purchaser may
request in connection with such change or relocation) and (y) if requested by
the Purchaser, the Seller shall cause to be delivered to the Purchaser, an
opinion, in form and substance satisfactory to the Purchaser as to such UCC
perfection and priority matters as the Purchaser may request at such time.

 

(v)     Compliance with Anti-Corruption Laws; Beneficial Ownership Regulation,
Anti-Money Laundering Laws and Sanctions.  The Seller will (i) maintain in
effect and enforce policies and procedures designed to ensure compliance by the
Seller, its Subsidiaries and their respective directors, officers, employees and
agents with all Anti-Corruption Laws, Anti-Money Laundering Laws and applicable
Sanctions, (ii) notify the Purchaser if the Seller ceases to qualify for an
express exclusion to the “legal entity customer” definition under the Beneficial
Ownership Regulation, and (iii) promptly upon the reasonable request of the
Purchaser, provide the Purchaser any information or documentation requested by
it for purposes of complying with the Beneficial Ownership Regulation.

 

(w)     Use of Proceeds. The Seller will not request any Investment, and the
Seller shall not use, and shall ensure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Investment, directly or indirectly, (i) in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money, or
anything else of value, to any Person in violation of any Anti-Corruption Laws
or Anti-Money Laundering Laws, (ii) for the purpose of funding, financing or
facilitating any activities, business or transaction of or with any Sanctioned
Person, or in any Sanctioned Country or (iii) in any manner that would result in
the violation of any Sanctions applicable to any party hereto.

 

(x)     Seller’s Net Worth. The Seller shall not permit the Seller’s Net Worth
to be less than the Required Capital Amount.

 

(y)     Taxes. The Seller will (i) timely file all tax returns (federal, state
and local) required to be filed by it and (ii) pay, or cause to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP.

 

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(z)     Seller’s Tax Status. The Seller will remain a wholly-owned subsidiary of
a U.S. Person and not be subject to withholding under Section 1446 of the Code.
No action will be taken that would cause (and no action will be omitted which
omission would cause) the Seller to (i) be treated other than as a “disregarded
entity” within the meaning of U.S. Treasury Regulation § 301.7701-3 for U.S.
federal income tax purposes or (ii) become an association taxable as a
corporation or a publicly traded partnership taxable as a corporation for U.S.
federal income tax purposes. The Seller shall not become subject to any Tax in
any jurisdiction outside the United States.

 

Section 8.02.     Covenants of the Master Servicer. At all times from the
Closing Date until the Final Payout Date:

 

(a)     Existence. The Master Servicer shall keep in full force and effect its
existence and rights as a corporation or other entity under the laws of the
State of Delaware. The Master Servicer shall obtain and preserve its
qualification to do business in each jurisdiction in which the conduct of its
business or the servicing of the Pool Receivables as required by this Agreement
requires such qualification, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect.

 

(b)     Financial and SEC Reporting. The Master Servicer will maintain a system
of accounting established and administered in accordance with GAAP, and the
Master Servicer shall furnish to the Purchaser:

 

(i)     Quarterly Financial Statements of StarTek. As soon as available, and in
any event within 45 days after the close of each fiscal quarter of StarTek, (A)
an unaudited Consolidated balance sheet of StarTek as of the end of such quarter
and the related statements of income and cash flow for such quarter and for the
portion of the Fiscal Year then elapsed, on a Consolidated basis for StarTek and
Subsidiaries, setting forth in comparative form corresponding figures for the
preceding Fiscal Year and (B) a consolidating trial balances at the end of each
quarter, in each case certified by the chief financial officer of StarTek as
prepared in accordance with GAAP and fairly presenting the financial condition,
results of operations, shareholders equity and cash flows for such quarter,
subject to normal year-end adjustments and the absence of footnotes.

 

(ii)     Annual Financial Statements and Projections of StarTek.

 

(A)     As soon as available, but in any event within 120 days after the end of
each fiscal year of StarTek or, if earlier, 15 days after the date required to
be filed with the SEC (without giving effect to any extension permitted by the
SEC), a Consolidated balance sheet of StarTek and its Subsidiaries as at the end
of such fiscal year, and the related Consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, such Consolidated
statements to be audited and accompanied by a report and opinion of a Registered
Public Accounting Firm of nationally recognized standing reasonably acceptable
to the Purchaser (the “Auditor”), which report and opinion shall be prepared in
accordance with audit standards of the Public Company Accounting Oversight Board
and applicable securities Laws and shall not be contain any paragraph of
emphasis or similar disclosure of a “going concern” determination by management
or any qualification or exception as to the scope of such audit and shall
include a certificate of the Auditor stating that in making the examination
necessary with respect to such audit it has not become aware of any Event of
Termination in respect of any term, covenant, condition of Section 10.01(r) or
other provision in so far as they relate to accounting matters or, if any such
Event of Termination shall exist, stating the nature and status of such event;
and

 

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(B)     As soon as available but not later than thirty (30) days after the end
of each fiscal year, annual financial projections (on a month by month basis) of
StarTek and its Subsidiaries on a Consolidated basis, in form satisfactory to
the Purchaser, consisting of (i) Consolidated balance sheets and statements of
income or operations and cash flows and (ii) monthly Available Liquidity for
StarTek for the immediately following fiscal year.

 

(iii)     Other Reports and Filings. Promptly (but in any event within ten days)
after the filing or delivery thereof, copies of all financial information, proxy
materials and reports, if any, which StarTek or any of its consolidated
Subsidiaries shall publicly file with the SEC or deliver to holders (or any
trustee, agent or other representative therefor) of any of its material Debt
pursuant to the terms of the documentation governing the same.

 

(iv)     Electronic Delivery Permitted. Documents required to be delivered
pursuant to Sections 8.02(b)(i), 8.02(b)(ii) and 8.02(b)(iii) (to the extent
such documents are filed with the SEC) may be delivered electronically,
including by filing with the SEC, and if so delivered, shall be deemed to have
been delivered on the date (A) on which StarTek posts such documents, or
provides a link thereto on StarTek’s website on the internet at www.StarTek.com;
(B) on which such documents are posted on StarTek’s behalf on an internet or
intranet website, if any, to which the Purchaser has access (whether a
commercial, third-party website or sponsored by the Purchaser); or (iii) filed
with the SEC.

 

(v)     Compliance Certificates. Within 120 days of the end of each fiscal year
of StarTek and within 45 days of the end of each fiscal quarter of StarTek
(other than the fourth fiscal quarter), a certificate of a Financial Officer of
the Master Servicer substantially in the form of Exhibit F stating that no Event
of Termination or Unmatured Event of Termination has occurred and is continuing,
or if any Event of Termination or Unmatured Event of Termination has occurred
and is continuing, stating the nature and status thereof.

 

(vi)     Daily Reports, Monthly Reports. Not later than 12:00 noon (New York
City time): (A) on the Closing Date and on each Business Day thereafter prior to
the Final Payout Date, the Master Servicer shall deliver (or cause to be
delivered) to the Purchaser, a Daily Report as of the close of business on the
second prior Business Day, and (B) not later than 12:00 noon (New York City
time) on each Determination Date, the Master Servicer shall deliver (or cause to
be delivered) to the Purchaser, a Monthly Report as of the last day of the
Calculation Period then most recently ended.

 

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(vii)     Know Your Customer. Promptly upon the request thereof, such other
information and documentation required under applicable “know your customer”
rules and regulations, the PATRIOT Act or any applicable Anti-Money Laundering
Laws or Anti-Corruption Laws, in each case as from time to time reasonably
requested by the Purchaser.

 

(viii)     Other Information. Such other information (including non-financial
information) as the Purchaser may from time to time reasonably request.

 

(c)     Notices. Unless such notice is provided by the Seller, the Master
Servicer will notify the Purchaser in writing of any of the following events
promptly upon (but in no event later than three (3) Business Days after) a
Financial Officer or other officer learning of the occurrence thereof, with such
notice describing the same, and if applicable, the steps being taken by the
Person(s) affected with respect thereto:

 

(i)     Notice of Events of Termination or Unmatured Events of Termination. A
statement of a Financial Officer of the Master Servicer setting forth details of
any Event of Termination or Unmatured Event of Termination that has occurred and
is continuing and the action which the Master Servicer proposes to take with
respect thereto.

 

(ii)     Representations and Warranties. The failure of any representation or
warranty made or deemed made by the Master Servicer under this Agreement or any
other Transaction Document to be true and correct in any material respect when
made.

 

(iii)     Litigation. The institution of any litigation, arbitration proceeding
or governmental proceeding with respect to any StarTek Party, which would
reasonably be expected to have a Material Adverse Effect.

 

(iv)     Adverse Claim. (A) Any Person shall obtain an Adverse Claim upon the
Sold Assets or the Seller Collateral or any portion thereof, (B) any Person
other than the Seller, the Master Servicer or the Purchaser shall obtain any
rights or direct any action with respect to any Collection Account (or related
Lock-Box) or (C) any Obligor shall receive any change in payment instructions
with respect to Pool Receivable(s) from a Person other than the Master Servicer
or the Purchaser.

 

(v)     Name Changes. At least five (5) Business Days before any change in any
Originator’s or the Seller’s name, jurisdiction of organization or any other
change requiring the amendment of UCC financing statements.

 

(vi)     Change in Accountants or Accounting Policy. Any change in (A) the
external accountants of any StarTek Party, (B) any accounting policy of the
Seller or (C) any material accounting policy of any Originator that is relevant
to the transactions contemplated by this Agreement or any other Transaction
Document (it being understood that any change to the manner in which any
Originator accounts for the Pool Receivables shall be deemed “material” for such
purpose).

 

(vii)     Termination Event. The occurrence of an RSCA Termination Event.

 

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(viii)     Material Adverse Change. Promptly after the occurrence thereof,
notice of any material adverse change in the business, operations, property or
financial or other condition of any Originator, the Master Servicer, the
Indemnification Guarantor or the Seller.

 

(d)     Conduct of Business. The Master Servicer will carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted, and will do all things necessary to
remain duly organized, validly existing and in good standing as a domestic
corporation in its jurisdiction of organization and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted if the failure to have such authority would reasonably be expected to
have a Material Adverse Effect.

 

(e)     Compliance with Laws. The Master Servicer will comply with all
applicable Laws to which it may be subject if the failure to comply would
reasonably be expected to have a Material Adverse Effect.

 

(f)     Furnishing of Information and Inspection of Receivables. The Master
Servicer will furnish or cause to be furnished to the Purchaser from time to
time such information with respect to the Pool Receivables and the other Sold
Assets and Seller Collateral as the Purchaser may reasonably request. The Master
Servicer will, at the Master Servicer’s expense, during regular business hours
with prior written notice, (i) permit the Purchaser or their respective agents
or representatives to (A) examine and make copies of and abstracts from all
books and records relating to the Pool Receivables or other Sold Assets and the
Seller Collateral, (B) visit the offices and properties of the Master Servicer
for the purpose of examining such books and records and (C) discuss matters
relating to the Pool Receivables, the other Sold Assets, the Seller Collateral
or the Master Servicer’s performance hereunder or under the other Transaction
Documents to which it is a party with any of the officers, directors, employees
or independent public accountants of the Master Servicer (provided that
representatives of the Master Servicer are present during such discussions)
having knowledge of such matters and (ii) without limiting the provisions of
clause (i) above, during regular business hours, at the Master Servicer’s
expense, upon prior written notice from the Purchaser, permit certified public
accountants or other auditors acceptable to the Purchaser to conduct a review of
its books and records with respect to the Pool Receivables and the other Sold
Assets and the Seller Collateral; provided, that the Seller and the Master
Service shall be required to reimburse the Purchaser for only one (1) such
review pursuant to clause (ii) above and Section 8.01(g) in any twelve-month
period, unless (x) an Event of Termination has occurred and is continuing or (y)
the prior review had one or more material adverse findings.

 

(g)     Payments on Receivables, Collection Accounts. (i) The Master Servicer
will at all times, instruct all Obligors to deliver payments on the Pool
Receivables to a Collection Account or a Lock-Box. The Master Servicer will, at
all times, maintain such books and records necessary to identify Collections
received from time to time on Pool Receivables and (ii) to segregate such
Collections from other property of the Master Servicer and any Originator. If
any payments on the Pool Receivables or other Collections are received by the
Seller, the Master Servicer or any Originator, it shall hold such payments in
trust for the benefit of the Purchaser and the other Secured Parties and
promptly (but in any event within one (1) Business Day after receipt) remit such
funds into a Collection Account. The Master Servicer shall use commercially
reasonable efforts not to permit funds other than (i) Collections on Pool
Receivables and (ii) other Sold Assets and Seller Collateral to be deposited
into any Collection Account. If such funds are nevertheless deposited into any
Collection Account, the Master Servicer will within two (2) Business Days
identify and transfer such funds to the appropriate Person entitled to such
funds. The Master Servicer will not, and will not permit the Seller, any
Originator or any other Person to commingle Collections or other funds to which
the Purchaser or any other Secured Party is entitled, with any other funds. The
Master Servicer shall only add a Collection Account (or a related Lock-Box), or
a Collection Account Bank to those listed on Schedule II to this Agreement, if
the Purchaser has received notice of such addition and an executed and
acknowledged copy of a Control Agreement (or an amendment thereto) in form and
substance acceptable to the Purchaser from the applicable Collection Account
Bank. The Master Servicer shall only terminate a Collection Account Bank or
close a Collection Account (or a related Lock-Box) with the prior written
consent of the Purchaser.

 

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(h)     Extension or Amendment of Pool Receivables. Except as otherwise
permitted in Section 9.02, the Master Servicer will not alter the delinquency
status or adjust the Outstanding Balance or otherwise modify the terms of any
Pool Receivable in any material respect, or amend, modify or waive, in any
material respect, any term or condition of any related Contract. The Master
Servicer shall at its expense, timely and fully 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 Pool Receivables, and
timely and fully comply with the Credit and Collection Policy with regard to
each Pool Receivable and the related Contract.

 

(i)     Change in Credit and Collection Policy. The Master Servicer will not
make any change in the Credit and Collection Policy that would reasonably be
expected to materially and adversely impact the validity, enforceability, value
or collectability of any material portion of the Pool Receivables, without the
prior written consent of the Purchaser. Promptly following any change in the
Credit and Collection Policy, the Master Servicer will deliver a copy of the
updated Credit and Collection Policy to the Purchaser.

 

(j)     Records. The Master Servicer will maintain and implement administrative
and operating procedures (including an ability to recreate records evidencing
Pool Receivables and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records,
computer tapes and disks and other information reasonably necessary or advisable
for the collection of all Pool Receivables (including records adequate to permit
the daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).

 

(k)     Identifying of Records. The Master Servicer shall identify its master
data processing records relating to Pool Receivables and related Contracts with
a notation, header or footnote that indicates that the Pool Receivables have
been pledged in accordance with this Agreement.

 

(l)     Change in Payment Instructions to Obligors. The Master Servicer shall
not (and shall not permit any Sub-Servicer to) add, replace or terminate any
Collection Account (or any related Lock-Box) or make any change in its
instructions to the Obligors regarding payments to be made to the Collection
Accounts (or any related Lock-Box), other than any instruction to remit payments
to a different Collection Account (or any related Lock-Box), unless the
Purchaser shall have received (i) prior written notice of such addition,
termination or change and (ii) a signed and acknowledged Control Agreement (or
an amendment thereto) with respect to such new Collection Accounts (or any
related Lock-Box).

 

(m)     Security Interest, Etc. The Master Servicer shall (to the extent not
performed by the Seller), at its expense, take all action necessary or
reasonably desirable to establish and maintain a valid and enforceable first
priority perfected security interest in the Sold Assets and Seller Collateral,
in each case free and clear of any Adverse Claim in favor of the Purchaser (on
behalf of the Secured Parties), including taking such action to perfect, protect
or more fully evidence the security interest of the Purchaser (on behalf of the
Secured Parties) as the Purchaser may reasonably request. In order to evidence
the security interests of the Purchaser under this Agreement, the Master
Servicer shall, from time to time take such action, or execute and deliver such
instruments as may be necessary (including, without limitation, such actions as
are reasonably requested by the Purchaser) to maintain and perfect, as a
first-priority interest, the Purchaser’s security interest in the Receivables,
Related Security and Collections. The Master Servicer shall, on behalf of the
Purchaser (to the extent not performed by the Seller or the Purchaser), from
time to time and within the time limits established by law, prepare and present
to the Purchaser for the Purchaser’s authorization and approval, all financing
statements, amendments, continuations or initial financing statements in lieu of
a continuation statement, or other filings necessary to continue, maintain and
perfect the Purchaser’s security interest as a first-priority interest. The
Purchaser’s approval of such filings shall authorize the Master Servicer to file
such financing statements under the UCC without the signature of the Seller, any
Originator or the Purchaser where allowed by applicable Law. Notwithstanding
anything else in the Transaction Documents to the contrary, the Master Servicer
shall not have any authority to file a termination, partial termination,
release, partial release, or any amendment that deletes the name of a debtor or
excludes collateral of any such financing statements filed in connection with
the Transaction Documents, without the prior written consent of the Purchaser.

 

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(n)     Further Assurances; Change in Name or Jurisdiction of Origination, etc.
The Master Servicer hereby authorizes and hereby agrees from time to time, at
its own expense, promptly to execute (if necessary) and deliver all further
instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Purchaser may reasonably request, to
perfect, protect or more fully evidence the security interest granted pursuant
to this Agreement or any other Transaction Document, or to enable the Purchaser
(on behalf of the Secured Parties) to exercise and enforce their respective
rights and remedies under this Agreement or any other Transaction Document.
Without limiting the foregoing, the Master Servicer hereby authorizes, and will,
upon the request of the Purchaser, at the Master Servicer’s own expense, execute
(if necessary) and file such financing statements or continuation statements, or
amendments thereto, and such other instruments and documents, that may be
necessary or desirable, or that the Purchaser may reasonably request, to
perfect, protect or evidence any of the foregoing.

 

(o)     Compliance with Anti-Corruption Laws; Beneficial Ownership Regulation,
Anti-Money Laundering Laws and Sanctions.  The Master Servicer will (a) maintain
in effect and enforce policies and procedures designed to ensure compliance by
the Master Servicer, its Subsidiaries and their respective directors, officers,
employees and agents with all Anti-Corruption Laws, Anti-Money Laundering Laws
and applicable Sanctions, (b) notify the Purchaser if the Purchaser ceases to
qualify for an express exclusion to the “legal entity customer” definition under
the Beneficial Ownership Regulation, and (c) promptly upon the reasonable
request of the Purchaser, provide the Purchaser any information or documentation
requested by it for purposes of complying with the Beneficial Ownership
Regulation.

 

(p)     Taxes. The Master Servicer will (i) timely file all tax returns
(federal, state and local) required to be filed by it and (ii) pay, or cause to
be paid, all taxes, assessments and other governmental charges, if any, other
than taxes, assessments and other governmental charges being contested in good
faith by appropriate proceedings and as to which adequate reserves have been
provided in accordance with GAAP, except in each case to the extent that such
failure to file or pay would not reasonably be expected to have a Material
Adverse Effect.

 

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(q)     Seller’s Tax Status. The Master Servicer shall not take or cause any
action to be taken that could result (and shall not fail to take any action the
omission of which could result) in the Seller (i) being treated other than as a
“disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3
that is a wholly-owned subsidiary of a U.S. Person for U.S. federal income tax
purposes or (ii) becoming an association taxable as a corporation or a publicly
traded partnership taxable as a corporation for U.S. federal income tax
purposes.

 

Section 8.03.     Separate Existence of the Seller. Each of the Seller and the
Master Servicer hereby acknowledges that the Purchaser is entering into the
transactions contemplated by this Agreement and the other Transaction Documents
in reliance upon the Seller’s identity as a legal entity separate from any
Originator, the Master Servicer, the Indemnification Guarantor and their
Affiliates. Therefore, each of the Seller and Master Servicer shall take all
steps specifically required by this Agreement or reasonably required by the
Purchaser to continue the Seller’s identity as a separate legal entity and to
make it apparent to third Persons that the Seller is an entity with assets and
liabilities distinct from those of the Indemnification Guarantor, any
Originator, the Master Servicer and any other Person, and is not a division of
the Indemnification Guarantor, any Originator, the Master Servicer, its
Affiliates or any other Person. Without limiting the generality of the foregoing
and in addition to and consistent with the other covenants set forth herein,
each of the Seller and the Master Servicer shall take such actions as shall be
required in order that:

 

(a)     Special Purpose Entity. The Seller will be a special purpose company
whose primary activities are restricted in its Limited Liability Company
Agreement to: (i) purchasing or otherwise acquiring from any Originator, owning,
holding, collecting, granting security interests or selling interests in the
Sold Assets and Seller Collateral, (ii) entering into agreements for the
selling, servicing and financing of the Receivables Pool (including the
Transaction Documents) and (iii) conducting such other activities as it deems
necessary or appropriate to carry out its primary activities.

 

(b)     No Other Business or Debt. The Seller shall not engage in any business
or activity except as set forth in this Agreement nor, incur any indebtedness or
liability other than as expressly permitted by the Transaction Documents.

 

(c)     Independent Manager. Not fewer than one member of the Seller’s board of
managers (the “Independent Manager”) shall be a natural person who (i) has never
been, and shall at no time be, an equityholder, director, officer, manager,
member, partner, officer, employee or associate, or any relative of the
foregoing, of any member of the StarTek Group (as hereinafter defined) (other
than his or her service as an Independent Manager of the Seller or an
independent manager or independent director of any other bankruptcy-remote
special purpose entity formed for the sole purpose of securitizing, or
facilitating the securitization of, financial assets of any member or members of
the StarTek Group), (ii) is not a customer or supplier of any member of the
StarTek Group (other than his or her service as an Independent Manager of the
Seller or an independent manager of any other bankruptcy-remote special purpose
entity formed for the sole purpose of securitizing, or facilitating the
securitization of, financial assets of any member or members of the StarTek
Group), (iii) is not any member of the immediate family of a person described in
(i) or (ii) above, and (iv) has (x) prior experience as an independent manager
for a corporation or limited liability company whose organizational or charter
documents required the unanimous consent of all independent managers thereof
before such corporation or limited liability company could consent to the
institution of bankruptcy or insolvency proceedings against it or could file a
petition seeking relief under any applicable federal or state law relating to
bankruptcy, (y) at least three years of employment experience with one or more
entities that provide, in the ordinary course of their respective businesses,
advisory, management or placement services to issuers of securitization or
structured finance instruments, agreements or securities and (z) is employed by
Global Securitization Services, LLC, Lord Securities Corporation, AMACAR Group
LLC, CT Corporation, Corporation Service Company, Puglisi & Associates, or
Citadel SPV (USA) LLC. A person shall be deemed to be an “associate” of (A) a
corporation or business organization of which such person is an officer,
director, partner or manager or is, directly or indirectly, the beneficial owner
of ten percent (10%) or more of any class of equity securities, (B) any trust or
other estate in which such person serves as trustee or in a similar capacity and
(C) any relative or spouse of a person described in clause (A) or (B) of this
sentence, or any relative of such spouse.

 

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The Seller shall (A) give written notice to the Purchaser of the election or
appointment, or proposed election or appointment, of a new Independent Manager
of the Seller, which notice shall be given not later than ten (10) Business Days
prior to the date such appointment or election would be effective (except when
such election or appointment is necessary to fill a vacancy caused by the death,
disability, or incapacity of the existing Independent Manager, or the failure of
such Independent Manager to satisfy the criteria for an Independent Manager set
forth in this clause (c), in which case the Seller shall provide written notice
of such election or appointment within one (1) Business Day) and (B) with any
such written notice, certify to the Purchaser that the Independent Manager
satisfies the criteria for an Independent Manager set forth in this clause (c).

 

The Seller’s Limited Liability Company Agreement shall provide that: (A) the
Seller’s board of managers shall not approve, or take any other action to cause
the filing of, a voluntary bankruptcy petition with respect to the Seller unless
the Independent Manager shall approve the taking of such action in writing
before the taking of such action and (B) such provision and each other provision
requiring an Independent Manager cannot be amended without the prior written
consent of the Independent Manager.

 

The Independent Manager shall not at any time serve as a trustee in bankruptcy
for the Seller, StarTek, the Indemnification Guarantor, any Originator, the
Master Servicer or any of their respective Affiliates.

 

(d)     Organizational Documents. The Seller shall maintain its organizational
documents in conformity with this Agreement, such that it does not amend,
restate, supplement or otherwise modify its ability to comply with the terms and
provisions of any of the Transaction Documents, including, without limitation,
Section 8.01(p).

 

(e)     Conduct of Business. The Seller shall conduct its affairs strictly in
accordance with its organizational documents and observe all necessary,
appropriate and customary company formalities, including, but not limited to,
holding all regular and special members’ and board of managers’ meetings
appropriate to authorize all company action, keeping separate and accurate
minutes of its meetings, passing all resolutions or consents necessary to
authorize actions taken or to be taken, and maintaining accurate and separate
books, records and accounts, including, but not limited to, payroll and
intercompany transaction accounts.

 

(f)     Compensation. Any employee, consultant or agent of the Seller will be
compensated from the Seller’s funds for services provided to the Seller, and to
the extent that Seller shares the same officers or other employees as the Master
Servicer (or any other Affiliate thereof), the salaries and expenses relating to
providing benefits to such officers and other employees shall be fairly
allocated among such entities, and each such entity shall bear its fair share of
the salary and benefit costs associated with such common officers and employees.
The Seller will not engage any agents other than its attorneys, auditors and
other professionals, and a servicer and any other agent contemplated by the
Transaction Documents for the Receivables Pool, which servicer will be fully
compensated for its services by payment of the Servicing Fee.

 

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(g)     Servicing and Costs. The Seller will contract with the Master Servicer
to perform for the Seller all operations required on a daily basis to service
the Receivables Pool. The Seller will not incur any indirect or overhead
expenses for items shared with the Master Servicer (or any other Affiliate
thereof) that are not reflected in the Servicing Fee. To the extent, if any,
that the Seller (or any Affiliate thereof) shares items of expenses not
reflected in the Servicing Fee, such as legal, auditing and other professional
services, such expenses will be allocated to the extent practical on the basis
of actual use or the value of services rendered, and otherwise on a basis
reasonably related to the actual use or the value of services rendered.

 

(h)     Operating Expenses. The Seller’s operating expenses will not be paid by
the Master Servicer, StarTek, the Indemnification Guarantor, any Originator or
any Affiliate thereof.

 

(i)     Books and Records. The Seller’s books and records will be maintained
separately from those of the Master Servicer, StarTek, the Indemnification
Guarantor, any Originator and any of their Affiliates and in a manner such that
it will not be difficult or costly to segregate, ascertain or otherwise identify
the assets and liabilities of the Seller.

 

(j)     Disclosure of Transactions. All financial statements of the Master
Servicer, StarTek, the Indemnification Guarantor, any Originator or any
Affiliate thereof that are consolidated to include the Seller will disclose that
(i) the Seller’s sole business consists of the purchase or acceptance through
capital contributions of the Receivables and Related Rights from any Originator
and the subsequent retransfer of or granting of a security interest in such
Receivables and Related Rights to the Purchaser pursuant to this Agreement, (ii)
the Seller is a separate legal entity with its own separate creditors who will
be entitled, upon its liquidation, to be satisfied out of the Seller’s assets
prior to any assets or value in the Seller becoming available to the Seller’s
equity holders and (iii) the assets of the Seller are not available to pay
creditors of the Master Servicer, StarTek, the Indemnification Guarantor, any
Originator or any Affiliate thereof (other than the Seller).

 

(k)     Segregation of Assets. The Seller’s assets will be maintained in a
manner that facilitates their identification and segregation from those of the
Master Servicer, StarTek, the Indemnification Guarantor, any Originator or any
Affiliates thereof.

 

(l)     Corporate Formalities. The Seller will strictly observe limited
liability company formalities in its dealings with the Master Servicer, StarTek,
the Indemnification Guarantor, any Originator or any Affiliates thereof, and
funds or other assets of the Seller will not be commingled with those of the
Master Servicer, StarTek, the Indemnification Guarantor, any Originator or any
Affiliates thereof except as permitted by this Agreement in connection with
servicing the Pool Receivables. The Seller shall not maintain joint bank
accounts or other depository accounts to which the Master Servicer, StarTek, the
Indemnification Guarantor, any Originator or any Affiliate thereof (other than
the Master Servicer solely in its capacity as such) has independent access. The
Seller is not named, and has not entered into any agreement to be named,
directly or indirectly, as a direct or contingent beneficiary or loss payee on
any insurance policy with respect to any loss relating to the property of the
Master Servicer, StarTek, the Indemnification Guarantor, any Originator or any
Subsidiaries or other Affiliates thereof. The Seller will pay to the appropriate
Affiliate the marginal increase or, in the absence of such increase, the market
amount of its portion of the premium payable with respect to any insurance
policy that covers the Seller and such Affiliate.

 

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(m)     Arm’s-Length Relationships. The Seller will maintain arm’s-length
relationships with the Master Servicer, StarTek, the Indemnification Guarantor,
any Originator and any Affiliates thereof. Any Person that renders or otherwise
furnishes services to the Seller will be compensated by the Seller at market
rates for such services it renders or otherwise furnishes to the Seller. Neither
the Seller on the one hand, nor the Master Servicer, StarTek, the
Indemnification Guarantor, any Originator or any Affiliate thereof, on the other
hand, will be or will hold itself out to be responsible for the debts of the
other or the decisions or actions respecting the daily business and affairs of
the other. The Seller, the Master Servicer, StarTek, the Indemnification
Guarantor, any Originator and their respective Affiliates will immediately
correct any known misrepresentation with respect to the foregoing, and they will
not operate or purport to operate as an integrated single economic unit with
respect to each other or in their dealing with any other entity.

 

(n)     Allocation of Overhead. To the extent that Seller, on the one hand, and
the Master Servicer, StarTek, the Indemnification Guarantor, any Originator or
any Affiliate thereof, on the other hand, have offices in the same location,
there shall be a fair and appropriate allocation of overhead costs between them,
and the Seller shall bear its fair share of such expenses, which may be paid
through the Servicing Fee or otherwise.

 

ARTICLE IX

SERVICING OF RECEIVABLES

 

Section 9.01.     Appointment of the Master Servicer.

 

(a)     The servicing, administering and collection of the Pool Receivables
shall be conducted by the Person so designated from time to time as the Master
Servicer in accordance with this Section 9.01. Until the Purchaser gives notice
to StarTek (in accordance with this Section 9.01) of the designation of a new
Master Servicer, StarTek is hereby designated as, and hereby agrees to perform
the duties and obligations of, the Master Servicer pursuant to the terms hereof.
The Purchaser may, at any time during the continuation of an Event of
Termination caused by a breach of this Agreement by the Master Servicer, in its
Permitted Discretion, designate as Master Servicer any Person (including itself)
to succeed StarTek or any successor Master Servicer, on the condition in each
case that any such Person so designated shall agree to perform the duties and
obligations of the Master Servicer pursuant to the terms hereof.

 

(b)     Upon the designation of a successor Master Servicer as set forth in
clause (a) above, StarTek agrees that it will terminate its activities as Master
Servicer hereunder in a manner that the Purchaser reasonably determines will
facilitate the transition of the performance of such activities to the new
Master Servicer, and StarTek shall cooperate with and assist such new Master
Servicer. Such cooperation shall include access to and transfer of records
(including all Contracts) related to Pool Receivables and use by the new Master
Servicer of all licenses (or the obtaining of new licenses), hardware or
software necessary or reasonably desirable to collect the Pool Receivables.

 

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(c)     StarTek acknowledges that, in making its decision to execute and deliver
this Agreement, the Purchaser has relied on StarTek’s agreement to act as Master
Servicer hereunder. Accordingly, StarTek agrees that it will not voluntarily
resign as Master Servicer without the prior written consent of the Purchaser.

 

(d)     The Master Servicer may delegate its duties and obligations hereunder to
any subservicer (each a “Sub-Servicer”); provided, that, in each such
delegation: (i) such Sub-Servicer shall agree in writing to perform the
delegated duties and obligations of the Master Servicer pursuant to the terms
hereof, (ii) the Master Servicer shall remain liable for the performance of the
duties and obligations so delegated, (iii) the Seller, the Purchaser shall have
the right to look solely to the Master Servicer for performance, (iv) the terms
of any agreement with any Sub-Servicer shall provide that the Purchaser may
terminate such agreement upon the termination of the Master Servicer hereunder
by giving notice of its desire to terminate such agreement to the Master
Servicer (and the Master Servicer shall provide appropriate notice to each such
Sub-Servicer) and (v) if such Sub-Servicer is not an Affiliate of StarTek, the
Purchaser shall have consented in writing in advance to such delegation. The
Purchaser hereby consents to the delegation to Finacity Corporation of some or
all of its reporting obligations with respect to the Pool Receivables.

 

Section 9.02.     Duties of the Master Servicer.

 

(a)     The Master Servicer shall take or cause to be taken all such action as
may be necessary or reasonably advisable to service, administer and collect each
Pool Receivable from time to time, all in accordance with this Agreement and all
applicable Laws, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy and consistent with the past practices of any
Originator. The Master Servicer shall set aside, for the account of the
Purchaser, the amount of Collections to which the Purchaser is entitled in
accordance with Article IV hereof. The Master Servicer may, in accordance with
the Credit and Collection Policy and consistent with past practices of any
Originator, take such action, including modifications, waivers or restructurings
of Pool Receivables and related Contracts, as the Master Servicer may reasonably
determine to be appropriate to maximize Collections thereof or reflect
adjustments expressly permitted under the Credit and Collection Policy or as
expressly required under applicable Laws or the applicable Contract; provided,
that for purposes of this Agreement: (i) such action shall not, and shall not be
deemed to, change the number of days such Pool Receivable has remained unpaid
from the date of the original due date related to such Pool Receivable, (ii)
such action shall not alter the status of such Pool Receivable as a Delinquent
Receivable or a Defaulted Receivable or limit the rights of any Secured Party
under this Agreement or any other Transaction Document and (iii) if an Event of
Termination has occurred and is continuing, the Master Servicer may take such
action only upon the prior written consent of the Purchaser. The Seller shall
deliver to the Master Servicer and the Master Servicer shall hold for the
benefit of the Purchaser, all records and documents (including computer tapes or
disks) with respect to each Pool Receivable. Notwithstanding anything to the
contrary contained herein, if an Event of Termination has occurred and is
continuing, the Purchaser may direct the Master Servicer to commence or settle
any legal action to enforce collection of any Pool Receivable that is a
Defaulted Receivable or to foreclose upon or repossess any Related Security with
respect to any such Defaulted Receivable.

 

(b)     The Master Servicer’s obligations hereunder shall terminate on the Final
Payout Date. Promptly following the Final Payout Date, the Master Servicer shall
deliver to the Seller all books, records and related materials that the Seller
previously provided to the Master Servicer, or that have been obtained by the
Master Servicer, in connection with this Agreement.

 

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Section 9.03.     Collection Account Arrangements. Prior to the Closing Date,
the Seller shall have entered into Control Agreements with all of the Collection
Account Banks and delivered executed counterparts of each to the Purchaser. At
any time during the continuation of an Event of Termination, the Purchaser may,
in the exercise of its Permitted Discretion, give notice to each Collection
Account Bank that the Purchaser is exercising its rights under the Control
Agreements to do any or all of the following: (a) to have the exclusive
ownership and control of the Collection Accounts transferred to the Purchaser
(for the benefit of the Secured Parties) and to exercise exclusive dominion and
control over the funds deposited therein (for the benefit of the Secured
Parties), (b) to have the proceeds that are sent to the respective Collection
Accounts redirected pursuant to the Purchaser’s instructions rather than
deposited in the applicable Collection Account and (c) to take any or all other
actions permitted under the applicable Control Agreement. The Seller hereby
agrees that if the Purchaser at any time takes any action set forth in the
preceding sentence, the Purchaser shall have exclusive control (for the benefit
of the Secured Parties) of the proceeds (including Collections) of all Pool
Receivables and the Seller hereby further agrees to take any other action that
the Purchaser may reasonably request to transfer such control. Any proceeds of
Pool Receivables received by the Seller or the Master Servicer thereafter shall
be sent immediately to, or as otherwise instructed by, the Purchaser.

 

Section 9.04.     Enforcement Rights.

 

(a)     At any time following the occurrence and during the continuation of an
Event of Termination:

 

(i)     the Purchaser (at the Seller’s expense) may direct the Obligors that
payment of all amounts payable under any Pool Receivable is to be made directly
to the Purchaser or its designee; provided, however, if the sole Event of
Termination is the Cross Payment Default, the Purchaser shall not exercise its
rights under this clause (i) unless the Cross Payment Default has continued
(without cure or waiver) for ten (10) Business Days or the creditor holding the
Debt which is the subject of such Cross Payment Default begins to exercise its
remedies;

 

(ii)     the Purchaser may instruct the Seller or the Master Servicer to give
notice of the Secured Parties’ interest in Pool Receivables to each Obligor,
which notice shall direct that payments be made directly to the Purchaser or its
designee (on behalf of the Secured Parties), and the Seller or the Master
Servicer, as the case may be, shall give such notice at the expense of the
Seller or the Master Servicer, as the case may be; provided, that if the Seller
or the Master Servicer, as the case may be, fails to so notify each Obligor
within two (2) Business Days following instruction by the Purchaser, the
Purchaser (at the Seller’s or the Master Servicer’s, as the case may be,
expense) may so notify the Obligors;

 

(iii)     the Purchaser may request the Master Servicer to, and upon such
request the Master Servicer shall: (A) assemble all of the records necessary or
desirable to collect the Pool Receivables and the Related Security, and transfer
or license to a successor Master Servicer the use of all software necessary or
desirable to collect the Pool Receivables and the Related Security, and make the
same available to the Purchaser or its designee (for the benefit of the Secured
Parties) at a place selected by the Purchaser and (B) segregate all cash, checks
and other instruments received by it from time to time constituting Collections
in a manner reasonably acceptable to the Purchaser and, promptly upon receipt,
remit all such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Purchaser or its designee;

 

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(iv)     if Notices of Exclusive Control have not previously been sent, the
Purchaser may send a Notice of Exclusive Control to each of the Collection
Account Banks with respect to each of the Collection Accounts and the Settlement
Account;

 

(v)     if the Purchaser has not previously done so, the Purchaser may replace
the Person then acting as Master Servicer; and

 

(vi)     the Purchaser may collect any amounts due from any Originators under
the RSCA or the Indemnification Guarantor under the Indemnification Guarantee.

 

For the avoidance of doubt, the foregoing rights and remedies of the Purchaser
upon an Event of Termination are in addition to and not exclusive of the rights
and remedies contained herein and under the other Transaction Documents.

 

(b)     The Seller hereby authorizes the Purchaser (on behalf of the Secured
Parties), and irrevocably appoints the Purchaser as its attorney-in-fact with
full power of substitution and with full authority in the place and stead of the
Seller, which appointment is coupled with an interest, to take any and all steps
in the name of the Seller and on behalf of the Seller necessary or desirable, in
the reasonable determination of the Purchaser, after the occurrence and during
the continuation of an Event of Termination, to collect any and all amounts or
portions thereof due under any and all Sold Assets and Seller Collateral,
including endorsing the name of the Seller on checks and other instruments
representing Collections and enforcing such Sold Assets and Seller Collateral.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.

 

(c)     The Master Servicer hereby authorizes the Purchaser (on behalf of the
Secured Parties), and irrevocably appoints the Purchaser as its attorney-in-fact
with full power of substitution and with full authority in the place and stead
of the Master Servicer, which appointment is coupled with an interest, to take
any and all steps in the name of the Master Servicer and on behalf of the Master
Servicer necessary or desirable, in the reasonable determination of the
Purchaser, after the occurrence and during the continuation of an Event of
Termination, to collect any and all amounts or portions thereof due under any
and all Sold Assets and Seller Collateral, including endorsing the name of the
Master Servicer on checks and other instruments representing Collections and
enforcing such Sold Assets and Seller Collateral. Notwithstanding anything to
the contrary contained in this subsection, none of the powers conferred upon
such attorney-in-fact pursuant to the preceding sentence shall subject such
attorney-in-fact to any liability if any action taken by it shall prove to be
inadequate or invalid, nor shall they confer any obligations upon such
attorney-in-fact in any manner whatsoever.

 

Section 9.05.     Responsibilities of the Seller.

 

(a)     Anything herein to the contrary notwithstanding, the Seller shall: (i)
perform all of its obligations, if any, under the Contracts related to the Pool
Receivables to the same extent as if interests in such Pool Receivables had not
been transferred hereunder, and the exercise by the Purchaser of its respective
rights hereunder shall not relieve the Seller from such obligations and (ii) pay
when due any taxes, including any sales taxes payable in connection with the
Pool Receivables and their creation and satisfaction. The Purchaser shall not
have any obligation or liability with respect to any Sold Assets or Seller
Collateral, nor shall any of them be obligated to perform any of the obligations
of the Seller, the Master Servicer or any Originator thereunder.

 

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(b)     StarTek hereby irrevocably agrees that if at any time it shall cease to
be the Master Servicer hereunder, it shall act (if the then-current Master
Servicer so requests) as the data-processing agent of the Master Servicer and,
in such capacity, StarTek shall conduct the data-processing functions of the
administration of the Receivables and the Collections thereon in substantially
the same way that StarTek conducted such data-processing functions while it
acted as the Master Servicer. In connection with any such processing functions,
the Seller shall pay to StarTek its reasonable out-of-pocket costs and expenses
from the Seller’s own funds (subject to the priority of payments set forth in
Section 4.01).

 

Section 9.06.     Servicing Fee.

 

(a)     Subject to clause (b) below, the Seller shall pay the Master Servicer a
fee (the “Servicing Fee”) equal to 1.00% per annum (the “Servicing Fee Rate”) of
the daily average aggregate Outstanding Balance of the Pool Receivables. Accrued
Servicing Fees shall be payable from Collections to the extent of available
funds in accordance with Section 4.01.

 

(b)     If the Master Servicer ceases to be StarTek or an Affiliate thereof, the
Servicing Fee shall be the greater of: (i) the amount calculated pursuant to
clause (a) above and (ii) an alternative amount specified by the successor
Master Servicer not to exceed 110% of the aggregate reasonable costs and
expenses incurred by such successor Master Servicer in connection with the
performance of its obligations as Master Servicer hereunder.

 

ARTICLE X

EVENTS OF TERMINATION

 

Section 10.01.     Events of Termination. If any of the following events (each
an “Event of Termination”) shall occur:

 

(a)     (i) any StarTek Party shall fail to perform or observe any term,
covenant or agreement under this Agreement or any other Transaction Document
(other than any such failure which would constitute an Event of Termination
under clause (ii) or (iii) of this paragraph (a)), and such failure, solely to
the extent capable of cure, shall continue for ten (10) Business Days after the
Seller or Master Servicer has knowledge or receives notice thereof, (ii) any
StarTek Party shall fail to make when due any payment or deposit to be made by
it under this Agreement or any other Transaction Document and such failure shall
continue unremedied for two (2) Business Days, or (iii) StarTek shall resign as
Master Servicer, and no successor Master Servicer reasonably satisfactory to the
Purchaser shall have been appointed;

 

(b)     any representation or warranty made or deemed made by any StarTek Party
(or any of their respective officers) under or in connection with this Agreement
or any other Transaction Document or any information or report delivered by any
StarTek Party pursuant to this Agreement or any other Transaction Document,
shall prove to have been incorrect or untrue when made or deemed made or
delivered, and such failure to be correct or true shall cause a Material Adverse
Effect;

 

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(c)     the Seller or the Master Servicer shall fail to deliver when due a Daily
Report or a Monthly Report pursuant to this Agreement, and such failure shall
remain unremedied for two (2) Business Days;

 

(d)     the Purchaser shall for any reason cease to have a valid and enforceable
first priority perfected security interest (as defined in the UCC) with respect
to the Sold assets or the Seller Collateral, free and clear of any Adverse
Claim;

 

(e)     (i) any StarTek Party shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; (ii) any
Insolvency Proceeding shall be instituted by or against the Seller; (iii) any
Insolvency Proceeding shall be instituted by or against any other StarTek Party
and, in the case of any such proceeding instituted against such Person (but not
instituted by such Person), either such proceeding shall remain undismissed or
unstayed for a period of sixty (60) consecutive days, or any of the actions
sought in such proceeding (including the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall occur; or (iv) any
StarTek Party shall take any corporate or organizational action to authorize any
of the actions set forth above in this paragraph;

 

(f)     as of the end of any Calculation Period, (i) the Three-Month Average
Delinquency Ratio shall exceed 1.00%, (ii) the Three-Month Average Default Ratio
shall exceed 1.00%, (iii) the Three-Month Average Dilution Ratio shall exceed
1.25%%, or (iv) the Days Sales Outstanding shall exceed 75 days;

 

(g)     a Change in Control shall occur;

 

(h)     a Capital Coverage Deficit shall occur, and shall not have been cured
within the period specified in Section 2.02(d);

 

(i)     (i) any StarTek Party or any of their respective Subsidiaries (other
than the Seller), individually or in the aggregate, shall fail to pay any
principal of or premium or interest on any of its Debt that is outstanding in a
principal amount of at least $1,500,000 in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement, mortgage, indenture
or instrument relating to such Debt, (ii) the Seller shall fail to pay any
principal of or premium or interest on any of its Debt that is outstanding in a
principal amount of at least $16,750 in the aggregate when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement, mortgage, indenture or instrument
relating to such Debt, or (iii) any default by any StarTek Party of any their
respective Subsidiaries with respect to such Debt (as referred to in clause (i)
of this paragraph) shall cause such Debt to be declared to be due and payable,
or required to be prepaid, redeemed, purchased or defeased, or an offer to
repay, redeem, purchase or defease such Debt shall be required to be made or the
commitment of any lender thereunder terminated, in each case before the stated
maturity thereof;

 

(j)     the Indemnification Guarantor shall fail to perform any of its
obligations under the Indemnification Guarantee;

 

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(k)     the Seller shall fail (x) at any time (other than for up to ten (10)
Business Days following notice of the death or resignation of any Independent
Manager or the Seller’s becoming aware or receiving notice that any Independent
Manager no longer satisfies each requirement and qualification specified in
Section 8.03(c)) to have an Independent Manager who satisfies each requirement
and qualification specified in Section 8.03(c) of this Agreement for Independent
Managers, on the Seller’s board of managers or (y) to timely notify the
Purchaser of any replacement or appointment of any manager that is to serve as
an Independent Manager on the Seller’s board of managers as required pursuant to
Section 8.03(c) of this Agreement;

 

(l)     either (i) the IRS shall file notice of a lien pursuant to Section 6323
of the Code with regard to any assets of the Seller, any Originator or StarTek
and, solely in the case of assets of any Originator or StarTek, realization on
such lien results in a Change of Control of the Seller or any Originator, or
(ii) the PBGC shall, or shall indicate its intention to, file notice of a lien
pursuant to Section 303(k) or 4068 of ERISA with regard to any of the assets of
any StarTek Party;

 

(m)     (i) an ERISA Event occurs with respect to a Plan, Multiemployer Plan or
Foreign Plan which has resulted or would reasonably be expected to result in
liability of any StarTek Party in an aggregate amount which would reasonably be
expected to result in a Material Adverse Effect or (ii) any StarTek Party or any
ERISA Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its Withdrawal Liability
under a Multiemployer Plan in an aggregate amount which would reasonably be
expected to result in a Material Adverse Effect;

 

(n)     (i) an RSCA Termination Event shall occur under the RSCA or (ii)
Receivables cease being sold or contributed to the Seller pursuant to the RSCA;

 

(o)     the Indemnification Guarantee shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Indemnification Guarantor,
or Indemnification Guarantor shall contest in any proceeding in any court or any
mediation or arbitral proceeding such effectiveness, validity, binding nature or
enforceability of its obligations thereunder;

 

(p)     any material provision of this Agreement or any other Transaction
Document shall cease to be in full force and effect or any of the Seller, any
Originator, the Indemnification Guarantor or the Master Servicer (or any of
their respective Affiliates) shall so state in writing;

 

(q)     (i) one or more judgments, orders, or decrees shall be entered against
any StarTek Party (other than the Seller) involving a liability of $1,500,000 or
more, in the aggregate (to the extent not paid or covered by insurance provided
by a carrier who has not disputed coverage) and such judgments, orders or
decrees shall be final and unappealable and shall not have been paid in
accordance with their terms when due, or vacated, satisfied, discharged, or
stayed or bonded pending appeal within thirty (30) days from the entry thereof
or (ii) one or more judgments, orders, or decrees involving a liability of
$16,750 or more shall be entered against the Seller; or

 

(r)     as of the last day of any calendar month, Available Liquidity shall be
less than 10% of the lesser of the Facility Limit;

 

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then, and upon the occurrence and continuation of any such event, the Purchaser
may by notice to the Seller (x) declare the Termination Date to have occurred
(in which case the Termination Date shall be deemed to have occurred), (y)
declare the Seller Obligation Final Due Date to have occurred (in which case the
Seller Obligation Final Due Date shall be deemed to have occurred) and (z)
declare the aggregate Capital outstanding and all other Seller Obligations to be
immediately due and payable (in which case the aggregate Capital outstanding and
all other Seller Obligations shall be immediately due and payable); provided
that, automatically upon the occurrence of any event (without any requirement
for the giving of notice) described in subsection (e) of this Section 10.01 with
respect to the Seller, the Termination Date shall occur and the aggregate
Capital outstanding and all other Seller Obligations shall be immediately due
and payable. Upon any such declaration or designation or upon such automatic
termination, the Purchaser and the other Secured Parties shall have, in addition
to the rights and remedies which they may have under this Agreement and the
other Transaction Documents, all other rights and remedies provided after
default under the UCC and under other applicable Law, which rights and remedies
shall be cumulative. Any proceeds from liquidation of the Sold Assets and Seller
Collateral shall be applied in the order of priority set forth in Section 4.01.

 

ARTICLE XI

INDEMNIFICATION

 

Section 11.01.     Indemnities by the Seller.

 

(a)     Without limiting any other rights that the Purchaser, the Affected
Persons and their respective assigns, officers, directors, agents and employees
(each, a “Seller Indemnified Party”) may have hereunder or under applicable Law,
the Seller hereby agrees to indemnify each Seller Indemnified Party from and
against any and all claims, losses and liabilities (including reasonable
Attorney Costs) (all of the foregoing being collectively referred to as “Seller
Indemnified Amounts”) arising out of or resulting from this Agreement or any
other Transaction Document or the use of proceeds of the Investments or the
security interest in respect of any Pool Receivable or any other Sold Assets or
Seller Collateral; excluding, however, (a) Seller Indemnified Amounts to the
extent a final non-appealable judgment of a court of competent jurisdiction
holds that such Seller Indemnified Amounts resulted from the gross negligence or
willful misconduct by the Seller Indemnified Party seeking indemnification and
(b) Taxes that are covered by Section 5.03 (other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim). Without limiting
or being limited by the foregoing, the Seller shall pay after demand (it being
understood that such payment obligation will be made from Collections at the
time and in the order of priority set forth in Section 4.01), to each Seller
Indemnified Party any and all amounts necessary to indemnify such Seller
Indemnified Party from and against any and all Seller Indemnified Amounts
relating to or resulting from any of the following (but excluding Seller
Indemnified Amounts and Taxes described in clauses (a) and (b) above):

 

(i)     any Pool Receivable which the Seller or the Master Servicer includes as
an Eligible Receivable as part of the Net Pool Balance but which is not an
Eligible Receivable at such time;

 

(ii)     any representation, warranty or statement made or deemed made by the
Seller (or any of its respective officers) under or in connection with this
Agreement, any of the other Transaction Documents, any Daily Report, any Monthly
Report or any other information or report delivered by or on behalf of the
Seller pursuant hereto which shall have been untrue or incorrect when made or
deemed made;

 

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(iii)     the failure by the Seller to comply with any applicable Law with
respect to any Pool Receivable or the related Contract; or the failure of any
Pool Receivable or the related Contract to conform to any such applicable Law;

 

(iv)     the failure to vest in the Purchaser a first priority perfected
ownership or security interest in all or any portion of the Sold Assets or
Seller Collateral, in each case free and clear of any Adverse Claim;

 

(v)     the failure to have filed, or any delay in filing, financing statements,
financing statement amendments, continuation statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or other
applicable Laws with respect to any Pool Receivable, any other Sold Assets or
any Seller Collateral, whether at the time of any Investment or at any
subsequent time;

 

(vi)     any dispute, claim or defense (other than discharge in bankruptcy) of
an Obligor to the payment of any Pool Receivable (including, without limitation,
a defense based on such Pool 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 or relating to
collection activities with respect to such Pool Receivable;

 

(vii)     any failure of the Seller to perform any of its duties or obligations
in accordance with the provisions hereof and of each other Transaction Document
related to Pool Receivables or to timely and fully comply with the Credit and
Collection Policy in regard to each Pool Receivable;

 

(viii)     any products liability, environmental or other claim arising out of
or in connection with any Pool Receivable or other merchandise, goods or
services which are the subject of or related to any Pool Receivable;

 

(ix)     the commingling of Collections of Pool Receivables at any time with
other funds;

 

(x)     any investigation, litigation or proceeding (actual or threatened)
related to this Agreement or any other Transaction Document or the use of
proceeds of any Investments or in respect of any Pool Receivable, any other Sold
Assets or any Seller Collateral or any related Contract;

 

(xi)     any failure of the Seller to comply with its covenants, obligations and
agreements contained in this Agreement or any other Transaction Document;

 

(xii)     any setoff with respect to any Pool Receivable;

 

(xiii)     any claim brought by any Person other than a Seller Indemnified Party
arising from any activity by the Seller or any Affiliate of the Seller in
servicing, administering or collecting any Pool Receivable;

 

(xiv)     the failure by the Seller to pay when due any taxes, including,
without limitation, sales, excise or personal property taxes;

 

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(xv)     any failure of a Collection Account Bank to comply with the terms of
the applicable Control Agreement, the termination by a Collection Account Bank
of any Control Agreement or any amounts (including in respect of any indemnity)
payable by the Purchaser to a Collection Account Bank under any Control
Agreement;

 

(xvi)     any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Pool Receivable
(including, without limitation, a defense based on such Pool 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 the rendering of services related to such
Pool Receivable or the furnishing or failure to furnish any such goods or
services or other similar claim or defense not arising from the financial
inability of any Obligor to pay undisputed indebtedness;

 

(xvii)     any action taken by the Purchaser as attorney-in-fact for the Seller,
any Originator or the Master Servicer pursuant to this Agreement or any other
Transaction Document;

 

(xviii)     the failure to provide or delay in providing any Obligor with an
Invoice or other evidence of indebtedness;

 

(xix)     the use of proceeds of any Investment; or

 

(xx)     any reduction in Capital as a result of the distribution of Collections
if all or a portion of such distributions shall thereafter be rescinded or
otherwise must be returned for any reason.

 

(b)     Notwithstanding anything to the contrary in this Agreement, solely for
purposes of the Seller’s indemnification obligations in clauses (ii), (iii),
(vii) and (xi) of Section 11.01(a), any representation, warranty or covenant
qualified by the occurrence or non-occurrence of a Material Adverse Effect or
similar concepts of materiality shall be deemed to be not so qualified.

 

(c)     If for any reason the foregoing indemnification is unavailable to any
Seller Indemnified Party or insufficient to hold it harmless, then the Seller
shall contribute to such Seller Indemnified Party the amount paid or payable by
such Seller Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative economic
interests of the Seller and its Affiliates on the one hand and such Seller
Indemnified Party on the other hand in the matters contemplated by this
Agreement as well as the relative fault of the Seller and its Affiliates and
such Seller Indemnified Party with respect to such loss, claim, damage or
liability and any other relevant equitable considerations. The reimbursement,
indemnity and contribution obligations of the Seller under this Section shall be
in addition to any liability which the Seller may otherwise have, shall extend
upon the same terms and conditions to each Seller Indemnified Party, and shall
be binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of the Seller and the Seller Indemnified Parties.

 

(d)     Any indemnification or contribution under this Section shall survive the
termination of this Agreement.

 

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Section 11.02.     Indemnification by the Master Servicer.

 

(a)     The Master Servicer hereby agrees to indemnify and hold harmless the
Seller, the Purchaser, the Affected Persons and their respective assigns,
officers, directors, agents and employees (each, a “Master Servicer Indemnified
Party”), from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of activities of the Master Servicer pursuant to this
Agreement or any other Transaction Document, including any judgment, award,
settlement, reasonable Attorney Costs and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim (all of the foregoing being collectively referred to as, “Master Servicer
Indemnified Amounts”); excluding (i) Master Servicer Indemnified Amounts to the
extent a final non-appealable judgment of a court of competent jurisdiction
holds that such Master Servicer Indemnified Amounts resulted from the gross
negligence or willful misconduct by the Master Servicer Indemnified Party
seeking indemnification, (ii) Taxes that are covered by Section 5.03 (other than
any Taxes that represent losses, claims, damages, etc. arising from any non-Tax
claim) and (iii) Master Servicer Indemnified Amounts to the extent the same
includes losses in respect of Pool Receivables that are uncollectible on account
of the insolvency, bankruptcy, lack of creditworthiness or other financial
inability to pay of the related Obligor. Without limiting or being limited by
the foregoing, the Master Servicer shall pay on demand, to each Master Servicer
Indemnified Party any and all amounts necessary to indemnify such Master
Servicer Indemnified Party from and against any and all Master Servicer
Indemnified Amounts relating to or resulting from any of the following (but
excluding Master Servicer Indemnified Amounts described in clauses (i), (ii) and
(iii) above):

 

(i)     any representation, warranty or statement made or deemed made by the
Master Servicer (or any of its respective officers) under or in connection with
this Agreement, any of the other Transaction Documents, any Daily Report, any
Monthly Report or any other information or report delivered by or on behalf of
the Master Servicer pursuant hereto which shall have been untrue or incorrect
when made or deemed made;

 

(ii)     the failure by the Master Servicer to comply with any applicable Law
with respect to any Pool Receivable or the related Contract; or the failure of
any Pool Receivable or the related Contract to conform to any such applicable
Law;

 

(iii)     the commingling of Collections of Pool Receivables at any time with
other funds;

 

(iv)     any failure of StarTek to comply with the terms of the applicable
Control Agreement to which it is a party, the termination by StarTek of any
Control Agreement except as permitted by this Agreement, or any amounts
(including in respect of any indemnity) payable by the Purchaser to a Collection
Account Bank under any Control Agreement; or

 

(v)     any failure of the Master Servicer to comply with its covenants,
obligations and agreements contained in this Agreement or any other Transaction
Document.

 

(b)     If for any reason the foregoing indemnification is unavailable to any
Master Servicer Indemnified Party or insufficient to hold it harmless, then the
Master Servicer shall contribute to the amount paid or payable by such Master
Servicer Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect the relative economic interests
of the Master Servicer and its Affiliates on the one hand and such Master
Servicer Indemnified Party on the other hand in the matters contemplated by this
Agreement as well as the relative fault of the Master Servicer and its
Affiliates and such Master Servicer Indemnified Party with respect to such loss,
claim, damage or liability and any other relevant equitable considerations. The
reimbursement, indemnity and contribution obligations of the Master Servicer
under this Section shall be in addition to any liability which the Master
Servicer may otherwise have, shall extend upon the same terms and conditions to
Master Servicer Indemnified Party, and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Master Servicer and the Master Servicer Indemnified Parties.

 

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(c)     Any indemnification or contribution under this Section shall survive the
termination of this Agreement.

 

ARTICLE XII

MISCELLANEOUS

 

Section 12.01.     Amendments, Etc.

 

(a)     No failure on the part of the Purchaser to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. No amendment or waiver of
any provision of this Agreement or consent to any departure by any of the Seller
or any Affiliate thereof shall be effective unless in a writing signed by the
Purchaser (and, in the case of any amendment, also signed by the Seller and the
Master Servicer), and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

 

Section 12.02.     Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile and email communication) and faxed, emailed or delivered, to each
party hereto, at its address set forth under its name on Schedule III hereto or
at such other address, facsimile number or email address as shall be designated
by such party in a written notice to the other parties hereto. Notices and
communications by facsimile or email shall be effective when sent receipt
confirmed by electronic or other means (such as by the “return receipt
requested” function, as available, return electronic mail or other
acknowledgement), and notices and communications sent by other means shall be
effective when received.

 

Section 12.03.     Participations and Assignments.

 

(a)     Participations. The Purchaser may sell participations to one or more
Eligible Assignees (each, a “Participant”) in or to all or a portion of its
rights and/or obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and its Capital and Yield thereon); provided,
however, that

 

(i)     The selling Purchaser’s obligations under this Agreement (including,
without limitation, its Commitment to the Seller hereunder) shall remain
unchanged, and

 

(ii)     The selling Purchaser shall remain solely responsible to the other
parties to this Agreement for the performance of such obligations.

 

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The Seller and the Master Servicer shall have the right to continue to deal
solely and directly with the Purchaser in connection with its rights and
obligations under this Agreement. The Seller agrees that each Participant shall
be entitled to the benefits of Sections 5.01 and 5.03 (subject to the
requirements and limitations therein, including the requirements under
Section 5.03(f) (it being understood that the documentation required under
Section 5.03(f) shall be delivered to the Purchaser)) to the same extent as if
it were the Purchaser and had acquired its interest by assignment pursuant to
clause (b) of this Section; provided that such Participant shall not be entitled
to receive any greater payment under Section 5.01 or 5.03, with respect to any
participation, than the Purchaser would have been entitled to receive, except to
the extent such entitlement to receive a greater payment results from a Change
in Law that occurs after the Participant acquired the applicable participation.

 

If the Purchaser sells a participation, the Purchaser shall, acting solely for
this purpose as a non-fiduciary agent of the Seller, maintain a register on
which it enters the name and address of each Participant and the Capital (and
stated Yield) participated to each Participant, together with each Participant’s
interest in the other obligations under this Agreement (the “Participant
Register”); provided that the Purchaser shall have no obligation to disclose all
or any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in the
Commitment, Capital, Yield or its other obligations under any this Agreement) to
any Person except to the extent that such disclosure is necessary to establish
that such Commitment, Capital, Yield or other obligation is in registered form
under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive absent manifest error, and the
Purchaser shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

 

(b)     Assignments by the Purchaser. In addition to the sale by the Purchaser
of participating interests as provided in clause (a) above, each of the Seller
and the Master Servicer acknowledges and agrees that the Purchaser may sell
assign or transfer all or any part of its rights and obligations under this
Agreement and the other Transaction documents to one or more Eligible Assignees
(each, an “Assignee Purchaser”) by executing and delivering a completed
Assignment and Acceptance Agreement in the form of Exhibit C hereto; provided
that, in the case of an assignment to an Eligible Assignee that is not an
Affiliate of the Purchaser, so long as no Event of Termination or Unmatured
Event of Termination has occurred and is continuing, such assignment shall
require the Master Servicer’s and the Seller’s consent (not to be unreasonably
withheld, conditioned or delayed). Each the Seller and the Master Servicer
acknowledges and agrees that from and after the time on which such assignment is
made, and to the extent thereof, the Seller and the Master Servicer shall attorn
directly to such Assignee Purchaser, and the Purchaser shall have no further
duty or obligations in respect hereof or of any assigned Transaction Documents
to the extent of such assignment. Each of the Seller and the Master Servicer
shall execute and deliver to the Purchaser (or its designee) or to such Assignee
Purchaser such further documents and do such further acts and things as the
Purchaser or such Assignee Purchaser may reasonably request in order to
effectuate the foregoing. The Purchaser, acting as agent for the Seller (such
agency being solely for Tax purposes), shall maintain at an office of the
Purchaser, a copy of each Assignment and Acceptance Agreement delivered to and
accepted by it hereunder and a register for the names and addresses of the
Purchaser and the Assignee Purchasers, the respective Commitment of the
Purchaser and each Assignee Purchasers, and the Investment and Yield owing to
each from time to time (the “Register”). The entries in the Register shall be
conclusive absent manifest error, and the other parties hereto may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Purchaser hereunder for all purposes of this Agreement. The Register shall be
available for inspection by any of the parties hereto at any reasonable time and
from time to time upon reasonable prior notice.

 

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(c)     Assignments by the Seller or the Master Servicer. Neither the Seller
nor, except as provided in Section 9.01, the Master Servicer may assign any of
its respective rights or obligations hereunder or any interest herein without
the prior written consent of the Purchaser (which consent may be provided or
withheld in the sole discretion of the Purchaser).

 

(d)     Pledge to a Federal Reserve Bank. Notwithstanding anything to the
contrary set forth herein, (i) the Purchaser, or any of its Affiliates may at
any time pledge or grant a security interest in all or any portion of its
interest in, to and under this Agreement (including, without limitation, rights
to payment of Capital and Yield) and any other Transaction Document to secure
its obligations to a Federal Reserve Bank, without notice to or the consent of
the Seller, the Master Servicer, any Affiliate thereof or the Purchaser;
provided, however, that that no such pledge shall relieve such assignor of its
obligations under this Agreement.

 

Section 12.04.     Costs and Expenses. In addition to the rights of
indemnification granted under Section 11.01 hereof, the Seller agrees to pay on
demand all reasonable out-of-pocket costs and expenses in connection with the
preparation, negotiation, execution, delivery and administration of this
Agreement, (or any supplement or amendment thereof) related to this Agreement
and the other Transaction Documents (together with all amendments, restatements,
supplements, consents and waivers, if any, from time to time hereto and
thereto), including, without limitation, (i) the reasonable Attorney Costs for
the Purchaser and any of its Affiliates with respect thereto and with respect to
advising the Purchaser as to its rights and remedies under this Agreement and
the other Transaction Documents and (ii) reasonable accountants’, auditors’ and
consultants’ fees and expenses for the Purchaser and the fees and charges of any
nationally recognized statistical rating agency incurred in connection with the
administration and maintenance of this Agreement or advising the Purchaser as to
its rights and remedies under this Agreement or as to any actual or reasonably
claimed breach of this Agreement or any other Transaction Document. In addition,
the Seller agrees to pay on demand all reasonable out-of-pocket costs and
expenses (including reasonable Attorney Costs), of the Purchaser, incurred in
connection with the enforcement of any of its rights or remedies under the
provisions of this Agreement and the other Transaction Documents.

 

Section 12.05.     No Proceedings; Limitation on Payments.

 

(a)     Each of the Master Servicer, the Purchaser and each assignee of Capital
or any Yield thereon or of any other Seller Obligations, hereby covenants and
agrees that it will not institute against, or join any other Person in
instituting against, the Seller any Insolvency Proceeding until one year and one
day after the Final Payout Date; provided that the Purchaser may take any such
action in its sole discretion following the occurrence of an Event of
Termination.

 

(b)     The provisions of this Section 12.05 shall survive any termination of
this Agreement.

 

Section 12.06.     Confidentiality.

 

(a)     Each of the Seller and the Master Servicer covenants and agrees to hold
in confidence, and not disclose to any Person, the terms of this Agreement or
the Fee Letter (including any fees payable in connection with this Agreement,
the Fee Letter or any other Transaction Document or the identity of the
Purchaser), except as the Purchaser may have consented to in writing prior to
any proposed disclosure; provided, however, that it may disclose such
information (i) to its Advisors and Representatives, (ii) to the extent such
information has become available to the public other than as a result of a
disclosure by or through the Seller, the Master Servicer or their Advisors and
Representatives or (iii) to the extent it should be (A) required by applicable
Law or stock market rules, or in connection with any legal or regulatory
proceeding or (B) requested by any Governmental Authority to disclose such
information; provided, that, in the case of clause (iii) above, the Seller and
the Master Servicer will use reasonable efforts to maintain confidentiality and
will (unless otherwise prohibited by applicable Law) notify the Purchaser of its
intention to make any such disclosure prior to making such disclosure. Each of
the Seller and the Master Servicer agrees to be responsible for any breach of
this Section by its Representatives and Advisors and agrees that its
Representatives and Advisors will be advised by it of the confidential nature of
such information and shall agree to comply with this Section. Notwithstanding
the foregoing, it is expressly agreed that each of the Seller, the Master
Servicer and their respective Affiliates may publish press releases and Forms
8-K or otherwise publicly announce the existence, principal amount, and material
terms of the Transaction Documents and the transactions contemplated hereby and
any material amendments thereto and may include material Transaction Documents
and amendments thereto as exhibits; provided that the Purchaser shall be
provided a reasonable opportunity to review such press releases, Forms 8-K or
other public announcements prior to their release and provide comments thereon.

 

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(b)     The Purchaser agrees to hold in confidence, and not disclose to any
Person, any confidential and proprietary information or material nonpublic
information concerning the Seller, the Master Servicer and their respective
Affiliates and their businesses or the terms of this Agreement (including any
fees payable in connection with this Agreement or the other Transaction
Documents), except as the Seller or the Master Servicer may have consented to in
writing prior to any proposed disclosure; provided, however, that it may
disclose such information (i) to its Advisors and Representatives, (ii) to its
Eligible Assignees and Participants and potential Eligible Assignees and
Participants and their respective counsel if they agree in writing to hold it
confidential, (iii) to the extent such information has become available to the
public other than as a result of a disclosure by or through it or its
Representatives or Advisors, (iv) at the request of a bank examiner or other
regulatory authority or in connection with an examination of the Purchaser or
its Affiliates or (v) to the extent it should be (A) required by applicable Law,
or in connection with any legal or regulatory proceeding or (B) requested by any
Governmental Authority to disclose such information; provided that, in the case
of clause (v) above, the Purchaser will use reasonable efforts to maintain
confidentiality and will (unless otherwise prohibited by applicable Law) notify
the Seller and the Master Servicer of its making any such disclosure as promptly
as reasonably practicable thereafter. The Purchaser agrees to be responsible for
any breach of this Section by its Representatives and Advisors and agrees that
its Representatives and Advisors will be advised by it of the confidential
nature of such information and shall agree to comply with this Section.
Notwithstanding the foregoing, the Seller consents to the publication by the
Purchaser of a tombstone or similar advertising material relating to the
financing transactions contemplated by this Agreement following public
disclosure of such financing transactions by the Seller or its Affiliates.

 

(c)     As used in this Section 12.06, (i) “Advisors” means, with respect to any
Person, such Person’s accountants, attorneys and other confidential advisors and
(ii) “Representatives” means, with respect to any Person, such Person’s
Affiliates, Subsidiaries, directors, managers, officers, employees, members,
investors, financing sources, insurers, professional advisors, representatives
and agents; provided that such Persons shall not be deemed to Representatives of
a Person unless (and solely to the extent that) confidential information is
furnished to such Person.

 

(d)     Notwithstanding the foregoing, to the extent not inconsistent with
applicable securities Laws, each party hereto (and each of its employees,
representatives or other agents) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure (as defined in
Section 1.6011-4 of the Treasury Regulations) of the transactions contemplated
by the Transaction Documents and all materials of any kind (including opinions
or other tax analyses) that are provided to such Person relating to such tax
treatment and tax structure.

 

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Section 12.07.     GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY
OTHER CONFLICTS OF LAW PROVISIONS THEREOF, EXCEPT TO THE EXTENT THAT THE
PERFECTION, THE EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE
PURCHASER IN THE SOLD ASSETS OR SELLER COLLATERAL IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK).

 

Section 12.08.     Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement. Delivery of an executed counterpart hereof by facsimile or other
electronic means shall be equally effective as delivery of an originally
executed counterpart.

 

Section 12.09.     Integration; Binding Effect; Survival of Termination. This
Agreement and the other Transaction Documents 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. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until the Final Payout Date; provided, however, that
the provisions of Sections 3.08, 3.09, 3.10, 5.01, 5.03, 11.01, 11.02, 12.04,
12.05, 12.06, 12.09, 12.11 and 12.13 shall survive any termination of this
Agreement.

 

Section 12.10.     CONSENT TO JURISDICTION. (a) EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT,
AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH NEW YORK STATE
COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

(b)     EACH OF THE SELLER AND THE MASTER SERVICER CONSENTS TO THE SERVICE OF
ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF
SUCH PROCESS TO IT AT ITS ADDRESS SPECIFIED IN SECTION 12.02. NOTHING IN THIS
SECTION 12.10 SHALL AFFECT THE RIGHT OF THE PURCHASER TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW.

 

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Section 12.11.     WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

 

Section 12.12.     [Reserved].

 

Section 12.13.     Limitation of Liability.

 

(a)     No claim may be made by the Seller or any Affiliate thereof or any other
Person against the Purchaser or any of its Affiliates, members, directors,
officers, employees, incorporators, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other Transaction Document,
or any act, omission or event occurring in connection herewith or therewith; and
each of the Seller and the Master Servicer hereby waives, releases, and agrees
not to sue upon any claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor. Neither the Purchaser
nor any of its Affiliates shall have any liability to the Seller or any
Affiliate thereof or any other Person asserting claims on behalf of or in right
of the Seller or any Affiliate thereof in connection with or as a result of this
Agreement or any other Transaction Document or the transactions contemplated
hereby or thereby, except to the extent that any losses, claims, damages,
liabilities or expenses incurred by the Seller or any Affiliate thereof result
from the breach of contract, gross negligence or willful misconduct of the
Purchaser in performing its duties and obligations hereunder and under the other
Transaction Documents to which it is a party.

 

(b)     The obligations of the Purchaser under this Agreement and each of the
Transaction Documents are solely the corporate obligations of such Person. No
recourse shall be had for any obligation or claim arising out of or based upon
this Agreement or any other Transaction Document against any member, director,
officer, employee or incorporator of any such Person.

 

Section 12.14.     Intent of the Parties. The Seller has structured this
Agreement with the intention that the obligations of the Seller hereunder
(including the obligation to return Capital to the Purchasers and make payments
of Yield thereon) will be treated under United States federal, and applicable
state, local and foreign tax laws as debt (the “Intended Tax Treatment”). The
Seller, the Master Servicer and the Purchaser agree to file no tax return, or
take any action, inconsistent with the Intended Tax Treatment unless required by
law. Each assignee and each Participant acquiring an interest in an Investment,
by its acceptance of such assignment or participation, agrees to comply with the
immediately preceding sentence.

 

Section 12.15.     USA Patriot Act. The Purchaser hereby notifies the Seller and
the Master Servicer that pursuant to the requirements of the USA PATRIOT Act,
Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT
Act”), the Purchaser may be required to obtain, verify and record information
that identifies the Seller, any Originator, the Master Servicer and the
Indemnification Guarantor, which information includes the name, address, tax
identification number and other information regarding the Seller, any
Originator, the Master Servicer and the Indemnification Guarantor that will
allow the Purchaser to identify the Seller, any Originator, the Master Servicer
and the Indemnification Guarantor in accordance with the PATRIOT Act. This
notice is given in accordance with the requirements of the PATRIOT Act. Each of
the Seller and the Master Servicer agrees to provide the Purchaser, from time to
time, with all documentation and other information required by bank regulatory
authorities under “know your customer” and anti-money laundering rules and
regulations, including, without limitation, the PATRIOT Act.

 

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Section 12.16.     Right of Setoff. The Purchaser is hereby authorized (in
addition to any other rights it may have), at any time during the continuance of
an Event of Termination, to setoff, appropriate and apply (without presentment,
demand, protest or other notice which are hereby expressly waived) any deposits
and any other indebtedness held or owing by the Purchaser (including by any
branches or agencies of the Purchaser) to, or for the account of, the Seller or
the Master Servicer against amounts owing by the Seller or the Master Servicer
hereunder (even if contingent or unmatured); provided that the Purchaser shall
notify the Seller or the Master Servicer, as applicable, promptly following such
setoff.

 

Section 12.17.     Severability. 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.

 

Section 12.18.     Mutual Negotiations. This Agreement and the other Transaction
Documents are the product of mutual negotiations by the parties thereto and
their counsel, and no party shall be deemed the draftsperson of this Agreement
or any other Transaction Document or any provision hereof or thereof or to have
provided the same. Accordingly, in the event of any inconsistency or ambiguity
of any provision of this Agreement or any other Transaction Document, such
inconsistency or ambiguity shall not be interpreted against any party because of
such party’s involvement in the drafting thereof.

 

Section 12.19.     Captions and Cross References. The various captions
(including the table of contents) in this Agreement are provided solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Agreement. Unless otherwise indicated, references in this
Agreement to any Section, Schedule or Exhibit are to such Section Schedule or
Exhibit to this Agreement, as the case may be, and references in any Section,
subsection, or clause to any subsection, clause or subclause are to such
subsection, clause or subclause of such Section, subsection or clause.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

StarTek Receivables Funding, LLC
 

By: /s/ Doug Tackett                                           

Name: Doug Tackett 
Title: President

 

STARTEK, INC.,
as the Master Servicer

By:  /s/ Del Cloninger                                         
Name: Del Cloninger
Title: VP, Treasury

 

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REGIONS BANK,
as the Purchaser

By:  /s/ Cecil Noble                                                           
                            
Name: Cecil Noble
Title: Managing Director

 

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