Exhibit 10(a)

 

EXECUTION COPY

 

RECEIVABLES PURCHASE AGREEMENT

 

Dated as of December 27, 2002

 

Among

 

LEGACY RECEIVABLES LLC

as the Seller

 

and

 

CIESCO L.P.

and

CORPORATE ASSET FUNDING COMPANY, INC.

as the Investors

 

and

 

CITIBANK, N.A.

as a Bank

 

and

 

CITICORP NORTH AMERICA, INC.

as the Agent

 

and

 

ELECTRONIC DATA SYSTEMS CORPORATION

 

and

 

EDS INFORMATION SERVICES L.L.C.

as the Collection Agent

and the Originator

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TABLE OF CONTENTS

 

    

Page

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ARTICLE I DEFINITIONS

  

1

Section 1.01.     Certain Defined Terms

  

1

Section 1.02.     Other Terms

  

29

ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES

  

29

Section 2.01.     Purchase Facility

  

29

Section 2.02.     Making Purchases

  

30

Section 2.03.     Receivable Interest Computation

  

32

Section 2.04.     Settlement Procedures

  

33

Section 2.05.     Fees

  

36

Section 2.06.     Payments and Computations, Etc.

  

36

Section 2.07.     Dividing or Combining Receivable Interests

  

37

Section 2.08.     Increased Costs

  

37

Section 2.09.     Additional Yield on Receivable Interests Bearing a Eurodollar
Rate

  

39

Section 2.10.     Taxes

  

39

Section 2.11.     Security Interest

  

42

Section 2.12.     Sharing of Payments

  

44

Section 2.13.     Repurchase Options

  

45

ARTICLE III CONDITIONS OF PURCHASES

  

46

Section 3.01.     Conditions Precedent to Initial Purchase

  

46

Section 3.02.     Conditions Precedent to All Purchases and Reinvestments

  

48

ARTICLE IV REPRESENTATIONS AND WARRANTIES

  

49

Section 4.01.     Representations and Warranties of the Seller

  

49

Section 4.02.     Representations and Warranties of the Collection Agent

  

52

ARTICLE V COVENANTS

  

54

Section 5.01.     Covenants of the Seller

  

54

Section 5.02.     Covenant of the Seller, the Originator and EDS

  

62

Section 5.03.     Compliance with Assignment of Claims Act

  

63

ARTICLE VI ADMINISTRATION AND COLLECTION OF POOL RECEIVABLES

  

64

 

- i -

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Section 6.01.     Designation of Collection Agent

  

64

Section 6.02.     Duties of Collection Agent

  

64

Section 6.03.     Certain Rights of the Agent

  

66

Section 6.04.     Rights and Remedies

  

67

Section 6.05.     Further Actions Evidencing Purchases

  

67

Section 6.06.     Covenants of the Collection Agent and the Originator

  

68

Section 6.07.     Indemnities by the Collection Agent

  

70

Section 6.08.     Procedures When Litigation or Similar Proceedings Involved

  

71

ARTICLE VII EVENTS OF TERMINATION

  

73

Section 7.01.     Events of Termination

  

73

ARTICLE VIII THE AGENT

  

77

Section 8.01.     Authorization and Action

  

77

Section 8.02.     Agent's Reliance, Etc.

  

77

Section 8.03.     CNAI and Affiliates

  

78

Section 8.04.     Bank's Purchase Decision

  

78

ARTICLE IX INDEMNIFICATION

  

79

Section 9.01.     Indemnities by the Seller

  

79

Section 9.02.     Procedures When Litigation or Similar Proceedings Involved

  

81

ARTICLE X MISCELLANEOUS

  

83

Section 10.01.    Amendments, Etc.

  

83

Section 10.02.    Notices, Etc.

  

83

Section 10.03.    Assignability

  

84

Section 10.04.    Costs, Expenses and Taxes

  

86

Section 10.05.    No Proceedings; Waiver of Consequential Damages

  

87

Section 10.06.    Confidentiality

  

88

Section 10.07.    Tax Treatment

  

89

Section 10.08.    GOVERNING LAW

  

89

Section 10.09.    Execution in Counterparts

  

89

Section 10.10.    Survival of Termination

  

89

Section 10.11.    Consent to Jurisdiction

  

89

Section 10.12.    WAIVER OF JURY TRIAL

  

90

Section 10.13.    Successors and Assigns

  

90

 

- ii -

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SCHEDULES

SCHEDULE I

  

—  

  

Lock-Box Banks

SCHEDULE II

  

—  

  

Credit and Collection Policy

SCHEDULE III

  

—  

  

Excluded Contracts and Excluded Receivables

ANNEXES

ANNEX A

  

—  

  

Form of Seller Report

ANNEX B-1

  

—  

  

Form of Lock-Box Agreement (Bank of America)

ANNEX B-2

  

—  

  

Form of Lock-Box Agreement (All Banks)

ANNEX C

  

—  

  

Form of Opinion of Counsel to the Seller

ANNEX D

  

—  

  

Form of Assignment and Acceptance

ANNEX E

  

—  

  

Form of Funds Transfer Letter

ANNEX F-1

  

—  

  

Form of Undertaking (Collection Agent and Accountholder)

ANNEX F-2

  

—  

  

Form of Undertaking (Originator)

 

- iii -

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RECEIVABLES

PURCHASE AGREEMENT

 

Dated as of December 27, 2002

 

LEGACY RECEIVABLES LLC, a Delaware limited liability company (the “Seller”),
CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation, and CIESCO L.P.,
a New York limited partnership, CITIBANK, N.A., CITICORP NORTH AMERICA, INC., a
Delaware corporation (“CNAI”), as agent (the “Agent”) for the Investors and the
Banks (each as defined herein), ELECTRONIC DATA SYSTEMS CORPORATION, a Delaware
corporation (“EDS”), and EDS INFORMATION SERVICES L.L.C., a Delaware limited
liability company (“EIS”), as Collection Agent and Originator, agree as follows:

 

PRELIMINARY STATEMENT

 

The Seller has acquired, and may continue to acquire, Receivables from the
Originator (as hereinafter defined), either by purchase or by contribution to
the capital of the Seller, as determined from time to time by the Seller and the
Originator. The Seller is prepared to sell undivided fractional ownership
interests (referred to herein as “Receivable Interests”) in the Receivables.
Each of CAFCO and CIESCO may, in their sole discretion, purchase such Receivable
Interests, and the Banks are prepared to purchase such Receivable Interests, in
each case on the terms set forth herein. Accordingly, the parties agree as
follows:

 

ARTICLE I

 

DEFINITIONS

 

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

 

“Adjusted Eurodollar Rate” means, for any Fixed Period, an interest rate per
annum equal to the rate per annum obtained by dividing (i) the Eurodollar Rate
for such Fixed Period by (ii) a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage for such Fixed Period.

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“Adverse Claim” means a lien, security interest or other charge or encumbrance,
or any other type of preferential arrangement.

 

“Affected Person” has the meaning specified in Section 2.08(a).

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or executive officer of such Person.

 

“Affiliated Obligor” means any Obligor that is an Affiliate of another Obligor.

 

“Agent’s Account” means the special account (account number 40636695) of the
Agent maintained at the office of Citibank at 399 Park Avenue, New York, New
York, ABA No. 021-000-089.

 

“Aggregate Purchase Limit” means $500,000,000, as such amount may be reduced
pursuant to Section 2.01(b) and Section 2.01(c). References to the unused
portion of the Aggregate Purchase Limit shall mean, at any time, the Aggregate
Purchase Limit, as then reduced pursuant to Section 2.01(b), minus the then
outstanding Capital of Receivable Interests under this Agreement.

 

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

 

(i)  the rate of interest announced publicly by Citibank in New York, New York,
from time to time as Citibank’s base rate;

 

(ii)  1/2 of one percent above the latest three-week moving average of secondary
market morning offering rates in the United States for three-month certificates
of deposit of major United States money market banks, such three-week moving
average being determined weekly on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve Bank of
New York or, if such publication shall be suspended or terminated, on the basis
of quotations for such rates received by Citibank

 

2

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from three New York certificate of deposit dealers of recognized standing
selected by Citibank, in either case adjusted to the nearest 1/4 of one percent
or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one
percent; and

 

(iii)  the Federal Funds Rate.

 

“Approved Government Contract” means a contract giving rise to U.S. Government
Receivables; provided that the Collection Agent or the Seller shall have
notified the Agent in writing that it wishes to include as Pool Receivables U.S.
Government Receivables arising under such contract and shall have provided the
Agent with a description of such contract and the Agent shall have approved such
request; and provided, further, that an Approved Government Contract shall not
include a special access program contract, sensitive compartmented information
contract or other contract for which the United States Government has restricted
disclosure of information regarding the existence or funding of the contract.

 

“Asset Purchase Agreement” means (i) in the case of any Bank other than
Citibank, the asset purchase agreement entered into by such Bank concurrently
with the Assignment and Acceptance pursuant to which it became party to this
Agreement and (ii) in the case of Citibank, the secondary market agreement,
asset purchase agreement or other similar liquidity agreement entered into by
Citibank for the benefit of CAFCO or CIESCO, to the extent relating to the sale
or transfer of interests in Receivable Interests.

 

“Assignee Rate” for any Fixed Period for any Receivable Interest means an
interest rate per annum equal to the Eurodollar Rate for such Fixed Period plus
2.0% plus (at any time when an Event of Termination shall exist) 2.0%; provided,
however, that in case of:

 

(i)  any Fixed Period on or prior to the first day of which an Investor or Bank
shall have notified the Agent that the introduction of or any change in or in
the interpretation of any law or regulation makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Investor or Bank to fund such Receivable Interest at the Assignee Rate set forth
above (and such Investor or Bank shall not have subsequently notified the Agent
that such circumstances no longer exist),

 

3

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(ii)  any Fixed Period of one to (and including) 29 days (it being understood
and agreed that this clause (ii) shall not be applicable to a Fixed Period for
which Yield is to be computed by reference to the Eurodollar Rate that is
intended to have a one-month duration but due solely to LIBOR interest period
convention the duration thereof will be less than 30 days),

 

(iii)  any Fixed Period as to which the Agent does not receive notice, by no
later than 12:00 noon (New York City time) on the third Business Day preceding
the first day of such Fixed Period, that the related Receivable Interest will
not be funded by CAFCO or CIESCO through the issuance of Promissory Notes, or

 

(iv)  any Fixed Period for a Receivable Interest the Capital of which allocated
to the Investors or the Banks is less than $500,000,

 

the “Assignee Rate” for such Fixed Period shall be an interest rate per annum
equal to the Alternate Base Rate in effect from time to time during such Fixed
Period plus (at any time when an Event of Termination shall exist) 2.0%;
provided further that the Agent and the Seller may agree in writing from time to
time upon a different “Assignee Rate”.

 

“Assignment and Acceptance” means an assignment and acceptance agreement entered
into by a Bank, an Eligible Assignee and the Agent, pursuant to which such
Eligible Assignee may become a party to this Agreement, in substantially the
form of Annex D hereto.

 

“Assignment of Claims Act” means (i) 31 U.S.C. § 3727 and 41 U.S.C. § 15, in
each case as amended and (ii) any rule, regulation or interpretation issued in
conjunction therewith.

 

“Assignment of Claims Documents” means (i) a duly completed, fully executed,
witnessed and notarized “Instrument of Assignment of Claims” in the form
prescribed by the Assignment of Claims Act and (ii) a duly completed and fully
executed (including the acknowledgment of the governmental contracting officer)
“Notice of Assignment of Claims” in the form prescribed by the Assignment of
Claims Act, in each case with such modifications as may be necessary or
advisable to obtain approval of the relevant government agency.

 

“Average Maturity” means at any time that period of days equal to the average
maturity of the Pool Receivables

 

4

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calculated by the Collection Agent in the then most recent Seller Report;
provided if the Agent shall reasonably disagree with any such calculation, the
Agent may recalculate such Average Maturity.

 

“Bank Commitment” of any Bank means, (i) with respect to Citibank, $500,000,000
or such amount as reduced or increased by any Assignment and Acceptance entered
into between Citibank and other Banks; or (ii) with respect to a Bank that has
entered into an Assignment and Acceptance, the amount set forth therein as such
Bank’s Bank Commitment, in each case as such amount may be reduced or increased
by an Assignment and Acceptance entered into between such Bank and an Eligible
Assignee, and as may be further reduced (or terminated) pursuant to the next
sentence. Subject to the provisions of Section 2.01(c), any reduction (or
termination) of the Aggregate Purchase Limit pursuant to the terms of this
Agreement shall reduce ratably (or, in the event the Aggregate Purchase Limit is
terminated, terminate) each Bank’s Bank Commitment.

 

“Banks” means Citibank and each Eligible Assignee that shall become a party to
this Agreement pursuant to Section 10.03.

 

“Business Day” means any day on which (i) banks are not authorized or required
to close in New York City, and (ii) if this definition of “Business Day” is
utilized in connection with the Eurodollar Rate, dealings are carried out in the
London interbank market.

 

“CAFCO” means Corporate Asset Funding Company, Inc., a Delaware corporation, and
any successor or assign of CAFCO that is a receivables investment company which
in the ordinary course of its business issues commercial paper or other
securities to fund its acquisition and maintenance of receivables.

 

“Capital” of any Receivable Interest means the original amount paid to the
Seller for such Receivable Interest at the time of its purchase by CAFCO or
CIESCO or a Bank pursuant to this Agreement, or such amount divided or combined
in accordance with Section 2.07, in each case reduced from time to time by
Collections distributed on account of such Capital pursuant to Section 2.04(d);
provided that if such Capital shall have been reduced by any distribution and
thereafter all or a portion of such distribution is rescinded or must otherwise
be returned for any reason, such Capital shall be increased by the amount of
such rescinded or returned distribution, as though it had not been made.

 

5

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“CIESCO” means CIESCO L.P., a New York limited partnership, and any successor or
assign of CIESCO that is a receivables investment company which in the ordinary
course of its business issues commercial paper or other securities to fund its
acquisition and maintenance of receivables.

 

“Citibank” means Citibank, N.A., a national banking association.

 

“Collection Agent” means at any time the Person then authorized pursuant to
Section 6.01 to administer and collect Pool Receivables.

 

“Collection Agent Fee” has the meaning specified in Section 2.05(a).

 

“Collection Delay Period” means 10 days or such other number of days as agreed
between the Agent and the Seller.

 

“Collections” means, with respect to any Receivable, all cash collections and
other cash proceeds of such Receivable, including, without limitation, all cash
proceeds of Related Security with respect to such Receivable, and any Collection
of such Receivable deemed to have been received pursuant to Section 2.04.

 

“Commitment Termination Date” means the earliest of (i) December 26, 2003,
unless, prior to such date (or the date so extended pursuant to this clause),
upon the Seller’s request, made not more than 90 nor less than 45 days prior to
the then Commitment Termination Date, one or more Banks shall in their sole
discretion consent, which consent shall be given not more than 30 days prior to
the then Commitment Termination Date, to the extension of the Commitment
Termination Date to a date occurring not more than 364 days after the then
Commitment Termination Date and such Bank or Banks shall have or make Bank
Commitments equal to 100% of the Aggregate Purchase Limit; provided, however,
that any failure of any Bank to respond to the Seller’s request for such
extension shall be deemed a denial of such request by such Bank, (ii) the
Facility Termination Date, (iii) the date determined pursuant to Section 7.01,
and (iv) the date the Aggregate Purchase Limit reduces to zero pursuant to
Section 2.01(b).

 

“Concentration Account” means bank account no. 321-029461 at JPMorgan Chase Bank
maintained by EPC.

 

6

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“Concentration Limit” for any Obligor means (i) at any time that such Obligor’s
Debt Rating is at least AA- by S&P and at least Aa3 by Moody’s, 36%, (ii) at any
time that such Obligor’s Debt Rating is at least BBB- by S&P and at least Baa3
by Moody’s and clause (i) above is not applicable, 18%, (iii) at all other
times, 9% (the percentage set forth in this clause (iii) being the “Normal
Concentration Limit”); provided that in the case of an Obligor with any
Affiliated Obligor, the Concentration Limit shall be calculated as if such
Obligor and such Affiliated Obligor are one Obligor; provided, further, that in
the case of an Obligor which is the United States government or any governmental
department or agency of the United States, such Obligor shall be deemed to be an
Affiliate of each other Obligor that is the United States government or any
governmental department or agency of the United States for purposes of
calculating the Concentration Limit for such Obligor; provided still further,
that in the case of an Obligor which is a state or local government or a state
or local governmental subdivision or agency of a state, such Obligor shall be
deemed to be an Affiliate of each other Obligor that is a state or local
governmental subdivision or agency of a state for the state in which such
Obligor is located for purposes of calculating the Concentration Limit for such
Obligor, unless the Debt Rating for such local government or local governmental
subdivisions or agency is lower than the Debt Rating for the state in which it
is located and falls within a range of Debt Ratings subject to a lower
Concentration Limit percentage, in which case such local government or local
governmental subdivision or agency shall not be deemed to be an Affiliate of
such state and the Concentration Limit therefor will be such lower percentage
set forth in clause (ii) or (iii) above for the applicable Debt Rating.

 

“Contract” means an agreement between the Originator and a customer of the
Originator, EDS and a customer of EDS, or the Originator and EDS jointly and a
joint customer, as the same may be amended, modified or restated from time to
time, pursuant to or under which the Originator, EDS or the Originator and EDS
jointly, as the case may be, shall be entitled to payment from such customer for
merchandise sold or services rendered from time to time and which shall
constitute all such agreements which are either (i) in force and effect on the
date hereof except for those agreements identified as Excluded Contracts in Part
I of Schedule III or (ii) entered into after the date hereof; provided, that the
Seller shall have the right to exclude (A) agreements entered into after the
date hereof that are (or are expected to be) subject to other financing
arrangements by providing written notice to the Agent within 90

 

7

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days after the execution of each such agreement (it being understood that if
notice is provided after the execution of any such agreement, the Receivables
Pool shall include the Receivables arising thereunder from and after the
execution of such agreement until the receipt of such notice), and (B)
agreements to which the Originator, EDS or the Originator and EDS jointly, as
the case may be, are no longer parties after the divestiture of any such
agreement in connection with the disposition by EDS or EIS of any portion of its
business, by providing written notice to the Agent at least three Business Days
prior to such divestiture, which notice, in the case of both clause (A) and
clause (B), shall include an amended Schedule III listing all excluded
agreements; provided, further, that (i) once an agreement becomes a Contract, it
may thereafter cease to be a Contract only upon mutual agreement between the
Seller and the Agent and (ii) once an agreement is excluded, it may thereafter
become a Contract only upon mutual agreement between the Seller and the Agent.

 

“CP Fixed Period Date” means, for any Receivable Interest, the date of purchase
of such Receivable Interest and thereafter the last day of each calendar month
or any other day as shall have been agreed to in writing by the Agent and the
Seller prior to the first day of such Fixed Period.

 

“Credit and Collection Policy” means those receivables credit and collection
policies and practices of the Seller in effect on the date of this Agreement and
described in Schedule II hereto, as modified in compliance with this Agreement.

 

“Debarment” means any exclusion of the Originator or EDS, as the case may be, or
the Seller from United States government contracting or subcontracting, by
action of any authorized official, for a specified period of time pursuant to
Federal Acquisition Regulation subpart 9.4 or any other provision of applicable
law, rule or regulation.

 

“Debt” means (i) indebtedness for borrowed money, (ii) obligations evidenced by
bonds, debentures, notes or other similar instruments, (iii) obligations to pay
the deferred purchase price of property or services, (iv) obligations as lessee
under leases which shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, and (v) obligations
under direct or indirect guaranties in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or

 

8

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obligations of others of the kinds referred to in clauses (i) through (iv)
above.

 

“Debt Rating” for any Person, means the rating by S&P or Moody’s of such
Person’s long-term public senior unsecured non-credit enhanced debt.

 

“Default Ratio” means the ratio (expressed as a percentage) computed as of the
last day of each calendar month by dividing (i) the aggregate Outstanding
Balance of all Originator Receivables that were Defaulted Receivables on such
day or that would have been Defaulted Receivables on such day had they not been
written off the books of the Originator, EDS or the Seller during such month by
(ii) the aggregate Outstanding Balance of all Originator Receivables on such
day.

 

“Defaulted Receivable” means an Originator Receivable:

 

(i)  as to which any payment, or part thereof, remains unpaid for more than 60
days from the original due date for such payment;

 

(ii)  as to which the Obligor thereof or any other Person obligated thereon or
owning any Related Security in respect thereof has taken any action, or suffered
any event to occur, of the type described in Section 7.01(g); or

 

(iii)  which, consistent with the Credit and Collection Policy, would be written
off the Originator’s, EDS’ or the Seller’s books as uncollectible.

 

“Deferred Purchase Price” has the meaning specified in the Originator Purchase
Agreement.

 

“Delinquency Ratio” means the ratio (expressed as a percentage) computed as of
the last day of each calendar month by dividing (i) the aggregate Outstanding
Balance of all Originator Receivables that were Delinquent Receivables on such
day by (ii) the aggregate Outstanding Balance of all Originator Receivables on
such day.

 

“Delinquent Receivable” means an Originator Receivable that is not a Defaulted
Receivable and:

 

(i)  as to which any payment, or part thereof, remains unpaid for more than 30
days but less than 61 days from the original due date for such payment; or

 

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(ii)  which, consistent with the Credit and Collection Policy, would be
classified as delinquent by the Originator, EDS or the Seller.

 

“Deposit Account Acknowledgment Agreement” means the letter agreement dated as
of the date hereof from EPC to the Seller and the Agent pursuant to which EPC
(i) acknowledges the transactions contemplated hereby and by the Originator
Purchase Agreement; (ii) agrees that the Collections of Receivables in the
relevant Lock-Box Accounts are solely the property of the Seller subject to a
first priority perfected security interest in favor of the Agent and (iii)
waives any right or interest it may have in such Collections, including any
right of setoff.

 

“Diluted Receivable” means that portion (and only that portion) of any
Originator Receivable by which the Originator Receivable is either (i) reduced
or canceled as a result of (A) any defective, rejected or returned merchandise
or services or any failure by the Originator or EDS, as the case may be, to
deliver any merchandise or provide any services or otherwise to perform under
the underlying Contract, (B) any change in the terms of or cancellation of, a
Contract or any cash discount, discount for quick payment or other adjustment by
the Originator or EDS, as the case may be, which reduces the amount payable by
the Obligor on the related Originator Receivable (except any such change or
cancellation resulting from or relating to the financial inability to pay or
insolvency of the Obligor of such Originator Receivable) or (C) any set-off by
an Obligor in respect of any claim by such Obligor as to amounts owed by it on
the related Originator Receivable (whether such claim arises out of the same or
a related transaction or an unrelated transaction) or (ii) subject to any
specific dispute, offset, counterclaim or defense whatsoever (except the
discharge in bankruptcy of the Obligor thereof), if such dispute, offset,
counterclaim or defense remains unresolved for more than 60 days, but if within
such 60 day period the Obligor thereof has held back payment on account thereof,
then such portion of the Originator Receivable shall immediately constitute a
Diluted Receivable; provided that Diluted Receivables are calculated assuming
that all chargebacks are resolved in the Obligor’s favor.

 

“Dilution Horizon Factor” means, as of any date, a ratio computed by dividing
(i) the aggregate original Outstanding Balance of all Originator Receivables
created by the Originator and EDS during the two most recently ended calendar
months by (ii) the Outstanding Balance of Originator Receivables

 

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(other than Defaulted Receivables) as at the last day of the most recently ended
calendar month.

 

“Dilution Percentage” means, as of any date, the product of (i) the sum of (A)
the product of (x) two, multiplied by (y) the average of the Dilution Ratios for
each of the twelve most recently ended calendar months, plus (B) the Dilution
Volatility Ratio as at the last day of the most recently ended calendar month,
multiplied by (ii) the Dilution Horizon Factor as of such date.

 

“Dilution Ratio” means, as of any date, the ratio (expressed as a percentage)
computed for the most recently ended calendar month by dividing (i) the
aggregate amount of Originator Receivables which became Diluted Receivables
during such calendar month and remained Diluted Receivables at the end of such
calendar month by (ii) the aggregate Outstanding Balance (in each case, at the
time of creation) of all Originator Receivables created during the first
calendar month immediately preceding such calendar month.

 

“Dilution Reserve” means, for any Receivable Interest on any date, an amount
equal to:

 

        

DP x (C + YFR)

where:

        

        DP

 

=

  

the Dilution Percentage for such Receivable Interest on such date.

        C

 

=

  

the Capital of such Receivable Interest on such date.

        YFR

 

=

  

the Yield and Fee Reserve for such Receivable Interest on such date.

 

“Dilution Volatility Ratio” means, as of any date, a ratio (expressed as a
percentage) equal to the product of (i) the highest of the Dilution Ratios
calculated for each of the 12 most recently ended calendar months minus the
average of the Dilution Ratios for each of the 12 most recently ended calendar
months, and (ii) a ratio calculated by dividing the highest of the Dilution
Ratios calculated for each of the 12 most recently ended calendar months by the
average of the Dilution Ratios for each of the 12 most recently ended calendar
months.

 

11

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“EDS Contribution Agreement” means the Contribution Agreement and Assignment,
dated as of the date hereof, between EDS and EIS, as the same may be amended or
restated from time to time, pursuant to which EIS will acquire Receivables,
Related Security and Collections related thereto (or interests therein) from EDS
by contribution to the capital of EIS.

 

“E-Mail Seller Report” has the meaning specified in Section 6.02(g).

 

“Eligible Assignee” means (i) CNAI or any of its Affiliates, (ii) any Person
managed by Citibank, CNAI or any of their Affiliates, or (iii) any financial or
other institution acceptable to the Agent to which, in the case of this clause
(iii), the Seller shall consent, such consent not to be unreasonably withheld or
delayed, provided that upon the occurrence of an Event of Termination, the
Seller’s consent shall not be required.

 

“Eligible Receivable” means, at any time, a Receivable:

 

(i)  the Obligor of which is a United States resident, is not an Affiliate of
any of the parties hereto, is not a state or local government or a state or
local governmental subdivision or agency of the states of Hawaii, Minnesota,
Montana, New Mexico or New York;

 

(ii)  the Obligor of which is not a U.S. Government Obligor, unless as to any
U.S. Government Receivable (A) such Receivable is an obligation which
constitutes the full faith and credit obligation of the United States, (B) such
Receivable arises out of an Approved Government Contract and (C) the Collection
Agent or the Seller shall have delivered to the Agent the Assignment of Claims
Documents with respect to the Contract out of which such Receivable arises;

 

(iii)  which is not a Defaulted Receivable and, if the Obligor is one of the 20
Obligors whose Receivables then in the Receivables Pool have the greatest
aggregate Outstanding Balances, such Obligor is not the Obligor of any Defaulted
Receivables which in the aggregate constitute 10% or more of the aggregate
Outstanding Balance of all Receivables of such Obligor;

 

12

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(iv)  which, according to the Contract related thereto, is required to be paid
in full within 60 days of the original billing date therefor;

 

(v)  which is an obligation representing all or part of the sales price of
merchandise or services within the meaning of Section 3(c)(5) of the Investment
Company Act of 1940, as amended, and the nature of which is such that its
purchase with the proceeds of notes would constitute a “current transaction”
within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

 

(vi)  which is an “account” within the meaning of Article 9 of the UCC of the
applicable jurisdictions governing the perfection of the interest created by a
Receivable Interest;

 

(vii)  which is denominated and payable only in United States dollars in the
United States;

 

(viii)  which arises under a Contract which, together with such Receivable, is
in full force and effect and constitutes the legal, valid and binding obligation
of the Obligor of such Receivable and is not subject to any Adverse Claim or any
current, known dispute that could result in the reduction, cancellation,
non-payment, adverse change in timing or other adverse change in the payment
terms of such Receivable, offset, counterclaim or defense whatsoever (except the
potential discharge in bankruptcy of such Obligor);

 

(ix)  which, together with the Contract related thereto, does not contravene in
any material respect any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to usury,
consumer protection, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and privacy)
and with respect to which none of the Seller, the Originator or EDS is in
violation of any such law, rule or regulation in any material respect;

 

(x)  which arises under a Contract under which the rights to payment of the
amounts owing thereunder by the Obligor may be legally transferred without the
consent of the Obligor;

 

13

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(xi)  which was generated in the ordinary course of the Originator’s and/or EDS’
business, as the case may be;

 

(xii)  which has not been extended, rewritten or otherwise modified from the
original terms thereof (except as permitted by Section 6.02(c));

 

(xiii)  the transfer, sale or assignment of which does not contravene any
applicable law, rule or regulation;

 

(xiv)  which (A) satisfies all applicable requirements of the Credit and
Collection Policy and (B) complies with such other criteria and requirements
(other than those relating to the collectibility of such Receivable) as the
Agent and the Seller may agree;

 

(xv)  as to which, at or prior to the later of the date of this Agreement and
the date such Receivable is created, the Agent has not notified the Seller that
such Receivable (or class of Receivables or Receivables due from designated
Obligors) for credit reasons is no longer acceptable for purchase by CAFCO or
CIESCO and the Banks hereunder; and

 

(xvi)  as to which the Originator or EDS, as the case may be, has satisfied and
fully performed all obligations required to be fulfilled by it in order for the
Obligor to be obligated to make payment thereunder and has rendered an invoice.

 

“EPC” means EDS Properties Corporation, a Delaware corporation.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

 

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.

 

“Eurodollar Rate” means, for any Fixed Period, an interest rate per annum equal
to the rate per annum at which deposits in U.S. dollars are offered by the
principal office of Citibank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London Time) two Business Days before the first
day of such Fixed Period in an amount substantially equal to the Capital
associated with such Fixed

 

14

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Period on such first day and for a period equal to such Fixed Period.

 

“Eurodollar Rate Reserve Percentage” of any Investor or Bank for any Fixed
Period in respect of which Yield is computed by reference to the Eurodollar Rate
means the reserve percentage applicable two Business Days before the first day
of such Fixed Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) (or if more than one
such percentage shall be applicable, the daily average of such percentages for
those days in such Fixed Period during which any such percentage shall be so
applicable) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for such Investor or Bank with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurocurrency Liabilities is determined) having a term equal to such Fixed
Period.

 

“Event of Termination” has the meaning specified in Section 7.01.

 

“Facility Termination Date” means the earliest of (i) December 23, 2005, (ii)
the date determined pursuant to Section 7.01,(iii) the date the Aggregate
Purchase Limit reduces to zero pursuant to Section 2.01(b), or (iv) the
Commitment Termination Date.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Fee Agreement” has the meaning specified in Section 2.05(b).

 

“Fees” has the meaning specified in Section 2.05(b).

 

15

--------------------------------------------------------------------------------

 

“Fixed Period” means, with respect to any Receivable Interest:

 

(a)  in the case of any Fixed Period in respect of which Yield is computed by
reference to the Investor Rate, each successive period commencing on each CP
Fixed Period Date for such Receivable Interest and ending on the next succeeding
CP Fixed Period Date for such Receivable Interest; and

 

(b)  in the case of any Fixed Period in respect of which Yield is computed by
reference to the Assignee Rate, each successive period of from one to and
including 29 days, or a period of one month, as the Seller shall select and the
Agent may approve on notice by the Seller received by the Agent (including
notice by telephone, confirmed in writing) not later than 11:00 A.M. (New York
City time) on (A) the day which occurs three Business Days before the first day
of such Fixed Period (in the case of Fixed Periods in respect of which Yield is
computed by reference to the Eurodollar Rate) or (B) the first day of such Fixed
Period (in the case of Fixed Periods in respect of which Yield is computed by
reference to the Alternate Base Rate), each such Fixed Period for such
Receivable Interest to commence on the last day of the immediately preceding
Fixed Period for such Receivable Interest (or, if there is no such Fixed Period,
on the date of purchase of such Receivable Interest), except that if the Agent
shall not have received such notice, or the Agent and the Seller shall not have
so mutually agreed, before 11:00 A.M. (New York City time) on such day, such
Fixed Period shall be one day;

 

provided, however, that:

 

(i)  any Fixed Period (other than of one day) which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day (provided, however, if Yield in respect of such Fixed Period is computed by
reference to the Eurodollar Rate, and such Fixed Period would otherwise end on a
day which is not a Business Day, and there is no subsequent Business Day in the
same calendar month as such day, such Fixed Period shall end on the next
preceding Business Day);

 

(ii)  in the case of any Fixed Period of one day, (A) if such Fixed Period is
the initial Fixed Period for a

 

16

--------------------------------------------------------------------------------

 

Receivable Interest, such Fixed Period shall be the day of the purchase of such
Receivable Interest; (B) any subsequently occurring Fixed Period which is one
day shall, if the immediately preceding Fixed Period is more than one day, be
the last day of such immediately preceding Fixed Period and, if the immediately
preceding Fixed Period is one day, be the day next following such immediately
preceding Fixed Period; and (C) if such Fixed Period occurs on a day immediately
preceding a day which is not a Business Day, such Fixed Period shall be extended
to the next succeeding Business Day; and

 

(iii)  in the case of any Fixed Period for any Receivable Interest which
commences before the Termination Date for such Receivable Interest and would
otherwise end on a date occurring after such Termination Date, such Fixed Period
shall end on such Termination Date and the duration of each Fixed Period which
commences on or after the Termination Date for such Receivable Interest shall be
of such duration (including, without limitation, one day) as shall be selected
by the Agent or, in the absence of any such selection, each period of thirty
days from the last day of the immediately preceding Fixed Period.

 

“Funds Transfer Letter” means a letter in substantially the form of Annex E
hereto executed and delivered by the Seller to the Agent, as the same may be
amended or restated in accordance with the terms thereof.

 

“Incipient Bankruptcy Event of Termination” means an event under Section 7.01(g)
that but for notice or lapse of time or both would constitute an Event of
Termination.

 

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

 

“Indemnified Party” has the meaning specified in Section 9.01.

 

“Investor” means CAFCO, CIESCO and all other owners by assignment or otherwise
of a Receivable Interest originally purchased by CAFCO or CIESCO and, to the
extent contemplated by the fourth sentence of Section 10.03(e), shall include
any Participants.

 

“Investor Purchase Limit” of any Investor means (i) with respect to CAFCO,
$250,000,000 or such amount as

 

17

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reduced or increased by each assignment entered into between CAFCO and an
Eligible Assignee pursuant to Section 10.03(a); or (ii) with respect to CIESCO,
$250,000,000 or such amount as reduced or increased by each assignment entered
into between CIESCO and an Eligible Assignee pursuant to Section 10.03(a); or
(iii) with respect to an Investor that has entered into such an assignment, the
amount set forth therein as its Investor Purchase Limit or such amount as
reduced by each assignment entered into between such Investor and an Eligible
Assignee, in each case as reduced (or terminated) pursuant to the next sentence.
Any reduction (or termination) of the Aggregate Purchase Limit pursuant to the
terms of this Agreement shall (unless otherwise agreed by all the Investors)
reduce ratably (or, in the event the Aggregate Purchase Limit is terminated,
terminate) each Investor’s Investor Purchase Limit.

 

“Investor Rate” for any Fixed Period for any Receivable Interest purchased by
CAFCO or CIESCO means the per annum rate equivalent to the weighted average of
the per annum rates paid or payable by such Investor from time to time as
interest on or otherwise (by means of interest rate hedges or otherwise) in
respect of those Promissory Notes issued by such Investor that are allocated, in
whole or in part, by the Agent (on behalf of such Investor) to fund the purchase
or maintenance of such Receivable Interest during such Fixed Period as
determined by the Agent (on behalf of such Investor) and reported to the Seller
and, if the Collection Agent is not the Seller, the Collection Agent, which
rates shall reflect and give effect to the commissions of placement agents and
dealers in respect of such Promissory Notes, to the extent such commissions are
allocated, in whole or in part, to such Promissory Notes by the Agent (on behalf
of such Investor); provided, however, that (i) if any component of such rate is
a discount rate, in calculating the “Investor Rate” for such Fixed Period the
Agent shall for such component use the rate resulting from converting such
discount rate to an interest bearing equivalent rate per annum; (ii) the
Investor Rate with respect to Receivable Interests funded by Participants shall
be the same rate as in effect from time to time on Receivable Interests or
portions thereof that are not funded by a Participant; (iii) if all of the
Receivable Interests maintained by such Investor are funded by Participants,
then the Investor Rate shall be such Investor’s pool funding rate in effect from
time to time for its largest size pool of transactions which settles monthly;
and (iv) the per annum rate determined pursuant hereto shall be increased by
2.0% at any time when an Event of Termination shall exist.

 

18

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“Liquidation Day” means, for any Receivable Interest, (i) each day during a
Fixed Period for such Receivable Interest on which the conditions set forth in
Section 3.02 are not satisfied or waived, and (ii) each day which occurs on or
after the Termination Date for such Receivable Interest.

 

“Liquidation Fee” means, for (i) any Fixed Period for which Yield is computed by
reference to the Investor Rate and a reduction of Capital is made for any reason
(A) on any day other than a Settlement Date or (B) on a Settlement Date and with
less than three Business Days’ prior written notice or (ii) any Fixed Period for
which Yield is computed by reference to the Eurodollar Rate and a reduction of
Capital is made for any reason on any day other than the last day of such Fixed
Period, the amount, if any, by which (A) the additional Yield (calculated
without taking into account any Liquidation Fee or any shortened duration of
such Fixed Period pursuant to clause (iii) of the definition thereof) which
would have accrued from the date of such repayment to the last day of such Fixed
Period (or, in the case of clause (i) above, the maturity of the underlying
commercial paper tranches) on the reductions of Capital of the Receivable
Interest relating to such Fixed Period had such reductions remained as Capital,
exceeds (B) the income, if any, received by the Investors or the Banks which
hold such Receivable Interest from the investment of the proceeds of such
reductions of Capital.

 

“Lock-Box Account” means a post office box administered by a Lock-Box Bank or an
account maintained at a Lock-Box Bank, in each case for the purpose of receiving
Collections.

 

“Lock-Box Agreements (All Banks)” means, collectively, the Lock-Box Agreements
to be executed pursuant to Section 6.06(c), among EPC, as assigning
accountholder, EIS, as Collection Agent, the Seller, the Agent and each of the
Lock-Box Banks, substantially in the form of Annex B-2 hereto, as the same may
be amended, modified or restated from time to time.

 

“Lock-Box Agreement (Bank of America)” means the Lock-Box Agreement dated as of
the date hereof among EPC, as assigning accountholder, EIS, as Collection Agent,
the Seller, the Agent and Bank of America, N.A., substantially in the form of
Annex B-1 hereto, as the same may be amended, modified or restated from time to
time.

 

19

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“Lock-Box Agreements” means, collectively, the Lock-Box Agreement (Bank of
America) and the Lock-Box Agreements (All Banks).

 

“Lock-Box Bank” means any of the banks holding one or more Lock-Box Accounts.

 

“Loss Horizon Factor” means, as of any date, a multiple computed by dividing (i)
the aggregate Outstanding Balance (in each case, at the time of creation) of all
Originator Receivables created by the Originator and EDS during the four most
recently ended calendar months by (ii) the Outstanding Balance of Originator
Receivables (other than Defaulted Receivables) as at the last day of the most
recently ended calendar month.

 

“Loss Percentage” means, as of any date, the greatest of (i) the product of (A)
two multiplied by (B) the Loss Horizon Factor as of the last day of the most
recently ended calendar month multiplied by (C) the highest of the Loss Ratios
for the twelve most recently ended calendar months, (ii) four times the Normal
Concentration Limit and (iii) 10%.

 

“Loss Ratio” means, as of any date, the average of the ratios (each expressed as
a percentage) for each of the three most recently ended calendar months computed
for each such month by dividing (i) the sum of the aggregate Outstanding Balance
of Originator Receivables which were 61-90 days past due (or otherwise would
have been classified during such month as Defaulted Receivables in accordance
with clause (ii) or (iii) of the definition of “Defaulted Receivables”) as at
the last day of such month plus (without duplication) write-offs made prior to
such 61 days during such month, by (ii) the aggregate Outstanding Balance (in
each case, at the time of creation) of Originator Receivables created during the
third preceding month.

 

“Loss Reserve” means, for any Receivable Interest on any date, an amount equal
to:

 

        

LP x (C + YFR)

where:

        

        LP

 

=

  

the Loss Percentage for such Receivable Interest on such date.

 

20

--------------------------------------------------------------------------------

 

        C

 

=

  

the Capital of such Receivable Interest at the close of business of the
Collection Agent on such date.

        YFR

 

=

  

the Yield and Fee Reserve for such Receivable Interest on such date.

 

“Loss-to-Liquidation Ratio” means the ratio (expressed as a percentage) computed
as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Originator Receivables written off by the Originator,
EDS or the Seller, as the case may be, or which should have been written off by
the Originator, EDS or the Seller, in accordance with the Credit and Collection
Policy, during the 12 calendar month period ending on such last day by (ii) the
aggregate amount of Collections of Originator Receivables actually received
during such period.

 

“Maximum Purchaser Interest” means (i) at any time when the Debt Rating of EDS
is at least BBB+ by S&P and Baa1 by Moody’s, 97%, and (ii) at all other times,
94%.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Net Receivables Pool Balance” means at any time the Outstanding Balance of
Eligible Receivables then in the Receivables Pool reduced, without duplication,
by the sum of (i) the aggregate amount by which the Outstanding Balance of
Eligible Receivables of each Obligor then in the Receivables Pool exceeds the
product of (A) the Concentration Limit for such Obligor multiplied by (B) the
aggregate outstanding Capital of all Receivable Interests, (ii) the aggregate
amount of Collections on hand at such time for payment on account of any
Eligible Receivables, the Obligor of which has not been identified, (iii) the
aggregate Outstanding Balance of all Eligible Receivables in respect of which
any credit memo issued to the related Obligors by the Originator, EDS or the
Seller is outstanding at such time but only to the extent deemed Collections
have not been paid pursuant to Section 2.04(e)(i), (iv) the aggregate
Outstanding Balance of Eligible Receivables which are U.S. Government
Receivables if there shall have occurred disputes with U.S. Government Obligors
relating to U.S. Government Receivables that could result in the reduction,
cancellation, non-payment or adverse change in the payment terms of such
Receivable constituting, in the aggregate for all such disputes with respect to
at least two or more U.S. Government Obligors and 15% or more of the aggregate
Outstanding Balance of all U.S. Government Receivables, (v) if the Debt Rating
of EDS

 

21

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is below BBB+ by S&P or below Baa1 by Moody’s, the sum of (A) the Tax Liability
Offset plus (B) the Payable Offset for each of the 15 Obligors whose Receivables
then in the Receivables Pool have the greatest aggregate Outstanding
Balances,(vi) the amount by which (A) the aggregate Outstanding Balance of
Eligible Receivables owed by a state or local government or a state or local
governmental subdivision or agency of a state exceeds(B) 20% of all Eligible
Receivables, and (vii) the amount by which the aggregate Outstanding Balance of
Eligible Receivables representing the sales price of merchandise exceeds 10% of
the Outstanding Balance of all Eligible Receivables.

 

“Obligor” means a Person obligated to make payments pursuant to a Contract.

 

“Originator” means EIS.

 

“Originator Purchase Agreement” means the Purchase and Contribution Agreement
dated as of the date of this Agreement between the Originator, as seller, and
the Seller, as purchaser, as the same may be amended, modified or restated from
time to time.

 

“Originator Receivable” means the indebtedness of any Obligor resulting from the
provision or sale of merchandise or services by the Originator or EDS, or the
Originator and EDS jointly, as the case may be, under a Contract (whether
constituting an account, instrument, chattel paper or general intangible) as
evidenced by an invoice or other statement that an amount is due and owing under
such Contract, and includes the right to payment of any interest or finance
charges and other obligations of such Obligor with respect to that indebtedness.

 

“Other Companies” means the Originator, EDS and all of their Subsidiaries except
the Seller.

 

“Outstanding Balance” of any Receivable at any time means the then outstanding
principal balance thereof. Sales or use tax and any other taxes, expense
reimbursements, out-of-pocket expenses and other expenses which may be billed in
connection with a Receivable are not included in the Outstanding Balance.

 

“Participant” shall have the meaning assigned to such term in Section 10.03(e).

 

“Payable Offset” means for any Obligor (other than an Obligor that is a state or
local government or a state or local

 

22

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governmental subdivision or agency of a state), the lesser of (i) the aggregate
Eligible Receivables owed by such Obligor to the Originator or EDS, or the
Originator and EDS jointly, as the case may be, and (ii) the aggregate payables
of the Originator or EDS, or the Originator and EDS jointly, as the case may be,
owing to such Obligor.

 

“Percentage” of any Bank means, (i) with respect to Citibank, the percentage set
forth on the signature page to this Agreement, or such amount as reduced or
increased by any Assignment and Acceptance entered into with an Eligible
Assignee, or (ii) with respect to a Bank that has entered into an Assignment and
Acceptance, the amount set forth therein as such Bank’s Percentage, or such
amount as reduced or increased by an Assignment and Acceptance entered into
between such Bank and an Eligible Assignee.

 

“Person” means an individual, partnership, corporation (including a business
trust or statutory 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.

 

“Pool Receivable” means a Receivable in the Receivables Pool.

 

“Promissory Notes” means, collectively, promissory notes issued by CAFCO or
CIESCO and (ii) participations sold by CAFCO or by CIESCO pursuant to Section
10.03(e); provided that the term “Promissory Notes” shall not include the
interests sold by CAFCO or CIESCO to a Bank or its designee under the Asset
Purchase Agreement.

 

“Receivable” means any Originator Receivable which has been acquired by the
Seller from the Originator by purchase or by capital contribution pursuant to
the Originator Purchase Agreement.

 

“Receivable Interest” means, at any time, an undivided percentage ownership
interest in (i) all then outstanding Pool Receivables arising prior to the time
of the most recent computation or recomputation of such undivided percentage
interest pursuant to Section 2.03, (ii) all Related Security with respect to
such Pool Receivables, and (iii) all Collections with respect to, and other
proceeds of, such Pool Receivables. Such undivided percentage interest shall be
computed as

 

23

--------------------------------------------------------------------------------

 

        

C + YFR + LR + DR

            NRPB

where:

        

        C

 

=

  

the Capital of such Receivable Interest at the time of computation.

        YFR

 

=

  

the Yield and Fee Reserve of such Receivable Interest at the time of
computation.

        LR

 

=

  

the Loss Reserve of such Receivable Interest at the time of computation.

        DR

 

=

  

the Dilution Reserve of such Receivable Interest at the time of computation.

        NRPB

 

=

  

The Net Receivables Pool Balance at the time of computation.

 

Each Receivable Interest shall be determined from time to time pursuant to the
provisions of Section 2.03.

 

“Receivables Pool” means at any time the aggregation of each then outstanding
Receivable.

 

“Receivable Turnover Days” means, on any date, an amount equal to

 

        

[OBOR x AVM] + CDP

    CO

where:

        

        OBOR

 

=

  

the aggregate original Outstanding Balance of all Originator Receivables created
by the Originator and/or EDS during the most recently ended month.

        CO

 

=

  

Collections received during such month.

        AVM

 

=

  

the Average Maturity on such date.

        CDP

 

=

  

the Collection Delay Period.

 

“Related Security” means with respect to any Receivable:

 

24

--------------------------------------------------------------------------------

 

(i)  to the extent such Receivable was originated solely by EDS or jointly by
EDS and the Originator, the EDS Contribution Agreement;

 

(ii)  all security interests or liens and property subject thereto from time to
time purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all financing
statements filed against an Obligor describing any collateral securing such
Receivable;

 

(iii)  all guaranties, insurance 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; and

 

(iv)  all books, records and other information (including, without limitation,
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) relating to such Receivable, but not including any
Contract or any agreement or correspondence relating to that Contract other than
correspondence relating to the payment of amounts owing by the Obligor under
that Contract.

 

“S&P” means Standard and Poor’s, a division of The McGraw-Hill Companies, Inc.

 

“SEC” means the Securities and Exchange Commission.

 

“Seller Report” means a report in substantially the form of Annex A hereto and
containing such additional information as the Agent may reasonably request from
time to time, furnished by the Collection Agent to the Agent pursuant to Section
6.02(g).

 

“Settlement Date” for any Receivable Interest means the last day of each Fixed
Period for such Receivable Interest; provided, however, that if Yield with
respect to such Receivable Interest is computed by reference to the Investor
Rate and no Liquidation Day exists on the last day of a Fixed Period for such
Receivable Interest, the Settlement Date for such Receivable Interest for such
Fixed Period shall be the twelfth Business Day after the last day of such Fixed
Period.

 

“Special Indemnified Party” has the meaning specified in Section 6.07.

 

25

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“Subsidiary” means any corporation or other entity of which securities having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by the Seller, the Originator or EDS, as the case may be, or one or more
Subsidiaries, or by the Seller, the Originator or EDS, as the case may be, and
one or more Subsidiaries.

 

“Tangible Net Worth” means at any time the excess of (i) the sum of (A) the
product of (x) 100% minus the Discount (as such term is defined in the
Originator Purchase Agreement) multiplied by (y) the Outstanding Balance of all
Receivables other than Defaulted Receivables plus (B) cash and cash equivalents
of the Seller plus (C) the outstanding principal amount of Purchaser Loans (as
such term is defined in the Originator Purchase Agreement), minus (ii) the sum
of (A) Capital plus (B) the Deferred Purchase Price.

 

“Tax Liability Offset” means, for each state or local government or a state or
local governmental subdivision or agency of a state which is an Obligor, the
lesser of (i) the Eligible Receivables owed by such Obligor to the Originator or
EDS, or to the Originator and EDS jointly, as the case may be, and (ii) the
accrued and unpaid tax liability for all taxes (including income, franchise and
sales taxes) owed by the Originator or EDS, as the case may be, to such Obligor.

 

“Termination Date” for any Receivable Interest means (i) in the case of a
Receivable Interest owned by an Investor, the earlier of (A) the Business Day
which the Seller or the Agent so designates by notice to the other at least one
Business Day in advance for such Receivable Interest and (B) the Facility
Termination Date and (ii) in the case of a Receivable Interest owned by a Bank,
the earlier of (A) the Business Day which the Seller so designates by notice to
the Agent at least one Business Day in advance for such Receivable Interest and
(B) the Commitment Termination Date.

 

“Third Party Payments” means the receivables identified as Excluded Receivables
in Part II of Schedule III.

 

“Transaction Document” means any of this Agreement, the Originator Purchase
Agreement, the Lock-Box Agreements, the Fee Agreement, the Undertakings, the
Deposit Account Acknowledgment Agreement, the EDS Contribution Agreement and all
other agreements and documents delivered hereunder and/or related hereto or
thereto.

 

26

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

 

“Undertaking (Collection Agent and Accountholder)” means the Undertaking
Agreement dated as of the date hereof made by EDS in favor of the Investors, the
Banks and the Agent and relating to obligations of EIS, as the Collection Agent,
and obligations of EPC, substantially in the form of Annex F-1 hereto, as the
same may be amended, modified or restated from time to time.

 

“Undertaking (Originator)” means the Undertaking Agreement dated as of the date
hereof made by EDS in favor of the Seller and relating to obligations of EIS, as
the Originator, substantially in the form of Annex F-2 hereto, as the same may
be amended, modified or restated from time to time.

 

“Undertakings” means, collectively, the Undertaking (Collection Agent and
Accountholder) and the Undertaking (Originator).

 

“U.S. Government Obligor” means the United States government or any federal
governmental department or agency of the United States.

 

“U.S. Government Receivable” means any Receivable the Obligor of which is a U.S.
Government Obligor.

 

“Yield” means for each Receivable Interest for each Fixed Period:

 

(i)  for each day during such Fixed Period to the extent such Receivable
Interest will be funded on such day by CAFCO or CIESCO through the issuance of
Promissory Notes,

 

IR x C x ED      + LF

 360

 

(ii)  for each day during such Fixed Period to the extent such Receivable
Interest will not be funded on such day by CAFCO or CIESCO through the issuance
of Promissory Notes,

 

27

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AR x C x ED     + LF

                360

where:

        

        AR

 

=

  

the Assignee Rate for such Receivable Interest for such Fixed Period

        C

 

=

  

the Capital of such Receivable Interest during such Fixed Period

        IR

 

=

  

the Investor Rate for such Receivable Interest for such Fixed Period

        ED

 

=

  

the actual number of days elapsed during such Fixed Period

        LF

 

=

  

the Liquidation Fee, if any, for such Receivable Interest for such Fixed Period

 

provided that no provision of this Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
and provided further that Yield for any Receivable Interest shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.

 

“Yield and Fee Reserve” means, for any Receivable Interest on any date, an
amount equal to

 

        

(C x YFRP) + AUYF

where:

        

        C

 

=

  

the Capital of such Receivable Interest at the close of business of the
Collection Agent on such date.

        YFRP

 

=

  

the Yield and Fee Reserve Percentage on such date.

        AUYF

 

=

  

accrued and unpaid Yield, Collection Agent Fee and Fees on such date, in each
case for such Receivable Interest.

 

“Yield and Fee Reserve Percentage” means, on any date, a percentage equal to

 

28

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[(AER x 1.5) + AM + PF + CAF] x RTD

                                360

where:

        

        AER

 

=

  

the greater of (a) 3% or (b) the one-month Adjusted Eurodollar Rate in effect on
such date.

        AM

 

=

  

the applicable spread or margin over the Eurodollar Rate used in the calculation
of the Assignee Rate in effect on such date.

        PF

 

=

  

the Program Fee (as defined in the Fee Agreement), in effect on such date.

        CAF

 

=

  

the percentage per annum used in the calculation of the Collection Agent Fee in
effect on such date.

        RTD

 

=

  

the Receivable Turnover Days on such date.

 

Section 1.02.    Other Terms.  All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of New York, and
not specifically defined herein, are used herein as defined in such Article 9.

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE PURCHASES

 

Section 2.01.    Purchase Facility.  (a)  On the terms and conditions
hereinafter set forth, each of CAFCO and CIESCO may, in its sole discretion,
ratably in accordance with its respective Investor Purchase Limit, and the Banks
shall, ratably in accordance with their respective Bank Commitments, purchase
Receivable Interests from the Seller from time to time during the period from
the date hereof to the Facility Termination Date (in the case of CAFCO and
CIESCO) and to the Commitment Termination Date (in the case of the Banks). Under
no circumstances shall either CAFCO or CIESCO make any such purchase, or the
Banks be obligated to make any such purchase, if after giving effect to such
purchase the aggregate

 

29

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outstanding Capital of Receivable Interests would exceed the Aggregate Purchase
Limit, nor shall CAFCO or CIESCO make any such purchase if after giving effect
to such purchase the outstanding Capital of Receivable Interests purchased by
such Investor would exceed its Investor Purchase Limit.

 

(b)  The Seller may at any time after March 31, 2003, upon at least five
Business Days’ notice to the Agent, terminate the facility provided for in this
Agreement in whole or, from time to time, reduce in part the Aggregate Purchase
Limit by an amount not to exceed the unused portion of the Aggregate Purchase
Limit; provided that each partial reduction shall be in the amount of at least
$1,000,000 or an integral multiple thereof.

 

(c)  If a Bank, other than Citibank, does not extend its Bank Commitment prior
to the then Commitment Termination Date, but the other Bank or Banks extend
their Bank Commitments prior to the occurrence of the Commitment Termination
Date, so long as the aggregate amount of the Bank Commitments after such
extensions shall equal or exceed $250,000,000, unless the Seller gives at least
five Business Days’ notice to the Agent that it is terminating the facility
contemplated by this Agreement, the Aggregate Purchase Limit and Capital will be
reduced to an amount equal to the aggregate amount of the Bank Commitments after
such extensions, and each Bank’s Bank Commitment shall equal the amount for
which that Bank agreed to extend its Bank Commitment subject to reduction (or
termination) thereafter as otherwise provided in this Agreement.

 

(d)  Until the Agent gives the Seller the notice provided in Section
3.02(c)(iii), the Agent, on behalf of the Investors which own Receivable
Interests, may have the Collections attributable to such Receivable Interests
automatically reinvested pursuant to Section 2.04 in additional undivided
percentage interests in the Pool Receivables by making an appropriate
readjustment of such Receivable Interests. The Agent, on behalf of the Banks
which own Receivable Interests, shall have the Collections attributable to such
Receivable Interests automatically reinvested pursuant to Section 2.04 in
additional undivided percentage interests in the Pool Receivables by making an
appropriate readjustment of such Receivable Interests.

 

Section 2.02.    Making Purchases.  (a)  Each purchase by CAFCO, CIESCO or the
Banks shall be made on at least three Business Days’ notice from the Seller to
the Agent that the Seller proposes to sell Receivables Interests hereunder;

 

30

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provided that no more than two purchases by CAFCO, CIESCO and the Banks as a
group shall be made in any one calendar month. Each such notice of a purchase
shall specify (i) the amount requested to be paid to the Seller (such amount,
which shall not be less than $5,000,000, being referred to herein as the initial
“Capital” of the Receivable Interest then being purchased), (ii) the date of
such purchase (which shall be a Business Day), and (iii) if the Assignee Rate is
to apply to such Receivable Interest, the duration of the initial Fixed Period
for such Receivable Interest. The Agent shall promptly thereafter notify the
Seller whether CAFCO and CIESCO have determined to make a purchase and, if so,
whether all of the terms specified by the Seller are acceptable to CAFCO and
CIESCO and the allocation of such purchase as between CAFCO and CIESCO (which
allocation shall be made on a ratable basis in accordance with the respective
Investor Purchase Limits of CAFCO and CIESCO, unless otherwise agreed by CAFCO
and CIESCO).

 

If CAFCO and/or CIESCO have determined not to make a proposed purchase, the
Agent shall promptly send notice of the proposed purchase to all of the Banks
concurrently by telecopier, telex or cable specifying the date of such purchase,
each Bank’s Percentage multiplied by the aggregate amount of Capital of the
Receivable Interests being purchased (which amount shall be equal to the portion
of the initial Capital not funded by CAFCO or CIESCO), whether the Yield for the
Fixed Period for such Receivable Interests is calculated based on the Eurodollar
Rate (which may be selected only if such notice is given at least three Business
Days prior to the purchase date) or the Alternate Base Rate, and the duration of
the Fixed Period for such Receivable Interests (which shall be one day if the
Seller has not selected another period).

 

(b)  On the date of each such purchase of a Receivable Interest, CAFCO, CIESCO
and/or the Banks, as the case may be, shall, upon satisfaction of the applicable
conditions set forth in Article III, make available to the Seller in same day
funds an amount equal to the initial Capital of such Receivable Interest, at the
account set forth in the Funds Transfer Letter; provided, however, if such
purchase is being made by the Banks following the designation by the Agent of a
Termination Date for a Receivable Interest owned by an Investor pursuant to
clause (i)(A) of the definition of Termination Date and any Capital of such
Receivable Interest is outstanding on such date of purchase, the Seller hereby
directs the Banks to pay the proceeds of such purchase (to the extent of the
outstanding Capital and accrued Yield on such Receivable Interest of such

 

31

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Investor) to the Agent’s Account, for application to the reduction of the
outstanding Capital and accrued Yield on such Receivable Interest of such
Investor.

 

(c)  Effective on the date of each purchase pursuant to this Section 2.02 and
each reinvestment pursuant to Section 2.04, the Seller hereby sells and assigns
to the Agent, for the benefit of the parties making such purchase, an undivided
percentage ownership interest, to the extent of the Receivable Interest then
being purchased, in each Pool Receivable then existing and in the Related
Security and Collections with respect thereto.

 

(d)  Notwithstanding the foregoing, a Bank shall not be obligated to make
purchases under this Section 2.02 at any time in an amount which would exceed
such Bank’s Bank Commitment less such Bank’s ratable share of the aggregate
outstanding Capital held by CAFCO and CIESCO (whether or not any portion thereof
has been assigned under the Asset Purchase Agreement), after giving effect to
any reductions of the Capital held by CAFCO and CIESCO to be made on the date of
such purchase (whether from the distribution of Collections or from the proceeds
of purchases by the Banks). Each Bank’s obligation shall be several, such that
the failure of any Bank to make available to the Seller any funds in connection
with any purchase by that Bank shall not relieve any other Bank of its
obligation, if any, hereunder to make funds available on the date of such
purchase, but no Bank shall be obligated to make funds available in connection
with any purchase of the Receivable Interest by the Bank failing to fund its
purchase.

 

Section 2.03.    Receivable Interest Computation.  Each Receivable Interest
shall be initially computed on its date of purchase. Thereafter until the
Termination Date for such Receivable Interest, such Receivable Interest shall be
automatically recomputed (or deemed to be recomputed) on each day other than a
Liquidation Day. Any Receivable Interest, as computed (or deemed recomputed) as
of the day immediately preceding the Termination Date for such Receivable
Interest, shall thereafter remain constant; provided, however, that from and
after the date on which the Termination Date shall have occurred for all
Receivable Interests and until each Receivable Interest becomes zero in
accordance with the next sentence, each Receivable Interest shall be calculated
as the percentage equivalent of a fraction the numerator of which is the
percentage representing such Receivable Interest immediately prior to such date
and the denominator of which is the sum of the percentages representing all
Receivable Interests which were

 

32

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outstanding immediately prior to such date. Each Receivable Interest shall
become zero when Capital thereof and Yield thereon shall have been paid in full,
and all Fees and other amounts owed by the Seller hereunder to the Investors,
the Banks or the Agent are paid and the Collection Agent shall have received the
accrued Collection Agent Fee thereon.

 

Section 2.04.    Settlement Procedures.  (a)  Collection of the Pool Receivables
shall be administered by a Collection Agent, in accordance with the terms of
Article VI of this Agreement. The Seller shall provide to the Collection Agent
(if other than the Seller) on a timely basis all information needed for such
administration, including notice of the occurrence of any Liquidation Day and
current computations of each Receivable Interest.

 

(b)  The Collection Agent shall, on each day on which Collections of Pool
Receivables are received by it:

 

(i)  pay to the Originator and/or EDS, as the case may be, any such Collections
which are identified as amounts referred to in the second sentence of the
definition of “Outstanding Balance”;

 

(ii)  with respect to each Receivable Interest, set aside and hold in trust
(and, at the request of the Agent, segregate) for the Investors or the Banks
that hold such Receivable Interest, out of the percentage of such Collections
represented by such Receivable Interest, an amount equal to the Yield, Fees and
Collection Agent Fee accrued through such day for such Receivable Interest and
not previously set aside;

 

(iii)  with respect to each Receivable Interest, if such day is not a
Liquidation Day for such Receivable Interest, reinvest with the Seller on behalf
of the Investors or the Banks that hold such Receivable Interest the percentage
of such Collections represented by such Receivable Interest, to the extent such
Collections represent a return of Capital, by recomputation of such Receivable
Interest pursuant to Section 2.03, and pay to the Seller the amount so
reinvested;

 

(iv)  if such day is a Liquidation Day for any one or more Receivable Interests,
set aside and hold in trust (and, at the request of the Agent, segregate) for
the Investors or the Banks that hold such Receivable Interests (A) if such day
is a Liquidation Day for less than all of

 

33

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the Receivable Interests, the percentage of such Collections represented by such
Receivable Interests as to which such day is a Liquidation Day, and (B) if such
day is a Liquidation Day for all of the Receivable Interests, all of the
remaining Collections (but in the case of the circumstances in both clause (A)
and clause (B) above, not in excess of the Capital of such Receivable Interests
and any other amounts payable by the Seller hereunder); provided that if amounts
are set aside and held in trust on any Liquidation Day occurring prior to the
Termination Date as to such Receivable Interests, and thereafter prior to the
Settlement Date for such Fixed Period the conditions set forth in Section 3.02
are satisfied or waived by the Agent, such previously set aside amounts shall,
to the extent representing a return of Capital, be reinvested in accordance with
the preceding subsection (ii) on the day of such subsequent satisfaction or
waiver of conditions; and

 

(v)  during such times as amounts are required to be reinvested in accordance
with the foregoing subSection (iii) or the proviso to subSection (iv), release
to the Seller for its own account any Collections in excess both of such amounts
and of the amounts that are required to be set aside pursuant to subSection (ii)
above.

 

(c)  The Collection Agent shall deposit into the Agent’s Account, on the
Settlement Date for each Receivable Interest, Collections held on that
Settlement Date for the Investors or the Banks that relate to such Receivable
Interest pursuant to Section 2.04(b).

 

(d)  Upon receipt of funds deposited into the Agent’s Account, the Agent shall
distribute them as follows:

 

(i)  if such distribution occurs on a day that is not a Liquidation Day, first
to the Investors or the Banks that hold the relevant Receivable Interests
ratably in payment in full of all accrued Yield and the Agent in payment in full
of the accrued Fees and then to the Collection Agent in payment in full of all
accrued Collection Agent Fee.

 

(ii)  if such distribution occurs on a Liquidation Day, first to the Investors
or the Banks that hold the relevant Receivable Interests ratably in payment in
full of all accrued Yield and the Agent in payment in full of the accrued Fees,
second to such Investors or Banks in reduction to zero of all Capital, third to
such Investors, Banks or the Agent in payment of any other amounts owed by

 

34

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the Seller hereunder, and fourth to the Collection Agent in payment in full of
all accrued Collection Agent Fee.

 

After the Capital, Yield, Fees and Collection Agent Fee with respect to a
Receivable Interest, and any other amounts payable by the Seller to the
Investors, the Banks or the Agent hereunder, have been paid in full and any
contingent obligations of the Agent under any Lock-Box Agreement have been
released, all additional Collections allocable to such Receivable Interest shall
be paid by the Collection Agent and the Agent, to the extent each of them holds
additional Collections, to the Seller for its own account.

 

(e)  For the purposes of this Section 2.04:

 

(i)  if on any day a Pool Receivable becomes (in whole or in part) a Diluted
Receivable, the Seller shall be deemed to have received on such day a Collection
of such Pool Receivable in the amount of such Diluted Receivable;

 

(ii)  if on any day any of the representations or warranties contained in
Section 4.01(h) is no longer true with respect to any Pool Receivable, the
Seller shall be deemed to have received on such day a Collection of such Pool
Receivable in full;

 

(iii)  except as provided in subSection (i) or (ii) of this Section 2.04(e), or
as otherwise required by applicable law or the relevant Contract, all
Collections received from an Obligor of any Receivables shall be applied to the
Receivables of such Obligor in the order of the age of such Receivables,
starting with the oldest such Receivable, unless such Obligor designates its
payment for application to specific Receivables; and

 

(iv)  if and to the extent the Agent, the Investors or the Banks shall be
required for any reason to pay over to an Obligor any amount received on its
behalf hereunder, such amount shall be deemed not to have been so received but
rather to have been retained by the Seller and, accordingly, the Agent, the
Investors or the Banks, as the case may be, shall have a claim against the
Seller for such amount, payable when and to the extent that any distribution
from or on behalf of such Obligor is made in respect thereof.

 

(f)  Within three Business Days after the end of each Fixed Period in respect of
which Yield is computed by reference

 

35

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to the Investor Rate, the Agent shall furnish the Seller with an invoice setting
forth the amount of the accrued and unpaid Yield and Fees for such Fixed Period
with respect to the Receivable Interests held by the Investors and the Banks.

 

Section 2.05.    Fees.  (a)  Each Investor and Bank shall pay to the Collection
Agent a fee (the “Collection Agent Fee”) of l/4 of 1% per annum on the average
daily Capital of each Receivable Interest owned by such Investor or Bank, from
the date of purchase of such Receivable Interest until the later of the
Termination Date for such Receivable Interest or the date on which such Capital
is reduced to zero, payable on the Settlement Date for such Receivable Interest.
Upon three Business Days’ notice to the Agent, the Collection Agent (if not EIS,
the Seller or its designee or an Affiliate of the Seller) may elect to be paid,
as such fee, another percentage per annum on the average daily Capital of such
Receivable Interest, but in no event in excess for all Receivable Interests
relating to the Receivables Pool, of 110% of the reasonable costs and expenses
of the Collection Agent in administering and collecting the Receivables in the
Receivables Pool. The Collection Agent Fee shall be payable only from
Collections pursuant to, and subject to the priority of payment set forth in,
Section 2.04. So long as EIS is acting as the Collection Agent hereunder,
amounts paid as the Collection Agent Fee pursuant to this Section 2.05(a) shall
reduce, on a dollar-for-dollar basis, the obligation of the Seller to pay the
“Collection Agent Fee” pursuant to Section 6.03 of the Originator Purchase
Agreement, provided that such obligation of the Seller shall in no event be
reduced below zero.

 

(b)  The Seller shall pay to the Agent certain fees (collectively, the “Fees”)
in the amounts and on the dates set forth in a separate fee agreement of even
date between the Seller and the Agent, as the same may be amended or restated
from time to time (the “Fee Agreement”).

 

Section 2.06.    Payments and Computations, Etc.  (a)  All amounts to be paid or
deposited by the Seller or the Collection Agent hereunder shall be paid or
deposited no later than 11:00 A.M. (New York City time) on the day when due in
same day funds to the Agent’s Account.

 

(b)  All computations of Yield, Fees, and other amounts hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed. Whenever any payment or deposit to be
made hereunder shall be due on a day other than a

 

36

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Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.

 

Section 2.07.    Dividing or Combining Receivable Interests.  Either the Seller
or the Agent may, upon notice to the other party received at least three
Business Days prior to the last day of any Fixed Period in the case of the
Seller giving notice, or up to the last day of such Fixed Period in the case of
the Agent giving notice, either (i) divide any Receivable Interest into two or
more Receivable Interests having aggregate Capital equal to the Capital of such
divided Receivable Interest, or (ii) combine any two or more Receivable
Interests originating on such last day or having Fixed Periods ending on such
last day into a single Receivable Interest having Capital equal to the aggregate
of the Capital of such Receivable Interests; provided, however, that no
Receivable Interest owned by CAFCO or CIESCO may be combined with a Receivable
Interest owned by any Bank.

 

Section 2.08.    Increased Costs.  (a)  If CNAI, any Investor, any Bank, any
entity which purchases or enters into a commitment to purchase Receivable
Interests or interests therein, or any of their respective Affiliates (each an
“Affected Person”) determines that (i) compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects the amount of the capital
required or expected to be maintained by such Affected Person and such Affected
Person determines that the amount of such capital is increased by or based upon
the existence of any commitment to make purchases of or otherwise to maintain
the investment in Pool Receivables or interests therein related to this
Agreement or to the funding thereof and other commitments of the same type or
(ii) U.S. generally accepted accounting principles require the consolidation of
some or all of the assets and liabilities of CAFCO and/or CIESCO, including the
assets and liabilities which are the subject of this Agreement and the other
Transaction Documents, with those of such Affected Person, then, upon demand by
such Affected Person (with a copy to the Agent), the Seller shall pay to the
Agent within 10 Business Days for the account of such Affected Person (as a
third-party beneficiary), from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected Person in
light of such circumstances, in the case of clause (i), to the extent that such
Affected Person reasonably determines such increase in capital to be allocable
to the existence of any of such

 

37

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commitments, and in the case of clause (ii), to the extent of any increased cost
or reduced return resulting from the consolidation of the assets and liabilities
which are the subject of this Agreement and the other Transaction Documents, as
reasonably determined by such Affected Person. If the Seller, at any time prior
to the Facility Termination Date, shall become or becomes liable to make any
payment as a result of the causes set forth in clause (ii) of the preceding
sentence, the Agent, the Investors and the Banks agree to discuss and negotiate
in good faith with the Seller a restructuring of the transactions contemplated
by this Agreement and the other Transaction Documents in a manner that would, to
the greatest extent possible, preserve the economic benefits of those
transactions for the Seller, the Agent, the Investors and the Banks and the
legal protections afforded to those parties without the Seller being required to
pay any increased costs under this Section 2.08 to any Affected Person as a
result of those causes; provided, that none of the Agent, the Investors and the
Banks shall be obligated to effect any restructuring of those transactions in
connection with any such occurrences nor shall the obligation of the Seller to
make such payment be affected thereby.

 

(b)  If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements referred to in
Section 2.09) in or in the interpretation of any law or regulation or (ii)
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Investor or Bank of agreeing to purchase or
purchasing, or maintaining the ownership of Receivable Interests in respect of
which Yield is computed by reference to the Eurodollar Rate, then, upon demand
by such Investor or Bank (with a copy to the Agent), the Seller shall pay to the
Agent within 10 Business Days, for the account of such Investor or Bank (as a
third-party beneficiary), from time to time as specified by such Investor or
Bank, additional amounts sufficient to compensate such Investor or Bank for such
increased costs.

 

(c)  A certificate of such Affected Person, delivered to the Seller and the
Agent, claiming compensation under this Section 2.08 and setting forth the
additional amount or amounts to be paid to it hereunder, as well as the manner
in which such amount or amounts were calculated, shall be conclusive in the
absence of manifest error. Any excess payments made by the Seller under this
Section 2.08 shall be reimbursed promptly by

 

38

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the Affected Person receiving such payments to the Seller upon the Affected
Person obtaining knowledge of any error in the amounts submitted to the Seller
by such Affected Person pursuant to this Section 2.08.

 

Section 2.09.    Additional Yield on Receivable Interests Bearing a Eurodollar
Rate.  The Seller shall pay to any Investor or Bank, so long as such Investor or
Bank shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional Yield on
the unpaid Capital of each Receivable Interest of such Investor or Bank during
each Fixed Period in respect of which Yield is computed by reference to the
Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all times
during such Fixed Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Fixed Period from (ii) the rate obtained by dividing
such Eurodollar Rate referred to in clause (i) above by that percentage equal to
100% minus the Eurodollar Rate Reserve Percentage of such Investor or Bank for
such Fixed Period, payable on each date on which Yield is payable on such
Receivable Interest. Such additional Yield shall be determined by such Investor
or Bank and notice thereof given to the Seller through the Agent within 30 days
after any Yield payment is made with respect to which such additional Yield is
requested. A certificate of such Affected Person, delivered to the Seller and
the Agent, claiming compensation under this Section 2.09 and setting forth the
additional amount or amounts to be paid to it hereunder, as well as the manner
in which such amount or amounts were calculated, shall be conclusive in the
absence of manifest error.

 

Section 2.10.    Taxes.  (a)  Any and all payments and deposits required to be
made hereunder or under any other Transaction Document by the Collection Agent
or the Seller shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding net income
taxes that are imposed by the United States and franchise taxes and net income
taxes that are imposed on an Affected Person by the state or foreign
jurisdiction under the laws of which such Affected Person is organized or any
political subdivision thereof and franchise taxes and net income taxes that are
imposed on an Affected Person by the state or foreign jurisdiction of the office
from which this facility is funded (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred

 

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to as “Taxes”). If the Seller or the Collection Agent shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder to any
Affected Person, (i) the Seller shall make an additional payment to such
Affected Person, in an amount sufficient so that, after making all required
deductions of such Taxes (including deductions applicable to additional sums
payable under this Section 2.10), such Affected Person receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Seller, the Collection Agent, the Agent or its designee, as the case may be,
shall make such deductions and (iii) the Seller, the Collection Agent, the Agent
or its designee, as the case may be, shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable law
and shall file any related forms to the extent required.

 

(b)  In addition, the Seller agrees to pay any present or future stamp or other
documentary taxes or any other excise or property taxes which arise from any
payment made hereunder or under any other Transaction Document or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Transaction Document (hereinafter referred to as “Other
Taxes”).

 

(c)  The Seller will indemnify each Affected Person for the full amount of Taxes
or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.10) paid by such
Affected Person and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto whether or not such Taxes or Other
Taxes were correctly or legally asserted; provided, however, that any Affected
Person receiving indemnification from Seller under this Section 2.10(c) shall
(i) at the request, direction and expense of Seller challenge and contest the
imposition of such Taxes, if such Affected Person is the appropriate party in
interest to initiate and pursue such a challenge, or (ii) cooperate fully with
and assist Seller in any challenge of contest by Seller relating to such Taxes,
if Seller is the appropriate party in interest to initiate and pursue such a
challenge, which challenge shall be pursued at Seller’s expense, except that in
either case, Seller has no right hereunder to participate in the internal tax
affairs of any Affected Person. This indemnification shall be made within thirty
days from the date the Affected Person makes written demand therefor (and a copy
of such demand shall be delivered to the Agent). A certificate as to the amount
of such indemnification submitted to the Seller and the Agent by such

 

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Affected Person, setting forth, in reasonable detail, the basis for and the
calculation thereof, shall be conclusive and binding for all purposes absent
manifest error.

 

(d)  (i)  Each Affected Person which is organized outside the United States (or,
in the case of any Person which becomes an Affected Person after the date
hereof, on the date on which it so becomes an Affected Person with respect to
any payments under this Agreement) shall, on or prior to the date hereof,
deliver to the Seller (or, in the case of any Person who becomes an Affected
Person after the date hereof, on or prior to the date on which any payment to it
that could be subject to Taxes is to be made, deliver to the Agent or its
designee) such certificates, documents or other evidence, as required by the
Internal Revenue Code of 1986, as amended or Treasury Regulations issued
pursuant thereto, including Internal Revenue Service Form W-8BEN or Form W-8ECI
and any other certificate or statement of exemption required by Treasury
Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or any subsequent version
thereof, properly completed and duly executed by such Affected Person as will
permit such payments to be made without withholding.

 

(ii)  Each Affected Person which is organized inside the United States (or, in
the case of any Person which becomes an Affected Person after the date hereof,
on the date on which it becomes an Affected Person with respect to any payments
under this Agreement) shall, on or prior to the date hereof, deliver to the
Seller (or, in the case of any Person that becomes an Affected Person after the
date hereof, on or prior to the date on which it so becomes an Affected Person,
deliver to the Agent or its designee) such properly completed and duly executed
certificates, documents or other evidence, as required by the Internal Revenue
Code of 1986, as amended, or Treasury Regulations thereto, including Internal
Revenue Service Form W-9 and any other certificate or statement of exemption
required by Treasury Regulations as will permit such payment to be made without
withholding.

 

(iii)  Each such Affected Person shall from time to time thereafter, upon
written request from the Agent, its designee or the Seller, deliver to the
Agent, its designee or the Seller, as the case may be, any new certificates,
documents or other evidence as described in the preceding sentence as will
permit payments under this Agreement to be made without withholding or at a
reduced rate (but only so long as such Affected Person is legally able to do
so).

 

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(iv)  After the date hereof, the Agent or its designee shall withhold and pay
over to the applicable taxing authorities any tax withholdings that are required
to be made under applicable law and file any related forms (including Form 1099)
to the extent required.

 

(v)  The Agent or its designee shall provide to the Seller, as and when
requested by the Seller, copies of all certificates, documents or other evidence
the Agent or its designee receives pursuant to this Section 2.10(d).

 

(e)  The Seller shall not be required to pay any amounts to any Affected Person
in respect of Taxes and Other Taxes pursuant to paragraphs (a), (b) and (c)
above if the obligation to pay such amounts is attributable to the failure by
such Affected Person to comply with the provisions of paragraph (d) above;
provided, however, that should an Affected Person become subject to Taxes
because of its failure to deliver a form required hereunder, the Seller shall
take such steps as such Affected Person shall reasonably request to assist such
Affected Person to recover such Taxes.

 

(f)  Within 30 days after the date of any payment of Taxes or Other Taxes, the
Seller or the Agent or its designee, as the case may be, will furnish to the
Affected Person the original or a certified copy of a receipt evidencing payment
thereof.

 

Section 2.11.    Security Interest.  As collateral security for the performance
by the Seller of all the terms, covenants and agreements on the part of the
Seller (whether as Seller or otherwise) to be performed under this Agreement or
any document delivered in connection with this Agreement in accordance with the
terms thereof, including the punctual payment when due of all obligations of the
Seller hereunder or thereunder, whether for indemnification payments, fees,
expenses or otherwise, the Seller hereby assigns to the Agent for its benefit
and the ratable benefit of the Investors and the Banks, and hereby grants to the
Agent for its benefit and the ratable benefit of the Investors and the Banks, a
security interest in, all of the Seller’s right, title and interest in and to
(i) the Originator Purchase Agreement, the EDS Contribution Agreement and the
Undertaking (Originator), including, without limitation, (A) all rights of the
Seller to receive moneys due or to become due under or pursuant to the
Originator Purchase Agreement or the Undertaking (Originator), (B) all security
interests and property subject thereto from time to time purporting to secure
payment of monies due or to become due under or pursuant to the

 

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Originator Purchase Agreement or the Undertaking (Originator), (C) all rights of
the Seller to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Originator Purchase Agreement or the Undertaking
(Originator), (D) claims of the Seller for damages arising out of or for breach
of or default under the Originator Purchase Agreement, the EDS Contribution
Agreement or the Undertaking (Originator), and (E) the right of the Seller to
compel performance and otherwise exercise all remedies thereunder, (ii) all
Receivables, whether now owned and existing or hereafter acquired or arising,
the Related Security with respect thereto and the Collections and all other
assets, including, without limitation, accounts, chattel paper, instruments and
general intangibles (as those terms are defined in the UCC), including undivided
interests in any of the foregoing, owned by the Seller and not otherwise
purchased under this Agreement, (iii) the Lock-Box Accounts (but not cash
collections or other cash proceeds received with respect to Third Party Payments
or other Receivables not constituting Pool Receivables) and (iv) to the extent
not included in the foregoing, all proceeds of any and all of the foregoing.

 

Each of the Agent, the Investors and the Banks hereby disclaims any interest or
right in, and hereby releases from any Adverse Claim it may have, any or all of
the items, collections and funds received in, deposited in or credited to any
Lock-Box Account that are not related to any of the Pool Receivables, which
property shall be and remain the exclusive property of EDS, EIS or any Person to
which EDS or EIS has assigned the right to receive such items, collections and
funds, and none of the Agent, the Investors, the Banks and any Person claiming
by, through or under any of the Agent, the Investors and the Banks shall have
any equitable or beneficial ownership or other interest therein. Each of the
Agent, the Investors and the Banks agrees that (x) if the Collection Agent is
EIS or any Affiliate of EIS, the Collection Agent shall, within one Business Day
after the collection of good funds as to any item or collection deposited in or
credited to any Lock-Box Account that is not related to any Pool Receivable, and
(y) if the Agent shall have given a Lock-Box Notice or similar notice of
effectiveness (as defined in the pertinent Lock-Box Agreement) to any Lock-Box
Bank, the Agent as to each Lock-Box Account as to which a Lock-Box Notice or
similar notice has been given, shall within one Business Day after the later of
(1) the collection of good funds as to any items or collections deposited in or
credited to any Lock-Box Account that are not related to any Pool Receivable and
(2) the identification to the

 

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Agent’s satisfaction that such items or collections are not related to any Pool
Receivable (EDS and EIS agreeing to provide the Agent with sufficient
information to make such identification), deliver and transfer such funds
deposited in or credited to the Lock-Box Accounts that are not related to any
Pool Receivable to EIS or to such other Person having an interest in such funds
as EIS may direct. The Agent agrees to instruct any Collection Agent that is not
EIS or another Affiliate of EDS to make such deliveries and payments in
accordance with clause (y) of the preceding sentence. EDS and EIS agree that
they shall have no legal or equitable rights or interests in any item received
or deposited in any Lock-Box Account in respect of payment of any Pool
Receivable or any Collections deposited in or credited to any Lock-Box Account
and that, if they receive any such items or are paid any such Collections, upon
becoming aware of such improper delivery or payment, they will promptly (and in
any event within two Business Days) remit such items or Collections to the
Collection Agent or, if no Collection then exists, the Agent.

 

Section 2.12.    Sharing of Payments.  If any Investor or any Bank (for purposes
of this Section only, referred to as a “Recipient”) shall obtain payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of the Capital of, or Yield on, any Receivable Interest or
portion thereof owned by it in excess of its ratable share of payments made on
account of the Capital of, or Yield on, all of the Receivable Interests owned by
the Investors and the Banks (other than as a result of a payment of Liquidation
Fee or different methods for calculating Yield), such Recipient shall forthwith
purchase from the Investors or the Banks which received less than their ratable
share participations in the Receivable Interests owned by such Persons as shall
be necessary to cause such Recipient to share the excess payment ratably with
each such other Person; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such Recipient, such purchase from
each such other Person shall be rescinded and each such other Person shall repay
to the Recipient the purchase price paid by such Recipient for such
participation to the extent of such recovery, together with an amount equal to
such other Person’s ratable share (according to the proportion of (a) the amount
of such other Person’s required payment to (b) the total amount so recovered
from the Recipient) of any interest or other amount paid or payable by the
Recipient in respect of the total amount so recovered.

 

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Section 2.13.    Repurchase Options.  (a)  The Seller shall have the right to
repurchase all, but not less than all, of the Receivable Interests held by the
Investors and the Banks and to terminate this Agreement upon not less than ten
Business Days’ prior written notice to the Agent. Such notice shall specify the
date that the Seller desires that such repurchase occur (such date, the
“Repurchase Date”). On the Repurchase Date, the Seller shall transfer to the
Agent’s Account in immediately available funds an amount equal to (i) the
aggregate outstanding Capital of the Receivable Interests held by the Investors
and the Banks, (ii) all accrued and unpaid Yield thereon to the Repurchase Date,
(iii) all accrued and unpaid Fees owing to the Investors and the Banks, (iv) the
Liquidation Fee (if any) owing to the Investors and the Banks in respect of such
repurchase and (v) all expenses and other amounts owing to any of the Agent, the
Investors and the Banks under the Transaction Documents. Any repurchase pursuant
to this Section 2.13 shall be made without recourse to or warranty by the Agent,
the Investors or the Banks. Further, on the Repurchase Date, the Bank
Commitments for all the Banks shall terminate, each of the Commitment
Termination Date and Facility Termination Date shall occur, the Termination Date
for all Receivable Interests shall occur and no further purchases or
reinvestments of Collections shall be made hereunder; provided, that the
provisions of this Agreement referenced in Section 10.10 shall survive such
termination.

 

(b)  The Seller shall have the right to repurchase in part the Receivable
Interests held by the Investors and the Banks upon not less than five Business
Days’ prior written notice to the Agent. Such notice shall specify the date that
the Seller desires that such repurchase occur (such date, the “Partial
Repurchase Date”) and the amount of Capital to be repaid (which shall be not
less than $5,000,000). On the Partial Repurchase Date, the Seller shall transfer
to the Agent’s Account in immediately available funds an amount equal to the
Capital specified in such notice, and the Agent shall distribute such funds
ratably to the Investors or the Banks that hold the outstanding Receivable
Interests, to be applied to the reduction of Capital. No more than two partial
repurchases pursuant to this Section 2.13(b) shall be made in any calendar
month.

 

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ARTICLE III

 

CONDITIONS OF PURCHASES

 

Section 3.01.    Conditions Precedent to Initial Purchase.  The initial purchase
of a Receivable Interest under this Agreement is subject to the conditions
precedent that the Agent shall have received on or before the date of such
purchase the following, each (unless otherwise indicated) dated such date, in
form and substance satisfactory to the Agent:

 

(a)  Certified copies of the resolutions of the Board of Managers of the Seller
approving, and evidence that an authorized officer of EDS, EIS and EPC has,
pursuant to delegated authority, approved, this Agreement, the Originator
Purchase Agreement and any other Transaction Documents to which it is a party
and copies of all documents evidencing other necessary corporate or limited
liability company action and governmental approvals, if any, with respect to
this Agreement, the Originator Purchase Agreement and any such other Transaction
Documents.

 

(b)  A certificate of the Secretary or Assistant Secretary of the Seller, EDS,
EIS and EPC certifying the names and true signatures of the officers of the
Seller, EDS, EIS and EPC authorized to sign this Agreement, the Originator
Purchase Agreement and the other documents to be delivered by it hereunder and
thereunder.

 

(c)  Acknowledgment copies or time stamped receipt copies of proper financing
statements, duly filed on or before the date of such initial purchase under the
UCC of all jurisdictions that the Agent may deem necessary or desirable in order
to perfect the ownership and security interests contemplated by this Agreement,
the EDS Contribution Agreement and the Originator Purchase Agreement.

 

(d)  Acknowledgment copies or time stamped receipt copies of proper financing
statements, if any, necessary to release all security interests and other rights
of any Person in (i) the Receivables, Related Security and any right to payment
of any Receivable arising under a Contract previously granted by the Seller, EDS
or the Originator, and (ii) the collateral security referred to in Section 2.11
previously granted by the Seller.

 

(e)  Completed requests for information, dated on or before the date of such
initial purchase, listing all effective

 

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financing statements filed in the jurisdictions referred to in subSection (c)
above that name the Seller, EPC, the Originator or EDS as debtor, together with
copies of such financing statements (none of which shall cover any Receivables,
Contracts, Related Security or the collateral security referred to in Section
2.11).

 

(f)  Executed copies of (i) the Deposit Account Acknowledgment Agreement and
(ii) the Lock-Box Agreement (Bank of America) with respect to each Lock-Box
Account maintained with Bank of America, N. A.

 

(g)  A favorable opinion of Hughes & Luce, L.L.P., counsel for the Seller, EDS,
EPC and the Originator, substantially in the form of Annex C hereto and as to
such other matters as the Agent may reasonably request.

 

(h)  The Fee Agreement.

 

(i)  The Funds Transfer Letter.

 

(j)  An executed copy of the Originator Purchase Agreement.

 

(k)  A copy of the by-laws of EPC and EDS, certified by the Secretary or
Assistant Secretary of EPC or EDS, as the case may be.

 

(l)  A copy of the operating agreement or regulations of EIS and the Seller,
certified by the Secretary or Assistant Secretary of EIS or the Seller, as the
case may be.

 

(m)  A copy of the certificate or articles of incorporation or the certificate
of formation of the Seller, EPC, the Originator and EDS, certified as of a
recent date by the Secretary of State or other appropriate official of the state
of its organization, and a certificate as to the good standing of the Seller,
EPC, the Originator and EDS from such Secretary of State or other official,
dated as of a recent date.

 

(n)  The opening pro forma balance sheet of the Seller referred to in Section
4.01(e).

 

(o)  Executed copies of the Undertakings.

 

(p)  An executed copy of the EDS Contribution Agreement.

 

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Section 3.02.    Conditions Precedent to All Purchases and Reinvestments.  Each
purchase (including the initial purchase) and each reinvestment shall be subject
to the further conditions precedent that (a) in the case of each purchase, the
Collection Agent shall have delivered to the Agent at least one Business Day
prior to such purchase, in form and substance satisfactory to the Agent, a
completed Seller Report containing information covering the most recently ended
reporting period as to which the Collection Agent is then required to deliver a
Seller Report pursuant to Section 6.02(g) and demonstrating that after giving
effect to such purchase no Event of Termination or Incipient Event of
Termination under Section 7.01(i) would occur, (b) in the case of each
reinvestment, the Collection Agent shall have delivered to the Agent on or prior
to the date of such reinvestment, in form and substance satisfactory to the
Agent, a completed Seller Report containing information covering the most
recently ended reporting period as to which the Collection Agent is then
required to deliver a Seller Report pursuant to Section 6.02(g), (c) on the date
of such purchase or reinvestment the following statements shall be true, except
that the statement in clause (iii) below is required to be true only if such
purchase or reinvestment is by an Investor (and acceptance of the proceeds of
such purchase or reinvestment shall be deemed a representation and warranty by
the Seller and the Collection Agent (each as to itself) that such statements are
then true):

 

(i)  The representations and warranties contained in Section 4.01 and 4.02 are
correct on and as of the date of such purchase or reinvestment as though made on
and as of such date, unless such representations and warranties are made as to
an earlier date, and

 

(ii)  No event has occurred and is continuing, or would result from such
purchase or reinvestment, that constitutes an Event of Termination or an
Incipient Event of Termination, and

 

(iii)  The Agent shall not have given the Seller at least one Business Day’s
notice that the Investors have terminated the reinvestment of Collections in
Receivable Interests, and

 

(iv)  EDS shall have contributed to the Originator, pursuant to the EDS
Contribution Agreement, Originator Receivables resulting from a Contract to
which EDS is a party, and the Originator shall have sold or contributed to the
Seller all Originator Receivables pursuant to the

 

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Originator Purchase Agreement, which Originator Receivables may arise on or
prior to such date and exist on or arise after the date of this Agreement, and

 

(d)  the Agent shall have received such other approvals, opinions or documents
as it may reasonably request.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.01.    Representations and Warranties of the Seller.  The Seller
hereby represents and warrants as follows:

 

(a)  The Seller is a limited liability company duly formed, validly existing and
in good standing under the laws of the State of Delaware, and is duly qualified
to do business, and is in good standing, in every jurisdiction where the nature
of its business requires it to be so qualified.

 

(b)  The execution, delivery and performance by the Seller of the Transaction
Documents and the other documents to be delivered by it hereunder, including the
Seller’s use of the proceeds of purchases and reinvestments, (i) are within the
Seller’s limited liability company powers, (ii) have been duly authorized by all
necessary limited liability company action, (iii) do not contravene (A) the
Seller’s certificate of formation or limited liability company agreement, (B)
any law, rule or regulation applicable to the Seller, (C) any contractual
restriction binding on or affecting the Seller or its property or (D) any order,
writ, judgment, award, injunction or decree binding on or affecting the Seller
or its property, and (iv) do not result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect to any of
its properties (except for the interest created pursuant to this Agreement).
Each of the Transaction Documents has been duly executed and delivered by the
Seller.

 

(c)  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, delivery and performance by the Seller of the Transaction Documents
or any other document to be delivered thereunder, except for the filing of UCC
financing statements which are referred to therein.

 

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(d)  Each of the Transaction Documents constitutes the legal, valid and binding
obligation of the Seller enforceable against the Seller in accordance with its
terms.

 

(e)  The opening pro forma balance sheet of the Seller as at December 30, 2002,
giving effect to the initial purchase to be made under this Agreement, a copy of
which has been furnished to the Agent, fairly presents the financial condition
of the Seller as at such date, in accordance with generally accepted accounting
principles, and since December 30, 2002 there has been no material adverse
change in the business, operations, property or financial or other condition of
the Seller.

 

(f)  There is no pending or threatened action, investigation or proceeding
affecting the Seller before any court, governmental agency or arbitrator which
is reasonably likely to materially adversely affect the financial condition or
operations of the Seller or the ability of the Seller to perform its obligations
under the Transaction Documents, or which is reasonably like to affect the
legality, validity or enforceability of the Transaction Documents.

 

(g)  No proceeds of any purchase or reinvestment will be used by the Seller to
acquire any equity security of a class which is registered pursuant to Section
12 of the Securities Exchange Act of 1934.

 

(h)  Immediately prior to the purchase by the Investors or the Banks, as the
case may be, the Seller is the legal and beneficial owner of the Pool
Receivables and Related Security free and clear of any Adverse Claim; upon each
purchase or reinvestment, the Investors or the Banks, as the case may be, shall
acquire a valid and perfected first priority undivided percentage ownership
interest to the extent of the pertinent Receivable Interest in each Pool
Receivable then existing or thereafter arising and in the Related Security and
Collections with respect thereto. No effective financing statement or other
instrument similar in effect covering any Contract (under which Pool Receivables
arise, except with respect to any Contract to the extent that Contract is
identified in Schedule III) or any Pool Receivable or the Related Security or
Collections with respect thereto is on file in any recording office, except
those filed in favor of the Agent relating to this Agreement and those filed by
the Seller pursuant to the Originator Purchase Agreement. Each Receivable
characterized in any Seller Report or other written statement made by or on
behalf of the Seller as an Eligible Receivable or as included in the Net
Receivables

 

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Pool Balance is, as of the date of such Seller Report or other statement, an
Eligible Receivable or properly included in the Net Receivables Pool Balance.

 

(i)  Each Seller Report (if prepared by the Seller or one of its Affiliates, or
to the extent that information contained therein is supplied by the Seller or an
Affiliate), information, exhibit, financial statement, document, book, record or
report furnished or to be furnished at any time by or on behalf of the Seller to
the Agent, the Investors or the Banks in connection with this Agreement is or
will be accurate in all material respects as of its date or (except as otherwise
disclosed to the Agent, Investors or the Banks, as the case may be, at such
time) as of the date so furnished, and no such document contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading.

 

(j)  the principal place of business and chief executive office of the Seller
and the office where the Seller keeps its records concerning the Pool
Receivables are located at the address or addresses referred to in Section
5.01(b).

 

(k)  The names and addresses of all the Lock-Box Banks, together with the
account numbers of the Lock-Box Accounts of the Seller at such Lock-Box Banks,
are as specified in Schedule I hereto, as such Schedule I may be updated from
time to time pursuant to Section 5.01(g). The Lock-Box Accounts are the only
accounts into which Collections of Receivables are deposited or remitted.

 

(l)  Each purchase of a Receivable Interest and each reinvestment of Collections
in Pool Receivables will constitute (i) a “current transaction” within the
meaning of Section 3(a)(3) of the Securities Act of 1933, as amended, and (ii) a
purchase or other acquisition of notes, drafts, acceptances, open accounts
receivable or other obligations representing part or all of the sales price of
merchandise or services within the meaning of Section 3(c)(5) of the Investment
Company Act of 1940, as amended.

 

(m)  The Seller is not known by and does not use any tradename or
doing-business-as name.

 

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(n)  The Seller was formed on December 16, 2002, and the Seller did not engage
in any business activities prior to the date of this Agreement. The Seller has
no Subsidiaries.

 

(o)  (i)  The fair value of the property of the Seller is greater than the total
amount of liabilities, including contingent liabilities, of the Seller, (ii) the
present fair salable value of the assets of the Seller is not less than the
amount that will be required to pay all probable liabilities of the Seller on
its debts as they become absolute and matured, (iii) the Seller does not intend
to, and does not believe that it will, incur debts or liabilities beyond the
Seller’s abilities to pay such debts and liabilities as they mature and (iv) the
Seller is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which the Seller’s property would constitute
unreasonably small capital.

 

(p)  With respect to each Pool Receivable, the Seller (i) shall have received
such Pool Receivable as a contribution to the capital of the Seller by the
Originator or (ii) shall have purchased such Pool Receivable from the Originator
in exchange for payment (made by the Seller to the Originator in accordance with
the provisions of the Originator Purchase Agreement) of cash, Deferred Purchase
Price, or a combination thereof in an amount which constitutes fair
consideration and reasonably equivalent value. Each such sale referred to in
clause (ii) of the preceding sentence shall not have been made for or on account
of an antecedent debt owed by the Originator to the Seller and no such sale is
or may be voidable or subject to avoidance under any Section of the Federal
Bankruptcy Code.

 

Section 4.02.    Representations and Warranties of the Collection Agent.  The
Collection Agent hereby represents and warrants as follows:

 

(a)  The Collection Agent is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware, and is
duly qualified to do business, and is in good standing, in every jurisdiction
where the nature of its business requires it to be so qualified, unless the
failure to so qualify would not have a material adverse effect on (i) the
interests of the Investors and the Banks hereunder, (ii) the collectibility of
the Receivables Pool, or (iii) the ability of the Collection Agent to perform
its obligations hereunder.

 

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(b)  The execution, delivery and performance by the Collection Agent of this
Agreement and any other documents to be delivered by it hereunder (i) are within
the Collection Agent’s limited liability company powers, (ii) have been duly
authorized by all necessary limited liability company action, (iii) do not
contravene (A) the Collection Agent’s certificate of formation or limited
liability company agreement, (B) any law, rule or regulation applicable to the
Collection Agent, (C) any contractual restriction binding on or affecting the
Collection Agent or its property or (D) any order, writ, judgment, award,
injunction or decree binding on or affecting the Collection Agent or its
property, and (iv) do not result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect to any of
its properties. This Agreement has been duly executed and delivered by the
Collection Agent.

 

(c)  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, delivery and performance by the Collection Agent of this Agreement or
any other document to be delivered by it hereunder.

 

(d)  This Agreement constitutes the legal, valid and binding obligation of the
Collection Agent enforceable against the Collection Agent in accordance with its
terms.

 

(e)  The consolidated balance sheets of EDS and its consolidated Subsidiaries as
at September 30, 2002, and the related consolidated statement of income and
consolidated statement of cash flows of EDS and its consolidated Subsidiaries
for the nine months then ended, copies of which have been furnished to the
Agent, fairly present the financial condition of EDS and its consolidated
Subsidiaries as at such date and the results of the operations of EDS and its
consolidated Subsidiaries for the nine month period ended on such date, all in
accordance with generally accepted accounting principles consistently applied,
and since September 30, 2002 there has been no material adverse change in the
business, operations, property or financial or other condition of EDS.

 

(f)  There is no pending or threatened action, investigation or proceeding
affecting the Collection Agent or any of its Subsidiaries before any court,
governmental agency or arbitrator which is reasonably likely to materially
adversely affect the financial condition or operations of the Collection Agent
or any of its Subsidiaries or the ability of the Collection Agent to perform its
obligations under this

 

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Agreement, or which purports to affect the legality, validity or enforceability
of this Agreement.

 

(g)  On the date of each purchase and reinvestment (and after giving effect
thereto), the sum of the Receivable Interests is not greater than the Maximum
Purchaser Interest on such date. Each Receivable characterized in any Seller
Report as an Eligible Receivable or as included in the Net Receivables Pool
Balance is, as of the date of such Seller Report, an Eligible Receivable or
properly included in the Net Receivables Pool Balance.

 

(h)  On each date on which any U.S. Government Receivable is included in the Net
Receivables Pool Balance, the Originator or EDS, as the case may be, is not (i)
on any list of debarred, suspended or otherwise ineligible contractors issued by
the General Services Administration or any other governmental agency, authority
or other regulatory body of the United States having authority to issue such a
list, (ii) the subject of proceedings under Federal Acquisition Regulation
subpart 9.4 or any other provision of applicable law, rule or regulation that
could reasonably be expected to lead to Debarment or (iii) on the List of
Contractors From Whom Certification is Required pursuant to 32 C.F.R. Part 173
(53 Fed. Reg. 42945) or on any other list of contractors required to provide a
special certification in connection with the award of defense contracts.

 

(i)  At no time shall the outstanding amount of Third Party Payments, the
Obligors of which have been instructed to remit payments to any of the Lock-Box
Accounts, exceed $15,000,000.

 

ARTICLE V

 

COVENANTS

 

Section 5.01.    Covenants of the Seller.  Until the latest of the Facility
Termination Date or the date on which no Capital of or Yield on any Receivable
Interest shall be outstanding or the date all other amounts owed by the Seller
hereunder to the Investors, the Banks or the Agent are paid in full:

 

(a)  Compliance with Laws, Etc.  The Seller will comply in all material respects
with all applicable laws, rules, regulations and orders and preserve and
maintain its limited liability company existence, rights, franchises,
qualifications,

 

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and privileges except to the extent that the failure so to comply with such
laws, rules and regulations or the failure so to preserve and maintain such
rights, franchises, qualifications, and privileges would not materially
adversely affect the collectibility of the Receivables Pool or the ability of
the Seller to perform its obligations under the Transaction Documents.

 

(b)  Offices, Records, Name and Organization.  The Seller will keep its
principal place of business and chief executive office and the office where it
keeps its records concerning the Pool Receivables at the address of the Seller
set forth under its name on the signature pages to this Agreement or, upon 30
days’ prior written notice to the Agent, at any other locations within the
United States. The Seller will not change its name or its state of organization,
unless (i) the Seller shall have provided the Agent with at least 30 days’ prior
written notice thereof and (ii) no later than the effective date of such change,
all actions reasonably requested by the Agent to protect and perfect the
interest in the Pool Receivables have been taken and completed. The Seller also
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Pool Receivables
and related Contracts in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other information
reasonably necessary or advisable for the collection of all Pool Receivables
(including, without limitation, records adequate to permit the daily
identification of each Pool Receivable and all Collections of and adjustments to
each existing Pool Receivable).

 

(c)  Performance and Compliance with Contracts and Credit and Collection
Policy.  The Seller will, at its expense, timely and fully perform and comply in
all material respects with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Pool
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy in regard to each Pool Receivable and the related
Contract.

 

(d)  Sales, Liens, Etc.  Except for the ownership and security interests created
hereunder in favor of the Agent, the Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, the Seller’s undivided interest in any
Pool Receivable, Related Security, related Contract (except to the extent that
any part thereof is listed

 

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in Schedule III, as amended from time to time in accordance with the definition
of the term “Contract” herein) or Collections, or upon or with respect to any
account to which any Collections of any Pool Receivable are sent, or assign any
right to receive income in respect thereof.

 

(e)  Extension or Amendment of Receivables.  Except as provided in Section
6.02(c), the Seller will not extend, amend or otherwise modify the terms of any
Pool Receivable, or amend, modify or waive any term or condition relating to
payment terms in any Contract.

 

(f)  Change in Business or Credit and Collection Policy.  The Seller will not
make any change in the character of its business or in the Credit and Collection
Policy that would, in either case, materially adversely affect the
collectibility of the Receivables Pool or the ability of the Seller to perform
its obligations under this Agreement.

 

(g)  Change in Payment Instructions to Obligors.  The Seller will not add or
terminate any bank or bank account as a Lock-Box Bank or Lock-Box Account from
those listed in Schedule I to this Agreement, or make any change in its
instructions to Obligors regarding payments to be made to the Seller or payments
to be made to any Lock-Box Bank, unless the Agent shall have received notice of
such addition, termination or change (including an updated Schedule I) and a
fully executed Lock-Box Agreement, substantially in the form attached hereto as
Annex B-2, with each new Lock-Box Bank or with respect to each new Lock-Box
Account.

 

(h)  Deposits to Lock-Box Accounts.  The Seller will instruct all Obligors to
remit all their payments in respect of Receivables to Lock-Box Accounts. If the
Seller shall receive any Collections directly, it shall immediately (and in any
event within two Business Days) deposit the same to a Lock-Box Account. The
Seller will not deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box Account cash or cash proceeds other than
Collections of Receivables, except that, (i) Third Party Payments may be
deposited or credited to the Lock-Box Accounts and (ii) prior to the earlier of
March 31, 2003 and the implementation of the redirection of payments described
in Section 6.06(c), other cash or cash proceeds which are not Collections of
Receivables may be deposited in the Lock-Box Accounts.

 

(i)  Marking of Records.  At its expense, the Seller will mark its master data
processing records evidencing Pool

 

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Receivables with a legend evidencing that Receivable Interests related to such
Pool Receivables have been sold in accordance with this Agreement; provided,
however, that until September 30, 2003, the Seller may comply with such
requirement to mark its records by placing a legend on its general ledger
stating that Receivable Interests related to the Pool Receivables have been sold
in accordance with the terms of this Agreement.

 

(j)  Further Assurances.  (i)  The Seller agrees from time to time, at its
expense, promptly to execute and deliver all further instruments and documents,
and to take all further actions, that may be necessary, or that the Agent may
reasonably request, to perfect or protect the Receivable Interests purchased
under this Agreement, or to enable the Investors, the Banks or the Agent to
exercise and enforce their respective rights and remedies under this Agreement.

 

(ii)  The Seller authorizes the Agent to file financing or continuation
statements, and amendments thereto and assignments thereof, relating to the Pool
Receivables and the Related Security and the Collections with respect thereto.

 

(k)  Reporting Requirements.  The Seller will provide to the Agent (in multiple
copies, if requested by the Agent) the following:

 

(i)  as soon as available and in any event within 60 days after the end of each
of the first three quarters of each fiscal year of EDS, consolidated balance
sheets of EDS and its consolidated Subsidiaries as of the end of such quarter
and consolidated statements of income and consolidated statement of cash flows
of EDS and its consolidated Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, certified by
the chief financial officer of EDS;

 

(ii)  as soon as available and in any event within 120 days after the end of
each fiscal year of EDS, a copy of the annual report for such year for EDS and
its consolidated Subsidiaries, containing consolidated financial statements for
such year audited by KPMG LLP or other nationally recognized independent public
accountants;

 

(iii)  as soon as available and in any event within 45 days after the end of
each of the first three quarters and within 90 days after the end of the fourth
fiscal quarter

 

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of each fiscal year of the Seller, a balance sheet of the Seller as of the end
of such quarter and a statement of income and statement of cash flows of the
Seller for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, certified by the chief financial officer of
the Seller;

 

(iv)  as soon as possible and in any event within three Business Days after the
Seller obtains knowledge of the occurrence of each Event of Termination or
Incipient Event of Termination, a statement of the chief financial officer of
the Seller setting forth details of such Event of Termination or Incipient Event
of Termination and the action that the Seller has taken and proposes to take
with respect thereto;

 

(v)  promptly after the sending or filing thereof, copies of all reports that
the Originator or EDS sends to any of their security holders, and copies of all
Forms 8-K and all periodic reports filed in accordance with Section 13 of the
Securities Exchange Act of 1934, as amended, and registration statements that
the Originator, EDS or any of their Subsidiaries file with the SEC or any
national securities exchange;

 

(vi)  promptly upon becoming aware thereof, notice of any cancellation or
termination for convenience or default of any Approved Government Contract, or
the assertion by or on behalf of a U.S. Government Obligor of a dispute that
could result in the reduction, cancellation, non-payment or adverse change in
the payment terms of the related U.S. Government Receivables;

 

(vii)  promptly after the filing or receiving thereof, copies of all reports and
notices that the Seller or any Affiliate files under ERISA with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or that the Seller or any Affiliate receives from any of the
foregoing or from any multiemployer plan (within the meaning of Section
4001(a)(3) of ERISA) to which the Seller or any Affiliate is or was, within the
preceding five years, a contributing employer, in each case in respect of the
assessment of withdrawal liability or an event or condition which is reasonably
likely, in the aggregate, to result in the imposition of liability on the Seller
and/or any such Affiliate in excess of $25,000,000;

 

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(viii)  at least 30 days prior to any change in the name or jurisdiction of
organization of the Originator or EDS, a notice setting forth the new name or
jurisdiction of organization and the effective date thereof;

 

(ix)  promptly after the Seller obtains knowledge thereof, notice of any “Event
of Termination” or “Facility Termination Date” under the Originator Purchase
Agreement;

 

(x)  so long as any Capital shall be outstanding, as soon as possible and in any
event no later than the day of occurrence thereof, notice that (i) the
Originator has stopped selling or contributing to the Seller, pursuant to the
Originator Purchase Agreement, all newly arising Originator Receivables or (ii)
EDS has stopped contributing Accounts (as defined in the EDS Contribution
Agreement) to EIS pursuant to the EDS Contribution Agreement;

 

(xi)  at the time of the delivery of the financial statements provided for in
clauses (i) and (ii) of this paragraph, a certificate of the chief financial
officer or the treasurer of the Seller to the effect that, to the best of such
officer’s knowledge, no Event of Termination has occurred and is continuing or,
if any Event of Termination has occurred and is continuing, specifying the
nature and extent thereof;

 

(xii)  promptly after receipt thereof, copies of all notices received by the
Seller from the Originator under the Originator Purchase Agreement; and

 

(xiii)  such other information respecting the Receivables or the condition or
operations, financial or otherwise, of the Seller as the Agent may from time to
time reasonably request.

 

Reports and financial statements required to be delivered pursuant to clauses
(i), (ii) and (v) of this Section 5.01(k) shall be deemed to have been delivered
on the date on which EDS posts such reports, or reports containing such
financial statements, on EDS’s website on the Internet at www.eds.com or when
such reports, or reports containing such financial statements, are posted on the
SEC’s website at www.sec.gov; provided that EDS shall deliver paper copies of
the reports and financial statements referred to in clauses (i), (ii) and (v) of
this Section 5.01(k) to the Agent or any Investor or Bank who requests EDS to
deliver such paper copies

 

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until written notice to cease delivering paper copies is given by the Agent or
such Investor or Bank, as applicable.

 

(l)  Separateness.  (i)  The Seller shall at all times maintain at least one
independent manager who (A) is not currently and has not been during the five
years preceding the date of this Agreement an officer, director, manager or
employee of an Affiliate of the Seller or any Other Company, (B) is not a
current or former officer or employee of the Seller and (C) is not a stockholder
or membership interest owner of any Other Company or any of their respective
Affiliates.

 

(ii)  The Seller shall not direct or participate in the management of any of the
Other Companies’ operations.

 

(iii)  The Seller shall conduct its business from an office separate from that
of the Other Companies (but which may be located in the same facility as one or
more of the Other Companies). The Seller shall have stationery and other
business forms and a mailing address and a telephone number separate from that
of the Other Companies.

 

(iv)  The Seller shall at all times be adequately capitalized in light of its
contemplated business.

 

(v)  The Seller shall at all times provide for its own operating expenses and
liabilities from its own funds.

 

(vi)  The Seller shall maintain its assets and transactions separately from
those of the Other Companies and reflect such assets and transactions in
financial statements separate and distinct from those of the Other Companies and
evidence such assets and transactions by appropriate entries in books and
records separate and distinct from those of the Other Companies. The Seller
shall hold itself out to the public under the Seller’s own name as a legal
entity separate and distinct from the Other Companies. The Seller shall not hold
itself out as having agreed to pay, or as being liable, primarily or
secondarily, for, any obligations of the Other Companies.

 

(vii)  The Seller shall not maintain any joint account with any Other Company or
become liable as a guarantor or otherwise with respect to any Debt or
contractual obligation of any Other Company.

 

(viii)  The Seller shall not make any payment or distribution of assets with
respect to any obligation of

 

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any Other Company or grant an Adverse Claim on any of its assets to secure any
obligation of any Other Company.

 

(ix)  The Seller shall not make loans, advances or otherwise extend credit to
any of the Other Companies other than Purchaser Loans on the terms and
conditions set forth in the Originator Purchase Agreement.

 

(x)  The Seller shall hold regular duly noticed meetings of its Board of
Managers and make and retain minutes of such meetings.

 

(xi)  The Seller shall have bills of sale (or similar instruments of assignment)
and, if appropriate, UCC-1 financing statements, with respect to all assets
purchased from any of the Other Companies.

 

(xii)  The Seller shall not engage in any transaction with any of the Other
Companies, except as permitted by this Agreement and as contemplated by the
Originator Purchase Agreement.

 

(xiii)  The Seller shall comply with (and cause to be true and correct) each of
the facts and assumptions contained in Section I (captioned “Assumptions of
Fact”) of the opinion of Hughes & Luce, L.L.P. delivered pursuant to Section
3.01(g) and designated as Annex C to this Agreement.

 

(m)  Originator Purchase Agreement.  The Seller will not amend, waive or modify
any provision of the Originator Purchase Agreement (provided that the Seller may
extend the “Facility Termination Date” thereunder without the consent
contemplated below) or, after the occurrence of an Event of Termination
hereunder, waive the occurrence of any “Event of Termination” under the
Originator Purchase Agreement, without in each case the prior written consent of
the Agent. The Seller will perform all of its obligations under the Originator
Purchase Agreement in all material respects and will enforce the Originator
Purchase Agreement in accordance with its terms in all material respects.

 

(n)  Nature of Business.  The Seller will not engage in any business other than
the purchase of Receivables, Related Security and Collections from the
Originator and the transactions contemplated by this Agreement. The Seller will
not create or form any Subsidiary.

 

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(o)  Mergers, Etc.  The Seller will not merge with or into or consolidate with
or into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions), all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets or capital stock or other ownership interest of,
or enter into any joint venture or partnership agreement with, any Person, other
than as contemplated by this Agreement and the Originator Purchase Agreement.

 

(p)  Distributions, Etc.  The Seller will not declare or make any distribution
of assets, properties, cash, rights, obligations or securities on account of any
membership interests of the Seller, or return any capital to its members as
such, or purchase, retire, defease, redeem or otherwise acquire for value or
make any payment in respect of any membership interests of the Seller or any
warrants, rights or options to acquire any such membership interests, now or
hereafter outstanding; provided, however, that the Seller may declare and make
cash distributions on its membership interests to its members so long as (i) no
Event of Termination shall then exist or would occur as a result thereof, (ii)
such distributions are in compliance with all applicable law including the
limited liability company law of the state of Seller’s formation, and (iii) such
distributions have been approved by all necessary and appropriate limited
liability company action of the Seller.

 

(q)  Debt.  The Seller will not incur any Debt, other than any Debt incurred
pursuant to this Agreement and the Deferred Purchase Price.

 

(r)  Limited Liability Company Agreement.  The Seller will not amend, modify or
delete any provision of its limited liability company agreement.

 

(s)  Tangible Net Worth.  The Seller will maintain Tangible Net Worth at all
times equal to at least 3% of the Outstanding Balance of the Receivables at such
time.

 

Section 5.02.    Covenant of the Seller, the Originator and EDS.  Until the
latest of the Facility Termination Date or the date on which no Capital of or
Yield on any Receivable Interest shall be outstanding or the date all other
amounts owed by the Seller hereunder to the Investors, the Banks or the Agent
are paid in full, each of the Seller, the Originator and EDS will, at their
respective expense, from time to time during regular business hours as requested
by the Agent, permit the

 

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Agent or its agents or representatives (including independent public
accountants, which may be the Seller’s, the Originator’s or EDS’ independent
public accountants), (i) no more than once each fiscal year of the Seller
(unless an Event of Termination has occurred and is continuing or a deficiency
was discovered during the previous audit, in which case such limitation shall
not apply), to conduct periodic audits of the Receivables, the Related Security
and the related books and records and collections systems of the Seller, the
Originator or EDS, as the case may be, (ii) to examine and make copies of and
abstracts from all books, records and documents (including, without limitation,
computer tapes and disks) in the possession or under the control of the Seller,
the Originator or EDS, as the case may be, relating to Pool Receivables and the
Related Security, and (iii) to visit the offices and properties of the Seller,
the Originator or EDS, as the case may be, for the purpose of examining such
materials described in clause (ii) above, and to discuss matters relating to
Pool Receivables and the Related Security or the Seller’s, the Originator’s or
EDS’ performance under the Transaction Documents or under the Contracts with any
of the officers or employees of the Seller, the Originator or EDS, as the case
may be, having knowledge of such matters. In addition, upon the Agent’s request
no more than once per year, the Seller will, at its expense, appoint independent
public accountants (which may, with the consent of the Agent, be the Seller’s
regular independent public accountants), or utilize the Agent’s representatives
or auditors, to prepare and deliver to the Agent a written report with respect
to the Receivables and the Credit and Collection Policy (including, in each
case, the systems, procedures and records relating thereto) on a scope and in a
form reasonably requested by the Agent.

 

Section 5.03.    Compliance with Assignment of Claims Act.  Each of the
Originator, EDS and the Seller hereby agrees that from time to time at the
request of and in a manner reasonably requested by the Agent, the Originator,
EDS or the Seller will, at its expense, execute and deliver all instruments and
documents, including without limitation the Assignment of Claims Documents, and
take all further action, that may be necessary or that the Agent may reasonably
request, in order to obtain any necessary authorization or approval under, or
provide any notice required by, the Assignment of Claims Act, in order to
protect, perfect or more fully evidence the U.S. Government Receivables
purchased by the Investors or the Banks hereunder, or to enable any of them or
the Agent to exercise or enforce any of their respective rights hereunder;
furthermore, the Originator, EDS and the Seller will, from time to time, upon

 

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request by the Agent, promptly provide the Agent with a written report in
reasonable detail as to (1) the actions it has taken under this Section 5.03,
(2) the authorizations or approvals, if any, that have been obtained or notices,
if any, that have been provided and (3) the actions, if any, that have been
taken by which governmental Obligors, and as to any other details requested by
the Agent.

 

 

ARTICLE VI

 

ADMINISTRATION AND COLLECTION

OF POOL RECEIVABLES

 

Section 6.01.    Designation of Collection Agent.  The servicing, administration
and collection of the Pool Receivables shall be conducted by the Collection
Agent so designated hereunder from time to time. Until the Agent gives notice to
the Seller of the designation of a new Collection Agent, EIS is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Collection Agent pursuant to the terms hereof. At any time after the occurrence
of an Event of Termination or an Incipient Bankruptcy Event of Termination, the
Agent may designate as Collection Agent any Person (including itself) to succeed
EIS or any successor Collection Agent, if such Person shall consent and agree to
the terms hereof. The Collection Agent may, with the prior consent of the Agent,
subcontract with any other Person for the servicing, administration or
collection of the Pool Receivables. Any such subcontract shall not affect the
Collection Agent’s liability for performance of its duties and obligations
pursuant to the terms hereof, and any such subcontract shall automatically
terminate upon designation of a successor Collection Agent.

 

Section 6.02.    Duties of Collection Agent.  (a)  The Collection Agent shall
take or cause to be taken all such actions as may be necessary or advisable to
collect each Pool 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. The Seller and the Agent
hereby appoint the Collection Agent, from time to time designated pursuant to
Section 6.01, as agent for themselves and for the Investors and the Banks to
enforce their respective rights and interests in the Pool Receivables, the
Related Security and the Collections with respect thereto. In performing its
duties as Collection Agent, the Collection Agent shall exercise the same care
and apply the same policies as it would exercise and apply if it owned such
Receivables and shall

 

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act in the best interests of the Seller, the Investors and the Banks.

 

(b)  The Collection Agent shall administer the Collections in accordance with
the procedures described in Section 2.04.

 

(c)  If no Event of Termination or Incipient Event of Termination shall have
occurred and be continuing, EIS while it is the Collection Agent, may, in
accordance with the Credit and Collection Policy, extend the maturity or adjust
the Outstanding Balance of any Receivable as EIS deems appropriate to maximize
Collections thereof, or otherwise amend or modify other terms of any Receivable,
provided that the classification of any such Receivable as a Delinquent
Receivable or Defaulted Receivable shall not be affected by any such extension.

 

(d)  The Collection Agent shall hold in trust for the Seller and each Investor
and Bank, in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or disks)
which evidence or relate to Pool Receivables; provided, however, that such
documents, instruments and records to be held in trust (i) shall not include
Contracts or any part or abstract thereof or any confidential information of the
Seller, EDS, the Originator or their Affiliates, but (ii) shall include
sufficient information to enable the Agent or a replacement Collection Agent to
administer, collect and enforce the Pool Receivables. The Collection Agent shall
mark the Seller’s master data processing records evidencing the Pool Receivables
with a legend, reasonably acceptable to the Agent, evidencing that Receivable
Interests therein have been sold.

 

(e)  The Collection Agent shall, as soon as practicable following receipt (and,
in the case of Third Party Payments, within one Business Day following receipt),
turn over to the Person entitled thereto any cash collections or other cash
proceeds received with respect to Third Party Payments and any other Receivables
not constituting Pool Receivables.

 

(f)  The Collection Agent shall, from time to time at the request of the Agent,
furnish to the Agent (promptly after any such request) a calculation of the
amounts set aside for the Investors and the Banks pursuant to Section 2.04.

 

(g)  On or prior to the tenth Business Day of each month, the Collection Agent
shall prepare and forward to the

 

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Agent a Seller Report relating to the Receivable Interests outstanding on the
last day of the immediately preceding month.

 

The Collection Agent shall transmit Seller Reports to the Agent concurrently by
facsimile and by electronic mail (each, an “E-Mail Seller Report”). Each E-Mail
Seller Report shall be (A) formatted as the Agent may reasonably designate from
time to time and (B) sent to the Agent at an electronic mail address designated
by the Agent.

 

Section 6.03.    Certain Rights of the Agent.  (a)  The Agent is authorized at
any time to date, and to deliver to the Lock-Box Banks, the Notices of
Effectiveness attached to the Lock-Box Agreements. The Seller hereby transfers
to the Agent the exclusive ownership and control of the Lock-Box Accounts to
which the Obligors of Pool Receivables shall make payments.

 

(b)  At any time following (x) the designation of a Collection Agent other than
EIS pursuant to Section 6.01 or (y) an Event of Termination or an Incipient
Bankruptcy Event of Termination which is continuing:

 

(i)  The Agent may notify the Obligors of Pool Receivables, at the Seller’s
expense, of the ownership of Receivable Interests under this Agreement.

 

(ii)  The Agent may direct the Obligors of Pool Receivables that all payments
thereunder be made directly to the Agent or its designee.

 

(iii)  At the Agent’s request and at the Seller’s expense, the Seller shall
notify each Obligor of Pool Receivables of the ownership of Receivable Interests
under this Agreement and direct that payments be made directly to the Agent or
its designee.

 

(iv)  At the Agent’s request and at the Seller’s expense, the Seller and the
Collection Agent shall (A) assemble all of the documents, instruments and other
records (including, without limitation, computer tapes and disks) that evidence
or relate to the Pool Receivables and Related Security, or that are otherwise
necessary or desirable to collect the Pool Receivables, and shall make the same
available to the Agent at a place selected by the Agent or its designee;
provided, however, that such documents, instruments and other records (i) shall
not include Contracts or any part or abstract thereof or any confidential
information of the Seller, the Originator or

 

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any of their Affiliates, but (ii) shall include sufficient information to enable
the Agent or a replacement Collection Agent to administer, collect and enforce
the Pool Receivables, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections of Pool Receivables in
a manner acceptable to the Agent and, promptly upon receipt, remit all such
cash, checks and instruments, duly indorsed or with duly executed instruments of
transfer, to the Agent or its designee.

 

(v)  The Seller authorizes the Agent to take any and all steps in the Seller’s
name and on behalf of the Seller that are necessary or desirable, in the
determination of the Agent, to collect amounts due under the Pool Receivables,
including, without limitation, endorsing the Seller’s name on checks and other
instruments representing Collections of Pool Receivables and enforcing the Pool
Receivables and the Related Security.

 

Section 6.04.    Rights and Remedies.  (a)  If the Collection Agent fails to
perform any of its obligations under this Agreement, the Agent may (but shall
not be required to) itself perform, or cause performance of, such obligation;
and the Agent’s reasonable costs and expenses incurred in connection therewith
shall be payable by the Collection Agent.

 

(b)  The Seller, the Originator and EDS shall perform their respective
obligations under the Contracts related to the Pool Receivables to the same
extent as if Receivable Interests had not been sold, and the exercise by the
Agent on behalf of the Investors and the Banks of their rights under this
Agreement shall not release the Collection Agent or the Seller from any of their
duties or obligations with respect to any Pool Receivables or related Contracts.
Neither the Agent, the Investors nor the Banks shall have any obligation or
liability with respect to any Pool Receivables or related Contracts, nor shall
any of them be obligated to perform the obligations of the Seller thereunder.

 

(c)  In the event of any conflict between the provisions of Article VI of this
Agreement and Article VI of the Originator Purchase Agreement, the provisions of
Article VI of this Agreement shall control.

 

Section 6.05.    Further Actions Evidencing Purchases.  Each of the Originator
and EDS agrees from time to time, at its expense, to promptly execute and
deliver all further instruments and documents, and to take all further actions,
that may be necessary, or that the Agent may reasonably request, to perfect

 

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or protect the Receivable Interests purchased hereunder, or to enable the
Investors, the Banks or the Agent to exercise and enforce their respective
rights and remedies hereunder; provided, however, that none of the Investors,
the Banks and the Agent shall have any rights or remedies regarding the
Contracts themselves, except with respect to the right to payment by the
Obligors thereunder of the amounts owing to the Originator and/or EDS thereunder
with respect to the merchandise sold or services provided to the Obligors
thereunder. Without limiting the foregoing, each of the Originator and EDS will
(i) upon the request of the Agent, execute and file such financing or
continuation statements, or amendments thereto, and such other instruments and
documents, that may be reasonably necessary, or that the Agent may reasonably
request, to perfect or protect such Receivable Interests; and (ii) mark its
master data processing records evidencing the Pool Receivables with a legend,
reasonably acceptable to the Agent, evidencing that Receivable Interests therein
have been sold. Each of the Originator and EDS authorizes the Seller, the Agent
or EIS to file financing statements with respect to the Originator Purchase
Agreement and the EDS Contribution Agreement as permitted by the UCC.

 

Section 6.06.    Covenants of the Collection Agent and the
Originator.  (a)  Audits.  The Collection Agent will, from time to time during
regular business hours as requested by the Agent, permit the Agent, or its
agents or representatives (including independent public accountants, which may
be the Collection Agent’s independent public accountants), (i) no more than once
each fiscal year of the Seller (unless an Event of Termination has occurred and
is continuing or a deficiency was discovered during the previous audit, in which
case such limitation shall not apply), to conduct periodic audits of the
Receivables, the Related Security and the books and records and collections
systems of the Collection Agent to the extent that they relate to the Pool
Receivables, (ii) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in the possession or under the control of the Collection Agent relating to Pool
Receivables and the Related Security, but not of the Contracts or any part or
abstract thereof except as provided in Section 10.06(c), and (iii) to visit the
offices and properties of the Collection Agent for the purpose of examining such
materials described in clause (ii) above, and to discuss matters relating to
Pool Receivables and the Related Security or the Collection Agent’s performance
hereunder with any of the

 

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officers or employees of the Collection Agent having knowledge of such matters.

 

(b)  Change in Credit and Collection Policy.  The Originator and EDS will not
make any change in the Credit and Collection Policy that would impair the
collectibility of any Pool Receivable or the ability of EIS (if it is acting as
Collection Agent) to perform its obligations under this Agreement. In the event
that the Collection Agent, the Originator or EDS makes any change to the Credit
and Collection Policy, it shall, contemporaneously with such change, provide the
Agent with an updated Credit and Collection Policy and a summary of all material
changes.

 

(c)  Redirection of Payments.  The Collection Agent will, no later than March
31, 2003, either (i) instruct all Persons who are remitting payments to the
Lock-Box Accounts which are not Collections of Receivables to instead remit such
payments to a bank account which is not Lock-Box Account and enter into new
Lock-Box Agreements, substantially in the form attached hereto as Annex B-2,
with respect to all existing Lock-Box Accounts, or (ii) instruct all Obligors of
Pool Receivables to remit their payments to one or more new bank accounts which
have been added as Lock-Box Accounts in accordance with Section 5.01(g) and are
subject to Lock-Box Agreements substantially in the form attached hereto as
Annex B-2. Notwithstanding the foregoing, with respect to Receivables arising
pursuant to Contracts under which amounts payable are currently paid by
electronic funds transfer directly to the Concentration Account (including such
Receivables due from General Motors Corporation and Delphi Automotive Systems
Corporation), the Collection Agent will, no later than January 15, 2003, (x) set
up a new bank account at JPMorgan Chase Bank in the Seller’s name and (y)
instruct each such Obligor to remit its payments with respect to such
Receivables to such bank account, and no later than February 28, 2003, enter
into a Lock-Box Agreement substantially in the form attached hereto as Annex B-2
with respect to such bank account.

 

(d)  EDS Contribution Agreement.  The Originator will not amend, waive or modify
any provision of the EDS Contribution Agreement without the Agent’s consent,
such consent not to be unreasonably withheld (it being agreed that the Agent may
reasonably withhold its consent to any amendment, waiver or modification that
would adversely affect the collectibility of any Pool Receivable). The
Originator will not agree to the removal or inclusion of any agreement as a
“Contract” pursuant to the final proviso contained in the definition of
“Contract”

 

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in the EDS Contribution Agreement, without the prior written consent of the
Agent in each instance. The Originator will perform all of its obligations under
the EDS Contribution Agreement in all material respects and will enforce the EDS
Contribution Agreement in accordance with its terms in all material respects.

 

Section 6.07.    Indemnities by the Collection Agent.  Without limiting any
other rights that the Agent, any Investor, any Bank, any of their respective
Affiliates or any of their respective officers, directors, employees or advisors
(each, a “Special Indemnified Party”) may have hereunder or under applicable
law, and in consideration of its appointment as Collection Agent, the Collection
Agent hereby agrees to indemnify each Special Indemnified Party from and against
any and all claims, losses and liabilities (including reasonable attorneys’
fees, but excluding consequential damages incurred by a Special Indemnified
Party (it being agreed that consequential damages payable by a Special
Indemnified Party to a third party are not excluded)) (all of the foregoing
being collectively referred to as “Special Indemnified Amounts”) arising out of
or resulting from any of the following (excluding, however, (a) Special
Indemnified Amounts to the extent found in a final non-appealable judgment of a
court of competent jurisdiction to have resulted from gross negligence or
willful misconduct on the part of such Special Indemnified Party, (b) recourse
for Receivables which are not collected, not paid or uncollectible on account of
the insolvency, bankruptcy or financial inability to pay of the applicable
Obligor or (c) any income taxes or any other tax or fee measured by income
incurred by such Special Indemnified Party arising out of or as a result of this
Agreement or the ownership of Receivable Interests or in respect of any
Receivable or any Contract):

 

(i)  any representation made or deemed made by the Collection Agent pursuant to
Section 4.02(g) hereof which shall have been incorrect in any respect when made
or any other representation or warranty or statement made or deemed made by the
Collection Agent under or in connection with this Agreement which shall have
been incorrect in any material respect when made;

 

(ii)  the failure by the Collection Agent to comply with any applicable law,
rule or regulation with respect to any Pool Receivable or Contract; or the
failure of any Pool Receivable or Contract to conform to any such applicable
law, rule or regulation;

 

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(iii)  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 with respect to any Receivables in, or purporting to be in, the
Receivables Pool and the Related Security and Collections in respect thereof,
whether at the time of any purchase or reinvestment or at any subsequent time;

 

(iv)  any failure of the Collection Agent to perform its duties or obligations
in accordance with the provisions of this Agreement;

 

(v)  the commingling of Collections of Pool Receivables at any time by the
Collection Agent with other funds;

 

(vi)  any action or omission by the Collection Agent (other than an action
required by the Transaction Documents) reducing or impairing the rights of the
Investors or the Banks with respect to any Pool Receivable or the value of any
Pool Receivable;

 

(vii)  any Collection Agent Fees or other costs and expenses payable to any
replacement Collection Agent, to the extent in excess of the Collection Agent
Fees payable to the Collection Agent hereunder; or

 

(viii)  any claim brought by any Person other than a Special Indemnified Party
arising from any activity by the Collection Agent or its Affiliates in
servicing, administering or collecting any Receivable.

 

Section 6.08.    Procedures When Litigation or Similar Proceedings
Involved.  (a)  In case any suit, proceeding or action is brought or any claim
is asserted against any Special Indemnified Party (and a claim for
indemnification in respect thereof may be made by such Special Indemnified Party
against the Collection Agent under Section 6.07 hereof), such Special
Indemnified Party shall promptly give notice of such suit, proceeding, action or
claim of which it has notice to the Collection Agent; provided, however, that
failure of such Special Indemnified Party to give such notice shall not relieve
the Collection Agent from any of its obligations under the indemnity herein,
except to the extent such failure prejudices the defense of such suit,
proceeding or action, or the contest of such claim, by the Collection Agent.

 

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(b)  Following receipt by the Collection Agent of any such notice from a Special
Indemnified Party as provided in subSection (a) above, and provided that (i) the
Collection Agent shall have acknowledged in writing that, to the extent of the
matters of any suit, proceeding, action or other claim for which the Collection
Agent wishes to assume the defense as set forth below, Section 6.07 will cover
any judgment, settlement, loss, costs or expenses in any suit, proceeding,
action or other claim referred to in such notice (provided such acknowledgment
shall not be deemed to expand the Collection Agent’s obligations under Section
6.07 hereof), (ii) no Event of Termination or Incipient Event of Termination has
occurred and is continuing and (iii) such suit, proceeding, action or other
claim does not involve any claim by the Collection Agent against any Special
Indemnified Party or any claim by a Special Indemnified Party against the
Collection Agent, then the Collection Agent shall be entitled to assume control
of and conduct the defense of any or all of the matters involved in such suit,
proceeding, action or other claim on behalf of such Special Indemnified Party at
the Collection Agent’s own cost and expense with independent counsel reasonably
satisfactory to the Agent, and if the Collection Agent shall so assume the
defense of any or all of the matters involved in such suit, proceeding, action
or other claim, the Collection Agent shall consult with the Agent and such
Special Indemnified Party and shall conduct such defense with due diligence and
at its own cost and expense. To the extent of the matters for which the
Collection Agent has so assumed the defense, any participation in such defense
by the Agent or such Special Indemnified Party or any claim by a Special
Indemnified Party shall be at their sole cost and expense and not subject to
indemnification hereunder. Except as otherwise provided in the preceding
sentence, nothing in this subparagraph (b) is intended in any way to diminish
the obligation of the Collection Agent to pay promptly on demand the legal fees
and expenses of any Special Indemnified Party.

 

(c)  The Collection Agent shall not be liable for any settlement of or
confessions of judgment in any action or proceeding without its consent;
provided that if an Event of Termination or Incipient Bankruptcy Event of
Termination shall have occurred and be continuing the Special Indemnified Party
shall notify the Collection Agent of any proposed settlement but shall not be
required to obtain the Collection Agent’s consent.

 

(d)  The Collection Agent, at its own cost and expense, agrees to assist, at the
request of and to the extent reasonably required by the Agent or any Special
Indemnified

 

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Party, in any suit, proceeding or other action brought by or against such
Special Indemnified Party relating to any of the transactions contemplated by
this Agreement or any of the Receivables, Related Security or any related
Contracts and as to which the Collection Agent has any indemnification
obligations; provided, that in rendering any such assistance, the Collection
Agent shall not be obligated to take any action or provide any information to
any party if to do so would be reasonably likely to result in a loss of the
attorney-client privilege.

 

ARTICLE VII

 

EVENTS OF TERMINATION

 

Section 7.01.    Events of Termination.  If any of the following events (“Events
of Termination”) shall occur and be continuing:

 

(a)  The Collection Agent (i) shall fail to perform or observe any term,
covenant or agreement under this Agreement (other than as referred to in clause
(ii) or (iii) of this subSection (a)) and such failure shall remain unremedied
for five Business Days or (ii) shall fail to make when due any payment or
deposit to be made by it under this Agreement (unless such payment became due
and payable as a result of a deemed Collection under Section 2.04(e), in which
case, such payment is not made within three Business Days after the Seller
becomes actually aware of the deemed Collection having occurred) or (iii) shall
fail to deliver any Seller Report within one Business Day from the date when
required; or

 

(b)  The Seller shall fail to make any payment required under Section 2.04(e)
for a period of three Business Days; or

 

(c)  Any representation or warranty made or deemed made by the Seller, the
Collection Agent, EIS, EDS or EPC (or any of their respective officers) under or
in connection with this Agreement or any other Transaction Document or any
information or report delivered by the Seller, the Collection Agent, EIS, EDS or
EPC pursuant to this Agreement or any other Transaction Document shall prove to
have been incorrect or untrue in any material respect when made or deemed made
or delivered (unless (i) the breach of such representation or warranty arises
under the first sentence of Section 4.01(h) and relates solely to specific Pool
Receivables in the aggregate amount of not more than $5,000,000 as to which the
Investors or

 

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the Banks, as the case may be, have not acquired a valid and perfected first
priority interest and (ii) the Seller either (A) cures such breach of
representation or warranty or (B) pays a deemed Collection on account of such
Pool Receivables pursuant to Section 2.04(e)(ii), in each case within two
Business Days; or

 

(d)  The Seller, EPC, the Originator or EDS shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement or any other
Transaction Document on its part to be performed or observed and any such
failure shall remain unremedied for 10 Business Days after written notice
thereof shall have been given to the Seller by the Agent; or

 

(e)  The Seller, EIS, EDS or EPC shall fail to pay any principal of or premium
or interest on any of its Debt which, in the case of each of EIS, EDS and EPC,
is outstanding in a principal amount of at least $50,000,000 in the aggregate
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate the maturity of such Debt; or any such Debt shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to repay,
redeem, purchase or defease such Debt shall be required to be made, in each case
prior to the stated maturity thereof; or

 

(f)  Any purchase or any reinvestment pursuant to this Agreement shall for any
reason (other than pursuant to the terms hereof) cease to create, or any
Receivable Interest shall for any reason cease to be, a valid and perfected
first priority undivided percentage ownership interest to the extent of the
pertinent Receivable Interest in each applicable Pool Receivable and the Related
Security and Collections with respect thereto, or the security interest created
pursuant to Section 2.11 shall for any reason cease to be a valid and perfected
first priority security interest in the collateral security referred to in that
section (unless (i) such defect in creation, perfection or priority relates
solely to specific Pool Receivables in the aggregate amount of not more than
$5,000,000 and (ii) the Seller either (A) cures such defect or (B) pays a deemed
Collection on

 

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account of such Pool Receivables pursuant to Section 2.04(e)(ii), in each case
within two Business Days; or

 

(g)  The Seller, the Collection Agent, EIS, EDS or EPC 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 any proceeding shall be instituted by or against the Seller, the
Collection Agent, EIS, EDS or EPC seeking to adjudicate it a 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, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur; or
the Seller, the Collection Agent, EIS, EDS or EPC shall take any corporate or
limited liability company action to authorize any of the actions set forth above
in this subsection (g); or

 

(h)  As of the last day of any calendar month, either (i) the average of the
Default Ratio for such month and the two immediately preceding months shall
exceed 14% or (ii) the average of the Delinquency Ratio for such month and the
two immediately preceding months shall exceed 7% or (iii) the
Loss-to-Liquidation Ratio shall exceed 1% or (iv) the average of the Dilution
Ratio for such month and the two preceding months shall exceed 5%; or

 

(i)  The sum of the Receivable Interests shall be greater than the Maximum
Purchaser Interest for more than one Business Day; or

 

(j)  There shall have occurred any event which is reasonably likely to
materially adversely affect the collectibility of the Receivables Pool or the
ability of the Seller or the Collection Agent to collect Pool Receivables or
otherwise perform its obligations under this Agreement; or

 

(k)  An “Event of Termination” or “Facility Termination Date” shall occur under
the Originator Purchase

 

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Agreement, or the Originator Purchase Agreement shall cease to be in full force
and effect; or

 

(l)  A default shall occur under the EDS Contribution Agreement, or the EDS
Contribution Agreement shall cease to be in full force and effect; or

 

(m)  The Debt Rating of EDS is below BBB- by S&P or below Baa3 by Moody’s, or is
withdrawn or suspended by S&P or Moody’s; or,

 

(n)  All of the outstanding membership interests of the Seller shall cease to be
owned, directly or indirectly, by EDS, or all of the outstanding capital stock
or membership interests of EIS or EPC shall cease to be owned, directly or
indirectly, by EDS; or

 

(o)  One or more judgments for the payment of money in an aggregate amount in
excess of $50,000,000 (except to the extent covered by insurance as to which the
insurer has acknowledged such coverage in writing) shall be rendered against (i)
EDS or any of its U.S. Subsidiaries or any combination thereof or (ii) the
Collection Agent or any of its U.S. Subsidiaries or a combination thereof, and
the same shall remain undischarged for a period of 90 consecutive days during
which execution shall not be effectively stayed, or any action shall be taken by
a judgment creditor to attach or levy upon any assets (other than Lock-Box
Accounts) of EDS or the Collection Agent or any of their respective U.S.
Subsidiaries to enforce any such judgment, which action is not stayed or
dismissed within five Business Days after its commencement; or

 

(p)  (i)  EDS shall fail to make any payment required by either Undertaking
which (x) if such failure relates to the Collection Agent’s obligation to remit
or deposit funds, shall continue for one Business Day after payment is due, or
(y) if such failure relates to any other payment obligation, shall continue for
five Business Days after payment is due, or (ii) EDS shall fail to perform or
observe any other term, covenant or agreement contained in either Undertaking
and any such failure shall remain unremedied for 10 Business Days after written
notice thereof shall have been given to the Seller by the Agent, or (iii) either
Undertaking shall cease to be in full force and effect;

 

then, and in any such event, any or all of the following actions may be taken by
notice to the Seller: (x) the Agent may declare the Facility Termination Date to
have occurred (in which case

 

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the Facility Termination Date shall be deemed to have occurred), (y) the Agent
may declare the Commitment Termination Date to have occurred (in which case the
Commitment Termination Date shall be deemed to have occurred), and (z) without
limiting any right under this Agreement to replace the Collection Agent, the
Agent may designate another Person to succeed EIS as the Collection Agent;
provided, that, automatically upon the occurrence of any event (without any
requirement for the passage of time or the giving of notice) described in
paragraph (g) of this Section 7.01, the Facility Termination Date and the
Commitment Termination Date shall occur, EIS (if it is then serving as the
Collection Agent) shall cease to be the Collection Agent, and the Agent or its
designee shall become the Collection Agent. Upon any such declaration or
designation or upon such automatic termination, the Investors, the Banks and the
Agent shall have, in addition to the rights and remedies which they may have
under this Agreement, all other rights and remedies provided after default under
the UCC and under other applicable law, which rights and remedies shall be
cumulative.

 

ARTICLE VIII

 

THE AGENT

 

Section 8.01.    Authorization and Action.  Each Investor and each Bank hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto.

 

Section 8.02.    Agent’s Reliance, Etc.  Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them as Agent under or in connection with this
Agreement (including, without limitation, the Agent’s servicing, administering
or collecting Pool Receivables as Collection Agent) or any other Transaction
Document, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent: (i) may consult
with legal counsel (including counsel for the Seller, the Originator, EDS and
the Collection Agent), independent certified public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or

 

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representation to any Investor or Bank (whether written or oral) and shall not
be responsible to any Investor or Bank for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement or any other Transaction Document; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the Seller, EIS, EDS or
the Collection Agent or to inspect the property (including the books and
records) of the Seller, EIS, EDS or the Collection Agent; (iv) shall not be
responsible to any Investor or Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (v) shall incur no
liability under or in respect of this Agreement or any other Transaction
Document by acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telecopier or telex)
believed by it to be genuine and signed or sent by the proper party or parties.

 

Section 8.03.    CNAI and Affiliates.  The obligation of Citibank to purchase
Receivable Interests under this Agreement may be satisfied by CNAI or any of its
Affiliates. With respect to any Receivable Interest or interest therein owned by
it, CNAI shall have the same rights and powers under this Agreement as any Bank
and may exercise the same as though it were not the Agent. CNAI and any of its
Affiliates may generally engage in any kind of business with the Seller, the
Collection Agent, any Obligor or EDS, any of their respective Affiliates and any
Person who may do business with or own securities of the Seller, the Collection
Agent, any Obligor or EDS or any of their respective Affiliates, all as if CNAI
were not the Agent and without any duty to account therefor to the Investors or
the Banks.

 

Section 8.04.    Bank’s Purchase Decision.  Each Bank acknowledges that it has,
independently and without reliance upon the Agent, any of its Affiliates or any
other Bank and based on such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into this Agreement.
Each Bank also acknowledges that it will, independently and without reliance
upon the Agent, any of its Affiliates or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under this Agreement.

 

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ARTICLE IX

 

INDEMNIFICATION

 

Section 9.01.    Indemnities by the Seller.  Without limiting any other rights
that the Agent, the Investors, the Banks, any of their respective Affiliates or
any of their respective officers, directors, employees or advisors (each, an
“Indemnified Party”) may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
claims, losses and liabilities (including reasonable attorneys’ fees, but
excluding consequential damages incurred by an Indemnified Party (it being
agreed that consequential damages payable by an Indemnified Party to a third
party are not excluded)) (all of the foregoing being collectively referred to as
“Indemnified Amounts”) arising out of or resulting from this Agreement or the
other Transaction Documents or the use of proceeds of purchases or reinvestments
or the ownership of Receivable Interests or in respect of any Receivable or any
Contract, excluding, however, (a) Indemnified Amounts to the extent found in a
final non-appealable judgment of a court of competent jurisdiction to have
resulted from gross negligence or willful misconduct on the part of such
Indemnified Party, (b) recourse (except as otherwise specifically provided in
this Agreement) for Receivables which are not collected, not paid or
uncollectible on account of the insolvency, bankruptcy or financial inability to
pay of the applicable Obligor or (c) any income taxes or any other tax or fee
measured by income incurred by such Indemnified Party arising out of or as a
result of this Agreement or the ownership of Receivable Interests or in respect
of any Receivable or any Contract. Without limiting or being limited by the
foregoing, the Seller shall pay on demand to each Indemnified Party any and all
amounts necessary to indemnify such Indemnified Party from and against any and
all Indemnified Amounts arising out of or resulting from any of the following:

 

(i)  the characterization in any Seller Report or other written statement made
by or on behalf of the Seller of any Receivable as an Eligible Receivable or as
included in the Net Receivables Pool Balance which, as of the date of such
Seller Report or other statement, is not an Eligible Receivable or should not be
included in the Net Receivables Pool Balance;

 

(ii)  any representation or warranty or statement made or deemed made by the
Seller (or any of its officers) under or in connection with this Agreement or
any of the other

 

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Transaction Documents which shall have been incorrect in any material respect
when made;

 

(iii)  the failure by the Seller, the Originator or EDS to comply with any
applicable law, rule or regulation with respect to any Pool Receivable or the
related Contract; or the failure of any Pool Receivable or the related Contract
to conform to any such applicable law, rule or regulation;

 

(iv)  the failure to vest in the Investors or the Banks, as the case may be, (A)
a perfected undivided percentage ownership interest, to the extent of each
Receivable Interest, in the Receivables in, or purporting to be in, the
Receivables Pool and the Related Security and Collections in respect thereof, or
(B) a perfected security interest as provided in Section 2.11, in each case free
and clear of any Adverse Claim;

 

(v)  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 with respect to any Receivables in, or purporting to be in, the
Receivables Pool and the Related Security and Collections in respect thereof,
whether at the time of any purchase or reinvestment or at any subsequent time;

 

(vi)  any dispute, claim, offset or defense (including termination for
convenience or default by a governmental Obligor, but not including discharge in
bankruptcy of an Obligor) of or by the Obligor to the payment of any Receivable
in, or purporting to be in, the Receivables Pool (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 services related to such Receivable or the furnishing or failure
to furnish such merchandise or services or relating to collection activities
with respect to such Receivable (if such collection activities were performed by
the Seller or any of its Affiliates acting as Collection Agent);

 

(vii)  any failure of funds or revenues to be set aside or otherwise
appropriated for payment of any U.S. Government Receivable arising out of an
Approved Government Contract;

 

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(viii)  any failure to obtain any acknowledgment, authorization or approval
under, or provide any notice required by, the Assignment of Claims Act with
respect to any Approved Government Contract;

 

(ix)  the sale of any Receivable in violation of applicable laws;

 

(x)  any failure of the Seller to perform its duties or obligations in
accordance with the provisions hereof;

 

(xi)  any products liability or other claim arising out of or in connection with
merchandise or services which are the subject of any Contract;

 

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

 

(xiii)  any investigation, litigation or proceeding related to this Agreement or
the use of proceeds of purchases or reinvestments or the ownership of Receivable
Interests or in respect of any Receivable or Related Security or Contract;

 

(xiv)  any failure of the Seller to comply with its covenants contained in this
Agreement or any other Transaction Document; or

 

(xv)  any claim brought by any Person other than an Indemnified Party arising
from any activity by the Seller or any Affiliate of the Seller in servicing,
administering or collecting any Receivable.

 

Section 9.02.    Procedures When Litigation or Similar Proceedings
Involved.  (a)  In case any suit, proceeding or action is brought or any claim
is asserted against any Indemnified Party (and a claim for indemnification in
respect thereof may be made by such Indemnified Party against the Seller under
Section 9.01 hereof), such Indemnified Party shall promptly give notice of such
suit, proceeding, action or claim of which it has notice to the Seller;
provided, however, that failure of such Indemnified Party to give such notice
shall not relieve the Seller from any of its obligations under the indemnity
herein, except to the extent such failure prejudices the defense of such suit,
proceeding or action, or the contest of such claim, by the Seller.

 

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(b)  Following receipt by the Seller of any such notice from an Indemnified
Party as provided in subsection (a) above, and provided that (i) the Seller
shall have acknowledged in writing that, to the extent of the matters of any
suit, proceeding, action or other claim for which the Seller wishes to assume
the defense as set forth below, Section 9.01 will cover any judgment,
settlement, loss, costs or expenses in any suit, proceeding, action or other
claim referred to in such notice (provided such acknowledgment shall not be
deemed to expand the Seller’s obligations under Section 9.01 hereof), (ii) no
Event of Termination or Incipient Event of Termination has occurred and is
continuing and (iii) such suit, proceeding, action or other claim does not
involve any claim by the Seller against any Indemnified Party or any claim by an
Indemnified Party against the Seller, then the Seller shall be entitled to
assume control of and conduct the defense of any or all of the matters involved
in such suit, proceeding, action or other claim on behalf of such Indemnified
Party at the Seller’s own cost and expense with independent counsel reasonably
satisfactory to the Agent, and if the Seller shall so assume the defense of any
or all of the matters involved in such suit, proceeding, action or other claim,
the Seller shall consult with the Agent and such Indemnified Party and shall
conduct such defense with due diligence and at its own cost and expense. To the
extent of the matters for which the Seller has so assumed the defense, any
participation in such defense by the Agent or such Indemnified Party shall be at
their sole cost and expense and not subject to indemnification hereunder. Except
as otherwise provided in the preceding sentence, nothing in this subparagraph
(b) is intended in any way to diminish the obligation of the Seller to pay
promptly on demand the legal fees and expenses of any Indemnified Party.

 

(c)  The Seller shall not be liable for any settlement of or confession of
judgment in any action or proceeding without its consent provided that if an
Event of Termination or Incipient Bankruptcy Event of Termination shall have
occurred and be continuing, the Indemnified Party shall notify the Seller of any
proposed settlement but shall not be required to obtain the Seller’s consent.

 

(d)  The Seller, at its own cost and expense, agrees to assist, at the request
of and to the extent reasonably required by the Agent or any Indemnified Party,
in any suit, proceeding or other action brought by or against such Indemnified
Party relating to any of the transactions contemplated by this Agreement or any
of the Receivables,

 

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Related Security or any related Contracts and as to which the Seller has any
indemnification obligation; provided, that in rendering any such assistance, the
Seller shall not be obligated to take any action or provide any information to
any party if to do so would be reasonably likely to result in a loss of the
attorney-client privilege.

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.01.    Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or consent to any departure by the Seller, the Originator, EDS or
the Collection Agent therefrom shall be effective unless in a writing signed by
the Agent, as agent for the Investors and the Banks (and, in the case of any
amendment, also signed by the Seller, the Originator and EDS; provided, however,
that the signatures of the Seller, the Originator and EDS shall not be required
for the effectiveness of any amendment which modifies the representations,
warranties, covenants or responsibilities of the Collection Agent at any time
when the Collection Agent is not the Originator or an Affiliate of the
Originator or a successor Collection Agent is designated by the Agent pursuant
to Section 6.01), and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by the Collection Agent in addition to the Agent, affect the rights
or duties of the Collection Agent under this Agreement. No failure on the part
of the Investors, the Banks or the Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.

 

Section 10.02.    Notices, Etc.  All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile communication) and faxed or delivered, to each party hereto, at its
address set forth under its name on the signature pages hereof or at such other
address as shall be designated by such party in a written notice to the other
parties hereto. Notices and communications by facsimile shall be effective when
sent (and shall be followed by hard copy sent by regular mail), and notices and
communications sent by other means shall be effective when received.

 

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Section 10.03.    Assignability.  (a)  This Agreement and the Investors’ rights
and obligations herein (including ownership of each Receivable Interest) shall
be assignable by the Investors and their successors and assigns (including,
without limitation, pursuant to the Asset Purchase Agreement) with the Seller’s
consent, which shall not be unreasonably withheld or delayed, provided that
Seller’s consent shall not be required (i) if the assignment shall be to an
Eligible Assignee pursuant to the Asset Purchase Agreement, which Eligible
Assignee either is eligible to deliver the forms required under Section
2.10(d)(i) or is a “United States person” within the meaning of §7701(a)(30) of
the Internal Revenue Code of 1986, as amended, (ii) if there shall occur an
Event of Termination or (iii) if the assignment shall be to another receivables
investment company managed and/or sponsored by Citibank or any of its Affiliates
that is a “United States person” within the meaning of §7701(a)(30) of the
Internal Revenue Code of 1986, as amended. Each assignor of a Receivable
Interest or any interest therein shall notify the Agent and the Seller of any
such assignment. Each assignor of a Receivable Interest or any interest therein
may, in connection with any such assignment, disclose to the assignee or
potential assignee any information relating to the Seller, the Originator or
EDS, including the Receivables, furnished to such assignor by or on behalf of
the Seller or by the Agent; provided that, prior to any such disclosure, the
assignee or potential assignee agrees to preserve the confidentiality of any
such information which is confidential in accordance with the provisions of
Section 10.06 hereof.

 

(b)  Each Bank may assign to any Eligible Assignee, which Eligible Assignee
either is eligible to deliver the forms required under Section 2.10(d)(i) or is
a “United States person” within the meaning of §7701(a)(30) of the Internal
Revenue Code of 1986, as amended, or to any other Bank all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Bank Commitment and any Receivable Interests or interests
therein owned by it); provided, however, that such assignment shall be limited
so that no more than 10 Banks shall be parties to this Agreement, whether
initially or by assignment, at any time. The parties to each such assignment
shall execute and deliver to the Agent an Assignment and Acceptance. In
addition, Citibank or any of its Affiliates may assign any of its rights
(including, without limitation, rights to payment of Capital and Yield) under
this Agreement to any Federal Reserve Bank without notice to or consent of the
Seller or the Agent.

 

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(c)  This Agreement and the rights and obligations of the Agent herein shall be
assignable by the Agent and its successors and assigns.

 

(d)  The Seller may not assign its rights or obligations hereunder or any
interest herein without the prior written consent of the Agent.

 

(e)  Each of CAFCO and CIESCO may, without the consent of the Seller, sell
participations to one or more banks or other entities (each, a “Participant”) in
all or a portion of its rights and obligations hereunder (including the
outstanding Receivable Interests); provided that following the sale of a
participation under this Agreement (i) the obligations of the applicable
Investor shall remain unchanged, (ii) such Investor shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Seller, the Agent, and the Banks shall continue to deal solely and
directly with such Investor in connection with such Investor’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
CAFCO or CIESCO sells such a participation shall provide that the Participant
shall not have any right to direct the enforcement of this Agreement or the
other Transaction Documents or to approve any amendment, modification or waiver
of any provision of this Agreement or the other Transaction Documents; provided
that such agreement or instrument may provide that the applicable Investor will
not, without the consent of the Participant, agree to any amendment,
modification or waiver that (i) reduces the amount of Capital or Yield that is
payable on account of any Receivable Interest or delays any scheduled date for
payment thereof or (ii) reduces any fees payable by the Seller to the Agent (to
the extent relating to payments to the Participant) or delays any scheduled date
for payment of such fees. The Seller acknowledges and agrees that CAFCO’s and
CIESCO’s source of funds may derive in part from its Participants. Accordingly,
references in Sections 2.08, 2.09, 2.10, 6.07, 9.01 and 10.04 and the other
terms and provisions of this Agreement and the other Transaction Documents to
determinations, reserve and capital adequacy requirements, expenses, increased
costs, reduced receipts and the like as they pertain to CAFCO or CIESCO shall be
deemed also to include those of its Participants; provided that the Seller shall
not be required to pay higher costs, taxes, expenses and indemnification amounts
pursuant to this sentence than would be required to be paid by the Seller in the
absence of the sale of any participation by CAFCO or CIESCO to a Participant as
contemplated by this Section 10.03(e). CAFCO, CIESCO or the

 

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Agent may, in connection with any such participation, disclose to Participants
and potential Participants any information relating to the Seller, the
Originator or EDS, including the Receivables, furnished to CAFCO, CIESCO or the
Agent by or on behalf of the Seller; provided that, prior to any such
disclosure, such Participant or potential Participant agrees to preserve the
confidentiality of any such information which is confidential in accordance with
the provisions of Section 10.06 hereof. Any interest sold by CAFCO or CIESCO to
a Bank or its designee under the Asset Purchase Agreement shall not be
considered a participation for the purpose of this Section 10.03(e) (and the
Bank or its designee shall not be considered a Participant as a result thereof).

 

(f)  The Agent shall maintain at its address referred to in Section 10.02 of
this Agreement a copy of each Assignment and Acceptance Agreement delivered to
and accepted by it and a register for the recordation of the names and addresses
of the Investors, the Banks, the Participants, and their respective assignees,
the Investor Purchase Limit of each Investor, the percentage of the related
Investor’s Receivable Interests held by each Participant, and the Bank
Commitment of each Bank, and aggregate outstanding Capital of Receivable
Interests or interests therein owned by, each Bank and each Investor from time
to time (the “Register”). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Seller, the Originator,
the Agent, the Investors, the Participants and the Banks may treat each person
whose name is recorded in the Register as a Bank under this Agreement for all
purposes of this Agreement. The Register shall be available for inspection by
the Seller, any Investor, any Participant or any Bank at any reasonable time and
from time to time upon reasonable prior notice. As between the Seller, on the
one hand, and the Investors, the Banks and the Participants, and their
respective assignees, on the other hand, no Receivable Interest transfer will be
recognized unless reflected in the Register.

 

Section 10.04.    Costs, Expenses and Taxes.  (a)  In addition to the rights of
indemnification granted under Section 9.01 hereof, the Seller agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including reasonable costs of periodic
auditing and the other activities contemplated in Section 5.02) of this
Agreement, any Asset Purchase Agreement and the other Transaction Documents,
including, without limitation, the reasonable fees and out-of-

 

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pocket expenses of one counsel to represent all of the Agent, CNAI, CAFCO,
CIESCO, Citibank and their respective Affiliates with respect thereto and with
respect to advising the Agent, CNAI, CAFCO, CIESCO, Citibank and their
respective Affiliates as to their rights and remedies under this Agreement, and
all reasonable costs and expenses, if any (including reasonable fees and
expenses of one counsel), of the Agent, CNAI, the Investors, the Banks and their
respective Affiliates, in connection with the enforcement of this Agreement and
the other Transaction Documents.

 

(b)  In addition, the Seller shall pay (i) to the extent not included in the
calculation of Yield, any and all commissions of placement agents and dealers in
respect of Promissory Notes issued to fund the purchase or maintenance of any
Receivable Interest, and (ii) any and all costs and expenses of any issuing and
paying agent or other Person responsible for the administration of the
Promissory Notes programs of CAFCO or CIESCO in connection with the preparation,
completion, issuance, delivery or payment of Promissory Notes issued to fund the
purchase or maintenance of any Receivable Interest.

 

(c)  Notwithstanding anything to the contrary set forth in this Agreement, the
Seller shall not be required to make any payment pursuant to any provision of
this Agreement providing for a payment of an indemnity to indemnify any Affected
Person for any tax payable by, assessed to or imposed on that Affected Person
unless the Seller is expressly obligated to pay such tax under another provision
of this Agreement other than Section 10.04.

 

Section 10.05.    No Proceedings; Waiver of Consequential
Damages.    (a)    Each of the Seller, the Agent, the Collection Agent, the
Originator, EDS, each Investor, each Bank, each assignee of a Receivable
Interest or any interest therein and each entity which enters into a commitment
to purchase Receivable Interests or interests therein hereby agrees that it will
not institute against, or join any other Person in instituting against, CAFCO or
CIESCO any proceeding of the type referred to in Section 7.01(g) so long as any
commercial paper or other senior indebtedness issued by CAFCO or CIESCO shall be
outstanding or there shall not have elapsed one year plus one day since the last
day on which any such commercial paper or other senior indebtedness shall have
been outstanding.

 

(b)  The Seller, the Originator, EDS and the Collection Agent each agrees that
no Indemnified Party shall have any liability to them or any of their
securityholders or

 

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creditors in connection with this Agreement, the other Transaction Documents or
the transactions contemplated thereby on any theory of liability for any
special, indirect, consequential or punitive damages (including, without
limitation, any loss of profits, business or anticipated savings).

 

Section 10.06.    Confidentiality.  (a)  The Seller, the Originator, EDS and the
Collection Agent each agrees to maintain the confidentiality of this Agreement
in communications with third parties and otherwise; provided that this Agreement
may be disclosed (i) to third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Agent, (ii) to the legal counsel, auditors and
other professional advisers of the Seller, the Originator, EDS and the
Collection Agent if they agree to hold it confidential, (iii) to rating agencies
rating any securities of the Originator or EDS, (iv) as a part of any filing
made with the SEC, including the text of this Agreement as an exhibit to that
filing, and (v) to the extent required by applicable law or regulation or by any
court, regulatory body or agency having jurisdiction over such party; and
provided, further, that such party shall have no obligation of confidentiality
in respect of any information which may be generally available to the public or
becomes available to the public through no fault of such party.

 

(b)  Each Investor, each Bank and the Agent agrees to maintain the
confidentiality of all information with respect to the Seller, EIS, EDS, EPC or
the Receivables Pool (including the Seller Reports) provided to it pursuant to
this Agreement in accordance with the provisions of the Confidentiality
Agreement dated October 30, 2002 between EDS and Citibank.

 

(c)  Notwithstanding anything to the contrary contained in this Agreement or any
other Transaction Document, none of the Agent, the Investors, the Banks and the
Participants shall have any right to read, review, obtain a counterpart or copy
of, or copy or abstract of any of the provisions of, any Contract; provided,
however, that in connection with any effort by the Agent or any Collection Agent
(which is not EDS or an Affiliate of EDS) to collect any Defaulted Receivable,
the Seller shall obtain from the Originator or EDS, as the case may be, with
respect to that Defaulted Receivable and provide to the Agent or such Collection
Agent such information concerning the rights and remedies of the Originator or
EDS, as the case may be, in connection with the collection of that Defaulted
Receivable (which in the case of any Contract that does not

 

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contain or impose any limitations on the disclosure, publication, distribution,
circulation, copying, abstracting or other dissemination of the Contract and its
terms, will include copies of the payment terms or abstracts of the payment
terms of that Contract) as shall be necessary for the Agent or such Collection
Agent to pursue the collection of that Defaulted Receivable, including to
prosecute any legal action to collect that Defaulted Receivable.

 

Section 10.07.    Tax Treatment.  Notwithstanding anything to the contrary set
forth in this Agreement, the parties to this Agreement have structured this
Agreement to constitute a financing with the intention that the Receivable
Interests will constitute indebtedness for tax purposes; and each Affected
Person agrees to recognize and report the Receivable Interests as indebtedness
for tax purposes, and to report all receipts and payments relating thereto in a
manner that is consistent with such characterization.

 

Section 10.08.    GOVERNING LAW.  THIS AGREEMENT SHALL, IN ACCORDANCE WITH
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR
THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT
THAT, PURSUANT TO THE UCC OF THE STATE OF NEW YORK, THE PERFECTION AND THE
EFFECT OF PERFECTION OR NON-PERFECTION OF THE INTERESTS OF THE INVESTORS AND THE
BANKS IN THE RECEIVABLES AND THE ORIGINATOR PURCHASE AGREEMENT ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

Section 10.09.    Execution in Counterparts.  This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement.

 

Section 10.10.    Survival of Termination.  The provisions of Sections
2.04(b)(i), 2.08, 2.09, 6.07, 9.01, 10.04, 10.05 and 10.06 shall survive any
termination of this Agreement.

 

Section 10.11.    Consent to Jurisdiction.  (a)  Each party hereto hereby
irrevocably submits to the non-exclusive jurisdiction of any New York State or
Federal court sitting in New York City in any action or proceeding arising out
of or relating to this Agreement, and each party hereto hereby irrevocably
agrees that all claims in respect of such action or

 

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proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. The parties hereto hereby
irrevocably waive, to the fullest extent they may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
parties hereto agree that a final non-appealable judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.

 

(b)  Each of the Seller, the Collection Agent, EDS and the Originator consents
to the service of any and all process in any such action or proceeding by the
mailing of copies of such process to it at its address specified in Section
10.02. Nothing in this Section 10.11 shall affect the right of the Investors,
any Bank or the Agent to serve legal process in any other manner permitted by
law.

 

Section 10.12.    WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED OR DELIVERED PURSUANT HERETO.

 

Section 10.13.    Successors and Assigns.  This Agreement and any amendments
hereto shall be binding upon and, to the extent expressly permitted by the
provisions hereof, shall inure to the benefit of the parties hereto and their
respective successors and assigns.

 

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

 

SELLER:

  

LEGACY RECEIVABLES LLC

    

By:

  

/S/    SCOTT J. KRENZ

--------------------------------------------------------------------------------

         

Title:  Scott J. Krenz, Treasurer

         

5400 Legacy Drive

         

H1-3B-45

         

Plano, Texas 75024

         

Attention:  Anthony C. Glasby

         

Facsimile No.  972-605-8640

INVESTORS:

  

CIESCO L.P.

    

By:

  

Citicorp North America, Inc., as Attorney-in-Fact

    

By:

  

/S/    LAIN J. GUTIERREZ

--------------------------------------------------------------------------------

         

Vice President

         

450 Mamaroneck Avenue

         

Harrison, N.Y. 10528

         

Attention:  Global Securitized Markets

         

Facsimile No.  914-899-7890

    

CORPORATE ASSET FUNDING COMPANY, INC.

    

By:

  

Citicorp North America, Inc., as Attorney-in-Fact

    

By:

  

/S/    LAIN J. GUTIERREZ

--------------------------------------------------------------------------------

         

Vice President

         

450 Mamaroneck Avenue

         

Harrison, N.Y. 10528

         

Attention:  Global Securitized Markets

         

Facsimile No.  914-899-7890

 

91

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AGENT:

  

CITICORP NORTH AMERICA, INC., as Agent

    

By:

  

/S/    LAIN J. GUTIERREZ

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Vice President

         

450 Mamaroneck Avenue

         

Harrison, N.Y. 10528

         

Attention:  Global Securitized Markets

         

Facsimile No.  914-899-7890

BANK:

  

CITIBANK, N.A.

    

By:

  

/S/    LAIN J. GUTIERREZ

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Attorney-in-Fact

         

Percentage:  100%

         

 

450 Mamaroneck Avenue

         

Harrison, N.Y. 10528

         

Facsimile No.  914-899-7890

    

ELECTRONIC DATA SYSTEMS CORPORATION

    

By:

  

/S/    SCOTT J. KRENZ

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Title:  Scott J. Krenz, Treasurer

         

5400 Legacy Drive

         

H1-3A-93

         

Plano, Texas 75024

         

Attention:  Anthony C. Glasby

         

Facsimile No.  972-605-8640

ORIGINATOR AND COLLECTION AGENT:

  

EDS INFORMATION SERVICES L.L.C.

    

By:

  

/S/    SCOTT J. KRENZ

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Title:  Scott J. Krenz, Treasurer

         

5400 Legacy Drive

         

H1-3A-93

         

Plano, Texas 75024

         

Attention:  Anthony C. Glasby

         

Facsimile No.  972-605-8640

 

92

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ANNEX E

[Form of Funds Transfer Letter]

 

[Letterhead of the Seller]

 

December     , 2002

 

Citicorp North America, Inc., as Agent

450 Mamaroneck Avenue

Harrison, New York 10528

 

Re:    Funds Transfers

 

Gentlemen:

 

This letter is the Funds Transfer Letter referred to in Section 2.02(b) of the
Receivables Purchase Agreement, dated as of December 27, 2002, as modified,
amended or restated from time to time (the “RPA”; terms used in the RPA, unless
otherwise defined herein, having the meaning set forth therein) among the
undersigned, CIESCO L.P. and Corporate Asset Funding Company, Inc., as the
Investors, Citibank, N.A., you, as Agent for the Investors and the Banks,
Electronic Data Systems Corporation and EDS Information Services L.L.C.

 

You are hereby directed to deposit all funds representing amounts paid for
Receivable Interests to Account Number 323-396437, at JPMorgan Chase Bank, New
York, New York, ABA No. 0210-0002-1.

 

The provisions of this Letter may not be changed or amended orally, but only by
a writing in substantially the form of this letter signed by the undersigned and
acknowledged by you.

 

Very truly yours,

LEGACY RECEIVABLES LLC

By:

 

 

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Title:

 

Receipt acknowledged:

CITICORP NORTH AMERICA, INC., as Agent

By:

 

 

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Vice President

 

E-1