Exhibit 10.2

EXECUTION COPY

RECEIVABLES FUNDING AND ADMINISTRATION AGREEMENT

Dated as of September 26, 2007

by and among

REXNORD FUNDING LLC,

as Borrower,

THE FINANCIAL INSTITUTIONS SIGNATORY HERETO FROM TIME TO TIME,

as Lenders,

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as a Lender, as Swing Line Lender and as Administrative Agent

 

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TABLE OF CONTENTS

 

             Page ARTICLE I. DEFINITIONS AND INTERPRETATION    1   Section 1.01.
  Definitions    1   Section 1.02.   Rules of Construction    1 ARTICLE II.
AMOUNTS AND TERMS OF ADVANCES    2   Section 2.01.   Advances    2  
Section 2.02.   Optional Changes in Aggregate Commitment    4   Section 2.03.  
Procedures for Making Advances    5   Section 2.04.   Pledge and Release of
Transferred Receivables    9   Section 2.05.   Commitment Termination Date    9
  Section 2.06.   Interest; Charges    9   Section 2.07.   Fees    10  
Section 2.08.   Application of Collections; Time and Method of Payments    11  
Section 2.09.   Capital Requirements; Additional Costs    16   Section 2.10.  
[RESERVED]    17   Section 2.11.   Letter of Credit Facility    17  
Section 2.12.   Increase in Commitments    24 ARTICLE III. CONDITIONS PRECEDENT
   25   Section 3.01.   Conditions to Effectiveness of Agreement    25  
Section 3.02.   Conditions Precedent to All Advances and Letter of Credit
Obligations    27 ARTICLE IV. REPRESENTATIONS AND WARRANTIES    28  
Section 4.01.   Representations and Warranties of the Borrower    28 ARTICLE V.
GENERAL COVENANTS OF THE BORROWER    37   Section 5.01.   Affirmative Covenants
of the Borrower    37   Section 5.02.   Reporting Requirements of the Borrower
   39   Section 5.03.   Negative Covenants of the Borrower    40 ARTICLE VI.
ACCOUNTS    43   Section 6.01.   Establishment of Accounts    43

 

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ARTICLE VII. GRANT OF SECURITY INTERESTS    46   Section 7.01.   Borrower’s
Grant of Security Interest    46   Section 7.02.   Borrower’s Agreements    47  
Section 7.03.   Delivery of Collateral    47   Section 7.04.   Borrower Remains
Liable    48   Section 7.05.   Covenants of the Borrower Regarding the Borrower
Collateral    48 ARTICLE VIII. TERMINATION EVENTS    51   Section 8.01.  
Termination Events    51 ARTICLE IX. REMEDIES    55   Section 9.01.   Actions
Upon Termination Event    55   Section 9.02.   Exercise of Remedies    56  
Section 9.03.   Power of Attorney    56   Section 9.04.   Continuing Security
Interest    57 ARTICLE X. INDEMNIFICATION    57   Section 10.01.   Indemnities
by the Borrower    57 ARTICLE XI. ADMINISTRATIVE AGENT    59   Section 11.01.  
Authorization and Action    59   Section 11.02.   Reliance    60  
Section 11.03.   GE Capital and Affiliates    60   Section 11.04.   Lender
Credit Decision    61   Section 11.05.   Indemnification    61   Section 11.06.
  Successor Administrative Agent    61   Section 11.07.   Setoff and Sharing of
Payments    62 ARTICLE XII. MISCELLANEOUS    63   Section 12.01.   Notices    63
  Section 12.02.   Binding Effect; Assignability    64   Section 12.03.  
Termination; Survival of Borrower Obligations Upon Commitment Termination Date
   66   Section 12.04.   Costs, Expenses and Taxes    67   Section 12.05.  
Confidentiality    68   Section 12.06.   Complete Agreement; Modification of
Agreement    70   Section 12.07.   Amendments and Waivers    70   Section 12.08.
  No Waiver; Remedies    71   Section 12.09.   GOVERNING LAW; CONSENT TO
JURISDICTION; WAIVER OF JURY TRIAL    72   Section 12.10.   Counterparts    73  
Section 12.11.   Severability    73

 

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  Section 12.12.   Section Titles    74   Section 12.13.   Further Assurances   
74   Section 12.14.   No Proceedings    75   Section 12.15.   Limitation on
Payments    75

 

EXHIBITS    Exhibit 2.01(a)(ii)-A    Form of Tranche A Revolving Note Exhibit
2.01(a)(ii)-B    Form of Tranche B Revolving Note Exhibit 2.01(b)(ii)    Form of
Swing Line Note Exhibit 2.02(a)    Form of Commitment Reduction Notice Exhibit
2.02(b)    Form of Commitment Termination Notice Exhibit 2.03(a)    Form of
Borrowing Request Exhibit 2.03(h)    Form of Repayment Notice Exhibit 5.02(b)   
Form of Borrowing Base Certificate Exhibit 9.03    Form of Power of Attorney
Exhibit 12.02(b)    Form of Assignment Agreement Exhibit A    Credit and
Collection Policy Exhibit B-1    Application for Standby Letter of Credit or
Direct Pay Letter of Credit Exhibit B-2    Application for Documentary Letter of
Credit Schedule 4.01(b)    Jurisdiction of organization/organizational number;
Executive Offices; Collateral Locations; Corporate or Other Names Schedule
4.01(i)    Tax Matters/Borrower Schedule 4.01(q)    Deposit and Disbursement
Accounts/Borrower Schedule 4.01(v)    Supplementary Representations Schedule
5.03(b)    Existing Liens Annex 5.02(a)    Reporting Requirements of the
Borrower (including Forms of Monthly Report, Weekly Report and Daily Report)
Annex W    Administrative Agent’s Account/Lenders’ Accounts Annex X   
Definitions and Interpretations Annex Y    Schedule of Documents Annex Z   
Special Concentration Percentages

 

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THIS RECEIVABLES FUNDING AND ADMINISTRATION AGREEMENT (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the
“Agreement”) is entered into as of September 26, 2007 by and among REXNORD
FUNDING LLC, a Delaware limited liability company (the “Borrower”), the
financial institutions signatory hereto from time to time as lenders (the
“Lenders”), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as
a Lender, as swing line lender (in such capacity, the “Swing Line Lender”) and
as administrative agent for the Lenders hereunder (in such capacity, the
“Administrative Agent”).

RECITALS

A. The Borrower is a special purpose limited liability company the sole member
of which is RBS Global, Inc. (in such capacity, the “Member”).

B. The Borrower has been formed for the purpose of purchasing, or otherwise
acquiring by capital contribution, Receivables of the Originators party to the
Sale Agreement.

C. The Borrower intends to fund its purchases of the Receivables, in part, by
borrowing Advances and obtaining Letters of Credit hereunder and pledging all of
its right, title and interest in and to the Receivables as security therefor,
and, subject to the terms and conditions hereof, the Lenders intend to make such
Advances and incur Letter of Credit Obligations, from time to time, as described
herein.

D. The Administrative Agent has been requested and is willing to act as
administrative agent on behalf of each of the Lenders in connection with the
making and financing of such Advances and the incurrence of such Letter of
Credit Obligations.

AGREEMENT

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

ARTICLE I.

DEFINITIONS AND INTERPRETATION

Section 1.01. Definitions. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in Annex X.

Section 1.02. Rules of Construction. For purposes of this Agreement, the rules
of construction set forth in Annex X shall govern. All Appendices hereto, or
expressly identified to this Agreement, are incorporated herein by reference
and, taken together with this Agreement, shall constitute but a single
agreement.

 

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ARTICLE II.

AMOUNTS AND TERMS OF ADVANCES

Section 2.01. Advances.

(a) Revolving Credit Advances. (i) From and after the Effective Date and until
the Commitment Termination Date and subject to the terms and conditions hereof,
each Lender (other than the Swing Line Lender) severally agrees to make its Pro
Rata Share of (i) Tranche A advances (each such advance hereunder, a “Tranche A
Revolving Credit Advance”) and (ii) Tranche B advances (each such advance
hereunder, a “Tranche B Revolving Credit Advance” and together with the Tranche
A Revolving Credit Advances, the “Revolving Credit Advances”) to the Borrower
from time to time. The Outstanding Principal Amount of all Advances shall not at
any time exceed the lesser of (x) the Aggregate Commitment and (y) the sum of
the Tranche A Borrowing Base and the Tranche B Borrowing Base. The Outstanding
Principal Amount of Revolving Credit Advances made by each Lender shall not
exceed such Lender’s Commitment. The Outstanding Principal Amount of all Tranche
A Revolving Credit Advances shall not at any time exceed the Tranche A Borrowing
Base. The Outstanding Principal Amount of Tranche A Revolving Credit Advances
made by each Lender shall not exceed such Lender’s Pro Rata Share of the Tranche
A Borrowing Base. The Outstanding Principal Amount of all Tranche B Revolving
Credit Advances shall not at any time exceed the Tranche B Borrowing Base. The
Outstanding Principal Amount of Tranche B Revolving Credit Advances made by each
Lender shall not exceed such Lender’s Pro Rata Share of the Tranche B Borrowing
Base. Except to the extent provided in Section 2.06(c), no Lender shall make any
Revolving Credit Advances if, after giving effect thereto, a Funding Excess
would exist. The Borrower may from time to time borrow, repay and reborrow
Revolving Credit Advances hereunder on the terms and conditions set forth
herein.

(ii) The Borrower shall execute and deliver to each Lender (other than the Swing
Line Lender) that makes a request therefor, (a) a note to evidence the Tranche A
Revolving Credit Advances which may be made hereunder from time to time by such
Lender and (b) a note to evidence the Tranche B Revolving Credit Advances which
may be made hereunder from time to time by such Lender. Each such note shall be
(x) in the principal amount of the applicable Commitment of the applicable
Lender, (y) dated as of the date of issuance thereof, and (z) substantially in
the form of Exhibit 2.01(a)(ii)-A (each, a “Tranche A Revolving Note”) or
Exhibit 2.01(a)(ii)-B (each, a “Tranche B Revolving Note”). Each Tranche A
Revolving Note shall represent the obligation of the Borrower to pay the amount
of each Lender’s Commitment or, if less, the Lender’s Pro Rata Share of the
aggregate Outstanding Principal Amount of all outstanding Tranche A Revolving
Credit Advances made to the Borrower, together with interest thereon as
prescribed in Section 2.06. Each Tranche B Revolving Note shall represent the
obligation of the Borrower to pay the amount of the applicable Lender’s Pro Rata
Share of the aggregate Outstanding Principal Amount of all outstanding Tranche B
Revolving Credit Advances made to the Borrower, together with interest thereon
as prescribed in Section 2.06. The Outstanding Principal Amount of Revolving
Credit Advances and all other accrued and unpaid Borrower Obligations shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date.

 

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(b) Swing Line Advances. (i) From and after the Effective Date and until the
Commitment Termination Date and subject to the terms and conditions hereof, the
Swing Line Lender agrees to make advances (each such advance hereunder, a “Swing
Line Advance”) to the Borrower from time to time. The aggregate amount of the
Swing Line Loan shall not at any time exceed the Swing Line Commitment. Under no
circumstances shall the Swing Line Lender make a Swing Line Advance if, after
giving effect thereto, the aggregate amount of the Swing Line Loan would exceed
the Swing Line Commitment. The Swing Line Lender shall not make any Swing Line
Advance, if after giving effect thereto, a Tranche A Funding Excess would exist.
The Borrower may from time to time borrow, repay and reborrow Swing Line
Advances hereunder on the terms and conditions set forth herein. Unless the
Swing Line Lender has received at least one Business Day’s prior written notice
from the Lenders instructing it not to make a Swing Line Advance, the Swing Line
Lender shall, notwithstanding the failure of any condition precedent set forth
in Section 3.01 or 3.02, be entitled to fund such Swing Line Advance, and to
have the Lenders make Tranche A Revolving Credit Advances in accordance with
Section 2.01(b)(iii) or purchase participating interests in accordance with
Section 2.01(b)(iv). The Borrower shall repay the aggregate outstanding
principal amount of the Swing Line Loan in full in immediately available funds
on the Commitment Termination Date.

(ii) The Borrower shall execute and deliver to the Swing Line Lender a note to
evidence the Swing Line Loan. Such note shall be in the principal amount of the
Swing Line Commitment, dated the Closing Date and substantially in the form of
Exhibit 2.01(b)(ii) (the “Swing Line Note”). The Swing Line Note shall represent
the obligation of the Borrower to pay the Swing Line Loan, together with
interest thereon as prescribed in Section 2.06. The Swing Line Loan and all
other accrued and unpaid Borrower Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.

(iii) The Swing Line Lender, at any time and from time to time no less
frequently than once per month, shall on behalf of the Borrower (and the
Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its
behalf) request each Lender (excluding the Swing Line Lender) to make a Tranche
A Revolving Credit Advance to the Borrower in an amount equal to such Lender’s
Pro Rata Share of the principal amount of the Swing Line Loan (the “Refunded
Swing Line Loan”) outstanding on the date such notice is given. Unless the
Commitment Termination Date has occurred (in which event the procedures of
subsection (iv) below shall apply) and regardless of whether the conditions
precedent set forth in Sections 3.01 and 3.02 to the making of a Tranche A
Revolving Credit Advance are then satisfied, each Lender shall disburse directly
to the Administrative Agent, its Pro Rata Share of a Tranche A Revolving Credit
Advance on behalf of the Swing Line Lender, prior to 2:00 p.m. (New York time),
in immediately available funds on the Business Day next succeeding the date on
which such notice is given; provided that (i) no Lender shall be required to
make such a Tranche A Revolving Credit Advance if the Swing Line Advance to be
financed was made in violation of the fourth sentence of Section 2.01(b)(i) and
the Tranche A Funding Excess resulting therefrom has not yet been cured, (ii) no
Lender shall be required to make such a Tranche A Revolving Credit Advance if,
after giving effect to such Tranche A

 

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Revolving Credit Advance, the Outstanding Principal Amount of the Revolving
Credit Advances made by such Lender would exceed such Lender’s Commitment and
(iii) no Lender shall be required to make such a Revolving Credit Advance after
the Final Advance Date. The proceeds of such Tranche A Revolving Credit Advances
shall be immediately paid to the Swing Line Lender and applied to repay the
Refunded Swing Line Loan.

(iv) If, prior to refunding a Swing Line Loan with a Tranche A Revolving Credit
Advance pursuant to Section 2.01(b)(iii), the Commitment Termination Date or one
of the events described in Sections 8.01(d) or (e) has occurred, then, subject
to the provisions of Section 2.01(b)(v) below, each Lender shall, on the date
such Tranche A Revolving Credit Advance was to have been made for the benefit of
the Borrower, purchase from the Swing Line Lender an undivided participation
interest in the Swing Line Loan in an amount equal to its Pro Rata Share of such
Swing Line Loan. Upon request by the Swing Line Lender, each Lender shall
promptly transfer to the Swing Line Lender, in immediately available funds, the
amount of its participation interest.

(v) Each Lender’s obligation to make Tranche A Revolving Credit Advances in
accordance with Section 2.01(b)(iii) and to purchase participation interests in
accordance with Section 2.01(b)(iv) shall, except to the extent described in the
proviso set forth in the second to last sentence of Section 2.01(b)(iii), be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right that
such Lender may have against the Swing Line Lender, the Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of any
Termination Event or Incipient Termination Event; (C) any inability of the
Borrower to satisfy the conditions precedent to borrowing set forth in this
Agreement at any time; or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Lender does
not make available to the Administrative Agent or the Swing Line Lender, as
applicable, the amount required pursuant to Sections 2.01(b)(iii) or (b)(iv), as
the case may be, the Swing Line Lender shall be entitled to recover such amount
on demand from such Lender, together with interest thereon for each day from the
date of non-payment until such amount is paid in full at the Federal Funds Rate
for the first two Business Days and at the Index Rate thereafter.

Section 2.02. Optional Changes in Aggregate Commitment.

(a) So long as no Incipient Termination Event or Termination Event shall have
occurred and be continuing, the Borrower may, not more than twice during each
calendar year, reduce the Aggregate Commitment permanently; provided, that
(i) the Borrower shall give ten Business Days’ prior written notice of any such
reduction to the Administrative Agent substantially in the form of Exhibit
2.02(a) (each such notice, a “Commitment Reduction Notice”), (ii) any partial
reduction of the Aggregate Commitment shall be in a minimum amount of
$10,000,000 or an integral multiple of $5,000,000 in excess of $10,000,000 and
(iii) no such

 

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partial reduction shall reduce the Aggregate Commitment below the greater of
(x) the Outstanding Principal Amount at such time and (y) $50,000,000. Any such
reduction in the Aggregate Commitment shall result in (i) a reduction in each
Lender’s Commitment in an amount equal to such Lender’s Pro Rata Share of the
amount by which the Aggregate Commitment is being reduced and (ii) a
proportional reduction in the L/C Sublimit, the Swing Line Commitment and the
Tranche B Sublimit; provided, however, that no such partial reduction shall
reduce the L/C Sublimit below the aggregate outstanding amount of Letter of
Credit Obligations or reduce the Swing Line Commitment below the aggregate
amount of the Swing Line Loan.

(b) The Borrower may, at any time, on at least 30 days’ prior written notice by
the Borrower to the Administrative Agent, irrevocably terminate the Aggregate
Commitment; provided, that (i) such notice of termination shall be substantially
in the form of Exhibit 2.02(b) (the “Commitment Termination Notice”) and
(ii) the Borrower shall reduce the aggregate outstanding amount of Advances to
zero, cash collateralize or provide a back-up letter of credit with respect to
all Letter of Credit Obligations in accordance with Section 2.11, and make all
payments required by Section 2.03(h) at the time and in the manner specified
therein. Upon such termination, the Borrower’s right to request that (1) any
Lender make Revolving Credit Advances or incur Letter of Credit Obligations or
(2) the Swing Line Lender make Swing Line Advances hereunder, shall in each case
simultaneously terminate and the Commitment Termination Date shall automatically
occur.

(c) Each written notice required to be delivered pursuant to Sections 2.02(a)
and (b) shall be irrevocable and shall be effective (i) on the day of receipt if
received by the Administrative Agent and the Lenders not later than 4:00 p.m.
(New York time) on any Business Day and (ii) on the immediately succeeding
Business Day if received by the Administrative Agent and the Lenders after such
time on such Business Day or if any such notice is received on a day other than
a Business Day (regardless of the time of day such notice is received). Each
such notice of termination or reduction shall specify, respectively, the amount
of, or the amount of the proposed reduction in, the Aggregate Commitment.

Section 2.03. Procedures for Making Advances.

(a) Borrowing Requests. Except as provided in Sections 2.06(c) and 2.11(b)(ii),
each Borrowing shall be made upon notice by the Borrower to the Administrative
Agent in the manner provided herein. Any such notice must be given in writing so
that it is received no later than (1) 11:00 a.m. (New York time) on the Business
Day of the proposed Advance Date set forth therein. Each Borrowing requested
pursuant to a Borrowing Request shall be (a) in the form of a Swing Line Advance
until such Swing Line Advance is refunded or otherwise refinanced in accordance
with Section 2.01(b)(iii) or (b)(iv) or (b) in the form of Tranche B Revolving
Credit Advances. Each request for a Borrowing (a “Borrowing Request”) shall
(i) be substantially in the form of Exhibit 2.03(a), (ii) be irrevocable and
(iii) specify the amount of the requested Borrowing (which shall be in a minimum
amount of $500,000) and the proposed Advance Date (which shall be a Business
Day), and shall include such other information as may be required by the Lenders
and the Administrative Agent. The

 

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Administrative Agent shall review the Borrowing Base Certificate delivered in
connection with each Borrowing Request to confirm whether a Funding Excess
exists or would exist after giving effect to the Borrowing requested in the
related Borrowing Request. If, in connection with such review, the
Administrative Agent determines that a Funding Excess exists or would exist
after giving effect to the Borrowing requested in the related Borrowing Request,
the Administrative Agent shall promptly notify each Lender thereof. Unless a
LIBOR Rate Disruption Event shall have occurred, each Advance shall be a LIBOR
Rate Advance.

(b) Advances; Payments.

(i) (A) The Administrative Agent shall, promptly after receipt of a Borrowing
Request and in any event prior to 12:00 noon (New York time) on the date such
Borrowing Request is deemed received, by telecopy, telephone or other similar
form of communication notify (i) the Swing Line Lender of its receipt of a
Borrowing Request relating to a request for Swing Line Advances or (ii) the
Lenders of its receipt of a Borrowing Request relating to a request for Tranche
B Revolving Credit Advances, and (B) (i) the Swing Line Lender (in the case of
Swing Line Advance) or (ii) the Lenders (in the case of Tranche B Revolving
Credit Advances) shall make the amount of such Swing Line Advance or Tranche B
Revolving Credit Advances, as applicable, available to the Administrative Agent
in same day funds by wire transfer to the Administrative Agent’s account as set
forth in Annex W not later than 3:00 p.m. (New York time) on the requested
Advance Date. After receipt of such wire transfers (or, in the Administrative
Agent’s sole discretion in accordance with Section 2.03(c), before receipt of
such wire transfers), subject to the terms hereof (including, without
limitation, the satisfaction of the conditions precedent set forth in
Section 3.02), the Administrative Agent shall make available to the Borrower by
deposit into the Borrower Account (or, in the case of Revolving Credit Advances
made pursuant to Section 2.11(b)(ii), shall apply in accordance with such
Section) on the Advance Date therefor, the lesser of (x) the amount of the
requested Borrowing and (y) (i) in the case of any requested Swing Line Advance,
the amount of Tranche A Funding Availability and (ii) in the case of any
requested Tranche B Revolving Credit Advances, the amount of Tranche B Funding
Availability. All payments by each Lender under this Section 2.03(b)(i) shall be
made without setoff, counterclaim or deduction of any kind.

(ii) On each Interest Payment Date, the Administrative Agent will advise each
Lender (other than the Swing Line Lender) by telephone or telecopy of the amount
of such Lender’s Pro Rata Share of principal, interest and Fees (to the extent
payable to all Lenders) paid for the benefit of Lenders with respect to each
applicable Revolving Credit Advance. Provided that such Lender has made all
payments required to be made by it and purchased all participations required to
be purchased by it under this Agreement and the other Related Documents as of
such Interest Payment Date, the Administrative Agent will pay to each Lender
such Lender’s Pro Rata Share of principal, interest and Fees (to the extent
payable to all Lenders) with respect to each applicable Revolving Credit
Advance, paid by the Borrower since the previous Interest Payment Date for the
benefit of that Lender. Such payments shall be made by wire transfer to such
Lender’s account (as specified by such Lender in Annex W or the applicable
Assignment Agreement) not later than 3:00 p.m. (New York time) on each Interest
Payment Date.

 

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(iii) On each Interest Payment Date, the Administrative Agent will advise the
Swing Line Lender of the amount of principal, interest and Fees paid for the
benefit of the Swing Line Lender with respect to the Swing Line Loan. The
Administrative Agent will pay to the Swing Line Lender the amount of principal,
interest and Fees paid by the Borrower since the previous Interest Payment Date
for the benefit of the Swing Line Lender. Such payments shall be made by wire
transfer or by book balance to the Swing Line Lender’s account (as specified by
the Swing Line Lender in Annex W or the applicable Assignment Agreement) not
later than 3:00 p.m. (New York time) on each Interest Payment Date.

(c) Availability of Lenders’ Advances. The Administrative Agent may assume that
each Lender (other than the Swing Line Lender) will make its Pro Rata Share of
each Borrowing of Revolving Credit Advances available to the Administrative
Agent on each Advance Date. If the Administrative Agent has made available to
the Borrower such Lender’s Pro Rata Share of any such Borrowing but such Pro
Rata Share is not, in fact, paid to the Administrative Agent by such Lender when
due, the Administrative Agent will be entitled to recover such amount on demand
from such Lender without set-off, counterclaim or deduction of any kind. If any
Lender fails to pay the amount of its Pro Rata Share forthwith upon the
Administrative Agent’s demand, the Administrative Agent shall promptly notify
the Borrower and the Borrower shall immediately repay such amount to the
Administrative Agent. Nothing in this Section 2.03(c) or elsewhere in this
Agreement or the other Related Documents shall be deemed to require the
Administrative Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its Commitment hereunder or to prejudice
any rights that the Borrower may have against any Lender as a result of any
default by such Lender hereunder. To the extent that the Administrative Agent
advances funds to the Borrower on behalf of any Lender and is not reimbursed
therefor on the same Business Day as such Revolving Credit Advance is made, the
Administrative Agent shall be entitled to retain for its account all interest
accrued on such Revolving Credit Advance from the date of such Revolving Credit
Advance to the date such Revolving Credit Advance is reimbursed by the
applicable Lender.

(d) Return of Payments. (i) If the Administrative Agent pays an amount to a
Lender under this Agreement in the belief or expectation that a related payment
has been or will be received by the Administrative Agent from the Borrower and
such related payment is not received by the Administrative Agent, then the
Administrative Agent will be entitled to recover such amount from such Lender on
demand without set-off, counterclaim or deduction of any kind.

(ii) If at any time any amount received by the Administrative Agent under this
Agreement must be returned to the Borrower or paid to any other Person pursuant
to any insolvency law or otherwise, then, notwithstanding any other term or
condition of this Agreement or any other Related Document, the Administrative
Agent will not be required to distribute any portion thereof to any Lender. In
addition, each

 

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Lender will repay to the Administrative Agent on demand any portion of such
amount that the Administrative Agent has distributed to such Lender, together
with interest at such rate, if any, as the Administrative Agent is required to
pay to the Borrower or such other Person, without set-off, counterclaim or
deduction of any kind.

(e) Non-Funding Lenders. The failure of any Lender (each such Lender, a
“Non-Funding Lender”) to make any Revolving Credit Advance to be made by it on
the date specified therefor shall not relieve any other Lender (each such other
Lender, an “Other Lender”) of its obligations to make the Revolving Credit
Advance to be made by it, but neither any Other Lender nor the Administrative
Agent shall be responsible for the failure of any Non-Funding Lender to make a
Revolving Credit Advance to be made by such Non-Funding Lender. Notwithstanding
anything set forth herein to the contrary, a Non-Funding Lender shall not have
any voting or consent rights under or with respect to any Related Document or
constitute a “Lender” (or be included in the calculation of “Requisite Lenders”
hereunder) for any voting or consent rights under or with respect to any Related
Document unless and until such Non-Funding Lender shall have cured in full its
failures to make Revolving Credit Advances hereunder.

(f) Dissemination of Information. The Administrative Agent will use reasonable
efforts to provide Lenders with (i) copies of all notices and other documents
provided to the Administrative Agent pursuant to Section 5.02, (ii) any notice
of an Incipient Termination Event or Termination Event received by the
Administrative Agent from, or delivered by the Administrative Agent to, the
Borrower, (iii) notice of any Termination Event of which the Administrative
Agent has actually become aware and (iv) notice of any action taken by the
Administrative Agent following any Termination Event; provided, however, that,
in the absence of gross negligence or wilful misconduct, the Administrative
Agent shall not be liable to any Lender for any failure to do so.

(g) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement, the Tranche A Revolving Notes, the Tranche B Revolving Notes or the
Swing Line Note (including exercising any rights of set-off) without first
obtaining the prior written consent of the Administrative Agent or the Requisite
Lenders, it being the intent of the Lenders that any such action to protect or
enforce rights under this Agreement, the Tranche A Revolving Notes, the Tranche
B Revolving Notes and the Swing Line Note shall, subject to any provision herein
requiring that each Lender consent to a particular action, be taken in concert
and at the direction or with the consent of the Administrative Agent or the
Requisite Lenders.

(h) Principal Repayments. The Borrower may at any time repay outstanding
Advances hereunder; provided that (i) the Borrower shall give not less than one
Business Day’s prior written notice of any such repayment to the Administrative
Agent substantially in the form of Exhibit 2.03(h) (each such notice, a
“Repayment Notice”), (ii) each such notice shall be irrevocable, (iii) each such
notice shall specify the amount of the requested repayment and the proposed date
of such repayment (which shall be a Business Day), (iv) any such repayment shall
be applied first to the Swing Line Loan until the Outstanding Principal Amount
thereof has been

 

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reduced to zero, and second to the outstanding Revolving Credit Advances
(provided, that if a Funding Excess exists and any outstanding Swing Line
Advances were made in violation of the fourth sentence of Section 2.01(b)(i) or
were funded after the Commitment Termination Date, then such Swing Line Advance
will be repaid after the Revolving Credit Advances) and (v) any such repayment
must be accompanied by payment of all interest accrued and unpaid on the portion
of the outstanding principal balance of the Advances to be repaid through but
excluding the date of such repayment. Any such notice of repayment must be
received by the Administrative Agent no later than 2:00 p.m. (New York time) on
the Business Day immediately preceding the date of the proposed repayment;
provided, further, that the foregoing requirements shall not apply to repayment
of the outstanding principal amount of Advances as a result of the application
of Collections pursuant to Section 2.08.

Section 2.04. Pledge and Release of Transferred Receivables.

(a) Pledge. The Borrower shall indicate in its Records that the Transferred
Receivables have been pledged hereunder and that the Administrative Agent has a
lien on and security interest in all such Transferred Receivables for the
benefit of the Secured Parties. The Borrower shall, and shall cause the Servicer
to, hold all Contracts and other documents relating to such Transferred
Receivables in trust for the benefit of the Administrative Agent on behalf of
itself and the other Secured Parties in accordance with their interests
hereunder. The Borrower hereby acknowledges that its retention and possession of
such Contracts and documents shall at all times be at the sole discretion of the
Administrative Agent and in a custodial capacity for the Administrative Agent’s
(on behalf of itself and the other Secured Parties) benefit only.

(b) Repurchases of Transferred Receivables. If an Originator is required to
repurchase Transferred Receivables from the Borrower pursuant to Section 4.04 of
the Sale Agreement, upon payment by such Originator to a Collection Account of
the applicable repurchase price thereof (which repurchase price shall not be
less than an amount equal to the Billed Amount of such Transferred Receivable
minus the sum of (A) Collections received in respect thereof and (B) the amount
of any Dilution Factors taken into account in the calculation of the Sale Price
therefor), the Administrative Agent on behalf of itself and the other Secured
Parties shall release their liens on and security interests in the Transferred
Receivables being so repurchased.

Section 2.05. Commitment Termination Date. Notwithstanding anything to the
contrary set forth herein, no Lender shall have any obligation to make any
Advances or incur Letter of Credit Obligations from and after the Commitment
Termination Date.

Section 2.06. Interest; Charges.

(a) The Borrower shall pay interest to the Administrative Agent, for the ratable
benefit of the Lenders, with respect to the outstanding amount of each Revolving
Credit Advance made or maintained by each Lender, in arrears on each applicable
Interest Payment Date, (i) for each LIBOR Rate Advance, at the applicable LIBOR
Rate as in effect from time to time during the period applicable to such
Interest Payment Date, and (ii) for each Index Rate

 

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Advance outstanding from time to time, at the applicable Index Rate as in effect
from time to time during the period applicable to such Interest Payment Date.
The Borrower shall pay interest to the Administrative Agent, for the benefit of
the Swing Line Lender, with respect to the outstanding amount of each Swing Line
Advance, in arrears on each applicable Interest Payment Date, at the LIBOR Rate
as in effect from time to time during the period applicable to such Interest
Payment Date. Interest for each Advance shall be calculated based upon actual
days elapsed during the applicable calendar month or other period, for a 360 day
year based upon actual days elapsed since the last Interest Payment Date. Unless
a LIBOR Rate Disruption Event shall have occurred, each Advance shall be a LIBOR
Rate Advance.

(b) So long as any Termination Event shall have occurred and be continuing, the
interest rates applicable to each Advance and any other unpaid Borrower
Obligation hereunder and the Letter of Credit Fee shall be increased by two
percent (2.0%) per annum (such increased rate, in each case, the “Default
Rate”), and all outstanding Borrower Obligations shall bear interest at the
applicable Default Rate from the date of such Termination Event until such
Termination Event is waived or cured.

(c) The Administrative Agent is authorized to, and at its sole election may,
charge to the Borrower as Tranche A Revolving Credit Advances (or Tranche B
Revolving Credit Advances to the extent there is not sufficient Tranche A
Revolving Credit Availability) and cause to be paid all Fees, Rating Agency
fees, expenses, charges, costs, interest and principal, other than principal of
the Advances or Reimbursement Obligations, owing by the Borrower under this
Agreement or any of the other Related Documents if and to the extent the
Borrower fails to pay any such amounts as and when due, and any charges so made
shall constitute part of the Outstanding Principal Amount hereunder even if such
charges would cause the aggregate balance of the Outstanding Principal Amount to
exceed the sum of the Tranche A Borrowing Base and the Tranche B Borrowing Base.

Section 2.07. Fees.

(a) On the Effective Date, the Borrower shall pay to the Administrative Agent,
for the account of itself and the Lenders, as applicable, the fees set forth in
the Fee Letter that are payable on the Effective Date.

(b) From and after the Closing Date, as additional compensation for the Lenders,
the Borrower agrees to pay to Administrative Agent, for the ratable benefit of
such Lenders, monthly in arrears, on each Settlement Date prior to the
Commitment Termination Date and on the Commitment Termination Date, the Unused
Commitment Fee.

(c) On each Settlement Date, the Borrower shall pay to the Servicer or to the
Successor Servicer, as applicable, the Servicing Fee or the Successor Servicing
Fees and Expenses, respectively, in each case to the extent of available funds
therefor pursuant to Section 2.08.

 

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Section 2.08. Application of Collections; Time and Method of Payments.

(a) Each Advance shall mature, and be payable, on the Commitment Termination
Date (in which case such Advance shall be payable in full).

(b) On each Business Day, the Administrative Agent shall allocate amounts on
deposit in the Agent Account on such day and not previously allocated under this
subsection (b) as follows, in the following order of priority:

(i) first, to be retained in the Agent Account and paid in accordance with
clause (i) of the following subsection (c), an amount equal to the aggregate
Fees accrued and unpaid through such date and all unreimbursed expenses of the
Administrative Agent which are reimbursable pursuant to the terms hereof;
provided, that, the sum of (i) the amounts retained pursuant to this clause
first and (ii) the amounts paid pursuant to clause (i) of the following
subsection (c) shall not exceed $100,000 in any calendar year;

(ii) second, to be retained in the Agent Account and paid in accordance with
clause (ii) of the following subsection (c), an amount equal to the aggregate
interest with respect to all outstanding Tranche A Advances and Tranche A
Reimbursement Obligations then accrued and unpaid;

(iii) third, if the Servicer has been replaced as a result of the occurrence of
an Event of Servicer Termination and such Servicer is not an Affiliate of the
Parent, to be retained in the Agent Account and paid in accordance with clause
(iii) of the following subsection (c), an amount equal to the aggregate accrued
and unpaid Servicing Fees through such date payable to such replacement
Servicer;

(iv) fourth, to be retained in the Agent Account and paid in accordance with
clause (vi) of the following subsection (c), an amount equal to the aggregate
interest with respect to all outstanding Tranche B Revolving Credit Advances and
Tranche B Reimbursement Obligations then accrued and unpaid;

(v) fifth, to be retained in the Agent Account, the amount of any cash
collateral required to be deposited therein under Section 2.11;

(vi) sixth, the extent not already retained in the Agent Account in accordance
with clause first, to be retained in the Agent Account and paid in accordance
with clause (ix) of the following subsection (c), an amount equal to the
aggregate Fees accrued and unpaid through such date and all unreimbursed
expenses of the Administrative Agent which are reimbursable pursuant to the
terms hereof;

(vii) seventh, if any of the conditions precedent set forth in Section 3.02
shall not be satisfied, all such remaining amounts to the extent not greater
than the Outstanding Principal Amount to be retained in the Agent Account until
paid in accordance with the following subsection (c) or all such conditions are
satisfied;

 

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(viii) eighth, to be retained in the Agent Account and paid in accordance with
the applicable provisions of the following subsection (c), an amount equal to
the aggregate amount of all other accrued and unpaid Borrower Obligations which
are then required to be paid according to such subsection, including, without
limitation, the expenses of the Lenders reimbursable under Section 12.04; and

(ix) ninth, unless a Termination Event or Incipient Termination Event has
occurred and is continuing, any remaining amounts on deposit in the Agent
Account, to be paid to the Borrower Account (if a Termination Event or Incipient
Termination Event has occurred and is continuing, such amounts shall remain in
the Agent Account until such time as all Borrower Obligations shall have been
indefeasibly paid in full and this Agreement shall have been terminated).

(c) On each Business Day on which any Borrower Obligations are due for payment,
the Administrative Agent shall withdraw amounts on deposit in the Agent Account
and pay such amounts as follows in the following order of priority:

(i) first, to the extent then due and payable, to the payment of all Fees
accrued and unpaid through such date and all unreimbursed expenses of the
Administrative Agent which are reimbursable pursuant to the terms hereof;
provided, that, the aggregate amount paid pursuant to this clause first in any
calendar year shall not exceed $100,000;

(ii) second, if such Business Day is an Interest Payment Date, to the payment of
accrued and unpaid interest which is then due and payable in respect of the
Tranche A Advances and Tranche A Reimbursement Obligations, pro rata based on
the Commitments;

(iii) third, if the Servicer has been replaced as a result of the occurrence of
an Event of Servicer Termination and such Servicer is not an Affiliate of the
Parent, to the payment of the aggregate accrued and unpaid Servicing Fees
through such date payable to such replacement Servicer;

(iv) fourth, to the payment of any outstanding Tranche A Advances and Tranche A
Reimbursement Obligations with respect to amounts drawn on Letters of Credit
then due and payable, pro rata based on the Commitments; provided, that
principal on Tranche A Advances shall be applied in the following order, to the
payment of the Outstanding Principal Amount of Tranche A Advances, first, in
respect of Swing Line Advances (provided, that if a Funding Excess exists and
any outstanding Swing Line Advances were made in violation of the fourth
sentence of Section 2.01(b)(i), then such Swing Line Advance will be repaid
after the Revolving Credit Advances), and second, in respect of Tranche A
Revolving Credit Advances, pro rata based on the Commitments;

(v) fifth, if any of the conditions precedent set forth in Section 3.02 shall
not be satisfied, to the payment of the Outstanding Principal Amount of all
other

 

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Tranche A Advances and Tranche A Reimbursement Obligations, first, in respect of
Swing Line Advances (provided, that if a Tranche A Funding Excess exists and any
outstanding Swing Line Advances were made in violation of the fourth sentence of
Section 2.01(b)(i), then such Swing Line Advance will be repaid after the
Tranche A Revolving Credit Advances), second, in respect of Tranche A
Reimbursement Obligations and third, in respect of Tranche A Revolving Credit
Advances, pro rata based on the Commitments;

(vi) sixth, if such Business Day is an Interest Payment Date, to the payment of
accrued and unpaid interest which is then due and payable in respect of the
Tranche B Revolving Credit Advances and Tranche B Reimbursement Obligations, pro
rata based on the Commitments;

(vii) seventh, to the payment of any outstanding Tranche B Revolving Credit
Advances and Tranche B Reimbursement Obligations with respect to amounts drawn
on Letters of Credit then due and payable, pro rata based on the Commitments;

(viii) eight, if any of the conditions precedent set forth in Section 3.02 shall
not be satisfied, to the payment of the Outstanding Principal Amount of all
other Tranche B Revolving Credit Advances and Tranche B Reimbursement
Obligations; first, in respect of Tranche B Reimbursement Obligations and
second, in respect of Tranche B Revolving Credit Advances, pro rata based on the
Commitments;

(ix) ninth, to the L/C Cash Collateral Account, the amount of any cash
collateral required to be deposited therein under Section 2.11;

(x) tenth, to the extent then due and payable and not already paid in accordance
with clause first above, pro rata, to the payment of all Fees accrued and unpaid
through such date and all unreimbursed expenses of the Administrative Agent
which are reimbursable pursuant to the terms hereof;

(xi) eleventh, to the extent then due and payable, pro rata, to the payment of
all other obligations of the Borrower accrued and unpaid hereunder, including,
without limitation, the expenses of the Lenders reimbursable under
Section 12.04; and

(xii) twelfth, to be paid to the Borrower Account.

(d) Funding Excesses.

(i) If and to the extent a Tranche A Funding Excess exists on any Business Day,
the Borrower shall deposit an amount equal to the amount of such Tranche A
Funding Excess in the Agent Account by no later than 11:00 a.m. (New York time)
on the immediately succeeding Business Day, which amount shall be applied by the
Administrative Agent first, in immediate repayment of the outstanding amount of
Swing Line Advances, and if no Swing Line Advances are outstanding, and second,
in immediate repayment of the outstanding amount of Tranche A Revolving Credit
Advances.

 

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(ii) If and to the extent a Tranche B Funding Excess exists on any Business Day,
the Borrower shall deposit an amount equal to the amount of such Tranche B
Funding Excess in the Agent Account by no later than 11:00 a.m. (New York time)
on the immediately succeeding Business Day, which amount shall be applied by the
Administrative Agent immediate repayment of the outstanding amount of Tranche B
Revolving Credit Advances.

(iii) If a Tranche A Funding Excess exists, to the extent of Tranche B Funding
Availability, the Borrower may cure such Tranche A Funding Excess by converting
Tranche A Advances to Tranche B Revolving Credit Advances by written notice of
such conversion to the Administrative Agent and each Lender. Such conversion
shall be deemed to have occurred on the Business Day that the Administrative
Agent and the Lenders receive such notice of conversion so long as such notice
of conversion is delivered by no later than 11:00 a.m. (New York time) on such
Business Day.

(iv) If a Tranche A Funding Excess and a Tranche B Funding Excess exist on any
Business Day, the Borrower shall make all payments required under clause (d)(i)
above in respect of such Tranche A Funding Excess before making any payments
under clause (d)(ii) above in respect of such Tranche B Funding Excess.

(e) To the extent that amounts on deposit in the Agent Account on any day are
insufficient to pay amounts due on such day in respect of the matured portion of
any Advances or any interest, Fees or any other amounts due and payable by the
Borrower hereunder, the Borrower shall pay, upon notice from the Administrative
Agent, the amount of such insufficiency to the Administrative Agent in Dollars,
in immediately available funds (for the account of the Administrative Agent, the
applicable Lenders, Affected Parties or Indemnified Persons) not later than
11:00 a.m. (New York time) on such day. Any such payment made on such date but
after such time shall be deemed to have been made on, and interest shall
continue to accrue and be payable thereon at the LIBOR Rate (in the case of
LIBOR Rate Advances) or the Index Rate (in all other cases), until the next
succeeding Business Day.

(f) The Borrower hereby irrevocably waives the right to direct the application
of any and all payments received from or on behalf of the Borrower, and the
Borrower hereby irrevocably agrees that any and all such payments shall be
applied by the Administrative Agent in accordance with this Section 2.08.

(g) All payments of principal of the Advances and all payments of interest, Fees
and other amounts payable by the Borrower hereunder shall be made in Dollars, in
immediately available funds. If any such payment becomes due on a day other than
a Business Day, the maturity thereof will be extended to the next succeeding
Business Day and interest thereon at the LIBOR Rate (in the case of LIBOR Rate
Advances) or Index Rate (in all other cases) shall be payable during such
extension. Payments received at or prior to 2:00 p.m. (New York time) on any
Business Day shall be deemed to have been received on such Business Day.
Payments received after 2:00 p.m. (New York time) on any Business Day or on a
day that is not a Business Day shall be deemed to have been received on the
following Business Day.

 

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(h) Any and all payments by the Borrower hereunder shall be made in accordance
with this Section 2.08 without setoff or counterclaim and free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, Charges or withholdings, excluding taxes imposed on or measured by
the net income, gross receipts or franchise taxes of any Affected Party by the
jurisdictions under the laws of which such Affected Party is organized or by any
political subdivisions thereof (such non-excluded taxes, levies, imposts,
deductions, Charges and withholdings being “Indemnified Taxes”). If the Borrower
shall be required by law to deduct any Indemnified Taxes from or in respect of
any sum payable hereunder, (i) the sum payable shall be increased as much as
shall be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.08) the
Affected Party entitled to receive any such payment receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, and (iii) the Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within 30 days after the date of any payment of Indemnified
Taxes, the Borrower shall furnish to the Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof. The Borrower shall
indemnify any Affected Party from and against, and, within ten days of demand
therefor, pay any Affected Party for, the full amount of Indemnified Taxes
(together with any taxes imposed by any jurisdiction on amounts payable under
this Section 2.08) paid by such Affected Party and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally asserted.

(i) Upon receipt of a notice in accordance with Section 7.03 of the Sale
Agreement, the Administrative Agent shall, if such amounts have not been applied
to the Borrower Obligations, segregate the Unrelated Amounts and the same shall
not be deemed to constitute Collections on Transferred Receivables.

 

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Section 2.09. Capital Requirements; Additional Costs.

(a) If any Affected Party shall have determined that, after the date hereof, the
adoption of or any change in, or any change in the administration or
interpretation of, any law, treaty, governmental (or quasi governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by such Affected Party with any request or
directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law) from any central bank or
other Governmental Authority increases or would have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Affected Party against commitments made by it under this Agreement or any other
Related Document and thereby reducing the rate of return on such Affected
Party’s capital as a consequence of its commitments hereunder or thereunder,
then the Borrower shall from time to time upon demand by the Administrative
Agent pay to the Administrative Agent on behalf of such Affected Party
additional amounts sufficient to compensate such Affected Party for such
reduction together with interest thereon from the date of any such demand until
payment in full at the applicable Index Rate. A certificate as to the amount of
that reduction and showing the basis of the computation thereof submitted by the
Affected Party to the Borrower shall be final, binding and conclusive on the
parties hereto (absent manifest error) for all purposes.

(b) If, due to any Regulatory Change, there shall be any increase in the cost to
any Affected Party of agreeing to make or making, funding or maintaining any
commitment hereunder or under any other Related Document, including with respect
to any Advances, Letter of Credit Obligations or other Outstanding Principal
Amount, or any reduction in any amount receivable by such Affected Party
hereunder or thereunder, including with respect to any Advances, Letter of
Credit Obligations or other Outstanding Principal Amount (any such increase in
cost or reduction in amounts receivable are hereinafter referred to as
“Additional Costs”), then the Borrower shall, from time to time upon demand by
the Administrative Agent, pay to the Administrative Agent on behalf of such
Affected Party additional amounts sufficient to compensate such Affected Party
for such Additional Costs together with interest thereon from the date demanded
until payment in full thereof at the applicable Index Rate. Each Affected Party
agrees that, as promptly as practicable after it becomes aware of any
circumstance referred to above that would result in any such Additional Costs,
it shall, to the extent not inconsistent with its internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by the Borrower pursuant to this
Section 2.09(b).

(c) Determinations by any Affected Party for purposes of this Section 2.09 of
the effect of any Regulatory Change on its costs of making, funding or
maintaining any commitments hereunder or under any other Related Documents or on
amounts payable to it hereunder or thereunder or of the additional amounts
required to compensate such Affected Party in respect of any Additional Costs
shall be set forth in a written notice to the Borrower in reasonable detail and
shall be final, binding and conclusive on the Borrower (absent manifest error)
for all purposes.

 

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(d) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Rate Advance,
then, unless that Lender is able to make or to continue to fund or to maintain
such LIBOR Rate Advance at another branch or office of that Lender without, in
that Lender’s opinion, adversely affecting it or its Advances or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to the
Borrower through the Administrative Agent, (i) the obligation of such Lender to
agree to make or to make or to continue to fund or maintain LIBOR Rate Advances
shall terminate and (ii) Borrower shall forthwith prepay in full all outstanding
LIBOR Rate Advances owing to such Lender, together with interest accrued
thereon, unless Borrower, within five (5) Business Days after the delivery of
such notice and demand, converts all such LIBOR Rate Advances into Index Rate
Advances.

(e) Promptly after any Affected Party has determined that it will make a request
for increased compensation pursuant to this Section 2.09, such Affected Party
shall notify the Borrower thereof. Failure or delay on the part of any Affected
Party to demand compensation or Additional Costs pursuant to this Section 2.09
shall not constitute a waiver of such Affected Party’s right to demand such
compensation or Additional Costs; provided that the Borrower shall not be
required to compensate an Affected Party pursuant to this Section 2.09 for any
increased costs or reduction or other Additional Costs incurred more than 90
days prior to the date that such Affected Party notifies the Borrower of the
Regulatory Change or other governmental action giving rise to such increased
costs or reductions or Additional Costs and of such Affected Party’s intention
to claim compensation therefor.

Section 2.10. [RESERVED].

Section 2.11. Letter of Credit Facility. From and after the Effective Date until
the Commitment Termination Date, and subject to and in accordance with the terms
and conditions set forth in this Section 2.11, the Borrower shall have the right
to request the issuance of Letters of Credit for the benefit of itself, any
Originator or any Subsidiary of an Originator, and the Lenders agree to incur or
purchase participations in, Letter of Credit Obligations in respect of the
Borrower.

(a) Issuance. (i) Subject to the terms and conditions of the Agreement, the
Administrative Agent and the Lenders agree to incur, upon the request of the
Borrower and for Borrower’s account, Letter of Credit Obligations by causing
Letters of Credit to be issued by either (x) an L/C Issuer which is also a
Lender hereunder, in which case such Letters of Credit shall not be guaranteed
by the Administrative Agent and draws on such Letters of Credit shall be
reimbursable by the Borrower in accordance with Section 2.11(b) below, or (y) an
L/C Issuer which is not a Lender (a “Third-Party L/C Issuer”), in which case
such Letters of Credit will be guaranteed by the Administrative Agent and draws
on such Letters of Credit will be reimbursed by the Borrower pursuant to
Section 2.11(b) below, and if the Borrower fails to do so, by the Administrative
Agent pursuant to the terms of a guaranty by the Administrative Agent (the “L/C
Guaranty”) and any payment by the Administrative Agent pursuant to the
applicable L/C

 

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Guaranty shall be repaid by the Borrower pursuant to the terms of
Section 2.11(b) below. The aggregate amount of all Letter of Credit Obligations
shall not at any time exceed the lesser of (i) the L/C Sublimit, and (ii) the
excess (if any) of (1) the lesser of (A) the Aggregate Commitment and (B) the
sum of the Tranche A Borrowing Base and the Tranche B Borrowing Base, over
(2) the aggregate outstanding amount of Advances. No such Letter of Credit shall
have an expiry date that is more than one year following the date of issuance
thereof unless otherwise determined by the Administrative Agent in its sole
discretion (including with respect to customary evergreen provisions), and
neither the Administrative Agent nor any Lender shall be under any obligation to
incur Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date that is later than
the Commitment Termination Date.

(ii) Any action taken or omitted to be taken by the Administrative Agent or any
L/C Issuer under or in connection with any Letter of Credit, if taken or omitted
in the absence of gross negligence or willful misconduct, shall not put the
Administrative Agent or such L/C Issuer under any resulting liability to the
Borrower, any Lender or any other Person. In determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof, the L/C Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit, the L/C Issuer may rely exclusively on the documents presented
to it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the L/C Issuer.

(b) Reimbursement Obligations; Advances and Participations. (i) The Borrower
hereby agrees to pay (either out of its own funds or with the proceeds of a
Revolving Credit Advance) to the applicable L/C Issuer or, with respect to a
Letter of Credit issued by a Third-Party L/C Issuer, to the Administrative Agent
in accordance with the terms of the related L/C Guaranty, on demand any amounts
drawn under any Letter of Credit, irrespective of any claim, set-off, defense or
other right that the Borrower may have at any time against the L/C Issuer, the
Administrative Agent, any Lender or any other Person. In the event the Borrower
does not pay any Reimbursement Obligation in cash out of its own funds on the
day such Reimbursement Obligation arises, it shall be deemed to have made a
request for (i) Tranche A Revolving Credit Advances to the extent of Tranche A
Funding Availability and (ii) Tranche B Revolving Credit Advances to the extent
that the Reimbursement Obligations is greater than Tranche A Funding
Availability at such time to be made in respect of such Reimbursement

 

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Obligation pursuant to Section 2.11(b)(ii) below. Each Reimbursement Obligation
shall bear interest from the date of the relevant drawing until the earlier of
(x) the date on which the Borrower pays such Reimbursement Obligation in full in
cash and (y) the date on which Revolving Credit Advances in respect of such
Reimbursement Obligations are made in accordance with Section 2.11(b)(ii) below,
at the Index Rate in effect at such time.

(ii) In the event that any Letter of Credit is drawn and the Borrower does not
pay the Reimbursement Obligation in full in cash on the day such Reimbursement
Obligation arises, the Borrower shall be deemed to have requested that the
Lenders make (i) Tranche A Revolving Credit Advances to the extent of Tranche A
Funding Availability and (ii) Tranche B Revolving Credit Advances to the extent
that the Reimbursement Obligations are greater than Tranche A Funding
Availability in respect of such Reimbursement Obligation on the Business Day
following the date on which such drawing was made (such date, the “Reimbursement
Date”). The Administrative Agent is hereby authorized to deliver notice of such
deemed request on behalf of the Borrower, and each Lender shall, by no later
than 3:00 p.m. (New York City time) on the Reimbursement Date (so long as it
received notice of such drawing by no later than 12:00 Noon (New York City time)
on the Reimbursement Date), make available to the Administrative Agent (for the
benefit of the applicable L/C Issuer or the Administrative Agent, as
applicable), as (i) a Tranche A Revolving Credit Advance up to its Pro Rata
Share of Tranche A Funding Availability and (ii) a Tranche B Revolving Credit
Advance to the extent that its Pro Rata Share of the Reimbursement Obligation is
greater than Tranche A Funding Availability, its Pro Rata Share of such
Reimbursement Obligation. In addition, if and to the extent the Borrower has
paid a Reimbursement Obligation and such payment is thereafter rescinded or set
aside for any reason, upon notice from the Administrative Agent to the Lenders,
each Lender shall, by no later than 3:00 p.m. (New York City time) on Business
Day following the date on which such notice is received, make available to the
Administrative Agent (for the benefit of the applicable L/C Issuer or the
Administrative Agent, as applicable), as (i) a Tranche A Revolving Credit
Advance up to its Pro Rata Share of Tranche A Funding Availability and (ii) a
Tranche B Revolving Credit Advance to the extent that its Pro Rata Share of the
Reimbursement Obligation is greater than its Pro Rata Share of Tranche A Funding
Availability, its Pro Rata Share of such Reimbursement Obligation. Each Lender’s
obligation to make Revolving Credit Advances in accordance with this
Section 2.11(b) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right that such Lender may have against the Administrative Agent, the L/C
Issuer, the Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of any Termination Event or Incipient Termination
Event (unless any of the events described in Sections 9.01(d) or (e) has
occurred (in which event the procedures of subsection (iv) below shall apply));
(C) any inability of the Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time; or (D) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. The failure of any Lender to make available to the Administrative
Agent, for the account of the applicable L/C Issuer or the Administrative Agent,
its Pro Rata Share of any such Revolving Credit Advances shall

 

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not relieve any other Lender of its obligation hereunder to make available to
the Administrative Agent its Pro Rata Share thereof, but no Lender shall be
responsible for the failure of any other Lender to make available such other
Lender’s Pro Rata Share of any such payment.

(iii) If it shall be illegal or unlawful for any Lender to make or the Borrower
to incur Revolving Credit Advances as contemplated by subsection (b)(ii) above
because of a Termination Event described in Sections 8.01(d) or (e) or otherwise
or if it shall be illegal or unlawful for any Lender to be deemed to have
assumed a ratable share of the Reimbursement Obligations owed to an L/C Issuer
or the Administrative Agent, or if the L/C Issuer is a Lender, then
(1) immediately and without further action whatsoever, each Lender shall be
deemed to have irrevocably and unconditionally purchased from the Administrative
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation equal to such Lender’s Pro Rata Share of the Letter of Credit
Obligations in respect of all Letters of Credit then outstanding and
(2) thereafter, immediately upon issuance of any Letter of Credit, each Lender
shall be deemed to have irrevocably and unconditionally purchased from the
Administrative Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation in such Lender’s Pro Rata Share of the Letter of
Credit Obligations with respect to such Letter of Credit on the date of such
issuance. Each Lender shall fund its participation in all payments or
disbursements made under the Letters of Credit in the same manner as provided in
this Agreement with respect to Revolving Credit Advances.

In the event that any Letter of Credit expires or is surrendered without being
drawn (in whole or in part) then, in such event, the foregoing commitment to
make Revolving Credit Advances pursuant to Section 2.11(b)(ii) and to purchase
participation interests pursuant to Section 2.11(b)(iii) shall expire and the
aggregate amount of Letter of Credit Obligations shall be automatically reduced
by the amount of the Letter of Credit which is no longer outstanding.

(c) Cash Collateral. (i) If the Borrower is required to provide cash collateral
for any Letter of Credit Obligations pursuant to this Agreement, on or prior to
the Commitment Termination Date, the Borrower will (A) pay to the Administrative
Agent for the ratable benefit of itself and the Lenders cash or cash equivalents
acceptable to the Administrative Agent (“Cash Equivalents”) in an amount equal
to 102% of the maximum amount then available to be drawn under each applicable
Letter of Credit outstanding. Such funds or Cash Equivalents shall be held by
the Administrative Agent in a cash collateral account (the “Cash Collateral
Account”) maintained at a bank or financial institution acceptable to the
Administrative Agent or (B) deliver a stand-by letter (or letters) of credit in
guarantee of such Letter of Credit Obligations, which stand-by letter (or
letters) of credit shall be of like tenor and duration (plus thirty
(30) additional days) as, and in an amount equal to 102% of the aggregate
maximum amount then available to be drawn under, the Letters of Credit to which
such outstanding Letter of Credit Obligations relate. The Cash Collateral
Account shall be in the name of the Borrower and shall be pledged to, and
subject to the control of, the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, in a manner satisfactory to the
Administrative Agent, and the Borrower hereby acknowledges and agrees that each
such Cash Collateral Account shall constitute part of the Collateral in
accordance with Section 8.01.

 

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(ii) If any Letter of Credit Obligations, whether or not then due and payable,
shall for any reason be outstanding on the Commitment Termination Date, the
Borrower shall either (A) provide cash collateral therefor in the manner
described above, (B) cause all such Letters of Credit and guaranties thereof, if
any, to be canceled and returned, or (C) deliver a stand-by letter (or letters)
of credit in guarantee of such Letter of Credit Obligations, which stand-by
letter (or letters) of credit shall be of like tenor and duration (plus thirty
(30) additional days) as, and in an amount equal to 102% of the aggregate
maximum amount then available to be drawn under, the Letters of Credit to which
such outstanding Letter of Credit Obligations relate and shall be issued by a
Person, and shall be subject to such terms and conditions, as are reasonably
satisfactory to the Administrative Agent.

(iii) From time to time after funds are deposited in the Cash Collateral Account
by the Borrower, whether before or after the Commitment Termination Date, the
Administrative Agent may apply such funds or Cash Equivalents then held in the
Cash Collateral Account to the payment of any amounts, and in such order as the
Administrative Agent may elect, as shall be or shall become due and payable by
the Borrower in respect of Reimbursement Obligations and, upon the satisfaction
in full of all Reimbursement Obligations of the Borrower, to any other Borrower
Obligations then due and payable.

(iv) Neither the Borrower nor any Person claiming on behalf of or through the
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by the
Borrower to the Administrative Agent and the Lenders in respect thereof, any
funds remaining in the Cash Collateral Account shall be applied to other
Borrower Obligations then due and owing and upon payment in full of such
Borrower Obligations any remaining amount shall be paid to the Borrower or as
otherwise required by law. Interest and other income earned on deposits in the
Cash Collateral Account and all proceeds thereof shall be held as additional
collateral.

(d) Fees and Expenses. The Borrower agrees to pay to the Administrative Agent
for the benefit of itself and the Lenders, as compensation for the Letter of
Credit Obligations incurred hereunder, (i) all reasonable costs and expenses
incurred by the Administrative Agent on account of such Letter of Credit
Obligations, and (ii) for each month during which any Letter of Credit
Obligation shall remain outstanding, the Letter of Credit Fee. Such Letter of
Credit Fee shall be paid to the Administrative Agent for the benefit of the
Lenders in arrears, on the first day of each month until no Letter of Credit
Obligations remain outstanding and all Letters of Credit have expired. In
addition, the Borrower shall pay to any L/C Issuer, on demand, such customary
fees (including per annum fees), charges and expenses of such L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.

 

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(e) Request for Incurrence of Letter of Credit Obligations. The Borrower shall
give the Administrative Agent at least two (2) Business Days’ prior written
notice of its request for the incurrence of any Letter of Credit Obligation. The
notice shall be accompanied by the form of the Letter of Credit (which shall be
acceptable to the Administrative Agent and the L/C Issuer) and a completed
Application for Standby Letter of Credit, Application for Documentary Letter of
Credit or Application for Direct-Pay Letter of Credit, as applicable, in the
form of Exhibit B-1 or B-2 attached hereto, respectively, or such other
application as the applicable L/C Issuer may require. Notwithstanding anything
contained herein to the contrary, Letter of Credit applications by the Borrower
and approvals by the Administrative Agent and the L/C Issuer may be made and
transmitted pursuant to electronic codes and security measures mutually agreed
upon and established by and among the Borrower, the Administrative Agent and the
L/C Issuer.

(f) Obligation Absolute. The obligation of the Borrower to pay each
Reimbursement Obligation shall be absolute, unconditional and irrevocable,
without necessity of presentment, demand, protest or other formalities, and the
obligation of each Lender to make payments to the Administrative Agent with
respect to Letters of Credit shall be unconditional and irrevocable. Such
obligations of the Borrower and the Lenders shall be paid strictly in accordance
with the terms hereof under any and all circumstances whatsoever, irrespective
of the following:

(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement or the other Related Documents or any other agreement;

(ii) any amendment or waiver of or any consent to departure from all or any of
the provisions of any Letter of Credit, this Agreement or the other Related
Documents;

(iii) the existence of any claim, setoff, defense or other right that the
Borrower or any of its Affiliates, any Lender or any L/C Issuer may at any time
have against a beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such transferee may be acting), the
Administrative Agent, any Lender, any L/C Issuer or any other Person, whether in
connection with this Agreement, such Letter of Credit, the transactions
contemplated herein or therein or any unrelated transaction (including any
underlying transaction between the Borrower or any of its Affiliates and the
beneficiary for which such Letter of Credit was procured);

(iv) any draft, demand, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;

(v) payment by the Administrative Agent (except as otherwise expressly provided
in subsection (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or
guaranty thereof against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit or such
guaranty;

 

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(vi) any change in the time, manner or place of payment of, or in any other term
of, all or any of the obligations of the L/C Issuer or the Administrative Agent
in respect of any Letter of Credit or any other amendment or waiver of or any
consent to departure from all or any of the Related Documents;

(vii) any exchange, release or non-perfection of any collateral, or any release
or amendment or waiver of or consent to departure from any guarantee, for all or
any of the obligations of the Borrower in respect of any Letter of Credit;

(viii) any other circumstance or event whatsoever, whether or not similar to the
foregoing, including, without limitation, any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower or
any Lender; or

(ix) the fact that a Termination Event or Incipient Termination Event has
occurred and is continuing.

(g) Indemnification; Nature of Lenders’ Duties. (i) In addition to amounts
payable as elsewhere provided in the Agreement, the Borrower hereby agrees to
pay and to protect, indemnify, and save harmless the Administrative Agent and
each Lender from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys’ fees and
reasonable allocated costs of internal counsel) that the Administrative Agent or
any Lender may incur or be subject to as a consequence, direct or indirect, of
(A) the issuance of any Letter of Credit or guaranty thereof, or (B) the failure
of the Administrative Agent or any Lender seeking indemnification or of any L/C
Issuer to honor a demand for payment under any Letter of Credit or guaranty
thereof as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority, in
each case other than to the extent as a result of the gross negligence or
willful misconduct of the Administrative Agent or such Lender (as finally
determined by a court of competent jurisdiction).

(ii) As between the Administrative Agent and any Lender and the Borrower, the
Borrower assumes all risks of the acts and omissions of, or misuse of any Letter
of Credit, by beneficiaries of any Letter of Credit. In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law neither the
Administrative Agent nor any Lender or L/C Issuer shall be responsible for:
(A) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document issued by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) failure of the beneficiary of any
Letter of Credit to comply

 

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fully with conditions required in order to demand payment under such Letter of
Credit; provided, that in the case of any payment by the Administrative Agent
under any Letter of Credit or guaranty thereof, the Administrative Agent shall
be liable to the extent such payment was made as a result of its gross
negligence or willful misconduct (as finally determined by a court of competent
jurisdiction) in determining that the demand for payment under such Letter of
Credit or guaranty thereof complies on its face with any applicable requirements
for a demand for payment under such Letter of Credit or guaranty thereof;
(D) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
may be in cipher; (E) errors in interpretation of technical terms; (F) any loss
or delay in the transmission or otherwise of any document required in order to
make a payment under any Letter of Credit or guaranty thereof or of the proceeds
thereof; (G) the credit of the proceeds of any drawing under any Letter of
Credit or guaranty thereof; and (H) any consequences arising from causes beyond
the control of the Administrative Agent or any Lender. None of the above shall
affect, impair, or prevent the vesting of any of the Administrative Agent’s or
any Lender’s rights or powers hereunder or under the Agreement. Without limiting
the foregoing, in no event shall the Administrative Agent, the Swing Line
Lender, any Lender or any L/C Issuer be responsible for any special, indirect or
consequential damages.

(iii) Nothing contained herein shall be deemed to limit or to expand any
waivers, covenants or indemnities made by the Borrower in favor of any L/C
Issuer in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between the Borrower and such L/C Issuer.

Section 2.12. Increase in Commitments.

(a) Request for Increase. Provided there exists no Event of Termination or
Incipient Event of Termination, upon notice to the Administrative Agent (which
shall promptly notify the Lenders), the Borrower may from time to time, request
an increase in the Aggregate Commitment by an amount (for all such requests) not
exceeding $75,000,000; provided that (i) any such request for an increase shall
be in a minimum amount of $25,000,000. At the time of sending such notice, the
Borrower (in consultation with the Administrative Agent) shall specify the time
period within which each Lender is requested to respond (which shall in no event
be less than ten Business Days from the date of delivery of such notice to the
Lenders).

(b) Lender Elections to Increase. Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its
Commitment and, if so, whether by an amount equal to, greater than, or less than
its Pro Rata Share of such requested increase. Any Lender not responding within
such time period shall be deemed to have declined to increase its Commitment.

(c) Notification by Administrative Agent; Additional Lenders. The Administrative
Agent shall notify the Borrower and each Lender of the Lenders’ responses to
each request made hereunder. To achieve the full amount of a requested increase
and subject to

 

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the approval of the Administrative Agent, the Borrower may also invite
additional Persons to become Lenders pursuant to a joinder agreement in form and
substance reasonably satisfactory to the Administrative Agent.

(d) Effective Date and Allocations. If the Aggregate Commitment is increased in
accordance with this Section, the Administrative Agent and the Borrower shall
determine the effective date (the “Increase Effective Date”) and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrower and the Lenders of the final allocation of such increase and the
Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate
of the Borrower dated as of the Increase Effective Date signed by an Authorized
Officer (i) certifying and attaching the resolutions adopted by the Borrower
approving or consenting to such increase, and (ii) certifying that, before and
after giving effect to such increase, (A) the representations and warranties
contained herein and the other Related Documents are true and correct on and as
of the Increase Effective Date, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and (B) no Termination Event or
Incipient Termination Event exists. The Borrowers shall prepay any Tranche A
Revolving Credit Advances outstanding on the Increase Effective Date to the
extent necessary to keep the outstanding Committed Loans ratable with any
revised Pro Rata Shares arising from any nonratable increase in the Commitments
under this Section.

(f) Tranche B Sublimit and L/C Sublimit. With the consent of each Lender, the
Tranche B Sublimit and/or the L/C Sublimit may be increased on any Increase
Effective Date in an amount not to exceed the amount of the increase in the
Aggregate Commitment on such Increase Effective Date.

(g) Conflicting Provisions. This Section shall supersede any provisions in this
Agreement to the contrary.

ARTICLE III.

CONDITIONS PRECEDENT

Section 3.01. Conditions to Effectiveness of Agreement. This Agreement shall not
be effective until the date on which each of the following conditions have been
satisfied, in the sole discretion of, or waived in writing by, the Lenders and
the Administrative Agent (such date, the “Effective Date”):

(a) Funding Agreement; Other Related Documents. This Agreement and (to the
extent requested by the Lenders) the Notes shall have been duly executed by, and
delivered to, the parties hereto and the Lenders and the Administrative Agent
shall have received such other documents, instruments, agreements and legal
opinions as each Lender and the Administrative Agent shall request in connection
with the transactions contemplated by this Agreement, including all those listed
in the Schedule of Documents, each in form and substance satisfactory to each
Lender and the Administrative Agent.

 

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(b) Governmental Approvals. The Lenders and the Administrative Agent shall have
received (i) satisfactory evidence that the Borrower, the Servicer and the
Originators have obtained all required consents and approvals of all Persons,
including all requisite Governmental Authorities, to the execution, delivery and
performance of this Agreement and the other Related Documents and the
consummation of the transactions contemplated hereby or thereby or (ii) an
Officer’s Certificate from each of the Borrower and the Servicer in form and
substance satisfactory to the Lenders and the Administrative Agent affirming
that no such consents or approvals are required.

(c) Compliance with Laws. The Borrower and the Transaction Parties shall be in
compliance with all applicable foreign, federal, state and local laws and
regulations, including, without limitation, those specifically referenced in
Section 5.01(a), except to the extent noncompliance could not reasonably be
expected to have a Material Adverse Effect.

(d) Payment of Fees. The Borrower shall have paid all fees required to be paid
by it on the Effective Date, including all fees required hereunder and under the
Fee Letter, and shall have reimbursed the Administrative Agent for all
reasonable fees, costs and expenses of closing the transactions contemplated
hereunder and under the other Related Documents, including the Administrative
Agent’s reasonable legal and audit expenses, and other reasonable document
preparation costs.

(e) Representations and Warranties. Each representation and warranty by the
Borrower and each Transaction Party contained herein and in each other Related
Document shall be true and correct as of the Effective Date, except to the
extent that such representation or warranty expressly relates solely to an
earlier date.

(f) No Termination Event. No Incipient Termination Event or Termination Event
hereunder or any “Event of Default” or “Default” (each as defined in the Credit
Agreement) shall have occurred and be continuing or would result after giving
effect to any of the transactions contemplated on the Closing Date.

(g) Audit. The Administrative Agent shall have completed a prefunding audit of
the Receivables as of the Closing Date, the scope and results of which are
satisfactory to the Administrative Agent and each Lender in its sole discretion.

(h) Material Adverse Change. There will have been (i) no material adverse change
individually or in the aggregate, (x) in the business, the industry in which the
Parent or any Originator operates, the financial or other condition or prospects
of the Parent, the Servicer, or any Originator, or (y) in the Receivables, taken
as a whole, (ii) no litigation commenced which is reasonably likely to be
adversely determined, and if so determined, would have a Material Adverse Effect
on the Parent, the Servicer, the Originators, their business, or which would
challenge the transactions contemplated under this Agreement, the Sale Agreement
and the other Related Documents, and (iii) since the Parent’s last audited
financial statements, no

 

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material increase in the liabilities, liquidated or contingent, of the Parent,
the Servicer or the Originators, or material decrease in the assets of the
Parent, the Servicer or the Originators, taken as a whole.

(i) Waiver of Set-Off Rights. Each Originator shall have waived its rights of
set-off with respect to the Receivables.

Section 3.02. Conditions Precedent to All Advances and Letter of Credit
Obligations. No Lender shall be obligated to make any Advances hereunder
(including the initial Advances but excluding Advances made pursuant to
Section 2.01(b)(iii), Section 2.01(b)(iv) or Section 2.06(c)) on any date if, as
of the date thereof:

(a) any representation or warranty of the Borrower, the Servicer or any
Originator contained herein or in any of the other Related Documents shall be
untrue or incorrect in any material respect as of such date, either before or
after giving effect to the Advances to be made or Letter of Credit Obligations
to be incurred on such date and to the application of the proceeds therefrom,
except to the extent that such representation or warranty expressly relates to
an earlier date and except for changes therein expressly permitted by this
Agreement;

(b) any event shall have occurred, or would result from the making of such
Advances or the incurrence of such Letter of Credit Obligations or from the
application of the proceeds therefrom, that constitutes an Incipient Termination
Event, a Termination Event, an Incipient Servicer Termination Event or an Event
of Servicer Termination;

(c) the Commitment Termination Date shall have occurred;

(d) either before or after giving effect to such Advance or the incurrence of
any Letter of Credit Obligations and to the application of the proceeds
therefrom, a Funding Excess would exist;

(e) any Originator, the Borrower or the Servicer shall fail to have taken such
other action, including delivery of approvals, consents, opinions, documents and
instruments to the Lenders and the Administrative Agent, as any Lender or the
Administrative Agent and, if applicable, either Rating Agency, may reasonably
request;

(f) on or prior to such date, the Borrower or the Servicer shall have failed to
deliver any Monthly Report, Weekly Report, Daily Report or Borrowing Base
Certificate required to be delivered in accordance with Section 5.02 hereof or
the Sale Agreement and such failure shall be continuing; or

(g) the Administrative Agent shall have reasonably determined that any event or
condition has occurred that has had, or could reasonably be expected to have or
result in, a Material Adverse Effect.

The delivery by the Borrower of a Borrowing Request and the acceptance by the
Borrower of the funds from the related Borrowing on any Advance Date or the
incurrence of any Letter of Credit

 

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Obligations shall be deemed to constitute, as of any such Advance Date or the
date on which such Letter of Credit Obligations were incurred, as the case may
be, a representation and warranty by the Borrower that the conditions in this
Section 3.02 have been satisfied.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

Section 4.01. Representations and Warranties of the Borrower. To induce each
Lender to make Advances and to incur Letter of Credit Obligations from time to
time and the Administrative Agent to take any action required to be performed by
it hereunder, the Borrower makes the following representations and warranties to
each Lender and the Administrative Agent on the Effective Date and each Advance
Date and each date on which Letter of Credit Obligations are incurred, each and
all of which shall survive the execution and delivery of this Agreement.

(a) Existence; Compliance with Law. The Borrower (i) is a limited liability
company duly formed, validly existing and in good standing under the laws of its
jurisdiction of incorporation, is a “registered organization” as defined in the
UCC of such jurisdiction and is not organized under the laws of any other
jurisdiction; (ii) is duly qualified to conduct business and is in good standing
in each other jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification; (iii) has the requisite
power and authority and the legal right to own, pledge, mortgage or otherwise
encumber and operate its properties, to lease the property it operates under
lease, and to conduct its business, in each case, as now, heretofore and
proposed to be conducted; (iv) has all licenses, permits, consents or approvals
from or by, and has made all filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (v) is in compliance with its limited
liability company agreement; and (vi) subject to specific representations set
forth herein regarding ERISA, tax and other laws, is in compliance with all
applicable provisions of law, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

(b) Executive Offices; Collateral Locations; Corporate or Other Names; FEIN. The
state of organization and the organization identification number of the Borrower
and current location of the Borrower’s chief executive office, principal place
of business, other offices, the premises within which any Borrower Collateral is
stored or located, and the locations of its records concerning the Borrower
Collateral (including originals of the Borrower Assigned Agreements) are set
forth in Schedule 4.01(b) and none of such locations has changed within the past
12 months (or such shorter time as the Borrower has been in existence). During
the prior five years (or such shorter time as the Borrower has been in
existence), except as set forth in Schedule 4.01(b), the Borrower has not been
known as or used any fictitious or trade name. In addition, Schedule 4.01(b)
lists the federal employer identification number of the Borrower.

(c) Power, Authorization, Enforceable Obligations. The execution, delivery and
performance by the Borrower of this Agreement and the other Related Documents to
which

 

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it is a party, and the creation and perfection of all Liens and ownership
interests provided for herein and therein: (i) are within the Borrower’s limited
liability company power; (ii) have been duly authorized by all necessary or
proper actions; (iii) do not contravene any provision of the Borrower’s
certificate of formation or limited liability company agreement; (iv) do not
violate any law or regulation, or any order or decree of any court or
Governmental Authority; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which the Borrower or any
Originator is a party or by which the Borrower or any Originator or any of the
property of the Borrower or any Originator is bound; (vi) do not result in the
creation or imposition of any Adverse Claim upon any of the property of the
Borrower or any Originator; and (vii) do not require the consent or approval of
any Governmental Authority or any other Person, except those which have been
duly obtained, made or complied with prior to the Effective Date as provided in
Section 3.01(b). The exercise by each of the Borrower, the Lenders or the
Administrative Agent of any of its rights and remedies under any Related
Document to which it is a party do not require the consent or approval of any
Governmental Authority or any other Person, except those which will have been
duly obtained, made or complied with prior to the Closing Date as provided in
Section 3.01(b). On or prior to the Effective Date, each of the Related
Documents to which the Borrower is a party shall have been duly executed and
delivered by the Borrower and each such Related Document shall then constitute a
legal, valid and binding obligation of the Borrower enforceable against it in
accordance with its terms.

(d) No Litigation. No Litigation is now pending or, to the knowledge of the
Borrower, overtly threatened in writing against the Borrower that (i) challenges
the Borrower’s right or power to enter into or perform any of its obligations
under the Related Documents to which it is a party, or the validity or
enforceability of any Related Document or any action taken thereunder,
(ii) seeks to prevent the transfer, sale, pledge or contribution of any
Receivable or the consummation of any of the transactions contemplated under
this Agreement or the other Related Documents, or (iii) is reasonably likely to
be adversely determined and, if adversely determined, could reasonably be
expected to have a Material Adverse Effect. There is no Litigation pending or
threatened that seeks damages or injunctive relief against, or alleges criminal
misconduct by, the Borrower.

(e) Solvency. After giving effect to the sale or contribution of Receivables and
the Advances to be made or Letter of Credit Obligations to be incurred on such
date and to the application of the proceeds therefrom, the Borrower is and will
be Solvent.

(f) Material Adverse Effect. Since the date of the Borrower’s organization,
(i) the Borrower has not incurred any obligations, contingent or non-contingent
liabilities, liabilities for Charges, long-term leases or unusual forward or
long-term commitments, other than in connection with the transaction
contemplated by the Related Documents, (ii) no contract, lease or other
agreement or instrument has been entered into by the Borrower or has become
binding upon the Borrower’s assets, other than in connection with the Related
Documents, and no law or regulation applicable to the Borrower has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect
and (iii) the Borrower is not in default

 

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and no third party is in default under any material contract, lease or other
agreement or instrument to which the Borrower is a party. Since the date of the
Borrower’s organization, no event has occurred with respect to the Borrower that
alone or together with other events could reasonably be expected to have a
Material Adverse Effect.

(g) Ownership of Property; Liens. None of the properties and assets (including
the Transferred Receivables) of the Borrower are subject to any Adverse Claims
other than Permitted Encumbrances not attaching to Transferred Receivables, and
there are no facts, circumstances or conditions known to the Borrower that may
result in (i) with respect to the Transferred Receivables, any Adverse Claims
(including Adverse Claims arising under environmental laws) and (ii) with
respect to its other properties and assets, any Adverse Claims (including
Adverse Claims arising under environmental laws) other than Permitted
Encumbrances. The Borrower has received all assignments, bills of sale and other
documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect the Borrower’s right, title and
interest in and to the Transferred Receivables and its other properties and
assets. No effective financing statement or other similar instrument is of
record in any filing office listing the Borrower or any Originator as debtor and
covering any of the Transferred Receivables or the other Borrower Collateral
except with respect to the Liens granted to the Administrative Agent hereunder,
and the Liens granted to the Administrative Agent pursuant to Section 7.01 are
and will be at all times fully perfected first priority Liens in and to the
Borrower Collateral.

(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.
The Borrower has no Subsidiaries, and is not engaged in any joint venture or
partnership with any other Person. The Borrower has no Investments in any Person
other than Permitted Investments. The Member is the only member of the Borrower.
There are no outstanding rights to purchase or options, warrants or similar
rights or agreements pursuant to which the Borrower may be required to issue,
sell, repurchase or redeem some or all of its membership interests. Other than
the Subordinated Loans, the Borrower has no outstanding Debt on the Effective
Date.

(i) Taxes. All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by the Borrower and
all material tax returns, reports and statements, including information returns,
required by any Governmental Authority to be filed by the Member, the Servicer
or any Originator, have in each case been filed with the appropriate
Governmental Authority and all Charges have been paid prior to the date on which
any fine, penalty, interest or late charge may be added thereto for nonpayment
thereof (or any such fine, penalty, interest, late charge or loss has been
paid), excluding Charges or other amounts being contested in accordance with
Section 5.01(e), unless the failure to file any such return, report or
statement, or the failure to pay any such charges or fine, penalty, interest,
late charge or loss, could reasonably not be expected to have a Material Adverse
Effect. As of the Effective Date, neither the Borrower nor any of its Affiliates
included in the Parent Group has agreed or been requested to make any adjustment
under IRC 481(a), by reason of a change in accounting method or otherwise, that
could reasonably be expected to have a Material Adverse Effect.

 

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(j) Full Disclosure. All information contained in this Agreement, any Borrowing
Base Certificate or any of the other Related Documents, or any other written
statement or information furnished by or on behalf of the Borrower to any Lender
or the Administrative Agent relating to this Agreement, the Transferred
Receivables or any of the other Related Documents, is true and accurate in every
material respect, and none of this Agreement, any Borrowing Base Certificate or
any of the other Related Documents, or any other written statement or
information furnished by or on behalf of the Borrower to any Lender or the
Administrative Agent relating to this Agreement or any of the other Related
Documents contains any untrue statement of a material fact or omitted, omits or
will omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. All information contained in this Agreement, any
Borrowing Base Certificate or any of the other Related Documents, or any other
written statement or information furnished to any Lender or the Administrative
Agent has been prepared in good faith by the management of the Borrower with the
exercise of reasonable diligence.

(k) ERISA. The Borrower is in compliance with ERISA and has not incurred and
does not expect to incur any liabilities (except for premium payments arising in
the ordinary course of business) payable to the PBGC under Title IV of ERISA.

(l) Brokers. No broker or finder acting on behalf of the Borrower was employed
or utilized in connection with this Agreement or the other Related Documents or
the transactions contemplated hereby or thereby and the Borrower has no
obligation to any Person in respect of any finder’s or brokerage fees in
connection therewith.

(m) Margin Regulations. The Borrower is not engaged in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin security,” as
such terms are defined in Regulation U of the Federal Reserve Board as now and
from time to time hereafter in effect (such securities being referred to herein
as “Margin Stock”). The Borrower owns no Margin Stock, and no portion of the
proceeds of the Advances made hereunder will be used, directly or indirectly,
for the purpose of purchasing or carrying any Margin Stock, for the purpose of
reducing or retiring any Debt that was originally incurred to purchase or carry
any Margin Stock or for any other purpose that might cause any portion of such
proceeds to be considered a “purpose credit” within the meaning of Regulations
T, U or X of the Federal Reserve Board. The Borrower will not take or permit to
be taken any action that might cause any Related Document to violate any
regulation of the Federal Reserve Board.

(n) Nonapplicability of Bulk Sales Laws. No transaction contemplated by this
Agreement or any of the Related Documents requires compliance with any bulk
sales act or similar law.

(o) Government Regulation. The Borrower is not an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company,” as such terms are defined in the Investment Company Act.
The making of Advances and the incurrence of Letter of Credit Obligations by the
Lenders hereunder, the application of the proceeds thereof and the consummation
of the transactions contemplated by this Agreement and the other Related
Documents will not violate any provision of any such statute or any rule,
regulation or order issued by the Securities and Exchange Commission.

 

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(p) Nonconsolidation. The Borrower is operated in such a manner that the
separate corporate existence of the Borrower, on the one hand, and any member of
the Parent Group, on the other hand, would not be disregarded in the event of
the bankruptcy or insolvency of any member of the Parent Group and, without
limiting the generality of the foregoing:

(i) the Borrower is a limited purpose limited liability company whose activities
are restricted in its limited liability company agreement to those activities
expressly permitted hereunder and under the other Related Documents and the
Borrower has not engaged, and does not presently engage, in any business or
other activity other than those activities expressly permitted hereunder and
under the other Related Documents, nor has the Borrower entered into any
agreement other than this Agreement, the other Related Documents to which it is
a party and, with the prior written consent of the Administrative Agent, any
other agreement necessary to carry out more effectively the provisions and
purposes hereof or thereof;

(ii) the Borrower has duly appointed a board of directors and its business is
managed solely by its own officers and directors, each of whom when acting for
the Borrower shall be acting solely in his or her capacity as an officer or
director of the Borrower and not as an officer, director, employee or agent of
any member of the Parent Group;

(iii) (A) Borrower shall compensate all employees (if any), consultants and
agents directly or indirectly through reimbursement of the Member, from its own
funds, for services provided to the Borrower by such employees (if any),
consultants and agents and, to the extent any employee (if any), consultant or
agent of the Borrower is also an employee, consultant or agent of such member of
the Parent Group on a basis which reflects the respective services rendered to
the Borrower and such member of the Parent Group and (B) Borrower shall not have
any employees;

(iv) Borrower shall pay its own incidental administrative costs and expenses
from its own funds, and shall allocate all other shared overhead expenses
(including, without limitation, telephone and other utility charges, the
services of shared consultants and agents, and reasonable legal and auditing
expenses) which are not reflected in the Servicing Fee, and other items of cost
and expense shared between the Borrower and the Member on the basis of actual
use to the extent practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use or the value of
services rendered; except as otherwise expressly permitted hereunder, under the
other Related Documents and under the Borrower’s organizational documents, no
member of the Parent Group (A) pays the Borrower’s expenses, (B) guarantees the
Borrower’s obligations, or (C) advances funds to the Borrower for the payment of
expenses or otherwise;

 

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(v) other than the purchase and acceptance through capital contribution of
Transferred Receivables pursuant to the Sale Agreement, the acceptance of
Subordinated Loans pursuant to the Sale Agreement, the payment of distributions
and the return of capital to the Member, the incurrence of indebtedness under
the L/C Note, the payment of Servicing Fees to the Servicer under the Sale
Agreement, the Borrower engages and has engaged in no intercorporate
transactions with any member of the Parent Group;

(vi) the Borrower maintains records and books of account separate from that of
each member of the Parent Group, holds regular meetings of its board of
directors and otherwise observes limited liability company formalities;

(vii) (A) the financial statements (other than consolidated financial
statements) and books and records of the Borrower and each member of the Parent
Group reflect the separate existence of the Borrower and (B) the consolidated
financial statements of the Parent Group shall contain disclosure to the effect
that the Borrower’s assets are not available to the creditors of any member of
the Parent Group;

(viii) (A) the Borrower maintains its assets separately from the assets of each
member of the Parent Group (including through the maintenance of separate bank
accounts and except for any Records to the extent necessary to assist the
Servicer in connection with the servicing of the Transferred Receivables),
(B) the Borrower’s funds (including all money, checks and other cash proceeds)
and assets, and records relating thereto, have not been and are not commingled
with those of any member of the Parent Group and (C) the separate creditors of
the Borrower will be entitled, on the winding-up of the Borrower, to be
satisfied out of the Borrower’s assets prior to any value in the Borrower
becoming available to the Member;

(ix) all business correspondence and other communications of the Borrower are
conducted in the Borrower’s own name, on its own stationery and through a
separately-listed telephone number;

(x) the Borrower has and shall maintain separate office space from the offices
of any member of the Parent Group and identify such office by a sign in its own
name;

(xi) the Borrower shall respond to any inquiries with respect to ownership of a
Transferred Receivable by stating that it is the owner of such Transferred
Receivable, and that such Transferred Receivable is pledged to the
Administrative Agent for the benefit of the Secured Parties;

(xii) the Borrower does not act as agent for any member of the Parent Group, but
instead presents itself to the public as a legal entity separate from each such
member and independently engaged in the business of purchasing and financing
Receivables;

 

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(xiii) the Borrower maintains at least one independent director who (A) is not a
Stockholder, director, officer, employee or associate, or any relative of the
foregoing, of any member of the Parent Group (other than the Borrower), all as
provided in its limited liability company agreement, (B) has (1) prior
experience as an independent director for an entity whose organizational
documents required the unanimous consent of all independent directors thereof
before such corporation 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 and (2) at least
three years of employment experience with one or more entities that provide, in
the ordinary course of their respective businesses, advisory, management,
independent director services or placement services to issuers of securitization
or structured finance instruments, agreements or securities, and (C) is
otherwise acceptable to the Administrative Agent, and the retention arrangement
with such independent directors requires them to consider the interest of
Borrower;

(xiv) the limited liability company agreement of the Borrower requires the
affirmative vote of each independent director before a voluntary petition under
Section 301 of the Bankruptcy Code may be filed by the Borrower;

(xv) Borrower shall maintain (1) correct and complete books and records of
account and (2) minutes of the meetings and other proceedings of its members and
board of directors;

(xvi) Borrower shall not hold out credit as being available to satisfy
obligations of others;

(xvii) Borrower shall not acquire obligations or Stock of any member of the
Parent Group;

(xviii) Borrower shall correct any known misunderstanding regarding its separate
identity; and

(xix) Borrower shall maintain adequate capital.

(q) Deposit and Disbursement Accounts. Schedule 4.01(q) lists all banks and
other financial institutions at which the Borrower maintains deposit or other
bank accounts as of the Closing Date, including any Account, and such schedule
correctly identifies the name, address and telephone number of each depository,
the name in which the account is held, a description of the purpose of the
account, and the complete account number therefor. Each Account constitutes a
deposit account within the meaning of the applicable UCC. The Borrower (or the
Servicer on its behalf) has delivered to the Administrative Agent a fully
executed agreement pursuant to which the Borrower Account Bank (with respect to
the Borrower Account), the Concentration Account Bank (in the case of the
Concentration Account) and each Collection Account Bank (with respect to each
Collection Account) has agreed to comply with all instructions originated by the
Administrative Agent directing the disposition of funds in the Accounts without
further consent by the Borrower, the Servicer or any Originator. No Account

 

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is in the name of any person other than the Borrower or the Administrative
Agent, and the Borrower has not consented to any Bank following the instructions
of any Person other than the Administrative Agent. Accordingly, the
Administrative Agent has a first priority perfected security interest in each
Account, and all funds on deposit therein.

(r) Transferred Receivables.

(i) Transfers. Each Transferred Receivable was purchased by or contributed to
the Borrower on the relevant Transfer Date pursuant to the Sale Agreement.

(ii) Eligibility. Each Transferred Receivable designated as an Eligible
Receivable in each Borrowing Base Certificate, Monthly Report, Weekly Report or
Daily Report, as the case may be, constitutes an Eligible Receivable as of the
date specified in such Borrowing Base Certificate, Monthly Report, Weekly Report
or Daily Report, as applicable.

(iii) No Material Adverse Effect. The Borrower has no actual knowledge of any
fact (including any defaults by the Obligor thereunder on any other Receivable)
that would cause it or should have caused it to expect that any payments on any
Transferred Receivable designated as an Eligible Receivable in any Borrowing
Base Certificate, Monthly Report, Weekly Report or Daily Report, as applicable,
will not be paid in full when due or that has caused it to expect any material
adverse effect on any such Transferred Receivable.

(iv) Nonavoidability of Transfers. The Borrower shall (1) have purchased each
Sold Receivable from the applicable Originator for cash consideration or with
the proceeds of a Subordinated Loan or an increase to the aggregate outstanding
principal amount of the L/C Note and (2) have accepted assignment of any
Eligible Receivables transferred pursuant to clause (b) of Section 4.04 of the
Sale Agreement, in each case in an amount that constitutes fair consideration
and reasonably equivalent value therefor. No Sale has been made for or on
account of an antecedent debt owed by any Originator to the Borrower and no such
Sale is or may be avoidable or subject to avoidance under any bankruptcy laws,
rules or regulations.

(s) Assignment of Interest in Related Documents. The Borrower’s interests in, to
and under the Receivables Sale and Servicing Agreement and each Originator
Support Agreement, if any, have been assigned by the Borrower to the
Administrative Agent (for the benefit of itself and the Lenders) as security for
the Borrower Obligations.

(t) Notices to Obligors. Each Obligor of Transferred Receivables has been
directed to remit all payments with respect to such Receivables for deposit in a
Lockbox or Collection Account.

(u) Representations and Warranties in Other Related Documents. Each of the
representations and warranties of the Borrower contained in the Related
Documents (other than

 

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this Agreement) is true and correct in all material respects and the Borrower
hereby makes each such representation and warranty to, and for the benefit of,
the Lenders and the Administrative Agent as if the same were set forth in full
herein.

(v) Supplementary Representations.

(i) Receivables; Accounts. (A) Each Receivable constitutes an “account” or a
“general intangible” within the meaning of the applicable UCC, and (B) each
Account constitutes a “deposit account” within the meaning of the applicable
UCC.

(ii) Creation of Security Interest. The Borrower owns and has good and
marketable title to the Receivables, Accounts and Lockboxes, free and clear of
any Adverse Claim. The Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Receivables, Accounts and
Lockboxes in favor of the Administrative Agent (on behalf of itself and the
other Secured Parties), which security interest is prior to all other Adverse
Claims and is enforceable as such as against any creditors of and purchasers
from the Borrower.

(iii) Perfection. Within ten days of the Effective Date: (A) The Borrower has
caused the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law and entered into
Account Agreements in order to perfect the sale of the Receivables from the
Originators to the Borrower pursuant to the Sale Agreement and the security
interest granted by the Borrower to the Administrative Agent (on behalf of
itself and the other Secured Parties) in the Receivables hereunder; (B) With
respect to the Borrower Account, the Borrower has delivered to the
Administrative Agent (on behalf of itself and the other Secured Parties), a
fully executed Borrower Account Agreement pursuant to which the applicable
Borrower Account Bank has agreed, following the occurrence and continuation of a
Termination Event, to comply with all instructions given by the Administrative
Agent with respect to all funds on deposit in the Borrower Account, without
further consent by the Borrower, the Servicer or any Originator; and (C) With
respect to each Account other than the Borrower Account, the Borrower has
delivered to the Administrative Agent (on behalf of itself and the other Secured
Parties), a fully executed Account Agreement pursuant to which the applicable
Bank has agreed to comply with all instructions given by the Administrative
Agent with respect to all funds on deposit in the Accounts and the related
Lockboxes, without further consent by the Borrower, the Servicer or any
Originator.

(iv) Priority. (A) Other than the transfer of the Receivables by the Originators
to the Borrower pursuant to the Sale Agreement and the grant of security
interest by the Borrower to the Administrative Agent (on behalf of itself and
the other Secured Parties) in the Receivables, the Accounts and the Lockboxes
hereunder, neither the Borrower nor any Originator has pledged, assigned, sold,
conveyed, or otherwise granted a security interest in any of the Receivables,
the Accounts and the Lockboxes to any other Person. (B) Neither the Borrower nor
any Originator has authorized, or is aware

 

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of, any filing of any financing statement against the Borrower or any Originator
that include a description of collateral covering the Receivables or all other
collateral pledged to the Administrative Agent (on behalf of itself and the
other Secured Parties) pursuant to the Related Documents, other than any
financing statement filed pursuant to the Sale Agreement and this Agreement or
financing statements that have been validly terminated prior to the date hereof.
(C) As of the Effective Date, the Borrower is not aware of any judgment, ERISA
or tax lien filings against either the Borrower or any Originator. (D) None of
the Accounts or Lockboxes is in the name of any Person other than the Borrower
or the Administrative Agent. Neither the Borrower, the Servicer or any
Originator has consented to any Bank complying with instructions of any person
other than the Administrative Agent.

(v) Survival of Supplemental Representations. Notwithstanding any other
provision of this Agreement or any other Related Document, the representations
contained in this Section 4.01(v) and Section 5.01(g) shall be continuing, and
remain in full force and effect until the Termination Date.

ARTICLE V.

GENERAL COVENANTS OF THE BORROWER

Section 5.01. Affirmative Covenants of the Borrower. The Borrower covenants and
agrees that from and after the Effective Date and until the Termination Date:

(a) Compliance with Agreements and Applicable Laws. The Borrower shall
(i) perform each of its obligations under this Agreement and the other Related
Documents and (ii) comply with all federal, state and local laws and regulations
applicable to it and the Transferred Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices, privacy,
licensing, taxation, ERISA and labor matters and environmental laws and
environmental permits except, solely with respect to this clause (ii), where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect.

(b) Maintenance of Existence and Conduct of Business. The Borrower shall: (i) do
or cause to be done all things necessary to preserve and keep in full force and
effect its limited liability company existence and its rights and franchises;
(ii) continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder and in accordance with (1) the terms of its
limited liability company agreement, (2) Section 4.01(p) and (3) the assumptions
set forth in each opinion letter of Quarles & Brady LLP or other outside counsel
to the Borrower from time to time delivered pursuant to Section 3.02(d) of the
Sale Agreement with respect to issues of substantive consolidation and true sale
and absolute transfer; (iii) at all times maintain, preserve and protect all of
its assets and properties used or useful in the conduct of its business,
including all licenses, permits, charters and registrations, and keep the same
in good repair, working order and condition in all material respects (taking
into consideration ordinary

 

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wear and tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and (iv) transact business only in the name of Rexnord
Funding LLC.

(c) Deposit of Collections. The Borrower shall deposit or cause to be deposited
promptly into a Collection Account, and in any event no later than the first
Business Day after receipt thereof, all Collections it may receive with respect
to any Transferred Receivable.

(d) Use of Proceeds. The Borrower shall utilize the proceeds of the Advances
made hereunder solely for (i) the repayment of Advances made and Letter of
Credit Obligations incurred hereunder and the payment of any fees due hereunder,
(ii) the purchase of Receivables from the Originators pursuant to the Sale
Agreement, (iii) the payment of distributions to the Member, (iv) the repayment
of Subordinated Loans and the payment of the aggregate outstanding principal
amount of, and accrued and unpaid interest on, the L/C Note, and (v) the payment
of administrative fees or Servicing Fees or expenses to the Servicer or routine
administrative or operating expenses, in each case only as expressly permitted
by and in accordance with the terms of this Agreement and the other Related
Documents.

(e) Payment and Performance of Charges and other Obligations.

(i) Subject to Section 5.01(e)(ii), the Borrower shall pay, perform and
discharge or cause to be paid, performed and discharged promptly all charges and
claims payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect to its
employees, and (B) lawful claims for labor, materials, supplies and services or
otherwise before any thereof shall become past due.

(ii) The Borrower may in good faith contest, by appropriate proceedings, the
validity or amount of any charges or claims described in Section 5.01(e)(i);
provided, that (A) adequate reserves with respect to such contest are maintained
on the books of the Borrower, in accordance with GAAP, (B) such contest is
maintained and prosecuted continuously and with diligence, (C) none of the
Borrower Collateral becomes subject to forfeiture or loss as a result of such
contest, (D) no Lien shall be imposed to secure payment of such charges or
claims other than inchoate tax liens and (E) the Administrative Agent has not
advised the Borrower in writing that it reasonably believes that failure to pay
or to discharge such claims or charges could have or result in a Material
Adverse Effect.

(f) ERISA. The Borrower shall give the Administrative Agent prompt written
notice of any event that (i) could reasonably be expected to result in the
imposition of a Lien on any Borrower Collateral under Section 412 of the IRC or
Section 302 or 4068 of ERISA, or (ii) could reasonably be expected to result in
the incurrence by Borrower of any liabilities under Title IV of ERISA (other
than premium payments arising in the ordinary course of business).

 

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(g) Borrower to Maintain Perfection and Priority. In order to evidence the
interests of the Administrative Agent and the Lenders under this Agreement, the
Borrower shall, from time to time take such action, or execute and deliver such
instruments (other than filing financing statements) as may be necessary or
advisable (including, such actions as are requested by the Administrative Agent)
to maintain and perfect, as a first-priority interest, the Administrative
Agent’s (on behalf of itself and the other Secured Parties) security interest in
the Receivables and all other collateral pledged to the Administrative Agent (on
behalf of itself and the other Secured Parties) pursuant to the Related
Documents. The Borrower shall, from time to time and within the time limits
established by law, prepare and present to the Administrative Agent upon request
for the Administrative Agent’s authorization and approval all financing
statements, amendments, continuations or initial financing statements in lieu of
a continuation statement in the, or other filings necessary to continue,
maintain and perfect the Administrative Agent’s (on behalf of itself and the
other Secured Parties) security interest in the Receivables and all other
collateral pledged to the Administrative Agent (on behalf of itself and the
other Secured Parties) pursuant to the Related Documents as a first-priority
interest. The Administrative Agent’s approval of such filings shall authorize
the Borrower to file such financing statements under the UCC without the
signature of the Borrower, any Originator or the Administrative Agent where
allowed by applicable law. Notwithstanding anything else in the Related
Documents to the contrary, neither the Borrower, the Servicer, nor any
Originator, shall 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, without the prior written
consent of the Administrative Agent.

Section 5.02. Reporting Requirements of the Borrower. The Borrower hereby agrees
that from and after the Effective Date until the Termination Date, it shall
furnish or cause to be furnished to the Administrative Agent and the Lenders:

(a) The financial statements, notices, reports and other information at the
times, to the Persons and in the manner set forth in Annex 5.02(a).

(b) At the same time each Monthly Report, Weekly Report or Daily Report, as
applicable, is required to be delivered pursuant to the terms of clause (a) of
Annex 5.02(a), a completed certificate in the form attached hereto as Exhibit
5.02(b) (each, a “Borrowing Base Certificate”), provided, that if (i) an
Incipient Termination Event or a Termination Event shall have occurred and be
continuing or (ii) the Administrative Agent, in good faith, believes that an
Incipient Termination Event or a Termination Event is imminent or deems the
Lenders’ rights or interests in the Transferred Receivables or the Borrower
Collateral insecure, then such Borrowing Base Certificates shall be delivered
daily; and each Borrowing Base Certificate shall be prepared by the Borrower or
the Servicer as of the last day of the previous month or week, in the event
Borrowing Base Certificates are required to be delivered on a monthly or weekly
basis, and as of the close of business on the previous Business Day, in the
event Borrowing Base Certificates are required to be delivered on each Business
Day.

 

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(c) Such other reports, statements and reconciliations with respect to the
Tranche A Borrowing Base, the Tranche B Borrowing Base or Borrower Collateral as
any Lender or the Administrative Agent shall from time to time request in its
reasonable discretion.

Section 5.03. Negative Covenants of the Borrower. The Borrower covenants and
agrees that, without the prior written consent of the Requisite Lenders and the
Administrative Agent, from and after the Effective Date until the Termination
Date:

(a) Sale of Membership Interests and Assets. The Borrower shall not sell,
transfer, convey, assign or otherwise dispose of, or assign any right to receive
income in respect of, any of its properties or other assets or any of its
membership interests (whether in a public or a private offering or otherwise),
any Transferred Receivable or Contract therefor or any of its rights with
respect to any Lockbox or any Collection Account, the Agent Account or any other
deposit account in which any Collections of any Transferred Receivable are
deposited except as otherwise expressly permitted by this Agreement or any of
the other Related Documents.

(b) Liens. The Borrower shall not create, incur, assume or permit to exist
(i) any Adverse Claim on or with respect to its Transferred Receivables or
(ii) any Adverse Claim on or with respect to its other properties or assets
(whether now owned or hereafter acquired) except for the Liens set forth in
Schedule 5.03(b) and other Permitted Encumbrances. In addition, the Borrower
shall not become a party to any agreement, note, indenture or instrument or take
any other action that would prohibit the creation of a Lien on any of its
properties or other assets in favor of the Lenders as additional collateral for
the Borrower Obligations, except as otherwise expressly permitted by this
Agreement or any of the other Related Documents.

(c) Modifications of Receivables, Contracts or Credit and Collection Policies.
The Borrower shall not, without the prior written consent of the Administrative
Agent, (i) extend, amend, forgive, discharge, compromise, waive, cancel or
otherwise modify the terms of any Transferred Receivable or amend, modify or
waive any term or condition of any Contract related thereto, provided that the
Borrower may authorize the Servicer to take such actions as are expressly
permitted by the terms of any Related Document or the Credit and Collection
Policies (it being understood that, to the extent that any such modification
causes any Receivable to fail one or more of the criteria set forth in the
definition of “Eligible Receivable” in Annex X hereto, such Receivable shall
cease to be an Eligible Receivable for purposes of this Agreement).

(d) Changes in Instructions to Obligors. The Borrower shall not make any change
in its instructions to Obligors regarding the deposit of Collections with
respect to the Transferred Receivables, except to the extent the Administrative
Agent directs the Borrower to change such instructions to Obligors or the
Administrative Agent consents in writing to such change.

(e) Capital Structure and Business. The Borrower shall not (i) make any changes
in any of its business objectives, purposes or operations, (ii) make any change
in its capital structure, including the issuance of any membership interests,
warrants or other securities convertible into membership interests or any
revision of the terms of its outstanding membership

 

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interests, (iii) amend, waive or modify any term or provision of its certificate
of formation or limited liability company agreement, (iv) make any change to its
name indicated on the public records of its jurisdiction of organization or
(v) change its jurisdiction of organization. The Borrower shall not engage in
any business other than as provided in its certificate of formation, limited
liability company agreement and the Related Documents. Without limiting the
foregoing, the Borrower shall not make an election to be treated as an
association taxable as a corporation under Section 301.7701-3(a) of the Treasury
Regulations and shall not issue any additional membership interests or take
other actions which would cause the Borrower to cease to be disregarded as an
entity separate from its owner for federal income tax purposes.

(f) Mergers, Subsidiaries, Etc. The Borrower shall not directly or indirectly,
by operation of law or otherwise, (i) form or acquire any Subsidiary, or
(ii) merge with, consolidate with, acquire all or substantially all of the
assets or capital Stock of, or otherwise combine with or acquire, any Person.

(g) Sale Characterization; Receivables Sale and Servicing Agreement. The
Borrower shall not make statements or disclosures, prepare any financial
statements or in any other respect account for or treat the transactions
contemplated by the Sale Agreement (including for accounting, tax and reporting
purposes) in any manner other than with respect to each Sale of each Sold
Receivable effected pursuant to the Sale Agreement, as a true sale and absolute
assignment of the title to and sole record and beneficial ownership interest of
the Transferred Receivables by the Originators to the Borrower.

(h) Restricted Payments. Except for the amounts outstanding under the L/C Note,
the Borrower shall not enter into any lending transaction with any other Person.
The Borrower shall not at any time (i) advance credit to any Person or
(ii) declare any distributions, repurchase any membership interest, return any
capital, or make any other payment or distribution of cash or other property or
assets in respect of the Borrower’s membership interest or make a repayment with
respect to any Subordinated Loans if, after giving effect to any such advance or
distribution, a Funding Excess, Incipient Termination Event or Termination Event
would exist or otherwise result therefrom.

(i) Indebtedness. The Borrower shall not create, incur, assume or permit to
exist any Debt, except (i) Debt of the Borrower to any Affected Party,
Indemnified Person, the Servicer or any other Person expressly permitted by this
Agreement or any other Related Document, (ii) Subordinated Loans pursuant to the
Subordinated Notes and amounts outstanding under the L/C Note, (iii) deferred
taxes, (iv) unfunded pension fund and other employee benefit plan obligations
and liabilities to the extent they are permitted to remain unfunded under
applicable law, and (v) endorser liability in connection with the endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business.

(j) Prohibited Transactions. The Borrower shall not enter into, or be a party
to, any transaction with any Person except as expressly permitted hereunder or
under any other Related Document.

 

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(k) Investments. Except as otherwise expressly permitted hereunder or under the
other Related Documents, the Borrower shall not make any investment in, or make
or accrue loans or advances of money to, any Person, including the Member, any
director, officer or employee of the Borrower, the Parent or any of the Parent’s
other Subsidiaries, through the direct or indirect lending of money, holding of
securities or otherwise, except with respect to Transferred Receivables and
Permitted Investments.

(l) Commingling. The Borrower shall not deposit or permit the deposit of any
funds that do not constitute Collections of Transferred Receivables into any
Collection Account or the Concentration Account, except as otherwise
contemplated under Section 4.02(l) of the Sale Agreement. If funds that are not
Collections are deposited into a Collection Account or the Concentration
Account, the Borrower shall, or shall cause the Servicer to notify the
Administrative Agent in writing promptly upon discovery thereof, and, the
Administrative Agent shall promptly remit (or direct the applicable Collection
Account Bank or the Concentration Account Bank to remit) any such amounts that
are not Collections to the applicable Originator or other Person designated in
such notice.

(m) ERISA. The Borrower shall not, and shall not cause or permit any of its
ERISA Affiliates to, cause or permit to occur an event that (i) could reasonably
be expected to result in the imposition of a Lien on any Borrower Collateral
under Section 412 of the IRC or Section 302 or 4068 of ERISA, or (ii) could
reasonably be expected to result in the incurrence by Borrower of any
liabilities under Title IV of ERISA (other than (x) premium payments arising in
the ordinary course of business and (y) liabilities arising under
Section 4041(b) of ERISA).

(n) Related Documents. The Borrower shall not amend, modify or waive any term or
provision of any Related Document without the prior written consent of the
Administrative Agent.

(o) Board Policies. The Borrower shall not modify the terms of any policy or
resolutions of its board of directors if such modification could reasonably be
expected to have or result in a Material Adverse Effect.

(p) Additional Members of Borrower. The Borrower shall not admit any additional
member without the prior written consent of the Administrative Agent other than
a “Special Member” as such term is defined in the Borrower’s limited liability
company agreement as of the date hereof.

 

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ARTICLE VI.

ACCOUNTS

Section 6.01. Establishment of Accounts.

(a) Collection Accounts.

(i) The Borrower has established with each Collection Account Bank one or more
Collection Accounts subject, in each case, to a fully executed Collection
Account Agreement. The Borrower agrees that the Administrative Agent shall have
exclusive dominion and control of each Collection Account and all monies,
instruments and other property from time to time on deposit therein. The
Borrower shall not make or cause to be made, or have any ability to make or
cause to be made, any withdrawals from any Collection Account except as provided
in Section 6.01(b)(ii).

(ii) The Borrower (or the Servicer on Borrower’s behalf) has instructed all
existing Obligors of Transferred Receivables, and shall instruct all future
Obligors of such Receivables, to make payments in respect thereof only (A) by
check or money order mailed to one or more lockboxes or post office boxes under
the control of the Administrative Agent (each a “Lockbox” and collectively the
“Lockboxes”) or (B) by wire transfer or moneygram directly to a Collection
Account. Schedule 4.01(q) lists all Lockboxes and all Collection Account Banks
at which the Borrower maintains Collection Accounts as of the Effective Date,
and such schedule correctly identifies (1) with respect to each such Collection
Account Bank, the name, address and telephone number thereof, (2) with respect
to each Collection Account, the name in which such account is held and the
complete account number therefor, and (3) with respect to each Lockbox, the
lockbox number and address thereof. The Borrower (or the Servicer on Borrower’s
behalf) shall endorse, to the extent necessary, all checks or other instruments
received in any Lockbox so that the same can be deposited in the Collection
Account, in the form so received (with all necessary endorsements), on the first
Business Day after the date of receipt thereof. In addition, the Borrower shall
deposit or cause to be deposited into a Collection Account all cash, checks,
money orders or other proceeds of Transferred Receivables or Borrower Collateral
received by it other than in a Lockbox or a Collection Account, in the form so
received (with all necessary endorsements), not later than the close of business
on the first Business Day following the date of receipt thereof, and until so
deposited all such items or other proceeds shall be held in trust for the
benefit of the Administrative Agent. The Borrower shall not make and shall not
permit the Servicer to make any deposits into a Lockbox or any Collection
Account except in accordance with the terms of this Agreement or any other
Related Document.

(iii) If, for any reason, a Collection Account Agreement terminates or any
Collection Account Bank fails to comply with its obligations under the
Collection Account Agreement to which it is a party, then the Borrower shall
promptly notify all Obligors of Transferred Receivables who had previously been
instructed to make wire payments to a Collection Account maintained at any such
Collection Account Bank to make all future payments to a new Collection Account
in accordance with this Section 6.01(a)(iii). The Borrower shall not close any
Collection Account unless it shall have (A) received the prior written consent
of the Administrative Agent, (B) established a new account with the same
Collection Account Bank or with a new depositary institution satisfactory to the
Administrative Agent, (C) entered into an agreement covering such new account
with such Collection Account Bank or with such new depositary institution
substantially in the form of the predecessor Collection Account Agreement or
that is

 

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satisfactory in all respects to the Administrative Agent (whereupon, for all
purposes of this Agreement and the other Related Documents, such new account
shall become a Collection Account, such new agreement shall become a Collection
Account Agreement and any new depositary institution shall become a Collection
Account Bank), and (D) taken all such action as the Administrative Agent shall
reasonably require to grant and perfect a first priority Lien in such new
Collection Account to the Administrative Agent under Section 7.01 of this
Agreement. Except as permitted by this Section 6.01(a), the Borrower shall not,
and shall not permit the Servicer to, open any new Lockbox or Collection Account
without the prior written consent of the Administrative Agent.

(b) Concentration Account.

(i) The Borrower has established the Concentration Account subject to a fully
executed Concentration Account Agreement. The Borrower agrees that the
Administrative Agent shall have exclusive dominion and control of the
Concentration Account and all monies, instruments and other property from time
to time on deposit therein.

(ii) The Borrower (or the Servicer on Borrower’s behalf) has instructed all
Collection Account Banks that on a daily basis all collected and available funds
on deposit in each Collection Account are to be automatically transferred to the
Concentration Account. The Concentration Account Bank has been instructed by the
Borrower and the Servicer to automatically transfer all collected and available
funds on deposit in the Concentration Account to the Agent Account on a daily
basis.

(iii) If, for any reason, the Concentration Account Agreement relating to the
Concentration Account terminates or the Concentration Account Bank fails to
comply with its obligations under such Concentration Account Agreement, then the
Borrower shall promptly notify the Administrative Agent thereof and the
Borrower, the Servicer or the Administrative Agent, as the case may be, shall
instruct all Collection Account Banks who had previously been instructed to make
wire payments to the Concentration Account maintained at any such Concentration
Account Bank to make all future payments to a new Concentration Account in
accordance with this Section 6.01(b)(iii). The Borrower shall not close the
Concentration Account unless it shall have (A) received the prior written
consent of the Administrative Agent, (B) established a new account with the same
Concentration Account Bank or with a new depositary institution satisfactory to
the Administrative Agent, (C) entered into an agreement covering such new
account with such Concentration Account Bank or with such new depositary
institution substantially in the form of the Concentration Account Agreement or
that is satisfactory in all respects to the Administrative Agent (whereupon, for
all purposes of this Agreement and the other Related Documents, such new account
shall become the Concentration Account, such new agreement shall become a
Concentration Account Agreement and any new depositary institution shall become
the Concentration Account Bank), and (D) taken all such action as the
Administrative Agent shall reasonably require to grant and perfect a first
priority Lien in such new Concentration Account to the Lender

 

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under Section 7.01 of this Agreement. Except as permitted by this
Section 6.01(b), the Borrower shall not, and shall not permit the Servicer to
open a new Concentration Account without the prior written consent of the
Administrative Agent.

(c) Agent Account.

(i) The Administrative Agent has established and shall maintain the Agent
Account with Deutsche Bank Trust Company Americas (the “Depositary”). The Agent
Account shall be registered in the name of the Administrative Agent and the
Administrative Agent shall, subject to the terms of this Agreement, have
exclusive dominion and control thereof and of all monies, instruments and other
property from time to time on deposit therein.

(ii) The Lenders and the Administrative Agent may deposit into the Agent Account
from time to time all monies, instruments and other property received by any of
them as proceeds of the Transferred Receivables.

(iii) If, for any reason, the Depositary wishes to resign as depositary of the
Agent Account or fails to carry out the instructions of the Administrative
Agent, then the Administrative Agent shall promptly notify the Lenders. Neither
the Lenders nor the Administrative Agent shall close the Agent Account unless
(A) a new deposit account has been established with a new depositary
institution, (B) the Lenders and the Administrative Agent have entered into an
agreement covering such new account with such new depositary institution
satisfactory in all respects to the Administrative Agent (whereupon such new
account shall become the Agent Account and such new depositary institution shall
become the Depositary for all purposes of this Agreement and the other Related
Documents), and (C) the Lenders and the Administrative Agent have taken all such
action as the Administrative Agent shall require to grant and perfect a first
priority Lien in such new Agent Account to the Administrative Agent (on behalf
of itself and the other Secured Parties).

(d) Borrower Account.

(i) The Borrower has established the Borrower Account subject to a fully
executed Borrower Account Agreement and agrees that, subject to clause
(ii) below, the Administrative Agent shall have exclusive dominion and control
of such Borrower Account and all monies, instruments and other property from
time to time on deposit therein.

(ii) The Administrative Agent hereby agrees that until such time as it exercises
its right to take control of the Borrower Account under Section 7.05(d), the
Borrower Account Bank shall be entitled to follow the instructions of the
Borrower, or the Administrative Agent on behalf of the Borrower, with respect to
the withdrawal, transfer or payment of funds on deposit in the Borrower Account.

 

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ARTICLE VII.

GRANT OF SECURITY INTERESTS

Section 7.01. Borrower’s Grant of Security Interest. To secure the prompt and
complete payment, performance and observance of all Borrower Obligations, and to
induce the Administrative Agent and the Lenders to enter into this Agreement and
perform the obligations required to be performed by them hereunder in accordance
with the terms and conditions hereof, the Borrower hereby grants, assigns,
conveys, pledges, hypothecates and transfers to the Administrative Agent, for
the benefit of the Administrative Agent and the other Secured Parties, a Lien
upon and security interest in all of the Borrower’s right, title and interest
in, to and under, but none of its obligations arising from, the following
property, whether now owned by or owing to, or hereafter acquired by or arising
in favor of, the Borrower (including under any trade names, styles or
derivations of the Borrower), and regardless of where located (all of which
being hereinafter collectively referred to as the “Borrower Collateral”):

(a) all Receivables;

(b) the Sale Agreement, all Collection Account Agreements, the Concentration
Account Agreement and all other Related Documents now or hereafter in effect
relating to the purchase, servicing, processing or collection of Receivables
(collectively, the “Borrower Assigned Agreements”), including (i) all rights of
the Borrower to receive moneys due and to become due thereunder or pursuant
thereto, (ii) all rights of the Borrower to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect thereto, (iii) all claims of the
Borrower for damages or breach with respect thereto or for default thereunder
and (iv) the right of the Borrower to amend, waive or terminate the same and to
perform and to compel performance and otherwise exercise all remedies
thereunder;

(c) all of the following (collectively, the “Borrower Account Collateral”):

(i) the Collection Accounts, the Lockboxes, and all funds on deposit therein and
all certificates and instruments, if any, from time to time representing or
evidencing the Collection Accounts, the Lockboxes or such funds,

(ii) the Agent Account and all funds on deposit therein and all certificates and
instruments, if any, from time to time representing or evidencing the Agent
Account or such funds,

(iii) the Concentration Account and all funds on deposit therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Concentration Account or such funds,

(iv) the Borrower Account and all funds on deposit therein and all certificates
and instruments, if any, from time to time representing or evidencing the
Borrower Account or such funds,

 

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(v) the Cash Collateral Account and all funds and Cash Equivalents on deposit
therein and all certificates and instruments, if any, from time to time
representing or evidencing the Cash Collateral Account or such funds or Cash
Equivalents,

(vi) all notes, certificates of deposit and other instruments from time to time
delivered to or otherwise possessed by any Lender or any assignee or agent on
behalf of any Lender in substitution for or in addition to any of the then
existing Borrower Account Collateral, and

(vii) all interest, dividends, cash, instruments, investment property and other
property from time to time received, receivable or otherwise distributed with
respect to or in exchange for any and all of the then existing Borrower Account
Collateral;

(d) all other property relating to the Receivables that may from time to time
hereafter be granted and pledged by the Borrower or by any Person on its behalf
whether under this Agreement or otherwise, including any deposit with any Lender
or the Administrative Agent of additional funds by the Borrower; and

(e) to the extent not otherwise included, all proceeds and products of the
foregoing and all accessions to, substitutions and replacements for, and profits
of, each of the foregoing Borrower Collateral (including proceeds that
constitute property of the types described in Sections 7.01(a) through (d)).

Section 7.02. Borrower’s Agreements. The Borrower hereby (a) assigns, transfer
and conveys the benefits of the representations, warranties and covenants of
each Originator made to the Borrower under the Sale Agreement to the
Administrative Agent for the benefit of the Secured Parties hereunder;
(b) acknowledges and agrees that the rights of the Borrower to require payment
of a Rejected Amount from an Originator under the Sale Agreement may be enforced
by the Lenders and the Administrative Agent; and (c) certifies that the Sale
Agreement provides that the representations, warranties and covenants described
in Sections 4.01, 4.02 and 4.03 thereof, the indemnification and payment
provisions of Article V thereof and the provisions of Sections 4.03(j), 6.12,
6.14 and 6.15 thereof shall survive the sale of the Transferred Receivables (and
undivided percentage ownership interests therein) and the termination of the
Sale Agreement and this Agreement.

Section 7.03. Delivery of Collateral. All certificates or instruments
representing or evidencing all or any portion of the Borrower Collateral shall
be delivered to and held by or on behalf of the Administrative Agent and shall
be in suitable form for transfer by delivery or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Administrative Agent. The
Administrative Agent shall have the right (a) at any time to exchange
certificates or instruments representing or evidencing Borrower Collateral for
certificates or instruments of smaller or larger denominations and (b) at any
time in its discretion following the occurrence and during the continuation

 

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of a Termination Event and without notice to the Borrower, to transfer to or to
register in the name of the Administrative Agent or its nominee any or all of
the Borrower Collateral.

Section 7.04. Borrower Remains Liable. It is expressly agreed by the Borrower
that, anything herein to the contrary notwithstanding, the Borrower shall remain
liable under any and all of the Transferred Receivables, the Contracts therefor,
the Borrower Assigned Agreements and any other agreements constituting the
Borrower Collateral to which it is a party to observe and perform all the
conditions and obligations to be observed and performed by it thereunder. The
Lenders and the Administrative Agent shall not have any obligation or liability
under any such Receivables, Contracts or agreements by reason of or arising out
of this Agreement or the granting herein or therein of a Lien thereon or the
receipt by the Administrative Agent or the Lenders of any payment relating
thereto pursuant hereto or thereto. The exercise by any Lender or the
Administrative Agent of any of its respective rights under this Agreement shall
not release any Originator, the Borrower or the Servicer from any of their
respective duties or obligations under any such Receivables, Contracts or
agreements. None of the Lenders or the Administrative Agent shall be required or
obligated in any manner to perform or fulfill any of the obligations of any
Originator, the Borrower or the Servicer under or pursuant to any such
Receivable, Contract or agreement, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such Receivable, Contract
or agreement, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts that may have been
assigned to it or to which it may be entitled at any time or times.

Section 7.05. Covenants of the Borrower Regarding the Borrower Collateral.

(a) Offices and Records. The Borrower shall maintain its principal place of
business and chief executive office and the office at which it stores its
Records at the respective locations specified in Schedule 4.01(b) or, upon 30
days’ prior written notice to the Administrative Agent, at such other location
in a jurisdiction where all action requested by the Administrative Agent
pursuant to Section 12.13 shall have been taken with respect to the Borrower
Collateral. The Borrower shall, and shall cause the Servicer to at its own cost
and expense, maintain adequate and complete records of the Transferred
Receivables and the Borrower Collateral, including records of any and all
payments received, credits granted and merchandise returned with respect thereto
and all other dealings therewith. The Borrower shall, and shall cause the
Servicer to, by no later than the Effective Date, mark conspicuously with a
legend, in form and substance satisfactory to the Administrative Agent, its
books and records (including computer records) and credit files pertaining to
the Borrower Collateral, and its file cabinets or other storage facilities where
it maintains information pertaining thereto, to evidence this Agreement and the
assignment and Liens granted pursuant to this Article VII. Upon the occurrence
and during the continuance of a Termination Event, the Borrower shall, and shall
cause the Servicer to, deliver and turn over such books and records to the
Administrative Agent

 

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or its representatives at any time on demand of the Administrative Agent. Prior
to the occurrence of a Termination Event and upon notice from the Administrative
Agent, the Borrower shall, and shall cause the Servicer to, permit any
representative of the Administrative Agent to inspect such books and records and
shall provide photocopies thereof to the Administrative Agent as more
specifically set forth in Section 7.05(b).

(b) Access. The Borrower shall, and shall cause the Servicer to, at its or the
Servicer’s own expense, during normal business hours, from time to time upon one
Business Day’s prior notice as frequently as the Administrative Agent determines
to be appropriate: (i) provide the Lenders, the Administrative Agent and any of
their respective officers, employees and agents access to its properties
(including properties utilized in connection with the collection, processing or
servicing of the Transferred Receivables), facilities, advisors and employees
(including officers) and to the Borrower Collateral, (ii) permit the Lenders,
the Administrative Agent and any of their respective officers, employees and
agents to inspect, audit and make extracts from its books and records, including
all Records, (iii) permit each of the Lenders and the Administrative Agent and
their respective officers, employees and agents to inspect, review and evaluate
the Transferred Receivables and the Borrower Collateral and (iv) permit each of
the Lenders and the Administrative Agent and their respective officers,
employees and agents to discuss matters relating to the Transferred Receivables
or its performance under this Agreement or the other Related Documents or its
affairs, finances and accounts with any of its officers, directors, employees,
representatives or agents (in each case, with those persons having knowledge of
such matters) and, if a Termination Event has occurred and is continuing with
its independent certified public accountants (subject to reasonable requirements
of confidentiality, including requirements imposed by law or by contract). If
(i) the Administrative Agent in good faith deems any Lender’s rights or
interests in the Transferred Receivables, the Borrower Assigned Agreements or
any other Borrower Collateral insecure or the Administrative Agent in good faith
believes that an Incipient Termination Event or a Termination Event is imminent
or (ii) an Incipient Termination Event or a Termination Event shall have
occurred and be continuing, then the Borrower shall, and shall cause the
Servicer to, at its own expense, provide such access at all times without prior
notice from the Administrative Agent and provide the Administrative Agent with
access to the suppliers and customers of the Borrower and the Servicer. The
Borrower shall, and shall cause the Servicer to, make available to the
Administrative Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records, including Records,
that the Administrative Agent may request. The Borrower shall, and shall cause
the Servicer to, and the Servicer shall deliver any document or instrument
necessary for the Administrative Agent, as the Administrative Agent may from
time to time request, to obtain records from any service bureau or other Person
that maintains records for the Borrower or the Servicer, and shall maintain
duplicate records or supporting documentation on media, including computer tapes
and discs owned by the Borrower or the Servicer.

(c) [RESERVED.]

(d) Collection of Transferred Receivables. In connection with the collection of
amounts due or to become due to the Borrower under the Transferred Receivables,
the

 

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Borrower Assigned Agreements and any other Borrower Collateral pursuant to the
Sale Agreement, the Borrower shall, or shall cause the Servicer to, take such
action as it, and from and after the occurrence and during the continuance of a
Termination Event, the Administrative Agent, may deem reasonably necessary or
desirable to enforce collection of the Transferred Receivables, the Borrower
Assigned Agreements and the other Borrower Collateral; provided that the
Borrower may, rather than commencing any such action or taking any other
enforcement action, at its option, elect to pay to the Administrative Agent, for
deposit into the Agent Account, an amount equal to the Outstanding Balance of
any such Transferred Receivable; provided, further, that if (i) an Incipient
Termination Event or a Termination Event shall have occurred and be continuing
or (ii) the Administrative Agent, in good faith believes that an Incipient
Termination Event or a Termination Event is imminent, then the Administrative
Agent may, without prior notice to the Seller or the Servicer, (x) exercise its
right to take exclusive ownership and control of (1) the Lockboxes and the
Collection Accounts in accordance with the terms of the applicable Collection
Account Agreements and (2) the Concentration Account and the Borrower Account
(in which case the Servicer shall be required, pursuant to the Sale Agreement,
to deposit any Collections it then has in its possession or at any time
thereafter receives, immediately in the Agent Account) and (y) notify any
Obligor under any Transferred Receivable or obligors under the Borrower Assigned
Agreements of the pledge of such Transferred Receivables or Borrower Assigned
Agreements, as the case may be, to the Administrative Agent (on behalf of itself
and the other Secured Parties) hereunder and direct that payments of all amounts
due or to become due to the Borrower thereunder be made directly to the
Administrative Agent or any servicer, collection agent or lockbox or other
account designated by the Administrative Agent and, upon such notification and
at the sole cost and expense of the Borrower, the Administrative Agent may
enforce collection of any such Transferred Receivable or the Borrower Assigned
Agreements and adjust, settle or compromise the amount or payment thereof. The
Administrative Agent shall provide prompt notice to the Borrower and the
Servicer of any such notification of pledge or direction of payment to the
Obligors under any Transferred Receivables.

(e) Performance of Borrower Assigned Agreements. The Borrower shall, and shall
cause the Servicer to, (i) perform and observe all the terms and provisions of
the Borrower Assigned Agreements to be performed or observed by it, maintain the
Borrower Assigned Agreements in full force and effect, enforce the Borrower
Assigned Agreements in accordance with their terms and take all action as may
from time to time be reasonably requested by the Administrative Agent in order
to accomplish the foregoing, and (ii) upon the reasonable request of and as
directed by the Administrative Agent, make such demands and requests to any
other party to the Borrower Assigned Agreements as are permitted to be made by
the Borrower or the Servicer thereunder.

(f) License for Use of Software and Other Intellectual Property. Unless
expressly prohibited by the licensor thereof or any provision of applicable law,
if any, the Borrower hereby grants to the Administrative Agent (on behalf of
itself and the other Secured Parties) a limited license to use, without charge,
the Borrower’s and the Servicer’s computer programs, software, printouts and
other computer materials, technical knowledge or processes, data bases,
materials, trademarks, registered trademarks, trademark applications, service
marks,

 

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registered service marks, service mark applications, patents, patent
applications, trade names, rights of use of any name, labels, fictitious names,
inventions, designs, trade secrets, goodwill, registrations, copyrights,
copyright applications, permits, licenses, franchises, customer lists, credit
files, correspondence, and advertising materials or any property of a similar
nature, as it pertains to the Borrower Collateral, or any rights to any of the
foregoing, only as reasonably required in connection with the collection of the
Transferred Receivables and the advertising for sale, and selling any of the
Borrower Collateral, or exercising of any other remedies hereto, and the
Borrower agrees that its rights under all licenses and franchise agreements
shall inure to the Administrative Agent’s benefit (on behalf of itself and the
other Secured Parties) for purposes of the limited license granted herein.
Except upon the occurrence and during the continuation of a Termination Event,
the Administrative Agent and the Lenders agree not to use any such license
without giving the Borrower prior written notice.

ARTICLE VIII.

TERMINATION EVENTS

Section 8.01. Termination Events. If any of the following events (each, a
“Termination Event”) shall occur (regardless of the reason therefor):

(a) the Borrower shall fail (i) to make any payment of principal, interest or
Fees hereunder or under any other Related Document and the same shall remain
unremedied for one (1) Business Day or more or (ii) to make payment of any other
monetary Borrower Obligation when due and payable and the same shall remain
unremedied for one (1) Business Day or more after notice thereof from the
Administrative Agent; or

(b) the Borrower, any Originator or the Servicer shall fail or neglect to
perform, keep or observe any covenant or other provision of this Agreement or
the other Related Documents (other than any provision embodied in or covered by
any other clause of this Section 8.01) and the same shall remain unremedied for
two (2) Business Days or more following the earlier to occur of an Authorized
Officer of the Borrower becoming aware of such breach and the Borrower’s receipt
of notice thereof from the Administrative Agent; or

(c) (i) an Originator, the Member, the Borrower, the Parent, the Servicer or any
Subsidiary of any Originator or the Servicer shall fail to make any payment with
respect to any of its Debts which, except with respect to the Borrower, is in an
aggregate principal amount in excess of $20,000,000 (other than Borrower
Obligations) when due, and the same shall remain unremedied after any applicable
grace period with respect thereto; or (ii) a default or breach or other
occurrence shall occur under any agreement, document or instrument to which an
Originator, the Member, the Borrower, the Parent, the Servicer or any Subsidiary
of any Originator or the Servicer is a party or by which it or its property is
bound (other than a Related Document) which relates to a Debt which, except with
respect to the Borrower, is in an aggregate principal amount in excess of
$20,000,000, which event has not been waived or shall remain unremedied within
the applicable grace period with respect thereto, and the effect of such
default, breach or occurrence is to cause or to permit the holder or holders
then to cause such Debt to become or be declared due prior to their stated
maturity; or

 

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(d) a case or proceeding shall have been commenced against the Borrower, the
Member, any Originator, the Parent, the Servicer or any Subsidiary (other than
an Immaterial Subsidiary) of any Originator or the Servicer seeking a decree or
order in respect of any such Person under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law,
(i) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any such Person or for any substantial
part of such Person’s assets, or (ii) ordering the winding up or liquidation of
the affairs of any such Person, and, so long as the Borrower is not a debtor in
any such case or proceedings, such case or proceeding continues for 60 days
unless dismissed or discharged; provided, however, that such 60-day period shall
be deemed terminated immediately if (x) a decree or order approving or ordering
any of the foregoing is entered by a court of competent jurisdiction with
respect to a case or proceeding described in this subsection (d) or (y) any of
the events described in Section 8.01(e) shall have occurred; or

(e) the Borrower, the Member, any Originator, the Parent, the Servicer or any
Subsidiary (other than an Immaterial Subsidiary) of any Originator or the
Servicer shall (i) file a petition seeking relief under the Bankruptcy Code or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) consent or fail to object in a timely and appropriate manner to the
institution of any proceedings under the Bankruptcy Code or any other applicable
federal, state or foreign bankruptcy or similar law or to the filing of any
petition thereunder or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for any such Person or for any substantial part of such Person’s
assets, (iii) make an assignment for the benefit of creditors, or (iv) take any
corporate or limited liability company action in furtherance of any of the
foregoing; or

(f) the Borrower, the Member, any Originator, the Parent, the Servicer or any
Subsidiary (other than an Immaterial Subsidiary) of any Originator or the
Servicer (i) generally does not pay its debts as such debts become due or admits
in writing its inability to, or is generally unable to, pay its debts as such
debts become due or (ii) is not Solvent; or

(g) a final judgment or judgments for the payment of money in excess of
$20,000,000 in the aggregate at any time outstanding shall be rendered against
any Originator, the Parent, the Member, the Servicer or any Subsidiary of any
Originator or the Servicer and either (i) enforcement proceedings shall have
been commenced upon any such judgment or (ii) the same shall not, within 30 days
after the entry thereof, have been discharged or execution thereof stayed or
bonded pending appeal, or shall not have been discharged prior to the expiration
of any such stay; or

(h) a judgment or order for the payment of money shall be rendered against the
Borrower; or

(i) (i) any information contained in any Borrowing Base Certificate or any
Borrowing Request is untrue or incorrect in any respect, or (ii) any
representation or warranty of

 

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any Originator or the Borrower herein or in any other Related Document or in any
statement, report, financial statement or certificate (other than a Borrowing
Base Certificate or any Borrowing Request) made or delivered by or on behalf of
such Originator or the Borrower to any Affected Party hereto or thereto is
untrue or incorrect in any material respect as of the date when made or deemed
made; or

(j) any Governmental Authority (including the IRS or the PBGC) shall file notice
of a Lien with regard to any assets of any Originator, the Parent or any of
their respective ERISA Affiliates (other than a Lien (i) limited by its terms to
assets other than Receivables and (ii) not materially adversely affecting the
financial condition of such Originator, the Parent or any such ERISA Affiliate
or the ability of the Servicer to perform its duties hereunder or under the
Related Documents); or

(k) any Governmental Authority (including the IRS or the PBGC) shall file notice
of a Lien with regard to any of the assets of the Borrower; or

(l) (1) there shall have occurred any event which, in the reasonable judgment of
the Administrative Agent, materially and adversely impairs (i) the ability of
any Originator to originate Receivables of a credit quality which are at least
of the credit quality of the Receivables as of the Effective Date, (ii) the
financial condition or operations of any Originator, the Borrower or the Parent,
or (iii) the collectibility of Receivables, or (2) the Administrative Agent
shall have determined (and so notified the Borrower) that any event or condition
that has had or could reasonably be expected to have or result in a Material
Adverse Effect has occurred; or

(m) (i) a default or breach shall occur under any provision of the Sale
Agreement and the same shall remain unremedied for two (2) Business Days or more
following the earlier to occur of an Authorized Officer of the Borrower becoming
aware of such breach and the Borrower’s receipt of notice thereof, or (ii) the
Sale Agreement shall for any reason cease to evidence the transfer to the
Borrower of the legal and equitable title to, and ownership of, the Transferred
Receivables; or

(n) except as otherwise expressly provided herein, any Collection Account
Agreement, the Concentration Account Agreement or the Sale Agreement shall have
been modified, amended or terminated without the prior written consent of the
Administrative Agent; or

(o) an Event of Servicer Termination shall have occurred; or

(p) (A) the Borrower shall cease to hold valid and properly perfected title to
and sole record and beneficial ownership in the Transferred Receivables and the
other Borrower Collateral or (B) the Administrative Agent (on behalf of itself
and the other Secured Parties) shall cease to hold a first priority, perfected
Lien in the Transferred Receivables or any of the Borrower Collateral; or

(q) a Change of Control shall occur; or

 

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(r) the Borrower shall amend its certificate of formation or limited liability
company agreement without the express prior written consent of the Requisite
Lenders and the Administrative Agent; or

(s) the Borrower shall have received an Election Notice pursuant to
Section 2.01(d) of the Sale Agreement; or

(t) (i) the Default Ratio shall exceed 3.0%; (ii) the Delinquency Ratio shall
exceed 6.0%; (iii) the Dilution Trigger Ratio shall exceed 10.0%; or (iv) the
Receivables Collection Turnover shall exceed 60 days; or

(u) any material provision of any Related Document shall for any reason cease to
be valid, binding and enforceable in accordance with its terms (or any
Originator or the Borrower shall challenge the enforceability of any Related
Document or shall assert in writing, or engage in any action or inaction based
on any such assertion, that any provision of any of the Related Documents has
ceased to be or otherwise is not valid, binding and enforceable in accordance
with its terms); or

(v) the incurrence of a liability to the PBGC under Title IV of ERISA by the
Parent, any Originator or the Servicer (except for premium payments arising in
the ordinary course of business), in excess of $1,000,000; or

(w) a Funding Excess exists at any time and the Borrower has not repaid the
amount of such Funding Excess within one (1) Business Day in accordance with
Section 2.08 hereof;

then, and in any such event, the Administrative Agent, may, with the consent of
the Requisite Lenders, and shall, at the request of the Requisite Lenders, by
notice to the Borrower, declare the Commitment Termination Date to have occurred
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, that the Commitment Termination Date
shall automatically occur (i) upon the occurrence of any of the Termination
Events described in Sections 8.01(d), (e), (f), (j), (k) or (s), (ii) three days
after the occurrence of the Termination Event described in Section 8.01(a) if
the same shall not have been remedied by such time, (iii) four Business Days
after the occurrence of the Termination Event described in Section 8.01(w) if
the same shall not have been waived by the Requisite Lenders prior to such time
or (iv) ten (10) Business Days after the occurrence of a Termination Event
described in Section 8.01(w) if the same shall not have been remedied by such
time and regardless of whether such Termination Event shall have been previously
waived by the Requisite Lenders in accordance with clause (iii) of this
paragraph, in each case without demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower. Upon the occurrence of the
Commitment Termination Date, all Borrower Obligations shall automatically be and
become due and payable in full, without any action to be taken on the part of
any Person. In addition, if any Event of Servicer Termination shall have
occurred, then, the Administrative Agent may, and shall, at the request of the
Requisite Lenders, by delivery of a Servicer Termination Notice to Buyer and the
Servicer, terminate the servicing responsibilities of the Servicer under the
Sale Agreement in accordance with the terms thereof.

 

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ARTICLE IX.

REMEDIES

Section 9.01. Actions Upon Termination Event. If any Termination Event shall
have occurred and be continuing and the Administrative Agent shall have declared
the Commitment Termination Date to have occurred or the Commitment Termination
Date shall be deemed to have occurred pursuant to Section 8.01, then the
Administrative Agent may exercise in respect of the Borrower Collateral, in
addition to any and all other rights and remedies granted to it hereunder, under
any other Related Document or under any other instrument or agreement securing,
evidencing or relating to the Borrower Obligations or otherwise available to it,
all of the rights and remedies of a secured party upon default under the UCC
(such rights and remedies to be cumulative and nonexclusive), and, in addition,
may take the following actions:

(a) The Administrative Agent may, without notice to the Borrower except as
required by law and at any time or from time to time, (i) charge, offset or
otherwise apply amounts payable to the Borrower from the Agent Account, the
Borrower Account, the Concentration Account or any Collection Account against
all or any part of the Borrower Obligations and (ii) without limiting the terms
of Section 7.05(d), notify any Obligor under any Transferred Receivable or
obligors under the Borrower Assigned Agreements of the transfer of the
Transferred Receivables to the Borrower and the pledge of such Transferred
Receivables or Borrower Assigned Agreements, as the case may be, to the
Administrative Agent on behalf of the Secured Parties hereunder and direct that
payments of all amounts due or to become due to the Borrower thereunder be made
directly to the Administrative Agent or any servicer, collection agent or
lockbox or other account designated by the Administrative Agent.

(b) The Administrative Agent may, without notice except as specified below,
solicit and accept bids for and sell the Borrower Collateral or any part thereof
in one or more parcels at public or private sale, at any exchange, broker’s
board or any of the Lenders’ or Agent’s offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Administrative
Agent may reasonably deem to be commercially reasonable. The Administrative
Agent shall have the right to conduct such sales on the Borrower’s premises or
elsewhere and shall have the right to use any of the Borrower’s premises without
charge for such sales at such time or times as the Administrative Agent
reasonably deems necessary or advisable. The Borrower agrees that, to the extent
notice of sale shall be required by law, ten days’ notice to the Borrower of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Administrative Agent shall
not be obligated to make any sale of Borrower Collateral regardless of notice of
sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed for
such sale, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Every such sale shall operate to divest all
right, title, interest, claim and demand whatsoever of the Borrower in and to
the Borrower Collateral so sold, and shall be a perpetual bar, both at law and
in equity, against each Originator, the Borrower, any Person claiming any right
in the Borrower Collateral sold through

 

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any Originator or the Borrower, and their respective successors or assigns. The
Administrative Agent shall deposit the net proceeds of any such sale in the
Agent Account and such proceeds shall be applied against all or any part of the
Borrower Obligations.

(c) Upon the completion of any sale under Section 9.01(b), the Borrower shall
deliver or cause to be delivered to the purchaser or purchasers at such sale on
the date thereof, or within a reasonable time thereafter if it shall be
impracticable to make immediate delivery, all of the Borrower Collateral sold on
such date, but in any event full title and right of possession to such property
shall vest in such purchaser or purchasers upon the completion of such sale.
Nevertheless, if so requested by the Administrative Agent or by any such
purchaser, the Borrower shall confirm any such sale or transfer by executing and
delivering to such purchaser all proper instruments of conveyance and transfer
and releases as may be designated in any such request.

(d) At any sale under Section 9.01(b), any Lender or the Administrative Agent
may bid for and purchase the property offered for sale and, upon compliance with
the terms of sale, may hold, retain and dispose of such property without further
accountability therefor.

(e) The Administrative Agent may (but in no event shall be obligated to)
exercise, at the sole cost and expense of the Borrower, any and all rights and
remedies of the Borrower under or in connection with the Borrower Assigned
Agreements or the other Borrower Collateral, including any and all rights of the
Borrower to demand or otherwise require payment of any amount under, or
performance of any provisions of, the Borrower Assigned Agreements. Without
limiting the foregoing, the Administrative Agent shall, upon the occurrence of
any Event of Servicer Termination, have the right to name any Successor Servicer
(including itself) pursuant to Article VIII of the Sale Agreement.

Section 9.02. Exercise of Remedies. No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
under this Agreement and no course of dealing between any Originator, the
Borrower or the Servicer, on the one hand, and the Administrative Agent or any
Lender, on the other hand, shall operate as a waiver of such right, power or
privilege, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege. The rights and remedies under this Agreement are cumulative, may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies that the Administrative Agent or any Lender would otherwise have at law
or in equity. No notice to or demand on any party hereto shall entitle such
party to any other or further notice or demand in similar or other
circumstances, or constitute a waiver of the right of the party providing such
notice or making such demand to any other or further action in any circumstances
without notice or demand.

Section 9.03. Power of Attorney. On the Closing Date, the Borrower shall execute
and deliver a power of attorney substantially in the form attached hereto as
Exhibit 9.03 (a “Power of Attorney”). The Power of Attorney is a power coupled
with

 

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an interest and shall be irrevocable until this Agreement has terminated in
accordance with its terms and all of the Borrower Obligations are indefeasibly
paid or otherwise satisfied in full. The powers conferred on the Administrative
Agent under each Power of Attorney are solely to protect the Liens of the
Administrative Agent and the Lenders upon and interests in the Borrower
Collateral and shall not impose any duty upon the Administrative Agent to
exercise any such powers. The Administrative Agent shall not be accountable for
any amount other than amounts that it actually receives as a result of the
exercise of such powers and none of the Administrative Agent’s officers,
directors, employees, agents or representatives shall be responsible to the
Borrower, any Originator, the Servicer or any other Person for any act or
failure to act, except to the extent of damages attributable to their own gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction. Notwithstanding any other provision herein or in any other Related
Document to the contrary, the Administrative Agent shall not exercise any powers
pursuant to any Power of Attorney unless a Termination Event or Servicer
Termination Event shall have occurred and be continuing.

Section 9.04. Continuing Security Interest. This Agreement shall create a
continuing Lien in the Borrower Collateral until the date such security interest
is released by Administrative Agent and the Lenders.

ARTICLE X.

INDEMNIFICATION

Section 10.01. Indemnities by the Borrower.

(a) Without limiting any other rights that the Lenders or the Administrative
Agent or any of their respective officers, directors, employees, attorneys,
agents, representatives, transferees, successors or assigns (each, an
“Indemnified Person”) may have hereunder or under applicable law, the Borrower
hereby agrees to indemnify and hold harmless each Indemnified Person from and
against any and all Indemnified Amounts that may be claimed or asserted against
or incurred by any such Indemnified Person in connection with or arising out of
the transactions contemplated under this Agreement or under any other Related
Document or any actions or failures to act in connection therewith, including
any and all Rating Agency costs and any and all reasonably legal costs and
expenses arising out of or incurred in connection with disputes between or among
any parties to any of the Related Documents; provided, that the Borrower shall
not be liable for any indemnification to an Indemnified Person to the extent
that any such Indemnified Amount (x) results from such Indemnified Person’s
gross negligence or willful misconduct, in each case as finally determined by a
court of competent jurisdiction or (y) constitutes recourse for uncollectible or
uncollected Transferred Receivables as a result of the insolvency, bankruptcy or
the failure (without cause or justification) or inability on the part of the
related Obligor to perform its obligations thereunder. Without limiting the
generality of the foregoing, the Borrower shall pay on demand to each
Indemnified Person any and all Indemnified Amounts relating to or resulting
from:

(i) reliance on any representation or warranty made or deemed made by the
Borrower (or any of its officers) under or in connection with this Agreement or
any other Related Document (without regard to any qualifications concerning the
occurrence or non-occurrence of a Material Adverse Effect or similar concepts of
materiality) or on any other information delivered by the Borrower pursuant
hereto or thereto that shall have been incorrect when made or deemed made or
delivered;

 

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(ii) the failure by the Borrower to comply with any term, provision or covenant
contained in this Agreement, any other Related Document or any agreement
executed in connection herewith or therewith (without regard to any
qualifications concerning the occurrence or non-occurrence of a Material Adverse
Effect or similar concepts of materiality), any applicable law, rule or
regulation with respect to any Transferred Receivable or the Contract therefor,
or the nonconformity of any Transferred Receivable or the Contract therefor with
any such applicable law, rule or regulation;

(iii) (1) the failure to vest and maintain vested in the Borrower valid and
properly perfected title to and sole record and beneficial ownership of the
Receivables that constitute Transferred Receivables, together with all
Collections in respect thereof and all other Borrower Collateral, free and clear
of any Adverse Claim and (2) the failure to maintain or transfer to the
Administrative Agent, for the benefit of itself and the other Secured Parties, a
first priority, perfected Lien in any portion of the Borrower Collateral;

(iv) any dispute, claim, offset or defense of any Obligor (other than its
discharge in bankruptcy) to the payment of any Transferred Receivable (including
a defense based on such Receivable or the Contract therefor not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale of the
merchandise or services giving rise to such Receivable or the furnishing of or
failure to furnish such merchandise or services or relating to collection
activities with respect to such Receivable (if such collection activities were
performed by any of its Affiliates acting as Servicer);

(v) any products liability claim or other claim arising out of or in connection
with merchandise, insurance or services that is the subject of any Contract with
respect to any Transferred Receivable;

(vi) the commingling of Collections with respect to Transferred Receivables by
the Borrower at any time with its other funds or the funds of any other Person;

(vii) any failure by the Borrower to cause the filing of, or any delay in
filing, financing statements or to cause the effectiveness of other similar
instruments or documents under the UCC of any applicable jurisdiction or any
other applicable laws with respect to any Transferred Receivable hereunder or
any other Borrower Collateral, whether at the time of the Borrower’s acquisition
thereof or any Advance made or Letter of Credit Obligation incurred hereunder or
at any subsequent time;

 

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(viii) any investigation, litigation or proceeding related to this Agreement or
any other Related Document or the ownership of Receivables or Collections with
respect thereto or any other investigation, litigation or proceeding relating to
the Borrower, the Servicer or any Originator in which any Indemnified Person
becomes involved as a result of any of the transactions contemplated hereby or
by any other Related Document;

(ix) any failure of (x) a Collection Account Bank to comply with the terms of
the applicable Collection Account Agreement, (y) the Concentration Account Bank
to comply with the terms of the Concentration Account Agreement, or (z) the
Borrower Account Bank to comply with the terms of the Borrower Account
Agreement;

(x) any Termination Event described in Section 8.01(d) or (e);

(xi) any failure of the Borrower to give reasonably equivalent value to the
applicable Originator under the Sale Agreement in consideration of the transfer
by such Originator of any Receivable, or any attempt by any Person to void such
transfer under statutory provisions or common law or equitable action;

(xii) any action or omission by Borrower or any Transaction Party which reduces
or impairs the rights of the Administrative Agent or the Secured Parties with
respect to any Receivable or the value of any such Receivable;

(xiii) any attempt by any Person to void any Borrowing or the Lien granted
hereunder under statutory provisions or common law or equitable action; or

(xiv) any withholding, deduction or Charge imposed upon any payments with
respect to any Transferred Receivable, any Borrower Assigned Agreement or any
other Borrower Collateral.

(b) Any Indemnified Amounts subject to the indemnification provisions of this
Section 10.01 not paid in accordance with Section 2.08 shall be paid by the
Borrower to the Indemnified Person entitled thereto within five Business Days
following demand therefor.

ARTICLE XI.

ADMINISTRATIVE AGENT

Section 11.01. Authorization and Action.

(a) The Administrative Agent may take such action and carry out such functions
under this Agreement as are authorized to be performed by it pursuant to the
terms of this Agreement, any other Related Document or otherwise contemplated
hereby or thereby or are reasonably incidental thereto; provided, that the
duties of the Administrative Agent set forth in this Agreement shall be
determined solely by the express provisions of this Agreement, and, other than
the duties set forth in Section 11.02, any permissive right of the
Administrative Agent hereunder shall not be construed as a duty.

 

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Section 11.02. Reliance. None of the Administrative Agent, any of its Affiliates
or any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or the other Related Documents, except for
damages solely caused by its or their own gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction. Without limiting the
generality of the foregoing, and notwithstanding any term or provision hereof to
the contrary, the Borrower and each Lender hereby acknowledge and agree that the
Administrative Agent as such (a) has no duties or obligations other than as set
forth expressly herein, and has no fiduciary obligations to any person, (b) acts
as a representative hereunder for the Lenders and has no duties or obligations
to, shall incur no liabilities or obligations to, and does not act as an agent
in any capacity for, the Borrower (other than, with respect to the
Administrative Agent, under the Power of Attorney with respect to remedial
actions), the Servicer, the Parent or the Originators, (c) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts, (d) makes no representation or warranty hereunder to any Affected Party
and shall not be responsible to any such Person for any statements,
representations or warranties made in or in connection with this Agreement or
the other Related Documents, (e) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Related Documents on the part of the
Borrower, the Servicer, any Originator, the Parent or any Lender, or to inspect
the property (including the books and records) of the Borrower, the Servicer,
any Originator, the Parent or any Lender, (f) shall not be responsible to the
Borrower, the Servicer, any Lender or any other Person for the due execution by
any Person other than the Administrative Agent, or the legality, validity,
enforceability, genuineness, sufficiency or value, of this Agreement or the
other Related Documents or any other instrument or document furnished pursuant
hereto or thereto, (g) shall incur no liability under or in respect of this
Agreement or the other Related Documents by acting upon any notice, consent,
certificate or other instrument or writing believed by it to be genuine and
signed, sent or communicated by the proper party or parties and (h) shall not be
bound to make any investigation into the facts or matters stated in any notice
or other communication hereunder and may conclusively rely on the accuracy of
such facts or matters.

Section 11.03. GE Capital and Affiliates. GE Capital and its Affiliates may
generally engage in any kind of business with any Obligor, the Parent, the
Originators, the Borrower, the Servicer, any Lender, any of their respective
Affiliates and any Person who may do business with or own securities of such
Persons or any of their respective Affiliates, all as if GE Capital were not the
Administrative Agent and without the duty to account therefor to any Obligor,
the Parent, any Originator, the Borrower, the Servicer, any Lender or any other
Person.

 

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Section 11.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based upon such documents and information as it has deemed
appropriate, made its own credit and financial analysis of the Borrower and its
own decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.

Section 11.05. Indemnification. Each of the Lenders severally agrees to
indemnify the Administrative Agent (to the extent not reimbursed by the Borrower
and without limiting the obligations of the Borrower hereunder), ratably
according to their respective Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other Related Document or
any action taken or omitted by the Administrative Agent in connection herewith
or therewith; provided, however, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent’s gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction. Without limiting the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any out-of-pocket expenses (including counsel fees)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Related Document, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower.

Section 11.06. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving not less than thirty (30) days’ prior written
notice thereof to each of the Lenders and the Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the resigning the Administrative Agent’s giving notice of
resignation, then the resigning Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be a Lender, if a
Lender is willing to accept such appointment, or otherwise shall be a commercial
bank or financial institution or a subsidiary of a commercial bank or financial
institution which commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof which has a
long-term debt rating from S&P of “A–” or better and Moody’s of “A3” or better
and has a combined capital and surplus of at least $300,000,000. If no successor
Administrative Agent has been appointed pursuant to the foregoing, by the 30th
day after the date such

 

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notice of resignation was given by the resigning Administrative Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder until such time, if
any, as the Requisite Lenders appoint a successor Administrative Agent as
provided above. Upon the acceptance of any appointment as the Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Administrative Agent. Upon the
earlier of the acceptance of any appointment as the Administrative Agent
hereunder by a successor Administrative Agent or the effective date of the
resigning Administrative Agent’s resignation, the resigning Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Related Documents, except that any indemnity rights or other rights in
favor of such resigning Administrative Agent shall continue. After any resigning
Administrative Agent’s resignation hereunder, the provisions of this Article XI
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent under this Agreement and the other Related
Documents.

Section 11.07. Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Termination Event,
each Lender and each holder of any Note is hereby authorized at any time or from
time to time, without notice to the Borrower or to any other Person, any such
notice being hereby expressly waived (but subject to Section 2.03(b)(i)), to set
off and to appropriate and to apply any and all balances held by it at any of
its offices for the account of the Borrower (regardless of whether such balances
are then due to the Borrower) and any other properties or assets any time held
or owing by that Lender or that holder to or for the credit or for the account
of the Borrower against and on account of any of the Borrower Obligations which
are not paid when due. Any Lender or holder of any Note exercising a right to
set off or otherwise receiving any payment on account of the Borrower
Obligations in excess of its Pro Rata Share thereof shall purchase for cash (and
the other Lenders or holders shall sell) such participations in each such other
Lender’s or holder’s Pro Rata Share of the Borrower Obligations as would be
necessary to cause such Lender to share the amount so set off or otherwise
received with each other Lender or holder in accordance with their respective
Pro Rata Shares. Each Lender’s obligation pursuant to this Section 11.07 is in
addition to and not in limitation of its obligations to purchase a participation
equal to its Pro Rata Share of the Swing Line Loan pursuant to Section 2.01(b)
or to purchase a participation equal to its Pro Rata Share of Letter of Credit
Obligations pursuant to Section 2.11(b). The Borrower agrees, to the fullest
extent permitted by law, that (a) any Lender or holder may exercise its right to
set off with respect to amounts in excess of its Pro Rata Share of the Borrower
Obligations and may sell participations in such amount so set off to other
Lenders and holders and (b) any Lender or holders so purchasing a participation
in the Advances made or Letter of Credit Obligations incurred or other Borrower
Obligations held by other Lenders or holders may exercise all rights of set off,
bankers’ lien, counterclaim or similar rights with respect to such participation
as fully as if such

 

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Lender or holder were a direct holder of the Advances, Letter of Credit
Obligations and the other Borrower Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of the
set-off amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of set-off, the purchase of participations
by that Lender shall be rescinded and the purchase price restored without
interest.

ARTICLE XII.

MISCELLANEOUS

Section 12.01. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by email of the signed notice in PDF form or facsimile
(with such email or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this
Section 12.01), (c) one Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number set forth below or to such other address (or
facsimile number) as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than any Lender and the Administrative Agent) designated in
any written notice provided hereunder to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication. Notwithstanding the foregoing,
whenever it is provided herein that a notice is to be given to any other party
hereto by a specific time, such notice shall only be effective if actually
received by such party prior to such time, and if such notice is received after
such time or on a day other than a Business Day, such notice shall only be
effective on the immediately succeeding Business Day.

Borrower:

Rexnord Funding LLC

4701 West Greenfield Ave.

Milwaukee, Wisconsin 53214

Attention: Chief Financial Officer/Treasurer

Telephone: (414) 643-2344

Facsimile: (414) 643-4584

 

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Administrative Agent:

General Electric Capital Corporation

401 Merritt 7

Norwalk, Connecticut 06851

Attention: Trade A/R Securitization Portfolio Administrator

Telephone: (203) 229-1482

Facsimile: (203) 956-4002

Section 12.02. Binding Effect; Assignability.

(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, each Lender and the Administrative Agent and their respective
successors and permitted assigns. The Borrower may not assign, transfer,
hypothecate or otherwise convey any of its rights or obligations hereunder or
interests herein without the express prior written consent of the Requisite
Lenders and the Administrative Agent. Any such purported assignment, transfer,
hypothecation or other conveyance by the Borrower without the prior express
written consent of the Requisite Lenders and the Administrative Agent shall be
void.

(b) The Borrower hereby consents to any Lender’s assignment or pledge of, and/or
sale of participations in, at any time or times after the Effective Date of the
Related Documents, Advances, Letter of Credit Obligations and any Commitment or
of any portion thereof or interest therein, including any Lender’s rights,
title, interests, remedies, powers or duties thereunder (including, without
limitation, an assignment by the Swing Line Lender of all or any portion of its
Swing Line Commitment), whether evidenced by a writing or not, made in
accordance with this Section 12.02(b). Any assignment by a Lender shall
(i) require the execution of an assignment agreement (an “Assignment Agreement”)
substantially in the form attached hereto as Exhibit 12.02(b) or otherwise in
form and substance satisfactory to the Administrative Agent, and acknowledged
by, the Administrative Agent and other than in the case of an assignment by a
Lender to one of its Affiliates, the consent of the Administrative Agent and, so
long as no Termination Event has occurred and is continuing, the Borrower (which
consent shall not be unreasonably withheld or delayed); (ii) if a partial
assignment, be in an amount at least equal to $5,000,000 and, after giving
effect to any such partial assignment, the assigning Lender shall have retained
Commitments in an amount at least equal to $5,000,000; (iii) require the
delivery to the Administrative Agent by the assignee or participant, as the case
may be, of any forms, certificates or other evidence with respect to United
States tax withholding matters, and (iv) other than in the case of an assignment
by a Lender to one of its Affiliates, include a payment to the Administrative
Agent by the assignor or assignee Lender of an assignment fee of $3,500. In the
case of an assignment by a Lender under this Section 12.02, the assignee shall
have, to the extent of such assignment, the same rights, benefits and
obligations as it would if it were a Lender hereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof from and after the date of

 

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such assignment. The Borrower hereby acknowledges and agrees that any assignment
made in accordance with this Section 12.02(b) will give rise to a direct
obligation of the Borrower to the assignee and that the assignee shall thereupon
be a “Lender” for all purposes. In all instances, each Lender’s obligation to
make Revolving Credit Advances and incur Letter of Credit Obligations hereunder
shall be several and not joint and shall be limited to such Lender’s Pro Rata
Share of the applicable Commitment. In the event any Lender assigns or otherwise
transfers all or any part of a Tranche A Revolving Note, Tranche B Revolving
Note or the Swing Line Note, the Borrower shall, upon the request of such
Lender, execute new Revolving Notes or Swing Line Notes in exchange for the
Tranche A Revolving Notes, the Tranche B Revolving Notes or Swing Line Notes, as
the case may be, being assigned. Notwithstanding the foregoing provisions of
this Section 12.02(b), any Lender may at any time pledge or assign all or any
portion of such Lender’s rights under this Agreement and the other Related
Documents to any Federal Reserve Bank or to any holder or trustee of such
Lender’s securities; provided, however, that no such pledge or assignment to any
Federal Reserve Bank, holder or trustee shall release such Lender from such
Lender’s obligations hereunder or under any other Related Document and no such
holder or trustee shall be entitled to enforce any rights of such Lender
hereunder unless such holder or trustee becomes a Lender hereunder through
execution of an Assignment Agreement as set forth above.

(c) In addition to the foregoing right, any Lender may, without notice to or
consent from the Administrative Agent or the Borrower, (x) grant to an SPV the
option to make all or any part of any Advance that such Lender would otherwise
be required to make hereunder (and the exercise of such option by such SPV and
the making of Loans pursuant thereto shall satisfy the obligation of such Lender
to make such Loans hereunder); (y) assign to an SPV all or a portion of its
rights (but not its obligations) under the Related Documents, including a sale
of any Advances or other Borrower Obligations hereunder and such Lender’s right
to receive payment with respect to any such Borrower Obligation and (z) sell
participations to one or more Persons in or to all or a portion of its rights
and obligations under the Related Documents (including all its rights and
obligations with respect to the Advances); provided, however, that (x) no such
SPV or participant shall have a commitment, or be deemed to have made an offer
to commit, to make Advances hereunder, and none shall be liable to any Person
for any obligations of such Lender hereunder (it being understood that nothing
in this Section 12.02(c) shall limit any rights the Lender may have as against
such SPV or participant under the terms of the applicable option, sale or
participation agreement between or among such parties); and (y) no such SPV or
holder of any such participation shall be entitled to require such Lender to
take or omit to take any action hereunder except actions directly affecting
(i) any reduction in the principal amount of, or interest rate or Fees payable
with respect to, any Advance or Letter of Credit Obligation in which such holder
participates, (ii) any extension of any scheduled payment of the principal
amount of any Advance in which such holder participates or the final maturity
date thereof, and (iii) any release of all or substantially all of the Borrower
Collateral (other than in accordance with the terms of this Agreement or the
other Related Documents). Solely for purposes of Sections 2.08, 2.09 and 9.01,
Borrower acknowledges and agrees that each such sale or participation shall give
rise to a direct obligation of the Borrower to the participant or SPV and each
such participant or SPV shall be considered to be a “Lender” for purposes of
such sections. Except as set forth in the preceding sentence, such Lender’s
rights and obligations, and

 

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the rights and obligations of the other Lenders and the Administrative Agent
towards such Lender under any Related Document shall remain unchanged and none
of the Borrower, the Administrative Agent or any Lender (other than the Lender
selling a participation or assignment to an SPV) shall have any duty to any
participant or SPV and may continue to deal solely with the assigning or selling
Lender as if no such assignment or sale had occurred.

(d) Except as expressly provided in this Section 12.02, no Lender shall, as
between the Borrower and that Lender, or between the Administrative Agent and
that Lender, be relieved of any of its obligations hereunder as a result of any
sale, assignment, transfer or negotiation of, or granting of participation in,
all or any part of the Advances, the Letter of Credit Obligations, the Tranche A
Revolving Notes, the Tranche B Revolving Notes, the Swing Line Note or other
Borrower Obligations owed to such Lender.

(e) The Borrower shall assist any Lender permitted to sell assignments or
participations under this Section 12.02 as reasonably required to enable the
assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be reasonably requested and the participation
of management in meetings with potential assignees or participants. The Borrower
shall, if the Administrative Agent so requests in connection with an initial
syndication of the Commitments hereunder, assist in the preparation of
informational materials for such syndication.

(f) A Lender may furnish any information concerning the Borrower, the
Originator, the Parent, the Servicer and/or the Receivables in the possession of
such Lender from time to time to assignees and participants (including
prospective assignees and participants). Each Lender shall obtain from all
prospective and actual assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 12.05.

Section 12.03. Termination; Survival of Borrower Obligations Upon Commitment
Termination Date.

(a) 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 Termination Date.

(b) Except as otherwise expressly provided herein or in any other Related
Document, no termination or cancellation (regardless of cause or procedure) of
any commitment made by any Affected Party under this Agreement shall in any way
affect or impair the obligations, duties and liabilities of the Borrower or the
rights of any Affected Party relating to any unpaid portion of the Borrower
Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Related
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Borrower and all rights of any Affected
Party hereunder, all as contained in the Related Documents, shall not terminate
or expire, but rather shall survive any such termination or cancellation and
shall

 

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continue in full force and effect until the Termination Date; provided, that the
rights and remedies provided for herein with respect to any breach of any
representation or warranty made by the Borrower pursuant to Article IV, the
indemnification and payment provisions of Article X and Sections 11.05, 12.05,
12.14 and 12.15 shall be continuing and shall survive the Termination Date.

Section 12.04. Costs, Expenses and Taxes. (a) The Borrower shall reimburse the
Administrative Agent for all reasonable out of pocket expenses incurred in
connection with the negotiation and preparation of this Agreement and the other
Related Documents (including the reasonable fees and expenses of all of its
special counsel, advisors, consultants and auditors retained in connection with
the transactions contemplated thereby and advice in connection therewith). The
Borrower shall reimburse each Lender and the Administrative Agent for all
reasonable fees, costs and expenses, including the fees, costs and expenses of
counsel or other advisors (including environmental and management consultants
and appraisers) for advice, assistance, or other representation in connection
with:

(i) the forwarding to the Borrower or any other Person on behalf of the Borrower
by any Lender of any proceeds of Advances made by such Lender hereunder;

(ii) the issuance of Letters of Credit on behalf of the Borrower;

(iii) any amendment, modification or waiver of, consent with respect to, or
termination of this Agreement or any of the other Related Documents or advice in
connection with the administration hereof or thereof or their respective rights
hereunder or thereunder;

(iv) any Litigation, contest or dispute (whether instituted by the Borrower, any
Lender, the Administrative Agent or any other Person as a party, witness, or
otherwise) in any way relating to the Borrower Collateral, any of the Related
Documents or any other agreement to be executed or delivered in connection
herewith or therewith, including any Litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection with a
case commenced by or against the Borrower, the Servicer or any other Person that
may be obligated to any Lender or the Administrative Agent by virtue of the
Related Documents, including any such Litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring of
the transactions contemplated hereby during the pendency of one or more
Termination Events;

(v) any attempt to enforce any remedies of a Lender or the Administrative Agent
against the Borrower, the Servicer or any other Person that may be obligated to
them by virtue of any of the Related Documents, including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
transactions contemplated hereby during the pendency of one or more Termination
Events;

 

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(vi) any work-out or restructuring of the transactions contemplated hereby
during the pendency of one or more Termination Events; and

(vii) efforts to (A) monitor the Advances, Letter of Credit Obligations or any
of the Borrower Obligations, (B) evaluate, observe or assess the Originators,
the Parent, the Borrower, the Member or the Servicer or their respective
affairs, and (C) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Borrower Collateral;

including all reasonable attorneys’ and other professional and service
providers’ fees arising from such services, including those in connection with
any appellate proceedings, and all reasonable expenses, costs, charges and other
fees incurred by such counsel and others in connection with or relating to any
of the events or actions described in this Section 12.04, all of which shall be
payable, on demand, by the Borrower to the applicable Lender or the
Administrative Agent, as applicable. Without limiting the generality of the
foregoing, such reasonable expenses, costs, charges and fees may include: fees,
costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
facsimile charges; secretarial overtime charges; and reasonable expenses for
travel, lodging and food paid or incurred in connection with the performance of
such legal or other advisory services.

(b) In addition, the Borrower shall pay on demand any and all stamp, sales,
excise and other taxes (excluding income taxes imposed by the jurisdiction under
the laws of which such person is organized), gross receipts or franchise taxes
and fees payable or determined to be payable in connection with the execution,
delivery, filing or recording of this Agreement or any other Related Document,
and the Borrower agrees to indemnify and save each Indemnified Person harmless
from and against any and all liabilities with respect to or resulting from any
delay or failure to pay such taxes and fees.

Section 12.05. Confidentiality.

(a) Except to the extent otherwise required by applicable law or as required to
be filed publicly with the Securities and Exchange Commission, or unless the
Administrative Agent shall otherwise consent in writing, the Borrower agrees to
maintain the confidentiality of this Agreement (and all drafts hereof and
documents ancillary hereto), in its communications with third parties other than
any Affected Party or any Indemnified Person and otherwise not to disclose,
deliver or otherwise make available to any third party (other than its
directors, officers, employees, accountants or counsel) the original or any copy
of all or any part of this Agreement (or any draft hereof and documents
ancillary hereto) except to an Affected Party or an Indemnified Person or any
financial institution party to the Credit Agreement.

(b) The Borrower, the Administrative Agent and each Lender severally agrees that
it shall not (and shall not permit any of its Subsidiaries to) issue any news
release or make any public announcement pertaining to the transactions
contemplated by this Agreement and the

 

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other Related Documents without the prior written consent of the Borrower, the
Requisite Lenders and the Administrative Agent (which consent shall not be
unreasonably withheld) unless such news release or public announcement is
required by law, in which case the Borrower, the Administrative Agent and/or any
Lender, as the case may be, shall consult with the Borrower, the Administrative
Agent and any Lenders specifically referenced therein prior to the issuance of
such news release or public announcement. The Borrower may, however, disclose
the general terms of the transactions contemplated by this Agreement and the
other Related Documents to trade creditors, suppliers and other
similarly-situated Persons so long as such disclosure is not in the form of a
news release or public announcement.

(c) The Administrative Agent and each Lender agrees to maintain the
confidentiality of the Information (as defined below), and will not use such
confidential Information for any purpose or in any matter except in connection
with this Agreement, except that Information may be disclosed (1) to (i) each
Affected Party (ii) its and each Affected Party’s and their respective
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential and to not
disclose or use such Information in violation of Regulation FD (17 C.F.R. §
243.100-243.103)) and (iii) industry trade organizations for inclusion in league
table measurements, (2) any regulatory authority (it being understood that it
will to the extent reasonably practicable provide the Borrower with an
opportunity to request confidential treatment from such regulatory authority),
(3) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process, (4) to any other party to this Agreement, (5) to the
extent required in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any other Related
Document or the enforcement of rights hereunder or thereunder, (6) subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of (or participant in), or any prospective assignee of (or
participant in), any of its rights or obligations under this Agreement, (7) with
the consent of the Borrower or (8) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or any
other confidentiality agreement to which it is party with the Borrower or the
Parent or any subsidiary thereof or (ii) becomes available to the Administrative
Agent, or any Lender on a nonconfidential basis from a source other than the
Parent or any subsidiary thereof. For the purposes of this Section,
“Information” means all information received from the Borrower and Servicer
relating to the Borrower, the Servicer, the Parent or any subsidiary thereof or
their businesses, or any Obligor, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by Borrower or Servicer; provided that in the case of
information received from the Borrower or Servicer after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

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Section 12.06. Complete Agreement; Modification of Agreement. This Agreement and
the other Related Documents constitute the complete agreement among the parties
hereto with respect to the subject matter hereof and thereof, supersede all
prior agreements and understandings relating to the subject matter hereof and
thereof, and may not be modified, altered or amended except as set forth in
Section 12.07.

Section 12.07. Amendments and Waivers.

(a) Except for actions expressly permitted to be taken by the Administrative
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any Note, or any consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Borrower and by the Requisite Lenders or, to the extent
required under clause (b) below, by all affected Lenders and the Swing Line
Lender or the L/C Issuers, as applicable, and, to the extent required under
clause (b) or clause (c) below, by the Administrative Agent. Except as set forth
in clause (b) below, all amendments, modifications, terminations or waivers
requiring the consent of any Lenders without specifying the required percentage
of Lenders shall require the written consent of the Requisite Lenders.

(b) (i) No amendment, modification, termination or waiver shall, unless in
writing and signed by each Lender directly affected thereby, do any of the
following: (1) increase the principal amount of any Lender’s Commitment;
(2) reduce the principal of, rate of interest on or Fees payable with respect to
any Advance or Letter of Credit Obligation incurred made by any affected Lender;
(3) extend any scheduled payment date or final maturity date of the principal
amount of any Advance of any affected Lender; (4) waive, forgive, defer, extend
or postpone any payment of interest or Fees as to any affected Lender;
(5) change the percentage of the Aggregate Commitments or of the aggregate
Outstanding Principal Amount which shall be required for Lenders or any of them
to take any action hereunder; (6) release all or substantially all of the
Borrower Collateral; or (7) amend or waive this Section 12.07 or the definition
of the term “Requisite Lenders” insofar as such definition affects the substance
of this Section 12.07. Furthermore, no amendment, modification, termination or
waiver shall be effective to the extent that it (x) affects the rights or duties
of the Administrative Agent under this Agreement or any other Related Document
unless in writing and signed by the Administrative Agent, (y) affects the rights
or duties of the Swing Line Lender under this Agreement or modifies or amends
any other provision of this Agreement or any other Related Document relating the
Swing Line Loan, Swing Line Advances or the Swing Line Lender unless in writing
and signed by the Swing Line Lender, or (z) affects the rights or duties of any
L/C Issuer under this Agreement or modifies or amends any other provision of
this Agreement or any other Related Document relating to Letter of Credit
Obligations, the issuance of Letters of Credit or any L/C Issuer unless in
writing and signed by (or with the prior written consent of) each L/C Issuer.

(ii) Each amendment, modification, termination or waiver shall be effective only
in the specific instance and for the specific purpose for which it was given. No
amendment, modification, termination or waiver shall be required for the
Administrative Agent to take additional Borrower Collateral pursuant to any
Related

 

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Document. No amendment, modification, termination or waiver of any provision of
any Note shall be effective without the written concurrence of the holder of
such Note. No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 12.07 shall be binding upon each holder
of a Note at the time outstanding and each future holder of a Note.

(iii) Neither the Administrative Agent nor any Lender shall waive any of the
provisions set forth in Section 4.01(v) or Section 5.01(g) if such waiver would
adversely affect the Ratings.

(c) If, in connection with any proposed amendment, modification, waiver or
termination (a “Proposed Change”):

(i) requiring the consent of all affected Lenders, the consent of Requisite
Lenders is obtained, but the consent of other Lenders whose consent is required
is not obtained (any such Lender whose consent is not obtained as described this
clause (i) or in clause (ii) below being referred to as a “Non-Consenting
Lender”), or

(ii) requiring the consent of Requisite Lenders, the consent of Lenders holding
51% or more of the Aggregate Commitments is obtained, but the consent of
Requisite Lenders is not obtained,

then, so long as the Administrative Agent is not a Non-Consenting Lender, at the
Borrower’s request the Administrative Agent, or a Person acceptable to the
Administrative Agent, shall have the right with the Administrative Agent’s
consent and in the Administrative Agent’s sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon the Administrative Agent’s
request, sell and assign to the Administrative Agent or such Person, all of the
Commitments of such Non-Consenting Lender for an amount equal to the principal
balance of all Advances held by the Non-Consenting Lender and all accrued
interest and Fees with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment Agreement.

(d) Upon indefeasible payment in full in cash and performance of all of the
Borrower Obligations (other than indemnification obligations under
Section 10.01), termination of the Aggregate Commitment and a release of all
claims against the Administrative Agent and Lenders, and so long as no suits,
actions, proceedings or claims are pending or threatened against any Indemnified
Person asserting any damages, losses or liabilities that are Indemnified
Liabilities, the Administrative Agent shall deliver to the Borrower termination
statements and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Borrower Obligations.

Section 12.08. No Waiver; Remedies. The failure by any Lender or the
Administrative Agent, at any time or times, to require strict performance by the
Borrower or the Servicer of any provision of this Agreement, any Receivables

 

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Assignment or any other Related Document shall not waive, affect or diminish any
right of any Lender or the Administrative Agent thereafter to demand strict
compliance and performance herewith or therewith. Any suspension or waiver of
any breach or default hereunder shall not suspend, waive or affect any other
breach or default whether the same is prior or subsequent thereto and whether
the same or of a different type. None of the undertakings, agreements,
warranties, covenants and representations of the Borrower or the Servicer
contained in this Agreement, any Receivables Assignment or any other Related
Document, and no breach or default by the Borrower or the Servicer hereunder or
thereunder, shall be deemed to have been suspended or waived by any Lender or
the Administrative Agent unless such waiver or suspension is by an instrument in
writing signed by an officer of or other duly authorized signatory of the
applicable Lenders and the Administrative Agent and directed to the Borrower or
the Servicer, as applicable, specifying such suspension or waiver. The rights
and remedies of the Lenders and the Administrative Agent under this Agreement
and the other Related Documents shall be cumulative and nonexclusive of any
other rights and remedies that the Lenders and the Administrative Agent may have
hereunder, thereunder, under any other agreement, by operation of law or
otherwise. Recourse to the Borrower Collateral shall not be required.

Section 12.09. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.

(a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT
ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS
ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS (INCLUDING 735
ILCS SECTION 105/5-1 ET. SEQ. BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS) EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR
PRIORITY OF THE INTERESTS OF THE ADMINISTRATIVE AGENT IN THE RECEIVABLES OR
REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS, AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.

(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN CHICAGO, ILLINOIS SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT
OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO,
ILLINOIS;

 

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PROVIDED FURTHER THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE ANY LENDER OR THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE BORROWER
COLLATERAL OR ANY OTHER SECURITY FOR THE BORROWER OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE LENDERS OR THE ADMINISTRATIVE
AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY
WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS PROVIDED FOR IN SECTION
12.01 HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF SUCH PARTY’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED
STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW.

(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS
ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON
AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Section 12.10. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.

Section 12.11. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under

 

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applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

Section 12.12. Section Titles. The section, titles and table of contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.

Section 12.13. Further Assurances.

(a) The Borrower shall, or shall cause the Servicer to, at its sole cost and
expense, upon request of any of the Lenders or the Administrative Agent,
promptly and duly execute and deliver any and all further instruments and
documents and take such further action that may be necessary or desirable or
that any of the Lenders or the Administrative Agent may request to (i) perfect,
protect, preserve, continue and maintain fully the Liens granted to the
Administrative Agent for the benefit of itself and the Lenders under this
Agreement, (ii) enable the Lenders or the Administrative Agent to exercise and
enforce its rights under this Agreement or any of the other Related Documents or
(iii) otherwise carry out more effectively the provisions and purposes of this
Agreement or any other Related Document. Without limiting the generality of the
foregoing, the Borrower shall, upon request of any of the Lenders or the
Administrative Agent, (A) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices that may be necessary or desirable or that any of the
Lenders or the Administrative Agent may request to perfect, protect and preserve
the Liens granted pursuant to this Agreement, free and clear of all Adverse
Claims, (B) mark, or cause the Servicer to mark, each Contract evidencing each
Transferred Receivable with a legend, acceptable to each Lender and the
Administrative Agent evidencing that the Borrower has purchased such Transferred
Receivables and that the Administrative Agent, for the benefit of the Secured
Parties, has a security interest in and lien thereon, (C) mark, or cause the
Servicer to mark, its master data processing records evidencing such Transferred
Receivables with such a legend and (D) notify or cause the Servicer to notify
Obligors of the Liens on the Transferred Receivables granted hereunder.

(b) Without limiting the generality of the foregoing, the Borrower hereby
authorizes the Lenders and the Administrative Agent, and each of the Lenders
hereby authorizes the Administrative Agent, to file one or more financing or
continuation statements, or amendments thereto or assignments thereof, relating
to all or any part of the Transferred Receivables, including Collections with
respect thereto, or the Borrower Collateral without the signature of the
Borrower or, as applicable, the Lenders, as applicable, to the extent permitted
by applicable law (including, for administrative convenience, financing
statements with respect to the Borrower describing the collateral covered by any
such UCC-1 financing statement as “all assets” or language similar thereto). A
carbon, photographic or other reproduction of this Agreement or of any notice or
financing statement covering the Transferred Receivables, the Borrower
Collateral or any part thereof shall be sufficient as a notice or financing
statement where permitted by law.

 

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Section 12.14. No Proceedings. Each of Administrative Agent and each Lender
agrees that, from and after the Closing Date and until the date one year plus
one day following the Termination Date, it will not, directly or indirectly,
institute or cause to be instituted against the Borrower any proceeding of the
type referred to in Sections 8.01(d) and 8.01(e). This Section 12.14 shall
survive the termination of this Agreement.

Section 12.15. Limitation on Payments. Notwithstanding any provision in any
other section of this Agreement to the contrary, the obligation of the Borrower
to pay any amounts payable to Lender or any other Affected Party pursuant to
Sections 2.09 and 10.01 of this Agreement shall be without recourse to the
Borrower except as to any Collections and other amounts and/or proceeds of the
Receivables (collectively, the “Available Amounts”) required to be distributed
to the Lenders, to the extent that such amounts are available for distribution.
In the event that amounts payable to a Lender or any other Affected Party
pursuant to this Agreement exceed the Available Amounts, the excess of the
amounts due hereunder over the Available Amounts paid shall not constitute a
“claim” under Section 101(5) of the Bankruptcy Code against the Borrower until
such time as the Borrower has Available Amounts. The foregoing shall not operate
to limit the rights of the Administrative Agent or any other Affected Party to
enforce any claims of Borrower or its assigns against the Originators under the
Sale Agreement or any other Related Document.

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

 

    REXNORD FUNDING LLC, as the Borrower     By:  

/s/ Todd A. Adams

    Name:   Todd A. Adams     Title:   President Commitment: $100,000,000    
GENERAL ELECTRIC CAPITAL CORPORATION,     as a Lender and as Swing Line Lender  
  By:  

/s/ Susan Bassett

    Name:   Susan Bassett     Title:   Duly Authorized Signatory     GENERAL
ELECTRIC CAPITAL CORPORATION,     as Administrative Agent     By:  

/s/ Susan Bassett

    Name:   Susan Bassett     Title:   Duly Authorized Signatory

 

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