Exhibit 10.28
Conformed through Thirteenth Amendment, dated as of May 19, 2020

AMENDED AND RESTATED
CONTRACT PURCHASE AGREEMENT

dated as of August 12, 2011

among

PDC FUNDING COMPANY II, LLC, as Seller,

PATTERSON COMPANIES, INC., as Servicer,

THE PURCHASERS PARTY HERETO,

and

FIFTH THIRD BANK, NATIONAL ASSOCIATION,
as Agent

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Table of Contents

Page
ARTICLE I PURCHASE ARRANGEMENTS 1
Section 1.1 Purchase Facility 1
Section 1.2 Increases; Sale of Asset Portfolio 2
Section 1.3 Decreases 3
Section 1.4 Payment Requirements 3
Section 1.5 Deemed Exchange 3
Section 1.6 RPA Deferred Purchase Price 4
ARTICLE II PAYMENTS AND COLLECTIONS 4
Section 2.1 Payments 4
Section 2.2 Collections Prior to Amortization 4
Section 2.3 Collections Following Amortization 6
Section 2.4 Ratable Payments 7
Section 2.5 Payment Rescission 7
Section 2.6 Maximum Purchases In Respect of the Asset Portfolio 8
Section 2.7 Clean-Up Call; Limitation on Payments 8
Section 2.8 Investment of Collections in Second-Tier Account 8
ARTICLE III [INTENTIONALLY OMITTED.] 9
ARTICLE IV PURCHASER FUNDING 9
Section 4.1 Purchaser Funding 9
Section 4.2 Purchaser Yield Payments 9
Section 4.3 Selection and Continuation of Rate Tranche Periods 9
Section 4.4 Purchaser Discount Rates 10
Section 4.5 Suspension of the LIBO Rate 10
Section 4.6 Extension of Purchase Termination Date 10
Section 4.7 Inability to Determine LIBO Rate 12
ARTICLE V REPRESENTATIONS AND WARRANTIES 13
Section 5.1 Representations and Warranties of the Seller Parties 13
ARTICLE VI CONDITIONS OF PURCHASES 17
Section 6.1 Conditions Precedent to Initial Purchase and Deemed Exchange 17
Section 6.2 Conditions Precedent to All Purchases 17
ARTICLE VII COVENANTS 18
Section 7.1 Affirmative Covenants of The Seller Parties 18
Section 7.2 Negative Covenants of The Seller Parties 25
Section 7.3 Hedging Agreements 27
ARTICLE VIII ADMINISTRATION AND COLLECTION 28
Section 8.1 Designation of Servicer 28
Section 8.2 Duties of Servicer 29
Section 8.3 Collection Notices 30
Section 8.4 Responsibilities of Seller 31
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Table of Contents
(continued)
Page

Section 8.5 Reports 31
Section 8.6 Servicing Fees 31
ARTICLE IX AMORTIZATION EVENTS 31
Section 9.1 Amortization Events 31
Section 9.2 Remedies 33
ARTICLE X INDEMNIFICATION 34
Section 10.1 Indemnities by The Seller Parties 34
Section 10.2 Increased Cost and Reduced Return 36
Section 10.3 Other Costs and Expenses 37
Section 10.4 [Reserved.] 38
Section 10.5 [Reserved.] 38
Section 10.6 Required Rating 38
ARTICLE XI AGENT 38
Section 11.1 Authorization and Action 38
Section 11.2 Delegation of Duties 38
Section 11.3 Exculpatory Provisions 39
Section 11.4 Reliance by Agent 39
Section 11.5 Non-Reliance on Agent and Other Purchasers 39
Section 11.6 Reimbursement and Indemnification 40
Section 11.7 Agent in its Individual Capacity 40
Section 11.8 Successor Agent 40
ARTICLE XII ASSIGNMENTS; PARTICIPATIONS 40
Section 12.1 Assignments 40
Section 12.2 Participations 41
Section 12.3 Federal Reserve 41
ARTICLE XIII [Reserved.] 42
ARTICLE XIV MISCELLANEOUS 42
Section 14.1 Waivers and Amendments 42
Section 14.2 Notices 43
Section 14.3 Ratable Payments 43
Section 14.4 Protection of Ownership Interests of the Purchasers 43
Section 14.5 Confidentiality 44
Section 14.6 Bankruptcy Petition 44
Section 14.7 Limitation of Liability 45
Section 14.8 CHOICE OF LAW 45
Section 14.9 CONSENT TO JURISDICTION 45
Section 14.10 WAIVER OF JURY TRIAL 45
Section 14.11 Integration; Binding Effect; Survival of Terms 46
Section 14.12 Counterparts; Severability; Section References 46
Section 14.13 [Reserved] 46
Section 14.14 Characterization 46
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Table of Contents
(continued)
Page

Section 14.15 [Reserved.] 47
Section 14.16 Intercreditor Agreement 47
Section 14.17 Confirmation and Ratification of Terms 47
Section 14.18 Consent 48

3

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EXHIBITS

Exhibit I -  Definitions
Exhibit II  - Form of Purchase Notice
Exhibit III - Places of Business of the Seller Parties; Locations
          of Records; Federal Employer Identification Number(s)
Exhibit IV - Names of Collection Banks; Collection Accounts
Exhibit V - Form of Compliance Certificate
Exhibit VI - Form of Collection Account Agreement
Exhibit VII - Form of Assignment Agreement
Exhibit VIII - Credit and Collection Policy
Exhibit IX - Form of Contract(s)
Exhibit X - Form of Monthly Report
Exhibit XI - Form of Performance Undertaking
Exhibit XII - Form of Postal Notice
SCHEDULES
Schedule A - Commitments and Payment Addresses
Schedule B - Documents to be delivered to Agent and Each Purchaser on or
prior to the Initial Purchase
Schedule C - Payment Instructions

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INDEX OF DEFINED TERMS
DEFINED IN THE BODY OF THE AGREEMENT
Agent 1
Aggregate Reduction 3
Amortization Event 31
Asset Portfolio 3
Assignment Agreement 40
Consent Notice 10
Consent Period 11
Deemed Exchange 4
Extension Notice 10
FTB 1
Indemnified Amounts 34
Indemnified Party 33
Non-Renewing Purchaser 11
Obligations 4
Participant 41
Payment Instruction 3
PDCo 1
Prior Agreement 1
Proposed Reduction Date 3
Purchase 2
Purchase Notice 2
Purchaser 1
Purchasers 1
Purchasing Purchaser 40
Ratings Request 36
Reduction Notice 3
Required Rating 37
RPA Deferred Purchase Price 4
Seller 1
Seller Parties 1
Seller Party 1
Servicer 28
Servicing Fee 30
Terminating Purchaser 11
Terminating Rate Tranche 10
Termination Date 6
Termination Percentage 6

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AMENDED AND RESTATED
CONTRACT PURCHASE AGREEMENT
This Amended and Restated Contract Purchase Agreement, dated as of August 12,
2011, is by and among PDC Funding Company II, LLC, a Minnesota limited liability
company (the “Seller”), Patterson Companies, Inc., a Minnesota corporation
(together with its successors and assigns “PDCo”), as initial Servicer (Servicer
together with Seller, the “Seller Parties” and each a “Seller Party”), the
entities listed on Schedule A to this Agreement under the heading “Purchaser”
(together with any of their respective successors and assigns hereunder, the
“Purchasers”) and Fifth Third Bank, National Association (“FTB”), as assignee of
U.S. Bank National Association, as agent for the Purchasers hereunder (together
with its successors and assigns hereunder, the “Agent”). Unless defined
elsewhere herein, capitalized terms used in this Agreement shall have the
meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
The Seller Parties, U.S. Bank National Association and certain other financial
institutions are parties to that certain Contract Purchase Agreement, dated as
of April 27, 2007 (as amended supplemented, or otherwise modified through the
date hereof excluding this Agreement, the “Prior Agreement”).
The parties to the Prior Agreement are entering into the Closing Date Assignment
Agreement as of the date hereof and, in connection therewith, the parties hereto
now desire to amend and restate the Prior Agreement in its entirety to read as
set forth herein. All obligations of the Seller Parties under the Prior
Agreement are not extinguished based on the amendment and restatement of the
Prior Agreement and remain outstanding under the terms hereof.
FTB has been requested and is willing to act as Agent on behalf of the
Purchasers in accordance with the terms hereof.
AGREEMENT
Now therefore, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree that, subject to satisfaction of the conditions
precedent set forth in Section 6.1, the Prior Agreement is hereby amended and
restated in its entirety to read as follows:
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof, during the period from
the date hereof to but not including the Facility Termination Date, Seller shall
sell and assign, as described in Section 1.2(b), the Asset Portfolio to Agent
for the benefit of the
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Purchasers, as applicable. In accordance with the terms and conditions set forth
herein, Agent shall make cash payments to Seller of the related Cash Purchase
Price in respect of the Asset Portfolio (each such cash payment, a “Purchase”),
on behalf of each Purchaser and from time to time in an aggregate amount not to
exceed at such time (i) in the case of each Purchaser, its Commitment and (ii)
in the aggregate, the lesser of (A) the Purchase Limit and (B) the aggregate
amount of the Commitments. Any amount not paid for the Asset Portfolio hereunder
as Cash Purchase Price shall be paid to Seller as the RPA Deferred Purchase
Price pursuant to, and only to the extent required by, the priority of payments
set forth in Sections 2.2(b) and (c) and otherwise pursuant to the terms of this
Agreement (including Section 2.6).
(b) Seller may, upon at least 10 Business Days’ prior notice to Agent and each
Purchaser, terminate in whole or reduce in part, ratably among the Purchasers,
the unused portion of the Purchase Limit; provided that (i) each partial
reduction of the Purchase Limit shall be in an amount equal to $5,000,000 or an
integral multiple thereof and (ii) the aggregate of the Commitments for all of
the Purchasers shall also be terminated in whole or reduced in part, ratably
among the Purchasers, by an amount equal to such termination or reduction in the
Purchase Limit.
Section 1.2 Increases; Sale of Asset Portfolio.
(a) Increases. Seller shall provide Agent and each Purchaser with at least two
Business Days’ prior notice in a form set forth as Exhibit II hereto of each
Purchase (a “Purchase Notice”). Seller shall send such Purchase Notice by
telecopier or email specifying (i) the date of such Purchase which, in the case
of any Purchase (after the initial Purchase and Deemed Exchange hereunder), must
be at least one Business Day after such notice is received by the applicable
Purchaser, (ii) each Purchaser’s Pro Rata Share of the aggregate Cash Purchase
Price in respect of such Receivables, Related Security and Collections and (iii)
the requested Discount Rate and the requested Rate Tranche Period. Each Purchase
Notice shall be subject to Section 6.2 hereof and, except as set forth below,
shall be irrevocable, shall specify a Cash Purchase Price that is not less than
$5,000,000 and in additional increments of $100,000 and, in the case of a
Purchase, the requested Discount Rate and Rate Tranche Period and shall be
accompanied by a current listing of all Receivables (including any Receivables
to be purchased by Seller under the Receivables Sale Agreement on the date of
such Purchase specified in such Purchase Notice). On the date of each Purchase,
upon satisfaction of the applicable conditions precedent set forth in Article VI
and the conditions set forth in this Section 1.2(a), the Purchasers shall
deposit to the Facility Account, in immediately available funds, no later than
1:00 p.m. (Eastern Standard time), an amount equal to such Purchaser’s Pro Rata
Share of the aggregate Cash Purchase Price of the Receivables, Related Security
and Collections. Each Purchaser’s obligation shall be several, such that the
failure of any Purchaser to make available to Seller any funds in connection
with any Purchase shall not relieve any other Purchaser of its obligation, if
any, hereunder to make funds available on the date of such Purchase, but no
Purchaser shall be responsible for the failure of any other Purchaser to make
funds available in connection with any Purchase.
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(b) Sale of Asset Portfolio. In accordance with Sections 1.1(a) and 1.2(a),
Seller hereby sells, assigns and transfers to Agent (on behalf of Purchasers),
for the related Cash Purchase Price and the RPA Deferred Purchase Price,
effective on and as of the date of each Purchase by any Purchaser hereunder, all
of its right, title and interest in, to and under all Receivables and the
Related Security and Collections relating to such Receivables (other than
Seller’s title in and to the Second-Tier Account and the Facility Account, each
of which shall remain with Seller), whether currently existing or thereafter
acquired (the assets sold, assigned and transferred to include not only the
Receivables, Collections and Related Security (other than Seller’s title in and
to the Second-Tier Account and the Facility Account) existing as of the date of
such Purchase but also all future Receivables and such Related Security and
Collections acquired by Seller from time to time as provided herein).
Purchaser’s right, title and interest in and to such assets is herein called the
“Asset Portfolio”.
Section 1.3 Decreases. Seller shall provide Agent and each Purchaser with an
irrevocable prior written notice (a “Reduction Notice”) two Business Days prior
to any proposed reduction of the Aggregate Capital from Collections. Such
Reduction Notice shall designate (i) the date (the “Proposed Reduction Date”)
upon which any such reduction of the Aggregate Capital shall occur and (ii) the
amount of the Aggregate Capital to be reduced that shall be applied ratably to
the aggregate Capital of the Purchasers in accordance with the amount of Capital
(if any) owing to the Purchasers (ratably to each Purchaser, based on the ratio
of such Purchaser’s Capital at such time to the aggregate Capital of all of the
Purchasers at such time) (the “Aggregate Reduction”), without regard to any
unpaid RPA Deferred Purchase Price. Only one (1) Reduction Notice shall be
outstanding at any time. Concurrently with any reduction of the Aggregate
Capital pursuant to this Section, Seller shall pay to the applicable Purchaser
all Broken Funding Costs arising as a result of such reduction. No Aggregate
Reduction will be made following the occurrence of the Amortization Date without
the prior written consent of Agent.
Section 1.4 Payment Requirements. All amounts to be paid or deposited by any
Seller Party pursuant to any provision of this Agreement or any other
Transaction Document shall be paid or deposited in accordance with the terms
hereof no later than 12:00 noon (Eastern Standard time) on the day when due in
immediately available funds, and if not received before 12:00 noon (Eastern
Standard time) shall be deemed to be received on the next succeeding Business
Day. If such amounts are payable to (i) Agent, they shall be paid to Agent for
its own account, in accordance with the applicable instructions set forth on
Schedule C and (ii) any Purchaser, they shall be paid to such Purchaser, in
accordance with the applicable instructions set forth on Schedule C, in each
case until otherwise notified by Agent or the Purchaser, as applicable (each
instruction set forth in clauses (i) and (ii) being a “Payment Instruction”).
Upon notice to Seller, Agent (on behalf of itself and/or any Purchaser) may
debit the Facility Account for all amounts due and payable hereunder. All
computations of Purchaser Yield, per annum fees hereunder and per annum fees
under any Fee Letter shall be made on the basis of a year of 360 days for the
actual number of days elapsed. If any amount hereunder or under any other
Transaction Document shall be payable on a day which is not a Business Day, such
amount shall be payable on the next succeeding Business Day.
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Section 1.5 Deemed Exchange. Notwithstanding the otherwise applicable conditions
precedent to payments in respect of the Asset Portfolio hereunder, upon the
effectiveness of this Agreement in accordance with its terms and the
effectiveness of the Closing Date Assignment Agreement in accordance with its
terms, each Purchaser shall be deemed to have delivered and released its
undivided interests in the “Buyer Interests” under (and as defined in) the Prior
Agreement as of the date hereof in a contemporaneous exchange for the
acquisition of the Asset Portfolio hereunder in an amount equal to the
outstanding principal amount of all outstanding “Buyer Investments” (as defined
in the Prior Agreement) advanced in respect of the initial purchase or any
subsequent purchase under the Prior Agreement. Such deemed exchange under the
Prior Agreement and the initial Purchase hereunder (the “Deemed Exchange”) shall
constitute a replacement of all outstanding principal amounts of the “Buyer
Investments” made under the Prior Agreement by way of such initial Purchase
hereunder.
Section 1.6 RPA Deferred Purchase Price. Subject to the application of
Collections as RPA Deferred Purchase Price as permitted on each Settlement Date
pursuant to Sections 2.2(b), 2.2(c) and 2.6, on each Business Day on and after
the Final Payout Date, Servicer, on behalf of Agent and the Purchasers, shall
pay to Seller an amount as deferred purchase price (the “RPA Deferred Purchase
Price”) equal to the Collections of Receivables then held or thereafter received
by Seller (or Servicer on its behalf) less any accrued and unpaid Servicing Fee.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on recourse contained in
this Agreement, Seller shall immediately pay to Agent when due, for the account
of Agent, or the relevant Purchaser or Purchasers, on a full recourse basis: (a)
all amounts accrued or payable by Seller to any such Person as described in
Section 2.2 and (b) each of the following amounts, to the extent that such
amounts are not paid in accordance with Section 2.2: (i) such fees as set forth
in each Fee Letter (which fees collectively shall be sufficient to pay all fees
owing to the Purchasers), (ii) all amounts payable as Purchaser Yield, (iii) all
amounts payable as Deemed Collections (which shall be immediately due and
payable by Seller and applied to reduce the outstanding Aggregate Capital
hereunder in accordance with Sections 2.2 and 2.3 hereof), (iv) all amounts
required pursuant to Section 2.5, (v) all amounts payable pursuant to Article X,
if any, (vi) all Servicer costs and expenses, including the Servicing Fee, in
connection with servicing, administering and collecting the Receivables, (vii)
all Broken Funding Costs, (viii) all Hedging Obligations, (ix) all amounts
required pursuant to Section 2.6 to ensure that the Net Portfolio Balance shall
at no time be less than the sum of (i) the Aggregate Capital at such time, plus
(ii) the Credit Enhancement and (x) all Default Fees (the fees, amounts and
other obligations described in clauses (a) and (b) collectively, the
“Obligations”). If any Person fails to pay any of the Obligations when due, such
Person agrees to pay, on demand, the Default Fee in respect thereof until paid.
Notwithstanding the foregoing, no provision of this Agreement or any Fee Letter
shall require the payment or permit the collection of any amounts hereunder in
excess of the maximum permitted by applicable law. If at any time Seller
receives any Collections or is
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deemed to receive any Collections, Seller shall immediately pay such Collections
or Deemed Collections to Servicer for payment in accordance with the terms and
conditions hereof and, at all times prior to such payment, such Collections or
Deemed Collections shall be held in trust by Seller for the exclusive benefit of
the Purchasers and Agent.
Section 2.2 Collections Prior to Amortization.
(a) Collections Generally. On any day prior to the Amortization Date that
Servicer receives any Collections and/or Deemed Collections, such Collections
and/or Deemed Collections shall be set aside and held in trust by Servicer for
the benefit of Agent and the Purchasers in the Collection Accounts in the manner
set forth in Sections 7.1(j) and 8.2. Prior to the Amortization Date, all such
amounts shall be applied as set forth in this Section 2.2. Servicer shall, on
each Settlement Date, determine the amount of Collections set aside in
accordance with the first sentence of this Section 2.2 during the related
Settlement Period which constitute Principal Collections and the portion of such
Collections which constitute Finance Charge Collections. On each Settlement
Date, Servicer shall remit the Principal Collections set aside pursuant to this
subsection (a) to the Second-Tier Account (to the extent such Principal
Collections are not already on deposit therein) to be distributed in accordance
with subsection (b) below and Servicer shall remit the Finance Charge
Collections set aside pursuant to this subsection (a) to the Second-Tier Account
(to the extent such Finance Charge Collections are not already on deposit
therein) to be distributed in accordance with subsection (c) below.
(b) Application of Principal Collections. On each Settlement Date, Servicer will
apply the Principal Collections on deposit in the Second-Tier Account in
accordance with the applicable Payment Instructions pursuant to Section 2.2(a)
to make the following distributions in the following amounts and order of
priority:
first, to each Terminating Purchaser, an amount equal to such Terminating
Purchaser’s Termination Percentage of such Principal Collections for the ratable
reduction of the Capital of each such Terminating Purchaser,
second, subject to Section 2.6, if any Purchase Notice shall have been delivered
in accordance with Section 1.2(a), to Seller to fund the Cash Purchase Price of
the Purchase to be made on such date; otherwise, to Agent for the account of the
Purchasers (other than any Terminating Purchaser) as a further reduction of the
Aggregate Capital, and
third, subject to Section 2.6, to the extent of any such amounts remaining after
such payments, to be applied as if they were Finance Charge Collections in
accordance with the priority of payments set forth in subsection (c) below.
(c) Application of Finance Charge Collections. On each Settlement Date, Servicer
will apply (i) the Finance Charge Collections on deposit in the Second-Tier
Account and (ii) all remaining Principal Collections after making the
distributions pursuant to clauses first and second of subsection (b) above,
pursuant to Section 2.2(a), together with the applicable Hedge Floating Amount,
if any, paid to Seller by each Hedge Provider and any net income from
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Permitted Investments deposited to the Second-Tier Account pursuant to
Section 2.8, in accordance with the applicable Payment Instructions, to make the
following distributions in the following amounts and order of priority:
first, to the reimbursement of Agent’s and each Purchaser’s costs of collection
and enforcement of this Agreement,
second, to Agent for the account of the Purchasers, all accrued and unpaid fees
under any Fee Letter and Purchaser Yield, including any accrued Purchaser Yield
in respect of Capital reduced pursuant to clause second of subsection (b) above,
together with any Broken Funding Costs,
third, if Servicer is not then Seller or an Affiliate of Seller, to Servicer in
payment of the Servicing Fee,
fourth, to Agent as a reduction of Aggregate Capital an amount necessary to pay
in full the Outstanding Balance of any Receivables that became Defaulted
Receivables during the related Settlement Period and Receivables that became
Defaulted Receivables during any prior Settlement Period that have not
previously been the subject of payment hereunder and, solely during the
Temporary Period, then first, to the Reserve Account, to the extent there is a
Reserve Account Deficiency, until the amount on deposit therein equals the
Reserve Account Required Amount, and second, to the ratable reduction of
Aggregate Capital to zero,
fifth, if Seller or an Affiliate of Seller is then acting as Servicer, to
Servicer in payment of the Servicing Fee,
sixth, to the applicable Persons, for the ratable payment in full of all other
unpaid Obligations, and
seventh, the balance, if any, in the following priority: first, to Agent for
deposit to the Second-Tier Account if the conditions of Section 7.3 requiring
that the Hedging Agreements be in effect have occurred, but the Hedging
Agreements are not then in effect (such amount to be set aside and held in trust
for application in accordance with this Section 2.2(c) on the next occurring
Settlement Date) and then second, subject to Section 2.6, to Seller as RPA
Deferred Purchase Price.
(d) Each Terminating Purchaser shall be allocated a ratable portion of
Collections from the Purchase Termination Date that such Terminating Purchaser
did not consent to extend (as to such Terminating Purchaser, the “Termination
Date”), until, with respect to a Terminating Purchaser, such Terminating
Purchaser’s Capital, if any, shall be paid in full and the applicable, ratable
portion of the RPA Deferred Purchase Price allocable to such Terminating
Purchaser’s portion of the Asset Portfolio has been paid in full in accordance
with the priority of payments set forth in Section 2.2(b). This ratable portion
shall be calculated on the Termination Date of each Terminating Purchaser as a
percentage equal to (i) Capital of such Terminating Purchaser outstanding on its
Termination Date, divided by (ii) the Aggregate Capital outstanding
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on such Termination Date (the “Termination Percentage”). Each Terminating
Purchaser’s Termination Percentage shall remain constant prior to the
Amortization Date. On and after the Amortization Date, each Termination
Percentage shall be disregarded, and each Terminating Purchaser’s Capital shall
be reduced ratably with all Purchasers in accordance with Section 2.3.
Section 2.3 Collections Following Amortization. On the Amortization Date and on
each day thereafter, Servicer shall set aside and hold in trust for the benefit
of Agent and the Purchasers, in the Collection Accounts in the manner set forth
in Sections 7.1(j) and 8.2, all Collections and/or Deemed Collections received
on such day and any additional amount for the payment of any Aggregate Unpaids
owed by Seller and not previously paid by Seller in accordance with Section 2.1.
On and after the Amortization Date, Servicer shall, at any time upon the request
from time to time by (or pursuant to standing instructions from) Agent (i) remit
to the Second-Tier Account the amounts set aside pursuant to the preceding
sentence (to the extent such amounts are not already on deposit therein) and
(ii) apply such amounts at Agent’s direction to reduce the Aggregate Capital and
any other Aggregate Unpaids (it being understood and agreed that, in any event,
no portion of the RPA Deferred Purchase Price may be paid to Seller on a date on
or after the Amortization Date and prior to the Final Payout Date). If there
shall be insufficient funds on deposit for Servicer to distribute funds in
payment in full of the aforementioned amounts, Servicer shall distribute funds
in accordance with the applicable Payment Instructions:
first, to the reimbursement of Agent’s and each Purchaser’s costs of collection
and enforcement of this Agreement,
second, ratably to the payment of all accrued and unpaid fees under any Fee
Letter and all accrued and unpaid Purchaser Yield,
third, to the payment of Servicer’s reasonable out-of-pocket costs and expenses
in connection with servicing, administering and collecting the Receivables,
including the Servicing Fee, if Seller, or one of its Affiliates is not then
acting as Servicer,
fourth, to the ratable reduction of Aggregate Capital to zero,
fifth, for the ratable payment of all other unpaid Obligations, provided that to
the extent such Obligations relate to the payment of Servicer costs and
expenses, including the Servicing Fee, when Seller or one of its Affiliates is
acting as Servicer, such costs and expenses will not be paid until after the
payment in full of all other Obligations,
sixth, to the ratable payment in full of all other Aggregate Unpaids, and
seventh, after the Facility Termination Date when the Aggregate Unpaids have
been indefeasibly reduced to zero, to Seller as RPA Deferred Purchase Price, any
remaining Collections.
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Section 2.4 Ratable Payments. Collections applied to the payment of Aggregate
Unpaids shall be distributed in accordance with the aforementioned provisions,
and, giving effect to each of the priorities set forth in Sections 2.2 and 2.3
above, shall be shared ratably (within each priority) among Agent and the
Purchasers in accordance with the amount of such Aggregate Unpaids owing to each
of them in respect of each such priority.
Section 2.5 Payment Rescission. No payment of any of the Aggregate Unpaids shall
be considered paid or applied hereunder to the extent that, at any time, all or
any portion of such payment or application is rescinded by application of law or
judicial authority, or must otherwise be returned or refunded for any reason.
Seller shall remain obligated for the amount of any payment or application so
rescinded, returned or refunded, and shall promptly pay to Agent (for
application to the Person or Persons who suffered such rescission, return or
refund), the full amount thereof, plus the Default Fee from the date of any such
rescission, return or refunding, in each case, if such rescinded amounts have
not been paid under Section 2.2.
Section 2.6 Maximum Purchases In Respect of the Asset Portfolio. Notwithstanding
anything to the contrary in this Agreement, Seller shall ensure that the Net
Portfolio Balance shall at no time be less than the sum of (i) the Aggregate
Capital at such time, plus (ii) the Credit Enhancement at such time. If, on any
date of determination, the sum of (i) the Aggregate Capital, plus (ii) the
Credit Enhancement exceeds the Net Portfolio Balance, in each case at such time,
Seller shall pay to the Purchasers within one (1) Business Day an amount to be
applied to reduce the Aggregate Capital (allocated ratably based on the ratio of
each Purchaser’s Capital at such time to the Aggregate Capital at such time),
such that after giving effect to such payment, the Net Portfolio Balance equals
or exceeds the sum of (i) the Aggregate Capital, plus (ii) the Credit
Enhancement, in each case at such time; provided however, that if on any
Settlement Date, the Net Portfolio Balance is less than the sum of (i) the
Aggregate Capital, plus (ii) the Credit Enhancement, in each case at such time,
the payment in full of the amount required by the previous sentence shall be
made prior to any distributions are made pursuant to Section 2.2(b).
Section 2.7 Clean-Up Call; Limitation on Payments.
(a) Clean Up Call. In addition to Seller’s rights pursuant to Section 1.3,
Seller shall have the right (after providing at least 2 Business Days’ written
notice to Agent and each Purchaser), at any time following the reduction of the
Aggregate Capital to a level that is less than 10.0% of the Purchase Limit as of
the date hereof, to repurchase from the Purchasers all, but not less than all,
of the Asset Portfolio at such time. The purchase price in respect thereof shall
be an amount equal to the Aggregate Unpaids through the date of such repurchase,
payable in immediately available funds. Such repurchase shall be without
representation, warranty or recourse of any kind by, on the part of, or against
any Purchaser or Agent. If, at any time, Servicer is not Seller or an Affiliate
of Seller, Seller may waive its repurchase rights under this Section 2.7(a) by
providing a written notice of such waiver to Agent and each Purchaser.
(b) Purchasers’ and Agent’s Limitation on Payments. Notwithstanding any
provision contained in this Agreement or any other Transaction Document to the
contrary, none of the Purchasers or Agent shall, and none of them shall be
obligated (whether on behalf of a
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Purchaser or otherwise) to, pay any amount to Seller in respect of any portion
of the RPA Deferred Purchase Price, except to the extent that Collections are
available for distribution to Seller in accordance with this Agreement. Any
amount which Agent or a Purchaser is not obligated to pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in
§ 101 of the Federal Bankruptcy Code) against, or corporate obligation of, any
Purchaser or Agent, as applicable, for any such insufficiency unless and until
such amount becomes available for distribution to Seller pursuant to the terms
hereof.
Section 2.8 Investment of Collections in Second-Tier Account. All amounts from
time to time held in, deposited in or credited to, the Second-Tier Account shall
be invested by Servicer (as agent for Agent) in Permitted Investments selected
in writing by Servicer. All such investments shall at all times be held by or on
behalf of Agent for the benefit of the Purchasers and the Hedge Providers,
provided, that neither Agent, any Purchaser nor the Hedge Providers shall be
held liable in any way by reason of any loss arising from the investment of
amounts on deposit in the Second-Tier Account in Permitted Investments. All
income or other gain from investment of monies deposited in or credited to the
Second-Tier Account shall be deposited in or credited to the Second-Tier Account
immediately upon receipt, and any loss resulting from such investment shall be
charged thereto. Any net income from such investments shall be transferred to
the Second-Tier Account on a monthly basis on the Business Day preceding each
Settlement Date to be applied in accordance with Section 2.2. Except as
permitted in writing by Agent, funds on deposit in the Second-Tier Account shall
be invested in Permitted Investments that will mature no later than the Business
Day immediately preceding the next Settlement Date. No Permitted Investment
shall be sold or otherwise disposed of prior to its scheduled maturity date
unless a default occurs with respect to such Permitted Investment and Agent
directs Servicer in writing to dispose of such Permitted Investment.
Section 2.9 Reserve Account.
(a) On or prior to the commencement of the Temporary Period, (i) the Agent shall
establish the Reserve Account and (ii) the Seller shall deposit, or cause to be
deposited, into the Reserve Account funds in an amount equal to the Reserve
Account Required Amount.
(b) Any and all funds or other property at any time on deposit in, or otherwise
to the credit of, the Reserve Account shall be held in trust by the Reserve
Account Bank for the ratable benefit of the Purchasers. Funds held in the
Reserve Account shall not be invested. The only permitted withdrawals from or
application of funds on deposit in, or otherwise to the credit of, the Reserve
Account shall be made pursuant to this Agreement. The Seller’s interest and
rights in the Reserve Account are limited to those provided for in this
Agreement. Except as set forth herein, the Seller shall not have the ability to
direct or apply funds on deposit in the Reserve Account.
(c) If at any time the Applicable Collection Amount with respect to any
Settlement Date is less than the Required Monthly Payments for such Settlement
Date, in each case, as reported in the Monthly Report delivered by the Servicer
in accordance with this Agreement, then the Agent shall withdraw from the
Reserve Account funds in an amount equal
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to the applicable Reserve Account Draw Amount (to the extent of the funds
available therein) for distribution in accordance with the priority of payments
set forth in Sections 2.2(c) and 2.3, as applicable. On the Settlement Date on
which the Temporary Period ends, the Agent shall withdraw from the Reserve
Account funds in an amount equal to all amounts then on deposit in the Reserve
Account and deposit such funds into the Collection Account for distribution in
accordance with the priority of payments set forth in Sections 2.2(c) and 2.3,
as applicable.
(d) The Seller shall be responsible for all costs and expenses of maintaining
the Reserve Account, including all service fees and other charges directly
related to the administration of the Reserve Account and for returned checks and
other items of payment.
ARTICLE III
[INTENTIONALLY OMITTED.]
ARTICLE IV
PURCHASER FUNDING
Section 4.1 Purchaser Funding. The aggregate Capital associated with the
Purchases by the Purchasers shall accrue Purchaser Yield for each day during its
Rate Tranche Period at either the LIBO Rate or the Alternate Base Rate in
accordance with the terms and conditions hereof. Until Seller gives notice to
Agent and the applicable Purchaser of another Discount Rate in accordance with
Section 4.4, the initial Discount Rate for any portion of the Asset Portfolio
transferred to the Purchasers pursuant to the terms and conditions hereof shall
be the Alternate Base Rate.
Section 4.2 Purchaser Yield Payments. On the Settlement Date for each Rate
Tranche Period with respect to the aggregate Capital of the Purchasers, Seller
shall pay to Agent (for the benefit of the Purchasers) an aggregate amount equal
to all accrued and unpaid Purchaser Yield for the entire Rate Tranche Period
with respect to such Capital in accordance with Article II. On the third
Business Day immediately preceding the Settlement Date for such Capital of each
of the Purchasers, each Purchaser shall calculate the aggregate amount of
accrued and unpaid Purchaser Yield for the entire Rate Tranche Period for such
Capital of such Purchaser and shall notify Seller of such aggregate amount.
Section 4.3 Selection and Continuation of Rate Tranche Periods.
(a) With consultation from (and approval by) Agent and the applicable Purchaser,
Seller shall from time to time, for purposes of computing the Purchaser Yield
with respect to such Purchaser, request Rate Tranche Periods to account for the
portion of the Asset Portfolio funded or maintained by such Purchaser, provided
that, if at any time any of the Purchasers shall have any Capital outstanding,
Seller shall always request Rate Tranche Periods such that at least one Rate
Tranche Period shall end on the 19th day of each calendar month.
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(b) Seller or the applicable Purchaser, upon notice to and consent by the other
received at least three (3) Business Days prior to the end of a Rate Tranche
Period (a “Terminating Rate Tranche”) for any portion of the Asset Portfolio
funded or maintained by such Purchaser, may, effective on the last day of the
Terminating Rate Tranche: (i) divide any such Purchaser’s Capital into multiple
portions by subdividing such Capital into smaller amounts of Capital,
(ii) combine any such portion of such Purchaser’s Capital with one or more other
portions of such Purchaser’s Capital that have a Terminating Rate Tranche ending
on the same day as such Terminating Rate Tranche by combining the associated
Capital of such Purchaser or (iii) combine any such Purchaser’s existing Capital
with additional Capital being paid to Seller as Cash Purchase Price in respect
of a new Purchase made on the day such Terminating Rate Tranche ends by
combining the associated Capital in respect of such new Purchase with the
existing Capital of such Purchaser, provided, that in no event may the Capital
of any Purchaser be combined with the Capital of any other Purchaser.
Section 4.4 Purchaser Discount Rates. Seller may select the LIBO Rate or the
Alternate Base Rate for each portion of the Capital of any of the Purchasers.
Seller shall by 12:00 noon (Eastern Standard time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Rate Tranche with
respect to which the LIBO Rate is being requested as a new Discount Rate and
(ii) at least one (1) Business Day prior to the expiration of any Terminating
Rate Tranche with respect to which the Alternate Base Rate is being requested as
a new Discount Rate, give each Purchaser irrevocable notice of the new Discount
Rate for the Capital or portion thereof associated with such Terminating Rate
Tranche. Until Seller gives notice to the applicable Purchaser of another
Discount Rate, the initial Discount Rate for any Capital of any Purchaser
pursuant to the terms and conditions hereof (or assigned or transferred to, or
funded by any other Person) shall be the Alternate Base Rate. Notwithstanding
anything to the contrary herein, no Purchaser shall fund any portion of Capital
with respect to a given Purchase Notice by reference to an index rate that is
different than the index rate for such portion of Capital funded by any other
Purchaser without the prior written consent of Agent (it being understood, that
so long as each Purchaser funds its ratable share of each Rate Tranche being
requested at such time, the Seller may request more than one Discount Rate in
connection with each funding).
Section 4.5 Suspension of the LIBO Rate. If any Purchaser notifies Agent that it
has determined that funding its Pro Rata Share of the Aggregate Capital in
respect of the Purchaser at the LIBO Rate would violate any applicable law,
rule, regulation, or directive of any governmental or regulatory authority,
whether or not having the force of law, or that (i) deposits of a type and
maturity appropriate to match fund its Capital at the LIBO Rate are not
available or (ii) the LIBO Rate does not accurately reflect the cost of
acquiring or maintaining any portion of the Asset Portfolio or Capital at the
LIBO Rate, then Agent or such Purchaser, as applicable, shall suspend the
availability of the LIBO Rate for such Purchaser and require Seller to select
the Alternate Base Rate for any Capital funded by such Purchasers accruing
Purchaser Yield at the LIBO Rate.
Section 4.6 Extension of Purchase Termination Date.
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(a) Seller may request one or more extensions of the Purchase Termination Date
then in effect by giving written notice of such request to Agent and each
Purchaser (each such notice, an “Extension Notice”) at least 60 days prior to
the Purchase Termination Date then in effect. Each Purchaser may, in its sole
discretion, by a revocable notice (a “Consent Notice”) given to Agent and Seller
on or prior to the 30th day prior to the Purchase Termination Date then in
effect (such period from the date of the Extension Notice to such 30th day being
referred to herein as the “Consent Period”), consent to such extension of such
Purchase Termination Date; provided, however, that, except as provided in
Section 4.6(b), such extension shall not be effective with respect to any of the
Purchasers if any one or more Purchasers: (i) notifies Agent and Seller during
the Consent Period that such Purchaser either does not wish to consent to such
extension or wishes to revoke its prior Consent Notice or (ii) fails to respond
to Agent and Seller (each Purchaser that does not wish to consent to such
extension or wishes to revoke its prior Consent Notice or fails to respond to
Agent and Seller within the Consent Period is herein referred to as a
“Non-Renewing Purchaser”). If none of the events described in the foregoing
clauses (i) or (ii) occurs during the Consent Period and all Consent Notices
have been received, then, the Purchase Termination Date shall be irrevocably
extended until the date that is mutually agreed to by the parties hereto.
(b) Upon receipt of notice from Agent, or, if applicable, a Purchaser, pursuant
to Section 4.6(a) of any Non-Renewing Purchaser or that the Purchase Termination
Date has not been extended, one or more of the Purchasers (including any
Non-Renewing Purchaser) may proffer to Agent, the names of one or more
institutions meeting the criteria set forth in Section 12.1(b)(i) that are
willing to accept assignments of and assume the rights and obligations under
this Agreement and the other applicable Transaction Documents of the
Non-Renewing Purchaser. Provided the proffered name(s) are acceptable to Agent,
Agent shall notify each Purchaser of such fact, and the then existing Purchase
Termination Date shall be extended for an additional term to be mutually agreed
to by the parties hereto upon satisfaction of the conditions for an assignment
in accordance with Section 12.1, and the Commitment of each Non-Renewing
Purchaser shall be reduced to zero. If the rights and obligations under this
Agreement and the other applicable Transaction Documents of each Non-Renewing
Purchaser are not assigned as contemplated by this Section 4.6(b) (each such
Non-Renewing Purchaser whose rights and obligations under this Agreement and the
other applicable Transaction Documents are not so assigned is herein referred to
as a “Terminating Purchaser”) and at least one Purchaser is not a Non-Renewing
Purchaser, the then existing Purchase Termination Date shall be extended for an
additional term to be mutually agreed to by the parties hereto; provided,
however, that (i) the Purchase Limit shall be reduced on the Termination Date
applicable to each Terminating Purchaser by an aggregate amount equal to the
Terminating Commitment Availability as of such date of each Terminating
Purchaser and shall thereafter continue to be reduced by amounts equal to any
reduction in the Capital of any Terminating Purchaser (after application of
Collections pursuant to Sections 2.2 and 2.3), and (ii) the Commitment of each
Terminating Purchaser shall be reduced to zero on the Termination Date
applicable to such Terminating Purchaser. Upon reduction to zero of the Capital
of a Terminating Purchaser (after application of Collections thereto pursuant to
Section 2.2 and 2.3), all rights and obligations of such Terminating Purchaser
hereunder shall be terminated and such Terminating Purchaser shall no longer be
a “Purchaser”;
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provided, however, that the provisions of Article X shall continue in effect for
its benefit with respect to the Capital held by such Terminating Purchaser prior
to its termination as a Purchaser.
(c) Any requested extension of the Purchase Termination Date may be approved or
disapproved by a Purchaser in its sole discretion. In the event that the
Commitments are not extended in accordance with the provisions of this Section
4.6, the Commitment of each Purchaser shall be reduced to zero on the Purchase
Termination Date. Upon reduction to zero of the Commitment of a Purchaser and
upon reduction to zero of the Capital of such Purchaser, all rights and
obligations of such Purchaser hereunder shall be terminated and such Purchaser
shall no longer be a “Purchaser”; provided, however, that the provisions of
Article X shall continue in effect for its benefit with respect to the Capital
held by such Purchaser prior to its termination as a Purchaser.
Section 4.7 Inability to Determine LIBO Rate.
(a) (i) In the event, the Agent shall determine (which determination shall be
deemed presumptively correct absent manifest error) that (a) the circumstances
set forth in Section 4.5(ii) have arisen and such circumstances are unlikely to
be temporary; (b) a public statement or publication of information (1) by or on
behalf of the administrator of the LIBO Rate; or by the regulatory supervisor
for the administrator of the LIBO Rate, the U.S. Federal Reserve System, an
insolvency official with jurisdiction over the administrator for the LIBO Rate,
a resolution authority with jurisdiction over the administrator for the LIBO
Rate or a court or an entity with similar insolvency or resolution authority
over the administrator for the LIBO Rate; in each case which states that such
administrator has ceased or will cease to provide the LIBO Rate, permanently or
indefinitely, provided that, at the time of the statement or publication, there
is no successor administrator that will continue to provide the LIBO Rate, (2)
by the administrator of the LIBO Rate that it has invoked or will invoke,
permanently or indefinitely, its insufficient submissions policy, or (3) by the
regulatory supervisor for the administrator of the LIBO Rate or any governmental
authority having jurisdiction over the Agent announcing that the LIBO Rate is no
longer representative or may no longer be used; (c) the LIBO Rate rate is not
published by the administrator of the LIBO Rate for five (5) consecutive
Business Days and such failure is not the result of a temporary moratorium,
embargo or disruption declared by the administrator of the LIBO Rate or by the
regulatory supervisor for the administrator of the LIBO Rate; or (d) a new index
rate has become a widely-recognized replacement benchmark rate for the LIBO Rate
in newly originated loans denominated in U.S. dollars in the U.S. market; then,
the Agent may, in consultation with the Seller amend this Agreement as described
below to replace the LIBO Rate with an alternative benchmark rate, and make
other related amendments, in each case giving due consideration to any evolving
or then existing convention for similar U.S. dollar denominated credit
facilities, or any selection, endorsement or recommendation by a relevant
governmental body with respect to such facilities (ii) the Agent shall provide
notice to the Seller of an amendment of this Agreement to reflect the
replacement index, adjusted margins and such other related amendments as may be
appropriate, in the sole discretion of the Agent, for the implementation and
administration of the replacement index-based rate. Notwithstanding anything to
the contrary in this Agreement or the other Transaction Documents (including,
without limitation, Section 14.1), such amendment shall
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become effective without any further action or consent of any other party to
this Agreement upon delivery of notice to the Seller; and (iii) for the
avoidance of doubt, following the date when a determination is made pursuant to
Section 4.7(a)(i) above and until a replacement index has been selected and
implemented in accordance with the terms and conditions of Section 4.7(a)(ii)
above, all Capital shall accrue interest at, and the Discount Rate shall be, the
Alternate Base Rate.
(b) Notwithstanding anything to the contrary contained herein, if at any time
the replacement index is less than zero, then at such times, such index shall be
deemed to be zero for purposes of this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Seller Parties. Each Seller
Party hereby represents and warrants to Agent and the Purchasers, as to itself,
as of the date hereof and as of the date of each Purchase (other than with
respect to the representations and warranties set forth in clause (x), which are
only made as of the date hereof) that:
(a) Existence and Power. Such Seller Party is a corporation or limited liability
company, as applicable, duly organized, validly existing and in good standing
under the laws of its state of organization. Such Seller Party is duly qualified
to do business and is in good standing as a foreign entity, and has and holds
all power, corporate or otherwise, and all governmental licenses,
authorizations, consents and approvals required to carry on its business in each
jurisdiction in which its business is conducted, except where the failure to be
so qualified or to have and hold such governmental licenses, authorization,
consents and approvals could not reasonably be expected to have a Material
Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery. The
execution and delivery by such Seller Party of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, in the case of Seller, Seller’s use of
the proceeds of Purchases made hereunder, are within its powers and authority,
corporate or otherwise, and have been duly authorized by all necessary action,
corporate or otherwise, on its part. This Agreement and each other Transaction
Document to which such Seller Party is a party has been duly executed and
delivered by such Seller Party.
(c) No Conflict. The execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or organization,
by-laws or limited liability company agreement (or equivalent governing
documents), (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of
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such Seller Party or its Subsidiaries (except as created hereunder); and no
transaction contemplated hereby requires compliance with any bulk sales act or
similar law.
(d) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings pending, or to
the best of such Seller Party’s knowledge, threatened, against or affecting such
Seller Party, or any of its properties, in or before any court, arbitrator or
other body, that could reasonably be expected to have a Material Adverse Effect.
Such Seller Party is not in default with respect to any order of any court,
arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction Document to which
such Seller Party is a party constitute the legal, valid and binding obligations
of such Seller Party enforceable against such Seller Party in accordance with
their respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) Accuracy of Information. All information heretofore furnished by such Seller
Party or any of its Affiliates to Agent or the Purchasers for purposes of or in
connection with this Agreement, any of the other Transaction Documents or any
transaction contemplated hereby or thereby is, and all such information
hereafter furnished by such Seller Party or any of its Affiliates to Agent or
the Purchasers will be, true and accurate in every material respect on the date
such information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not materially misleading.
(h) Use of Proceeds. No proceeds of any Purchase hereunder will be used (i) for
a purpose that violates, or would be inconsistent with, Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time or (ii) to acquire any security in any transaction which is subject to
Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to each Purchase hereunder, Seller shall be
the legal and beneficial owner of the Receivables and Related Security with
respect thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Seller’s ownership
interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the financing
statements contemplated hereby, is effective to, and shall, upon each Purchase
hereunder,
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transfer to Agent for the benefit of the Purchasers (and Agent for the benefit
of the Purchasers shall acquire from Seller) a valid and perfected ownership of
or first priority perfected security interest in each Receivable existing or
hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Agent’s (on behalf
of the Purchasers) ownership or security interest in the Receivables, the
Related Security and the Collections.
(k) Jurisdiction of Organization; Places of Business and Locations of Records.
The principal places of business, jurisdiction of organization and chief
executive office of such Seller Party and the offices where it keeps all of its
Records are located at the address(es) listed on Exhibit III or such other
locations of which Agent has been notified in accordance with Section 7.2(a) in
jurisdictions where all action required by Section 7.1(h) and/or Section 14.4(a)
has been taken and completed. Such Seller party’s organizational number assigned
to it by its jurisdiction of organization and such Seller Party’s Federal
Employer Identification Number are correctly set forth on Exhibit III. Except as
set forth on Exhibit III, such Seller Party has not, within a period of one year
prior to the date hereof, (i) changed the location of its principal place of
business or chief executive office or its organizational structure, (ii) changed
its legal name, (iii) become a “new debtor” (as defined in Section 9-102(a)(56)
of the UCC in effect in the State of Minnesota) or (iv) changed its jurisdiction
of organization. Seller is a Minnesota limited liability company and is a
“registered organization” (within the meaning of Section 9-102 of the UCC in
effect in the State of Minnesota).
(l) Collections. The conditions and requirements set forth in Section 7.1(j) and
Section 8.2 have at all times been satisfied and duly performed. The names and
addresses of all Collection Banks, together with the account numbers of the
Collection Accounts at each Collection Bank and the post office box number of
each Lock-Box or P.O. Box, are listed on Exhibit IV or have been provided to
Agent in a written notice that complies with Section 7.2(b). Seller has not
granted, other than as contemplated by the Intercreditor Agreement, any Person,
other than Agent as contemplated by this Agreement, dominion and control or
“control” (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions) of any Lock-Box, P.O. Box or Collection Account, or the right to
take dominion and control or “control” (within the meaning of Section 9-104 of
the UCC of all applicable jurisdictions) of any such Lock-Box, P.O. Box or
Collection Account at a future time or upon the occurrence of a future event.
Each Seller Party has taken all steps necessary to ensure that Agent has
“control” (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions) over all Collection Accounts. Such Seller Party has the ability
to identify, within one Business Day of deposit, all amounts that are deposited
to any First-Tier Account as constituting Collections or non-Collections. No
funds other than Capital associated with Purchases hereunder and the proceeds of
Receivables are deposited to the Second-Tier Account.
(m) Material Adverse Effect. (i) The initial Servicer represents and warrants
that since April 27, 2007, no event has occurred that would have a material
adverse effect on the financial condition or operations of the initial Servicer
and its Subsidiaries or the ability of the
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initial Servicer to perform its obligations under this Agreement, and (ii)
Seller represents and warrants that since April 27, 2007, no event has occurred
that would have a material adverse effect on (A) the financial condition or
operations of Seller, (B) the ability of Seller to perform its obligations under
the Transaction Documents, or (C) the collectibility of the Receivables
generally or any material portion of the Receivables.
(n) Names. In the past five (5) years, Seller has not used any corporate or
other names, trade names or assumed names other than the name in which it has
executed this Agreement.
(o) Ownership of Seller. PDCo owns, directly or indirectly, 100% of the issued
and outstanding membership units of Seller, free and clear of any Adverse Claim.
Such membership units are validly issued, fully paid and nonassessable, and
there are no options, warrants or other rights to acquire securities of Seller.
(p) Not an Investment Company. Such Seller Party is not and, after giving effect
to the transactions contemplated hereby, will not be required to be registered
as, an “investment company” within the meaning of the Investment Company Act of
1940, as amended (the “Investment Company Act”), or any successor statute. 
Seller is not a “covered fund” under Section 13 of the U.S. Bank Holding Company
Act of 1956, as amended, and the applicable rules and regulations thereunder
(the “Volcker Rule”).  In determining that Seller is not a “covered fund” under
the Volcker Rule, Seller is entitled to rely on the exemption from the
definition of “investment company” set forth in Section 3(c)(5)(A) or (B) of the
Investment Company Act and may also rely on other exemptions under the
Investment Company Act.
(q) Compliance with Law. Such Seller Party has complied in all respects with all
applicable laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. Each
Receivable, together with the Contract related thereto, does not contravene any
laws, rules or regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy), and no part of such Contract is in violation of any such law, rule
or regulation.
(r) Compliance with Credit and Collection Policy. Such Seller Party has complied
in all material respects with the Credit and Collection Policy with regard to
each Receivable and the related Contract, and has not made any material change
to such Credit and Collection Policy, except such material change as to which
Agent and each Purchaser have been notified in accordance with Section
7.1(a)(vii).
(s) Payments to Originators. With respect to each Receivable transferred to
Seller under the Receivables Sale Agreement, Seller has given reasonably
equivalent value to the applicable Originator in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
any Originator of any Receivable under the Receivables Sale Agreement is or may
be voidable under any section of the Federal Bankruptcy Code.
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(t) Enforceability of Contracts. Each Contract with respect to each Receivable
is effective to create, and has created, a legal, valid and binding obligation
of the related Obligor to pay the Outstanding Balance of the Receivable created
thereunder and any accrued interest thereon, enforceable against the Obligor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(u) Eligible Receivables. Each Receivable included in the Net Portfolio Balance
as an Eligible Receivable was an Eligible Receivable on the date of its purchase
by Seller under the Receivables Sale Agreement.
(v) Net Portfolio Balance. Seller has determined that, immediately after giving
effect to each Purchase hereunder (including the initial Purchase and the Deemed
Exchange on the date hereof), the Net Portfolio Balance equals or exceeds the
sum of (i) the Aggregate Capital, plus (ii) the Credit Enhancement, in each
case, at such time.
(w) Accounting. The manner in which such Seller Party accounts for the
transactions contemplated by this Agreement and the Receivables Sale Agreement
does not jeopardize the true sale analysis.
(x) Prior Agreement. As of the date hereof, no Termination Event (as defined in
the Prior Agreement) or Unmatured Termination Event (as defined in the Prior
Agreement) has occurred and is continuing under the Prior Agreement and no
default under any of the “Transaction Documents” (as defined in the Prior
Agreement) has occurred and is continuing.
(y) Beneficial Ownership Regulation. As of the Twelfth Amendment Date, the
Seller is an entity that is organized under the laws of the State of Minnesota
and at least 51% of its common stock or analogous equity interests is owned
directly or indirectly by a company whose common stock or analogous equity
interests are listed on the NASDAQ Global Select Market (as successor to the
NASDAQ National Market) and is excluded on that basis from the definition of
“Legal Entity Customer” as defined in the Beneficial Ownership Regulation.
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Purchase and Deemed Exchange. Each
of the initial Purchase and the Deemed Exchange under this Agreement are subject
to the conditions precedent that (a) Agent shall have received on or before the
date of such Purchase those documents listed on Schedule B, (b) each Purchaser
shall have received all fees and expenses required to be paid on or prior to
such date pursuant to the terms of this Agreement and/or any Fee Letter, (c)
Seller shall have marked its books and records with a legend satisfactory to
Agent identifying Agent’s interest therein, (d) Agent shall have completed to
its satisfaction a due diligence review of each Originator’s and Seller’s
billing, collection and
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reporting systems and other items related to the Receivables and (e) each of the
Purchasers shall have received the approval of its credit committee of the
transactions contemplated hereby.
Section 6.2 Conditions Precedent to All Purchases. Each Purchase (including the
initial Purchase and the Deemed Exchange) shall be subject to the further
conditions precedent that in the case of each such Purchase: (a) Servicer shall
have delivered to Agent and each Purchaser on or prior to the date of such
Purchase, in form and substance satisfactory to Agent and each Purchaser all
Monthly Reports as and when due under Section 8.5, and upon Agent’s or any
Purchaser’s request, Servicer shall have delivered to Agent and each Purchaser
at least three (3) days prior to such Purchase an interim Monthly Report showing
the amount of Eligible Receivables; (b) the Facility Termination Date shall not
have occurred; (c) Agent and each Purchaser shall have received a duly executed
Purchase Notice and such other approvals, opinions or documents as Agent or any
Purchaser may reasonably request, (d) if required to be in effect pursuant to
Section 7.3, the Hedging Agreements shall be in full force and effect and (e) on
the date of each such Purchase, the following statements shall be true (and
acceptance of the proceeds of such Purchase shall be deemed a representation and
warranty by Seller that such statements are then true):
(i) the representations and warranties set forth in Section 5.1 are true and
correct on and as of the date of such Purchase as though made on and as of such
date;
(ii) no event has occurred and is continuing, or would result from such
Purchase, that will constitute an Amortization Event, and no event has occurred
and is continuing, or would result from such Purchase, that would constitute a
Potential Amortization Event;
(iii) the Aggregate Capital does not exceed the Purchase Limit and the Net
Portfolio Balance equals or exceeds the sum of (i) the Aggregate Capital, plus
(ii) the Credit Enhancement, in each case, both immediately before and after
giving effect to such Purchase; and
(iv) the Temporary Period is not then continuing.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of The Seller Parties. Until the date on which
the Aggregate Unpaids have been indefeasibly paid in full and this Agreement
terminates in accordance with its terms, each Seller Party hereby covenants, as
to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for itself and each of
its Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish or cause to be furnished to Agent and each
Purchaser:
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(i) Annual Reporting. Within 90 days after the close of each of its respective
fiscal years, (x) audited, unqualified consolidated financial statements (which
shall include balance sheets, statements of income and retained earnings and a
statement of cash flows) for PDCo and its consolidated Subsidiaries for such
fiscal year certified in a manner acceptable to Agent by independent public
accountants acceptable to Agent and (y) unaudited balance sheets of Seller as at
the close of such fiscal year and statements of income and retained earnings and
a statement of cash flows for Seller for such fiscal year, all certified by its
chief financial officer. Delivery within the time period specified above of
PDCo’s annual report on Form 10-K for such fiscal year (together with PDCo’s
annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the
Securities Exchange Act of 1934, as amended) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements of clause (x) of this Section
7.1(a)(i), provided that the report of the independent public accountants
contained therein is acceptable to Agent.
(ii) Quarterly Reporting. Within 45 days after the close of the first three (3)
quarterly periods of each of its respective fiscal years, unaudited balance
sheets of PDCo as at the close of each such period and statements of income and
retained earnings and a statement of cash flows for PDCo for the period from the
beginning of such fiscal year to the end of such quarter, all certified by its
chief financial officer. Delivery within the time period specified above of
copies of PDCo’s quarterly report Form 10-Q for such fiscal quarter prepared in
accordance with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the foregoing requirements of
this Section 7.1(a)(ii).
(iii) Compliance Certificate. Together with the financial statements required
hereunder, a compliance certificate in substantially the form of Exhibit V
signed by such Seller Party’s Authorized Officer and dated the date of such
annual financial statement or such quarterly financial statement, as the case
may be.
(iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof
to the shareholders of such Seller Party copies of all financial statements,
reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which PDCo,
any Originator or any of their respective Subsidiaries files with the Securities
and Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any notice, request for
consent, financial statements, certification, report or other communication
under or in connection with any Transaction Document from any Person other than
Agent or any Purchaser (so long as each other Purchaser is copied on such
communication), copies of the same.
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(vii) Change in Credit and Collection Policy. At least thirty (30) days prior to
the effectiveness of any material change in or material amendment to the Credit
and Collection Policy, a copy of the Credit and Collection Policy then in effect
and a notice (A) indicating such change or amendment, and (B) if such proposed
change or amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables, requesting Agent’s and each Purchaser’s consent thereto.
(viii) Sale Assignments. Promptly upon its receipt of any Sale Assignment under
and as defined in the Receivables Sale Agreement, copies of the same.
(ix) Other Information. Promptly, from time to time, such other information,
documents, records or reports relating to the Receivables or the condition or
operations, financial or otherwise, of such Seller Party as Agent or any
Purchaser may from time to time reasonably request in order to protect the
interests of Agent and the Purchasers under or as contemplated by this
Agreement.
(b) Notices. Such Seller Party will notify Agent and each Purchaser in writing
of any of the following promptly upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
(i) Amortization Events or Potential Amortization Events. The occurrence of each
Amortization Event and each Potential Amortization Event, by a statement of an
Authorized Officer of such Seller Party.
(ii) Judgment and Proceedings. (1) The entry of any judgment or decree against
Servicer or any of its respective Subsidiaries if the aggregate amount of all
judgments and decrees then outstanding against Servicer and its Subsidiaries
exceeds $1,000,000 and (2) the institution of any litigation, arbitration
proceeding or governmental proceeding against Servicer that could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
and (B) the entry of any judgment or decree or the institution of any
litigation, arbitration proceeding or governmental proceeding against Seller.
(iii) Material Adverse Effect. The occurrence of any event or condition that has
had, or could reasonably be expected to have, a Material Adverse Effect.
(iv) Termination Event. The occurrence of a “Termination Event” under and as
defined in the Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a default or an event of
default under any other financing arrangement pursuant to which such Seller
Party is a debtor or an obligor.
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(vi) Downgrade of PDCo or any Originator. Any downgrade in the rating of any
Indebtedness of PDCo or any Originator by S&P or Moody’s, setting forth the
Indebtedness affected and the nature of such change.
(vii) Appointment of Independent Governor. The decision to appoint a new
governor of Seller as the “Independent Governor” for purposes of this Agreement,
such notice to be issued not less than ten (10) days prior to the effective date
of such appointment and to certify that the designated Person satisfies the
criteria set forth in the definition herein of “Independent Governor.”
(c) Compliance with Laws and Preservation of Existence. Such Seller Party will
comply in all respects with all applicable laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject,
except where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Such Seller Party will preserve and maintain its legal
existence, rights, franchises and privileges in the jurisdiction of its
organization, and qualify and remain qualified in good standing as a foreign
entity in each jurisdiction where its business is conducted, except where the
failure to so preserve and maintain any such rights, franchises or privileges or
to so qualify could not reasonably be expected to have a Material Adverse
Effect.
(d) Audits. Such Seller Party will furnish to Agent and each Purchaser from time
to time such information with respect to it and the Receivables as Agent or any
Purchaser may reasonably request. Such Seller Party will, from time to time
during regular business hours as requested by Agent or any Purchaser upon
reasonable notice and at the sole cost of such Seller Party, permit Agent or any
Purchaser or any of their respective agents or representatives, (i) to examine
and make copies of and abstracts from all Records in the possession or under the
control of such Person relating to the Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of such Person for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to such
Person’s financial condition or the Receivables and the Related Security or any
Person’s performance under any of the Transaction Documents or any Person’s
performance under the Contracts and, in each case, with any of the officers or
employees of Seller or Servicer having knowledge of such matters. Without
limiting the foregoing, such Seller Party will, annually and prior to any
Purchaser renewing its Commitment hereunder, during regular business hours as
requested by Agent or any Purchaser upon reasonable notice and at the sole cost
of such Seller Party, permit Agent or any Purchaser or any of their respective
agents or representatives, to conduct a follow-up audit.
(e) Keeping and Marking of Records and Books.
(i) Servicer will maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the immediate identification of each new
Receivable and all
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Collections of and adjustments to each existing Receivable). Servicer will give
Agent notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(ii) Such Seller Party (A) has on or prior to April 27, 2007, marked its master
data processing records and other books and records relating to the Asset
Portfolio with a legend, acceptable to Agent, describing the Asset Portfolio and
(B) will, upon the request of Agent (x) mark each Contract with a legend
describing the Asset Portfolio and (y) deliver to Agent all Contracts
(including, without limitation, all multiple originals of any such Contract)
relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such Seller
Party will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables, and (ii) comply in all respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract.
(g) Performance and Enforcement of Receivables Sale Agreement. Seller will, and
will require each Originator to, perform each of their respective obligations
and undertakings under and pursuant to the Receivables Sale Agreement, will
purchase Receivables thereunder in strict compliance with the terms thereof and
will vigorously enforce the rights and remedies accorded to Seller under the
Receivables Sale Agreement. Seller will take all actions to perfect and enforce
its rights and interests (and the rights and interests of Agent and the
Purchasers as assignees of Seller) under the Receivables Sale Agreement as Agent
may from time to time reasonably request, including, without limitation, making
claims to which it may be entitled under any indemnity, reimbursement or similar
provision contained in the Receivables Sale Agreement.
(h) Ownership. Seller will take all necessary action to (i) vest legal and
equitable title to the Receivables, the Related Security and the Collections
purchased under the Receivables Sale Agreement irrevocably in Seller, free and
clear of any Adverse Claims other than Adverse Claims in favor of Agent and the
Purchasers (including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Seller’s
interest in such Receivables, Related Security and Collections and such other
action to perfect, protect or more fully evidence the interest of Seller therein
as Agent may reasonably request), and (ii) establish and maintain, in favor of
Agent, for the benefit of the Purchasers, a valid and perfected ownership
interest (and/or a valid and perfected first priority security interest) in all
Receivables, Related Security and Collections to the full extent contemplated
herein, free and clear of any Adverse Claims other than Adverse Claims in favor
of Agent for the benefit of the Purchasers (including, without limitation, the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Agent’s (for the benefit of the Purchasers) interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of Agent for the benefit of the
Purchasers as Agent may reasonably request).
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(i) Purchasers’ Reliance. Seller acknowledges that the Purchasers are entering
into the transactions contemplated by this Agreement in reliance upon Seller’s
identity as a legal entity that is separate from each Patterson Entity and their
respective Affiliates. Therefore, from and after April 27, 2007, Seller will
take all reasonable steps, including, without limitation, all steps that Agent
or any Purchaser may from time to time reasonably request, to maintain Seller’s
identity as a separate legal entity and to make it manifest to third parties
that Seller is an entity with assets and liabilities distinct from those of each
Patterson Entity and any Affiliates thereof and not just a division of any
Patterson Entity. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Seller will:
(A) conduct its own business in its own name and require that all full-time
employees of Seller, if any, identify themselves as such and not as employees of
any Patterson Entity (including, without limitation, by means of providing
appropriate employees with business or identification cards identifying such
employees as Seller’s employees);
(B) compensate all employees, consultants and agents directly, from Seller’s own
funds, for services provided to Seller by such employees, consultants and agents
and, to the extent any employee, consultant or agent of Seller is also an
employee, consultant or agent of any Patterson Entity or any Affiliate thereof,
allocate the compensation of such employee, consultant or agent between Seller
and such Patterson Entity or such Affiliate, as applicable on a basis that
reflects the services rendered to Seller and such Patterson Entity or such
Affiliate, as applicable;
(C) clearly identify its offices (by signage or otherwise) as its offices and,
if such office is located in the offices of any Patterson Entity or an Affiliate
thereof, Seller will lease such office at a fair market rent;
(D) have a separate telephone number, which will be answered only in its name
and separate stationery, invoices and checks in its own name;
(E) conduct all transactions with each Patterson Entity and Servicer and their
respective Affiliates strictly on an arm’s-length basis, allocate all overhead
expenses (including, without limitation, telephone and other utility charges)
for items shared between Seller and any Patterson Entity or any Affiliate
thereof 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;
(F) at all times have a Board of Governors consisting of three members, at least
one member of which is an Independent Governor;
(G) observe all limited liability company formalities as a distinct entity, and
ensure that all limited liability company actions relating to (1) the selection,
maintenance or replacement of the Independent Governor, (2) the dissolution or
liquidation of Seller or (3) the initiation of, participation in, acquiescence
in or consent to any bankruptcy, insolvency, reorganization or similar
proceeding involving Seller, are
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duly authorized by unanimous vote of its Board of Governors (including the
Independent Governor);
(H) maintain Seller’s books and records separate from those of each Patterson
Entity and any Affiliate thereof and otherwise readily identifiable as its own
assets rather than assets of any Patterson Entity and any Affiliate thereof;
(I) prepare its financial statements separately from those of each Patterson
Entity and insure that any consolidated financial statements of any Patterson
Entity or any Affiliate thereof that include Seller, including any that are
filed with the Securities and Exchange Commission or any other governmental
agency have notes clearly stating that Seller is a separate legal entity and
that its assets will be available first and foremost to satisfy the claims of
the creditors of Seller;
(J) except as herein specifically otherwise provided, maintain the funds or
other assets of Seller separate from, and not commingled with, those of any
Patterson Entity or any Affiliate thereof and only maintain bank accounts or
other depository accounts to which Seller alone (or Servicer in the performance
of its duties hereunder) is the account party and from which Seller alone (or
Servicer in the performance of its duties hereunder or Agent hereunder) has the
power to make withdrawals;
(K) pay all of Seller’s operating expenses from Seller’s own assets (except for
certain payments by any Patterson Entity or other Persons pursuant to allocation
arrangements that comply with the requirements of this Section 7.1(i));
(L) operate its business and activities such that: it does not engage in any
business or activity of any kind, or enter into any transaction or indenture,
mortgage, instrument, agreement, contract, lease or other undertaking, other
than the transactions contemplated and authorized by this Agreement and the
Receivables Sale Agreement; and does not create, incur, guarantee, assume or
suffer to exist any Indebtedness or other liabilities, whether direct or
contingent, other than (1) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (2) the incurrence of obligations under this Agreement, (3)
the incurrence of obligations, as expressly contemplated in the Receivables Sale
Agreement, to make payment to the Originators thereunder for the purchase of
Receivables from the Originators under the Receivables Sale Agreement, and (4)
the incurrence of operating expenses in the ordinary course of business of the
type otherwise contemplated by this Agreement;
(M) maintain its articles of organization and bylaws in conformity with this
Agreement, such that (1) it does not amend, restate, supplement or otherwise
modify its articles of organization or bylaws in any respect that would impair
its ability to comply with the terms or provisions of any of the Transaction
Documents, including, without limitation, Section 7.1(i) of this Agreement; and
(2) its articles of organization and bylaws, at all times that this Agreement is
in effect, provides for not less than ten (10) days’ prior written notice to
Agent of the replacement or appointment of any governor
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that is to serve as an Independent Governor for purposes of this Agreement and
the condition precedent to giving effect to such replacement or appointment that
Seller certify that the designated Person satisfied the criteria set forth in
the definition herein of “Independent Governor” and Agent’s written
acknowledgement that in its reasonable judgment the designated Person satisfies
the criteria set forth in the definition herein of “Independent Governor”;
(N) maintain the effectiveness of, and continue to perform under the Receivables
Sale Agreement, the Performance Undertaking and the other Transaction Documents,
such that it does not amend, restate, supplement, cancel, terminate or otherwise
modify the Receivables Sale Agreement, the Performance Undertaking or any other
Transaction Document, or give any consent, waiver, directive or approval
thereunder or waive any default, action, omission or breach under the
Receivables Sale Agreement, the Performance Undertaking, or any other
Transaction Document, or otherwise grant any indulgence thereunder, without (in
each case) the prior written consent of Agent and the Required Purchasers;
(O) maintain its legal separateness such that it does not merge or consolidate
with or into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, and except as otherwise contemplated
herein) all or substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of, any Person,
nor at any time create, have, acquire, maintain or hold any interest in any
Subsidiary;
(P) maintain at all times the Required Capital Amount (as defined in the
Receivables Sale Agreement) and refrain from making any dividend, distribution,
redemption of membership units or payment of any subordinated Indebtedness or
other liabilities which would cause the Required Capital Amount to cease to be
so maintained; and
(Q) take such other actions as are necessary on its part to ensure that the
facts and assumptions set forth in the opinion issued by Briggs and Morgan,
Professional Association, as counsel for Seller, dated April 27, 2007 (as such
opinion may be brought down or replaced from time to time), relating to
substantive consolidation issues, and in the certificates accompanying such
opinion, remain true and correct in all material respects at all times.
(j) Collections. Such Seller Party will cause (1) all items from all P.O. Boxes
to be processed and deposited into a Collection Account within 1 Business Day
after receipt in a P.O. Box, all ACH Receipts to be deposited immediately to a
Collection Account and all proceeds from all Lock-Boxes to be directly deposited
by a Collection Bank into a Collection Account, (2) all Collections deposited to
any First-Tier Account to be electronically swept or otherwise transferred to
the Second-Tier Account within 1 Business Day of being deposited to such
First-Tier Account, and (3) each Lock-Box, P.O. Box and Collection Account to be
subject at all times to a Collection Account Agreement that is in full force and
effect. In the event any payments relating to Receivables are remitted directly
to any Seller Party or any Affiliate of any
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Seller Party, such Seller Party will remit (or will cause all such payments to
be remitted) directly to a Collection Bank and deposited into a Collection
Account within 1 Business Day following receipt thereof, and, at all times prior
to such remittance, such Seller Party or Affiliate will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of Agent and the Purchasers. Seller will maintain exclusive ownership,
dominion and control (subject to the terms of this Agreement) of each Lock-Box,
P.O. Box and Collection Account and shall not grant the right to take dominion
and control or establish “control” (within the meaning of Section 9-104 of the
UCC of all applicable jurisdictions) of any Lock-Box, P.O. Box or Collection
Account at a future time or upon the occurrence of a future event to any Person,
except to Agent as contemplated by this Agreement or as contemplated by the
Intercreditor Agreement. With respect to each Collection Account, each Seller
Party shall take all steps necessary to ensure that Agent has “control” (within
the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over
each such Collection Account.
(k) Taxes. Such Seller Party will file all tax returns and reports required by
law to be filed by it and will promptly pay all taxes and governmental charges
at any time owing. Seller will pay when due any taxes payable in connection with
the Receivables, exclusive of taxes on or measured by income or gross receipts
of any Agent or any Purchaser.
(l) Insurance. Seller will maintain in effect, or cause to be maintained in
effect, at Seller’s own expense, such casualty and liability insurance as Seller
shall deem appropriate in its good faith business judgment. Agent, for the
benefit of the Purchasers, shall be named as an additional insured with respect
to all such liability insurance maintained by Seller. Seller will pay or cause
to be paid, the premiums therefor and deliver to Agent evidence satisfactory to
Agent of such insurance coverage. Copies of each policy shall be furnished to
Agent and any Purchaser in certificated form upon Agent’s or such Purchaser’s
request. The foregoing requirements shall not be construed to negate, reduce or
modify, and are in addition to, Seller’s obligations hereunder.
(m) Payments to Originators. With respect to any Receivable purchased by Seller
from any Originator, such sale shall be effected under, and in strict compliance
with the terms of, the Receivables Sale Agreement, including, without
limitation, the terms relating to the amount and timing of payments to be made
to such Originator in respect of the purchase price for such Receivable.
(n) Certificate of Beneficial Ownership. Promptly following the occurrence of
any change that would result in a change to the status as an excluded “Legal
Entity Customer” under the Beneficial Ownership Regulation or upon the Agent’s
request therefor notwithstanding the Seller’s status as an excluded “Legal
Entity Customer”, the Seller shall execute and deliver to the Agent a
Certificate of Beneficial Ownership.
Section 7.2 Negative Covenants of The Seller Parties. Until the date on which
the Aggregate Unpaids have been indefeasibly paid in full and this Agreement
terminates in accordance with its terms, each Seller Party hereby covenants, as
to itself, that:
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(a) Name Change, Offices and Records. Such Seller Party will not change its
name, jurisdiction of organization, identity or organizational structure (within
the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable
jurisdictions) or relocate its chief executive office, principal place of
business or any office where Records are kept unless it shall have: (i) given
Agent and each Purchaser at least forty-five (45) days’ prior written notice
thereof and (ii) delivered to Agent all financing statements, instruments and
other documents requested by Agent and each Purchaser in connection with such
change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be required by
Agent pursuant to Section 8.2(b), such Seller Party will not add or terminate
any bank as a Collection Bank, or make any change in the instructions to
Obligors regarding payments to be made to any Lock-Box, P.O. Box or Collection
Account, unless Agent and each Purchaser shall have received, at least ten (10)
days before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account, P.O. Box or Lock-Box, an executed
Collection Account Agreement with respect to the new Collection Account or
Lock-Box or P.O. Box; provided, however, that Servicer may make changes in
instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. Such Seller
Party will not make any change to the Credit and Collection Policy that could
adversely affect the collectibility of the Receivables or decrease the credit
quality of any newly created Receivables. Except as provided in Section 8.2(d),
Servicer will not extend, amend or otherwise modify the terms of any Receivable
or any Contract related thereto other than in accordance with the Credit and
Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Receivable,
Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box, P.O. Box or Collection Account, or
assign any right to receive income with respect thereto (other than, in each
case, the creation of the interests therein in favor of Agent and the Purchasers
provided for herein), and Seller will defend the right, title and interest of
Agent and the Purchasers in, to and under any of the foregoing property, against
all claims of third parties claiming through or under Seller or any Originator.
Seller will not create or suffer to exist any mortgage, pledge, security
interest, encumbrance, lien, charge or other similar arrangement on any of its
inventory, the financing or lease of which gives rise to any Receivable.
(e) Net Portfolio Balance. At no time prior to the Amortization Date shall
Seller permit the Net Portfolio Balance to be less than an amount equal to the
sum of (i) the Aggregate Capital plus (ii) the Credit Enhancement, in each case,
at such time.
(f) Termination Date Determination. Seller will not designate the Termination
Date (as defined in the Receivables Sale Agreement), or send any written notice
to any Originator in respect thereof, without the prior written consent of Agent
and each Purchaser,
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except with respect to the occurrence of such Termination Date arising pursuant
to Section 5.1(d) of the Receivables Sale Agreement.
(g) Restricted Junior Payments. From and after the occurrence of any
Amortization Event, Seller will not make any Restricted Junior Payment if, after
giving effect thereto, Seller would fail to meet its obligations set forth in
Section 7.2(e).
(h) Collections. No Seller Party will deposit or otherwise credit, or cause or
permit to be so deposited or credited, to the Second-Tier Account cash or cash
proceeds other than Collections. Except as may be required by Agent pursuant to
the last sentence of Section 8.2(b), no Seller Party will deposit or otherwise
credit, or cause or permit to be so deposited or credited, any Collections or
proceeds thereof to any lock-box account or to any other account not covered by
a Collection Account Agreement.
Section 7.3 Hedging Agreements.
(a) Entering into Hedging Agreements. At all times Seller shall be a party to a
Hedging Agreement in accordance with the terms hereof.
(b) Notices. Each Seller Party will notify Agent in writing of any of the
following promptly upon learning of the occurrence thereof, describing the same,
and if applicable, the steps being taken with respect thereto:
(A) the occurrence of any default, event of default, early termination date,
termination event or similar event under, or the termination of, any Hedging
Agreement;
(B) the failure of any Hedging Agreement (or assignment thereof from Seller to
Agent for the ratable benefit of the Purchasers) to be in full force and effect;
(C) any downgrade in, or withdrawal of, the unsecured, unguaranteed, long-term
debt rating of any Hedge Provider by S&P or Moody’s, setting forth the long-term
debt rating effected and the nature of such change; and
(D) any failure of any Hedge Provider to be an Eligible Hedge Provider.
(c) Affirmative Covenants. So long as Seller is a party to any Hedging
Agreement:
(A) Seller will timely and fully perform and comply with all provisions,
covenants and other promises required to be observed by it under any Hedging
Agreement and will vigorously enforce the rights and remedies accorded to Seller
under any Hedging Agreement. Seller will take all actions to perfect and enforce
its rights and interests (and the rights and interests of Agent and the
Purchasers as assignees of Seller) under each Hedging Agreement as Agent may
from time to time reasonably request, including, without limitation, making
claims to which it may be entitled under any provision contained in any Hedging
Agreement.
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(B) Seller and Servicer will instruct all Hedge Providers to pay all Hedge
Floating Amounts relating to any Hedging Agreement directly to Second-Tier
Account. In the event any Hedge Floating Amounts relating to any Hedging
Agreement are remitted directly to any Seller Party or any Affiliate of a Seller
Party, such Seller Party will remit (or will cause all such payments to be
remitted) directly to Second-Tier Account within one Business Day following
receipt thereof, and, at all times prior to such remittance, such Seller Party
or Affiliate will itself hold or, if applicable, will cause such payments to be
held in trust for the exclusive benefit of Agent and the Purchasers.
(C) At any time that it enters into a Hedging Agreement, Seller will (A) execute
and deliver to Agent, for the ratable benefit of the Purchasers, an assignment,
in form and substance satisfactory to Agent, of all Hedge Floating Amounts
payable to Seller under such Hedging Agreement and (B) cause the applicable
Hedge Provider to consent and agree to such assignment, which consent and
agreement shall be evidenced by a writing in form and substance satisfactory to
Agent and shall effect any amendments to the applicable Hedging Agreement to
allow such assignment.
(D) If a Hedge Provider Downgrade shall occur with respect to a Hedge Provider
(other than FTB), within 10 days thereof, Seller shall cause such Hedge Provider
to transfer its obligations under this Agreement and the applicable Hedging
Agreement, at such Hedge Provider’s cost and expense, to a bank or other
financial institution acceptable to Agent, and consented to by Seller (such
consent not to be unreasonably withheld) which possesses an unsecured,
unguaranteed, long-term debt rating of A- or better by S&P and A3 or better by
Moody’s.
(d) Negative Covenants. So long as Seller is a party to any Hedging Agreement:
(A) No Seller Party will make any change in the instructions to any Hedge
Provider regarding payments to be made to the Second-Tier Account (it being
understood that on the date hereof Seller shall instruct each Hedge Provider to
direct all Hedge Floating Amounts to the Second-Tier Account in accordance with
Section 7.3(c)(B)).
(B) Seller will not designate an early termination date under any Hedging
Agreement, or send any written notice to any Hedge Provider in respect thereof,
or waive any provision of any Hedging Agreement, without, in each case, the
prior written consent of Agent.
(C) Seller shall not supplement, amend, extend, replace, terminate, or otherwise
modify any Hedging Agreement without, in each case, the prior written consent of
Agent.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
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Section 8.1 Designation of Servicer.
(a) The servicing, administration and collection of the Receivables on behalf of
Agent and the Purchasers shall be conducted by such Person (the “Servicer”) so
designated from time to time in accordance with this Section 8.1. PDCo is hereby
designated as, and hereby agrees to perform the duties and obligations of,
Servicer for Agent and the Purchasers pursuant to the terms of this Agreement.
Agent (on behalf of the Purchasers) may, and at the direction of the Required
Purchasers shall, at any time following the occurrence of an Amortization Event
designate as Servicer any Person to succeed PDCo or any successor Servicer.
(b) Without the prior written consent of Agent and the Required Purchasers, PDCo
shall not be permitted to delegate any of its duties or responsibilities as
Servicer to any Person other than (i) an Originator (with respect to Receivables
originated by such Originator), (ii) Seller and (iii) with respect to certain
Charged-Off Receivables, outside collection agencies and lawyers in accordance
with its customary practices. None of Seller or any Originator shall be
permitted to further delegate to any other Person any of the duties or
responsibilities of Servicer delegated to it by PDCo. If at any time Agent shall
designate as Servicer any Person other than PDCo, all duties and
responsibilities theretofore delegated by PDCo to Seller and any Originator may,
at the discretion of Agent, be terminated forthwith on notice given by Agent to
PDCo and to Seller.
(c) Notwithstanding the foregoing subsection (b), (i) PDCo shall be and remain
primarily liable to Agent and the Purchasers and the Hedge Providers for the
full and prompt performance of all duties and responsibilities of Servicer
hereunder and (ii) Agent, and the Purchasers shall be entitled to deal
exclusively with PDCo in matters relating to the discharge by Servicer of its
duties and responsibilities hereunder. Agent, and the Purchasers shall not be
required to give notice, demand or other communication to any Person other than
PDCo in order for communication to Servicer and its sub-servicer or other
delegate with respect thereto to be accomplished. PDCo, at all times that it is
Servicer, shall be responsible for providing any sub-servicer or other delegate
of Servicer with any notice given to Servicer under this Agreement.
Section 8.2 Duties of Servicer.
(a) Servicer shall take or cause to be taken all such actions as may be
necessary or advisable to collect each Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy.
(b) Servicer will instruct all Obligors to pay all Collections either (i)
directly to a Collection Account by means of an automatic electronic funds
transfer, wire transfer or otherwise or (ii) directly to a Lock-Box or P.O. Box.
Servicer shall cause any payments made by means of automatic electronic funds
transfer to be deposited directly into a Collection Account from each Obligor’s
relevant account. Servicer shall effect a Collection Account Agreement
substantially in the form of Exhibit VI with each bank party to a Collection
Account at any time. In the case of any remittances received in any Lock-Box,
P.O. Box or Collection Account that shall have been identified, to the
satisfaction of Servicer, to not constitute Collections or other
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proceeds of the Receivables or the Related Security, Servicer shall promptly
remit such items to the Person identified to it as being the owner of such
remittances. From and after the date Agent delivers a Collection Notice to any
Collection Bank or a Postal Notice to any post office pursuant to Section 8.3,
Agent may request that Servicer, and Servicer thereupon promptly shall instruct
all Obligors with respect to the Receivables, to remit all payments thereon to a
new lock-box, post office box or depositary account specified by Agent and, at
all times thereafter, Seller and Servicer shall not deposit or otherwise credit,
and shall not permit any other Person to deposit or otherwise credit to such new
lock-box, post office box or depositary account any cash or payment item other
than Collections.
(c) Servicer shall administer the Collections in accordance with the procedures
described herein and in Article II. Servicer shall set aside and hold in trust
for the account of Seller (in respect of RPA Deferred Purchase Price, as
applicable), the Purchasers and the Hedge Providers their respective shares of
the Collections in accordance with Article II. Servicer shall, upon the request
of Agent, segregate, in a manner acceptable to Agent, all cash, checks and other
instruments received by it from time to time constituting Collections from the
general funds of Servicer or Seller prior to the remittance thereof in
accordance with Article II. If Servicer shall be required to segregate
Collections pursuant to the preceding sentence, Servicer shall segregate and
deposit with a bank designated by Agent such allocable share of Collections of
Receivables set aside for the Purchasers on the first Business Day following
receipt by Servicer of such Collections, duly endorsed or with duly executed
instruments of transfer.
(d) Servicer may, in accordance with the Credit and Collection Policy, extend
the maturity of any Receivable or adjust the Outstanding Balance of any
Receivable as Servicer determines to be appropriate to maximize Collections
thereof; provided, however, that such extension or adjustment shall not (x)
alter the status of such Receivable as a Delinquent Receivable, Defaulted
Receivable or Charged-Off Receivable and for purposes of determining if such
Receivable is a Delinquent Receivable, Defaulted Receivable or Charged-Off
Receivable, the original due date for such Receivable shall continue to apply or
(y) limit the rights of Agent or the Purchasers under this Agreement; provided
further, however, that solely with respect to any Eligible COVID-19 Modified
Receivable, no installment payment that has been reduced to $0 during the
related 90-day deferral period in connection with the COVID-19 Deferred Payment
program shall be considered delinquent for purposes of this Agreement.
Notwithstanding anything to the contrary contained herein, Agent shall have the
absolute and unlimited right to direct Servicer to commence or settle any legal
action with respect to any Receivable or to foreclose upon or repossess any
Related Security. Notwithstanding anything to the contrary contained herein,
each of the Seller and the Servicer acknowledge and agree that it will not sell
any Related Equipment for any Receivable that is Repossessed for less than the
fair market value of such Related Equipment.
(e) Servicer shall hold in trust for Agent on behalf of the Purchasers all
Records that (i) evidence or relate to the Receivables, the related Contracts
and Related Security or (ii) are otherwise necessary or desirable to collect the
Receivables and shall, as soon as practicable upon demand of Agent, deliver or
make available to Agent all such Records, at a place selected by Agent. Servicer
shall, as soon as practicable following receipt thereof turn over
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to Seller any cash collections or other cash proceeds received with respect to
Indebtedness not constituting Receivables. Servicer shall, from time to time at
the request of any Purchaser, furnish to the Purchasers (promptly after any such
request) a calculation of the amounts set aside for the Purchasers pursuant to
Article II.
(f) Any payment by an Obligor in respect of any Indebtedness or other liability
owed by it to the applicable Originator or Seller shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
otherwise instructed by Agent, be applied as a Collection of any Receivable of
such Obligor (starting with the oldest such Receivable) to the extent of any
amounts then due and payable thereunder before being applied to any other
receivable or other obligation of such Obligor.
Section 8.3 Collection Notices. Agent (or its designee pursuant to the
Intercreditor Agreement) is authorized at any time after the occurrence of an
Amortization Event to date and to deliver to the Collection Banks the Collection
Notices and to date and deliver the Postal Notices to the applicable post
offices. Seller hereby transfers to Agent for the benefit of the Purchasers,
effective when Agent delivers such notices, the dominion and control and
“control” (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions) of each Lock-Box, P. O. Box, each Collection Account and the
amounts on deposit therein. In case any authorized signatory of Seller whose
signature appears on a Collection Account Agreement shall cease to have such
authority before the delivery of such notice, such Collection Notice or Postal
Notice shall nevertheless be valid as if such authority had remained in force.
Seller hereby authorizes Agent (or its designee pursuant to the Intercreditor
Agreement), and agrees that Agent (or its designee pursuant to the Intercreditor
Agreement) shall be entitled to (i) endorse Seller’s name on checks and other
instruments representing Collections, (ii) enforce the Receivables, the related
Contracts and the Related Security and (iii) take such action as shall be
necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of Agent
rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the contrary
notwithstanding, the exercise by Agent and the Purchasers of their rights
hereunder shall not release Servicer, any Originator or Seller from any of their
duties or obligations with respect to any Receivables or under the related
Contracts. The Purchasers shall have no obligation or liability with respect to
any Receivables or related Contracts, nor shall any of them be obligated to
perform the obligations of Seller.
Section 8.5 Reports. Servicer shall prepare and forward to Agent and each
Purchaser (i) three Business Days prior to each Settlement Date and at such
times as Agent or any Purchaser shall request, a Monthly Report and (ii) at such
times as Agent or any Purchaser shall request, a listing by Obligor of all
Receivables together with an aging of such Receivables. Unless otherwise
requested by Agent or any Purchaser, all computations in such Monthly Report
shall be made as of the close of business on the last day of the Accrual Period
preceding the date on which such Monthly Report is delivered.
Section 8.6 Servicing Fees. In consideration of PDCo’s agreement to act as
Servicer hereunder, the Purchasers hereby agree that, so long as PDCo shall
continue to perform
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as Servicer hereunder, PDCo shall be paid a fee (the “Servicing Fee“) in
accordance with the priority of payments set forth in Sections 2.2(c) and 2.3,
as applicable, on the 19th calendar day of each month (or, if such day is not a
Business Day, then the next Business Day thereafter), in arrears for the
immediately preceding Fiscal Month, equal to 1% per annum of the average Net
Portfolio Balance during such period, as compensation for its servicing
activities.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of the
following events shall constitute an “Amortization Event”:
(a) Any Seller Party shall fail (i) to make any payment or deposit required
hereunder when due, or (ii) to perform or observe any term, covenant or
agreement hereunder (other than as referred to in clause (i) of this paragraph
(a) and Section 9.1(e)) or any other Transaction Document and such failure shall
continue for seven (7) consecutive Business Days.
(b) Any representation, warranty, certification or statement made by any Seller
Party in this Agreement, any other Transaction Document or in any other document
delivered pursuant hereto or thereto shall prove to have been incorrect in any
material respect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due or the failure of any
other Seller Party to pay Indebtedness when due in excess of $1,000,000; or the
default by any Seller Party in the performance of any term, provision or
condition contained in any agreement under which any such Indebtedness was
created or is governed, the effect of which is to cause, or to permit the holder
or holders of such Indebtedness to cause, such Indebtedness to become due prior
to its stated maturity; or any such Indebtedness of any Seller Party shall be
declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the date of maturity thereof.
(d) (i) Any Seller Party, the Hedge Providers, the Performance Provider or any
of their respective Subsidiaries shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts generally or
shall make a general assignment for the benefit of creditors; or (ii) any
proceeding shall be instituted by or against any Seller Party, the Hedge
Providers, the Performance Provider or any of their respective Subsidiaries
seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee or other similar official for it or
any substantial part of its property, and solely in the case of Servicer and the
Performance Provider and a proceeding instituted against (and not by) such
Person, such proceeding is not dismissed within 60 days; or (iii) any Seller
Party, the Hedge Providers, the Performance Provider or any of their respective
Subsidiaries shall take any corporate or other action to authorize any of the
actions set forth in clauses (i) or (ii) above in this subsection (d).
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(e) Seller shall fail to comply with the terms of Section 2.6 or Section 7.3
hereof.
(f) As at the end of any Fiscal Month (provided, that during the Temporary
Period, COVID-19 Modified Receivables shall be excluded from each component of
the calculation of the Default Ratio and Delinquency Ratio):
(i) commencing on the third Fiscal Month after the Closing Date, the average of
the Delinquency Ratio for such Fiscal Month and each of the two immediately
preceding Fiscal Months shall exceed 7.00%, or
(ii) commencing on the third Fiscal Month after the Closing Date, the average of
the Default Ratio for such Fiscal Month and each of the two immediately
preceding Fiscal Months shall exceed 3.30%, or
(iii) commencing on the end of the first Fiscal Month after the Closing Date,
Excess Spread is less than 0.75%.
(g) A Change of Control shall occur.
(h) A Hedge Provider Downgrade shall occur and a replacement Hedge Provider
meeting the requirements of Section 7.3 fails to assume such then current Hedge
Provider’s obligations under this Agreement and the applicable Hedging Agreement
as provided in Section 7.3 after such occurrence.
(i) (i) One or more final judgments for the payment of money shall be entered
against Seller or (ii) one or more final judgments for the payment of money in
an amount in excess of $1,000,000, individually or in the aggregate, shall be
entered against Servicer on claims not covered by insurance or as to which the
insurance carrier has denied its responsibility, and such judgment shall
continue unsatisfied and in effect for fifteen (15) consecutive days without a
stay of execution.
(j) The “Termination Date” under and as defined in the Receivables Sale
Agreement shall occur under the Receivables Sale Agreement or any Originator
shall for any reason cease to transfer, or cease to have the legal capacity to
transfer, or otherwise be incapable of transferring Receivables to Seller under
the Receivables Sale Agreement; or Seller shall for any reason cease to
purchase, or cease to have the legal capacity to purchase, or otherwise be
incapable of accepting Receivables from any Originator under the Receivables
Sale Agreement.
(k) This Agreement shall terminate in whole or in part (except in accordance
with its terms), or shall cease to be effective or to be the legally valid,
binding and enforceable obligation of Seller, or any Obligor shall directly or
indirectly contest in any manner such effectiveness, validity, binding nature or
enforceability, or Agent for the benefit of the Purchasers shall cease to have a
valid and perfected ownership or first priority perfected security interest in
the Receivables, the Related Security and the Collections with respect thereto
and the Collection Accounts.
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(l) If required to be in effect pursuant to Section 7.3, any Hedging Agreement
shall for any reason not be in full force and effect.
(m) The Intercreditor Agreement shall terminate in whole or in part or shall
cease to be in full force and effect or any party other than Agent thereto shall
directly or indirectly contest in any manner the effectiveness or enforceability
thereof.
(n) PDCo’s Leverage Ratio shall exceed the applicable amount set forth in
Section 6.20 of the Credit Agreement as of any applicable period(s) or date(s)
set forth in Section 6.20 of the Credit Agreement.
(o) Performance Provider shall fail to perform or observe any term, covenant or
agreement required to be performed by it under the Performance Undertaking, or
the Performance Undertaking shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Performance Provider, or
Performance Provider shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability.
(p) As determined commencing with fiscal quarter ending April 28, 2018, PDCo’s
Interest Expense Coverage Ratio shall be less than the applicable amount set
forth in Section 6.21 of the Credit Agreement as of any applicable period(s) or
date(s) set forth in Section 6.21 of the Credit Agreement.
(q) Any Person shall be appointed as an Independent Governor of Seller without
prior notice thereof having been given to Agent in accordance with Section
7.1(b)(vii) or without the written acknowledgement by Agent that such Person
conforms, to the satisfaction of Agent, with the criteria set forth in the
definition herein of “Independent Governor.”
(r) Seller shall fail to pay in full all of its Obligations to Agent and the
Purchasers hereunder and under each other Transaction Document on or prior to
the Legal Maturity Date.
Section 9.2 Remedies. Upon the occurrence and during the continuation of an
Amortization Event, Agent may, or upon the direction of the Required Purchasers
shall, take any of the following actions: (i) replace the Person then acting as
Servicer, (ii) declare the Amortization Date to have occurred, whereupon the
Amortization Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Seller
Party; provided, however, that upon the occurrence of an Amortization Event
described in Section 9.1(d), or of an actual or deemed entry of an order for
relief with respect to any Seller Party under the Federal Bankruptcy Code or
under any other applicable bankruptcy, insolvency, arrangement, moratorium or
similar laws of any other jurisdiction (foreign or domestic), the Amortization
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by each Seller Party, (iii) to
the fullest extent permitted by applicable law, declare that the Default Fee
shall accrue with respect to any of the Aggregate Unpaids outstanding at such
time, (iv) deliver the Collection Notices to the Collection Banks and the Postal
Notices to any post office where a P.O. Box is located, and (v) notify Obligors
of the Purchasers’ interest in the Receivables. The aforementioned rights and
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remedies shall be without limitation, and shall be in addition to all other
rights and remedies of Agent and the Purchasers otherwise available under any
other provision of this Agreement, by operation of law, at equity or otherwise,
all of which are hereby expressly preserved, including, without limitation, all
rights and remedies provided under the UCC, all of which rights shall be
cumulative. For the avoidance of doubt, following an Amortization Event, the
Purchasers shall have the rights of a secured party under Article 9 of the UCC
following a breach or default, including but not limited to the right to demand
acceleration of all outstanding amounts hereunder or foreclose on the
Receivables sold hereunder.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by The Seller Parties. Without limiting any other
rights that Agent, any Purchaser or any of their respective Affiliates may have
hereunder or under applicable law, (A) Seller hereby agrees to indemnify (and
pay upon demand to) Agent, each Purchaser and the Hedge Providers and their
respective Affiliates, successors, assigns, officers, directors, agents and
employees (each an “Indemnified Party”) from and against any and all damages,
losses, claims, taxes, liabilities, costs, expenses and for all other amounts
payable, including reasonable attorneys’ fees (which attorneys may be employees
of any Indemnified Party) and disbursements (all of the foregoing being
collectively referred to as “Indemnified Amounts”) awarded against or incurred
by any of them arising out of or as a result of this Agreement or the Hedging
Agreements, or the use of the proceeds of any Purchase hereunder, or the
acquisition, funding or ownership either directly or indirectly, by any
Indemnified Party of a an interest in the Asset Portfolio, Receivables, or any
Receivable or any Contract or any Related Security, or any action or inaction of
any Seller Party, and (B) Servicer hereby agrees to indemnify (and pay upon
demand to) each Indemnified Party for Indemnified Amounts awarded against or
incurred by any of them arising out of Servicer’s activities as Servicer
hereunder excluding, however, in all of the foregoing instances under the
preceding clauses (A) and (B):
(x) Indemnified Amounts to the extent a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts resulted from gross negligence
or willful misconduct on the part of the Indemnified Party seeking
indemnification;
(y) Indemnified Amounts to the extent the same includes losses in respect of
Receivables that are uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor; or
(z) taxes imposed by the jurisdiction in which such Indemnified Party’s
principal executive office is located, on or measured by the overall net income
of such Indemnified Party to the extent that the computation of such taxes is
consistent with the characterization for income tax purposes of the acquisition
by the Purchasers of the Asset Portfolio as a loan or loans by the Purchasers to
Seller secured by the Receivables, the Related Security, the Collection Accounts
and the Collections;
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provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Seller shall indemnify each Indemnified Party
for Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Seller or Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller Party, any Originator or
Performance Provider (or any officers of any such Person) under or in connection
with this Agreement, any other Transaction Document or any other information or
report delivered by any such Person pursuant hereto or thereto, which shall have
been false or incorrect when made or deemed made;
(ii) the failure by Seller, Servicer or any Originator to comply with any
applicable law, rule or regulation with respect to any Receivable or Contract
related thereto, or the nonconformity of any Receivable or Contract included
therein with any such applicable law, rule or regulation or any failure of any
Originator to keep or perform any of its obligations, express or implied, with
respect to any Contract;
(iii) any failure of Seller, Servicer, any Originator or Performance Provider to
perform its duties, covenants or other obligations in accordance with the
provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit, or other similar
claim arising out of or in connection with merchandise, insurance or services
that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than discharge in bankruptcy of
the Obligor) of the Obligor to the payment of any Receivable (including, without
limitation, a defense based on such Receivable or the related Contract not being
a legal, valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale of the
merchandise or service related to such Receivable or the furnishing or failure
to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time with other funds;
(vii) any investigation, litigation or proceeding related to or arising from
this Agreement or any other Transaction Document, the transactions contemplated
hereby, the use of the proceeds of a Purchase, the ownership of the Asset
Portfolio (or any portion thereof) or any other investigation, litigation or
proceeding relating to Seller, Servicer or any Originator in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;
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(viii) any inability to litigate any claim against any Obligor in respect of any
Receivable as a result of such Obligor being immune from civil and commercial
law and suit on the grounds of sovereignty or otherwise from any legal action,
suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Seller to acquire and maintain legal and equitable title to,
and ownership of, any Receivable and the Related Security and Collections with
respect thereto from any Originator, free and clear of any Adverse Claim (other
than as created hereunder); or any failure of Seller to give reasonably
equivalent value to any Originator under the Receivables 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;
(xi) any failure to vest and maintain vested in Agent for the benefit of the
Purchasers, or to transfer to Agent for the benefit of the Purchasers, legal and
equitable title to, and ownership of, or a valid and perfected first priority
security interest in, the Asset Portfolio, free and clear of any Adverse Claim
(except as created by the Transaction Documents);
(xii) the failure to have filed, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivable, the
Related Security and Collections with respect thereto, and the proceeds of any
thereof, whether at the time of any Purchase or at any subsequent time;
(xiii) any action or omission by any Seller Party which reduces or impairs the
rights of Agent or the Purchasers with respect to any Receivable or the value of
any such Receivable;
(xiv) any attempt by any Person to void any Purchase under statutory provisions
or common law or equitable action;
(xv) the failure of any Receivable included in the calculation of the Net
Portfolio Balance as an Eligible Receivable to be an Eligible Receivable at the
time so included; and
(xvi) the Agent holding and maintaining the Reserve Account and applying any
funds on deposit therein.
Section 10.2 Increased Cost and Reduced Return.
(a) If any Regulatory Change (i) subjects any Purchaser to any charge or
withholding on or with respect to this Agreement or a Purchaser’s obligations
under this Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of
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payments to any Purchaser of any amounts payable under this Agreement (except
for changes in the rate of tax on the overall net income of a Purchaser or taxes
excluded by Section 10.1) or (ii) imposes, modifies or deems applicable any
reserve, assessment, fee, tax, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of, or
liabilities of a Purchaser, or credit extended by a Purchaser pursuant to this
Agreement or (iii) imposes any other condition the result of which is to
increase the cost to a Purchaser of performing its obligations under this
Agreement, or to reduce the rate of return on a Purchaser’s capital as a
consequence of its obligations under this Agreement, or to reduce the amount of
any sum received or receivable by a Purchaser under this Agreement, or to
require any payment calculated by reference to the amount of interests or loans
held or interest received by it, then, upon demand by Agent, Seller shall pay to
Agent, for the benefit of the relevant Purchaser, such amounts charged to such
Purchaser or such amounts to otherwise compensate such Purchaser for such
increased cost or such reduction.
(b) A certificate of the applicable Purchaser setting forth the amount or
amounts necessary to compensate such Purchaser pursuant to paragraph (a) of this
Section 10.2 shall be delivered to Seller and shall be conclusive absent
manifest error.
(c) If any Purchaser has or anticipates having any claim for compensation from
Seller pursuant to clause (iii) of the definition of Regulatory Change, and such
Purchaser believes that having the Facility publicly rated by one credit rating
agency would reduce the amount of such compensation by an amount deemed by such
Purchaser to be material, such Purchaser shall provide written notice to Seller
and Servicer (a “Ratings Request”) that such Purchaser intends to request a
public rating of the Facility from one credit rating agency selected by such
Purchaser and reasonably acceptable to Seller, of at least AA equivalent (the
“Required Rating“). Seller and Servicer agree that they shall cooperate with
such Purchaser’s efforts to obtain the Required Rating, and shall provide the
applicable credit rating agency (either directly or through distribution to
Agent or Purchaser), any information requested by such credit rating agency for
purposes of providing and monitoring the Required Rating. Seller shall pay the
initial fees payable to the credit rating agency for providing the rating and
all ongoing fees payable to the credit rating agency for their continued
monitoring of the rating. Nothing in this Section 10.2(c) shall preclude any
Purchaser from demanding compensation from Seller pursuant to Section 10.2(a)
hereof at any time and without regard to whether the Required Rating shall have
been obtained, or shall require any Purchaser to obtain any rating on the
Facility prior to demanding any such compensation from Seller.
Section 10.3 Other Costs and Expenses. Seller shall reimburse Agent and each
Purchaser on demand for all costs and out-of-pocket expenses in connection with
the preparation, negotiation, arrangement, execution, delivery, enforcement and
administration of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder, including without limitation, the
cost of any Purchaser’s auditors auditing the books, records and procedures of
Seller, reasonable fees and out-of-pocket expenses of legal counsel for any
Purchaser and/or Agent (which such counsel may be employees of any Purchaser or
Agent) with respect thereto and with respect to advising any Purchaser and/or
Agent as to their respective rights and remedies under this Agreement. Seller
shall reimburse Agent and each
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Purchaser on demand for any and all costs and expenses of Agent, and the
Purchasers, if any, including reasonable counsel fees and expenses in connection
with the enforcement of this Agreement and the other documents delivered
hereunder and in connection with any restructuring or workout of this Agreement
or such documents, or the administration of this Agreement following an
Amortization Event.
Section 10.4 [Reserved.]
Section 10.5 [Reserved.]
Section 10.6 Required Rating. Agent shall have the right at any time to request
that a public rating of the Facility of at least the Required Rating be obtained
from one credit rating agency acceptable to Agent. Each of Seller and Servicer
agree that they shall cooperate with Agent’s efforts to obtain the Required
Rating, and shall provide Agent, for distribution to the applicable credit
rating agency, any information requested by such credit rating agency for
purposes of providing the Required Rating. Any Ratings Request shall be in
writing, and if the Required Rating is not obtained within 60 days following the
date of such Ratings Request (unless the failure to obtain the Required Rating
is solely the result of Agent’s failure to provide the credit rating agency with
sufficient information to permit the credit rating agency to perform their
analysis, and is not the result of Seller or Servicer’s failure to cooperate or
provide sufficient information to Agent), (i) upon written notice by Agent to
Seller, the Amortization Date shall occur, and (ii) outstanding Capital shall
thereafter incur the Default Fee and costs associated with obtaining the
Required Rating hereunder shall be paid by Seller or Servicer.
ARTICLE XI
AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby designates and
appoints FTB to act as its agent hereunder and under each other Transaction
Document, and authorizes Agent to take such actions as agent on its behalf and
to exercise such powers as are delegated to Agent by the terms of this Agreement
and the other Transaction Documents together with such powers as are reasonably
incidental thereto. Agent shall not have any duties or responsibilities, except
those expressly set forth herein or in any other Transaction Document, or any
fiduciary relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of Agent shall
be read into this Agreement or any other Transaction Document or otherwise exist
for Agent. In performing its functions and duties hereunder and under the other
Transaction Documents, Agent shall act solely as agent for the Purchasers and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any Seller Party or any Purchaser or
any of such Seller Party’s or Purchaser’s successors or assigns. Agent shall not
be required to take any action that exposes Agent to personal liability or that
is contrary to this Agreement, any other Transaction Document or applicable law.
The appointment and authority of Agent hereunder shall terminate upon the
indefeasible payment in full of all Aggregate Unpaids. Each Purchaser hereby
authorizes Agent to authorize and file each of the Uniform Commercial Code
financing
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or continuations statements (and amendments thereto and assignments or
terminations thereof) on behalf of such Purchaser (the terms of which shall be
binding on such Purchaser).
Section 11.2 Delegation of Duties. Agent may execute any of its duties under
this Agreement and each other Transaction Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 11.3 Exculpatory Provisions. Neither Agent nor any of its directors,
officers, agents or employees shall be (i) liable for any action lawfully taken
or omitted to be taken by it or them under or in connection with this Agreement
or any other Transaction Document (except for its, their or such Person’s own
gross negligence or willful misconduct), or (ii) responsible in any manner to
any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the ownership, perfection, priority, condition,
value or sufficiency of any collateral pledged in connection herewith. Agent
shall not be under any obligation to any Purchaser to ascertain or to inquire as
to the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller Parties. Agent shall not
be deemed to have knowledge of any Amortization Event or Potential Amortization
Event unless Agent has received notice from Seller or a Purchaser.
Section 11.4 Reliance by Agent. Agent shall in all cases be entitled to rely,
and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any Seller Party), independent
accountants and other experts selected by Agent. Agent shall in all cases be
fully justified in failing or refusing to take any action under this Agreement
or any other Transaction Document unless it shall first receive such advice or
concurrence of the Required Purchasers or all of the Purchasers, as applicable,
as it deems appropriate and it shall first be indemnified to its satisfaction by
the Purchasers, provided that unless and until Agent shall have received such
advice, Agent may take or refrain from taking any action, as Agent shall deem
advisable and in the best interests of the Purchasers. Agent shall in all cases
be fully protected in acting, or in refraining from acting, in accordance with a
request of the Required Purchasers or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
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Section 11.5 Non-Reliance on Agent and Other Purchasers. Each Purchaser
expressly acknowledges that neither Agent, nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by Agent hereafter taken, including, without
limitation, any review of the affairs of any Seller Party, shall be deemed to
constitute any representation or warranty by Agent. Each Purchaser represents
and warrants to Agent that it has and will, independently and without reliance
upon Agent or any other Purchaser and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, prospects, financial and other conditions and
creditworthiness of each Seller Party and made its own decision to enter into
this Agreement, the other Transaction Documents and all other documents related
hereto or thereto.
Section 11.6 Reimbursement and Indemnification. Each Purchaser agrees to
reimburse and indemnify Agent and its officers, directors, employees,
representatives and agents ratably based on the ratio of each such indemnifying
Purchaser’s Commitment to the aggregate Commitment to the extent not paid or
reimbursed by Seller Parties (i) for any amounts for which Agent, acting in its
capacity as Agent, is entitled to reimbursement by the Seller Parties hereunder
and (ii) for any other expenses incurred by Agent, in its capacity as Agent and
acting on behalf of the Purchasers, in connection with the administration and
enforcement of this Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
any Seller Party or any Affiliate of any Seller Party as though Agent were not
Agent hereunder. With respect to the acquisition of the Asset Portfolio on
behalf of the Purchasers pursuant to this Agreement, Agent shall have the same
rights and powers under this Agreement in its individual capacity as any
Purchaser and may exercise the same as though it were not Agent, and the term
“Purchaser” shall include Agent in its individual capacity.
Section 11.8 Successor Agent. Agent may, upon 10 Business Days’ notice to Seller
and the Purchasers, and Agent will, upon the direction of all of the Purchasers
(other than Agent, in its individual capacity) resign as Agent. If Agent shall
resign, then the Required Purchasers during such five-day period shall appoint
from among the Purchasers a successor agent. If for any reason no successor
Agent is appointed by the Required Purchasers during such five-day period, then
effective upon the termination of such five-day period, the Purchasers shall
perform all of the duties of Agent hereunder and under the other Transaction
Documents and Seller and Servicer (as applicable) shall make all payments in
respect of the Aggregate Unpaids directly to the applicable Purchasers and for
all purposes shall deal directly with the Purchasers. After the effectiveness of
any retiring Agent’s resignation hereunder as Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other
Transaction Documents and the provisions of this Article XI and Article X shall
continue in effect for its benefit with respect to any actions taken or omitted
to be taken by it while it was Agent under this Agreement and under the other
Transaction Documents.
ARTICLE XII
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ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments.
(a) Neither Seller nor Servicer shall have the right to assign its rights or
obligations under this Agreement; provided, however, that Seller may assign its
right to receive the RPA Deferred Purchase Price or any portion thereof, which
right shall be freely assignable by Seller without the consent of Agent or any
Purchaser so long as no Amortization Event has occurred that has not been waived
in accordance with the terms hereof and the Amortization Date has not occurred,
upon prior written notice of such assignment to Agent; provided, that the
related assignee has agreed, in a writing in form and substance reasonably
satisfactory to Agent, to (i) all of the terms and conditions hereunder in
respect of payment of the RPA Deferred Purchase Price (including Section
2.7(b)), (ii) a non-petition clause in favor of each of Seller in substantially
the form of Section 14.6 and (iii) a limitation on payment clause in favor of
Agent and each Purchaser in substantially the form of Section 2.7(b).
(b) With the prior written consent of Agent not to be unreasonably withheld, any
Purchaser may at any time and from time to time assign to one or more Persons
(“Purchasing Purchasers”) all or any part of its rights and obligations under
this Agreement pursuant to an assignment agreement, substantially in the form
set forth in Exhibit VII hereto (the “Assignment Agreement”) executed by such
Purchasing Purchaser and such selling Purchaser; provided, however, that no
Purchaser shall transfer, sell or assign its rights in all or any part of the
Asset Portfolio at any time prior to the Amortization Date unless the RPA
Deferred Purchase Price allocable to the Asset Portfolio (or such relevant
portion thereof), as determined by Agent to be allocable to such assigned
interest on a pro rata basis, has been paid in full or is being assumed by the
applicable transferee. Each assignee of a Purchaser must agree to deliver to
Agent, promptly following any request therefor by Agent an enforceability
opinion in form and substance satisfactory to Agent. Upon the “Effective Date”
as defined in the applicable Assignment Agreement, such selling Purchaser shall
be released from its obligations hereunder to the extent of such assignment.
Thereafter the Purchasing Purchaser shall for all purposes be a Purchaser party
to this Agreement and shall have all the rights and obligations of a Purchaser
(including, without limitation, the applicable obligations of a Related
Purchaser) under this Agreement to the same extent as if it were an original
party hereto and no further consent or action by Seller, the Purchasers or Agent
shall be required.
Section 12.2 Participations. Any Purchaser may, in the ordinary course of its
business at any time sell to one or more Persons (each a “Participant”)
participating interests in its Pro Rata Share portion of the Asset Portfolio or
any other interest of such Purchaser hereunder. Notwithstanding any such sale by
a Purchaser of a participating interest to a Participant, such Purchaser’s
rights and obligations under this Agreement shall remain unchanged, such
Purchaser shall remain solely responsible for the performance of its obligations
hereunder, and each Seller Party, each other Purchaser and Agent shall continue
to deal solely and directly with such Purchaser in connection with such
Purchaser’s rights and obligations under this Agreement. Each Purchaser agrees
that any agreement between such Purchaser and any such Participant in respect of
such participating interest shall not restrict such Purchaser’s
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right to agree to any amendment, supplement, waiver or modification to this
Agreement, except for any amendment, supplement, waiver or modification
described in Section 14.1(b)(i).
Section 12.3 Federal Reserve. Notwithstanding any other provision of this
Agreement to the contrary, any Purchaser may at any time pledge or grant a
security interest in all or any portion of its rights (including, without
limitation, its portion of the Asset Portfolio and any rights to payment of
Capital and Purchaser Yield) under this Agreement to secure obligations of such
Purchaser to a Federal Reserve Bank, without notice to or consent of Seller or
Agent; provided that no such pledge or grant of a security interest shall
release a Purchaser from any of its obligations hereunder, or substitute any
such pledgee or grantee for such Purchaser as a party hereto.
ARTICLE XIII
[Reserved.]
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments.
(a) No failure or delay on the part of Agent, or any Purchaser in exercising any
power, right or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy
preclude any other further exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified or
waived except in writing in accordance with the provisions of this Section
14.1(b). Seller and Agent, at the direction of the Required Purchasers, may
enter into written modifications or waivers of any provisions of this Agreement,
provided, however, that no such modification or waiver shall:
(i) without the consent of each affected Purchaser, (A) extend the Purchase
Termination Date or the date of any payment or deposit of Collections by Seller
or Servicer, (B) reduce the rate or extend the time of payment of Purchaser
Yield (or any component of Purchaser Yield), (C) reduce any fee payable to Agent
for the benefit of the Purchasers, (D) except pursuant to Article XII hereof,
change the amount of the Capital of any Purchaser, any Purchaser’s Pro Rata
Share or any Purchaser’s Commitment, (E) amend, modify or waive any provision of
the definition of Required Purchasers, Section 4.6, this Section 14.1(b) or
Section 14.6, (F) consent to or permit the assignment or transfer by Seller of
any of its rights and obligations under this Agreement, (G) change the
definition of “Concentration Limit,” “Eligible Receivable,” “Credit
Enhancement,”
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“Hedging Agreement,” “Hedge Provider,” “Net Portfolio Balance,” “Reserve Account
Required Amount” or “RPA Deferred Purchase Price” or (H) amend or modify any
defined term (or any defined term used directly or indirectly in such defined
term) used in clauses (A) through (G) above in a manner that would circumvent
the intention of the restrictions set forth in such clauses; or
(ii) without the written consent of the then Agent, amend, modify or waive any
provision of this Agreement if the effect thereof is to affect the rights or
duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Purchasers, but
with the consent of Seller, Agent may amend this Agreement solely to add
additional Persons as Purchasers, hereunder and (ii) Agent and the Required
Purchasers may enter into amendments to modify any of the terms or provisions of
Article XI, Article XII, Section 14.13 or any other provision of this Agreement
without the consent of any Seller Party, provided that such amendment has no
negative impact upon such Seller Party. Any modification or waiver made in
accordance with this Section 14.1 shall apply to each of the Purchasers equally
and shall be binding upon each Seller Party, the Purchasers and Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective  if given by telecopy, upon the receipt
thereof,  if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or  if
given by any other means, when received at the address specified in this Section
14.2. Seller hereby authorizes Agent and the Purchasers to effect Purchases and
Rate Tranche Period and Discount Rate selections based on telephonic notices
made by any Person whom Agent or applicable Purchaser in good faith believes to
be acting on behalf of Seller. Seller agrees to deliver promptly to Agent and
each applicable Purchaser a written confirmation of each telephonic notice
signed by an authorized officer of Seller; provided, however, the absence of
such confirmation shall not affect the validity of such notice. If the written
confirmation differs from the action taken by Agent and/or the applicable
Purchaser, the records of Agent and/or the applicable Purchaser shall govern
absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or otherwise,
has payment made to it with respect to any portion of the Aggregate Unpaids
owing to such Purchaser (other than payments received pursuant to Sections 10.2
or 10.3) in a greater proportion than that received by any other Purchaser
entitled to receive a ratable share of such Aggregate Unpaids, such Purchaser
agrees, promptly upon demand, to purchase for cash without recourse or warranty
a portion of such Aggregate Unpaids held by the other Purchasers so that after
such purchase each Purchaser will hold its ratable proportion of such Aggregate
Unpaids; provided that if all or any portion of such excess amount is thereafter
recovered from such
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Purchaser, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
Section 14.4 Protection of Ownership Interests of the Purchasers.
(a) Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may be necessary or desirable, or that Agent may request, to perfect, protect or
more fully evidence Agent’s (on behalf of the Purchasers) valid ownership of or
first priority perfected security interest in the Asset Portfolio, or to enable
Agent or the Purchasers to exercise and enforce their rights and remedies
hereunder. Without limiting the foregoing, Seller will, upon the request of
Agent, file such financing or continuation statements, or amendments thereto or
assignments thereof, and execute and file such other instruments and documents,
that may be necessary or desirable, or that Agent may reasonably request, to
perfect, protect or evidence such valid ownership of or first priority perfected
security interest in the Asset Portfolio. At any time following the occurrence
of an Amortization Event, Agent may, or Agent may direct Seller or Servicer to,
notify the Obligors of Receivables, at Seller’s expense, of the ownership or
security interests of the Purchasers under this Agreement and may also direct
that payments of all amounts due or that become due under any or all Receivables
be made directly to Agent or its designee. Seller or Servicer (as applicable)
shall, at any Purchaser’s request, withhold the identity of such Purchaser in
any such notification.
(b) If any Seller Party fails to perform any of its obligations hereunder, Agent
or any Purchaser may (but shall not be required to) perform, or cause
performance of, such obligations, and Agent’s or such Purchaser’s costs and
expenses incurred in connection therewith shall be payable by Seller as provided
in Section 10.3. Each Seller Party irrevocably authorizes Agent at any time and
from time to time in the sole and absolute discretion of Agent, and appoints
Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to
authorize and/or execute on behalf of such Seller Party as debtor and to file
financing or continuation statements (and amendments thereto and assignments
thereof) necessary or desirable in Agent’s sole and absolute discretion to
perfect and to maintain Agent’s (on behalf of the Purchasers) valid ownership of
or first priority perfected security interest in the Receivables and (ii) to
file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Receivables as a financing statement in
such offices as Agent in its sole and absolute discretion deems necessary or
desirable to perfect and to maintain the ownership of or first priority
perfected security interest in the interests of the Purchasers in the
Receivables. This appointment is coupled with an interest and is irrevocable.
The authorization by each Seller Party set forth in the second sentence of this
Section 14.4(b) is intended to meet all requirements for authorization by a
debtor under Article 9 of any applicable enactment of the UCC, including,
without limitation, Section 9-509 thereof.
Section 14.5 Confidentiality.
(a) Each Seller Party, Agent and each Purchaser shall maintain and shall cause
each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential or proprietary information with respect to
Agent, each Purchaser and their
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respective businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party, Agent and such Purchaser and its officers and employees may
disclose such information to such Seller Party’s, Agent’s and such Purchaser’s
external accountants and attorneys and as required by any applicable law or
order of any judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Seller Party hereby
consents to the disclosure of any nonpublic information with respect to it (i)
to Agent or the Purchasers, by each other and by each such Person to such
Person’s equityholders, and (ii) by Agent or the Purchasers to any prospective
or actual assignee or participant of any of them and provided each such Person
is informed of and agrees to maintain the confidential nature of such
information. In addition, the Purchasers and Agent may disclose any such
nonpublic information pursuant to any law, rule, regulation, direction, request
or order of any judicial, administrative or regulatory authority or proceedings
(whether or not having the force or effect of law).
Section 14.6 Bankruptcy Petition.
(a) Seller, Servicer, Agent and each Purchaser hereby covenants and agrees that,
prior to the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of any Purchaser that is a special purpose
bankruptcy remote entity, it will not institute against, or join any other
Person in instituting against any Purchaser or any such entity any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
(b) Servicer hereby covenants and agrees that, prior to the date that is one
year and one day after the payment in full of all Obligations of Seller, it will
not institute against, or join any other Person in instituting against, Seller
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
Section 14.7 Limitation of Liability. Except with respect to any claim arising
out of the willful misconduct or gross negligence of Agent or any Purchaser, no
claim may be made by any Seller Party or any other Person against Agent or any
Purchaser or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and each Seller
Party hereby waives, releases and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO,
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ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND
EACH SELLER PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF AGENT OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST AGENT OR
ANY PURCHASER OR ANY AFFILIATE OF AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns (including any
trustee in bankruptcy) and shall inure to the benefit of the Hedge Providers and
its successors and permitted assigns (including any trustee in bankruptcy). 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 terminated in accordance with its terms; provided, however, that the
rights and remedies with respect to (i) any breach of any representation and
warranty made by any Seller Party pursuant to Article V, (ii) the
indemnification, payment and other provisions of Article X and Sections 2.7(b),
14.5 and 14.6 shall be continuing and shall survive any termination of this
Agreement.
Section 14.12 Counterparts; Severability; Section References. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which
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when taken together shall constitute one and the same Agreement. Any provisions
of this Agreement which are prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Unless otherwise expressly indicated, all references herein to “Article,”
“Section,” “Schedule” or “Exhibit” shall mean articles and sections of, and
schedules and exhibits to, this Agreement.
Section 14.13 [Reserved]
Section 14.14 Characterization.
(a) It is the intention of the parties hereto that each Purchase hereunder shall
constitute and be treated as an absolute and irrevocable sale to Agent, on
behalf of the Purchasers, for all purposes (other than federal and state income
tax purposes), which such Purchase shall provide Agent, on behalf of the
Purchasers, with the full benefits of ownership of the Asset Portfolio. Except
as specifically provided in this Agreement, each Purchase hereunder is made
without recourse to Seller; provided, however, that (i) Seller shall be liable
to each Purchaser and Agent for all representations, warranties, covenants and
indemnities made by Seller pursuant to the terms of this Agreement and (ii) such
sale does not constitute and is not intended to result in an assumption by any
Purchaser or Agent or any assignee thereof of any obligation of Seller or any
Originator or any other Person arising in connection with the Receivables, the
Related Security, or the related Contracts, or any other obligations of Seller
or any Originator.
(b) In addition to any ownership interest which Agent may from time to time
acquire pursuant hereto, Seller hereby grants to Agent for the ratable benefit
of the Purchasers a valid and perfected security interest in all of Seller’s
right, title and interest in, to and under all Receivables now existing or
hereafter arising, the Collections, each Lock-Box, each P.O. Box, each
Collection Account, the Reserve Account, all Related Security, all other rights
and payments relating to such Receivables and all proceeds of any thereof prior
to all other liens on and security interests therein to secure the prompt and
complete payment of the Aggregate Unpaids. Agent and the Purchasers shall have,
in addition to the rights and remedies that they may have under this Agreement,
all other rights and remedies provided to a secured creditor under the UCC and
other applicable law, which rights and remedies shall be cumulative.
Section 14.15 [Reserved.]
Section 14.16 Intercreditor Agreement. Each Purchaser, Seller and Servicer each
hereby authorize Agent to enter into the Intercreditor Agreement or an amendment
thereto, as applicable, in each case, on or about the date hereof and each
Purchaser agrees to be bound by the provisions thereof.
Section 14.17 Confirmation and Ratification of Terms.
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(a) Upon the effectiveness of this Agreement, each reference to the Prior
Agreement in any other Transaction Document and any document, instrument or
agreement executed and/or delivered in connection with the Prior Agreement or
any other Transaction Document, shall mean and be a reference to this Agreement.
(b) The other Transaction Documents and all agreements, instruments and
documents executed or delivered in connection with the Prior Agreement or any
other Transaction Document shall each be deemed to be amended to the extent
necessary, if any, to give effect to the provisions of this Agreement, as the
same may be amended, modified, supplemented or restated from time to time.
(c) The effect of this Agreement is to amend and restate the Prior Agreement in
its entirety, and to the extent that any rights, benefits or provisions in favor
of Agent or any Purchaser existed in the Prior Agreement and continue to exist
in this Agreement without any written waiver of any such rights, benefits or
provisions prior to the date hereof, then such rights, benefits or provisions
are acknowledged to be and to continue to be effective from and after April 27,
2007. This Agreement is not a novation.
(d) The parties hereto agree and acknowledge that any and all rights, remedies
and payment provisions under the Prior Agreement, including, without limitation,
any and all rights, remedies and payment provisions with respect to (i) any
representation and warranty made or deemed to be made pursuant to the Prior
Agreement, or (ii) any indemnification provision, shall continue and survive the
execution and delivery of this Agreement.
(e) Except to the extent paid pursuant to the Closing Date Assignment Agreement,
the parties hereto agree and acknowledge that any and all amounts owing as or
for advances, Purchaser Yield, fees, expenses or otherwise under or pursuant to
the Prior Agreement, immediately prior to the effectiveness of this Agreement
shall be owing as or for advances, Purchaser Yield, fees, expenses or otherwise,
respectively, under or pursuant to this Agreement.
(f) Each of the Seller Parties hereby fully and forever waives, releases,
extinguishes and discharges Agent and the Purchasers from any and all claims,
actions, complaints, causes of action, debts, costs and expenses, demands on
suits, at law or in equity or in bankruptcy or otherwise, known or unknown,
present or future, fixed or contingent, which any Seller Party, as applicable,
may now have or claim to have against Agent or any Purchaser arising out of or
relating to the Prior Agreement or the transactions contemplated thereby.
(g) Agent and the Purchasers acknowledge and agree that the Support Agreement,
dated as of April 27, 2007, executed by Seller in favor of U.S. Bank National
Association, as agent, is terminated, of no further force and effect and Seller
has no liability to Agent or any Purchaser pursuant to the Support Agreement.
Section 14.18 Consent. Each of the parties hereto hereby consents to the Amended
and Restated Receivables Sale Agreement, dated as of the date hereof, among
Seller, Webster and PDSI, the Amended and Restated Subordinated Notes, dated as
of the date hereof, executed in connection with the Amended and Restated
Receivables Sale Agreement and the
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Articles of Amendment to Seller’s Articles of Organization filed
contemporaneously with the execution and delivery of this Agreement.
(Signature Pages Follow)
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WHEREOF, the parties hereto have caused this Agreement to be executed and
delivered by their duly authorized officers as of the date hereof.
Conformed copy of agreement does not contain signatures as signatories only sign
individual amendments.

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EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
“2006 ESOP Note” means that certain ESOP Note dated September 11, 2006 payable
by the Patterson Companies, Inc. Employee Stock Ownership Trust to the order of
Patterson Companies, Inc., a Minnesota corporation, and its permitted successors
and assigns (including, without limitation, a debtor in possession on its
behalf) and certain of its domestic subsidiaries, in the original principal
amount of $105,000,000.00.
“3D Cone Receivable” means a Receivable originated by PDSI that arises from the
sale or financing (or servicing) of 3D Cone Beam technology.
“3D Cone Beam Receivable” means a Receivable originated by PDSI that arises from
the sale or financing of 3D Cone Beam technology.
“Accrual Period” means each Fiscal Month, provided that the initial Accrual
Period hereunder means the period from (and including) the date hereof to (and
including) the last day of the Fiscal Month thereafter.
“ACH Receipts” means funds received in respect of Automatic Debit Collections.
“Acquisition” means any transaction, or any series of related transactions,
consummated on or after April 30, 2011, by which PDCo or any of its Subsidiaries
(i) acquires any going concern business or all or substantially all of the
assets of any Person, or division thereof, whether through purchase of assets,
merger or otherwise or (ii) directly or indirectly acquires from one or more
Persons (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
ownership interests of a partnership or limited liability company of any Person.
“Adverse Claim” means a lien, security interest, charge or encumbrance, or other
right or claim in, of or on any Person’s assets or properties in favor of any
other Person.
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person or any Subsidiary of such Person. A Person shall be
deemed to control another Person if the controlling Person owns 10% or more of
any class of voting securities of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
“Agent” has the meaning set forth in the preamble to this Agreement.
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“Aggregate Capital” means, on any date of determination, the aggregate
outstanding Capital of all Purchasers on such date.
“Aggregate Reduction” has the meaning set forth in Section 1.3.
“Aggregate Unpaids” means, at any time, an amount equal to the sum of all
accrued and unpaid fees under any Fee Letter, Purchaser Yield, Aggregate
Capital, Hedging Obligations and all other unpaid Obligations (whether due or
accrued) at such time.
“Agreement” means this Amended and Restated Contract Purchase Agreement, as it
may be amended, restated, supplemented or otherwise modified and in effect from
time to time.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the LIBO Rate for a one month
period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, for the avoidance of doubt, the
LIBO Rate for any day shall be based on the rate appearing on the Reuters BBA
Libor Rates Page 3750 (or on any successor or substitute page of such page) at
approximately 11:00 a.m. London time on such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or
the LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate,
respectively.
“Amortization Date” means the earliest to occur of (i) the day on which any of
the conditions precedent set forth in Section 6.2 are not satisfied, (ii) the
Business Day immediately prior to the occurrence of an Amortization Event set
forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written
notice from Agent following the occurrence of any other Amortization Event, (iv)
the Business Day specified in a written notice from Agent following the failure
to obtain the Required Ratings within 60 days following delivery of a Ratings
Request to Seller and Servicer and (v) the date which is 5 Business Days after
Agent’s receipt of written notice from Seller that it wishes to terminate the
facility evidenced by this Agreement.
“Amortization Event” has the meaning set forth in Article IX.
“Applicable Collection Amount” means, with respect to any Settlement Date, (i)
if the Amortization Date has not occurred, the aggregate amount of funds
Servicer will apply on such Settlement Date in accordance with Section 2.2(c)
and without giving effect to any Reserve Account Draw Amount and (ii) otherwise,
$0.
“Asset Portfolio” has the meaning set forth in Section 1.2(b).
“Assignment Agreement” has the meaning set forth in Section 12.1(b).
“Authorized Officer” means, with respect to any Person, its president, corporate
controller, treasurer or chief financial officer.
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“Automatic Debit Collection” means the payment of Collections by an Obligor by
means of automatic electronic funds transfer from the Obligor’s bank account.
“Balloon Payment Receivable” means a Receivable that arises under a Contract
that requires the final payment to be in an amount equal to 35% of the initial
balance of such Receivable.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Broken Funding Costs” means for any Capital of any Purchaser which: (i) is
reduced without compliance by Seller with the notice requirements hereunder or
(ii) is otherwise transferred or terminated on the date prior to the date on
which it was originally scheduled to end; an amount equal to the excess, if any,
of (A) Purchaser Yield that would have accrued during the remainder of the Rate
Tranche Periods subsequent to the date of such reduction, assignment, transfer,
funding or termination of such Capital if such reduction, assignment, transfer,
funding or termination had not occurred, over (B) the income, if any, actually
received net of any costs of redeployment of funds during the remainder of such
period by the holder of such Capital from investing the portion of such Capital
not so allocated.
“Business Day” means any day on which banks are not authorized or required to
close in New York, New York or Chicago, Illinois and The Depository Trust
Company of New York is open for business, and, if the applicable Business Day
relates to any computation or payment to be made with respect to the LIBO Rate,
any day on which dealings in dollar deposits are carried on in the London
interbank market.
“Capital” means at any time with respect to the Asset Portfolio and any
Purchaser, an amount equal to (A) the amount of Cash Purchase Price paid by such
Purchaser to Seller for Purchases pursuant to Sections 1.1 and 1.2, minus (B)
the sum of the aggregate amount of Collections and other payments received by
Agent or such Purchaser, as applicable, which in each case are applied to reduce
such Purchaser’s Capital in accordance with the terms and conditions of this
Agreement; provided that such Capital shall be restored (in accordance with
Section 2.5) in the amount of any Collections or other payments so received and
applied if at any time the distribution of such Collections or payments are
rescinded, returned or refunded for any reason.
“Cap Strike Rate” means 3.25%, or such other applicable “cap strike rate”
approved by Agent and specified as such in the applicable Hedging Agreement in
effect at such time.
“Cash Purchase Price” means, with respect to any Purchase of any portion of the
Asset Portfolio, the amount paid to Seller for such portion of the Asset
Portfolio which shall not exceed the least of (i) the amount requested by Seller
in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit
on the applicable Purchase date, taking into account any other proposed Purchase
requested on the applicable Purchase date and (iii) the excess, if any, of the
Net Portfolio Balance (less the Credit Enhancement) on the applicable Purchase
date over the aggregate outstanding amount of the Aggregate Capital determined
as of the date of the most
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recent Monthly Report, taking into account any other proposed Purchase requested
on the applicable Purchase date.
“CEREC Receivable” means a Receivable originated by PDSI that arises from the
sale or financing (or servicing) by PDSI of ceramic reconstruction machinery
that was manufactured by or on behalf of Sirona Dental Systems, Inc.
“Certificate of Beneficial Ownership” means a certification regarding beneficial
ownership of the applicant as required by the Beneficial Ownership Regulation.
“Change of Control” means (i) the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the outstanding shares of voting stock of
Servicer or (ii) PDCo ceases to own, directly or indirectly, 100% of the
outstanding membership units of Seller or 100% of the outstanding capital stock
of any Originator.
“Charged-Off Receivable” means a Receivable: (i) as to which the Obligor thereof
has taken any action, or suffered any event to occur, of the type described in
Section 9.1(d) (as if references to the Seller Party therein refer to such
Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller’s books as uncollectible, (iv) which has been identified
by Seller as uncollectible or (v) as to which any payment, or part thereof,
remains unpaid for 180 days or more from the original due date for such payment.
“Closing Date Assignment Agreement” means that certain Assignment and Assumption
Agreement, dated as of the date hereof, by and among Servicer, Seller, U.S. Bank
National Association, Northern Trust and Agent, as amended, restated,
supplemented or otherwise modified from time to time.
“Collection Account” means, collectively, each First-Tier Account and the
Second-Tier Account.
“Collection Account Agreement” means (i) with respect to each Lock-Box or
Collection Account, an agreement, substantially in the form of Exhibit VI, among
an Originator (if applicable), Seller, Agent and a Collection Bank, or any
similar or analogous agreement among an Originator, Seller, Agent and a
Collection Bank and (ii) with respect to each P.O. Box, a Postal Notice, in each
case as such document may be amended, restated, supplemented or otherwise
modified from time to time.
“Collection Bank” means, at any time, any of the banks holding one or more
Collection Accounts.
“Collection Notice” means a notice, in substantially the form of Annex A to
Exhibit VI, from Agent to a Collection Bank, or any similar or analogous notice
from Agent to a Collection Bank.
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“Collections” means, with respect to any Receivable, all cash collections and
other cash and other proceeds in respect of such Receivable, including, without
limitation, all scheduled payments, prepayments, yield, Finance Charges or other
related amounts accruing in respect thereof, all cash proceeds of Related
Security with respect to such Receivable and all payments received pursuant to
the Hedging Agreements.
“Commitment” means, for each Purchaser, the commitment of such Purchaser to
Purchase portions of the Asset Portfolio from Seller in an amount not to exceed
(i) in the aggregate, the amount set forth opposite such Purchaser’s name on
Schedule A to this Agreement, as such amount may be modified in accordance with
the terms hereof (including, without limitation, any termination of Commitments
pursuant to Section 4.6 hereof) and (ii) with respect to any individual Purchase
hereunder, its Pro Rata Share of the Cash Purchase Price therefor.
“Concentration Limit” means, at any time, for any Obligor, 2% of the aggregate
Outstanding Balance of all Eligible Receivables, or such other amount (a
“Special Concentration Limit”) for such Obligor designated by Agent and
consented to by each Purchaser; provided, that in the case of an Obligor and any
Affiliate of such Obligor, the Concentration Limit shall be calculated as if
such Obligor and such Affiliate are one Obligor; and provided, further, that
Agent may, upon not less than three Business Days’ notice to Seller, cancel any
Special Concentration Limit.
“Consent Notice” has the meaning set forth in Section 4.6(a).
“Consent Period” has the meaning set forth in Section 4.6(a).
“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit or the
obligations of any such Person as general partner of a partnership with respect
to the liabilities of the partnership.
“Contract” means, with respect to any Receivable, any and all instruments,
agreements, invoices or other writings pursuant to which such Receivable arises
or which evidences such Receivable.
“COVID-19 Deferred Payment Program” means PDSI’s program that permits Obligors
to defer payments under their related Contract for a period of up to 90 days in
connection with the COVID-19 Emergency.
“COVID-19 Emergency” means collectively, the public health emergency declared by
the United States Secretary of Health and Human Services on January 27, 2020,
with respect to
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the 2019 Novel Coronavirus and all related federal and state emergency
declarations and measures.
“COVID-19 Modifications” means, with respect to any COVID-19 Modified
Receivable, each of the following modifications to the related Contract: (i)
installment payments under the related Contract are deferred for a period of up
to 90 days commencing on the date such Receivable first became a COVID-19
Modified Receivable and (ii) the deferred monthly installments are added to the
end of the related Contract and payable in equal monthly installments.
“COVID-19 Modified Receivable” means a Receivable as to which the payment terms
of the related Contract have been extended or modified in connection with the
COVID-19 Deferred Payment Program.
“Credit Agreement” means the Amended and Restated Credit Agreement, dated on or
about January 27, 2017 (as it may be amended, restated, supplemented or
otherwise modified from time to time) by and among PDCo, the lenders from time
to time party thereto, and MUFG Bank, Ltd., as administrative agent.
“Credit and Collection Policy” means Seller’s and/or the applicable Originator’s
credit and collection policies and practices relating to Contracts and
Receivables existing on the date of the Prior Agreement and summarized in
Exhibit VIII hereto, as modified from time to time in accordance with this
Agreement.
“Credit Enhancement” means, on any date, an amount equal to the product of (i)
the Net Portfolio Balance as of the close of business of Servicer on such date,
multiplied by (ii) the sum of (x) the greater of (a) 11.00% and (b) the product
of the Loss Multiple multiplied by the average Loss-to-Liquidation Ratio for the
immediately preceding four Fiscal Months plus (y) the average Dilution Ratio for
the immediately preceding three Fiscal Months; provided, that during the
Temporary Period, COVID-19 Modified Receivables shall be excluded from each
component of the calculation of the Loss-to-Liquidation Ratio and Dilution
Ratio.
“Deemed Collections” means the aggregate of all amounts Seller shall have been
deemed to have received as a Collection of a Receivable. If at any time, (i) the
Outstanding Balance of any Receivable is either (x) reduced as a result of any
defective or rejected goods or services, any discount or any adjustment or
otherwise by Seller or any Originator (other than cash Collections on account of
the Receivables) or (y) reduced or canceled as a result of a setoff in respect
of any claim by any Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction), (ii) any of the
representations or warranties in Article V are no longer true with respect to
any Receivable or (iii) the Related Equipment for any Receivable is Repossessed
and sold for less than the fair market value of such Related Equipment, Seller
shall be deemed to have received a Collection of such Receivable in the amount
of (A) such reduction or cancellation in the case of clause (i) above, (B) the
entire Outstanding Balance in the case of clause (ii) above and (C) the
difference between the fair market value of the Repossessed Related Equipment
and the gross proceeds received upon the sale of such Repossessed Related
Equipment in the case of clause (iii) above.
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“Deemed Exchange” shall have the meaning set forth in Section 1.5.
“Defaulted Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for 121 days or more from the original due date for such
payment.
“Default Fee” means with respect to any amount due and payable by Seller in
respect of any Aggregate Unpaids, an amount equal to the greater of (i) $1000
and (ii) interest on any such unpaid Aggregate Unpaids at a rate per annum equal
to 3.50% above the Alternate Base Rate.
“Default Ratio” means, as of the last day of each Fiscal Month, a percentage
equal to: (i) the aggregate Outstanding Balance of all Defaulted Receivables on
such day, divided by (ii) the aggregate Outstanding Balance of all Receivables
on such day.
“Delinquency Ratio” means, at any time, a percentage equal to (i) the aggregate
Outstanding Balance of all Receivables that were Delinquent Receivables at such
time divided by (ii) the aggregate Outstanding Balance of all Receivables at
such time.
“Delinquent Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for 61 days or more from the original due date for such
payment.
“Designated Obligor” means an Obligor indicated by Agent to Seller in writing.
“Dilution Ratio” means, on any date, an amount equal to the product of (i) 6
multiplied by (ii) the quotient of (x) “non-cash full returns” and “non-cash
partial returns” (each as set forth as a separate line item in the Monthly
Report) divided by (y) the Outstanding Balance of all Receivables as of the
first day of the current month.
“Discounted Receivable” means a Receivable that arises under a Contract pursuant
to which the first installment payment thereunder is not required to be made
until four (4) months after the contract inception; provided that such
Receivable shall cease to be a Discounted Receivable after the date that is four
(4) months after the contract inception and shall at all times thereafter be
deemed to be a “Skip Receivable”; provided further, if the first six payments
thereunder are made in full in consecutive months, such Receivable shall no
longer be deemed to be a Skip Receivable.
“Discount Rate” means, the LIBO Rate or the Alternate Base Rate, as applicable,
with respect to the Capital of each Purchaser.
“EagleSoft Computer Receivable” means a Receivable originated by PDSI or Webster
that arises from the sale or financing of computer hardware equipment by PDSI or
Webster. “EagleSoft Computer Receivables” may also be referred to as “Patterson
Computer Receivables”.
“EagleSoft Software Receivable” means a Receivable originated by PDSI or Webster
that arises from the sale, licensing or financing of computer software by PDSI
or Webster.
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“EagleSoft Software Receivable Discounted Balance” means, at any time, with
respect to any EagleSoft Software Receivable, the discounted Outstanding Balance
of such Receivable, which Outstanding Balance shall be discounted using a
discount rate of 10%.
“EBITDA” means earnings before interest, taxes, depreciation and amortization.
“Eligible COVID-19 Modified Receivable” means, as of any date of determination,
a COVID-19 Modified Receivable that satisfied each of the following criteria:
(i) installment payments under the related Contract are not required to be made
for a period of up to 90 days commencing on the date such Receivable first
became a COVID-19 Modified Receivable, (ii) interest will continue to accrue
under the related Contract during such deferral period, (iii) the monthly
installment amount owing by the related Obligor during the related deferral
period is $0, (iv) the deferred monthly installments will be added to the end of
the related Contract and payable in equal monthly installments, (v) such
Receivable was not a Delinquent Receivable on the date it became a COVID-19
Modified Receivable, (vi) no payment, or part thereof, that was invoiced to the
related Obligor prior to such Receivable becoming a COVID-19 Modified Receivable
remains unpaid for 61 days or more from the original due date for such payment,
(vii) the related Obligor has affirmatively elected to participate in the
COVID-19 Deferred Payment Program by completing and submitting an application
therefore to PDSI, (viii) such Receivable became a COVID-19 Modified Receivable
not later than June 30, 2020, (ix) no more than three monthly installment
payments in the aggregate are being deferred under the related Contract and (x)
the Originator thereof is PDSI. No Receivable that is modified other than in in
accordance with the criteria set forth above shall be an Eligible COVID-19
Modified Receivable and any subsequent modification to an Eligible COVID-19
Modified Receivable shall cause such Receivable to cease being an Eligible
COVID-19 Modified Receivable and instead become a Modified Receivable.
“Eligible Hedge Provider” means FTB or any financial institution approved by
Agent.
“Eligible Receivable” means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a resident of the United
States or, if a corporation or other business organization, is organized under
the laws of the United States or any political subdivision thereof and has its
chief executive office in the United States; (b) is not an Affiliate of any of
the parties hereto; (c) is not a Designated Obligor; and (d) is not a government
or a governmental subdivision or agency,
(ii) the Obligor of which is not, and has not been, the Obligor of any
Charged-Off Receivable or any Defaulted Receivable,
(iii) that is not a Charged-Off Receivable or a Defaulted Receivable,
(iv) that is not a Delinquent Receivable,
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(v) that arises under a Contract that has not had any payment or other terms of
such Contract extended, modified or waived other than, in the case of an
Eligible COVID-19 Modified Receivable, the COVID-19 Modifications,
(vi) that is an “account” or “chattel paper” within the meaning of Article 9 of
the UCC of all applicable jurisdictions,
(vii) that is denominated and payable only in United States dollars in the
United States,
(viii) that arises under a Contract in substantially the form of one of the form
contracts set forth on Exhibit IX hereto or otherwise approved by Agent in
writing, which, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms subject to no
offset, counterclaim or other defense,
(ix) that arises under a Contract that (A) does not require the Obligor under
such Contract to consent to the transfer, sale or assignment of the rights and
duties of the applicable Originator or any of its assignees under such Contract,
(B) does not contain a confidentiality provision that purports to restrict the
ability of any Purchaser to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract and (C) at the time the
payment is received the Contract is continuing and does not constitute a refund
on a terminated Contract,
(x) that arises under a Contract that contains an obligation to pay a specified
sum of money, contingent only upon the sale of goods or the provision of
services by the applicable Originator,
(xi) that, together with the Contract related thereto, does not contravene any
law, rule or regulation applicable thereto (including, without limitation, any
law, rule and regulation relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation,
(xii) that satisfies all applicable requirements of the Credit and Collection
Policy,
(xiii) that was generated in the ordinary course of the applicable Originator’s
business,
(xiv) that arises solely from the sale, licensing or financing of goods or the
provision of services to the related Obligor by the applicable Originator, and
not by any other Person (in whole or in part),
(xv) as to which Agent has not notified Seller that Agent has determined that
such Receivable or class of Receivables is not acceptable as an Eligible
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Receivable, including, without limitation, because such Receivable arises under
a Contract that is not acceptable to Agent,
(xvi) that is not subject to any right of rescission, set-off, counterclaim, any
other defense (including defenses arising out of violations of usury laws) of
the applicable Obligor against the applicable Originator or any other Adverse
Claim, and the Obligor thereon holds no right as against such Originator to
cause such Originator to repurchase the goods or merchandise the sale of which
shall have given rise to such Receivable (except with respect to sale discounts
effected pursuant to the Contract, or defective goods returned in accordance
with the terms of the Contract),
(xvii) that, (a) if such Receivable is a Discounted Receivable, the related
Contract requires that payment in full of the Outstanding Balance of such
Receivable be made not later than 64 months (or in the case of (x) a Large
Receivable, not later than 88 months or (y) a Large Extended Discount
Receivable, not later than 91 months) after the date such Receivable was
originated; (b) if such Receivable is an Extended Discounted Receivable, the
related Contract requires that payment in full of the Outstanding Balance of
such Receivable be made not later than 73 months after the date such Receivable
was originated; (c) if such Receivable is an EagleSoft Computer Receivable or
EagleSoft Software Receivable, the related Contract requires that payment in
full of the Outstanding Balance of such Receivable be made not later than 39
months after the date such Receivable was originated; (d) if such Receivable is
a 3D Cone Beam Receivable, the related Contract requires that payment in full of
the Outstanding Balance of such Receivable be made not later than 84 months
after the date such Receivable was originated; (e) if such Receivable is a Large
Receivable, the related Contract requires that payment in full of the
Outstanding Balance of such Receivable be made not later than 85 months after
the date such Receivable was originated and (f) otherwise, the related Contract
requires that payment in full of the Outstanding Balance of such Receivable be
made not later than 61 months after the date such Receivable was originated,
(xviii) as to which the applicable Originator has satisfied and fully performed
all obligations on its part with respect to such Receivable required to be
fulfilled by it, and no further action is required to be performed by any Person
with respect thereto other than payment thereon by the applicable Obligor,
(xix) all right, title and interest to and in which has been validly transferred
by the applicable Originator directly to Seller under and in accordance with the
Receivables Sale Agreement, and Seller has good and marketable title thereto
free and clear of any Adverse Claim,
(xx) that arises under a Contract that requires the Outstanding Balance of such
Receivable to be paid in equal consecutive monthly installments; provided,
however, any delay in or deferral of the payment of the first installment
payment of a Discounted Receivable or an Extended Discounted Receivable shall
not cause such Receivable to be ineligible pursuant to this clause (xx) so long
as all installment
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payments after the first installment payment are to be paid in equal consecutive
monthly installments,
(xxi) that, if such Receivable is a Veterinary Receivable, the Outstanding
Balance thereof, when added to the Outstanding Balance of all other Veterinary
Receivables, does not exceed 10% of the aggregate Outstanding Balance of all
Eligible Receivables,
(xxii) that is not (a) a Balloon Payment Receivable or (b) a Modified Receivable
that does not constitute an Eligible COVID-19 Modified Receivable,
(xxiii) that, if such Receivable is an EagleSoft Software Receivable, the
Outstanding Balance thereof, when added to the Outstanding Balance of all other
EagleSoft Software Receivables, does not exceed 3% of the aggregate Outstanding
Balance of all Eligible Receivables,
(xxiv) that, if such Receivable is an EagleSoft Computer Receivable (also
referred to as a “Patterson Computer Receivable”), the Outstanding Balance
thereof, when added to the Outstanding Balance of all other EagleSoft Computer
Receivables, does not exceed 2% of the aggregate Outstanding Balance of all
Eligible Receivables,
(xxv) that if such Receivable is a Large Receivable for which the related
Contract requires that payment in full of the Outstanding Balance of such
Receivable be made later than 64 months after the date such Receivable was
originated, the Outstanding Balance thereof when added to the Outstanding
Balance of all other such Large Receivables, does not exceed 15% of the
aggregate Outstanding Balance of all Eligible Receivables,
(xxvi) that if such Receivable is a Discounted Receivable, the Outstanding
Balance thereof when added to the Outstanding Balance of all other such
Discounted Receivables, does not exceed 5% of the aggregate Outstanding Balance
of all Eligible Receivables,
(xxvii) that if such Receivable is an Extended Discounted Receivable, (a) the
Outstanding Balance thereof when added to the Outstanding Balance of all other
such Extended Discounted Receivables, does not exceed 10% of the aggregate
Outstanding Balance of all Eligible Receivables and (b) the Obligor thereof has
a credit score of 720 or higher from TransUnion or Experian,
(xxviii) that, together with the related Contract, has not been sold, assigned
or pledged by the applicable Originator or Seller, except pursuant to the terms
of the Receivables Sale Agreement and this Agreement,
(xxix) that if such Receivable is an EagleSoft Software Receivable, the Obligor
thereof has made at least three payments on such Receivable,
        Exh. I-11
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(xxx) the Obligor of which is not (a) with respect to (x) any Obligor that (A)
has a credit score of 720 or higher from TransUnion or Experian, (B) has five
years of payment history with the Servicer and its Affiliates, (C) has a supply
account and finance account that is current and (D) is purchasing monthly from
the Servicer and its Affiliates and is not subject to any purchase restrictions,
the Obligor of other Receivables with an aggregate Outstanding Balance in excess
of $750,000 or (y) with respect to any other Obligor, the Obligor of other
Receivables with an aggregate Outstanding Balance in excess of $500,000 or (b)
the Group Practice Obligor of other Receivables with an aggregate Outstanding
Balance in excess of $700,000,
(xxxi) with respect to which there is only one executed copy of the related
Contract, which may be executed in counterparts and received by facsimile or
electronic mail, and which will, together with the related records be held by
Servicer as bailee of Agent and the Purchasers, and no other custodial
agreements are in effect with respect thereto,
(xxxii) that excludes residual value and any maintenance component,
(xxxiii)  that if such Receivable is a Discounted Receivable or a Skip
Receivable, the Outstanding Balance thereof when added to the Outstanding
Balance of all other such Discounted Receivables and Skip Receivables, does not
exceed 10% of the aggregate Outstanding Balance of all Eligible Receivables,
(xxxiv)  that if such Receivable is an Extended Skip Receivable, the Outstanding
Balance thereof when added to the Outstanding Balance of all other such Extended
Skip Receivables, does not exceed 10% of the aggregate Outstanding Balance of
all Eligible Receivables,
(xxxv) that if such Receivable is an Extended Skip Receivable, no required
payment, or part thereof, in connection with such Receivable remains unpaid for
30 days or more from the original due date for such payment,
(xxxvi)  that if such Receivable is a Special Market Receivable, the Outstanding
Balance thereof when added to the Outstanding Balance of all other such Special
Market Receivables, does not exceed 5% of the aggregate Outstanding Balance of
all Eligible Receivables,
(xxxvii) that if such Receivable is a Large Extended Discount Receivable, the
Outstanding Balance thereof when added to the Outstanding Balance of all other
such Large Extended Discount Receivable, does not exceed 2.5% of the aggregate
Outstanding Balance of all Eligible Receivables, and
(xxxviii) that if such Receivable is a Large Individual Obligor Receivable, the
Outstanding Balance thereof when added to the Outstanding Balance of all other
such Large Individual Obligor Receivable, does not exceed 5% of the aggregate
Outstanding Balance of all Eligible Receivables.
        Exh. I-12
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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“ESOP” means the Patterson Companies, Inc. Employee Stock Ownership Plan, as
amended and restated effective May 1, 2011, as amended.
“Excess Spread” means, as of the last day of any Fiscal Month, the sum of (i)
the weighted average annual percentage rate accruing on the Receivables, minus
(ii) 1%, minus (iii) the Cap Strike Rate, minus (iv) the Program Fee Rate (as
defined in each Fee Letter).
“Extended Discounted Receivable” means a Receivable that arises under a Contract
pursuant to which the first installment payment thereunder is required to be
made at least five (5) months, but not more than twelve (12) months, after the
contract inception; provided that such Receivable shall cease to be an Extended
Discounted Receivable after the date on which the first installment payment
thereunder is required to be paid and shall at all times thereafter be deemed to
be an “Extended Skip Receivable”; provided further, if the first six payments
thereunder are made in full in consecutive months, such Receivable shall no
longer be deemed to be an “Extended Skip Receivable.”
“Extended Skip Receivable” has the meaning set forth in the definition of
“Extended Discounted Receivable”.
“Extension Notice” has the meaning set forth in Section 4.6(a).
“Facility” means the facility providing for Seller to sell the Asset Portfolio
as provided in this Agreement.
“Facility Account” means the account numbered 7024149366 maintained by Seller in
the name of “PDC Funding Company II, LLC” at FTB, together with any successor
account or sub-account.
“Facility Termination Date” means the earliest of (i) the Purchase Termination
Date and (ii) the Amortization Date.
“Federal Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as amended and any successor statute thereto.
“Federal Funds Effective Rate” means for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it. Notwithstanding the foregoing, if any Purchaser is borrowing
overnight funds on any day from a Federal Reserve Bank to make or maintain such
Purchaser’s funding of all or any portion of the
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Asset Portfolio hereunder, the Federal Funds Effective Rate, at the option of
such Purchaser, for such Purchaser shall be the average rate per annum at which
such overnight borrowings are made on any such day. Each determination of the
Federal Funds Effective Rate shall be conclusive and binding on Seller and the
Seller Parties, except in the case of manifest error.
“Fee Letter” means the letter agreement dated as of the date hereof (as amended,
restated, supplemented, or otherwise modified from time to time) between Seller
and FTB.
“Final Payout Date” means the date following the Amortization Date on which the
Aggregate Capital shall have been reduced to zero and all of the Aggregate
Unpaids, Obligations and all other amounts then accrued or payable to Agent, the
Purchasers and the other Indemnified Parties shall have been indefeasibly paid
in full in cash.
“Finance Charge Collections” means Collections consisting of Finance Charges.
“Finance Charges” means, with respect to a Contract, any finance, interest, late
payment charges or similar charges owing by an Obligor pursuant to such
Contract.
“First-Tier Account” means each concentration account, depositary account,
lock-box account or similar account in which any Collections are collected or
deposited, including, without limitation, by means of automatic funds transfer
(other than the Second-Tier Account) and which is listed on Exhibit IV.
“Fiscal Month” means any of the twelve consecutive four week or five week
accounting periods used by PDCo for accounting purposes which begin on the
Sunday after the last Saturday in April of each year and ending on the last
Saturday in April of the next year.
“FTB” has the meaning set forth in the Preliminary Statements to this Agreement.
“GAAP” means generally accepted accounting principles in effect in the United
States of America as of the date of this Agreement, provided, that if there
occurs after the date of this Agreement any change in GAAP that affects in any
material respect the calculation of any amount described in Sections 9.1(f) or
(m), Agent and Seller shall negotiate in good faith amendments to the provisions
of this Agreement that relate to the calculation of such amounts with the intent
of having the respective positions of Agent and the Purchasers and Seller after
such change in GAAP conform as nearly as possible to their respective positions
as of the date of this Agreement and, until any such amendments have been agreed
upon, the amounts described in Sections 9.1(f) or (m) shall be calculated as if
no such change in GAAP has occurred.
“Group Practice” means a dental practice with four or more offices and/or
$200,000 in annual merchandise purchases.
“Group Practice Obligor” means an Obligor to which PDCo will extend credit
without a personal guaranty of the dentists within the Group Practice.
“Hedge Floating Amount” means, with respect to any Hedging Agreement, all
amounts owing to Seller under, and any other Collections with respect to, such
Hedging Agreement.
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“Hedge Provider” means any Person that enters into a Hedging Agreement with
Seller.
“Hedge Provider Downgrade” means, with respect to any Hedge Provider, other than
FTB, the unsecured, unguaranteed, long-term debt rating of any Hedge Provider
under its then current Hedging Agreement, if any, is reduced below A- or
withdrawn by S&P or below A3 or withdrawn by Moody’s.
“Hedging Agreement” means an interest rate cap agreement in form and substance
satisfactory to Agent, entered into by Seller (and pledged to Agent, for the
ratable benefit of the Purchasers), as the same may from time to time be
supplemented, amended, extended, replaced or otherwise modified, in each case,
in accordance with Section 7.3(d)(C); provided that (i) at the time such
transaction is entered into, the Hedge Provider thereunder is an Eligible Hedge
Provider, (ii) Seller shall have no payment obligations nor any Hedging
Obligations under such transaction other than the payment of up-front premiums
to the Eligible Hedge Provider (and on or prior to the date of such Hedging
Agreement all such premiums payable by Seller during the scheduled term of such
Hedging Agreement shall have been duly paid in full in advance), (iii) the
notional amount with respect to such Hedging Agreement shall be an amount at all
times satisfactory to Agent, which amount shall be equal to the aggregate amount
of all Commitments hereunder until otherwise specified by Agent to Seller and
(iv) the documentation governing such hedge transaction shall be in form and
substance satisfactory to Agent.
“Hedging Obligations” means all amounts payable to a Hedge Provider under such
Hedge Provider’s Hedging Agreement, including, without limitation, the accrued
fixed amount under such Hedging Agreement and all breakage costs associated with
the termination of such Hedging Agreement.
“Indebtedness” of a Person means such Person’s (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of property or
services (other than accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
capitalized lease obligations, (vi) net liabilities under interest rate swap,
exchange or cap agreements, (vii) Contingent Obligations and (viii) liabilities
in respect of unfunded vested benefits under plans covered by Title IV of ERISA.
“Independent Governor” shall mean a member of the Board of Governors of Seller
who (i) shall not have been at the time of such Person’s appointment or at any
time during the preceding five years, and shall not be as long as such Person is
a governor of Seller, (A) a director, officer, employee, partner, shareholder,
member, manager, governor or Affiliate of any of the following Persons
(collectively, the “Independent Parties”): Servicer, any Patterson Entity, or
any of their respective Subsidiaries or Affiliates (other than Seller), (B) a
supplier to any of the Independent Parties, (C) a Person controlling or under
common control with any partner, shareholder, member, manager, governor,
Affiliate or supplier of any of the Independent Parties, or (D) a member of the
immediate family of any director, officer, employee, partner, shareholder,
member, manager, Affiliate or supplier of any of the Independent Parties; (ii)
has
        Exh. I-15
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prior experience as an independent director or governor for a corporation or
limited liability company whose charter documents required the unanimous consent
of all independent directors or governors thereof before such corporation or
limited liability company could consent to the institution of bankruptcy or
insolvency proceedings against it or could file a petition seeking relief under
any applicable federal or state law relating to bankruptcy and (iii) has at
least three years of employment experience with one or more entities that
provide, in the ordinary course of their respective businesses, advisory,
management or placement services to issuers of securitization or structured
finance instruments, agreements or securities and is employed by any such
entity.
“Indemnified Amounts” has the meaning set forth in Section 10.1.
“Indemnified Party” has the meaning set forth in Section 10.1.
“Intercreditor Agreement” means the Amended and Restated Intercreditor
Agreement, dated as of April 27, 2007, by and among Agent, The Bank of Tokyo
Mitsuibishi UFJ, Ltd., as agent under that certain Third Amended and Restated
Receivables Purchase Agreement dated December 3, 2010, PDCo, PDSI, Webster and
Seller, as amended by Amendment #1 thereto, dated as of December 3, 2010 and as
amended by Amendment #2 thereto, dated as of the date hereof, and as the same
may be further amended, restated supplemented or otherwise modified from time to
time.
“Interest Expense Coverage Ratio” shall have the meaning assigned to such term
in the Credit Agreement, including all defined terms used within such term which
defined terms and definitions thereof are incorporated by reference herein;
provided, however, that in the event the Credit Agreement is terminated or such
defined term is no longer used in the Credit Agreement, the respective meaning
assigned to such term immediately preceding such termination or non-usage shall
be used for purposes of this Agreement. If, after the date hereof, the Interest
Expense Coverage Ratio maintenance covenant set forth in Section 6.21 of the
Credit Agreement (or any of the defined terms used in connection with such
covenant (including the term “Interest Expense Coverage Ratio”)) is amended,
modified or waived, then the test set forth in this Agreement or the defined
terms used therein, as applicable, shall, for all purposes of this Agreement,
automatically and without further action on the part of any Person, be deemed to
be also so amended, modified or waived, if at the time of such amendment,
modification or waiver, (i) each Purchaser Agent and the Agent is a party to the
Credit Agreement and (ii) such amendment, modification or waiver is consummated
in accordance with the terms of the Credit Agreement.
“JPMorgan” means JPMorgan Chase Bank, N.A. in its individual capacity and its
successors and assigns.
“Large Extended Discount Receivable” means a Receivable that is both a Large
Receivable and an Extended Discounted Receivable with an original term of 84
months.
“Large Individual Obligor Receivable” means any Receivable owing by an Obligor
that (i) is not a Group Practice Obligor and (ii) is the Obligor of Receivables
(inclusive of such Receivable) with an aggregate Outstanding Balance in excess
of $500,000.
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“Large Receivable” means (i) each Receivable, the initial Outstanding Balance of
such Receivable on the date it was originated was not less than $75,000, (ii)
each 3D Cone Beam Receivable that was originated on or prior to November 30,
2012 and (iii) each CEREC Receivable that was originated on or prior to November
30, 2012.
“Legal Maturity Date” means the two-year anniversary of the due date of the
latest maturing Receivable in the Asset Portfolio on the date of the occurrence
of the Amortization Date.
“Leverage Ratio” shall have the meaning assigned to such term in the Credit
Agreement, including all defined terms used within such term which defined terms
and definitions thereof are incorporated by reference herein; provided, however,
that in the event the Credit Agreement is terminated or such defined term is no
longer used in the Credit Agreement, the respective meaning assigned to such
term immediately preceding such termination or non-usage shall be used for
purposes of this Agreement. If, after the date hereof, the Leverage Ratio
maintenance covenant set forth in Section 6.20 of the Credit Agreement (or any
of the defined terms used in connection with such covenant (including the term
“Leverage Ratio”)) is amended, modified or waived, then the test set forth in
this Agreement or the defined terms used therein, as applicable, shall, for all
purposes of this Agreement, automatically and without further action on the part
of any Person, be deemed to be also so amended, modified or waived, if at the
time of such amendment, modification or waiver, (i) each Purchaser Agent and the
Agent is a party to the Credit Agreement and (ii) such amendment, modification
or waiver is consummated in accordance with the terms of the Credit Agreement.
“LIBO Rate” means the rate per annum equal to the sum of (a) the applicable
British Bankers’ Association Interest Settlement Rate for deposits in U.S.
dollars appearing on Reuters Screen LIBOR01 as of 11:00 a.m. (London time) two
Business Days prior to the first day of the relevant Rate Tranche Period, and
having a maturity equal to the greater of (i) Rate Tranche Period, provided
that, if Reuters Screen LIBOR01 is not available to Agent for any reason, the
applicable LIBO Rate for the relevant Rate Tranche Period shall instead be the
applicable British Bankers’ Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Rate Tranche Period, and having a maturity equal to such Rate Tranche
Period, and (ii) if no such British Bankers’ Association Interest Settlement
Rate is available to Agent, the applicable LIBO Rate for the relevant Rate
Tranche Period shall instead be the rate determined by Agent from another
recognized source for interbank quotation reasonably acceptable to Seller at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Rate Tranche Period, in the approximate amount to be funded at the LIBO
Rate and having a maturity equal to such Rate Tranche Period, and (b) 0.50%. The
LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
“Lock-Box” means each locked postal box with respect to which a bank who has
executed a Collection Account Agreement has been granted exclusive access for
the purpose of retrieving and processing payments made on the Receivables and
which is listed on Exhibit IV.
        Exh. I-17
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“Loss Multiple” means (i) 3.5 if the Leverage Ratio is less than or equal to
3.0x and (ii) 4.5 if the Leverage Ratio is greater than 3.0x.
“Loss-to-Liquidation Ratio” means, on any date, an amount equal to the quotient
of (i) the Loss Amount divided by (ii) the sum of (x) the total Collections that
reduce the Outstanding Balance on the Receivables during the immediately
preceding Fiscal Month, plus (y) the Loss Amount,
where:
Loss Amount  = The positive number representing the difference between (i) the
Outstanding Balance of all Receivables which became Defaulted Receivables during
the immediately preceding Fiscal Month minus (ii) the Outstanding Balance of all
Receivables which ceased to continue to be Defaulted Receivables (solely as a
consequence of any Obligor making a payment on any Defaulted Receivable) during
the immediately preceding Fiscal Month. The Loss Amount shall not be less than
“zero”.
“Material Adverse Effect” means a material adverse effect on (i) the financial
condition or operations of any Seller Party and its Subsidiaries, (ii) the
ability of any Seller Party to perform its obligations under this Agreement or
the Performance Provider to perform its obligations under the Performance
Undertaking, (iii) the legality, validity or enforceability of this Agreement or
any other Transaction Document, (iv) any Purchaser’s interest in the Receivables
generally or in any significant portion of the Receivables, the Related Security
or the Collections with respect thereto, or (v) the collectibility of the
Receivables generally or of any material portion of the Receivables.
“Modified Receivable” means a Receivable as to which the payment terms of the
related Contract have been extended or modified for credit reasons since the
origination of such Receivable.
“Monthly Report” means a report, in substantially the form of Exhibit X hereto
(appropriately completed), furnished by Servicer to Agent and each Purchaser
pursuant to Section 8.5.
“Moody’s” means Moody’s Investors Service, Inc.
“Net Portfolio Balance” means, at any time, the aggregate Outstanding Balance of
all Eligible Receivables at such time reduced by (i) the aggregate amount by
which the Outstanding Balance of all Eligible Receivables of each Obligor and
its Affiliates exceeds the Concentration Limit for such Obligor and (ii) the
excess of the aggregate Outstanding Balance of all Eligible Receivables that are
EagleSoft Software Receivables over the aggregate EagleSoft Software Receivable
Discounted Balance of all such Receivables.
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“Non-Renewing Purchaser” has the meaning set forth in Section 4.6(a).
“Obligations” shall have the meaning set forth in Section 2.1.
“Obligor” means a Person obligated to make payments pursuant to a Contract.
“Off-Balance Sheet Liability” of a Person means the principal component of (i)
any repurchase obligation or liability of such Person with respect to accounts
or notes receivable sold by such Person, (ii) any liability under any sale and
leaseback transaction which is not a capitalized lease, (iii) any liability
under any so-called “synthetic lease” or “tax ownership operating lease”
transaction entered into by such Person, (iv) any receivables purchase or
financing facility or (v) any obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated balance
sheets of such Person, but excluding from this clause (v) all operating leases.
“Originated Receivable” means all indebtedness and other obligations owed to
Seller or an Originator (at the time it arises, and before giving effect to any
transfer or conveyance under the Receivables Sale Agreement or hereunder) or in
which Seller or an Originator has a security interest or other interest,
including, without limitation, any indebtedness, obligation or interest
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale, licensing or financing of goods or the
rendering of services by an Originator, and further includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute an Originated Receivable
separate from an Originated Receivable consisting of the indebtedness and other
rights and obligations arising from any other transaction; provided further,
that any indebtedness, rights or obligations referred to in the immediately
preceding sentence shall be an Originated Receivable regardless of whether the
account debtor, any Originator or Seller treats such indebtedness, rights or
obligations as a separate payment obligation.
“Originator” means each of PDSI and Webster, in their respective capacities as
seller under the Receivables Sale Agreement and any other seller from time to
time party thereto.
“Outstanding Balance” of any Receivable at any time means the then outstanding
principal balance thereof.
“Participant” has the meaning set forth in Section 12.2.
“Patterson Entity” means each of PDCo and each Originator and their respective
successors and assigns.
“Payment Instruction” has the meaning set forth in Section 1.4.
“PDCo” has the meaning set forth in the preamble to this Agreement.
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“PDSI” means Patterson Dental Supply, Inc., a Minnesota corporation, together
with its successors and assigns.
“Performance Provider” means PDCo in its capacity as Provider under the
Performance Undertaking.
“Performance Undertaking” means that certain Performance Undertaking, dated as
of the date hereof, by Performance Provider in favor of Seller, substantially in
the form of Exhibit XI, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
“Permitted Investments” means (a) evidences of indebtedness maturing within
thirty days after the date of loan thereof, issued by, or guaranteed by the full
faith and credit of, the federal government of the United States, (b) repurchase
agreements with banking institutions or broker-dealers registered under the
Securities Exchange Act of 1934 which are fully secured by obligations of the
kind specified in clause (a), (c) money market funds (i) rated not lower than
the highest rating category from Moody’s and “AAA m” or “AAAm-g,” from S&P or
(ii) which are otherwise acceptable to Agent or (d) commercial paper issued by
any corporation incorporated under the laws of the United States and rated at
least “A-1+” (or the equivalent) by S&P and at least “P-1” (or the equivalent)
by Moody’s.
“Person” means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
“P.O. Box” means a locked postal box located in a United States post office to
which Obligors remit payments of Receivables.
“Postal Notice” means a notice from Patterson Companies, Inc. directing the
United States post office where any P.O. Box is located to transfer control of
such P.O. Box to Agent, which notice shall be substantially in the form of
Exhibit XII.
“Potential Amortization Event” means an event which, with the passage of time or
the giving of notice, or both, would constitute an Amortization Event.
“Prior Agreement” has the meaning set forth in the Preliminary Statements to
this Agreement.
“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by FTB or its parent (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.
“Principal Collections” means Collections other than Finance Charge Collections.
“Proposed Reduction Date” has the meaning set forth in Section 1.3.
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“Pro Rata Share” means, for each Purchaser, a percentage equal to (i) the
Commitment of such Purchaser, divided by (ii) the aggregate amount of all
Commitments of all Purchasers.
“Purchase” has the meaning set forth in Section 1.1(a).
“Purchase Limit” means $100,000,000, as such amount may be modified in
accordance with the terms of Section 4.6(b).
“Purchase Notice” has the meaning set forth in Section 1.2(a).
“Purchase Termination Date” means July 31, 2020, as extended by mutual agreement
of Seller, Agent and one or more Purchasers.
“Purchasers” has the meaning set forth in the preamble in this Agreement.
“Purchaser Yield” means for each respective Rate Tranche Period relating to any
Capital (or portion thereof) of any of the Purchasers, an amount equal to the
product of the applicable Discount Rate for such Capital (or portion thereof)
multiplied by the Capital (or portion thereof) of such Purchaser for each day
elapsed during such Rate Tranche Period, annualized on a 360 day basis.
“Purchasing Purchaser” has the meaning set forth in Section 12.1(b).
“Qualified Acquisition” means any acquisition of either or both the capital
stock or assets of any Person or Persons (or any portion thereof), or the last
to occur of a series of such acquisitions consummated within a period of six
consecutive months, if the aggregate amount of indebtedness incurred by the PDCo
and its Subsidiaries to finance the purchase price of, or assumed by one or more
of them in connection with the acquisition of, such stock and property is at
least $100,000,000.
“Rams Acquisition” means the acquisition by Patterson Companies, Inc. of Animal
Health International, Inc. pursuant to an Agreement and Plan of Merger dated as
of May 2, 2015 (as amended, supplemented or modified from time to time) by and
among Patterson Companies, Inc., Rams Merger Sub, Inc. and Animal Health
International, Inc.
“Rate Tranche Period” means, with respect to any portion of the Asset Portfolio
held by a Purchaser:
(a) if Purchaser Yield for any portion of such Purchaser’s Capital is calculated
on the basis of the LIBO Rate, a period of one month, or such other period as
may be mutually agreeable to the applicable Purchaser and Seller (but not to
exceed 90 days), commencing on a Business Day selected by Seller or the
applicable Purchaser pursuant to this Agreement. Such Rate Tranche Period shall
end on the day in the applicable succeeding calendar month which corresponds
numerically to the beginning day of such Rate Tranche Period, provided, however,
that if there is no such numerically corresponding day in such succeeding month,
such Rate Tranche Period shall end on the last Business Day of such succeeding
month; or
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(b) if Purchaser Yield for any portion of such Purchaser’s Capital is calculated
on the basis of the Alternate Base Rate, a period commencing on a Business Day
selected by Seller and agreed to by the applicable Purchaser, provided no such
period shall exceed one month.
If any Rate Tranche Period would end on a day which is not a Business Day, such
Rate Tranche Period shall end on the next succeeding Business Day, provided,
however, that in the case of Rate Tranche Periods corresponding to the LIBO
Rate, if such next succeeding Business Day falls in a new month, such Rate
Tranche Period shall end on the immediately preceding Business Day. In the case
of any Rate Tranche Period for any portion of any Purchaser’s Capital which
commences before the Amortization Date and would otherwise end on a date
occurring after the Amortization Date, such Rate Tranche Period shall end on the
Amortization Date. The duration of each Rate Tranche Period which commences
after the Amortization Date shall be of such duration as selected by the
applicable Purchaser.
“Ratings Request” has the meaning as specified in Section 10.2(c).
“Receivable” means at any time, each and every Originated Receivable that has
been identified for sale to Seller in any Sale Assignment (as defined in the
Receivables Sale Agreement), including all schedules thereto, delivered pursuant
to Section 1.1(a)(ii) of the Receivables Sale Agreement.
“Receivables Sale Agreement” means that certain Receivables Sale Agreement,
dated as of April 27, 2007, as amended by the Amended and Restated Receivables
Sale Agreement dated August 12, 2011, by and among the Originators and Seller,
as amended, restated, supplemented or otherwise modified from time to time.
“Records” means, with respect to any Receivable, all Contracts and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable, any Related Security
therefor and the related Obligor.
“Reduction Notice” has the meaning set forth in Section 1.3.
“Regulatory Change” shall mean (i) the adoption after the date hereof of any
applicable law, rule or regulation (including any applicable law, rule or
regulation regarding capital adequacy) or any change therein after the date
hereof, (ii) any change after the date hereof in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency, or (iii) the compliance,
whether commenced prior to or after the date hereof, by any Purchaser with the
final rule titled Risk-Based Capital Guidelines; Capital Adequacy Guidelines;
Capital Maintenance: Regulatory Capital; Impact of Modifications to Generally
Accepted Accounting Principles; Consolidation of Asset-Backed Commercial Paper
Programs; and Other Related Issues, adopted by the United States bank regulatory
agencies on
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December 15, 2009, or any rules or regulations promulgated in connection
therewith by any such agency.
“Related Equipment” means with respect to any Receivable, the goods sold or
licensed to or financed for the Obligor which sale, licensing or financing gave
rise to such Receivable and all financing statements or other filings with
respect thereto.
“Related Security” means, with respect to any Receivable:
(i) all of Seller’s interest in the Related Equipment or other inventory and
goods (including returned or repossessed inventory or goods), if any, the sale,
licensing or financing of which by the applicable Originator gave rise to such
Receivable, and all insurance contracts with respect thereto,
(ii) all other security interests or liens and property subject thereto from
time to time, if any, purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all financing statements and security agreements describing any collateral
securing such Receivable,
(iii) all guaranties, letters of credit, insurance, “supporting obligations”
(within the meaning of Section 9-102(a) of the UCC of all applicable
jurisdictions) and other agreements or arrangements of whatever character from
time to time supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements associated with
such Receivable,
(v) all Records related to such Receivable,
(vi) all of Seller’s right, title and interest in, to and under the Receivables
Sale Agreement and the Performance Undertaking,
(vii) all of Seller’s right, title and interest in and to each Lock-Box, P.O.
Box and Collection Account, and any and all agreements related thereto,
(viii) all of Seller’s right, title and interest in, to and under the Hedging
Agreements,
(ix) all Collections in respect thereof, and
(x) all proceeds of such Receivable and any of the foregoing.
“Repossessed” means that, with respect to any Related Equipment, the applicable
Originator or its agent has obtained possession, control and dominion of such
Related Equipment from the related Obligor.
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“Required Monthly Payments” means, as of any Settlement Date, an amount equal to
(i) if such date is before the Amortization Date, the amount owing on such
Settlement Date under clauses first and second of Section 2.2(c) and (ii) if
such date is on and after the Amortization Date, the Aggregate Unpaids at such
time.
“Required Purchasers” means, at any time, collectively, the Purchasers with
Commitments in excess of 75% of the aggregate Commitments.
“Required Ratings” has the meaning as specified in Section 10.2(c).
“Reserve Account” means the account numbered 7029029258 maintained by Agent at
the Reserve Account Bank, together with any successor account or sub-account.
“Reserve Account Bank” means FTB.
“Reserve Account Deficiency” means, at any time of determination, the excess, if
any, of: (a) the Reserve Account Required Amount, over (b) the amount then on
deposit in the Reserve Account.
“Reserve Account Draw Amount” means, with respect to any Settlement Date, the
excess, if any, of (a) the Required Monthly Payments for the related Settlement
Date, over (b) the Applicable Collection Amount for such Settlement Date.
“Reserve Account Required Amount” means (i) during the Temporary Period,
$800,000 and (ii) thereafter, $0.
“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of membership units of Seller
now or hereafter outstanding, except a dividend payable solely in shares of that
class of membership units or in any junior class of membership units of Seller,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
membership units of Seller now or hereafter outstanding, (iii) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to the
Subordinated Loans (as defined in the Receivables Sale Agreement), (iv) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of membership units of Seller now or hereafter outstanding,
and (v) any payment of management fees by Seller (except for reasonable
management fees to the Originators or their Affiliates in reimbursement of
actual management services performed).
“RPA Deferred Purchase Price” has the meaning set forth in Section 1.6.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.
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“Second-Tier Account” means the account numbered 7024149366 maintained by Seller
in the name of “PDC Funding Company II, LLC” at FTB, together with any successor
account or sub-account.
“Seller” has the meaning set forth in the preamble to this Agreement.
“Seller Parties” has the meaning set forth in the preamble to this Agreement.
“Seller Party” has the meaning set forth in the preamble to this Agreement.
“Servicer” means at any time the Person (which may be Agent) then authorized
pursuant to Article VIII to service, administer and collect Receivables.
“Servicing Fee” has the meaning set forth in Section 8.6.
“Settlement Date” means the 19th day of each calendar month, provided, however,
that on and after the occurrence and continuation of any Amortization Event, the
Settlement Date with respect to any portion of Capital shall be the date
selected as such by the Agent from time to time (it being understood that the
Agent may select such Settlement Date to occur as frequently as daily) or, if
such day is not a Business Day, then the first Business Day thereafter.
“Settlement Period” means each Accrual Period, provided, however, that on and
after the occurrence and continuation of any Amortization Event, the Settlement
Period with respect to any portion of Capital shall be the period commencing on
the last day of the previous Settlement Period and ending such number of days
later as may be selected by the Agent (it being understood that the Agent may
select such Settlement Period to occur as frequently as daily).
“Skip Receivable” has the meaning set forth in the definition of “Discounted
Receivable”.
“Special Market Receivables” means any Receivable for which the Obligor is a
Group Practice Obligor.
“Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of Seller.
“Temporary Period” means the period beginning on May 19, 2020 and ending on the
Settlement Date occurring in August 2020.
“Terminating Commitment Availability” means, with respect to any Terminating
Purchaser, the positive difference (if any) between (a) an amount equal to the
Commitment (without giving effect to clause (iii) of the proviso to the
penultimate sentence of Section 4.6(b))
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of such Terminating Purchaser, minus an amount equal to 2% of such Commitment,
minus (b) the Capital funded by such Terminating Purchaser.
“Terminating Purchaser” has the meaning set forth in Section 4.6(b).
“Terminating Rate Tranche” has the meaning set forth in Section 4.3(b).
“Termination Date” has the meaning set forth in Section 2.2(d).
“Termination Percentage” has the meaning set forth in Section 2.2(d).
“Thompson Note” means that certain Promissory Note dated April 1, 2002 payable
by GreatBanc Trust Company, solely in its capacity as trustee of the Thompson
Dental Company Employee Stock Ownership Plan and Trust, to the order of Thompson
Dental Company, in the original principal amount of $12,611,503.67.
“Transaction Documents” means, collectively, this Agreement, the Prior
Agreement, each Purchase Notice, the Receivables Sale Agreement, the Performance
Undertaking, the Intercreditor Agreement, each Collection Account Agreement, the
Hedging Agreements, each Fee Letter, the Subordinated Note (as defined in the
Receivables Sale Agreement), the Closing Date Assignment Agreement and all other
instruments, documents and agreements executed and delivered in connection
herewith or in connection with the Prior Agreement, in each case, as amended,
restated, supplemented or otherwise modified from time to time.
“Twelfth Amendment Date” means August 2, 2019.
“UCC” means the Uniform Commercial Code as from time to time in effect in the
specified jurisdiction.
“Veterinary Receivable” means a Receivable arising from the sale or financing by
Webster of veterinary equipment.
“Webster” means Webster Veterinary Supply, Inc., a Minnesota corporation,
together with its successors and assigns.
All accounting terms defined directly or by incorporation in this Agreement or
the Receivables Sale Agreement shall have the defined meanings when used in any
certificate or other document delivered pursuant thereto unless otherwise
defined therein. For purposes of this Agreement, the Receivables Sale Agreement
and all such certificates and other documents, unless the context otherwise
requires: (a) accounting terms not specifically defined herein shall be
construed in accordance with GAAP; (b) all terms used in Article 9 of the UCC in
the State of Illinois, and not specifically defined herein, are used herein as
defined in such Article 9; (c) references to any amount as on deposit or
outstanding on any particular date means such amount at the close of business on
such day; (d) the words “hereof,” “herein” and “hereunder” and words of similar
import refer to such agreement (or the certificate or other document in which
they are used) as a whole and not to any particular provision of such agreement
(or such certificate or document); (e) references to any Section are references
to such Section in such
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agreement (or the certificate or other document in which the reference is made),
and references to any paragraph, subsection, clause or other subdivision within
any Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (f) the term “including” means
“including without limitation”; (g) references to any law, rule, regulation, or
directive of any governmental or regulatory authority refer to such law, rule,
regulation, or directive, as amended from time to time and include any successor
law, rule, regulation, or directive; (h) references to any agreement refer to
that agreement as from time to time amended or supplemented or as the terms of
such agreement are waived or modified in accordance with its terms; (i)
references to any Person include that Person’s successors and assigns; (j)
headings are for purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof; (k) unless otherwise
provided, in the calculation of time from a specified date to a later specified
date, the term “from” means “from and including”, and the terms “to” and “until”
each means “to but excluding”; (l) terms in one gender include the parallel
terms in the neuter and opposite gender; and (m) the term “or” is not exclusive.

        Exh. I-27
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