Exhibit 10.1
EXECUTION COPY

RECEIVABLES FINANCING AGREEMENT

Dated as of June 30, 2020

by and among

COMPASS MINERALS RECEIVABLES LLC,
as Borrower,

THE PERSONS FROM TIME TO TIME PARTY HERETO,
as Lenders,

PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent,

COMPASS MINERALS AMERICA INC.,
as initial Servicer,

and

PNC CAPITAL MARKETS LLC,
as Structuring Agent

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

TABLE OF CONTENTS
(continued)
Page

ARTICLE I
DEFINITIONS
1

SECTION 1.01.
Certain Defined Terms
1

SECTION 1.02.
Other Interpretative Matters
28

ARTICLE II
TERMS OF THE LOANS
29

SECTION 2.01.
Loan Facility
29

SECTION 2.02.
Making Loans; Repayment of Loans
30

SECTION 2.03.
Interest and Fees
31

SECTION 2.04.
Records of Loans
31

SECTION 2.05.
Selection of Interest Rates and Tranche Periods
31

ARTICLE III
[Reserved]
32

ARTICLE IV
SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS
32

SECTION 4.01.
Settlement Procedures
32

SECTION 4.02.
Payments and Computations, Etc
35

ARTICLE V
INCREASED COSTS; FUNDING LOSSES; TAXES; ILLEGALITY AND SECURITY INTEREST
35

SECTION 5.01.
Increased Costs
35

SECTION 5.02.
Funding Losses
37

SECTION 5.03.
Taxes
37

SECTION 5.04.
Inability to Determine Adjusted LIBOR or LMIR; Change in Legality
41

SECTION 5.05.
Security Interest
41

SECTION 5.06.
Successor Adjusted LIBOR or LMIR
42

ARTICLE VI
CONDITIONS to Effectiveness and CREDIT EXTENSIONS
44

SECTION 6.01.
Conditions Precedent to Effectiveness and the Initial Credit Extension
44

SECTION 6.02.
Conditions Precedent to All Credit Extensions
44

SECTION 6.03.
Conditions Precedent to All Releases
45

ARTICLE VII
REPRESENTATIONS AND WARRANTIES
45

SECTION 7.01.
Representations and Warranties of the Borrower
45

SECTION 7.02.
Representations and Warranties of the Servicer
51

 
-i-
 

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

TABLE OF CONTENTS
(continued)
Page

ARTICLE VIII
COVENANTS
55

SECTION 8.01.
Covenants of the Borrower
55

SECTION 8.02.
Covenants of the Servicer
63

SECTION 8.03.
Separate Existence of the Borrower
69

ARTICLE IX
ADMINISTRATION AND COLLECTION OF RECEIVABLES
73

SECTION 9.01.
Appointment of the Servicer
73

SECTION 9.02.
Duties of the Servicer
74

SECTION 9.03.
Collection Account Arrangements
75

SECTION 9.04.
Enforcement Rights
76

SECTION 9.05.
Responsibilities of the Borrower
77

SECTION 9.06.
Servicing Fee
78

ARTICLE X
EVENTS OF DEFAULT
78

SECTION 10.01.
Events of Default
78

ARTICLE XI
THE ADMINISTRATIVE AGENT
82

SECTION 11.01.
Authorization and Action
82

SECTION 11.02.
Administrative Agent’s Reliance, Etc
83

SECTION 11.03.
Administrative Agent and Affiliates
83

SECTION 11.04.
Indemnification of Administrative Agent
83

SECTION 11.05.
Delegation of Duties
83

SECTION 11.06.
Action or Inaction by Administrative Agent
84

SECTION 11.07.
Notice of Events of Default; Action by Administrative Agent
84

SECTION 11.08.
Non-Reliance on Administrative Agent and Other Parties
84

SECTION 11.09.
Successor Administrative Agent
85

SECTION 11.10.
Structuring Agent
85

ARTICLE XII
[RESERVED]
85

ARTICLE XIII
INDEMNIFICATION
85

SECTION 13.01.
Indemnities by the Borrower
85

SECTION 13.02.
Indemnification by the Servicer
89

ARTICLE XIV
MISCELLANEOUS
90

 
-ii-
 

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

TABLE OF CONTENTS
(continued)
Page

SECTION 14.01.
Amendments, Etc
90

SECTION 14.02.
Notices, Etc
91

SECTION 14.03.
Assignability; Addition of Lenders
91

SECTION 14.04.
Costs and Expenses
94

SECTION 14.05.
No Proceedings; Limitation on Payments
95

SECTION 14.06.
Confidentiality
95

SECTION 14.07.
GOVERNING LAW
96

SECTION 14.08.
Execution in Counterparts
97

SECTION 14.09.
Integration; Binding Effect; Survival of Termination
97

SECTION 14.10.
CONSENT TO JURISDICTION
97

SECTION 14.11.
WAIVER OF JURY TRIAL
98

SECTION 14.12.
Ratable Payments
98

SECTION 14.13.
Limitation of Liability
98

SECTION 14.14.
Intent of the Parties
99

SECTION 14.15.
USA Patriot Act
99

SECTION 14.16.
Right of Setoff
99

SECTION 14.17.
Severability
99

SECTION 14.18.
Mutual Negotiations
100

SECTION 14.19.
Captions and Cross References
100

 
-iii-
 

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

TABLE OF CONTENTS
(continued)
Page

EXHIBITS
 
 
 
 
 
EXHIBIT A
–
Form of Loan Request
EXHIBIT B
–
Form of Reduction Notice
EXHIBIT C
–
Form of Assignment and Acceptance Agreement
EXHIBIT D
–
Form of Assumption Agreement
EXHIBIT E
–
Credit and Collection Policy
EXHIBIT F
–
Form of Information Package
EXHIBIT G
–
Form of Compliance Certificate
EXHIBIT H
–
Closing Memorandum
EXHIBIT I
–
Forms of Interim Report
 
 
 
SCHEDULES
 
 
 
 
 
SCHEDULE I
–
Commitments
SCHEDULE II
–
Lock-Boxes, Collection Accounts and Collection Account Banks
SCHEDULE III
–
Notice Addresses
SCHEDULE IV
–
Locations of Mining Operations and Mineheads
 
 
 
 
 
 

 
-iv-
 

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

This RECEIVABLES FINANCING AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) is entered into as of
June 30, 2020 by and among the following parties:
(i)    COMPASS MINERALS RECEIVABLES LLC, a Delaware limited liability company,
as Borrower (together with its successors and assigns, the “Borrower”);
(ii)    the Persons from time to time party hereto as Lenders;
(iii)    PNC BANK, NATIONAL ASSOCIATION (“PNC”), as Administrative Agent;
(iv)    COMPASS MINERALS AMERICA INC., a Delaware corporation, in its individual
capacity (“CMA”) and as initial Servicer (in such capacity, together with its
successors and assigns in such capacity, the “Servicer”); and
(v)    PNC CAPITAL MARKETS LLC, a Pennsylvania limited liability company, as
Structuring Agent.
PRELIMINARY STATEMENTS
The Borrower has acquired, and will acquire from time to time, Receivables from
the Originator(s) pursuant to the Purchase and Sale Agreement. The Borrower has
requested that the Lenders make Loans from time to time to the Borrower, on the
terms, and subject to the conditions set forth herein, secured by, among other
things, the Receivables.
In consideration of the mutual agreements, provisions and covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I

DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
“Account Control Agreement” means each agreement, in form and substance
satisfactory to the Administrative Agent, among the Borrower, the Servicer (if
applicable), the Administrative Agent and a Collection Account Bank, governing
the terms of the related Collection Accounts that (i) provides the
Administrative Agent with control within the meaning of the UCC over the deposit
accounts subject to such agreement and (ii) by its terms, may not be terminated
or canceled by the related Collection Account Bank without the written consent
of the Administrative Agent or upon no less than sixty (60) days prior written
notice to the Administrative Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

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

“Adjusted LIBOR” means with respect to any Tranche Period, the interest rate per
annum determined by the Administrative Agent by dividing (the resulting quotient
rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the
rate of interest determined by the Administrative Agent in accordance with its
usual procedures (which determination shall be conclusive absent manifest error)
to be the rate per annum for deposits in Dollars as reported on the Reuters
Screen LIBOR01 Page as the composite offered rate for London interbank deposits
for such Tranche Period (or on any successor or substitute page of such service,
or any successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at or about 11:00 a.m. (London time) on the Business
Day which is two (2) Business Days prior to the first day of such Tranche Period
for an amount comparable to the Portion of any Loan Amount to be funded at
Adjusted LIBOR during such Tranche Period, by (ii) a number equal to 1.00 minus
the Euro-Rate Reserve Percentage; provided, however, that with respect to the
initial Tranche Period for a Loan that is not advanced on a Monthly Settlement
Date, Adjusted LIBOR shall be the interest rate per annum equal to LMIR for each
day during such initial Tranche Period from the date that such Loan is made
pursuant to Section 2.01 until the next occurring Monthly Settlement Date. The
calculation of Adjusted LIBOR may also be expressed by the following formula:
Composite of London interbank offered rates shown on
Reuters Screen LIBOR01 Page or appropriate successor
Adjusted LIBOR    
=                                                                    
1.00 - Euro-Rate Reserve Percentage
Adjusted LIBOR shall be adjusted on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent
shall give prompt notice to the Borrower of Adjusted LIBOR as determined or
adjusted in accordance herewith (which determination shall be conclusive absent
manifest error). Notwithstanding the foregoing, if Adjusted LIBOR as determined
herein would be less than 0.50%, such rate shall be deemed to be 0.50% for
purposes of this Agreement.
“Administrative Agent” means PNC, in its capacity as contractual representative
for the Credit Parties, and any successor thereto in such capacity appointed
pursuant to Article XI or Section 14.03(f).
“Adverse Claim” means any ownership interest or claim, mortgage, deed of trust,
pledge, lien, security interest, hypothecation, charge or other encumbrance or
security arrangement of any nature whatsoever, whether voluntarily or
involuntarily given, including, but not limited to, any conditional sale or
title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing statement
or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing); it being understood
that any thereof in favor of, or assigned to, the Administrative Agent (for the
benefit of the Secured Parties) shall not constitute an Adverse Claim.
“Advisors” has the meaning set forth in Section 14.06(c).

2
 

 

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

“Affected Person” means each Credit Party and each of their respective
Affiliates.
“Affiliate” means, as to any Person: (a) any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a). For purposes of this definition, control of
a Person shall mean the power, direct or indirect: (x) to vote 25% or more of
the securities having ordinary voting power for the election of directors or
managers of such Person or (y) to direct or cause the direction of the
management and policies of such Person, in either case whether by ownership of
securities, contract, proxy or otherwise.
“Aggregate Interest” means, at any time of determination, the aggregate accrued
and unpaid Interest on the Loans of all Lenders at such time.
“Aggregate Loan Amount” means, at any time of determination, the aggregate
outstanding Loan Amounts of all Lenders at such time.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“Anti-Terrorism Laws” means any Applicable Law relating to terrorism financing,
trade sanctions programs and embargoes, import/export licensing, money
laundering or bribery, and any regulation, order, or directive promulgated,
issued or enforced pursuant to such Applicable Laws, all as amended,
supplemented or replaced from time to time.
“Applicable Law” means, with respect to any Person, (x) all provisions of law,
statute, treaty, constitution, ordinance, rule, regulation, ordinance,
requirement, restriction, permit, executive order, certificate, decision,
directive or order of any Governmental Authority applicable to such Person or
any of its property and (y) all judgments, injunctions, orders, writs, decrees
and awards of all courts and arbitrators in proceedings or actions in which such
Person is a party or by which any of its property is bound. For the avoidance of
doubt, FATCA shall constitute an “Applicable Law” for all purposes of this
Agreement.
“Assignment and Acceptance Agreement” means an assignment and acceptance
agreement entered into by a Lender, an Eligible Assignee and the Administrative
Agent, and, if required, the Borrower, pursuant to which such Eligible Assignee
may become a party to this Agreement, in substantially the form of Exhibit C
hereto.
“Assumption Agreement” has the meaning set forth in Section 14.03(i).
“Attorney Costs” means and includes all fees, costs, expenses and disbursements
of any law firm or other external counsel and all disbursements of internal
counsel.
“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time.
“Base Rate” means, for any day and any Lender, 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:

3
 

 

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

(a)    the rate of interest in effect for such day as publicly announced from
time to time by such Lender or its Affiliate as its “reference rate” or “prime
rate”, as applicable. Such “reference rate” or “prime rate” is set by the
applicable Lender or its Affiliate based upon various factors, including such
Person’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such announced rate, and is not necessarily the lowest
rate charged to any customer; and
(b)    0.50% per annum above the latest Overnight Bank Funding Rate; and
(c)    0.50% per annum above Adjusted LIBOR applicable to the Interest Period
for which the Base Rate is then being determined.
“Beneficial Owner” means, for the Borrower, each of the following: (a) each
individual, if any, who, directly or indirectly, owns 25% or more of the
Borrower’s Capital Stock; and (b) a single individual with significant
responsibility to control, manage, or direct the Borrower.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Borrower” has the meaning specified in the preamble to this Agreement.
“Borrower Indemnified Amounts” has the meaning set forth in Section 13.01(a).
“Borrower Indemnified Party” has the meaning set forth in Section 13.01(a).
“Borrower Obligations” means all present and future indebtedness, reimbursement
obligations, and other liabilities and obligations (howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, or due or to
become due) of the Borrower to any Credit Party, Borrower Indemnified Party
and/or any Affected Person, arising under or in connection with this Agreement
or any other Transaction Document or the transactions contemplated hereby or
thereby, and shall include, without limitation, all Loan Amounts and Interest on
the Loans, all Fees and all other amounts due or to become due under the
Transaction Documents (whether in respect of fees, costs, expenses,
indemnifications or otherwise), including, without limitation, interest, fees
and other obligations that accrue after the commencement of any Insolvency
Proceeding with respect to the Borrower (in each case whether or not allowed as
a claim in such proceeding).
“Borrower’s Net Worth” means, at any time of determination, an amount equal to
(i) the aggregate Outstanding Balance of all Pool Receivables at such time,
minus (ii) the sum of (A) the Aggregate Loan Amount at such time, plus (B) the
Aggregate Interest at such time, plus (C) the aggregate accrued and unpaid Fees
at such time, plus (D) the aggregate outstanding principal balance owing under
each Intercompany Loan Agreement at such time, plus (E) the aggregate accrued
and unpaid interest owing under each Intercompany Loan Agreement at such time,
plus (F) without duplication, the aggregate accrued and unpaid other Borrower
Obligations at such time.
“Borrowing Base” means, at any time of determination, the amount equal to the
lesser of (a) the Facility Limit and (b) the amount equal to (i) the Net
Receivables Pool Balance at such time,

4
 

 

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

minus (ii) the sum of (x) Total Reserves at such time and (y) the Specifically
Reserved Dilution Amount.
“Borrowing Base Deficit” means, at any time of determination, the amount, if
any, by which (a) the Aggregate Loan Amount at such time, exceeds (b) the
Borrowing Base at such time.
“Breakage Fee” means (i) for any Interest Period for which Interest is computed
by reference to LMIR or Adjusted LIBOR and a reduction of any Loan Amount is
made for any reason on any day other than the last day of the related Tranche
Period or (ii) to the extent that the Borrower shall for any reason, fail to
borrow on the date specified by the Borrower in connection with any request for
funding pursuant to Article II of this Agreement, the amount, if any, by which
(A) the additional Interest (calculated without taking into account any Breakage
Fee or any shortened duration of such Interest Period pursuant to the definition
thereof) which would have accrued during such Interest Period on the reductions
of such Loan Amount relating to such Interest Period had such reductions not
been made (or, in the case of clause (ii) above, the amounts so failed to be
borrowed or accepted in connection with any such request for funding by the
Borrower), exceeds (B) the income, if any, received by the applicable Lender
from the investment of the proceeds of such reductions of such Loan Amount (or
such amounts failed to be borrowed by the Borrower). A certificate as to the
amount of any Breakage Fee (including the computation of such amount) shall be
submitted by the affected Lender to the Borrower and shall be conclusive and
binding for all purposes, absent manifest error.
“Business Day” means any day (other than a Saturday or Sunday) on which: (a)
banks are not authorized or required to close in Pittsburgh, Pennsylvania, or
New York City, New York and (b) if this definition of “Business Day” is utilized
in connection with Adjusted LIBOR or LMIR, dealings are carried out in the
London interbank market.
“CMA” has the meaning set forth in the preamble to this Agreement.
“Capital Stock” means, with respect to any Person, any and all common shares,
preferred shares, interests, participations, rights in or other equivalents
(however designated) of such Person’s capital stock, partnership interests,
limited liability company interests, membership interests or other equivalent
interests and any rights (other than debt securities convertible into or
exchangeable for capital stock), warrants or options exchangeable for or
convertible into such capital stock or other equity interests.
“Certificate of Beneficial Ownership” means, for the Borrower, a certificate in
form and substance acceptable to the Administrative Agent (as amended or
modified by the Administrative Agent from time to time in its sole discretion),
certifying, among other things, the Beneficial Owner of the Borrower.
“Change in Control” means the occurrence of any of the following:
(a)    CMA ceases to own, directly, 100% of the issued and outstanding Capital
Stock and all other equity interests of the Borrower free and clear of all
Adverse Claims;

5
 

 

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

(b)    the Parent ceases to own, directly or indirectly, 100% of the issued and
outstanding Capital Stock, membership interests or other equity interests of the
Servicer or any Originator;
(c)    any Adverse Claim should exist with respect to any Intercompany Loan
Agreement or any Intercompany Loan;
(d)    with respect to the Parent:
(i)    any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under
the Exchange Act) shall have (x) acquired beneficial ownership or control of 30%
or more (on a fully diluted basis) of the voting and/or economic interest in the
Capital Stock of the Parent; or (y) obtained the power (whether or not
exercised) to elect a majority of the members of the board of directors (or
similar governing body) of the Parent;
(ii)    the majority of the seats (other than vacant seats) on the board of
directors (or similar governing body) of the Parent shall cease to be occupied
by Continuing Directors; or
(iii)    any “change of control” or similar event (however denominated) shall
occur under any indenture or other agreement with respect to “Material
Indebtedness” (as such term is defined in the Credit Agreement) of the Parent or
any “Restricted Subsidiary” (as such term is defined in the Credit Agreement).
“Change in Law” means the occurrence, after the Closing Date, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to the agreements reached
by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory
Framework for More Resilient Banks and Banking Systems” (as amended,
supplemented or otherwise modified or replaced from time to time), shall in each
case be deemed to be a “Change in Law”, regardless of the date enacted, adopted
or issued.
“Closing Date” means June 30, 2020.
“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
“Collateral” has the meaning set forth in Section 5.05(a).

6
 

 

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

“Collection Account” means each account listed on Schedule II to this Agreement
(as such schedule may be modified from time to time in connection with the
closing or opening of any Collection Account in accordance with the terms
hereof) (in each case, in the name of the Borrower) and maintained at a bank or
other financial institution acting as a Collection Account Bank pursuant to an
Account Control Agreement for the purpose of receiving Collections.
“Collection Account Bank” means any of the banks or other financial institutions
holding one or more Collection Accounts.
“Collections” means, with respect to any Pool Receivable: (a) all funds that are
received by any Originator, the Borrower, the Servicer or any other Person on
their behalf in payment of any amounts owed in respect of such Pool Receivable
(including purchase price, service charges, finance charges, interest, fees and
all other charges), or applied to amounts owed in respect of such Pool
Receivable (including insurance payments, proceeds of drawings under supporting
letters of credit and net proceeds of the sale or other disposition of
repossessed goods or other collateral or property of the related Obligor or any
other Person directly or indirectly liable for the payment of such Pool
Receivable and available to be applied thereon), (b) all Deemed Collections, (c)
all proceeds of all Related Security with respect to such Pool Receivable and
(d) all other proceeds of such Pool Receivable.
“Commitment” means, with respect to any Lender and any date of determination
during any Period, the maximum aggregate Loan Amount of which such Person is
obligated to lend or pay hereunder on account of all Loans, on a combined basis,
as set forth on Schedule I or in the Assumption Agreement or other agreement
pursuant to which it became a Lender, as such amount may be modified in
connection with any subsequent assignment pursuant to Section 14.03 or in
connection with a reduction in the Facility Limit pursuant to Section 2.02(e).
If the context so requires, “Commitment” also refers to a Lender’s obligation to
make Loans hereunder in accordance with this Agreement.
“Concentration Percentage” means (a) except as provided in clause (b) below, (i)
for any Group A Obligor, 12.0%, (ii) for any Group B Obligor, 10.0%, (iii) for
any Group C Obligor, 8.0% and (iv) for the two largest Group D Obligors (by
Obligor Percentage), 6.0% and (v) any other Group D Obligor, 4.0% and (b) for
each of the Obligors listed in the chart below (each, a “Special Obligor”), the
percentage specified in the chart below for such Special Obligor (the applicable
“Special Concentration Limit”); provided, however, that the Administrative Agent
(with the prior written consent of each Lender) may approve higher
“Concentration Percentages” for selected Obligors; provided, further, that the
Administrative Agent or any Lender may, upon not less than thirty (30) days’
notice to the Borrower, cancel or reduce the Special Concentration Limit with
respect to any or all Special Obligors, in which case the Concentration
Percentage for such Special Obligor(s) shall be determined pursuant to clause
(a) above. In the event that any other Obligor is or becomes an Affiliate of a
Special Obligor, the Special Concentration Limit shall apply to both such
Obligor and such Special Obligor and shall be calculated as if such Obligor and
such Special Obligor were a single Obligor.

7
 

 

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

Special Obligor
Special Concentration Limit
Ace Hardware Corp.
8.00%

“Concentration Reserve Percentage” means, at any time of determination, the
largest of: (a) the sum of the five (5) largest Obligor Percentages of the Group
D Obligors, (b) the sum of the three (3) largest Obligor Percentages of the
Group C Obligors, (c) the sum of the two (2) largest Obligor Percentages of the
Group B Obligors and (d) the largest Obligor Percentage of the Group A Obligors.
“Continuing Directors” shall mean (a) the directors of the Parent on the Closing
Date and (b) each other director of the Parent if, in each case, such other
director’s nomination for election to the board of directors of the Parent is
recommended by at least 66-2/3% of the votes of the then Continuing Directors.
“Contract” means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.
“Controlled Group” means all members of a controlled group of corporations or
other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with Parent or any of its
Subsidiaries, are treated as a single employer under Section 414 of the Code.
“Covered Entity” means (a) each of Borrower, the Servicer, each Originator, the
Parent and each of Parent’s Subsidiaries and (b) each Person that, directly or
indirectly, is in control of a Person described in clause (a) above. For
purposes of this definition, control of a Person shall mean the direct or
indirect (x) ownership of, or power to vote, 35% or more of the issued and
outstanding equity interests having ordinary voting power for the election of
directors of such Person or other Persons performing similar functions for such
Person, or (y) power to direct or cause the direction of the management and
policies of such Person whether by ownership of equity interests, contract or
otherwise.
“Credit Agreement” means the Credit Agreement, dated as of April 20, 2016, as
amended and restated as of November 26, 2019 (as further amended, restated,
amended and restated, supplemented or otherwise modified from time to time)
among Compass Minerals International, Inc., as US borrower, Compass Minerals
Canada Corp., as Canadian borrower, Compass Minerals UK Limited, as UK borrower,
the several banks and other financial institutions or entities from time to time
parties hereto, as lenders and JPMorgan Chase Bank, N.A., as administrative
agent and collateral agent.
“Credit Agreement Agent” means JPMorgan Chase Bank, N.A., as administrative
agent.

8
 

 

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

“Credit and Collection Policy” means, as the context may require, those
receivables credit and collection policies and practices of the Originators in
effect on the Closing Date and described in Exhibit F, as modified in compliance
with this Agreement.
“Credit Extension” means the making of any Loan.
“Credit Party” means each Lender, the Structuring Agent and the Administrative
Agent.
“Days’ Sales Outstanding” means, for any Fiscal Month, an amount computed as of
the last day of such Fiscal Month equal to: (a) the average of the Outstanding
Balance of all Pool Receivables as of the last day of each of the three most
recent Fiscal Months ended on the last day of such Fiscal Month, divided by (b)
(i) the aggregate initial Outstanding Balance of all Pool Receivables generated
by the Originators during the three most recent Fiscal Months ended on the last
day of such Fiscal Month, divided by (ii) 90.
“Debt” means, as to any Person at any time of determination, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any bonds, debentures, notes,
note purchase, acceptance or credit facility, or other similar instruments or
facilities, (iii) reimbursement obligations (contingent or otherwise) under any
letter of credit, (iv) any other transaction (including production payments
(excluding royalties), installment purchase agreements, forward sale or purchase
agreements, capitalized leases and conditional sales agreements) having the
commercial effect of a borrowing of money entered into by such Person to finance
its operations or capital requirements (but not including accounts payable
incurred in the ordinary course of such Person’s business payable on terms
customary in the trade), (v) all net obligations of such Person in respect of
interest rate or currency hedges or (vi) any Guaranty of any such Debt.
“Deemed Collections” has the meaning set forth in Section 4.01(d).
“Default Ratio” means the ratio (expressed as a percentage and rounded to the
nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last
day of each Fiscal Month by dividing: (a) the aggregate Outstanding Balance of
all Pool Receivables that became Defaulted Receivables during such Fiscal Month,
by (b) the aggregate initial Outstanding Balance of all Pool Receivables
generated by the Originators during the month that is three (3) Fiscal Months
before such Fiscal Month.
“Defaulted Receivable” means a Receivable:
(a)    as to which any payment, or part thereof, remains unpaid for more than 60
days and not more than 90 days from the original due date for such payment;
(b)    as to which an Insolvency Proceeding shall have occurred with respect to
the Obligor thereof or any other Person obligated thereon or owning any Related
Security with respect thereto;

9
 

 

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

(c)    that has been written off the applicable Originator’s or the Borrower’s
books as uncollectible; or
(d)    that, consistent with the Credit and Collection Policy, should be written
off the applicable Originator’s or the Borrower’s books as uncollectible;
provided, however, that in each case above such amount shall be calculated
without giving effect to any netting of credits that have not been matched to a
particular Receivable for the purposes of aged trial balance reporting.
“Delinquency Ratio” means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each Fiscal Month by dividing (a) the aggregate Outstanding Balance
of all Pool Receivables that were Delinquent Receivables on such day, by (b) the
aggregate Outstanding Balance of all Pool Receivables on such day.
“Delinquent Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for more than sixty (60) days from the original due date
for such payment; provided, however, that such amount shall be calculated
without giving effect to any netting of credits that have not been matched to a
particular Receivable for the purposes of aged trial balance reporting.
“Dilution Horizon Ratio” means, for any Fiscal Month, the ratio (expressed as a
percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded
upward) computed as of the last day of such Fiscal Month by dividing: (a) the
aggregate initial Outstanding Balance of all Pool Receivables generated by the
Originators during such Fiscal Month and the immediately preceding Fiscal Month,
by (b) the Net Receivables Pool Balance as of the last day of such Fiscal Month.
Within thirty (30) days of the completion and the receipt by the Administrative
Agent of the results of any annual audit or field exam of the Receivables and
the servicing and origination practices of the Servicer and the Originators, the
numerator of the Dilution Horizon Ratio may be adjusted by the Administrative
Agent upon not less than five (5) Business Days’ notice to the Borrower to
reflect such number of Fiscal Months as the Administrative Agent reasonably
believes best reflects the business practices of the Servicer and the
Originators and the actual amount of dilution and Deemed Collections that occur
with respect to Pool Receivables based on the weighted average dilution lag
calculation completed as part of such audit or field exam.
“Dilution Ratio” means, for any Fiscal Month, the ratio (expressed as a
percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded
upward), computed as of the last day of each Fiscal Month by dividing: (a) the
aggregate amount of Deemed Collections (other than payments related to the
Specifically Reserved Dilution Amount) during such Fiscal Month, by (b) the
aggregate initial Outstanding Balance of all Pool Receivables generated by the
Originators during such Fiscal Month.
“Dilution Reserve Percentage” means, at any time of determination, the product
(expressed as a percentage and rounded to the nearest 1/100th of 1%, with
5/1000th of 1% rounded upward) of (a) the Dilution Horizon Ratio, multiplied by
(b) the sum of (i) the Stress Factor times the average

10
 

 

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

of the Dilution Ratios for the twelve (12) most recent Fiscal Months and (ii)
the Dilution Volatility Component.
“Dilution Volatility Component” means, for any Fiscal Month, the product
(expressed as a percentage) and rounded to the nearest 1/100th of 1%, with
5/1000th of 1% rounded upward) of:
(a)    the positive difference, if any, between: (i) the highest Dilution Ratio
for any Fiscal Month during the twelve (12) most recent Fiscal Months and (ii)
the arithmetic average of the Dilution Ratios for such twelve (12) Fiscal
Months; multiplied by
(b)    the quotient of (i) the highest Dilution Ratio for any Fiscal Month
during the twelve (12) most recent consecutive Fiscal Months divided by (ii) the
arithmetic average of the Dilution Ratios for such twelve (12) consecutive
Fiscal Months.
“Dollars” and “$” each mean the lawful currency of the United States of America.
“Eligible Assignee” means (i) any Lender or any of its Affiliates, (ii) any
Person managed by a Lender or any of its Affiliates and (iii) any other
financial or other institution.
“Eligible Foreign Obligor” means an Eligible Tier 1 Foreign Obligor and an
Eligible Tier 2 Foreign Obligor.
“Eligible Receivable” means, at any time of determination, a Pool Receivable:
(a)    the Obligor of which is: (i) a U.S. Obligor or an Eligible Foreign
Obligor; (ii) not a Sanctioned Person; (iii) not an Affiliate of the Borrower,
the Servicer, the Parent or any Originator; (iv) not the Obligor with respect to
Delinquent Receivables with an aggregate Outstanding Balance exceeding 50% of
the aggregate Outstanding Balance of all such Obligor’s Pool Receivables; (v)
not the Obligor with respect to Defaulted Receivables with an aggregate
Outstanding Balance exceeding 50% of the aggregate Outstanding Balance of all
such Obligor’s Pool Receivables, (vi) not a natural person, (vii) not a material
supplier to any Originator or an Affiliate of a material supplier and (viii) not
a Governmental Authority (other than a U.S. Federal Governmental Entity or U.S.
State or Local Governmental Entity);
(b)    for which an Insolvency Proceeding shall not have occurred with respect
to the Obligor thereof or any other Person obligated thereon or owning any
Related Security with respect thereto;
(c)    that is denominated and payable only in Dollars in the United States of
America, and the Obligor with respect to which has been instructed to remit
Collections in respect thereof directly to a Lock-Box or Collection Account in
the United States of America;
(d)    that has been billed to the related Obligor and does not have a due date
which is more than 180 days after the original invoice date of such Receivable;

11
 

 

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

(e)    that (i) arises under a Contract for the sale of goods or services in the
ordinary course of the applicable Originator’s business and (ii) does not
constitute a loan or other similar financial accommodation being provided by the
applicable Originator;
(f)    that arises under a duly authorized Contract that (i) is in full force
and effect, (ii) is governed by the law of the United States of America or of
any State thereof, (iii) is a legal, valid and binding obligation of the related
Obligor, enforceable against such Obligor in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law and (iv) the
payments thereunder are free and clear of any withholding Taxes;
(g)    that has been transferred by an Originator to the Borrower pursuant to
the Purchase and Sale Agreement with respect to which transfer all conditions
precedent under the Purchase and Sale Agreement have been met;
(h)    that, together with the Contract related thereto, conforms in all
material respects with all Applicable Laws (including any applicable laws
relating to usury, truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and privacy);
(i)    with respect to which all consents, licenses, approvals or authorizations
of, or registrations or declarations with or notices to, any Governmental
Authority or other Person required to be obtained, effected or given by an
Originator in connection with the creation of such Receivable, the execution,
delivery and performance by such Originator of the related Contract or the
assignment thereof under the Purchase and Sale Agreement have been duly
obtained, effected or given and are in full force and effect;
(j)    that is not subject to any existing dispute, right of rescission,
set-off, counterclaim, any other defense against the applicable Originator (or
any assignee of such Originator) or Adverse Claim, and the Obligor of which
holds no right as against the applicable Originator to cause such Originator to
repurchase the goods or merchandise, the sale of which shall have given rise to
such Receivable;
(k)    that satisfies all applicable requirements of the Credit and Collection
Policy;
(l)    that, together with the Contract related thereto, has not been modified,
waived or restructured since its creation, except as permitted pursuant to
Section 9.02 of this Agreement;
(m)    in which the Borrower owns good and marketable title, free and clear of
any Adverse Claims, and that is freely assignable (including without any consent
of the related Obligor or any Governmental Authority), and the payments thereon
are free and clear of any, or increased to account for any applicable,
withholding Taxes;

12
 

 

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

(n)    for which the Administrative Agent (on behalf of the Secured Parties)
shall have a valid and enforceable first priority perfected security interest
therein and in the Related Security and Collections with respect thereto, in
each case free and clear of any Adverse Claim;
(o)    that (x) constitutes an “account” or “general intangible” (as defined in
the UCC), and (y) is not evidenced by instruments or chattel paper;
(p)    that is neither a Defaulted Receivable nor a Delinquent Receivable;
(q)    for which no Originator, the Borrower, the Parent, the Performance
Guarantor or the Servicer has established any offset or netting arrangements
(including customer deposits and advance payments (including payments relating
to unearned revenues)) with the related Obligor in connection with the ordinary
course of payment of such Receivable;
(r)    except with respect to any Receivables arising from Payment Upon Final
Delivery Contracts, that represents amounts earned and payable by the Obligor
that are not subject to the performance of additional services by the Originator
thereof or by the Borrower and the related goods or merchandise shall have been
shipped and/or services performed;
(s)    which (i) does not arise from a sale of accounts made as part of a sale
of a business or constitute an assignment for the purpose of collection only,
(ii) is not a transfer of a single account made in whole or partial satisfaction
of a preexisting indebtedness or an assignment of a right to payment under a
contract to an assignee that is also obligated to perform under the contract and
(iii) is not a transfer of an interest in or an assignment of a claim under a
policy of insurance;
(t)    which does not relate to the sale of any consigned goods or finished
goods which have incorporated any consigned goods into such finished goods;
(u)    for which the related Originator has recognized the related revenue on
its financial books and records in accordance with GAAP; and
(v)    for which neither the related Originator nor any Affiliate thereof is
holding any deposits received by or on behalf of the related Obligor; provided
that only the portion of such Pool Receivable in an amount equal to such
deposits shall be ineligible.
“Eligible Tier 1 Foreign Obligor” means an Obligor that is organized in or that
has a head office (domicile), registered office, and chief executive office
located in a country other than the United States of America that is (i) not a
Sanctioned Country and (ii) that has a long-term sovereign foreign currency
rating of at least “BBB-” by S&P and “Baa3” by Moody’s.
“Eligible Tier 2 Foreign Obligor” means an Obligor that is organized in or that
has a head office (domicile), registered office, and chief executive office
located in a country other than the United States of America that is (i) not a
Sanctioned Country and (ii) not an Eligible Tier 1 Foreign Obligor.

13
 

 

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

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.
“ERISA Affiliate” means, with respect to any Person, any corporation, trade or
business which together with the Person is a member of a controlled group of
corporations or a controlled group of trades or businesses and would be deemed a
“single employer” within the meaning of Sections 414(b), (c), (m) of the Code or
Section 4001(b) of ERISA.
“Euro-Rate Reserve Percentage” means, the maximum effective percentage in effect
on such day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including
without limitation, supplemental, marginal, and emergency reserve requirements)
with respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”).
“Event of Default” has the meaning specified in Section 10.01. For the avoidance
of doubt, any Event of Default that occurs shall be deemed to be continuing at
all times thereafter until cured or until waived in accordance with Section
14.01.
“Excess Concentration” means the sum of the following amounts, without
duplication:
(a)    the sum of the amounts calculated for each of the Obligors equal to the
excess (if any) of (i) the aggregate Outstanding Balance of the Eligible
Receivables of such Obligor, over (ii) the product of (x) such Obligor’s
Concentration Percentage, multiplied by (y) the aggregate Outstanding Balance of
all Eligible Receivables then in the Receivables Pool; plus
(b)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables, the Obligors of which are U.S. Federal Governmental
Entities, over (ii) the product of (x) 1.0%, multiplied by (y) the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool;
plus
(c)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables, the Obligors of which are U.S. State or Local Governmental
Entities, over (ii) the product of (x) 50.0%, multiplied by (y) the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool;
plus
(d)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables, the Obligors of which are Eligible Tier 1 Foreign
Obligors, over (ii) the product of (x) 5.0%, multiplied by (y) the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool;
plus
(e)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables, the Obligors of which are Eligible Tier 2 Foreign
Obligors, over (ii) the product of (x) 1.0%, multiplied by (y) the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool;
plus

14
 

 

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

(f)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables that have a due date which is more than 60 days but not
more than 90 days after the original invoice date of such Receivable, over (ii)
the product of (x) 35.0%, multiplied by (y) the aggregate Outstanding Balance of
all Eligible Receivables; plus
(g)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables that have a due date which is more than 90 days but not
more than 120 days after the original invoice date of such Receivable, over (ii)
the product of (x) 10.0%, multiplied by (y) the aggregate Outstanding Balance of
all Eligible Receivables; plus
(h)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables that have a due date which is more than 120 days but not
more than 150 days after the original invoice date of such Receivable, over (ii)
the product of (x) 5.0%, multiplied by (y) the aggregate Outstanding Balance of
all Eligible Receivables; plus
(i)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables that have a due date which is more than 150 days after the
original invoice date of such Receivable, over (ii) the product of (x) 2.5%,
multiplied by (y) the aggregate Outstanding Balance of all Eligible Receivables;
plus
(j)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables arising from Payment Upon Final Delivery Contracts, over
(ii) the product of (x) 2.00%, multiplied by (y) the aggregate Outstanding
Balance of all Eligible Receivables then in the Receivables Pool.
“Exchange Act” means the Securities Exchange Act of 1934, as amended or
otherwise modified from time to time.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to
an Affected Person or required to be withheld or deducted from a payment to an
Affected Person: (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes and branch profits Taxes, in each case, (i)
imposed as a result of such Affected Person being organized under the laws of,
or having its principal office or, in the case of any Lender, its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of
a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in the Loans
or Commitment pursuant to a law in effect on the date on which (i) such Lender
makes a Loan or its Commitment or (ii) such Lender changes its lending office,
except in each case to the extent that amounts with respect to such Taxes were
payable either to such Lender’s assignor immediately before such Lender became a
party hereto or to such Lender immediately before it changed its lending office
and (c) any U.S. federal withholding Taxes imposed pursuant to FATCA.
“Facility Limit” means as of any date of determination during (a) Period 1,
$50,000,000, and (b) Period 2, $100,000,000, in each case, as reduced from time
to time pursuant to Section 2.02(e). References to the unused portion of the
Facility Limit shall mean, at any time of

15
 

 

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

determination, an amount equal to (x) the Facility Limit at such time, minus (y)
the Aggregate Loan Amount at such time.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental
agreement entered into between the United States and any other Governmental
Authority in connection with the implementation of the foregoing and any fiscal
or regulatory legislation, rules or official practices adopted pursuant to any
such intergovernmental agreement.
“Fee Letter” has the meaning specified in Section 2.03(a).
“Fees” has the meaning specified in Section 2.03(a).
“Final Maturity Date” means the date that (i) is ninety (90) days following the
Scheduled Termination Date or (ii) such earlier date on which the Aggregate Loan
Amount and all other Borrower Obligations become due and payable pursuant to
Section 10.01.
“Final Payout Date” means the date on or after the Termination Date when (i) the
Aggregate Loan Amount and Aggregate Interest have been paid in full, (ii) all
Borrower Obligations shall have been paid in full, (iii) all other amounts owing
to the Credit Parties and any other Borrower Indemnified Party or Affected
Person hereunder and under the other Transaction Documents have been paid in
full and (iv) all accrued Servicing Fees have been paid in full.
“Financial Officer” of any Person means, the chief executive officer, the chief
financial officer, the chief accounting officer, the principal accounting
officer, the controller, the treasurer or the assistant treasurer of such
Person.
“Fiscal Month” means each calendar month.
“GAAP” means generally accepted accounting principles in the United States of
America, consistently applied.
“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
“Group A Obligor” means any Obligor (or its parent or majority owner, as
applicable, if such Obligor is not rated) with a short-term rating of at least:
(a) “A-1” by S&P, or if such Obligor does not have a short-term rating from S&P,
a rating of “A+” or better by S&P on such Obligor’s, its parent’s, or its
majority owner’s (as applicable) long-term senior unsecured and
uncredit-enhanced debt securities, or (b) “P 1” by Moody’s, or if such Obligor
does not have a short-term rating from Moody’s, “Al” or better by Moody’s on
such Obligor’s, its parent’s or its majority

16
 

 

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

owner’s (as applicable) long-term senior unsecured and uncredit-enhanced debt
securities. Notwithstanding the foregoing, any Obligor that is a Subsidiary of
an Obligor that satisfies the definition of “Group A Obligor” shall be deemed to
be a Group A Obligor and shall be aggregated with the Obligor that satisfies
such definition for the purposes of determining the “Concentration Reserve
Percentage” and clause (a) of the definition of “Excess Concentration” for such
Obligors, unless such deemed Obligor separately satisfies the definition of
“Group B Obligor”, or “Group C Obligor”, in which case such Obligor shall be
separately treated as a Group B Obligor or a Group C Obligor, as the case may
be, and shall be aggregated and combined for such purposes with any of its
Subsidiaries that are Obligors.
“Group B Obligor” means an Obligor (or its parent or majority owner, as
applicable, if such Obligor is not rated) that is not a Group A Obligor, with a
short-term rating of at least: (a) “A 2” by S&P, or if such Obligor does not
have a short-term rating from S&P, a rating of “BBB+” or better by S&P on such
Obligor’s, its parent’s or its majority owner’s (as applicable) long-term senior
unsecured and uncredit-enhanced debt securities, or (b) “P 2” by Moody’s, or if
such Obligor does not have a short-term rating from Moody’s, “Baal” or better by
Moody’s on such Obligor’s, its parent’s or its majority owner’s (as applicable)
long-term senior unsecured and uncredit-enhanced debt securities.
Notwithstanding the foregoing, any Obligor that is a Subsidiary of an Obligor
that satisfies the definition of “Group B Obligor” shall be deemed to be a Group
B Obligor and shall be aggregated with the Obligor that satisfies such
definition for the purposes of determining the “Concentration Reserve
Percentage” and clause (a) of the definition of “Excess Concentration” for such
Obligors, unless such deemed Obligor separately satisfies the definition of
“Group A Obligor” or “Group C Obligor”, in which case such Obligor shall be
separately treated as a Group A Obligor or a Group C Obligor, as the case may
be, and shall be aggregated and combined for such purposes with any of its
Subsidiaries that are Obligors.
“Group C Obligor” means an Obligor (or its parent or majority owner, as
applicable, if such Obligor is not rated) that is not a Group A Obligor or a
Group B Obligor, with a short-term rating of at least: (a) “A 3” by S&P, or if
such Obligor does not have a short-term rating from S&P, a rating of “BBB-” or
better by S&P on such Obligor’s, its parent’s or its majority owner’s (as
applicable) long-term senior unsecured and uncredit-enhanced debt securities, or
(b) “P 3” by Moody’s, or if such Obligor does not have a short-term rating from
Moody’s, “Baa3” or better by Moody’s on such Obligor’s, its parent’s or its
majority owner’s (as applicable) long-term senior unsecured and
uncredit-enhanced debt securities. Notwithstanding the foregoing, any Obligor
that is a Subsidiary of an Obligor that satisfies the definition of “Group C
Obligor” shall be deemed to be a Group C Obligor and shall be aggregated with
the Obligor that satisfies such definition for the purposes of determining the
“Concentration Reserve Percentage”, and clause (a) of the definition of “Excess
Concentration” for such Obligors, unless such deemed Obligor separately
satisfies the definition of “Group A Obligor” or “Group B Obligor” in which case
such Obligor shall be separately treated as a Group A Obligor or Group B
Obligor, as the case may be, and shall be aggregated and combined for such
purposes with any of its Subsidiaries that are Obligors.
“Group D Obligor” means any Obligor that is not a Group A Obligor, Group B
Obligor or Group C Obligor; provided, that any Obligor (or its parent or
majority owner, as applicable, if such Obligor is unrated) that is not rated by
both Moody’s and S&P shall be a Group D Obligor.

17
 

 

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

“Guaranty” means, with respect to any Person, any obligation of such Person
guarantying or in effect guarantying any Debt, liability or obligation of any
other Person in any manner, whether directly or indirectly, including any such
liability arising by virtue of partnership agreements, including any agreement
to indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower or any of its Affiliates under any Transaction Document and (b) to the
extent not otherwise described in clause (a) above, Other Taxes.
“Independent Director” has the meaning set forth in Section 8.03(c).
“Information Package” means a report, in substantially the form of Exhibit G.
“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person,
composition, marshaling of assets for creditors of a Person, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, in each of clauses (a) and (b) undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
“Intended Tax Treatment” has the meaning set forth in Section 14.14.
“Intercompany Loan” has the meaning set forth in the Purchase and Sale
Agreement.
“Intercompany Loan Agreement” has the meaning set forth in the Purchase and Sale
Agreement.
“Interest” means, for each Loan for any day during any Interest Period (or
portion thereof), the amount of interest accrued on the Loan Amount of such Loan
during such Interest Period (or portion thereof) in accordance with Section
2.03(b).
“Interest Period” means, with respect to each Loan, (a) before the Termination
Date: (i) initially, the period commencing on the date such Loan is made
pursuant to Section 2.01 (or in the case of any fees payable hereunder,
commencing on the Closing Date) and ending on (but not including) the next
Monthly Settlement Date and (ii) thereafter, each period commencing on such
Monthly Settlement Date and ending on (but not including) the next Monthly
Settlement Date and (b) on and after the Termination Date, such period
(including a period of one day) as shall be selected from time to time by the
Administrative Agent (with the consent or at the direction of the Majority
Lenders) or, in the absence of any such selection, each period of 30 days from
the last day of the preceding Interest Period.

18
 

 

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

“Interest Rate” means, for any day in any Interest Period for any Loan (or any
portion of Loan Amount thereof):
(a)    so long as no Event of Default has occurred and is continuing on such
day, LMIR or Adjusted LIBOR as determined pursuant to Section 2.05, provided,
however, that the Interest Rate applicable to any LIBOR Loan that is not
advanced on a Monthly Settlement Date shall be LMIR for each day during the
initial Interest Period applicable to such Loan from the date such Loan is made
pursuant to Section 2.01 until the next occurring Monthly Settlement Date; or
(b) for any day while an Event of Default or an Unmatured Event of Default has
occurred and is continuing shall be an interest rate per annum equal to the sum
of 2.50% per annum plus the greater of (i) the interest rate per annum
determined for such Loan and such day pursuant to clause (a) above and (ii) the
Base Rate in effect on such day; provided, however, that no provision of this
Agreement shall require the payment or permit the collection of Interest in
excess of the maximum permitted by Applicable Law; provided, further, however,
that Interest for any Loan 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.
“Interim Report” means a report, in substantially the form of Exhibit J.
“Interim Reporting Period” means the period beginning on the tenth (10th)
Business Day after the date, if any, on which the Administrative Agent (acting
in its sole discretion) delivers a notice in writing to the Servicer that it is
then requiring the delivery of Interim Reports hereunder and ending on the date
on which the Administrative Agent (acting in its sole discretion) delivers a
notice in writing to the Servicer that it is no longer requiring the delivery of
Interim Reports.
“Investment Company Act” means the Investment Company Act of 1940, as amended or
otherwise modified from time to time.
“LCR Security” means any commercial paper or security (other than equity
securities issued to Parent or any Originator that is a consolidated subsidiary
of Parent under GAAP) within the meaning of Paragraph __.32(e)(viii) of the
final rules titled Liquidity Coverage Ratio: Liquidity Risk Measurement
Standards, 79 Fed. Reg. 197, 61440 et seq. (October 10, 2014).
“Lenders” means PNC and each other Person that is or becomes a party to this
Agreement in the capacity of a “Lender”.
“LIBOR Loan” means any Loan accruing Interest at Adjusted LIBOR.
“Linked Account” means any deposit account linked to a Collection Account
maintained with Bank of America, N.A. or JPMorgan Chase Bank, N.A., as
Collection Account Banks.
“LMIR” means for any day during any Interest Period, the interest rate per annum
determined by the Administrative Agent (which determination shall be conclusive
absent manifest error) by

19
 

 

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

dividing (i) the one-month Eurodollar rate for Dollar deposits as reported on
the Reuters Screen LIBOR01 Page or any other service or page that may replace
such page from time to time for the purpose of displaying offered rates of
leading banks for London interbank deposits in Dollars, as of 11:00 a.m. (London
time) on such day, or if such day is not a Business Day, then the immediately
preceding Business Day (or if not so reported, then as determined by the
Administrative Agent from another recognized source for interbank quotation), in
each case, changing when and as such rate changes, by (ii) a number equal to
1.00 minus the Euro-Rate Reserve Percentage on such day. The calculation of LMIR
may also be expressed by the following formula:
One-month Eurodollar rate for Dollars
shown on the Reuters Screen LIBOR01 Page or appropriate successor
LMIR    
=                                                                        
1.00 - Euro-Rate Reserve Percentage
LMIR shall be adjusted on the effective date of any change in the Euro-Rate
Reserve Percentage as of such effective date. Notwithstanding the foregoing, if
LMIR as determined herein would be less than 0.50%, such rate shall be deemed to
be 0.50% for purposes of this Agreement.
“Loan” means any loan made by a Lender pursuant to Section 2.02.
“Loan Amount” means, with respect to any Lender, the aggregate amounts paid to,
or on behalf of, the Borrower in connection with all Loans made by such Lender
pursuant to Article II, as reduced from time to time by Collections distributed
and applied on account of such Loan Amount pursuant to Section 4.01; provided,
that if such Loan Amount 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 Loan Amount shall be increased by the amount of
such rescinded or returned distribution as though it had not been made.
“Loan Request” means a letter in substantially the form of Exhibit A hereto
executed and delivered by the Borrower to the Administrative Agent and the
Lenders pursuant to Section 2.02(a).
“Lock-Box” means each locked postal box with respect to which a Collection
Account Bank has executed an Account Control Agreement pursuant to which it has
been granted exclusive access for the purpose of retrieving and processing
payments made on the Receivables and which is listed on Schedule II (as such
schedule may be modified from time to time in connection with the addition or
removal of any Lock-Box in accordance with the terms hereof).
“Loss Horizon Ratio” means, at any time of determination, the ratio (expressed
as a percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1%
rounded upward) computed by dividing:
(a)    the sum of (i) the aggregate initial Outstanding Balance of all Pool
Receivables (other than Unbilled Receivables) generated by the Originators
during the two (2) most recent Fiscal Months, plus (ii) the product of (x) 0.65,
multiplied by (y) the aggregate initial Outstanding Balance of all Pool
Receivables (other than Unbilled Receivables) originated by the Originators
during the third (3rd) most recent Fiscal Month; by

20
 

 

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

(b)    the Net Receivables Pool Balance as of such date.
“Loss Reserve Percentage” means, at any time of determination, the product
(expressed as a percentage and rounded to the nearest 1/100th of 1%, with
5/1000th of 1% rounded upward) of (a) the Stress Factor, multiplied by (b) the
highest average of the Default Ratios for any three (3) consecutive Fiscal
Months during the twelve (12) most recent Fiscal Months, multiplied by (c) the
Loss Horizon Ratio.
“Majority Lenders” means Lenders representing more than 50% of the aggregate
Commitments of all Lenders (or, if the Commitments have been terminated, Lenders
representing more than 50% of the aggregate outstanding Loan Amounts held by all
the Lenders).
“Material Adverse Effect” means relative to any Person (provided that if no
particular Person is specified, “Material Adverse Effect” shall be deemed to be
relative to the Borrower, the Performance Guarantor, the Servicer and the
Originators, individually and in the aggregate) with respect to any event or
circumstance, a material adverse effect on and/or material adverse development
with respect to any of the following:
(a)    the business, financial condition or results of operation of the
Borrower, the Servicer, the Performance Guarantor or any Originator;
(b)    the ability of the Borrower, the Servicer, the Performance Guarantor or
any Originator to fully and timely perform its obligations under this Agreement
or any other Transaction Document to which it is a party;
(c)    the validity or enforceability of this Agreement or any other Transaction
Document, or the validity, enforceability, value or collectibility of any
material portion of the Pool Receivables;
(d)    the status, perfection, enforceability or priority of the Administrative
Agent’s security interest in the Collateral; or
(e)    the rights, remedies and benefits available to, or conferred upon, the
Administrative Agent, any Lender or any other Secured Party under the
Transaction Documents or associated with its respective interest in the
Collateral.
“Mined Properties” means real property from which any salt, minerals or other
naturally occurring products are extracted for subsequent sale or processing.
“Minimum Dilution Reserve Percentage” means, at any time of determination, the
product (expressed as a percentage and rounded to the nearest 1/100th of 1%,
with 5/1000th of 1% rounded upward) of (a) the average of the Dilution Ratios
for the twelve (12) most recent Fiscal Months, multiplied by (b) the Dilution
Horizon Ratio.
“Minimum Funding Threshold” means, on any day on and after the Settlement Date
occurring in July 2020, an amount equal to the lesser of (a) the product of (i)
75.00% times (ii) the Facility Limit at such time and (b) the Borrowing Base at
such time.

21
 

 

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

“Monthly Settlement Date” means the fifteenth (15th) day of each calendar month
(or if such day is not a Business Day, the next occurring Business Day).
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized statistical rating organization.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which the Borrower, the Servicer, any Originator, the Parent or any
of their respective ERISA Affiliates (other than one considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
“Net Receivables Pool Balance” means, at any time of determination: (a) the
aggregate Outstanding Balance of all Eligible Receivables then in the
Receivables Pool, minus (b) the Excess Concentration.
“Obligor” means, with respect to any Receivable, the Person obligated to make
payments pursuant to the Contract relating to such Receivable.
“Obligor Percentage” means, at any time of determination, for each Obligor, a
fraction, expressed as a percentage, (a) the numerator of which is the aggregate
Outstanding Balance of the Eligible Receivables of such Obligor and its
Affiliates less the amount (if any) then included in the calculation of the
Excess Concentration with respect to such Obligor and its Affiliates and (b) the
denominator of which is the aggregate Outstanding Balance of all Eligible
Receivables at such time; provided that Ace Hardware Corp.’s Obligor Percentage
shall not exceed six percent (6.00%).
“OFAC” means the U.S. Department of Treasury’s Office of Foreign Assets Control.
“Originator” and “Originators” have the meaning set forth in the Purchase and
Sale Agreement, as the same may be modified from time to time by adding new
Originators or removing Originators, in each case in accordance with the prior
written consent of the Administrative Agent.
“Other Connection Taxes” means, with respect to any Affected Person, Taxes
imposed as a result of a present or former connection between such Affected
Person and the jurisdiction imposing such Tax (other than connections arising
from such Affected Person having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected
a security interest under, engaged in any other transaction pursuant to or
enforced any Transaction Document, or sold or assigned an interest in any Loan
or Transaction Document).
“Other Taxes” means any and all present or future stamp or documentary Taxes or
any other excise or property Taxes, charges or similar levies or fees arising
from any payment made hereunder or from the execution, delivery, filing,
recording or enforcement of, or otherwise in respect of, this Agreement, the
other Transaction Documents and the other documents or agreements to be
delivered hereunder or thereunder.

22
 

 

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

“Outstanding Balance” means, at any time of determination, with respect to any
Receivable, the then outstanding principal balance thereof.
Overnight Bank Funding Rate” means for any day, the rate comprised of both
overnight federal funds and overnight eurocurrency borrowings by U.S.-managed
banking offices of depository institutions, as such composite rate shall be
determined by the Federal Reserve Bank of New York (“NYFRB”), as set forth on
its public website from time to time, and as published on the next succeeding
Business Day as the overnight bank funding rate by the NYFRB (or by such other
recognized electronic source (such as Bloomberg) selected by the Administrative
Agent for the purpose of displaying such rate); provided, that if such day is
not a Business Day, the Overnight Bank Funding Rate for such day shall be such
rate on the immediately preceding Business Day; provided, further, that if such
rate shall at any time, for any reason, no longer exist, a comparable
replacement rate determined by the Administrative Agent at such time (which
determination shall be conclusive absent manifest error). If the Overnight Bank
Funding Rate determined as above would be less than zero, then such rate shall
be deemed to be zero. The rate of interest charged shall be adjusted as of each
Business Day based on changes in the Overnight Bank Funding Rate without notice
to the Borrower.
“Parent” means Compass Minerals International, Inc., a Delaware corporation.
“Parent Group” has the meaning set forth in Section 8.03(c).
“Participant” has the meaning set forth in Section 14.03(d).
“Participant Register” has the meaning set forth in Section 14.03(e).
“PATRIOT Act” has the meaning set forth in Section 14.15.
“Payment Upon Final Delivery Contracts” means any Contract whereby payment of
any invoice received with respect to any partial shipment under such Contract,
regardless of its stated due date, is not required until the entire order is
delivered in full.
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
“Pension Plan” means a pension plan as defined in Section 3(2) of ERISA that is
subject to Title IV of ERISA with respect to which any Originator, the Borrower
or any other member of the Controlled Group may have any liability, contingent
or otherwise.
“Percentage” means, at any time of determination, with respect to any Lender, a
fraction (expressed as a percentage), (a) the numerator of which is (i) prior to
the termination of all Commitments hereunder, its Commitment at such time or
(ii) if all Commitments hereunder have been terminated, the aggregate
outstanding Loan Amounts of all Loans being funded by the Lenders at such time
and (b) the denominator of which is (i) prior to the termination of all
Commitments hereunder, the aggregate Commitments of all Lenders at such time or
(ii) if all Commitments hereunder have been terminated, the Aggregate Loan
Amount at such time.
“Performance Guarantor” means the Parent.

23
 

 

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

“Performance Guaranty” means the Performance Guaranty, dated as of the Closing
Date, by the Performance Guarantor in favor of the Administrative Agent for the
benefit of the Secured Parties, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.
“Period 1” means the period beginning on and including one (1) Business Day
prior to the Settlement Date occurring in April of each calendar year through
and excluding one (1) Business Day prior to the Settlement Date occurring in
November of the same calendar year.
“Period 2” means the period beginning on and including one (1) Business Day
prior to the Settlement Date occurring in November of each calendar year through
and excluding one (1) Business Day prior to the Settlement Date occurring in
April of the following calendar year.
“Periods” means each of Period 1 and Period 2.
“Permitted Linked Account” means any of the following accounts maintained at
JPMorgan Chase Bank, N.A.: 581776991 and 582281983.
“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or any Governmental Authority.
“PNC” has the meaning set forth in the preamble to this Agreement.
“Pool Receivable” means a Receivable in the Receivables Pool.
“Portion of Loan Amount” means, with respect to any Lender and its related Loan
Amount, the portion of such Loan Amount being funded or maintained by such
Lender by reference to a particular interest rate basis.
“Purchase and Sale Agreement” means the Purchase and Sale Agreement, dated as of
the Closing Date, among the Servicer, the Originators and the Borrower, as such
agreement may be amended, supplemented or otherwise modified from time to time.
“Purchase and Sale Termination Event” has the meaning set forth in the Purchase
and Sale Agreement.
“Receivable” means any right to payment of a monetary obligation, whether or not
earned by performance, owed to any Originator or the Borrower (as assignee of an
Originator), whether constituting an account, as-extracted collateral, chattel
paper, payment intangible, instrument or general intangible, in each instance
arising in connection with the sale of goods that have been or are to be sold or
for services rendered or to be rendered, and includes, without limitation, the
obligation to pay any service charges, finance charges, interest, fees and other
charges with respect thereto. Any such right to payment arising from any one
transaction, including, without limitation, any such right to payment
represented by an individual invoice or agreement, shall constitute a Receivable
separate from a Receivable consisting of any such right to payment arising from
any other transaction.

24
 

 

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

“Receivables Pool” means, at any time of determination, all of the then
outstanding Receivables transferred (or purported to be transferred) to the
Borrower pursuant to the Purchase and Sale Agreement prior to the Termination
Date.
“Register” has the meaning set forth in Section 14.03(b).
“Related Rights” has the meaning set forth in Section 1.1 of the Purchase and
Sale Agreement.
“Related Security” means, with respect to any Receivable:
(a)    all of the Borrower’s and each Originator’s interest in any goods
(including Returned Goods), and documentation of title evidencing the shipment
or storage of any goods (including Returned Goods), the sale of which gave rise
to such Receivable;
(b)    all instruments and chattel paper that may evidence such Receivable;
(c)    all other 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 UCC
financing statements or similar filings relating thereto;
(d)    all of the Borrower’s and each Originator’s rights, interests and claims
under the related Contracts and all guaranties, indemnities, insurance and other
agreements (including the related Contract) or arrangements of whatever
character from time to time supporting or securing payment of such Receivable or
otherwise relating to such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise;
(e)    all books and records of the Borrower and each Originator to the extent
related to any of the foregoing, and all rights, remedies, powers, privileges,
title and interest (but not obligations) in and to each Lock-Box and all
Collection Accounts, into which any Collections or other proceeds with respect
to such Receivables may be deposited, and any related investment property
acquired with any such Collections or other proceeds (as such term is defined in
the applicable UCC);
(f)    all of the Borrower’s rights, interests and claims under the Purchase and
Sale Agreement and the other Transaction Documents; and
(g)    all Collections and other proceeds (as defined in the UCC) of any of the
foregoing.
“Release” has the meaning set forth in Section 4.01(a).
“Reportable Compliance Event” means that any Covered Entity becomes a Sanctioned
Person, or is charged by indictment, criminal complaint or similar charging
instrument, arraigned, or custodially detained in connection with any
Anti-Terrorism Law or any predicate crime to any

25
 

 

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

Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect
that it is reasonably likely that any aspect of its operations is in actual or
probable violation of any Anti-Terrorism Law.
“Reportable Event” means any reportable event as defined in Section 4043(c) of
ERISA or the regulations issued thereunder with respect to a Pension Plan (other
than a Pension Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
“Representatives” has the meaning set forth in Section 14.06(c).
“Required Capital Amount” means $4,000,000.
“Restricted Payments” has the meaning set forth in Section 8.01(r).
“Returned Goods” means all right, title and interest in and to returned,
repossessed or foreclosed goods and/or merchandise the sale of which gave rise
to a Receivable; provided that such goods shall no longer constitute Returned
Goods after a Deemed Collection has been deposited in a Collection Account with
respect to the full Outstanding Balance of the related Receivables.
“S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial
Services LLC business, and any successor thereto that is a nationally recognized
statistical rating organization.
“Sanctioned Country” means a country subject to a sanctions program maintained
under any Anti-Terrorism Law, including any such country identified on the list
maintained by OFAC and available at:
http://www.treasury.gov/resource‑center/sanctions/ Programs/Pages/Programs.aspx,
or as otherwise published from time to time
“Sanctioned Person” means (i) A person named on the list of “Specially
Designated Nationals” or “Blocked Persons” maintained by OFAC available at:
http://www.treasury.gov/ resource‑center/sanctions/SDN‑List/Pages/default.aspx,
or as otherwise published from time to time, (ii) (A) an agency of the
government of a Sanctioned Country, (B) an organization controlled by a
Sanctioned Country or (C) a person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by OFAC, or (iii) any
individual person, group, regime, entity or thing listed or otherwise recognized
as a specially designated, prohibited, sanctioned or debarred person, group,
regime, entity or thing, or subject to any limitations or prohibitions
(including but not limited to the blocking of property or rejection of
transactions), under any Anti-Terrorism Law.
“Scheduled Termination Date” means June 30, 2023, as such date may be extended
from time to time pursuant to Section 2.02(g).
“SEC” means the U.S. Securities and Exchange Commission or any governmental
agencies substituted therefor.
“Secured Parties” means each Credit Party, each Borrower Indemnified Party and
each Affected Person.

26
 

 

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

“Securities Act” means the Securities Act of 1933, as amended or otherwise
modified from time to time.
“Servicer” has the meaning set forth in the preamble to this Agreement.
“Servicer Indemnified Amounts” has the meaning set forth in Section 13.02(a).
“Servicer Indemnified Party” has the meaning set forth in Section 13.02(a).
“Servicing Fee” means the fee referred to in Section 9.06(a) of this Agreement.
“Servicing Fee Rate” means the rate referred to in Section 9.06(a) of this
Agreement.
“Settlement Date” means with respect to any Portion of any Loan Amount for any
Interest Period or any Interest or Fees, (i) so long as no Event of Default has
occurred and is continuing and the Termination Date has not occurred, the
Monthly Settlement Date and (ii) on and after the Termination Date or if an
Event of Default has occurred and is continuing, each day selected from time to
time by the Administrative Agent (with the consent or at the direction of the
Majority Lenders) (it being understood that the Administrative Agent (with the
consent or at the direction of the Majority Lenders) may select such Settlement
Date to occur as frequently as daily), or, in the absence of such selection, the
Monthly Settlement Date.
“Solvent” means, with respect to any Person and as of any particular date, (i)
the present fair market value (or present fair saleable value) of the assets of
such Person is not less than the total amount required to pay the probable
liabilities of such Person on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured, (ii)
such Person is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (iii) such Person is not incurring debts
or liabilities beyond its ability to pay such debts and liabilities as they
mature and (iv) such Person is not engaged in any business or transaction, and
is not about to engage in any business or transaction, for which its property
would constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged.
“Special Concentration Limit” has the meaning set forth in the definition of
Concentration Percentage.
“Special Obligor” has the meaning set forth in the definition of Concentration
Percentage.
“Specifically Reserved Dilution Amount” means for any Fiscal Month, an amount
computed on the last day of such Fiscal Month, equal to the aggregate balance
sheet reserve amount for rebates maintained on the books and records of each
Originator or the Servicer for the most recent Fiscal Month in accordance with
customary accrual methodology pursuant to GAAP.
“Stress Factor” means 2.25.
“Structuring Agent” means PNC Capital Markets LLC, a Pennsylvania limited
liability company.

27
 

 

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

“Subject JV” means Fermavi Eletroquímica Ltda.
“Sub-Servicer” has the meaning set forth in Section 9.01(d).
“Subsidiary” means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority and all interest,
penalties, additions to tax and any similar liabilities with respect thereto.
“Termination Date” means the earliest to occur of (a) the Scheduled Termination
Date, (b) the date on which the “Termination Date” is declared or deemed to have
occurred under Section 10.01 and (c) the date selected by the Borrower on which
all Commitments have been reduced to zero pursuant to Section 2.02(e).
“Total Reserves” means, at any time of determination, an amount equal to the
product of (i) the sum of: (a) the Yield Reserve Percentage, plus (b) the
greater of (I) the sum of the Concentration Reserve Percentage, plus the Minimum
Dilution Reserve Percentage and (II) the sum of the Loss Reserve Percentage,
plus the Dilution Reserve Percentage, times (ii) the Net Receivables Pool
Balance at such time.
“Tranche Period” means, with respect to any LIBOR Loan, a period of one, two,
three or six months selected by the Borrower pursuant to Section 2.05. Each
Tranche Period shall commence on a Monthly Settlement Date and end on (but not
including) the Monthly Settlement Date occurring one, two or three calendar
months thereafter, as selected by the Borrower pursuant to Section 2.05;
provided, however, that if the date any Loan made pursuant to Section 2.01 is
not a Monthly Settlement Date, the initial Tranche Period for such Loan shall
commence on the date such Loan is made pursuant to Section 2.01 and end on the
next Monthly Settlement Date occurring after the day in the applicable
succeeding calendar month which corresponds numerically to the beginning day of
such initial Tranche Period; provided, further, that if any Tranche Period would
end after the Termination Date, such Tranche Period (including a period of one
day) shall end on the Termination Date.
“Transaction Documents” means this Agreement, the Purchase and Sale Agreement,
the Account Control Agreements, the Fee Letter, each Intercompany Loan
Agreement, the Performance Guaranty and all other certificates, instruments, UCC
financing statements, reports, notices, agreements and documents executed or
delivered under or in connection with this Agreement, in each case as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with this Agreement.

28
 

 

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

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.
“Unmatured Event of Default” means an event that but for notice or lapse of time
or both would constitute an Event of Default.
“U.S. Federal Governmental Entity” means the government of the United States of
America, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
such government.
“U.S. Obligor” means an Obligor that is a corporation or other business
organization and is organized under the laws of the United States of America (or
of a United States of America territory, district, state, commonwealth, or
possession, including, without limitation, Puerto Rico and the U.S. Virgin
Islands) or any political subdivision thereof.
“U.S. State or Local Governmental Entity” means any Governmental Authority that
is (i) not a U.S. Federal Governmental Entity and (ii) organized under the laws
of any United States of America territory, district, state, commonwealth, or
possession, including, without limitation, Puerto Rico and the U.S. Virgin
Islands.
“U.S. Tax Compliance Certificate” has the meaning set forth in
Section 5.03(f)(ii)(B)(3).
“Volcker Rule” means Section 13 of the U.S. Bank Holding Company Act of 1956, as
amended, and the applicable rules and regulations thereunder.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
“Yield Reserve Percentage” means at any time of determination:
1.50 x DSO x (BR + SFR)
        360
where:
BR
=    the Base Rate at such time;

DSO
=    the Days’ Sales Outstanding for the most recently ended Fiscal Month; and

SFR
=    the Servicing Fee Rate.

SECTION 1.02. Other Interpretative Matters. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. All
terms used in Article 9 of the UCC in the State of New York and not specifically
defined herein, are used herein as defined in such Article 9.

29
 

 

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

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

TERMS OF THE LOANS
SECTION 2.01. Loan Facility. Upon a request by the Borrower pursuant to Section
2.02, and on the terms and subject to the conditions hereinafter set forth, the
Lenders shall, ratably in accordance with their respective Commitments,
severally and not jointly, make Loans to the Borrower from time to time during
the period from the Closing Date to the Termination Date. Under no circumstances
shall any Lender be obligated to make any such Loan if, after giving effect to
such Loan:
(i)    the Aggregate Loan Amount would exceed the Facility Limit at such time;
(ii)    the aggregate outstanding Loan Amount of such Lender would exceed its
Commitment; or
(iii)    the Aggregate Loan Amount would exceed the Borrowing Base at such time.

30
 

 

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

SECTION 2.02. Making Loans; Repayment of Loans. (a) Each Loan hereunder shall be
made on at least one (1) Business Day prior written request from the Borrower to
the Administrative Agent and each Lender in the form of a Loan Request attached
hereto as Exhibit A. Each such request for a Loan shall be made no later than
1:00 p.m. (New York City time) on a Business Day (it being understood that any
such request made after such time shall be deemed to have been made on the
following Business Day) and shall specify (i) the amount of the Loan(s)
requested (which shall not be less than $1,000,000 and shall be an integral
multiple of $100,000), (ii) the allocation of such amount among the Lenders
(which shall be ratable based on the Commitments), (iii) the account to which
the proceeds of such Loan shall be distributed and (iv) the date such requested
Loan is to be made (which shall be a Business Day).
(b)    On the date of each Loan specified in the applicable Loan Request, the
Lenders shall, upon satisfaction of the applicable conditions set forth in
Article VI and pursuant to the other conditions set forth in this Article II,
make available to the Borrower in same day funds an aggregate amount equal to
the amount of such Loans requested, at the account set forth in the related Loan
Request.
(c)    Each Lender’s obligation shall be several, such that the failure of any
Lender to make available to the Borrower any funds in connection with any Loan
shall not relieve any other Lender of its obligation, if any, hereunder to make
funds available on the date such Loans are requested (it being understood, that
no Lender shall be responsible for the failure of any other Lender to make funds
available to the Borrower in connection with any Loan hereunder).
(d)    The Borrower shall repay in full the outstanding Loan Amount of each
Lender on the Final Maturity Date. Prior thereto, the Borrower shall, on each
Settlement Date, make a prepayment of the outstanding Loan Amounts of the
Lenders to the extent required under Section 4.01 and otherwise in accordance
therewith. Notwithstanding the foregoing, the Borrower, in its discretion, shall
have the right to make a prepayment, in whole or in part, of the outstanding
Loan Amounts of the Lenders on any Business Day upon one (1) Business Day’s
prior written notice thereof to the Administrative Agent and each Lender in the
form of a Reduction Notice attached hereto as Exhibit E; provided, however, that
(i) each such prepayment shall be in a minimum aggregate amount of $100,000 or
any higher multiple thereof, (ii) the Borrower shall not provide any Reduction
Notice, and no such Reduction Notice shall be effective, if after giving effect
thereto, the Aggregate Loan Amount at such time would be less than an amount
equal to the Minimum Funding Threshold and (iii) any accrued Interest and Fees
in respect of such prepaid Loan Amounts shall be paid on the immediately
following Settlement Date; provided, however that notwithstanding the foregoing,
a prepayment may be in an amount necessary to reduce any Borrowing Base Deficit
existing at such time to zero.
(e)    The Borrower may, at any time upon at least thirty (30) days’ prior
written notice to the Administrative Agent and each Lender, terminate the
Facility Limit in whole or ratably reduce the Facility Limit in part. Each
partial reduction in the Facility Limit shall be in a minimum aggregate amount
of $5,000,000 or integral multiples of $1,000,000 in excess thereof, and no such
partial reduction shall reduce the Facility Limit to an amount less than
$35,000,000. In connection

31
 

 

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

with any partial reduction in the Facility Limit, the Commitment of each Lender
shall be ratably reduced.
(f)    In connection with any reduction of the Commitments, the Borrower shall
remit to the Administrative Agent (i) instructions regarding such reduction and
(ii) for payment to the Lenders, cash in an amount sufficient to pay (A) the
Loan Amount of each Lender in excess of the Commitment of such Lender and (B)
all other outstanding Borrower Obligations with respect to such reduction
(determined based on the ratio of the reduction of the Commitments being
effected to the amount of the Commitments prior to such reduction or, if the
Administrative Agent reasonably determines that any portion of the outstanding
Borrower Obligations is allocable solely to that portion of the Commitments
being reduced or has arisen solely as a result of such reduction, all of such
portion) including, without duplication, any associated Breakage Fees. Upon
receipt of any such amounts, the Administrative Agent shall apply such amounts
first to the reduction of the outstanding Loan Amounts, and second to the
payment of the remaining outstanding Borrower Obligations with respect to such
reduction, including any Breakage Fees, by paying such amounts to the Lenders.
SECTION 2.03. Interest and Fees.
(a)    On each Settlement Date, the Borrower shall, in accordance with the terms
and priorities for payment set forth in Section 4.01, pay to each Lender, the
Administrative Agent and the Structuring Agent certain fees (collectively, the
“Fees”) in the amounts set forth in the fee letter agreements from time to time
entered into, among the Borrower, the Lenders and/or the Administrative Agent
and/or the Structuring Agent (each such fee letter agreement, as amended,
restated, supplemented or otherwise modified from time to time, collectively
being referred to herein as the “Fee Letter”).
(b)    Each Loan of each Lender and the Loan Amount thereof shall accrue
interest on each day when such Loan Amount remains outstanding at the then
applicable Interest Rate for such Loan. The Borrower shall pay all Interest
(including, for the avoidance of doubt, all Interest accrued on LIBOR Loans
during an Interest Period regardless of whether the applicable Tranche Period
has ended), Fees and Breakage Fees accrued during each Interest Period on each
Settlement Date in accordance with the terms and priorities for payment set
forth in Section 4.01.
SECTION 2.04. Records of Loans. Each Lender shall record in its records, the
date and amount of each Loan made by such Lender hereunder, the interest rate
with respect thereto, the Interest accrued thereon and each repayment and
payment thereof. Subject to Section 14.03(b), such records shall be conclusive
and binding absent manifest error. The failure to so record any such information
or any error in so recording any such information shall not, however, limit or
otherwise affect the obligations of the Borrower hereunder or under the other
Transaction Documents to repay the Loan Amount of each Lender, together with all
Interest accruing thereon and all other Borrower Obligations.
SECTION 2.05. Selection of Interest Rates and Tranche Periods.

32
 

 

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

(a)    Subject to the following sentence, each Loan shall bear interest
initially at LMIR. Thereafter, so long as no Event of Default has occurred and
is continuing, the Borrower may from time to time elect to change or continue
the type of Interest Rate and/or Tranche Period borne by each Loan or, subject
to the minimum amount requirement for each outstanding Loan set forth in
Section 2.02, a portion thereof by notice to the Administrative Agent not later
than 11:00 a.m. (New York City time), one (1) Business Day prior to the
expiration of any Tranche Period or Interest Period, as applicable; provided,
that there shall not be more than three (3) LIBOR Loans outstanding hereunder at
any one time; provided, further that for the avoidance of doubt, any change from
LMIR to Adjusted LIBOR and/or any change to a Tranche Period applicable to a
Loan shall not be effective until the Monthly Settlement Date occurring after
the date of such request. Any such notices requesting the continuation or
conversion of a Loan to the Administrative Agent may be given by telephone,
telecopy, or other telecommunication device acceptable to the Administrative
Agent (which notice shall be irrevocable once given and, if by telephone, shall
be promptly confirmed in writing in a manner acceptable to the Administrative
Agent).
(b)    If, by the time required in Section 2.05(a), the Borrower fails to select
a Tranche Period or Interest Rate for any Loan, such Loan shall automatically
accrue Interest at LMIR for the next occurring Interest Period.
ARTICLE III

[RESERVED]
ARTICLE IV

SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS
SECTION 4.01. Settlement Procedures.
(a)    The Servicer shall set aside and hold in trust for the benefit of the
Secured Parties (or, if so requested by the Administrative Agent, segregate in a
separate account designated by the Administrative Agent, which shall be an
account maintained and controlled by the Administrative Agent unless the
Administrative Agent otherwise instructs in its sole discretion; it being
understood and agreed, that, unless and until the Administrative Agent gives
such instructions, the Servicer shall not be required to hold Collections in a
separate deposit account containing only such Collections, and may commingle
such Collections with its own funds, so long as the Servicer is able, on each
Business Day and on an equitable and consistent basis, to identify which portion
of amounts credited to such deposit account are Collections), for application in
accordance with the priority of payments set forth below, all Collections on
Pool Receivables that are received by the Servicer or the Borrower or received
in any Lock-Box or Collection Account; provided, however, that so long as each
of the conditions precedent set forth in Section 6.03 are satisfied on such
date, the Servicer may release to the Borrower from such Collections the amount
(if any) necessary to pay (i) the purchase price for Receivables purchased by
the Borrower on such date in accordance with the terms of the Purchase and Sale
Agreement or (ii) amounts owing by the Borrower to the Originators under any
Intercompany Loan Agreement (each such release, a “Release”).. On each

33
 

 

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

Settlement Date, the Servicer (or, following its assumption of control of the
Collection Accounts, the Administrative Agent) shall, distribute such
Collections in the following order of priority:
(i)    first, to the Servicer for the payment of the accrued Servicing Fees
payable for the immediately preceding Interest Period (plus, if applicable, the
amount of Servicing Fees payable for any prior Interest Period to the extent
such amount has not been distributed to the Servicer);
(ii)    second, to each Lender and other Credit Party (ratably, based on the
amount then due and owing), all accrued and unpaid Interest, Fees and Breakage
Fees due to such Lender and other Credit Party for the immediately preceding
Interest Period (including any additional amounts or indemnified amounts payable
under Sections 5.03 and 13.01 in respect of such payments), plus, if applicable,
the amount of any such Interest, Fees and Breakage Fees (including any
additional amounts or indemnified amounts payable under Sections 5.03 and 13.01
in respect of such payments) payable for any prior Interest Period to the extent
such amount has not been distributed to such Lender or Credit Party;
(iii)    third, as set forth in clause (x), (y) or (z) below, as applicable:
(x)    prior to the occurrence of the Termination Date, to the extent that a
Borrowing Base Deficit exists on such date, to the Lenders (ratably, based on
the aggregate outstanding Loan Amount of each Lender at such time) for the
payment of a portion of the outstanding Aggregate Loan Amount at such time, in
an aggregate amount equal to the amount necessary to reduce the Borrowing Base
Deficit to zero ($0);
(y)    on and after the occurrence of the Termination Date, to each Lender
(ratably, based on the aggregate outstanding Loan Amount of each Lender at such
time) for the payment in full of the aggregate outstanding Loan Amount of such
Lender at such time; or
(z)    prior to the occurrence of the Termination Date, at the election of the
Borrower and in accordance with Section 2.02(d), to the payment of all or any
portion of the outstanding Aggregate Loan Amount at such time (ratably, based on
the aggregate outstanding Loan Amount of each Lender at such time);
(iv)    fourth, to the Credit Parties, the Affected Persons and the Borrower
Indemnified Parties (ratably, based on the amount due and owing at such time),
for the payment of all other Borrower Obligations then due and owing by the
Borrower to the Credit Parties, the Affected Persons and the Borrower
Indemnified Parties; and
(v)    fifth, the balance, if any, to be paid to the Borrower for its own
account.
(b)    All payments or distributions to be made by the Servicer, the Borrower
and any other Person to the Lenders (or their respective related Affected
Persons and the Borrower

34
 

 

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

Indemnified Parties), shall be paid or distributed to the applicable party to
which such amounts are owed.
(c)    If and to the extent the Administrative Agent, any Credit Party, any
Affected Person or any Borrower Indemnified Party shall be required for any
reason to pay over to any Person (including any Obligor or any trustee,
receiver, custodian or similar official in any Insolvency Proceeding) any amount
received on its behalf hereunder, such amount shall be deemed not to have been
so received but rather to have been retained by the Borrower and, accordingly,
the Administrative Agent, such Credit Party, such Affected Person or such
Borrower Indemnified Party, as the case may be, shall have a claim against the
Borrower for such amount.
(d)    For the purposes of this Section 4.01:
(i)    if on any day the Outstanding Balance of any Pool Receivable is reduced
or adjusted as a result of any defective, rejected, returned, repossessed or
foreclosed goods or services, or any revision, cancellation, allowance, rebate,
credit memo, discount or other adjustment made by the Borrower, any Originator,
the Servicer or any Affiliate of the Servicer, or any setoff, counterclaim or
dispute between the Borrower or any Affiliate of the Borrower, an Originator or
any Affiliate of an Originator, or the Servicer or any Affiliate of the
Servicer, and an Obligor, the Borrower shall be deemed to have received on such
day a Collection of such Pool Receivable in the amount of such reduction or
adjustment and shall immediately pay any and all such amounts in respect thereof
to a Collection Account (or as otherwise directed by the Administrative Agent at
such time) for the benefit of the Credit Parties for application pursuant to
Section 4.01(a);
(ii)    if on any day any of the representations or warranties in Section 7.01
is not true with respect to any Pool Receivable, the Borrower shall be deemed to
have received on such day a Collection of such Pool Receivable in full and shall
immediately pay the amount of such deemed Collection to a Collection Account (or
as otherwise directed by the Administrative Agent at such time) for the benefit
of the Credit Parties for application pursuant to Section 4.01(a) (Collections
deemed to have been received pursuant to Section 4.01(d) are hereinafter
sometimes referred to as “Deemed Collections”);
(iii)    except as provided in clauses (i) or (ii) above or otherwise required
by Applicable Law or the relevant Contract, all Collections received from an
Obligor of any Receivable shall be applied to the Receivables of such Obligor in
the order of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and
(iv)    if and to the extent the Administrative Agent, any Credit Party, any
Affected Person or any Borrower Indemnified Party shall be required for any
reason to pay over to an Obligor (or any trustee, receiver, custodian or similar
official in any Insolvency Proceeding) any amount received by it hereunder, such
amount shall be deemed not to have been so received by such Person but rather to
have been retained by the Borrower and, accordingly, such Person shall have a
claim against the Borrower for such amount, payable

35
 

 

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

when and to the extent that any distribution from or on behalf of such Obligor
is made in respect thereof.
SECTION 4.02. Payments and Computations, Etc. (a) All amounts to be paid by the
Borrower or the Servicer to the Administrative Agent, any Credit Party, any
Affected Person or any Borrower Indemnified Party hereunder shall be paid no
later than noon (New York City time) on the day when due in same day funds to
the applicable party to which such amounts are due.
(b)    Each of the Borrower and the Servicer shall, to the extent permitted by
Applicable Law, pay interest on any amount not paid or deposited by it when due
hereunder, at an interest rate per annum equal to 2.50% per annum above the Base
Rate, payable on demand.
(c)    All computations of interest under subsection (b) above and all
computations of Interest, Fees and other amounts hereunder shall be made on the
basis of a year of 360 days (or, in the case of amounts determined by reference
to the Base Rate, 365 or 366 days, as applicable) for the actual number of days
(including the first but excluding the last day) elapsed. Whenever any payment
or deposit to be made hereunder shall be due on a day other than a Business Day,
such payment or deposit shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of such payment or
deposit.
ARTICLE V

INCREASED COSTS; FUNDING LOSSES; TAXES; ILLEGALITY AND SECURITY INTEREST
SECTION 5.01. Increased Costs.
(a)    Increased Costs Generally. If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit,
liquidity, compulsory loan, insurance charge or similar requirement against
assets of, deposits with or for the account of, or credit extended or
participated in by, any Affected Person;
(ii)    subject any Affected Person to any Taxes (except to the extent such
Taxes are (A) Indemnified Taxes for which relief is sought under Section 5.03,
(B) Taxes described in clause (b) or (c) of the definition of Excluded Taxes or
(C) Other Connection Taxes that are imposed on or measured by net income
(however denominated) or that are franchise Taxes or branch profits Taxes) on
its loans, loan principal, letters of credit, commitments or other obligations,
or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii)    impose on any Affected Person any other condition, cost or expense
(other than Taxes) (A) affecting the Collateral, this Agreement, any other
Transaction Document, any Loan or any participation therein or (B) affecting its
obligations or rights to make Loans;

36
 

 

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

and the result of any of the foregoing shall be to increase the cost to such
Affected Person of (A) acting as the Administrative Agent, or a Lender
hereunder, (B) funding or maintaining any Loan or (C) maintaining its obligation
to fund or maintain any Loan, or to reduce the amount of any sum received or
receivable by such Affected Person hereunder, then, upon request of such
Affected Person, the Borrower shall pay to such Affected Person such additional
amount or amounts as will compensate such Affected Person for such additional
costs incurred or reduction suffered.
(b)    Capital and Liquidity Requirements. If any Affected Person determines
that any Change in Law affecting such Affected Person or any lending office of
such Affected Person or such Affected Person’s holding company, if any,
regarding capital or liquidity requirements, has or would have the effect of (x)
increasing the amount of capital required to be maintained by such Affected
Person or Affected Person’s holding company, if any, (y) reducing the rate of
return on such Affected Person’s capital or on the capital of such Affected
Person’s holding company, if any, or (z) causing an internal capital or
liquidity charge or other imputed cost to be assessed upon such Affected Person
or Affected Person’s holding company, if any, in each case, as a consequence of
(A) this Agreement or any other Transaction Document, (B) the commitments of
such Affected Person hereunder or under any other Transaction Document, (C) the
Loans made by such Affected Person, or (D) any Loan Amount, to a level below
that which such Affected Person or such Affected Person’s holding company could
have achieved but for such Change in Law (taking into consideration such
Affected Person’s policies and the policies of such Affected Person’s holding
company with respect to capital adequacy and liquidity), then from time to time,
upon request of such Affected Person, the Borrower will pay to such Affected
Person such additional amount or amounts as will compensate such Affected Person
or such Affected Person’s holding company for any such increase, reduction or
charge.
(c)    Adoption of Changes in Law. The Borrower acknowledges that any Affected
Person may institute measures in anticipation of a Change in Law (including,
without limitation, the imposition of internal charges on such Affected Person’s
interests or obligations under any Transaction Document), and may commence
allocating charges to or seeking compensation from the Borrower under this
Section 5.01 in connection with such measures, in advance of the effective date
of such Change in Law, and the Borrower agrees to pay such charges or
compensation to such Affected Person, following demand therefor in accordance
with the terms of this Section 5.01, without regard to whether such effective
date has occurred.
(d)    Certificates for Reimbursement. A certificate of an Affected Person
setting forth the amount or amounts necessary to compensate such Affected Person
or its holding company, as the case may be, as specified in clause (a), (b) or
(c) of this Section and delivered to the Borrower, shall be conclusive absent
manifest error. The Borrower shall, subject to the priorities of payment set
forth in Section 4.01, pay such Affected Person the amount shown as due on any
such certificate on the first Settlement Date occurring after the Borrower’s
receipt of such certificate.
(e)    Delay in Requests. Failure or delay on the part of any Affected Person to
demand compensation pursuant to this Section shall not constitute a waiver of
such Affected Person’s right to demand such compensation.
SECTION 5.02. Funding Losses.

37
 

 

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

(a)    The Borrower will pay each Lender all Breakage Fees.
(b)    A certificate of a Lender setting forth the amount or amounts necessary
to compensate such Lender, as specified in clause (a) above and delivered to the
Borrower, shall be conclusive absent manifest error. The Borrower shall, subject
to the priorities of payment set forth in Section 4.01, pay such Lender the
amount shown as due on any such certificate on the first Settlement Date
occurring after the Borrower’s receipt of such certificate.
SECTION 5.03. Taxes.
(a)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any Transaction Document shall be made without
deduction or withholding for any Taxes, except as required by Applicable Law. If
any Applicable Law (as determined in the good faith discretion of the applicable
Credit Party, Affected Person or Borrower Indemnified Party) requires the
deduction or withholding of any Tax from any such payment to a Credit Party,
Affected Person or Borrower Indemnified Party, then the applicable Credit Party,
Affected Person or Borrower Indemnified Party shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with Applicable
Law, and, if such Tax is an Indemnified Tax, then the sum payable by the
Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section), the applicable Credit Party,
Affected Person or Borrower Indemnified Party receives an amount equal to the
sum it would have received had no such deduction or withholding been made.
(b)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to
the relevant Governmental Authority in accordance with Applicable Law, or, at
the option of the Administrative Agent, timely reimburse the Administrative
Agent for the payment of, any Other Taxes.
(c)    Indemnification by the Borrower. The Borrower shall indemnify each
Affected Person, within ten days after demand therefor, for the full amount of
any (I) Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Affected Person or required to be withheld or deducted from a payment to such
Affected Person and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority
and (II) Taxes that arise because a Loan is not treated for U.S. federal, state,
local or franchise tax consistently with the Intended Tax Treatment (such
indemnification will include any U.S. federal, state or local income and
franchise taxes necessary to make such Affected Person whole on an after-tax
basis taking into account the taxability of receipt of payments under this
clause (II) and any reasonable expenses (other than Taxes) arising out of,
relating to, or resulting from the foregoing). Promptly upon having knowledge
that any such Indemnified Taxes have been levied, imposed or assessed, and
promptly upon notice by the Administrative Agent or any Affected Person, the
Borrower shall pay such Indemnified Taxes directly to the relevant taxing
authority or Governmental Authority (or to the Administrative Agent or such
Affected Person if such Taxes have already been paid to the relevant taxing
authority or

38
 

 

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

Governmental Authority); provided that neither the Administrative Agent nor any
Affected Person shall be under any obligation to provide any such notice to the
Borrower. A certificate as to the amount of such payment or liability delivered
to the Borrower by an Affected Person (with a copy to the Administrative Agent),
or by the Administrative Agent on its own behalf or on behalf of an Affected
Person, shall be conclusive absent manifest error.
(d)    Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender or any of their respective
Affiliates that are Affected Persons (but only to the extent that the Borrower
and its Affiliates have not already indemnified the Administrative Agent for
such Indemnified Taxes and without limiting any obligation of the Borrower, the
Servicer or their Affiliates to do so), (ii) any Taxes attributable to the
failure of such Lender or any of their respective Affiliates that are Affected
Persons to comply with Section 14.03(e) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender or
any of their respective Affiliates that are Affected Persons, in each case, that
are payable or paid by the Administrative Agent in connection with any
Transaction Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender by the Administrative Agent
shall be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender, or any of their respective Affiliates that are Affected Persons
under any Transaction Document or otherwise payable by the Administrative Agent
to such Lender, or any of their respective Affiliates that are Affected Persons
from any other source against any amount due to the Administrative Agent under
this clause (d).
(e)    Evidence of Payments. As soon as practicable after any payment of Taxes
by the Borrower to a Governmental Authority pursuant to this Section 5.03, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(f)    Status of Affected Persons. (i) Any Affected Person that is entitled to
an exemption from or reduction of withholding Tax with respect to payments made
under any Transaction Document shall deliver to the Borrower and the
Administrative Agent, at the time or times reasonably requested by the Borrower
or the Administrative Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Affected Person, if reasonably requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Affected Person is subject to backup withholding
or information reporting requirements. Notwithstanding anything to the contrary
in the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Sections
5.03(f)(ii)(A), 5.03(f)(ii)(B) and 5.03(g)) shall not be required if, in the
Affected Person’s reasonable judgment, such completion, execution or submission
would subject such

39
 

 

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

Affected Person to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Affected Person.
(ii)    Without limiting the generality of the foregoing:
(A)    an Affected Person that is a U.S. Person shall deliver to the Borrower
and the Administrative Agent from time to time upon the reasonable request of
the Borrower or the Administrative Agent, executed originals of Internal Revenue
Service Form W-9 certifying that such Affected Person is exempt from U.S.
federal backup withholding tax;
(B)    any Affected Person that is not a U.S. Person shall, to the extent it is
legally entitled to do so, deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the Affected Person) from
time to time upon the reasonable request of the Borrower or the Administrative
Agent, whichever of the following is applicable:
(1)    in the case of such an Affected Person claiming the benefits of an income
tax treaty to which the United States is a party, (x) with respect to payments
of interest under any Transaction Document, executed originals of Internal
Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E, as
applicable, establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and (y)
with respect to any other applicable payments under any Transaction Document,
Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E,
as applicable, establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “business profits” or “other income” article of
such tax treaty;
(2)    executed originals of Internal Revenue Service Form W-8ECI;
(3)    in the case of such an Affected Person claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate to the effect that such Affected Person is not a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
(a “U.S. Tax Compliance Certificate”) and (y) executed originals of Internal
Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E, as
applicable; or

40
 

 

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

(4)    to the extent such Affected Person is not the beneficial owner, executed
originals of Internal Revenue Service Form W-8IMY, accompanied by Internal
Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN or Internal
Revenue Service Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate,
Internal Revenue Service Form W-9, and/or other certification documents from
each beneficial owner, as applicable; provided that, if such Affected Person is
a partnership and one or more direct or indirect partners of such Affected
Person are claiming the portfolio interest exemption, such Affected Person may
provide a U.S. Tax Compliance Certificate on behalf of each such direct and
indirect partner; and
(C)    any Affected Person that is not a U.S. Person shall, to the extent it is
legally entitled to do so, deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient), from time to
time upon the reasonable request of the Borrower or the Administrative Agent,
executed originals of any other form prescribed by Applicable Law as a basis for
claiming exemption from or a reduction in U.S. federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by Applicable Law to permit the Borrower or the Administrative Agent to
determine the withholding or deduction required to be made.
(g)    Documentation Required by FATCA. If a payment made to an Affected Person
under any Transaction Document would be subject to U.S. federal withholding Tax
imposed by FATCA if such Affected Person were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in Section
1471(b) or 1472(b) of the Code, as applicable), such Affected Person shall
deliver to the Borrower and the Administrative Agent at the time or times
prescribed by Applicable Law and at such time or times reasonably requested by
the Borrower or the Administrative Agent such documentation prescribed by
Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Affected Person has complied with such Affected Person’s obligations under FATCA
or to determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (g), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.
(h)    Survival. Each party’s obligations under this Section 5.03 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Credit Party or any other Affected Person,
the termination of the Commitments and the repayment, satisfaction or discharge
of all the Borrower Obligations and the Servicer’s obligations hereunder.

41
 

 

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

(i)    Updates. Each Affected Person agrees that if any form or certification it
previously delivered pursuant to this Section 5.03 expires or becomes obsolete
or inaccurate in any respect, it shall update such form or certification or
promptly notify the Borrower and the Administrative Agent in writing of its
legal inability to do so.
SECTION 5.04. Inability to Determine Adjusted LIBOR or LMIR; Change in Legality.
(a)    If any Lender shall have determined (which determination shall be
conclusive and binding upon the parties hereto absent manifest error) on any
day, by reason of circumstances affecting the interbank Eurodollar market,
either that: (i) dollar deposits in the relevant amounts and for the relevant
Interest Period or day, as applicable, are not available, (ii) adequate and
reasonable means do not exist for ascertaining Adjusted LIBOR or LMIR for such
Interest Period or day, as applicable, or (iii) Adjusted LIBOR or LMIR
determined pursuant hereto does not accurately reflect the cost to the
applicable Affected Person (as conclusively determined by the related Lender) of
maintaining any Portion of any Loan Amount during such Interest Period or day,
as applicable, until such Lender shall promptly give telephonic notice of such
determination, confirmed in writing, to the Administrative Agent and Borrower on
such day. Upon delivery of such notice: (i) no Portion of any Loan Amount shall
be funded thereafter at Adjusted LIBOR or LMIR unless and until such Lender
shall have given notice to the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist and (ii) with
respect to any outstanding Portion of any Loan Amount then funded at Adjusted
LIBOR or LMIR, such Interest Rate shall automatically and immediately be
converted to the Base Rate.
(b)    If on any day any Lender shall have been notified by any Lender that such
Lender has determined (which determination shall be final and conclusive absent
manifest error) that any Change in Law, or compliance by such Lender with any
Change in Law, shall make it unlawful or impossible for such Lender to fund or
maintain any Portion of any Loan Amount at or by reference to Adjusted LIBOR or
LMIR, such Lender shall notify the Borrower and the Administrative Agent
thereof. Upon receipt of such notice, such Lender notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such determination no
longer apply, (i) no Portion of any Loan Amount shall be funded at or by
reference to Adjusted LIBOR or LMIR and (ii) the Interest Rate for any
outstanding Portion of any Loan Amount then funded at Adjusted LIBOR or LMIR
shall automatically and immediately be converted to the Base Rate.
SECTION 5.05. Security Interest.
(a)    As security for the performance by the Borrower of all the terms,
covenants and agreements on the part of the Borrower to be performed under this
Agreement or any other Transaction Document, including the punctual payment when
due of the Aggregate Loan Amount and all Interest in respect of the Loans and
all other Borrower Obligations, the Borrower hereby grants to the Administrative
Agent for its benefit and the ratable benefit of the Secured Parties, a
continuing security interest in, all of the Borrower’s right, title and interest
in, to and under all of the following, whether now or hereafter owned, existing
or arising (collectively, the “Collateral”): (i) all Pool Receivables, (ii) all
Related Security with respect to such Pool Receivables, (iii) all Collections
with respect to such Pool Receivables, (iv) the Lock-Boxes and Collection
Accounts and all amounts on deposit therein, and all certificates and
instruments, if any, from time to time

42
 

 

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

evidencing such Lock-Boxes and Collection Accounts and amounts on deposit
therein, (v) all rights (but none of the obligations) of the Borrower under the
Purchase and Sale Agreement, (vi) all other personal and fixture property or
assets of the Borrower of every kind and nature including, without limitation,
all goods (including inventory, equipment and any accessions thereto),
instruments (including promissory notes), documents, accounts, chattel paper
(whether tangible or electronic), deposit accounts, securities accounts,
securities entitlements, letter-of-credit rights, commercial tort claims,
securities and all other investment property, supporting obligations, money, any
other contract rights or rights to the payment of money, insurance claims and
proceeds, and all general intangibles (including all payment intangibles) (each
as defined in the UCC) and (vii) all proceeds of, and all amounts received or
receivable under any or all of, the foregoing.
The Administrative Agent (for the benefit of the Secured Parties) shall have,
with respect to all the Collateral, and in addition to all the other rights and
remedies available to the Administrative Agent (for the benefit of the Secured
Parties), all the rights and remedies of a secured party under any applicable
UCC. The Borrower hereby authorizes the Administrative Agent to file financing
statements describing as the collateral covered thereby as “all of the debtor’s
personal property or assets” or words to that effect, notwithstanding that such
wording may be broader in scope than the collateral described in this Agreement
Immediately upon the occurrence of the Final Payout Date, the Collateral shall
be automatically released from the lien created hereby, and this Agreement and
all obligations (other than those expressly stated to survive such termination)
of the Administrative Agent, the Lenders and the other Credit Parties hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the Borrower;
provided, however, that promptly following written request therefor by the
Borrower delivered to the Administrative Agent following any such termination,
and at the expense of the Borrower, the Administrative Agent shall execute and
deliver to the Borrower UCC-3 termination statements and such other documents as
the Borrower shall reasonably request to evidence such termination.
SECTION 5.06.    Successor Adjusted LIBOR or LMIR.
(a)    Benchmark Replacement. Notwithstanding anything to the contrary herein or
in any other Transaction Document, if the Administrative Agent determines that a
Benchmark Transition Event or an Early Opt-in Event has occurred, the
Administrative Agent and the Borrower may amend this Agreement to replace
Adjusted LIBOR or LMIR with a Benchmark Replacement; and any such amendment will
become effective at 5:00 p.m. New York City time on the fifth (5th) Business Day
after the Administrative Agent has provided such proposed amendment to all
Lenders, so long as the Administrative Agent has not received, by such time,
written notice of objection to such amendment from Lenders comprising the
Majority Lenders. Until the Benchmark Replacement is effective, each advance,
conversion and renewal of a Loan bearing interest by reference to Adjusted LIBOR
or LMIR will continue to bear interest with reference to Adjusted LIBOR or LMIR
(as the case may be); provided, however, that during a Benchmark Unavailability
Period (i) any pending selection of, conversion to or renewal of a Loan bearing
interest by reference to Adjusted LIBOR or LMIR that has not yet gone into
effect shall be deemed to be a selection of, conversion to or renewal of the
Base Rate with respect to such Loan, and such Loan shall bear interest by
reference

43
 

 

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

to the Base Rate (rather than by reference to Adjusted LIBOR or LMIR), and (ii)
all outstanding Loans bearing interest by reference to Adjusted LIBOR or LMIR
shall automatically be converted to bear interest by reference to the Base Rate
at the expiration of the existing Interest Period (or sooner, if Administrative
Agent cannot continue to lawfully maintain such affected Loan bearing interest
by reference to Adjusted LIBOR or LMIR).
(b)    Benchmark Replacement Conforming Changes. In connection with the
implementation of a Benchmark Replacement, the Administrative Agent will have
the right to make Benchmark Replacement Conforming Changes from time to time
and, notwithstanding anything to the contrary herein or in any other Transaction
Document, any amendments implementing such Benchmark Replacement Conforming
Changes will become effective without any further action or consent of any other
party to this Agreement.
(c)    Notices; Standards for Decisions and Determinations. The Administrative
Agent will promptly notify the Borrower and the Lenders of (i) the
implementation of any Benchmark Replacement, (ii) the effectiveness of any
Benchmark Replacement Conforming Changes and (iii) the commencement of any
Benchmark Unavailability Period. Any determination, decision or election that
may be made by the Administrative Agent or the Lenders pursuant to this Section
5.06 including any determination with respect to a tenor, rate or adjustment or
of the occurrence or non-occurrence of an event, circumstance or date and any
decision to take or refrain from taking any action, will be conclusive and
binding absent manifest error and may be made in its or their sole discretion
and without consent from any other party hereto, except, in each case, as
expressly required pursuant to this Section 5.06.
(d)    Certain Defined Terms. As used in this Section 5.06:
(i)    “Benchmark Replacement” means the sum of: (a) the alternate benchmark
rate that has been selected by the Administrative Agent and the Borrower giving
due consideration to (i) any selection or recommendation of a replacement rate
or the mechanism for determining such a rate by the Relevant Governmental Body
or (ii) any evolving or then-prevailing market convention for determining a rate
of interest as a replacement to Adjusted LIBOR or LMIR for U.S.
Dollar-denominated credit facilities and (b) the Benchmark Replacement
Adjustment; provided that, if the Benchmark Replacement as so determined would
be less than 0.50%, the Benchmark Replacement will be deemed to be 0.50% for the
purposes of this Agreement.
(ii)    “Benchmark Replacement Adjustment” means, with respect to any
replacement of Adjusted LIBOR or LMIR with an alternate benchmark rate for each
applicable Interest Period, the spread adjustment, or method for calculating or
determining such spread adjustment, (which may be a positive or negative value
or zero) that has been selected by the Administrative Agent and the Borrower (a)
giving due consideration to (i) any selection or recommendation of a spread
adjustment, or method for calculating or determining such spread adjustment, for
the replacement of Adjusted LIBOR or LMIR with the applicable Benchmark
Replacement (excluding such spread adjustment) by the Relevant Governmental Body
or (ii) any evolving or then-prevailing market convention for determining a
spread adjustment, or method for calculating or determining such spread

44
 

 

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

adjustment, for such replacement of Adjusted LIBOR or LMIR for U.S.
Dollar-denominated credit facilities at such time and (b) which may also reflect
adjustments to account for (i) the effects of the transition from Adjusted LIBOR
or LMIR to the Benchmark Replacement and (ii) yield- or risk-based differences
between Adjusted LIBOR or LMIR and the Benchmark Replacement.
(iii)    “Benchmark Replacement Conforming Changes” means, with respect to any
Benchmark Replacement, any technical, administrative or operational changes
(including changes to the definition of “Base Rate,” the definition of “Interest
Period,” timing and frequency of determining rates and making payments of
interest and other administrative matters) that the Administrative Agent decides
may be appropriate to reflect the adoption and implementation of such Benchmark
Replacement and to permit the administration thereof by the Administrative Agent
in a manner substantially consistent with market practice (or, if the
Administrative Agent decides that adoption of any portion of such market
practice is not administratively feasible or if the Administrative Agent
determines that no market practice for the administration of the Benchmark
Replacement exists, in such other manner of administration as the Administrative
Agent decides is reasonably necessary in connection with the administration of
this Agreement).
(iv)    Benchmark Replacement Date” means the earlier to occur of the following
events with respect to the LIBOR Rate:
(A)    in the case of clause (A) or (B) of the definition of “Benchmark
Transition Event,” the later of (x) the date of the public statement or
publication of information referenced therein and (y) the date on which the
administrator of the London Interbank Offered Rate for interbank deposits in
Dollars (“USD LIBOR”) permanently or indefinitely ceases to provide USD LIBOR;
or
(B)    in the case of clause (C) of the definition of “Benchmark Transition
Event,” the date of the public statement or publication of information
referenced therein.
(v)    “Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to Adjusted LIBOR or LMIR:
(A)     a public statement or publication of information by or on behalf of the
administrator of USD LIBOR announcing that such administrator has ceased or will
cease to provide USD LIBOR, permanently or indefinitely, provided that, at the
time of such statement or publication, there is no successor administrator that
will continue to provide USD LIBOR;
(B)    a public statement or publication of information by a Governmental
Authority having jurisdiction over the Administrative Agent, the regulatory
supervisor for the administrator of USD LIBOR, the U.S. Federal Reserve System,
an insolvency official with jurisdiction over the administrator for USD LIBOR, a
resolution authority with jurisdiction over the administrator for USD LIBOR or a

45
 

 

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

court or an entity with similar insolvency or resolution authority over the
administrator for USD LIBOR, which states that the administrator of USD LIBOR
has ceased or will cease to provide USD LIBOR permanently or indefinitely,
provided that, at the time of such statement or publication, there is no
successor administrator that will continue to provide USD LIBOR; or
(C)    a public statement or publication of information by the regulatory
supervisor for the administrator of USD LIBOR or a Governmental Authority having
jurisdiction over the Administrative Agent announcing that USD LIBOR is no
longer representative.
(vi)    “Benchmark Unavailability Period” means, if a Benchmark Transition Event
and its related Benchmark Replacement Date have occurred with respect to
Adjusted LIBOR or LMIR and solely to the extent that Adjusted LIBOR or LMIR (as
the case may be) has not been replaced with a Benchmark Replacement, the period
(x) beginning at the time that such Benchmark Replacement Date has occurred if,
at such time, no Benchmark Replacement has replaced Adjusted LIBOR or LMIR (as
the case may be) for all purposes hereunder in accordance with this Section 5.06
and (y) ending at the time that a Benchmark Replacement has replaced Adjusted
LIBOR or LMIR (as the case may be) for all purposes hereunder pursuant to this
Section 5.06.
(vii)    “Early Opt-in Event” means a determination by the Administrative Agent
that U.S. Dollar-denominated credit facilities being executed at such time, or
that include language similar to that contained in this Section 5.06, are being
executed or amended, as applicable, to incorporate or adopt a new benchmark
interest rate to replace USD LIBOR.
(viii)    “Relevant Governmental Body” means the Federal Reserve Board and/or
the Federal Reserve Bank of New York, or a committee officially endorsed or
convened by the Federal Reserve Board and/or the Federal Reserve Bank of New
York or any successor thereto.
(f)    This Section 5.06 provides a mechanism for determining an alternative
rate of interest in the event that the London interbank offered rate is no
longer available or in certain other circumstances. The Administrative Agent
does not warrant or accept any responsibility for and shall not have any
liability with respect to, the administration, submission or any other matter
related to the London interbank offered rate or other rates in the definition of
Adjusted LIBOR or LMIR or with respect to any alternative or successor rate
thereto, or replacement rate therefor.
ARTICLE VI

CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS
SECTION 6.01. Conditions Precedent to Effectiveness and the Initial Credit
Extension. This Agreement shall become effective as of the Closing Date when (a)
the Administrative Agent shall have received each of the documents, agreements
(in fully executed form), opinions of counsel, lien search results, UCC filings,
certificates and other deliverables listed on the closing memorandum attached as
Exhibit I hereto (subject to Section 6.04), in each case, in form and substance
acceptable

46
 

 

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

to the Administrative Agent and (b) all fees and expenses payable by the
Borrower on the Closing Date to the Credit Parties have been paid in full in
accordance with the terms of the Transaction Documents.
SECTION 6.02. Conditions Precedent to All Credit Extensions. Each Credit
Extension hereunder on or after the Closing Date shall be subject to the
conditions precedent that:
(a)    the Borrower shall have delivered to the Administrative Agent and each
Lender a Loan Request for such Loan, in accordance with Section 2.02(a);
(b)    the Servicer shall have delivered to the Administrative Agent and each
Lender all Information Packages and Interim Reports required to be delivered
hereunder;
(c)    the conditions precedent to such Credit Extension specified in Section
2.01(i) through (iii), shall be satisfied;
(d)    on the date of such Credit Extension the following statements shall be
true and correct (and upon the occurrence of such Credit Extension, the Borrower
and the Servicer shall be deemed to have represented and warranted that such
statements are then true and correct):
(i)    the representations and warranties of the Borrower and the Servicer
contained in Sections 7.01 and 7.02 are true and correct in all material
respects on and as of the date of such Credit Extension as though made on and as
of such date unless such representations and warranties by their terms refer to
an earlier date, in which case they shall be true and correct in all material
respects on and as of such earlier date;
(ii)    no Event of Default or Unmatured Event of Default has occurred and is
continuing, and no Event of Default or Unmatured Event of Default would result
from such Credit Extension;
(iii)    no Borrowing Base Deficit exists or would exist after giving effect to
such Credit Extension;
(iv)    the Termination Date has not occurred; and
(v)    the Aggregate Loan Amount exceeds the Minimum Funding Threshold; and
(e)    with respect to the initial Credit Extension, the Administrative Agent
shall have received recorded copies or other evidence of filing of amendments,
assignments or releases, in each case releasing any Receivables and Related
Security described in any mortgages filed in favor of the Credit Agreement
Agent, in form and substance acceptable to the Administrative Agent.
SECTION 6.03. Conditions Precedent to All Releases. Each Release hereunder on or
after the Closing Date shall be subject to the conditions precedent that:

47
 

 

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

(a)    after giving effect to such Release, the Servicer shall be holding in
trust for the benefit of the Secured Parties an amount of Collections sufficient
to pay the sum of (x) all accrued and unpaid Servicing Fees, Interest, Fees and
Breakage Fees, in each case, through the date of such Release, (y) the amount of
any Borrowing Base Deficit and (z) the amount of all other accrued and unpaid
Borrower Obligations through the date of such Release;
(b)    the Borrower shall use the proceeds of such Release solely to pay the
purchase price for Receivables purchased by the Borrower in accordance with the
terms of the Purchase and Sale Agreement and amounts owing by the Borrower to
the Originators under the Intercompany Loans; and
(c)    on the date of such Release the following statements shall be true and
correct (and upon the occurrence of such Release, the Borrower and the Servicer
shall be deemed to have represented and warranted that such statements are then
true and correct):
(i)    the representations and warranties of the Borrower and the Servicer
contained in Sections 7.01 and 7.02 are true and correct in all material
respects on and as of the date of such Release as though made on and as of such
date unless such representations and warranties by their terms refer to an
earlier date, in which case they shall be true and correct in all material
respects on and as of such earlier date;
(ii)    no Event of Default or Unmatured Event of Default has occurred and is
continuing, and no Event of Default or Unmatured Event of Default would result
from such Release;
(iii)    no Borrowing Base Deficit exists or would exist after giving effect to
such Release; and
(iv)    the Termination Date has not occurred.
SECTION 6.04. Post-Closing Condition. Notwithstanding anything in Section 6.01,
after the Closing Date, but prior to the initial Credit Extension, the Borrower
shall deliver to the Administrative Agent recorded copies or other evidence of
filing of mortgage amendments, assignments or releases, in each case releasing
any Receivables and Related Security described in any mortgages filed in favor
of the Credit Agreement Agent, in form and substance acceptable to the
Administrative Agent.
ARTICLE VII

REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants to each Credit Party as of the Closing Date, on each
Settlement Date and on each day that a Credit Extension or Release shall have
occurred:

48
 

 

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

(a)    Organization and Good Standing. The Borrower is a limited liability
company duly organized and validly existing in good standing under the laws of
the State of Delaware and has full power and authority under its constitutional
documents and under the laws of its jurisdiction to conduct its business as such
business is presently conducted, except to the extent such failure would not
reasonably be expected to have a Material Adverse Effect.
(b)    Due Qualification. The Borrower is duly qualified to do business, is in
good standing as a foreign entity and has obtained all necessary licenses and
approvals in all jurisdictions in which the conduct of its business requires
such qualification, licenses or approvals, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(c)    Power and Authority; Due Authorization. The Borrower (i) has all
necessary power and authority to (A) execute and deliver this Agreement and the
other Transaction Documents to which it is a party, (B) perform its obligations
under this Agreement and the other Transaction Documents to which it is a party
and (C) grant a security interest in the Collateral to the Administrative Agent
on the terms and subject to the conditions herein provided and (ii) has duly
authorized by all necessary action such grant and the execution, delivery and
performance of, and the consummation of the transactions provided for in, this
Agreement and the other Transaction Documents to which it is a party.
(d)    Binding Obligations. This Agreement and each of the other Transaction
Documents to which the Borrower is a party constitutes legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms, except (i) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and (ii) as such
enforceability may be limited by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(e)    No Conflict or Violation. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents to which the Borrower is a party, and the
fulfillment of the terms hereof and thereof, will not (i) conflict with, result
in any breach of any of the terms or provisions of, or constitute (with or
without notice or lapse of time or both) a default under its organizational
documents or any indenture, sale agreement, credit agreement, loan agreement,
security agreement, mortgage, deed of trust, or other agreement or instrument to
which the Borrower is a party or by which it or any of its properties is bound,
(ii) result in the creation or imposition of any Adverse Claim upon any of the
Collateral pursuant to the terms of any such indenture, credit agreement, loan
agreement, security agreement, mortgage, deed of trust, or other agreement or
instrument other than this Agreement and the other Transaction Documents or
(iii) conflict with or violate any Applicable Law, except to the extent that any
such conflict, breach, default, Adverse Claim or violation could not reasonably
be expected to have a Material Adverse Effect.
(f)    Litigation and Other Proceedings. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of the Borrower,
threatened, against the Borrower before any Governmental Authority and (ii) the
Borrower is not subject to any order, judgment, decree, injunction, stipulation
or consent order of or with any Governmental Authority that, in the

49
 

 

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

case of either of the foregoing clauses (i) and (ii), (A) asserts the invalidity
of this Agreement or any other Transaction Document, (B) seeks to prevent the
grant of a security interest in any Collateral by the Borrower to the
Administrative Agent, the ownership or acquisition by the Borrower of any Pool
Receivable or other Collateral or the consummation of any of the transactions
contemplated by this Agreement or any other Transaction Document, (C) seeks any
determination or ruling that could materially and adversely affect the
performance by the Borrower of its obligations under, or the validity or
enforceability of, this Agreement or any other Transaction Document or (D)
individually or in the aggregate for all such actions, suits, proceedings and
investigations could reasonably be expected to have a Material Adverse Effect.
(g)    Governmental Approvals. Except where the failure to obtain or make such
authorization, consent, order, approval or action could not reasonably be
expected to have a Material Adverse Effect, all authorizations, consents, orders
and approvals of, or other actions by, any Governmental Authority that are
required to be obtained by the Borrower in connection with the grant of a
security interest in the Collateral to the Administrative Agent hereunder or the
due execution, delivery and performance by the Borrower of this Agreement or any
other Transaction Document to which it is a party and the consummation by the
Borrower of the transactions contemplated by this Agreement and the other
Transaction Documents to which it is a party have been obtained or made and are
in full force and effect.
(h)    Margin Regulations. The Borrower is not engaged, principally or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meanings of Regulations T, U and
X of the Board of Governors of the Federal Reserve System).
(i)    Solvency. After giving effect to the transactions contemplated by this
Agreement and the other Transaction Documents, the Borrower is Solvent.
(j)    Offices; Legal Name. The Borrower’s sole jurisdiction of organization is
the State of Delaware and such jurisdiction has not changed since its date of
formation. The office of the Borrower is located at 9900 W. 109th Street, Suite
100, Overland Park, KS 66210. The legal name of the Borrower is Compass Minerals
Receivables LLC.
(k)    Investment Company Act; Volcker Rule. The Borrower (i) is not, and is not
controlled by, an “investment company” registered or required to be registered
under the Investment Company Act and (ii) is not a “covered fund” under the
Volcker Rule. In determining that the Borrower is not a “covered fund” under the
Volcker Rule, the Borrower relies on, and is entitled to rely on, the exemption
from the definition of “investment company” set forth in Section 3(c)(5) of the
Investment Company Act.
(l)    No Material Adverse Effect. Since the date of formation of the Borrower
there has been no Material Adverse Effect with respect to the Borrower.
(m)    Accuracy of Information. All Information Packages, Interim Reports, Loan
Requests, certificates, reports, statements, documents and other information
furnished to the Administrative Agent or any other Credit Party by or on behalf
of the Borrower pursuant to any

50
 

 

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

provision of this Agreement or any other Transaction Document, or in connection
with or pursuant to any amendment or modification of, or waiver under, this
Agreement or any other Transaction Document, is, at the time the same are so
furnished, complete and correct in all material respects on the date the same
are furnished to the Administrative Agent or such other Credit Party, and does
not contain any material misstatement of fact or omit to state a material fact
or any fact necessary to make the statements contained therein not misleading.
(n)    Anti-Money Laundering/International Trade Law Compliance. No Covered
Entity is a Sanctioned Person. No Covered Entity, either in its own right or
through any third party, (i) has any of its assets in a Sanctioned Country or in
the possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (ii) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; or (iii) engages in any dealings
or transactions prohibited by any Anti-Terrorism Law; provided that with respect
to the Subject JV, each of the foregoing representations shall be made subject
to the actual knowledge of the Borrower after exercising reasonable due
diligence.
(o)    Mortgage Covering As-Extracted Collateral. There are no mortgages that
are effective as financing statements covering the Receivables as as-extracted
collateral (or the proceeds thereof) and that name any Originator (or, if such
Originator is not the “record owner” of the underlying property, any “record
owner” with respect to such as-extracted collateral, as such term is used in the
UCC) as grantor, debtor or words of similar effect filed or recorded in any
jurisdiction.
(p)    Perfection Representations.
(i)    This Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Borrower’s right, title and interest in,
to and under the Collateral which (A) security interest has been perfected and
is enforceable against creditors of and purchasers from the Borrower and (B)
will be free of all Adverse Claims in such Collateral.
(ii)    The Receivables constitute “accounts” (including, without limitation,
“accounts” constituting “as-extracted collateral”) or “general intangibles”
within the meaning of Section 9-102 of the UCC.
(iii)    The Borrower owns and has good and marketable title to the Collateral
free and clear of any Adverse Claim of any Person.
(iv)    All appropriate financing statements, financing statement amendments and
continuation statements have been filed in the proper filing office in the
appropriate jurisdictions under Applicable Law in order to perfect (and continue
the perfection of) the sale and contribution of the Receivables and Related
Security from each Originator to the Borrower pursuant to the Purchase and Sale
Agreement and the grant by the Borrower of a security interest in the Collateral
to the Administrative Agent pursuant to this Agreement.

51
 

 

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

(v)    Other than the security interest granted to the Administrative Agent
pursuant to this Agreement, the Borrower has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Collateral
except as permitted by this Agreement and the other Transaction Documents. The
Borrower has not authorized the filing of and is not aware of any financing
statements filed against the Borrower that include a description of collateral
covering the Collateral other than any financing statement (i) in favor of the
Administrative Agent or (ii) that has been terminated. The Borrower is not aware
of any judgment lien, ERISA lien or tax lien filings against the Borrower.
(vi)    Notwithstanding any other provision of this Agreement or any other
Transaction Document, the representations contained in this Section 7.01(p)
shall be continuing and remain in full force and effect until the Final Payout
Date.
(q)    The Lock-Boxes and Collection Accounts.
(i)    Nature of Collection Accounts. Each Collection Account constitutes a
“deposit account” within the meaning of the applicable UCC.
(ii)    Ownership. Each Lock-Box and Collection Account is in the name of the
Borrower, and the Borrower owns and has good and marketable title to the
Collection Accounts free and clear of any Adverse Claim.
(iii)    Perfection. The Borrower has delivered to the Administrative Agent a
fully executed Account Control Agreement relating to each Lock-Box and
Collection Account, pursuant to which each applicable Collection Account Bank
has agreed to comply with the instructions originated by the Administrative
Agent directing the disposition of funds in such Lock-Box and Collection Account
without further consent by the Borrower, the Servicer or any other Person. The
Administrative Agent has “control” (as defined in Section 9-104 of the UCC) over
each Collection Account.
(iv)    Instructions. Neither the Lock-Boxes nor the Collection Accounts are in
the name of any Person other than the Borrower. Neither the Borrower nor the
Servicer has consented to the applicable Collection Account Bank complying with
instructions of any Person other than the Administrative Agent.
(r)    Ordinary Course of Business. Each remittance of Collections by or on
behalf of the Borrower to the Credit Parties under this Agreement will have been
(i) in payment of a debt incurred by the Borrower in the ordinary course of
business or financial affairs of the Borrower and (ii) made in the ordinary
course of business or financial affairs of the Borrower.
(s)    Compliance with Law. The Borrower has complied in all material respects
with all Applicable Laws to which it may be subject.
(t)    Bulk Sales Act. No transaction contemplated by this Agreement requires
compliance by it with any bulk sales act or similar law.

52
 

 

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

(u)    Eligible Receivables. Each Receivable included as an Eligible Receivable
in the calculation of the Net Receivables Pool Balance as of any date is an
Eligible Receivable as of such date.
(v)    Taxes. The Borrower has (i) timely filed all tax returns (federal, state
and local) required to be filed by it and (ii) paid, or caused to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP.
(w)    Tax Status. The Borrower (i) is, and shall at all relevant times continue
to be, a “disregarded entity” within the meaning of U.S. Treasury Regulation §
301.7701-3 for U.S. federal income tax purposes that is wholly owned by a
“United States person” (within the meaning of Section 7701(a)(30) of the Code)
and (ii) is not and will not at any relevant time become an association (or
publicly traded partnership) taxable as an association for U.S. federal income
tax purposes. The Borrower is not subject to any Tax in any jurisdiction outside
the United States.
(x)    Opinions. The facts regarding the Borrower, the Servicer, each
Originator, the Performance Guarantor, the Receivables, the Related Security and
the related matters set forth or assumed in each of the opinions of counsel
delivered in connection with this Agreement and the Transaction Documents are
true and correct in all material respects.
(y)    Other Transaction Documents. Each representation and warranty made by the
Borrower under each other Transaction Document to which it is a party is true
and correct in all material respects as of the date when made.
(z)    No Linked Accounts. Except for any Permitted Linked Account, there are no
Linked Accounts with respect to any Collection Account maintained at Bank of
America, N.A. or JPMorgan Chase Bank, N.A.
(aa)    Liquidity Coverage Ratio. The Borrower has not, does not and will not
during this Agreement issue any LCR Security. The Borrower further represents
and warrants that its assets and liabilities are consolidated with the assets
and liabilities of the Parent for purposes of GAAP.
(bb)    Beneficial Ownership Regulation.  As of the Closing Date, the Borrower
is an entity that is organized under the laws of the United States or of any
state and at least 51% of whose common stock or analogous equity interest is
owned directly or indirectly by a company listed on the New York Stock Exchange
or the American Stock Exchange or designated as a NASDAQ National Market
Security listed on the NASDAQ stock exchange and is excluded on that basis from
the definition of “Legal Entity Customer” as defined in the Beneficial Ownership
Regulation.
Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations and warranties contained in this Section shall be
continuing, and remain in full force and effect until the Final Payout Date.

53
 

 

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

SECTION 7.02. Representations and Warranties of the Servicer. The Servicer
represents and warrants to each Credit Party as of the Closing Date, on each
Settlement Date and on each day that a Credit Extension or Release shall have
occurred:
(a)    Organization and Good Standing. The Servicer is a duly organized and
validly existing corporation in good standing under the laws of the State of
Delaware, with the power and authority under its organizational documents and
under the laws of Delaware to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted,
except to the extent such failure would not reasonably be expected to have a
Material Adverse Effect.
(b)    Due Qualification. The Servicer is duly qualified to do business, is in
good standing as a foreign entity and has obtained all necessary licenses and
approvals in all jurisdictions in which the conduct of its business or the
servicing of the Pool Receivables as required by this Agreement requires such
qualification, licenses or approvals, except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
(c)    Power and Authority; Due Authorization. The Servicer has all necessary
power and authority to (i) execute and deliver this Agreement and the other
Transaction Documents to which it is a party and (ii) perform its obligations
under this Agreement and the other Transaction Documents to which it is a party
and the execution, delivery and performance of, and the consummation of the
transactions provided for in, this Agreement and the other Transaction Documents
to which it is a party have been duly authorized by the Servicer by all
necessary action.
(d)    Binding Obligations. This Agreement and each of the other Transaction
Documents to which it is a party constitutes legal, valid and binding
obligations of the Servicer, enforceable against the Servicer in accordance with
their respective terms, except (i) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and (ii) as such
enforceability may be limited by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(e)    No Conflict or Violation. The execution and delivery of this Agreement
and each other Transaction Document to which the Servicer is a party, the
performance of the transactions contemplated by this Agreement and the other
Transaction Documents and the fulfillment of the terms of this Agreement and the
other Transaction Documents by the Servicer will not (i) conflict with, result
in any breach of any of the terms or provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the organizational
documents of the Servicer or any indenture, sale agreement, credit agreement,
loan agreement, security agreement, mortgage, deed of trust or other agreement
or instrument to which the Servicer is a party or by which it or any of its
property is bound, (ii) result in the creation or imposition of any Adverse
Claim upon any of its properties pursuant to the terms of any such indenture,
credit agreement, loan agreement, security agreement, mortgage, deed of trust or
other agreement or instrument, other than this Agreement and the other
Transaction Documents or (iii) conflict with or violate any Applicable Law,
except to the extent that any such conflict, breach, default, Adverse Claim or
violation could not reasonably be expected to have a Material Adverse Effect.

54
 

 

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

(f)    Litigation and Other Proceedings. There is no action, suit, proceeding or
investigation pending, or to the Servicer’s knowledge threatened, against the
Servicer before any Governmental Authority: (i) asserting the invalidity of this
Agreement or any of the other Transaction Documents; (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any
other Transaction Document; or (iii) seeking any determination or ruling that
could materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement or any
of the other Transaction Documents.
(g)    No Consents. The Servicer is not required to obtain the consent of any
other party or any consent, license, approval, registration, authorization or
declaration of or with any Governmental Authority in connection with the
execution, delivery, or performance of this Agreement or any other Transaction
Document to which it is a party that has not already been obtained, except where
the failure to obtain such consent, license, approval, registration,
authorization or declaration could not reasonably be expected to have a Material
Adverse Effect.
(h)    Compliance with Applicable Law. The Servicer (i) shall duly satisfy all
obligations on its part to be fulfilled under or in connection with the Pool
Receivables and the related Contracts, (ii) has maintained in effect all
qualifications required under Applicable Law in order to properly service the
Pool Receivables and (iii) has complied in all material respects with all
Applicable Laws in connection with servicing the Pool Receivables.
(i)    Accuracy of Information. All Information Packages, Interim Reports, Loan
Requests, certificates, reports, statements, documents and other information
furnished to the Administrative Agent or any other Credit Party by the Servicer
pursuant to any provision of this Agreement or any other Transaction Document,
or in connection with or pursuant to any amendment or modification of, or waiver
under, this Agreement or any other Transaction Document, is, at the time the
same are so furnished, complete and correct in all material respects on the date
the same are furnished to the Administrative Agent or such other Credit Party,
and does not contain any material misstatement of fact or omit to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
(j)    Location of Records. The offices where the initial Servicer keeps all of
its records relating to the servicing of the Pool Receivables are located at
9900 West 109th Street, Suite 100, Overland Park, KS 66210.
(k)    Credit and Collection Policy. The Servicer has complied in all material
respects with the Credit and Collection Policy with regard to each Pool
Receivable and the related Contracts.
(l)    Eligible Receivables. Each Receivable included as an Eligible Receivable
in the calculation of the Net Receivables Pool Balance as of any date is an
Eligible Receivable as of such date.
(m)    Servicing Programs. No license or approval is required for the
Administrative Agent’s use of any software or other computer program used by the
Servicer, any Originator or any

55
 

 

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

Sub-Servicer in the servicing of the Pool Receivables, other than those which
have been obtained and are in full force and effect.
(n)    Servicing of Pool Receivables. Since the Closing Date there has been no
material adverse change in the ability of the Servicer or any Sub-Servicer to
service and collect the Pool Receivables and the Related Security.
(o)    Other Transaction Documents. Each representation and warranty made by the
Servicer under each other Transaction Document to which it is a party
(including, without limitation, the Purchase and Sale Agreement) is true and
correct in all material respects as of the date when made.
(p)    No Material Adverse Effect. Since December 31, 2019, there has been no
Material Adverse Effect on the Servicer.
(q)    Investment Company Act. The Servicer is not an “investment company,” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act.
(r)    Anti-Money Laundering/International Trade Law Compliance. No Covered
Entity is a Sanctioned Person. No Covered Entity, either in its own right or
through any third party, (i) has any of its assets in a Sanctioned Country or in
the possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (ii) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; or (iii) engages in any dealings
or transactions prohibited by any Anti-Terrorism Law; provided that with respect
to the Subject JV, each of the foregoing representations shall be made subject
to the actual knowledge of the Servicer after exercising reasonable due
diligence.
(s)    Mortgages Covering As-Extracted Collateral. There are no mortgages that
are effective as financing statements covering the Receivables as as-extracted
collateral (or the proceeds thereof) and that name any Originator (or, if such
Originator is not the “record owner” of the underlying property, any “record
owner” with respect to such as-extracted collateral, as such term is used in the
UCC) as grantor, debtor or words of similar effect filed or recorded in any
jurisdiction.
(t)    Financial Condition. The consolidated balance sheets of the Servicer and
its consolidated Subsidiaries as of March 31, 2020 and the related statements of
income and shareholders’ equity of the Servicer and its consolidated
Subsidiaries for the fiscal quarter then ended, copies of which have been
furnished to the Administrative Agent and the Lenders, present fairly in all
material respects the consolidated financial position of the Servicer and its
consolidated Subsidiaries for the period ended on such date, all in accordance
with GAAP.
(u)    Bulk Sales Act. No transaction contemplated by this Agreement requires
compliance by it with any bulk sales act or similar law.

56
 

 

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

(v)    No Linked Accounts. Except for any Permitted Linked Account, there are no
Linked Accounts with respect to any Collection Account maintained at Bank of
America, N.A. or JPMorgan Chase Bank, N.A.
(w)    Taxes. The Servicer has (i) timely filed all tax returns (federal, state
and local) required to be filed by it and (ii) paid, or caused to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP.
(x)    Opinions. The facts regarding the Borrower, the Servicer, each
Originator, the Performance Guarantor, the Receivables, the Related Security and
the related matters set forth or assumed in each of the opinions of counsel
delivered in connection with this Agreement and the Transaction Documents are
true and correct in all material respects.
(y)    Other Transaction Documents. Each representation and warranty made by the
Servicer under each other Transaction Document to which it is a party is true
and correct in all material respects as of the date when made.
Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations and warranties contained in this Section shall be
continuing, and remain in full force and effect until the Final Payout Date.
ARTICLE VIII

COVENANTS
SECTION 8.01. Covenants of the Borrower. At all times from the Closing Date
until the Final Payout Date:
(a)    Payment of Principal and Interest. The Borrower shall duly and punctually
pay all Loan Amounts, Interest, Fees and all other amounts payable by the
Borrower hereunder in accordance with the terms of this Agreement.
(b)    Existence. The Borrower shall keep in full force and effect its existence
and rights as a limited liability company under the laws of the State of
Delaware, and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the other Transaction Documents
and the Collateral.
(c)    Financial Reporting. The Borrower will maintain a system of accounting
established and administered in accordance with GAAP, and the Borrower (or the
Servicer on its behalf) shall furnish to the Administrative Agent and each
Lender:
(i)    Annual Financial Statements of the Borrower. Promptly upon completion and
in no event later than 90 days after the close of each fiscal year of the

57
 

 

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

Borrower (or, if applicable, such earlier day on which the financial statements
described in clause (v) below are delivered), annual unaudited financial
statements of the Borrower certified by a Financial Officer of the Borrower that
they fairly present in all material respects, in accordance with GAAP, the
financial condition of the Borrower as of the date indicated and the results of
its operations for the periods indicated.
(ii)    Information Packages and Interim Reports. As soon as available and in
any event (A) not later than two (2) Business Days prior to each Settlement
Date, an Information Package as of the most recently completed Fiscal Month and
(B) if an Interim Reporting Period has commenced and is continuing, not later
than 1:00 p.m. (New York City time) on the first Business Day of each calendar
week, an Interim Report with respect to the Pool Receivables with data as of the
close of business on the last Business Day of the immediately preceding calendar
week.
(iii)    Other Information. Such other information (including non-financial
information) as the Administrative Agent or any Lender may from time to time
reasonably request.
(iv)    Quarterly Financial Statements of Parent. As soon as available and in no
event later than 45 days following the end of each of the first three fiscal
quarters in each of Parent’s fiscal years (A) the unaudited consolidated balance
sheet and statements of income of Parent and its consolidated Subsidiaries as at
the end of such fiscal quarter and the related unaudited consolidated statements
of earnings and cash flows for such fiscal quarter and for the elapsed portion
of the fiscal year ended with the last day of such fiscal quarter, in each case
setting forth comparative figures for the corresponding fiscal quarter in the
prior fiscal year, all of which shall be certified by a Financial Officer of
Parent that they fairly present in all material respects, in accordance with
GAAP, the financial condition of Parent and its consolidated Subsidiaries as of
the dates indicated and the results of their operations for the periods
indicated, subject to normal year-end audit adjustments and the absence of
footnotes and (B) management’s discussion and analysis of the important
operational and financial developments during such fiscal quarter.
(v)    Annual Financial Statements of Parent. Within 90 days after the close of
each of Parent’s fiscal years, the consolidated balance sheet of Parent and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of earnings and cash flows for such fiscal year setting
forth comparative figures for the preceding fiscal year, all reported on by
independent certified public accountants of recognized national standing
(without (x) a “going concern” or like qualification or exception or (y) a
qualification as to the scope of the audit) to the effect that such consolidated
financial statements present fairly in all material respects, in accordance with
GAAP, the financial condition of Parent and its consolidated Subsidiaries as of
the dates indicated and the results of their operations for the periods
indicated.
(vi)    Other Reports and Filings. Promptly (but in any event within ten days)
after the filing or delivery thereof, copies of all financial information, proxy
materials and reports, if any, which Parent or any of its consolidated
Subsidiaries shall publicly file

58
 

 

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

with the SEC or deliver to holders (or any trustee, agent or other
representative therefor) of any of its material Debt pursuant to the terms of
the documentation governing the same.
(d)    Notices. The Borrower (or the Servicer on its behalf) will notify the
Administrative Agent and each Lender in writing of any of the following events
promptly upon (but in no event later than three (3) Business Days after) a
Financial Officer or other officer learning of the occurrence thereof, with such
notice describing the same, and if applicable, the steps being taken by the
Person(s) affected with respect thereto:
(i)    Notice of Events of Default or Unmatured Events of Default. A statement
of a Financial Officer of the Borrower setting forth details of any Event of
Default or Unmatured Event of Default that has occurred and is continuing and
the action which the Borrower proposes to take with respect thereto.
(ii)    Representations and Warranties. The failure of any representation or
warranty made or deemed to be made by the Borrower under this Agreement or any
other Transaction Document to be true and correct in any material respect when
made.
(iii)    Litigation. The institution of any litigation, arbitration proceeding
or governmental proceeding with respect to the Borrower, the Servicer, the
Performance Guarantor or any Originator, which with respect to any Person other
than the Borrower, could reasonably be expected to have a Material Adverse
Effect.
(iv)    Adverse Claim. (A) Any Person shall obtain an Adverse Claim upon the
Collateral or any portion thereof, (B) any Person other than the Borrower, the
Servicer or the Administrative Agent shall obtain any rights or direct any
action with respect to any Collection Account (or related Lock-Box) or (C) any
Obligor shall receive any change in payment instructions with respect to Pool
Receivable(s) from a Person other than the Servicer or the Administrative Agent.
(v)    Name Changes. At least thirty (30) days before any change in any
Originator’s or the Borrower’s name, jurisdiction of organization or any other
change requiring the amendment of UCC financing statements.
(vi)    Change in Accountants or Accounting Policy. Any change in (A) the
external accountants of the Borrower, the Servicer, any Originator or the
Parent, (B) any accounting policy of the Borrower or (C) any material accounting
policy of any Originator that is relevant to the transactions contemplated by
this Agreement or any other Transaction Document (it being understood that any
change to the manner in which any Originator accounts for the Pool Receivables
shall be deemed “material” for such purpose).
(vii)    Termination Event. The occurrence of a Purchase and Sale Termination
Event under the Purchase and Sale Agreement.

59
 

 

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

(viii)    Material Adverse Change. Promptly after the occurrence thereof, notice
of any material adverse change in the business, operations, property or
financial or other condition of the Borrower, the Servicer, the Performance
Guarantor or any Originator.
(e)    Conduct of Business. The Borrower will carry on and conduct its business
in substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted and will do all things necessary to
remain duly organized, validly existing and in good standing as a domestic
organization in its jurisdiction of organization and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
(f)    Compliance with Laws. The Borrower will comply with all Applicable Laws
to which it may be subject if the failure to comply could reasonably be expected
to have a Material Adverse Effect.
(g)    Furnishing of Information and Inspection of Receivables. The Borrower
will furnish or cause to be furnished to the Administrative Agent from time to
time such information with respect to the Pool Receivables and the other
Collateral as the Administrative Agent or any Lender may reasonably request. The
Borrower will, at the Borrower’s expense, during regular business hours with
prior written notice (i) permit the Administrative Agent and each Lender or
their respective agents or representatives to (A) examine and make copies of and
abstracts from all books and records relating to the Pool Receivables or other
Collateral, (B) visit the offices and properties of the Borrower for the purpose
of examining such books and records and (C) discuss matters relating to the Pool
Receivables, the other Collateral or the Borrower’s performance hereunder or
under the other Transaction Documents to which it is a party with any of the
officers, directors, employees or independent public accountants of the Borrower
having knowledge of such matters and (ii) without limiting the provisions of
clause (i) above, during regular business hours, at the Borrower’s expense, upon
prior written notice from the Administrative Agent, permit certified public
accountants or other auditors acceptable to the Administrative Agent to conduct
a review of its books and records with respect to such Pool Receivables and
other Collateral; provided, that the Borrower shall be required to reimburse the
Administrative Agent for only one (1) such review pursuant to clause (ii) above
in any twelve-month period, unless an Event of Default has occurred and is
continuing.
(h)    Payments on Receivables, Collection Accounts. The Borrower (or the
Servicer on its behalf) will, and will cause each Originator to, at all times,
instruct all Obligors to deliver payments on the Pool Receivables to a
Collection Account or a Lock-Box. The Borrower (or the Servicer on its behalf)
will, and will cause each Originator to, at all times, maintain such books and
records necessary to identify Collections received from time to time on Pool
Receivables and to segregate such Collections from other property of the
Servicer and the Originators. If any payments on the Pool Receivables or other
Collections are received by the Borrower, the Servicer or an Originator, it
shall hold such payments in trust for the benefit of the Administrative Agent,
the Lenders and the other Secured Parties and promptly (but in any event within
one (1) Business Day after receipt) remit such funds into a Collection Account.
The Borrower (or the Servicer on its behalf) will cause each Collection Account
Bank to comply with the terms of each applicable Account Control Agreement. The
Borrower shall not permit funds other than Collections on Pool

60
 

 

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

Receivables and other Collateral to be deposited into any Collection Account. If
such funds are nevertheless deposited into any Collection Account, the Borrower
(or the Servicer on its behalf) will within two (2) Business Days identify and
transfer such funds to the appropriate Person entitled to such funds. Except as
contemplated by Section 4.01(a), the Borrower will not, and will not permit the
Servicer, any Originator or any other Person to commingle Collections or other
funds to which the Administrative Agent, any Lender or any other Secured Party
is entitled, with any other funds. The Borrower shall only add a Collection
Account (or a related Lock-Box) or a Collection Account Bank to those listed on
Schedule II to this Agreement, if the Administrative Agent has received notice
of such addition and an executed and acknowledged copy of an Account Control
Agreement (or an amendment thereto) in form and substance acceptable to the
Administrative Agent from the applicable Collection Account Bank. The Borrower
shall only terminate a Collection Account Bank or close a Collection Account (or
a related Lock-Box) with the prior written consent of the Administrative Agent.
The Servicer shall ensure that no disbursements are made from any Collection
Account, other than such disbursements that are made at the direction and for
the account of the Borrower.
(i)    Sales, Liens, etc. Except as otherwise provided herein, the Borrower will
not sell, assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Pool Receivable
or other Collateral, or assign any right to receive income in respect thereof.
(j)    Extension or Amendment of Pool Receivables. Except as otherwise permitted
in Section 9.02, the Borrower will not, and will not permit the Servicer to,
alter the delinquency status or adjust the Outstanding Balance or otherwise
modify the terms of any Pool Receivable in any material respect, or amend,
modify or waive, in any material respect, any term or condition of any related
Contract. The Borrower shall at its expense, timely and fully perform and comply
in all material respects with all provisions, covenants and other promises
required to be observed by it under the Contracts related to the Pool
Receivables, and timely and fully comply with the Credit and Collection Policy
with regard to each Pool Receivable and the related Contract.
(k)    Change in Credit and Collection Policy. The Borrower will not make any
material change in the Credit and Collection Policy without fifteen (15) days’
prior written notice to the Administrative Agent and the Lenders. Promptly
following any change in the Credit and Collection Policy, the Borrower will
deliver a copy of the updated Credit and Collection Policy to the Administrative
Agent and each Lender.
(l)    Fundamental Changes. The Borrower shall not, without the prior written
consent of the Administrative Agent and the Majority Lenders, permit itself (i)
to merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to,
any Person, (ii) undertake any division of its rights, assets, obligations, or
liabilities pursuant to a plan of division or otherwise pursuant to Applicable
Law or (iii) to be directly owned by any Person other than an Originator. The
Borrower shall not, without the prior written consent of the Administrative
Agent and the Majority Lenders, make any change in the Borrower’s name,

61
 

 

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

identity, corporate structure or location or make any other change in the
Borrower’s identity or corporate structure that could impair or otherwise render
any UCC financing statement filed in connection with this Agreement or any other
Transaction Document “seriously misleading” as such term (or similar term) is
used in the applicable UCC.
(m)    Books and Records. The Borrower shall maintain and implement (or cause
the Servicer to maintain and implement) administrative and operating procedures
(including an ability to recreate records evidencing Pool Receivables and
related Contracts in the event of the destruction of the originals thereof), and
keep and maintain (or cause the Servicer to keep and maintain) all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including
records adequate to permit the daily identification of each Pool Receivable and
all Collections of and adjustments to each existing Pool Receivable).
(n)    Identifying of Records. The Borrower shall: (i) identify (or cause the
Servicer to identify) its master data processing records relating to Pool
Receivables and related Contracts with a legend that indicates that the Pool
Receivables have been pledged in accordance with this Agreement and (ii) cause
each Originator so to identify its master data processing records with such a
legend.
(o)    Change in Payment Instructions to Obligors. The Borrower shall not (and
shall not permit the Servicer or any Sub-Servicer to) add, replace or terminate
any Collection Account (or any related Lock-Box) or make any change in its (or
their) instructions to the Obligors regarding payments to be made to the
Collection Accounts (or any related Lock-Box), other than any instruction to
remit payments to a different Collection Account (or any related Lock-Box),
unless the Administrative Agent shall have received (i) prior written notice of
such addition, termination or change and (ii) a signed and acknowledged Account
Control Agreement (or amendment thereto) with respect to such new Collection
Accounts (or any related Lock-Box), and the Administrative Agent shall have
consented to such change in writing.
(p)    Security Interest, Etc. The Borrower shall (and shall cause the Servicer
to), at its expense, take all action necessary or reasonably desirable to
establish and maintain a valid and enforceable first priority perfected security
interest in the Collateral, in each case free and clear of any Adverse Claim, in
favor of the Administrative Agent (on behalf of the Secured Parties), including
taking such action to perfect, protect or more fully evidence the security
interest of the Administrative Agent (on behalf of the Secured Parties) as the
Administrative Agent or any Secured Party may reasonably request. In order to
evidence the security interests of the Administrative Agent under this
Agreement, the Borrower shall, from time to time take such action, or execute
and deliver such instruments as may be necessary (including, without limitation,
such actions as are reasonably requested by the Administrative Agent) to
maintain and perfect, as a first-priority interest, the Administrative Agent’s
security interest in the Receivables, Related Security and Collections. The
Borrower shall, from time to time and within the time limits established by law,
prepare and present to the Administrative Agent for the Administrative Agent’s
authorization and approval, all financing statements, amendments, continuations
or initial financing statements in lieu of a continuation statement, or other
filings necessary to continue, maintain and perfect the

62
 

 

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

Administrative Agent’s security interest as a first-priority interest. The
Administrative Agent’s approval of such filings shall authorize the Borrower to
file such financing statements under the UCC without the signature of the
Borrower, any Originator or the Administrative Agent where allowed by Applicable
Law. Notwithstanding anything else in the Transaction Documents to the contrary,
the Borrower shall not have any authority to file a termination, partial
termination, release, partial release, or any amendment that deletes the name of
a debtor or excludes collateral of any such financing statements filed in
connection with the Transaction Documents, without the prior written consent of
the Administrative Agent.
(q)    Certain Agreements. Without the prior written consent of the
Administrative Agent and the Majority Lenders, the Borrower will not (and will
not permit any Originator or the Servicer to) amend, modify, waive, revoke or
terminate any Transaction Document to which it is a party or any provision of
the Borrower’s organizational documents which requires the consent of the
“Independent Director” (as such term is used in the Borrower’s Certificate of
Formation and Limited Liability Company Agreement).
(r)    Restricted Payments. (i) Except pursuant to clause (ii) below, the
Borrower will not: (A) purchase or redeem any of its membership interests,
(B) declare or pay any dividend or set aside any funds for any such purpose,
(C) prepay, purchase or redeem any Debt, (D) lend or advance any funds or
(E) repay any loans or advances to, for or from any of its Affiliates (the
amounts described in clauses (A) through (E) being referred to as “Restricted
Payments”).
(ii)    Subject to the limitations set forth in clause (iii) below, the Borrower
may make Restricted Payments so long as such Restricted Payments are made only
in one or more of the following ways: (A) the Borrower may make cash payments
(including prepayments) on the Intercompany Loans in accordance with their
respective terms and (B) the Borrower may declare and pay dividends if, both
immediately before and immediately after giving effect thereto, the Borrower’s
Net Worth is not less than the Required Capital Amount.
(iii)    The Borrower may make Restricted Payments only out of the funds, if
any, it receives pursuant to Sections 4.01 of this Agreement; provided that the
Borrower shall not pay, make or declare any Restricted Payment (including any
dividend) if, after giving effect thereto, any Event of Default or Unmatured
Event of Default shall have occurred and be continuing.
(s)    Other Business. The Borrower will not: (i) engage in any business other
than the transactions contemplated by the Transaction Documents, (ii) create,
incur or permit to exist any Debt of any kind (or cause or permit to be issued
for its account any letters of credit or bankers’ acceptances other than
pursuant to this Agreement or any Intercompany Loan Agreement or (iii) form any
Subsidiary or make any investments in any other Person.
(t)    Use of Collections Available to the Borrower. The Borrower shall apply
the Collections available to the Borrower to make payments in the following
order of priority: (i) the payment of its obligations under this Agreement and
each of the other Transaction Documents (other

63
 

 

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

than any Intercompany Loan Agreement), (ii) the payment of accrued and unpaid
interest on any Intercompany Loans and (iii) other legal and valid purposes.
(u)    Further Assurances; Change in Name or Jurisdiction of Origination, etc.
(i) The Borrower hereby authorizes and hereby agrees from time to time, at its
own expense, promptly to execute (if necessary) and deliver all further
instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Administrative Agent may reasonably request,
to perfect, protect or more fully evidence the security interest granted
pursuant to this Agreement or any other Transaction Document, or to enable the
Administrative Agent (on behalf of the Secured Parties) to exercise and enforce
the Secured Parties’ rights and remedies under this Agreement and the other
Transaction Document. Without limiting the foregoing, the Borrower hereby
authorizes, and will, upon the request of the Administrative Agent, at the
Borrower’s own expense, execute (if necessary) and file such financing
statements or continuation statements (including as-extracted collateral), or
amendments thereto, and such other instruments and documents, that may be
necessary or desirable, or that the Administrative Agent may reasonably request,
to perfect, protect or evidence any of the foregoing.
(ii)    The Borrower authorizes the Administrative Agent to file financing
statements, continuation statements and amendments thereto and assignments
thereof, relating to the Receivables, the Related Security, the related
Contracts, Collections with respect thereto and the other Collateral without the
signature of the Borrower. A photocopy or other reproduction of this Agreement
shall be sufficient as a financing statement where permitted by law.
(iii)    The Borrower shall at all times be organized under the laws of the
State of Delaware and shall not take any action to change its jurisdiction of
organization.
(iv)    The Borrower will not change its name, location, identity or corporate
structure unless (x) the Borrower, at its own expense, shall have taken all
action necessary or appropriate to perfect or maintain the perfection of the
security interest under this Agreement (including, without limitation, the
filing of all financing statements and the taking of such other action as the
Administrative Agent may request in connection with such change or relocation)
and (y) if requested by the Administrative Agent, the Borrower shall cause to be
delivered to the Administrative Agent, an opinion, in form and substance
satisfactory to the Administrative Agent as to such UCC perfection and priority
matters as the Administrative Agent may request at such time.
(v)    Anti-Money Laundering/International Trade Law Compliance. The Borrower
will not become a Sanctioned Person. No Covered Entity, either in its own right
or through any third party, will (a) have any of its assets in a Sanctioned
Country or in the possession, custody or control of a Sanctioned Person in
violation of any Anti-Terrorism Law; (b) do business in or with, or derive any
of its income from investments in or transactions with, any Sanctioned Country
or Sanctioned Person in violation of any Anti-Terrorism Law; (c) engage in any
dealings or transactions prohibited by any Anti-Terrorism Law or (d) use the
proceeds of any Credit Extension to fund any operations in, finance any
investments or activities in, or, make any payments to, a Sanctioned Country or
Sanctioned Person in violation of any Anti-Terrorism Law; provided that

64
 

 

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

with respect to the Subject JV, the Borrower shall not knowingly undertake any
of the forgoing actions. The funds used to repay each Credit Extension will not
be derived from any unlawful activity. The Borrower shall comply with all
Anti-Terrorism Laws. The Borrower shall promptly notify the Administrative Agent
and each Lender in writing upon the occurrence of a Reportable Compliance Event.
The Borrower has not used and will not use the proceeds of any Credit Extension
to fund any operations in, finance any investments or activities in or make any
payments to, a Sanctioned Person or a Sanctioned Country.
(w)    Borrower’s Net Worth. The Borrower shall not permit the Borrower’s Net
Worth to be less than the Required Capital Amount.
(x)    Taxes. The Borrower will (i) timely file all tax returns (federal, state
and local) required to be filed by it and (ii) pay, or cause to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP.
(y)    Borrower’s Tax Status. The Borrower will remain a wholly-owned subsidiary
of a United States person (within the meaning of Section 7701(a)(30) of the
Code) and not be subject to withholding under Section 1446 of the Code. No
action will be taken that would cause the Borrower to (i) be treated other than
as a “disregarded entity” within the meaning of U.S. Treasury Regulation §
301.7701-3 for U.S. federal income tax purposes or (ii) become an association
taxable as a corporation or a publicly traded partnership taxable as a
corporation for U.S. federal income tax purposes. The Borrower shall not become
subject to any Tax in any jurisdiction outside the United States.
(z)    Linked Accounts. Except for any Permitted Linked Account, the Borrower
shall not permit any Linked Account to exist with respect to any Collection
Account maintained at Bank of America, N.A. or JPMorgan Chase Bank, N.A.;
provided, however, that at any time during the continuance of an Event of
Default or an Unmatured Event of Default, the Borrower shall, if so instructed
by the Administrative Agent (in its sole discretion), cause each Permitted
Linked Account to cease being a “Linked Account” promptly, but not later than 2
Business Days following the Borrower’s or the Servicer’s receipt of such
instruction.
(aa)    Minimum Funding Threshold. The Borrower shall cause the Aggregate Loan
Amount to exceed the Minimum Funding Threshold at all times.
(bb)    Liquidity Coverage Ratio. The Borrower shall not issue any LCR Security.
(cc)    Beneficial Ownership Rule.  Promptly following any change that would
result in a change to the status as an excluded “Legal Entity Customer” under
(and as defined in) the Beneficial Ownership Rule, the Borrower shall execute
and deliver to the Administrative Agent a Certification of Beneficial Owner(s)
complying with the Beneficial Ownership Rule, in form and substance reasonably
acceptable to the Administrative Agent.

65
 

 

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

SECTION 8.02. Covenants of the Servicer. At all times from the Closing Date
until the Final Payout Date:
(a)    Existence. The Servicer shall keep in full force and effect its existence
and rights as a corporation or other entity under the laws of the State of
Delaware. The Servicer shall obtain and preserve its qualification to do
business in each jurisdiction in which the conduct of its business or the
servicing of the Pool Receivables as required by this Agreement requires such
qualification, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(b)    Financial Reporting. The Servicer will maintain a system of accounting
established and administered in accordance with GAAP, and the Servicer shall
furnish to the Administrative Agent and each Lender:
(i)    Compliance Certificates. (a) A compliance certificate promptly upon
completion of the annual report of the Parent and in no event later than 90 days
after the close of the Parent’s fiscal year, in form and substance substantially
similar to Exhibit G signed by a Financial Officer of the Servicer stating that
no Event of Default or Unmatured Event of Default has occurred and is
continuing, or if any Event of Default or Unmatured Event of Default has
occurred and is continuing, stating the nature and status thereof (b) within 45
days after the close of each fiscal quarter of the Parent, a compliance
certificate in form and substance substantially similar to Exhibit G signed by a
Financial Officer of the Servicer stating that no Event of Default or Unmatured
Event of Default has occurred and is continuing, or if any Event of Default or
Unmatured Event of Default has occurred and is continuing, stating the nature
and status thereof and (c) within 45 days after the close of each fiscal quarter
of the Parent, a certificate in form and substance substantially similar to
Exhibit G signed by a Financial Officer of the Servicer certifying that the
location of any Originator’s Mined Properties or mineheads is accurately set
forth on Schedule IV to this Agreement, as amended prior to the date thereof.
(ii)    Information Packages and Interim Reports. Information Packages and
Interim Reports. As soon as available and in any event (A) not later than two
(2) Business Days prior to each Settlement Date, an Information Package as of
the most recently completed Fiscal Month and (B) if an Interim Reporting Period
has commenced and is continuing, not later than 1:00 p.m. (New York City time)
on the first Business Day of each calendar week, an Interim Report with respect
to the Pool Receivables with data as of the close of business on the last
Business Day of the immediately preceding calendar week.
(iii)    Other Information. Such other information (including non-financial
information) as the Administrative Agent or any Lender may from time to time
reasonably request.
(c)    Notices. The Servicer will notify the Administrative Agent and each
Lender in writing of any of the following events promptly upon (but in no event
later than three (3) Business Days after) a Financial Officer or other officer
learning of the occurrence thereof, with such notice

66
 

 

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

describing the same, and if applicable, the steps being taken by the Person(s)
affected with respect thereto:
(i)    Notice of Events of Default or Unmatured Events of Default. A statement
of a Financial Officer of the Servicer setting forth details of any Event of
Default or Unmatured Event of Default that has occurred and is continuing and
the action which the Servicer proposes to take with respect thereto.
(ii)    Representations and Warranties. The failure of any representation or
warranty made or deemed made by the Servicer under this Agreement or any other
Transaction Document to be true and correct in any material respect when made.
(iii)    Litigation. The institution of any litigation, arbitration proceeding
or governmental proceeding which could reasonably be expected to have a Material
Adverse Effect.
(iv)    Adverse Claim. (A) Any Person shall obtain an Adverse Claim upon the
Collateral or any portion thereof, (B) any Person other than the Borrower, the
Servicer or the Administrative Agent shall obtain any rights or direct any
action with respect to any Collection Account (or related Lock-Box) or (C) any
Obligor shall receive any change in payment instructions with respect to Pool
Receivable(s) from a Person other than the Servicer or the Administrative Agent.
(v)    Name Changes. At least thirty (30) days before any change in any
Originator’s or the Borrower’s name, jurisdiction of organization or any other
change requiring the amendment of UCC financing statements.
(vi)    Change in Accountants or Accounting Policy. Any change in (i) the
external accountants of the Borrower, the Servicer, any Originator or the
Parent, (ii) any accounting policy of the Borrower or (iii) any material
accounting policy of any Originator that is relevant to the transactions
contemplated by this Agreement or any other Transaction Document (it being
understood that any change to the manner in which any Originator accounts for
the Pool Receivables shall be deemed “material” for such purpose).
(vii)    Termination Event. The occurrence of a Purchase and Sale Termination
Event under the Purchase and Sale Agreement.
(viii)    Material Adverse Change. Promptly after the occurrence thereof, notice
of any material adverse change in the business, operations, property or
financial or other condition of any Originator, the Servicer, the Performance
Guarantor or the Borrower.
(d)    Conduct of Business. The Servicer will carry on and conduct its business
in substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted, and will do all things necessary to
remain duly organized, validly existing and in good standing as a domestic
corporation in its jurisdiction of organization and maintain all requisite

67
 

 

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

authority to conduct its business in each jurisdiction in which its business is
conducted if the failure to have such authority could reasonably be expected to
have a Material Adverse Effect.
(e)    Compliance with Laws. The Servicer will comply with all Applicable Laws
to which it may be subject if the failure to comply could reasonably be expected
to have a Material Adverse Effect.
(f)    Furnishing of Information and Inspection of Receivables. The Servicer
will furnish or cause to be furnished to the Administrative Agent and each
Lender from time to time such information with respect to the Pool Receivables
and the other Collateral as the Administrative Agent or any Lender may
reasonably request. The Servicer will, at the Servicer’s expense, during regular
business hours with prior written notice, (i) permit the Administrative Agent
and each Lender or their respective agents or representatives to (A) examine and
make copies of and abstracts from all books and records relating to the Pool
Receivables or other Collateral, (B) visit the offices and properties of the
Servicer for the purpose of examining such books and records and (C) discuss
matters relating to the Pool Receivables, the other Collateral or the Servicer’s
performance hereunder or under the other Transaction Documents to which it is a
party with any of the officers, directors, employees or independent public
accountants of the Servicer (provided that representatives of the Servicer are
present during such discussions) having knowledge of such matters and
(ii) without limiting the provisions of clause (i) above, during regular
business hours, at the Servicer’s expense, upon prior written notice from the
Administrative Agent, permit certified public accountants or other auditors
acceptable to the Administrative Agent to conduct a review of its books and
records with respect to the Pool Receivables and other Collateral; provided,
that the Servicer shall be required to reimburse the Administrative Agent for
only one (1) such review pursuant to clause (ii) above in any twelve-month
period unless an Event of Default has occurred and is continuing.
(g)    Payments on Receivables, Collection Accounts. The Servicer will at all
times, instruct all Obligors to deliver payments on the Pool Receivables to a
Collection Account or a Lock-Box. The Servicer will, at all times, maintain such
books and records necessary to identify Collections received from time to time
on Pool Receivables and to segregate such Collections from other property of the
Servicer and the Originators. If any payments on the Pool Receivables or other
Collections are received by the Borrower, the Servicer or an Originator, it
shall hold such payments in trust for the benefit of the Administrative Agent,
the Lenders and the other Secured Parties and promptly (but in any event within
one (1) Business Day after receipt) remit such funds into a Collection Account.
The Servicer shall not permit funds other than Collections on Pool Receivables
and other Collateral to be deposited into any Collection Account. If such funds
are nevertheless deposited into any Collection Account, the Servicer will within
two (2) Business Days identify and transfer such funds to the appropriate Person
entitled to such funds. Except as contemplated by Section 4.01(a), the Servicer
will not, and will not permit the Borrower, any Originator or any other Person
to commingle Collections or other funds to which the Administrative Agent, any
Lender or any other Secured Party is entitled, with any other funds. The
Servicer shall only add a Collection Account (or a related Lock-Box), or a
Collection Account Bank to those listed on Schedule II to this Agreement, if the
Administrative Agent has received notice of such addition and an executed and
acknowledged copy of an Account Control Agreement (or an amendment thereto) in
form and substance acceptable to the Administrative Agent from the applicable
Collection

68
 

 

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

Account Bank. The Servicer shall only terminate a Collection Account Bank or
close a Collection Account (or a related Lock-Box) with the prior written
consent of the Administrative Agent.
(h)    Extension or Amendment of Pool Receivables. Except as otherwise permitted
in Section 9.02, the Servicer will not alter the delinquency status or adjust
the Outstanding Balance or otherwise modify the terms of any Pool Receivable in
any material respect, or amend, modify or waive, in any material respect, any
term or condition of any related Contract. The Servicer shall at its expense,
timely and fully perform and comply in all material respects with all
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables, and timely and fully comply with the
Credit and Collection Policy with regard to each Pool Receivable and the related
Contract.
(i)    Change in Credit and Collection Policy. The Servicer will not make any
material change in the Credit and Collection Policy without fifteen (15) days’
prior written notice to the Administrative Agent and the Lenders. Promptly
following any change in the Credit and Collection Policy, the Servicer will
deliver a copy of the updated Credit and Collection Policy to the Administrative
Agent and each Lender.
(j)    Records. The Servicer will maintain and implement administrative and
operating procedures (including an ability to recreate records evidencing Pool
Receivables and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records,
computer tapes and disks and other information reasonably necessary or advisable
for the collection of all Pool Receivables (including records adequate to permit
the daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).
(k)    Identifying of Records. The Servicer shall identify its master data
processing records relating to Pool Receivables and related Contracts with a
legend that indicates that the Pool Receivables have been pledged in accordance
with this Agreement.
(l)    Change in Payment Instructions to Obligors. The Servicer shall not (and
shall not permit any Sub-Servicer to) add, replace or terminate any Collection
Account (or any related Lock-Box) or make any change in its instructions to the
Obligors regarding payments to be made to the Collection Accounts (or any
related Lock-Box), other than any instruction to remit payments to a different
Collection Account (or any related Lock-Box), unless the Administrative Agent
shall have received (i) prior written notice of such addition, termination or
change and (ii) a signed and acknowledged Account Control Agreement (or an
amendment thereto) with respect to such new Collection Accounts (or any related
Lock-Box) and the Administrative Agent shall have consented to such change in
writing.
(m)    Security Interest, Etc. The Servicer shall, at its expense, take all
action necessary or reasonably desirable to establish and maintain a valid and
enforceable first priority perfected security interest in the Collateral, in
each case free and clear of any Adverse Claim in favor of the Administrative
Agent (on behalf of the Secured Parties), including taking such action to
perfect, protect or more fully evidence the security interest of the
Administrative Agent (on behalf of the Secured Parties) as the Administrative
Agent or any Secured Party may reasonably request.

69
 

 

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

In order to evidence the security interests of the Administrative Agent under
this Agreement, the Servicer shall, from time to time take such action, or
execute and deliver such instruments as may be necessary (including, without
limitation, such actions as are reasonably requested by the Administrative
Agent) to maintain and perfect, as a first-priority interest, the Administrative
Agent’s security interest in the Receivables, Related Security and Collections.
The Servicer shall, from time to time and within the time limits established by
law, prepare and present to the Administrative Agent for the Administrative
Agent’s authorization and approval, all financing statements, amendments,
continuations or initial financing statements in lieu of a continuation
statement, or other filings necessary to continue, maintain and perfect the
Administrative Agent’s security interest as a first-priority interest. The
Administrative Agent’s approval of such filings shall authorize the Servicer to
file such financing statements under the UCC without the signature of the
Borrower, any Originator or the Administrative Agent where allowed by Applicable
Law. Notwithstanding anything else in the Transaction Documents to the contrary,
the Servicer shall not have any authority to file a termination, partial
termination, release, partial release, or any amendment that deletes the name of
a debtor or excludes collateral of any such financing statements filed in
connection with the Transaction Documents, without the prior written consent of
the Administrative Agent.
(n)    Further Assurances; Change in Name or Jurisdiction of Origination, etc.
The Servicer hereby authorizes and hereby agrees from time to time, at its own
expense, promptly to execute (if necessary) and deliver all further instruments
and documents, and to take all further actions, that may be necessary or
desirable, or that the Administrative Agent may reasonably request, to perfect,
protect or more fully evidence the security interest granted pursuant to this
Agreement or any other Transaction Document, or to enable the Administrative
Agent (on behalf of the Secured Parties) to exercise and enforce their
respective rights and remedies under this Agreement or any other Transaction
Document. Without limiting the foregoing, the Servicer hereby authorizes, and
will, upon the request of the Administrative Agent, at the Servicer’s own
expense, execute (if necessary) and file such financing statements or
continuation statements, or amendments thereto, and such other instruments and
documents, that may be necessary or desirable, or that the Administrative Agent
may reasonably request, to perfect, protect or evidence any of the foregoing.
(o)    Anti-Money Laundering/International Trade Law Compliance. The Servicer
will not become a Sanctioned Person. No Covered Entity, either in its own right
or through any third party, will (a) have any of its assets in a Sanctioned
Country or in the possession, custody or control of a Sanctioned Person in
violation of any Anti-Terrorism Law; (b) do business in or with, or derive any
of its income from investments in or transactions with, any Sanctioned Country
or Sanctioned Person in violation of any Anti-Terrorism Law; (c) engage in any
dealings or transactions prohibited by any Anti-Terrorism Law or (d) use the
proceeds of any Credit Extension to fund any operations in, finance any
investments or activities in, or, make any payments to, a Sanctioned Country or
Sanctioned Person in violation of any Anti-Terrorism Law; provided that with
respect to the Subject JV, the Borrower shall not knowingly undertake any of the
forgoing actions. The funds used to repay each Credit Extension will not be
derived from any unlawful activity. The Servicer shall comply with all
Anti-Terrorism Laws. The Servicer shall promptly notify the Administrative Agent
and each Lender in writing upon the occurrence of a Reportable Compliance Event.

70
 

 

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

(p)    Mining Operations and Mineheads. The Servicer shall (and shall cause each
applicable Originator to) promptly, and in any event within 5 Business Days of
any change, deletion or addition to the location of any Originator’s Mined
Properties or mineheads set forth on Schedule IV to this Agreement, (i) notify
the Administrative Agent of such change, deletion or addition, (ii) cause the
filing or recording of such financing statements and amendments and/or releases
to financing statements, mortgages or other instruments, if any, necessary to
preserve and maintain the perfection and priority of the ownership and security
interests of the Borrower and the Administrative Agent in the Collateral
pursuant to the Purchase and Sale Agreement and this Agreement, in each case in
form and substance satisfactory to the Administrative Agent and (iii) deliver to
the Administrative Agent an updated Schedule IV to this Agreement reflecting
such change, deletion or addition.
(q)    Taxes. The Servicer will (i) timely file all tax returns (federal, state
and local) required to be filed by it and (ii) pay, or cause to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP, except in each case to the extent that such failure to
file or pay could not reasonably be expected to have a Material Adverse Effect.
(r)    Borrower’s Tax Status. The Servicer shall not take or cause any action to
be taken that could result in the Borrower (i) being treated other than as a
“disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3
for U.S. federal income tax purposes or (ii) becoming an association taxable as
a corporation or a publicly traded partnership taxable as a corporation for U.S.
federal income tax purposes.
(s)    Linked Accounts.  Except for any Permitted Linked Account, the Servicer
shall not permit any Linked Account to exist with respect to any Collection
Account maintained at Bank of America, N.A. or JPMorgan Chase Bank, N.A.;
provided, however, that at any time during the continuance of an Event of
Default or an Unmatured Event of Default, the Servicer shall, if so instructed
by the Administrative Agent (in its sole discretion), cause each Permitted
Linked Account to cease being a “Linked Account” promptly, but not later than 2
Business Days following the Borrower’s or the Servicer’s receipt of such
instruction. The Servicer shall at all times ensure that (i) the account balance
in each Permitted Linked Account is greater than zero and will exceed the
aggregate face amount of each check or other payment order drawn on or payable
against any Linked Account at any time outstanding with respect to any Permitted
Linked Account and (ii) no amount will be debited against any Collection Account
as a result of any check or other payment order drawn on or payable against any
Permitted Linked Account or any other account other than a Collection Account.
SECTION 8.03. Separate Existence of the Borrower. Each of the Borrower and the
Servicer hereby acknowledges that the Secured Parties, the Lenders and the
Administrative Agent are entering into the transactions contemplated by this
Agreement and the other Transaction Documents in reliance upon the Borrower’s
identity as a legal entity separate from any Originator, the Servicer, the
Performance Guarantor and their Affiliates. Therefore, each of the Borrower and
Servicer shall take all steps specifically required by this Agreement or
reasonably required by the Administrative

71
 

 

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

Agent or any Lender to continue the Borrower’s identity as a separate legal
entity and to make it apparent to third Persons that the Borrower is an entity
with assets and liabilities distinct from those of the Performance Guarantor,
the Originators, the Servicer and any other Person, and is not a division of the
Performance Guarantor, the Originators, the Servicer, its Affiliates or any
other Person. Without limiting the generality of the foregoing and in addition
to and consistent with the other covenants set forth herein, each of the
Borrower and the Servicer shall take such actions as shall be required in order
that:
(a)    Special Purpose Entity. The Borrower will be a special purpose company
whose primary activities are restricted in its Limited Liability Company
Agreement to: (i) purchasing or otherwise acquiring from the Originators,
owning, holding, collecting, granting security interests or selling interests in
the Collateral, (ii) entering into agreements for the selling, servicing and
financing of the Receivables Pool (including the Transaction Documents) and
(iii) conducting such other activities as it deems necessary or appropriate to
carry out its primary activities.
(b)    No Other Business or Debt. The Borrower shall not engage in any business
or activity except as set forth in this Agreement nor, incur any indebtedness or
liability other than as expressly permitted by the Transaction Documents.
(c)    Independent Director. Not fewer than one member of the Borrower’s board
of directors (the “Independent Director”) shall be a natural person who (i) has
never been, and shall at no time be, an equityholder, director, officer,
manager, member, partner, officer, employee or associate, or any relative of the
foregoing, of any member of the Parent Group (as hereinafter defined) (other
than his or her service as an Independent Director of the Borrower or an
independent director of any other bankruptcy-remote special purpose entity
formed for the sole purpose of securitizing, or facilitating the securitization
of, financial assets of any member or members of the Parent Group), (ii) is not
a customer or supplier of any member of the Parent Group (other than his or her
service as an Independent Director of the Borrower or an independent director of
any other bankruptcy-remote special purpose entity formed for the sole purpose
of securitizing, or facilitating the securitization of, financial assets of any
member or members of the Parent Group), (iii) is not any member of the immediate
family of a person described in (i) or (ii) above, and (iv) has (x) prior
experience as an independent director for a corporation or limited liability
company whose organizational or charter documents required the unanimous consent
of all independent directors thereof before such corporation or limited
liability company could consent to the institution of bankruptcy or insolvency
proceedings against it or could file a petition seeking relief under any
applicable federal or state law relating to bankruptcy and (y) at least three
years of employment experience with one or more entities that provide, in the
ordinary course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities. For purposes of this clause (c), “Parent
Group” shall mean (i) the Parent, the Servicer, the Performance Guarantor and
each Originator, (ii) each person that directly or indirectly, owns or controls,
whether beneficially, or as a trustee, guardian or other fiduciary, five percent
(5%) or more of the membership interests in the Parent, (iii) each person that
controls, is controlled by or is under common control with the Parent and (iv)
each of such person’s officers, directors, managers, joint venturers and
partners. For the purposes of this definition, “control” of a person means the
possession, directly or indirectly, of the power to direct or cause

72
 

 

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

the direction of the management and policies of a person or entity, whether
through the ownership of voting securities, by contract or otherwise. A person
shall be deemed to be an “associate” of (A) a corporation or organization of
which such person is an officer, director, partner or manager or is, directly or
indirectly, the beneficial owner of ten percent (10%) or more of any class of
equity securities, (B) any trust or other estate in which such person serves as
trustee or in a similar capacity and (C) any relative or spouse of a person
described in clause (A) or (B) of this sentence, or any relative of such spouse.
The Borrower shall (A) give written notice to the Administrative Agent of the
election or appointment, or proposed election or appointment, of a new
Independent Director of the Borrower, which notice shall be given not later than
ten (10) Business Days prior to the date such appointment or election would be
effective (except when such election or appointment is necessary to fill a
vacancy caused by the death, disability, or incapacity of the existing
Independent Director, or the failure of such Independent Director to satisfy the
criteria for an Independent Director set forth in this clause (c), in which case
the Borrower shall provide written notice of such election or appointment within
one (1) Business Day) and (B) with any such written notice, certify to the
Administrative Agent that the Independent Director satisfies the criteria for an
Independent Director set forth in this clause (c).
The Borrower’s Limited Liability Company Agreement shall provide that: (A) the
Borrower’s board of directors shall not approve, or take any other action to
cause the filing of, a voluntary bankruptcy petition with respect to the
Borrower unless the Independent Director shall approve the taking of such action
in writing before the taking of such action and (B) such provision and each
other provision requiring an Independent Director cannot be amended without the
prior written consent of the Independent Director.
The Independent Director shall not at any time serve as a trustee in bankruptcy
for the Borrower, the Parent, the Performance Guarantor, any Originator, the
Servicer or any of their respective Affiliates.
(d)    Organizational Documents. The Borrower shall maintain its organizational
documents in conformity with this Agreement, such that it does not amend,
restate, supplement or otherwise modify its ability to comply with the terms and
provisions of any of the Transaction Documents, including, without limitation,
Section 8.01(p).
(e)    Conduct of Business. The Borrower shall conduct its affairs strictly in
accordance with its organizational documents and observe all necessary,
appropriate and customary company formalities, including, but not limited to,
holding all regular and special members’ and board of directors’ meetings
appropriate to authorize all company action, keeping separate and accurate
minutes of its meetings, passing all resolutions or consents necessary to
authorize actions taken or to be taken, and maintaining accurate and separate
books, records and accounts, including, but not limited to, payroll and
intercompany transaction accounts.
(f)    Compensation. Any employee, consultant or agent of the Borrower will be
compensated from the Borrower’s funds for services provided to the Borrower, and
to the extent that Borrower shares the same officers or other employees as the
Servicer (or any other Affiliate

73
 

 

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

thereof), the salaries and expenses relating to providing benefits to such
officers and other employees shall be fairly allocated among such entities, and
each such entity shall bear its fair share of the salary and benefit costs
associated with such common officers and employees. The Borrower will not engage
any agents other than its attorneys, auditors and other professionals, and a
servicer and any other agent contemplated by the Transaction Documents for the
Receivables Pool, which servicer will be fully compensated for its services by
payment of the Servicing Fee.
(g)    Servicing and Costs. The Borrower will contract with the Servicer to
perform for the Borrower all operations required on a daily basis to service the
Receivables Pool. The Borrower will not incur any indirect or overhead expenses
for items shared with the Servicer (or any other Affiliate thereof) that are not
reflected in the Servicing Fee. To the extent, if any, that the Borrower (or any
Affiliate thereof) shares items of expenses not reflected in the Servicing Fee,
such as legal, auditing and other professional services, such expenses will be
allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual use
or the value of services rendered.
(h)    Operating Expenses. The Borrower’s operating expenses will not be paid by
the Servicer, the Parent, the Performance Guarantor, any Originator or any
Affiliate thereof.
(i)    Stationery. The Borrower will have its own separate stationery.
(j)    Books and Records. The Borrower’s books and records will be maintained
separately from those of the Servicer, the Parent, the Performance Guarantor,
the Originators and any of their Affiliates and in a manner such that it will
not be difficult or costly to segregate, ascertain or otherwise identify the
assets and liabilities of the Borrower.
(k)    Disclosure of Transactions. All financial statements of the Servicer, the
Parent, the Performance Guarantor, the Originators or any Affiliate thereof that
are consolidated to include the Borrower will disclose that (i) the Borrower’s
sole business consists of the purchase or acceptance through capital
contributions of the Receivables and Related Rights from the Originators and the
subsequent retransfer of or granting of a security interest in such Receivables
and Related Rights to the Administrative Agent pursuant to this Agreement, (ii)
the Borrower is a separate legal entity with its own separate creditors who will
be entitled, upon its liquidation, to be satisfied out of the Borrower’s assets
prior to any assets or value in the Borrower becoming available to the
Borrower’s equity holders and (iii) the assets of the Borrower are not available
to pay creditors of the Servicer, the Parent, the Performance Guarantor, the
Originators or any Affiliate thereof.
(l)    Segregation of Assets. The Borrower’s assets will be maintained in a
manner that facilitates their identification and segregation from those of the
Servicer, the Parent, the Performance Guarantor, the Originators or any
Affiliates thereof.
(m)    Corporate Formalities. The Borrower will strictly observe limited
liability company formalities in its dealings with the Servicer, the Parent, the
Performance Guarantor, the Originators or any Affiliates thereof, and funds or
other assets of the Borrower will not be commingled with those of the Servicer,
the Parent, the Performance Guarantor, the Originators or any Affiliates
thereof, except as permitted by this Agreement. The Borrower shall not maintain

74
 

 

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

joint bank accounts or other depository accounts to which the Servicer, the
Parent, the Performance Guarantor, the Originators or any Affiliate thereof
(other than the Servicer solely in its capacity as such) has independent access.
The Borrower is not named, and has not entered into any agreement to be named,
directly or indirectly, as a direct or contingent beneficiary or loss payee on
any insurance policy with respect to any loss relating to the property of the
Servicer, the Parent, the Performance Guarantor, the Originators or any
Subsidiaries or other Affiliates thereof. The Borrower will pay to the
appropriate Affiliate the marginal increase or, in the absence of such increase,
the market amount of its portion of the premium payable with respect to any
insurance policy that covers the Borrower and such Affiliate.
(n)    Arm’s-Length Relationships. The Borrower will maintain arm’s-length
relationships with the Servicer, the Parent, the Performance Guarantor, the
Originators and any Affiliates thereof. Any Person that renders or otherwise
furnishes services to the Borrower will be compensated by the Borrower at market
rates for such services it renders or otherwise furnishes to the Borrower.
Neither the Borrower on the one hand, nor the Servicer, the Parent, the
Performance Guarantor, any Originator or any Affiliate thereof, on the other
hand, will be or will hold itself out to be responsible for the debts of the
other or the decisions or actions respecting the daily business and affairs of
the other. The Borrower, the Servicer, the Parent, the Performance Guarantor,
the Originators and their respective Affiliates will immediately correct any
known misrepresentation with respect to the foregoing, and they will not operate
or purport to operate as an integrated single economic unit with respect to each
other or in their dealing with any other entity.
(o)    Allocation of Overhead. To the extent that Borrower, on the one hand, and
the Servicer, the Parent, the Performance Guarantor, any Originator or any
Affiliate thereof, on the other hand, have offices in the same location, there
shall be a fair and appropriate allocation of overhead costs between them, and
the Borrower shall bear its fair share of such expenses, which may be paid
through the Servicing Fee or otherwise.
ARTICLE IX

ADMINISTRATION AND COLLECTION
OF RECEIVABLES
SECTION 9.01. Appointment of the Servicer.
(a)    The servicing, administering and collection of the Pool Receivables shall
be conducted by the Person so designated from time to time as the Servicer in
accordance with this Section 9.01. Until the Administrative Agent gives notice
to CMA (in accordance with this Section 9.01) of the designation of a new
Servicer, CMA is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Servicer pursuant to the terms hereof. Upon the
occurrence of an Event of Default, the Administrative Agent may (with the
consent of the Majority Lenders) and shall (at the direction of the Majority
Lenders) designate as Servicer any Person (including itself) to succeed CMA or
any successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof.

75
 

 

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

(b)    Upon the designation of a successor Servicer as set forth in clause (a)
above, CMA agrees that it will terminate its activities as Servicer hereunder in
a manner that the Administrative Agent reasonably determines will facilitate the
transition of the performance of such activities to the new Servicer, and CMA
shall cooperate with and assist such new Servicer. Such cooperation shall
include access to and transfer of records (including all Contracts) related to
Pool Receivables and use by the new Servicer of all licenses (or the obtaining
of new licenses), hardware or software necessary or reasonably desirable to
collect the Pool Receivables and the Related Security.
(c)    CMA acknowledges that, in making its decision to execute and deliver this
Agreement, the Administrative Agent and each Lender have relied on CMA’s
agreement to act as Servicer hereunder. Accordingly, CMA agrees that it will not
voluntarily resign as Servicer without the prior written consent of the
Administrative Agent and the Majority Lenders.
(d)    The Servicer may delegate its duties and obligations hereunder to any
subservicer (each a “Sub-Servicer”); provided, that, in each such delegation:
(i) such Sub-Servicer shall agree in writing to perform the delegated duties and
obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain liable for the performance of the duties and obligations so
delegated, (iii) the Borrower, the Administrative Agent and each Lender shall
have the right to look solely to the Servicer for performance, (iv) the terms of
any agreement with any Sub-Servicer shall provide that the Administrative Agent
may terminate such agreement upon the termination of the Servicer hereunder by
giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall provide appropriate notice to each such Sub-Servicer) and (v) if
such Sub-Servicer is not an Affiliate of the Parent, the Administrative Agent
and the Majority Lenders shall have consented in writing in advance to such
delegation.
SECTION 9.02. Duties of the Servicer.
(a)    The Servicer shall take or cause to be taken all such action as may be
necessary or reasonably advisable to service, administer and collect each Pool
Receivable from time to time, all in accordance with this Agreement and all
Applicable Laws, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy and consistent with the past practices of the
Originators. The Servicer shall set aside, for the accounts of each Credit
Party, the amount of Collections to which each such Credit Party is entitled in
accordance with Article IV hereof. The Servicer may, in accordance with the
Credit and Collection Policy and consistent with past practices of the
Originators, take such action, including modifications, waivers or
restructurings of Pool Receivables and related Contracts, as the Servicer may
reasonably determine to be appropriate to maximize Collections thereof or
reflect adjustments expressly permitted under the Credit and Collection Policy
or as expressly required under Applicable Laws or the applicable Contract,
including adjustment of any payment terms with respect to any Payment Upon Final
Delivery Contracts; provided, that for purposes of this Agreement: (i) such
action shall not, and shall not be deemed to, change the number of days such
Pool Receivable has remained unpaid from the date of the original due date
related to such Pool Receivable, (ii) such action shall not alter the status of
such Pool Receivable as a Delinquent Receivable or a Defaulted Receivable or
limit the rights of any Secured Party under this Agreement or any other
Transaction Document and (iii) if an Event

76
 

 

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

of Default has occurred and is continuing, the Servicer may take such action
only upon the prior written consent of the Administrative Agent. The Borrower
shall deliver to the Servicer and the Servicer shall hold for the benefit of the
Administrative Agent (individually and for the benefit of each Credit Party), in
accordance with their respective interests, all records and documents (including
computer tapes or disks) with respect to each Pool Receivable. Notwithstanding
anything to the contrary contained herein, if an Event of Default has occurred
and is continuing, the Administrative Agent may direct the Servicer to commence
or settle any legal action to enforce collection of any Pool Receivable that is
a Defaulted Receivable or to foreclose upon or repossess any Related Security
with respect to any such Defaulted Receivable.
(b)    The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Borrower the collections of any indebtedness
that is not a Pool Receivable, less, if CMA or an Affiliate thereof is not the
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
such Servicer of servicing, collecting and administering such collections. The
Servicer, if other than CMA or an Affiliate thereof, shall, as soon as
practicable upon demand, deliver to the Borrower all records in its possession
that evidence or relate to any indebtedness that is not a Pool Receivable, and
copies of records in its possession that evidence or relate to any indebtedness
that is a Pool Receivable.
(c)    The Servicer’s obligations hereunder shall terminate on the Final Payout
Date. Promptly following the Final Payout Date, the Servicer shall deliver to
the Borrower all books, records and related materials that the Borrower
previously provided to the Servicer, or that have been obtained by the Servicer,
in connection with this Agreement.
SECTION 9.03. Collection Account Arrangements. Prior to the Closing Date, the
Borrower shall have entered into Account Control Agreements with all of the
Collection Account Banks and delivered executed counterparts of each to the
Administrative Agent. Upon the occurrence and during the continuance of an
Unmatured Event of Default or an Event of Default, the Administrative Agent may
(with the consent of the Majority Lenders) and shall (upon the direction of the
Majority Lenders) at any time thereafter give notice to each Collection Account
Bank that the Administrative Agent is exercising its rights under the Account
Control Agreements to do any or all of the following: (a) to have the exclusive
dominion and control of the Collection Accounts transferred to the
Administrative Agent (for the benefit of the Secured Parties) and to exercise
exclusive dominion and control over the funds deposited therein (for the benefit
of the Secured Parties), (b) to have the proceeds that are sent to the
respective Collection Accounts redirected pursuant to the Administrative Agent’s
instructions rather than deposited in the applicable Collection Account and (c)
to take any or all other actions permitted under the applicable Account Control
Agreement. The Borrower hereby agrees that if the Administrative Agent at any
time takes any action set forth in the preceding sentence, the Administrative
Agent shall have exclusive control (for the benefit of the Secured Parties) of
the proceeds (including Collections) of all Pool Receivables and the Borrower
hereby further agrees to take any other action that the Administrative Agent may
reasonably request to transfer such control. Any proceeds of Pool Receivables
received by the Borrower or the Servicer thereafter shall be sent immediately
to, or as otherwise instructed by, the Administrative Agent.
SECTION 9.04. Enforcement Rights.

77
 

 

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

(a)    At any time following the occurrence and during the continuation of an
Event of Default:
(i)    the Administrative Agent (at the Borrower’s expense) may direct the
Obligors that payment of all amounts payable under any Pool Receivable is to be
made directly to the Administrative Agent or its designee;
(ii)    the Administrative Agent may instruct the Borrower or the Servicer to
give notice of the Secured Parties’ interest in Pool Receivables to each
Obligor, which notice shall direct that payments be made directly to the
Administrative Agent or its designee (on behalf of the Secured Parties), and the
Borrower or the Servicer, as the case may be, shall give such notice at the
expense of the Borrower or the Servicer, as the case may be; provided, that if
the Borrower or the Servicer, as the case may be, fails to so notify each
Obligor within two (2) Business Days following instruction by the Administrative
Agent, the Administrative Agent (at the Borrower’s or the Servicer’s, as the
case may be, expense) may so notify the Obligors;
(iii)    the Administrative Agent may request the Servicer to, and upon such
request the Servicer shall: (A) assemble all of the records necessary or
desirable to collect the Pool Receivables and the Related Security, and transfer
or license to a successor Servicer the use of all software necessary or
desirable to collect the Pool Receivables and the Related Security, and make the
same available to the Administrative Agent or its designee (for the benefit of
the Secured Parties) at a place selected by the Administrative Agent and (B)
segregate all cash, checks and other instruments received by it from time to
time constituting Collections in a manner reasonably acceptable to the
Administrative Agent and, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer, to the
Administrative Agent or its designee;
(iv)    the Administrative Agent may notify the Collection Account Banks that
the Borrower and the Servicer will no longer have any access to the Collection
Accounts;
(v)    the Administrative Agent may (or, at the direction of the Majority
Lenders shall) replace the Person then acting as Servicer; and
(vi)    the Administrative Agent may collect any amounts due from an Originator
under the Purchase and Sale Agreement or the Performance Guarantor under the
Performance Guaranty.
For the avoidance of doubt, the foregoing rights and remedies of the
Administrative Agent upon an Event of Default are in addition to and not
exclusive of the rights and remedies contained herein and under the other
Transaction Documents.
(b)    The Borrower hereby authorizes the Administrative Agent (on behalf of the
Secured Parties), and irrevocably appoints the Administrative Agent as its
attorney-in-fact with full power of substitution and with full authority in the
place and stead of the Borrower, which appointment is coupled with an interest,
to take any and all steps in the name of the Borrower and

78
 

 

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

on behalf of the Borrower necessary or desirable, in the reasonable
determination of the Administrative Agent, after the occurrence and during the
continuation of an Event of Default, to collect any and all amounts or portions
thereof due under any and all Collateral, including endorsing the name of the
Borrower on checks and other instruments representing Collections and enforcing
such Collateral. Notwithstanding anything to the contrary contained in this
subsection, none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence shall subject such attorney-in-fact to any liability if
any action taken by it shall prove to be inadequate or invalid, nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever.
(c)    The Servicer hereby authorizes the Administrative Agent (on behalf of the
Secured Parties), and irrevocably appoints the Administrative Agent as its
attorney-in-fact with full power of substitution and with full authority in the
place and stead of the Servicer, which appointment is coupled with an interest,
to take any and all steps in the name of the Servicer and on behalf of the
Servicer necessary or desirable, in the reasonable determination of the
Administrative Agent, after the occurrence and during the continuation of an
Event of Default, to collect any and all amounts or portions thereof due under
any and all Collateral, including endorsing the name of the Servicer on checks
and other instruments representing Collections and enforcing such Collateral.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.
SECTION 9.05. Responsibilities of the Borrower.
(a)    Anything herein to the contrary notwithstanding, the Borrower shall: (i)
perform all of its obligations, if any, under the Contracts related to the Pool
Receivables to the same extent as if interests in such Pool Receivables had not
been transferred hereunder, and the exercise by the Administrative Agent, or any
other Credit Party of their respective rights hereunder shall not relieve the
Borrower from such obligations and (ii) pay when due any taxes, including any
sales taxes payable in connection with the Pool Receivables and their creation
and satisfaction. None of the Credit Parties shall have any obligation or
liability with respect to any Collateral, nor shall any of them be obligated to
perform any of the obligations of the Borrower, the Servicer or any Originator
thereunder.
(b)    CMA hereby irrevocably agrees that if at any time it shall cease to be
the Servicer hereunder, it shall act (if the then-current Servicer so requests)
as the data-processing agent of the Servicer and, in such capacity, CMA shall
conduct the data-processing functions of the administration of the Receivables
and the Collections thereon in substantially the same way that CMA conducted
such data-processing functions while it acted as the Servicer. In connection
with any such processing functions, the Borrower shall pay to CMA its reasonable
out-of-pocket costs and expenses from the Borrower’s own funds (subject to the
priority of payments set forth in Section 4.01).
SECTION 9.06. Servicing Fee.

79
 

 

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

(a)    Subject to clause (b) below, the Borrower shall pay the Servicer a fee
(the “Servicing Fee”) equal to 1.00% per annum (the “Servicing Fee Rate”) of the
daily average aggregate Outstanding Balance of the Pool Receivables. Accrued
Servicing Fees shall be payable from Collections to the extent of available
funds in accordance with Section 4.01.
(b)    If the Servicer ceases to be CMA or an Affiliate thereof, the Servicing
Fee shall be the greater of: (i) the amount calculated pursuant to clause (a)
above and (ii) an alternative amount specified by the successor Servicer not to
exceed 110% of the aggregate reasonable costs and expenses incurred by such
successor Servicer in connection with the performance of its obligations as
Servicer hereunder.
ARTICLE X

EVENTS OF DEFAULT
SECTION 10.01. Events of Default. If any of the following events (each an “Event
of Default”) shall occur:
(a)    (i) the Borrower, any Originator, the Performance Guarantor or the
Servicer shall fail to perform or observe any term, covenant or agreement under
this Agreement or any other Transaction Document (other than any such failure
which would constitute an Event of Default under clause (ii) or (iii) of this
paragraph (a)), and such failure, solely to the extent capable of cure, shall
continue for thirty (30) days after the earlier of the date an officer of the
Borrower, any Originator, the Performance Guarantor or the Servicer becomes
aware of such default or receipt by the Borrower of notice of such default from
the Administrative Agent or any Lender, (ii) the Borrower, any Originator, the
Performance Guarantor or the Servicer shall fail to make when due (x) any
payment or deposit to be made by it under this Agreement or any other
Transaction Document and such failure shall continue unremedied for two (2)
Business Days or (iii) CMA shall resign as Servicer, and no successor Servicer
reasonably satisfactory to the Administrative Agent shall have been appointed;
(b)    any representation or warranty made or deemed made by the Borrower, any
Originator, the Performance Guarantor or the Servicer (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 Borrower, any
Originator, the Performance Guarantor or the Servicer 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;
(c)    the Borrower or the Servicer shall fail to deliver an Information Package
or an Interim Report pursuant to this Agreement when due, and such failure shall
remain unremedied for two (2) Business Days;
(d)    this Agreement or any security interest granted pursuant to this
Agreement or any other Transaction Document shall for any reason cease to
create, or for any reason cease to be, a valid and enforceable first priority
perfected security interest in favor of the Administrative Agent with respect to
the Collateral, free and clear of any Adverse Claim;

80
 

 

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

(e)    the Borrower, any Originator, the Performance Guarantor or the Servicer
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 Insolvency Proceeding shall be
instituted by or against the Borrower, any Originator, the Performance Guarantor
or the Servicer and, in the case of any such proceeding instituted against such
Person (but not instituted by such Person), either such proceeding shall remain
undismissed or unstayed for a period of sixty (60) consecutive days, or any of
the actions sought in such proceeding (including the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall
occur; or the Borrower, any Originator, the Performance Guarantor or the
Servicer shall take any corporate or organizational action to authorize any of
the actions set forth above in this paragraph;
(f)    (i) the average for three consecutive Fiscal Months of: (A) the Default
Ratio shall exceed 4.0%, (B) the Delinquency Ratio shall exceed 10.0% or (C) the
Dilution Ratio shall exceed 5.5% or (ii) the Days’ Sales Outstanding shall
exceed 70 days;
(g)    a Change in Control shall occur;
(h)    a Borrowing Base Deficit shall occur, and shall not have been cured
within two (2) Business Days;
(i)    (i) the Borrower shall fail to pay any principal of or premium or
interest on any of its Debt when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement, mortgage, indenture or instrument relating to such Debt
(whether or not such failure shall have been waived under the related
agreement); (ii) any Originator, the Performance Guarantor or the Servicer, or
any of their respective Subsidiaries, individually or in the aggregate, shall
fail to pay any principal of or premium or interest on any of its Debt that is
outstanding in a principal amount of at least $40,000,000 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, mortgage,
indenture or instrument relating to such Debt (whether or not such failure shall
have been waived under the related agreement); (iii) any other event shall occur
or condition shall exist under any agreement, mortgage, indenture or instrument
relating to any such Debt (as referred to in clause (i) or (ii) of this
paragraph and shall continue after the applicable grace period, if any,
specified in such agreement, mortgage, indenture or instrument (whether or not
such failure shall have been waived under the related agreement), if the effect
of such event or condition is to give the applicable debtholders the right
(whether acted upon or not) to accelerate the maturity of such Debt (as referred
to in clause (i) or (ii) of this paragraph) or to terminate the commitment of
any lender thereunder, or (iv) any such Debt (as referred to in clause (i) or
(ii) of this paragraph) 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 or the commitment of any lender thereunder
terminated, in each case before the stated maturity thereof;

81
 

 

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

(j)    any “Event of Default” (as defined in the Credit Agreement) shall occur
and be continuing under the Credit Agreement (whether or not such event shall
have been waived thereunder);
(k)    [reserved];
(l)    the Borrower shall fail (x) at any time (other than for ten (10) Business
Days following notice of the death or resignation of any Independent Director)
to have an Independent Director who satisfies each requirement and qualification
specified in Section 8.03(c) of this Agreement for Independent Directors, on the
Borrower’s board of directors or (y) to timely notify the Administrative Agent
of any replacement or appointment of any director that is to serve as an
Independent Director on the Borrower’s board of directors as required pursuant
to Section 8.03(c) of this Agreement;
(m)    [Reserved];
(n)    either (i) the Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Code with regard to any assets of the Borrower,
any Originator, the Servicer or the Parent or (ii) the PBGC shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068 of
ERISA with regard to any of the assets of the Borrower, the Servicer, any
Originator or the Parent;
(o)    (i) the occurrence of a Reportable Event; (ii) the adoption of an
amendment to a Pension Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Code; (iii) the existence with respect to
any Multiemployer Plan of an “accumulated funding deficiency” (as defined in
Section 431 of the Code or Section 304 of ERISA), whether or not waived; (iv)
the failure to satisfy the minimum funding standard under Section 412 of the
Code with respect to any Pension Plan (v) the incurrence of any liability under
Title IV of ERISA with respect to the termination of any Pension Plan or the
withdrawal or partial withdrawal of any of the Borrower, any Originator, the
Servicer, the Parent, the Performance Guarantor or any of their respective ERISA
Affiliates from any Multiemployer Plan; (vi) the receipt by any of the Borrower,
any Originator, the Servicer, the Parent, the Performance Guarantor or any of
their respective ERISA Affiliates from the PBGC or any plan administrator of any
notice relating to the intention to terminate any Pension Plan or Multiemployer
Plan or to appoint a trustee to administer any Pension Plan or Multiemployer
Plan; (vii) the receipt by the Borrower, any Originator, the Servicer, the
Parent, the Performance Guarantor or any of their respective ERISA Affiliates of
any notice concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (viii) the occurrence
of a prohibited transaction with respect to any of the Borrower, any Originator,
the Servicer, the Parent, the Performance Guarantor or any of their respective
ERISA Affiliates (pursuant to Section 4975 of the Code); or (ix) the occurrence
or existence of any other similar event or condition with respect to a Pension
Plan or a Multiemployer Plan, with respect to each of clause (i) through (ix),
either individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect;
(p)    [Reserved];

82
 

 

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

(q)    a Purchase and Sale Termination Event shall occur under the Purchase and
Sale Agreement;
(r)    the Borrower shall (i) be required to register as an “investment company”
within the meaning of the Investment Company Act or (ii) become a “covered fund”
within the meaning of the Volcker Rule;
(s)    any material provision of this Agreement or any other Transaction
Document shall cease to be in full force and effect or any of the Borrower, any
Originator, the Performance Guarantor or the Servicer (or any of their
respective Affiliates) shall so state in writing;
(t)    the Parent shall fail to satisfy the financial covenant set forth in
Section 6.13(a) of the Credit Agreement as in effect on the Closing Date and
without giving effect to any amendment or modification thereto or any
termination thereof. For purposes of this clause (t) terms used and covenant
levels provided for in such section (including all defined terms used within
such terms) shall have the respective meaning assigned to such terms and the
covenant levels provided for, in each case, in the Credit Agreement as in effect
on the Closing Date and without giving effect to any amendment or modification
thereto or any termination thereof; or
(u)    one or more judgments or decrees shall be entered against the Borrower,
any Originator, the Performance Guarantor or the Servicer, or any Affiliate of
any of the foregoing involving in the aggregate a liability (not paid or to the
extent not covered by a reputable and solvent insurance company) and such
judgments and decrees either shall be final and non-appealable or shall not be
vacated, discharged or stayed or bonded pending appeal for any period of 60
consecutive days, and the aggregate amount of all such judgments equals or
exceeds $40,000,000 (or solely with respect to the Borrower, $15,775);
then, and in any such event, the Administrative Agent may (or, at the direction
of the Majority Lenders shall) by notice to the Borrower (x) declare the
Termination Date to have occurred (in which case the Termination Date shall be
deemed to have occurred), (y) declare the Final Maturity Date to have occurred
(in which case the Final Maturity Date shall be deemed to have occurred) and (z)
declare the Aggregate Loan Amount and all other Borrower Obligations to be
immediately due and payable (in which case the Aggregate Loan Amount and all
other Borrower Obligations shall be immediately due and payable); provided that,
automatically upon the occurrence of any event (without any requirement for the
giving of notice) described in subsection (e) of this Section 10.01 with respect
to the Borrower, the Termination Date shall occur and the Aggregate Loan Amount
and all other Borrower Obligations shall be immediately due and payable. Upon
any such declaration or designation or upon such automatic termination, the
Administrative Agent and the other Secured Parties shall have, in addition to
the rights and remedies which they may have under this Agreement and the other
Transaction Documents, all other rights and remedies provided after default
under the UCC and under other Applicable Law, which rights and remedies shall be
cumulative. Any proceeds from liquidation of the Collateral shall be applied in
the order of priority set forth in Section 4.01.
ARTICLE XI

THE ADMINISTRATIVE AGENT

83
 

 

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

SECTION 11.01. Authorization and Action. Each Credit Party hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The Administrative Agent shall not have any
duties other than those expressly set forth in the Transaction Documents, and no
implied obligations or liabilities shall be read into any Transaction Document,
or otherwise exist, against the Administrative Agent. The Administrative Agent
does not assume, nor shall it be deemed to have assumed, any obligation to, or
relationship of trust or agency with, the Borrower or any Affiliate thereof or
any Credit Party except for any obligations expressly set forth herein.
Notwithstanding any provision of this Agreement or any other Transaction
Document, in no event shall the Administrative Agent ever be required to take
any action which exposes the Administrative Agent to personal liability or which
is contrary to any provision of any Transaction Document or Applicable Law.
SECTION 11.02. Administrative Agent’s Reliance, Etc. Neither the Administrative
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 Administrative
Agent under or in connection with this Agreement (including, without limitation,
the Administrative Agent’s servicing, administering or collecting Pool
Receivables in the event it replaces the Servicer in such capacity pursuant to
Section 9.01), in the absence of its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Administrative
Agent: (a) may consult with legal counsel (including counsel for any Credit
Party or the Servicer), 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; (b) makes no warranty or representation to any Credit
Party (whether written or oral) and shall not be responsible to any Credit Party
for any statements, warranties or representations (whether written or oral) made
by any other party in or in connection with this Agreement; (c) 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 any
Credit Party or to inspect the property (including the books and records) of any
Credit Party; (d) shall not be responsible to any Credit Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other instrument or document furnished pursuant hereto;
and (e) shall be entitled to rely, and shall be fully protected in so relying,
upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile) believed by it to be genuine
and signed or sent by the proper party or parties.
SECTION 11.03. Administrative Agent and Affiliates. With respect to any Credit
Extension or interests therein owned by any Credit Party that is also the
Administrative Agent, such Credit Party shall have the same rights and powers
under this Agreement as any other Credit Party and may exercise the same as
though it were not the Administrative Agent. The Administrative Agent and any of
its Affiliates may generally engage in any kind of business with the Borrower or
any Affiliate thereof and any Person who may do business with or own securities
of the Borrower or any Affiliate thereof, all as if the Administrative Agent
were not the Administrative Agent hereunder and without any duty to account
therefor to any other Secured Party.

84
 

 

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

SECTION 11.04. Indemnification of Administrative Agent. Each Lender agrees to
indemnify the Administrative Agent (to the extent not reimbursed by the Borrower
or any Affiliate thereof), ratably according to the respective Percentage of
such Lender, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or any other Transaction Document or any action taken or
omitted by the Administrative Agent under this Agreement or any other
Transaction Document; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent’s gross negligence or willful misconduct.
SECTION 11.05. Delegation of Duties. The Administrative Agent may execute any of
its duties through agents or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 11.06. Action or Inaction by Administrative Agent. The Administrative
Agent shall in all cases be fully justified in failing or refusing to take
action under any Transaction Document unless it shall first receive such advice
or concurrence of the Majority Lenders and assurance of its indemnification by
the Lenders, as it deems appropriate. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Transaction Document in accordance with a request or at
the direction of the Majority Lenders, and such request or direction and any
action taken or failure to act pursuant thereto shall be binding upon all Credit
Parties. The Credit Parties and the Administrative Agent agree that unless any
action to be taken by the Administrative Agent under a Transaction Document (i)
specifically requires the advice or concurrence of all Lenders or (ii) may be
taken by the Administrative Agent alone or without any advice or concurrence of
any Lender, then the Administrative Agent may take action based upon the advice
or concurrence of the Majority Lenders.
SECTION 11.07. Notice of Events of Default; Action by Administrative Agent. The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Unmatured Event of Default or Event of Default unless the
Administrative Agent has received notice from any Credit Party or the Borrower
stating that an Unmatured Event of Default or Event of Default has occurred
hereunder and describing such Unmatured Event of Default or Event of Default. If
the Administrative Agent receives such a notice, it shall promptly give notice
thereof to each Lender. The Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, concerning an
Unmatured Event of Default or Event of Default or any other matter hereunder as
the Administrative Agent deems advisable and in the best interests of the
Secured Parties.
SECTION 11.08. Non-Reliance on Administrative Agent and Other Parties. Each
Credit Party expressly acknowledges that neither the Administrative Agent nor
any of its directors, officers, agents or employees has made any representations
or warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of the Borrower or any

85
 

 

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

Affiliate thereof, shall be deemed to constitute any representation or warranty
by the Administrative Agent. Each Credit Party represents and warrants to the
Administrative Agent that, independently and without reliance upon the
Administrative Agent or any other Credit Party and based on such documents and
information as it has deemed appropriate, it has made and will continue to make
its own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Borrower,
each Originator, the Performance Guarantor or the Servicer and the Pool
Receivables and its own decision to enter into this Agreement and to take, or
omit, action under any Transaction Document. Except for items expressly required
to be delivered under any Transaction Document by the Administrative Agent to
any Credit Party, the Administrative Agent shall not have any duty or
responsibility to provide any Credit Party with any information concerning the
Borrower, any Originator, the Performance Guarantor or the Servicer that comes
into the possession of the Administrative Agent or any of its directors,
officers, agents, employees, attorneys-in-fact or Affiliates.
SECTION 11.09. Successor Administrative Agent.
(a)    The Administrative Agent may, upon at least thirty (30) days’ notice to
the Borrower, each Servicer and each Lender, resign as Administrative Agent.
Except as provided below, such resignation shall not become effective until a
successor Administrative Agent is appointed by the Majority Lenders as a
successor Administrative Agent and has accepted such appointment. If no
successor Administrative Agent shall have been so appointed by the Majority
Lenders, within thirty (30) days after the departing Administrative Agent’s
giving of notice of resignation, the departing Administrative Agent may, on
behalf of the Secured Parties, appoint a successor Administrative Agent as
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders within sixty (60) days after the
departing Administrative Agent’s giving of notice of resignation, the departing
Administrative Agent may, on behalf of the Secured Parties, petition a court of
competent jurisdiction to appoint a successor Administrative Agent.
(b)    Upon such acceptance of its appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor Administrative Agent shall
succeed to and become vested with all the rights and duties of the resigning
Administrative Agent, and the resigning Administrative Agent shall be discharged
from its duties and obligations under the Transaction Documents. After any
resigning Administrative Agent’s resignation hereunder, the provisions of this
Article XI and Article XIII shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Agent.
SECTION 11.10. Structuring Agent. Each of the parties hereto hereby acknowledges
and agrees that the Structuring Agent shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement, other than
the Structuring Agent’s right to receive fees pursuant to Section 2.03. Each
Credit Party acknowledges that it has not relied, and will not rely, on the
Structuring Agent in deciding to enter into this Agreement and to take, or omit
to take, any action under any Transaction Document.

86
 

 

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

ARTICLE XII

[RESERVED]
ARTICLE XIII

INDEMNIFICATION
SECTION 13.01. Indemnities by the Borrower.
(a)    Without limiting any other rights that the Administrative Agent, the
Credit Parties, the Affected Persons and their respective assigns, officers,
directors, agents and employees (each, a “Borrower Indemnified Party”) may have
hereunder or under Applicable Law, the Borrower hereby agrees to indemnify each
Borrower Indemnified Party from and against any and all claims, losses and
liabilities (including reasonable and documented Attorney Costs) (all of the
foregoing being collectively referred to as “Borrower Indemnified Amounts”)
arising out of or resulting from this Agreement or any other Transaction
Document or the use of proceeds of the Credit Extensions or the security
interest in respect of any Pool Receivable or any other Collateral; excluding,
however, (a) Borrower Indemnified Amounts to the extent a final non-appealable
judgment of a court of competent jurisdiction holds that such Borrower
Indemnified Amounts resulted solely from the gross negligence or willful
misconduct by the Borrower Indemnified Party seeking indemnification and (b)
Taxes that are covered by Section 5.03 (other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim). Without limiting
or being limited by the foregoing, the Borrower shall pay on demand (it being
understood that if any portion of such payment obligation is made from
Collections, such payment will be made at the time and in the order of priority
set forth in Section 4.01), to each Borrower Indemnified Party any and all
amounts necessary to indemnify such Borrower Indemnified Party from and against
any and all Borrower Indemnified Amounts relating to or resulting from any of
the following (but excluding Borrower Indemnified Amounts and Taxes described in
clauses (a) and (b) above):
(i)    any Pool Receivable which the Borrower or the Servicer includes as an
Eligible Receivable as part of the Net Receivables Pool Balance but which is not
an Eligible Receivable at such time;
(ii)    any representation, warranty or statement made or deemed made by the
Borrower (or any of its respective officers) under or in connection with this
Agreement, any of the other Transaction Documents, any Information Package, any
Interim Report or any other information or report delivered by or on behalf of
the Borrower pursuant hereto which shall have been untrue or incorrect when made
or deemed made;
(iii)    the failure by the Borrower to comply with any Applicable Law with
respect to any Pool Receivable or the related Contract; or the failure of any
Pool Receivable or the related Contract to conform to any such Applicable Law;

87
 

 

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

(iv)    the failure to vest in the Administrative Agent a first priority
perfected security interest in all or any portion of the Collateral, in each
case free and clear of any Adverse Claim;
(v)    the failure to have filed, or any delay in filing, financing statements
(including as-extracted collateral filings), financing statement amendments,
continuation statements or other similar instruments or documents under the UCC
of any applicable jurisdiction or other Applicable Laws with respect to any Pool
Receivable and the other Collateral and Collections in respect thereof, whether
at the time of any Credit Extension or at any subsequent time;
(vi)    any dispute, claim or defense (other than discharge in bankruptcy) of an
Obligor to the payment of any Pool Receivable (including, without limitation, a
defense based on such Pool Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from or relating to
collection activities with respect to such Pool Receivable;
(vii)    any failure of the Borrower to perform any of its duties or obligations
in accordance with the provisions hereof and of each other Transaction Document
related to Pool Receivables or to timely and fully comply with the Credit and
Collection Policy in regard to each Pool Receivable;
(viii)    any products liability, environmental or other claim arising out of or
in connection with any Pool Receivable or other merchandise, goods or services
which are the subject of or related to any Pool Receivable;
(ix)    the commingling of Collections of Pool Receivables at any time with
other funds;
(x)    any investigation, litigation or proceeding (actual or threatened)
related to this Agreement or any other Transaction Document or the use of
proceeds of any Credit Extensions or in respect of any Pool Receivable or other
Collateral or any related Contract;
(xi)    any failure of the Borrower to comply with its covenants, obligations
and agreements contained in this Agreement or any other Transaction Document;
(xii)    any setoff with respect to any Pool Receivable;
(xiii)    any claim brought by any Person other than a Borrower Indemnified
Party arising from any activity by the Borrower or any Affiliate of the Borrower
in servicing, administering or collecting any Pool Receivable;
(xiv)    the failure by the Borrower to pay when due any Taxes, including,
without limitation, sales, excise or personal property taxes;

88
 

 

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

(xv)    any failure of a Collection Account Bank to comply with the terms of the
applicable Account Control Agreement, the termination by a Collection Account
Bank of any Account Control Agreement or any amounts (including in respect of an
indemnity) payable by the Administrative Agent to a Collection Account Bank
under any Account Control Agreement;
(xvi)    any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Pool Receivable
(including, without limitation, a defense based on such Pool Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of goods or the rendering of services related to such
Pool Receivable or the furnishing or failure to furnish any such goods or
services or other similar claim or defense not arising from the financial
inability of any Obligor to pay undisputed indebtedness;
(xvii)    any action taken by the Administrative Agent as attorney-in-fact for
the Borrower, any Originator or the Servicer pursuant to this Agreement or any
other Transaction Document;
(xviii)    the failure or delay to provide any Obligor with an invoice or other
evidence of indebtedness;
(xix)    the maintenance of any Linked Account with respect to any Collection
Account or the debiting against any Collection Account of amounts as a result of
any Settlement Item that originated in any Linked Account or any other account
other than a Collection Account;
(xx)    the failure or delay to make any filings under the Federal Assignment of
Claims Act (or any other similar Applicable Law, including any state or
municipal law or regulation) with respect to Receivables from Obligors that are
Governmental Entities (whether or not such filing is requested by the
Administrative Agent);
(xxi)    the use of proceeds of any Credit Extension; or
(xxii)    any reduction in Loan Amount as a result of the distribution of
Collections if all or a portion of such distributions shall thereafter be
rescinded or otherwise must be returned for any reason.
(b)    Notwithstanding anything to the contrary in this Agreement, solely for
purposes of the Borrower’s indemnification obligations in clauses (ii), (iii),
(vii) and (xi) of this Article XIII, any representation, warranty or covenant
qualified by the occurrence or non-occurrence of a material adverse effect or
similar concepts of materiality shall be deemed to be not so qualified.
(c)    If for any reason the foregoing indemnification is unavailable to any
Borrower Indemnified Party or insufficient to hold it harmless, then the
Borrower shall contribute to such Borrower Indemnified Party the amount paid or
payable by such Borrower Indemnified

89
 

 

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

Party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect the relative economic interests of the Borrower and
its Affiliates on the one hand and such Borrower Indemnified Party on the other
hand in the matters contemplated by this Agreement as well as the relative fault
of the Borrower and its Affiliates and such Borrower Indemnified Party with
respect to such loss, claim, damage or liability and any other relevant
equitable considerations. The reimbursement, indemnity and contribution
obligations of the Borrower under this Section shall be in addition to any
liability which the Borrower may otherwise have, shall extend upon the same
terms and conditions to each Borrower Indemnified Party, and shall be binding
upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Borrower and the Borrower Indemnified Parties.
(d)    Any indemnification or contribution under this Section shall survive the
termination of this Agreement.
SECTION 13.02. Indemnification by the Servicer.
(a)    The Servicer hereby agrees to indemnify and hold harmless the Borrower,
the Administrative Agent, the Credit Parties, the Affected Persons and their
respective assigns, officers, directors, agents and employees (each, a “Servicer
Indemnified Party”), from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of activities of the Servicer pursuant to this Agreement
or any other Transaction Document, including any judgment, award, settlement,
reasonable and documented Attorney Costs and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim (all of the foregoing being collectively referred to as, “Servicer
Indemnified Amounts”); excluding (i) Servicer Indemnified Amounts to the extent
a final non-appealable judgment of a court of competent jurisdiction holds that
such Servicer Indemnified Amounts resulted solely from the gross negligence or
willful misconduct by the Servicer Indemnified Party seeking indemnification,
(ii) Taxes that are covered by Section 5.03 (other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim) and (iii) Servicer
Indemnified Amounts to the extent the same includes losses in respect of Pool
Receivables that are uncollectible solely on account of the insolvency,
bankruptcy, lack of creditworthiness or other financial inability to pay of the
related Obligor. Without limiting or being limited by the foregoing, the
Servicer shall pay on demand, to each Servicer Indemnified Party any and all
amounts necessary to indemnify such Servicer Indemnified Party from and against
any and all Servicer Indemnified Amounts relating to or resulting from any of
the following (but excluding Servicer Indemnified Amounts described in clauses
(i), (ii) and (iii) above):
(i)    any representation, warranty or statement made or deemed made by the
Servicer (or any of its respective officers) under or in connection with this
Agreement, any of the other Transaction Documents, any Information Package, any
Interim Report or any other information or report delivered by or on behalf of
the Servicer pursuant hereto which shall have been untrue or incorrect when made
or deemed made;
(ii)    the failure by the Servicer to comply with any Applicable Law with
respect to any Pool Receivable or the related Contract; or the failure of any
Pool Receivable or the related Contract to conform to any such Applicable Law;

90
 

 

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

(iii)    the commingling of Collections of Pool Receivables at any time with
other funds;
(iv)    any failure of a Collection Account Bank to comply with the terms of the
applicable Account Control Agreement, the termination by a Collection Account
Bank of any Account Control Agreement or any amounts (including in respect of an
indemnity) payable by the Administrative Agent to a Collection Account Bank
under any Account Control Agreement;
(v)    the failure or delay to provide any Obligor with an invoice or other
evidence of indebtedness;
(vi)    the maintenance of any Linked Account with respect to any Collection
Account or the debiting against any Collection Account of amounts as a result of
any Settlement Item that originated in any Linked Account or any other account
other than a Collection Account;
(vii)    the failure or delay to make any filings under the Federal Assignment
of Claims Act (or any other similar Applicable Law, including any state or
municipal law or regulation) with respect to Receivables from Obligors that are
Governmental Entities (whether or not such filing is requested by the
Administrative Agent); or
(viii)    any failure of the Servicer to comply with its covenants, obligations
and agreements contained in this Agreement or any other Transaction Document.
(b)    If for any reason the foregoing indemnification is unavailable to any
Servicer Indemnified Party or insufficient to hold it harmless, then the
Servicer shall contribute to the amount paid or payable by such Servicer
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative economic interests of the
Servicer and its Affiliates on the one hand and such Servicer Indemnified Party
on the other hand in the matters contemplated by this Agreement as well as the
relative fault of the Servicer and its Affiliates and such Servicer Indemnified
Party with respect to such loss, claim, damage or liability and any other
relevant equitable considerations. The reimbursement, indemnity and contribution
obligations of the Servicer under this Section shall be in addition to any
liability which the Servicer may otherwise have, shall extend upon the same
terms and conditions to Servicer Indemnified Party, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Servicer and the Servicer Indemnified Parties.
(c)    Any indemnification or contribution under this Section shall survive the
termination of this Agreement.
ARTICLE XIV

MISCELLANEOUS
SECTION 14.01. Amendments, Etc.

91
 

 

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

(a)    No failure on the part of any Credit Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. No amendment or waiver of
any provision of this Agreement or consent to any departure by any of the
Borrower or any Affiliate thereof shall be effective unless in a writing signed
by the Administrative Agent and the Majority Lenders (and, in the case of any
amendment, also signed by the Borrower), 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 (A) no amendment, waiver or
consent shall, unless in writing and signed by the Servicer, affect the rights
or duties of the Servicer under this Agreement; (B) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent and each
Lender:
(i)    change (directly or indirectly) the definitions of, Borrowing Base
Deficit, Defaulted Receivable, Delinquent Receivable, Eligible Receivable,
Facility Limit, Final Maturity Date, Net Receivables Pool Balance or Total
Reserves contained in this Agreement, or increase the then existing
Concentration Percentage or Special Concentration Limit for any Obligor or
change the calculation of the Borrowing Base;
(ii)    reduce the amount of any Loan Amount or Interest that is payable on
account of any Loan or with respect to any other Credit Extension or delay any
scheduled date for payment thereof;
(iii)    change any Event of Default;
(iv)    release all or a material portion of the Collateral from the
Administrative Agent’s security interest created hereunder;
(v)    release the Performance Guarantor from any of its obligations under the
Performance Guaranty or terminate the Performance Guaranty;
(vi)    change any of the provisions of this Section 14.01 or the definition of
“Majority Lenders”; or
(vii)    change the order of priority in which Collections are applied pursuant
to Section 4.01.
Notwithstanding the foregoing, (A) no amendment, waiver or consent shall
increase any Lender’s Commitment hereunder without the consent of such Lender
and (B) no amendment, waiver or consent shall reduce any Fees payable by the
Borrower to any Lender or delay the dates on which any such Fees are payable, in
either case, without the consent of such Lender.
SECTION 14.02. Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile and email communication) and faxed, emailed or delivered, to each
party hereto, at its address set forth under its name on Schedule III hereto or
at such other address, facsimile number or email address as shall be designated
by such party in a written notice to the other parties hereto. Notices and

92
 

 

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

communications by facsimile or email shall be effective when sent receipt
confirmed by electronic or other means (such as by the “return receipt
requested” function, as available, return electronic mail or other
acknowledgement), and notices and communications sent by other means shall be
effective when received.
SECTION 14.03. Assignability; Addition of Lenders.
(a)    Assignment by Lenders. Each Lender may assign to any Eligible Assignee or
to any other Lender all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and any Loan or
interests therein owned by it); provided, however that
(i)    except for an assignment by a Lender to either an Affiliate of such
Lender or any other Lender, each such assignment shall require the prior written
consent of the Borrower (such consent not to be unreasonably withheld,
conditioned or delayed; provided, however, that such consent shall not be
required if an Event of Default or an Unmatured Event of Default has occurred
and is continuing);
(ii)    each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement;
(iii)    the amount being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance Agreement with respect to such
assignment) shall in no event be less than the lesser of (x) $5,000,000 and (y)
all of the assigning Lender’s Commitment; and
(iv)    the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance Agreement.
Upon such execution, delivery, acceptance and recording from and after the
effective date specified in such Assignment and Acceptance Agreement, (x) the
assignee thereunder shall be a party to this Agreement, and to the extent that
rights and obligations under this Agreement have been assigned to it pursuant to
such Assignment and Acceptance Agreement, have the rights and obligations of a
Lender hereunder and (y) the assigning Lender shall, to the extent that rights
and obligations have been assigned by it pursuant to such Assignment and
Acceptance Agreement, relinquish such rights and be released from such
obligations under this Agreement (and, in the case of an Assignment and
Acceptance Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b)    Register. The Administrative Agent shall, acting solely for this purpose
as an agent of the Borrower, maintain at its address referred to on Schedule III
of this Agreement (or such other address of the Administrative Agent as the
Administrative Agent may notify the other parties hereto) 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 Lenders, the
Commitment of each Lender and the aggregate outstanding Loan Amount (and stated
interest) of the Loans of

93
 

 

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

each Lender from time to time (the “Register”). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Servicer, the Administrative Agent, the Lenders, and the other
Credit Parties shall treat each Person whose name is recorded in the Register
pursuant to the terms of this Agreement as a Lender under this Agreement for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Servicer, or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(c)    Procedure. Upon its receipt of an Assignment and Acceptance Agreement
executed and delivered by an assigning Lender and an Eligible Assignee or
assignee Lender, the Administrative Agent shall, if such Assignment and
Acceptance Agreement has been duly completed, (i) accept such Assignment and
Acceptance Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower and the Servicer.
(d)    Participations. Each Lender may sell participations to one or more
Eligible Assignees (each, a “Participant”) in or to all or a portion of its
rights and/or obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and the interests in the Loans owned by it);
provided, however, that
(i)    such Lender’s obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
and
(ii)    such Lender shall remain solely responsible to the other parties to this
Agreement for the performance of such obligations.
The Administrative Agent, the Lenders, the Borrower and the Servicer shall have
the right to continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement. The Borrower
agrees that each Participant shall be entitled to the benefits of Sections 5.01
and 5.03 (subject to the requirements and limitations therein, including the
requirements under Section 5.03(f) (it being understood that the documentation
required under Section 5.03(f) shall be delivered to the participating Lender))
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to clause (b) of this Section; provided that such
Participant shall not be entitled to receive any greater payment under Section
5.01 or 5.03, with respect to any participation, than its participating Lender
would have been entitled to receive, except to the extent such entitlement to
receive a greater payment results from a Change in Law that occurs after the
Participant acquired the applicable participation.
(e)    Participant Register. Each Lender that sells a participation shall,
acting solely for this purpose as a non-fiduciary agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under this Agreement (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
Commitments, Loans or its other obligations under any this Agreement) to any
Person except to the extent that such disclosure is necessary to establish that
such Commitment, Loan or other obligation is in registered form under Section
5f.103-1(c) of the United States Treasury Regulations. The entries in the
Participant Register shall be conclusive absent

94
 

 

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

manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.
(f)    Assignments by Administrative Agents. This Agreement and the rights and
obligations of the Administrative Agent herein shall be assignable by the
Administrative Agent or such Lender, and its successors and assigns; provided
that in the case of an assignment to a Person that is not an Affiliate of the
Administrative Agent a Lender, so long as no Event of Default or Unmatured Event
of Default has occurred and is continuing, such assignment shall require the
Borrower’s consent (not to be unreasonably withheld, conditioned or delayed).
(g)    Assignments by the Borrower or the Servicer. Neither the Borrower nor,
except as provided in Section 9.01, the Servicer may assign any of its
respective rights or obligations hereunder or any interest herein without the
prior written consent of the Administrative Agent and each Lender (such consent
to be provided or withheld in the sole discretion of such Person).
(h)    Addition of Lenders. The Borrower may, with written notice to the
Administrative Agent and each Lender, add additional Persons as Lenders or cause
an existing Lender to increase its Commitment; provided, however, that the
Commitment of any existing Lender may only be increased with the prior written
consent of such Lender. Each new Lender shall become a party hereto, by
executing and delivering to the Administrative Agent and the Borrower, an
assumption agreement (each, an “Assumption Agreement”) in the form of Exhibit D
hereto.
(i)    Pledge to a Federal Reserve Bank. Notwithstanding anything to the
contrary set forth herein, (i) any Lender or any of their respective Affiliates
may at any time pledge or grant a security interest in all or any portion of its
interest in, to and under this Agreement (including, without limitation, rights
to payment of any Loan Amount and Interest) and any other Transaction Document
to secure its obligations to a Federal Reserve Bank, without notice to or the
consent of the Borrower, the Servicer, any Affiliate thereof or any Credit
Party; provided, however, that that no such pledge shall relieve such assignor
of its obligations under this Agreement.
SECTION 14.04. Costs and Expenses. In addition to the rights of indemnification
granted under Section 13.01 hereof, the Borrower agrees to pay on demand all
reasonable and documented out-of-pocket costs and expenses in connection with
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Transaction Documents (together with all amendments,
restatements, supplements, consents and waivers, if any, from time to time
hereto and thereto), including, without limitation, (i) the reasonable and
documented Attorney Costs for the Administrative Agent and the other Credit
Parties and any of their respective Affiliates with respect thereto and with
respect to advising the Administrative Agent and the other Credit Parties and
their respective Affiliates as to their rights and remedies under this Agreement
and the other Transaction Documents and (ii) reasonable accountants’, auditors’
and consultants’ fees and expenses for the Administrative Agent and the other
Credit Parties and any of their respective Affiliates and the fees and charges
of any nationally recognized statistical rating agency incurred in connection
with the administration and maintenance of this Agreement or advising the
Administrative Agent or any other Credit Party as to their rights and remedies
under this Agreement

95
 

 

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

or as to any actual or reasonably claimed breach of this Agreement or any other
Transaction Document. In addition, the Borrower agrees to pay on demand all
reasonable and documented out-of-pocket costs and expenses (including reasonable
and documented Attorney Costs), of the Administrative Agent and the other Credit
Parties and their respective Affiliates, incurred in connection with the
enforcement of any of their respective rights or remedies under the provisions
of this Agreement and the other Transaction Documents.
SECTION 14.05. No Proceedings; Limitation on Payments.
(a)    Each of the Servicer, each Lender and each assignee of a Loan or any
interest therein, hereby covenants and agrees that it will not institute
against, or join any other Person in instituting against, the Borrower any
Insolvency Proceeding until one year and one day after the Final Payout Date;
provided, that the Administrative Agent may take any such action in its sole
discretion following the occurrence of an Event of Default. The provisions of
this Section 14.05 shall survive any termination of this Agreement.
SECTION 14.06. Confidentiality.
(a)    Each of the Borrower and the Servicer covenants and agrees to hold in
confidence, and not disclose to any Person, the terms of this Agreement or the
Fee Letter (including any fees payable in connection with this Agreement, the
Fee Letter or any other Transaction Document or the identity of the
Administrative Agent or any other Credit Party), except as the Administrative
Agent and each Lender may have consented to in writing prior to any proposed
disclosure; provided, however, that it may disclose such information (i) to its
Advisors and Representatives, (ii) to the extent such information has become
available to the public other than as a result of a disclosure by or through the
Borrower, the Servicer or their Advisors and Representatives or (iii) to the
extent it should be (A) required by Applicable Law, or in connection with any
legal or regulatory proceeding or (B) requested by any Governmental Authority to
disclose such information; provided, that, in the case of clause (iii) above,
the Borrower and the Servicer will use reasonable efforts to maintain
confidentiality and will (unless otherwise prohibited by Applicable Law) notify
the Administrative Agent and the affected Credit Party of its intention to make
any such disclosure prior to making such disclosure. Each of the Borrower and
the Servicer agrees to be responsible for any breach of this Section by its
Representatives and Advisors and agrees that its Representatives and Advisors
will be advised by it of the confidential nature of such information and shall
agree to comply with this Section. Notwithstanding the foregoing, it is
expressly agreed that each of the Borrower, the Servicer and their respective
Affiliates may publish a press release or otherwise publicly announce the
existence and principal amount of the Commitments under this Agreement and the
transactions contemplated hereby; provided that the Administrative Agent shall
be provided a reasonable opportunity to review such press release or other
public announcement prior to its release and provide comment thereon; and
provided, further, that no such press release shall name or otherwise identify
the Administrative Agent, any other Credit Party or any of their respective
Affiliates without such Person’s prior written consent (such consent not to be
unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing,
the Borrower consents to the publication by the Administrative Agent or any
other Credit Party of

96
 

 

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

a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement.
(b)    Each of the Administrative Agent and each other Credit Party, severally
and with respect to itself only, agrees to hold in confidence, and not disclose
to any Person, any confidential and proprietary information concerning the
Borrower, the Servicer and their respective Affiliates and their businesses or
the terms of this Agreement (including any fees payable in connection with this
Agreement or the other Transaction Documents), except as the Borrower or the
Servicer may have consented to in writing prior to any proposed disclosure;
provided, however, that it may disclose such information (i) to its Advisors and
Representatives, (ii) to its assignees and Participants and potential assignees
and Participants and their respective counsel if they agree in writing to hold
it confidential, (iii) to the extent such information has become available to
the public other than as a result of a disclosure by or through it or its
Representatives or Advisors, (iv) at the request of a bank examiner or other
regulatory authority or in connection with an examination of any of the
Administrative Agent or any Lender or their respective Affiliates or (v) to the
extent it should be (A) required by Applicable Law, or in connection with any
legal or regulatory proceeding or (B) requested by any Governmental Authority to
disclose such information; provided, that, in the case of clause (v) above, the
Administrative Agent and each Lender will use reasonable efforts to maintain
confidentiality and will (unless otherwise prohibited by Applicable Law) notify
the Borrower and the Servicer of its making any such disclosure as promptly as
reasonably practicable thereafter. Each of the Administrative Agent and each
Lender, severally and with respect to itself only, agrees to be responsible for
any breach of this Section by its Representatives and Advisors and agrees that
its Representatives and Advisors will be advised by it of the confidential
nature of such information and shall agree to comply with this Section.
(c)    As used in this Section, (i) “Advisors” means, with respect to any
Person, such Person’s accountants, attorneys and other confidential advisors and
(ii) “Representatives” means, with respect to any Person, such Person’s
Affiliates, Subsidiaries, directors, managers, officers, employees, members,
investors, financing sources, insurers, professional advisors, representatives
and agents; provided that such Persons shall not be deemed to Representatives of
a Person unless (and solely to the extent that) confidential information is
furnished to such Person.
(d)    Notwithstanding the foregoing, to the extent not inconsistent with
applicable securities laws, each party hereto (and each of its employees,
representatives or other agents) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure (as defined in
Section 1.6011-4 of the Treasury Regulations) of the transactions contemplated
by the Transaction Documents and all materials of any kind (including opinions
or other tax analyses) that are provided to such Person relating to such tax
treatment and tax structure.
SECTION 14.07. GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF
THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY
OTHER CONFLICTS OF LAW PROVISIONS THEREOF, EXCEPT TO THE EXTENT THAT THE
PERFECTION, THE EFFECT OF

97
 

 

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

PERFECTION OR PRIORITY OF THE INTERESTS OF ADMINISTRATIVE AGENT OR ANY LENDER IN
THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK).
SECTION 14.08. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart hereof by facsimile or other
electronic means shall be equally effective as delivery of an originally
executed counterpart.
SECTION 14.09. Integration; Binding Effect; Survival of Termination. This
Agreement and the other Transaction Documents contain the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until the Final Payout Date; provided, however, that
the provisions of Sections 5.01, 5.02, 5.03, 11.04, 11.06, 13.01, 13.02, 14.04,
14.05, 14.06, 14.09, 14.11 and 14.13 shall survive any termination of this
Agreement.
SECTION 14.10. CONSENT TO JURISDICTION. (a) EACH PARTY HERETO HEREBY IRREVOCABLY
SUBMITS TO (I) WITH RESPECT TO THE BORROWER AND THE SERVICER, THE EXCLUSIVE
JURISDICTION, AND (II) WITH RESPECT TO EACH OF THE OTHER PARTIES HERETO, THE
NON-EXCLUSIVE JURISDICTION, IN EACH CASE, OF ANY NEW YORK STATE OR FEDERAL COURT
SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND EACH PARTY
HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING (I) IF BROUGHT BY THE BORROWER, THE SERVICER OR ANY AFFILIATE
THEREOF, SHALL BE HEARD AND DETERMINED, AND (II) IF BROUGHT BY ANY OTHER PARTY
TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, MAY BE HEARD AND
DETERMINED, IN EACH CASE, IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. NOTHING IN THIS SECTION 14.10 SHALL
AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY OTHER CREDIT PARTY TO BRING
ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR THE SERVICER OR ANY OF THEIR
RESPECTIVE PROPERTY IN THE COURTS OF OTHER JURISDICTIONS. EACH OF THE BORROWER
AND THE SERVICER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

98
 

 

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

(b)    EACH OF THE BORROWER AND THE SERVICER CONSENTS TO THE SERVICE OF ANY AND
ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS TO IT AT ITS ADDRESS SPECIFIED IN SECTION 14.02. NOTHING IN THIS SECTION
14.10 SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY OTHER CREDIT
PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 14.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.
SECTION 14.12. Ratable Payments. If any Credit Party, whether by setoff or
otherwise, has payment made to it with respect to any Borrower Obligations in a
greater proportion than that received by any other Credit Party entitled to
receive a ratable share of such Borrower Obligations, such Credit Party agrees,
promptly upon demand, to purchase for cash without recourse or warranty a
portion of such Borrower Obligations held by the other Credit Parties so that
after such purchase each Credit Party will hold its ratable proportion of such
Borrower Obligations; provided that if all or any portion of such excess amount
is thereafter recovered from such Credit Party, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
SECTION 14.13. Limitation of Liability.
(a)    No claim may be made by the Borrower or any Affiliate thereof or any
other Person against any Credit Party or their respective Affiliates, members,
directors, officers, employees, incorporators, attorneys or agents for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement or any other Transaction
Document, or any act, omission or event occurring in connection herewith or
therewith; and each of the Borrower and the Servicer hereby waives, releases,
and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor. None of the
Credit Parties and their respective Affiliates shall have any liability to the
Borrower or any Affiliate thereof or any other Person asserting claims on behalf
of or in right of the Borrower or any Affiliate thereof in connection with or as
a result of this Agreement or any other Transaction Document or the transactions
contemplated hereby or thereby, except to the extent that any losses, claims,
damages, liabilities or expenses incurred by the Borrower or any Affiliate
thereof result from the breach of contract, gross negligence or willful
misconduct of such Credit Party in performing its duties and obligations
hereunder and under the other Transaction Documents to which it is a party.
(b)    The obligations of the Administrative Agent and each of the other Credit
Parties under this Agreement and each of the Transaction Documents are solely
the corporate obligations of such Person. No recourse shall be had for any
obligation or claim arising out of or based upon this Agreement or any other
Transaction Document against any member, director, officer, employee or
incorporator of any such Person.

99
 

 

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

SECTION 14.14. Intent of the Parties. The Borrower has structured this Agreement
with the intention that the Loans and the obligations of the Borrower hereunder
will be treated under United States federal, and applicable state, local and
foreign tax law as debt (the “Intended Tax Treatment”). The Borrower, the
Servicer, the Administrative Agent and the other Credit Parties agree to file no
tax return, or take any action, inconsistent with the Intended Tax Treatment
unless required by law. Each assignee and each Participant acquiring an interest
in a Credit Extension, by its acceptance of such assignment or participation,
agrees to comply with the immediately preceding sentence.
SECTION 14.15. USA Patriot Act. Each of the Administrative Agent and each of the
other Credit Parties hereby notifies the Borrower and the Servicer that pursuant
to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed
into law October 26, 2001) (the “PATRIOT Act”), the Administrative Agent and the
other Credit Parties may be required to obtain, verify and record information
that identifies the Borrower, the Originators, the Servicer and the Performance
Guarantor, which information includes the name, address, tax identification
number and other information regarding the Borrower, the Originators, the
Servicer and the Performance Guarantor that will allow the Administrative Agent
and the other Credit Parties to identify the Borrower, the Originators, the
Servicer and the Performance Guarantor in accordance with the PATRIOT Act. This
notice is given in accordance with the requirements of the PATRIOT Act. Each of
the Borrower and the Servicer agrees to provide the Administrative Agent and
each other Credit Parties, from time to time, with all documentation and other
information required by bank regulatory authorities under “know your customer”
and anti-money laundering rules and regulations, including, without limitation,
the PATRIOT Act.
SECTION 14.16. Right of Setoff. Each Credit Party is hereby authorized (in
addition to any other rights it may have), at any time during the continuance of
an Event of Default, to setoff, appropriate and apply (without presentment,
demand, protest or other notice which are hereby expressly waived) any deposits
and any other indebtedness held or owing by such Credit Party (including by any
branches or agencies of such Credit Party) to, or for the account of, the
Borrower or the Servicer against amounts owing by the Borrower or the Servicer
hereunder (even if contingent or unmatured); provided that such Credit Party
shall notify the Borrower or the Servicer, as applicable, promptly following
such setoff.
SECTION 14.17. Severability. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 14.18. Mutual Negotiations. This Agreement and the other Transaction
Documents are the product of mutual negotiations by the parties thereto and
their counsel, and no party shall be deemed the draftsperson of this Agreement
or any other Transaction Document or any provision hereof or thereof or to have
provided the same. Accordingly, in the event of any inconsistency or ambiguity
of any provision of this Agreement or any other Transaction Document,

100
 

 

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

such inconsistency or ambiguity shall not be interpreted against any party
because of such party’s involvement in the drafting thereof.
SECTION 14.19. Captions and Cross References. The various captions (including
the table of contents) in this Agreement are provided solely for convenience of
reference and shall not affect the meaning or interpretation of any provision of
this Agreement. Unless otherwise indicated, references in this Agreement to any
Section, Schedule or Exhibit are to such Section Schedule or Exhibit to this
Agreement, as the case may be, and references in any Section, subsection, or
clause to any subsection, clause or subclause are to such subsection, clause or
subclause of such Section, subsection or clause.
[Signature Pages Follow]

101
 

 

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

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.
 
COMPASS MINERALS RECEIVABLES LLC
 
By:
/s/ James D. Standen
 
Name: James D. Standen
 
Title: Chief Financial Officer
 
 
 
COMPASS MINERALS AMERICA INC.,
as the Servicer
 
By:
/s/ James D. Standen
 
Name: James D. Standen
 
Title: Chief Financial Officer
 
 
 

 
 
Receivables Financing Agreement

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

 
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
 
By:
/s/ Michael Brown
 
Name: Michael Brown
 
Title: Senior Vice President
 
 
 

PNC BANK, NATIONAL ASSOCIATION,
as a Lender
 
By:
/s/ Michael Brown
 
Name: Michael Brown
 
Title: Senior Vice President
 
 
 
PNC CAPITAL MARKETS LLC,
as Structuring Agent
 
By:
/s/ Michael Brown
 
Name: Michael Brown
 
Title: Managing Director

 
 
Receivables Financing Agreement

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

EXHIBIT A
Form of Loan Request

[Letterhead of Borrower]

[Date]

[Administrative Agent]
[Lenders]
Re:    Loan Request
Ladies and Gentlemen:
Reference is hereby made to that certain Receivables Financing Agreement, dated
as of June 30, 2020 among Compass Minerals Receivables LLC (the “Borrower”),
Compass Minerals America Inc., as Servicer (the “Servicer”), the Lenders party
thereto, PNC Bank, National Association, as Administrative Agent (in such
capacity, the “Administrative Agent”) and PNC Capital Markets LLC, as
Structuring Agent (as amended, supplemented or otherwise modified from time to
time, the “Agreement”). Capitalized terms used in this Loan Request and not
otherwise defined herein shall have the meanings assigned thereto in the
Agreement.
This letter constitutes a Loan Request pursuant to Section 2.02(a) of the
Agreement. The Borrower hereby request a Loan in the aggregate amount of
[$_______] to be made on [_____, 20__] (of which $[___] will be funded by PNC
and $[___] will be funded by [___]. The proceeds of such Loan should be
deposited to [Account number], at [Name, Address and ABA Number of Bank]. After
giving effect to such Loan, the Aggregate Loan Amount will be [$_______].
The Borrower hereby represents and warrants as of the date hereof, and after
giving effect to such Credit Extension, as follows:
(i)    the representations and warranties of the Borrower and the Servicer
contained in Sections 7.01 and 7.02 of the Agreement are true and correct in all
material respects on and as of the date of such Credit Extension as though made
on and as of such date unless such representations and warranties by their terms
refer to an earlier date, in which case they shall be true and correct in all
material respects on and as of such earlier date;
(ii)    no Event of Default or Unmatured Event of Default has occurred and is
continuing, and no Event of Default or Unmatured Event of Default would result
from such Credit Extension;
(iii)    no Borrowing Base Deficit exists or would exist after giving effect to
such Credit Extension;

Exhibit A-1
 

    

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

(iv)    the Aggregate Loan Amount will not exceed the Facility Limit;
(v)    the Termination Date has not occurred; and
(vi)    the Aggregate Loan Amount exceeds the Minimum Funding Threshold.

Exhibit A-2
 

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

IN WITNESS WHEREOF, the undersigned has executed this letter by its duly
authorized officer as of the date first above written.
 
Very truly yours,
 
 
 
 
 
 
By:
 
 
Name:
 
Title:

Exhibit A-3
 

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

EXHIBIT B
Form of Reduction Notice
[LETTERHEAD OF BORROWER]
[Date]
[Administrative Agent]
[Lenders]
Re:    Reduction Notice

Ladies and Gentlemen:
Reference is hereby made to that certain Receivables Financing Agreement, dated
as of June 30, 2020 among Compass Minerals Receivables LLC (the “Borrower”),
Compass Minerals America Inc., as Servicer (the “Servicer”), the Lenders party
thereto, PNC Bank, National Association, as Administrative Agent (in such
capacity, the “Administrative Agent”) and PNC Capital Markets LLC, as
Structuring Agent (as amended, supplemented or otherwise modified from time to
time, the “Agreement”). Capitalized terms used in this Reduction Notice and not
otherwise defined herein shall have the meanings assigned thereto in the
Agreement.
This letter constitutes a Reduction Notice pursuant to Section 2.02(d) of the
Agreement. The Borrower hereby notifies the Administrative Agent and the Lenders
that it shall prepay the outstanding Loan Amount of the Lenders in the amount of
[$_______] to be made on [_____, 20_]. After giving effect to such prepayment,
the Aggregate Loan Amount will be [$_______].
The Borrower hereby represents and warrants as of the date hereof, and after
giving effect to such reduction, as follows:
(i)    the representations and warranties of the Borrower and the Servicer
contained in Sections 7.01 and 7.02 of the Agreement are true and correct in all
material respects on and as of the date of such prepayment as though made on and
as of such date unless such representations and warranties by their terms refer
to an earlier date, in which case they shall be true and correct in all material
respects on and as of such earlier date;
(ii)    no Event of Default or Unmatured Event of Default has occurred and is
continuing, and no Event of Default or Unmatured Event of Default would result
from such prepayment;
(iii)    no Borrowing Base Deficit exists or would exist after giving effect to
such prepayment;

Exhibit B-1

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

(iv)    the Termination Date has not occurred; and
(v)    the Facility Limit exceeds the Minimum Funding Threshold.

    Exhibit B-2

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

IN WITNESS WHEREOF, the undersigned has executed this letter by its duly
authorized officer as of the date first above written.

 
Very truly yours,
 
 
 
 
COMPASS MINERALS RECEIVABLES LLC
 
By:
 
 
 
Name:
 
 
Title:

    Exhibit B-3

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

EXHIBIT C
[Form of Assignment and Acceptance Agreement]
Dated as of ___________, 20__
Section 1.
Commitment assigned:
$[_____]
Assignor’s remaining Commitment:
$[_____]
Loan Amount allocable to Commitment assigned:
$[_____]
Assignor’s remaining Loan Amount:
$[_____]
Interest (if any) allocable to Loan Amount assigned:
$[_____]
Interest (if any) allocable to Assignor’s remaining Loan Amount:
$[_____]

Section 2.
Effective Date of this Assignment and Acceptance Agreement: [__________]
Upon execution and delivery of this Assignment and Acceptance Agreement by the
assignee and the assignor and the satisfaction of the other conditions to
assignment specified in Section 14.03(a) of the Agreement (as defined below),
from and after the effective date specified above, the assignee shall become a
party to, and, to the extent of the rights and obligations thereunder being
assigned to it pursuant to this Assignment and Acceptance Agreement, shall have
the rights and obligations of a Lender under that certain Receivables Financing
Agreement, dated as of June 30, 2020 among Compass Minerals Receivables LLC,
Compass Minerals America Inc., as Servicer, the Lenders party thereto, PNC Bank,
National Association, as Administrative Agent and PNC Capital Markets LLC, as
Structuring Agent (as amended, supplemented or otherwise modified from time to
time, the “Agreement”).
(Signature Pages Follow)

Exhibit C-1

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

ASSIGNOR:
 
[_________]
 
 
 
 
 
 
By:
 
 
 
Name:
 
 
Title:

ASSIGNEE:
 
[_________]
 
 
 
 
 
 
By:
 
 
 
Name:
 
 
Title:
 
 
[Address]

Accepted as of date first above
 
written:
 
 
 
PNC BANK, NATIONAL ASSOCIATION,

 
as Administrative Agent
 
 
 
By:
 
 
Name:
 
Title:
 
 
 
COMPASS MINERALS RECEIVABLES LLC,
 
as Borrower
 
 
 
By:
 
 
Name:
 
Title
 

    Exhibit C-2

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

EXHIBIT D
[Form of Assumption Agreement]

THIS ASSUMPTION AGREEMENT (this “Agreement”), dated as of [______ __, ____], is
among Compass Minerals Receivables LLC (the “Borrower”) and [________], as the
Lender (the “[______]Lender”).
BACKGROUND
The Borrower and various others are parties to a certain Receivables Financing
Agreement, dated as of June 30, 2020 (as amended through the date hereof and as
the same may be amended, amended and restated, supplemented or otherwise
modified from time to time, the “Receivables Financing Agreement”). Capitalized
terms used and not otherwise defined herein have the respective meaning assigned
to such terms in the Receivables Financing Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1.    This letter constitutes an Assumption Agreement pursuant to
Section 14.03(h) of the Receivables Financing Agreement. The Borrower desires
the [_____] Lender [the to [become a Lender] [increase its existing Commitment]
under the Receivables Financing Agreement, and upon the terms and subject to the
conditions set forth in the Receivables Financing Agreement, the [[________]
Lender] agree[s] to [become Lender] [increase its Commitment to the amount set
forth as its “Commitment” under the signature of such [______] Lender hereto].
The Borrower hereby represents and warrants to the [________] Lender as of the
date hereof, as follows:
(i)    the representations and warranties of the Borrower contained in Section
7.01 of the Receivables Financing Agreement are true and correct on and as of
such date as though made on and as of such date;
(ii)    no Event of Default or Unmatured Event of Default has occurred and is
continuing, or would result from the assumption contemplated hereby; and
(iii)    the Termination Date shall not have occurred.
SECTION 2.    Upon execution and delivery of this Agreement by the Borrower and
the [____] Lender, satisfaction of the other conditions with respect to the
addition of a Lender specified in the Receivables Financing Agreement (including
the written consent of the Administrative Agent and the Majority Lenders) and
receipt by the Administrative Agent of counterparts of this Agreement (whether
by facsimile or otherwise) executed by each of the parties hereto, [the [_____]
Lender shall become a party to, and have the rights and obligations of Lenders
under, the Receivables Financing Agreement and the “Commitment” with respect to
the Lender shall be as set forth under the signature of each such Lender hereto]
[the [______]Lender shall

Exhibit D-1

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

increase its Commitment to the amount set forth as the “Commitment” under the
signature of the [______]Lender hereto].
SECTION 4.    THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES
HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER
CONFLICTS OF LAW PROVISIONS THEREOF). This Agreement may not be amended or
supplemented except pursuant to a writing signed be each of the parties hereto
and may not be waived except pursuant to a writing signed by the party to be
charged. This Agreement may be executed in counterparts, and by the different
parties on different counterparts, each of which shall constitute an original,
but all together shall constitute one and the same agreement.
(Signature Pages Follow)
    

Exhibit D-2

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

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
duly authorized officers as of the date first above written.

 
[______], as a Lender
 
written:
 
 
 
 
 
By:
 
 
 
Name Printed:
 
 
Title:
 
 
 
[Address]
 
[Comment]

Exhibit D-3

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

Compass Minerals Receivables LLC
 
as Borrower
 
 
 
 
 
 
By:
 
 
 
 
Name Printed:
 
 
Title:
 
 
 

Exhibit D-4

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

EXHIBIT E
Credit and Collection Policy

Exhibit E

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

EXHIBIT F
Form of Information Package

Exhibit F

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

EXHIBIT G
Form of Compliance Certificate

To: PNC Bank, National Association, as Administrative Agent
This Compliance Certificate is furnished pursuant to that certain Receivables
Financing Agreement, dated as of June 30, 2020 among Compass Minerals
Receivables LLC (the “Borrower”), Compass Minerals America Inc., as Servicer
(the “Servicer”), the Lenders party thereto, PNC Bank, National Association, as
Administrative Agent (in such capacity, the “Administrative Agent”) and PNC
Capital Markets LLC, as Structuring Agent (as amended, supplemented or otherwise
modified from time to time, the “Agreement”). Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to them in the
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1.    I am the duly elected ________________of the Servicer.
2.    I have reviewed the terms of the Agreement and each of the other
Transaction Documents and I have made, or have caused to be made under my
supervision, a detailed review of the transactions and condition of the Borrower
during the accounting period covered by the attached financial statements.
3.    The examinations described in paragraph 2 above did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
an Event of Default or an Unmatured Event of Default, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate[, except as set forth in paragraph 5 below].
4.    Schedule I attached hereto sets forth financial statements of the Parent
and its Subsidiaries for the period referenced on such Schedule I.
[5.    Described below are the exceptions, if any, to paragraph 3 above by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:]
6.     the location of any Originator’s Mined Properties or mineheads is
accurately set forth on Schedule IV to the Agreement

Exhibit G-1

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

The foregoing certifications are made and delivered this ______ day of
___________________, 20___.

[_______]
 
 
 
 
 
 
By:
 
 
 
 
Name Printed:
 
 
Title:
 
 
 

Exhibit G-2

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

SCHEDULE I TO COMPLIANCE CERTIFICATE

A.    Schedule of Compliance as of     ___________________, 20__ with Section
8.02([s]) of the Agreement. Unless otherwise defined herein, the terms used in
this Compliance Certificate have the meanings ascribed thereto in the Agreement.
This schedule relates to the month ended: __________________.
B.    The following financial statements of the Parent and its Subsidiaries for
the period ending on ______________, 20__, are attached hereto:

Exhibit G-3

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

EXHIBIT H
Closing Memorandum

Exhibit H-1

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

EXHIBIT I
Forms of Interim Report

Exhibit I

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

SCHEDULE I
Commitments

Party
Capacity
Period 1 Commitment
PNC Bank, National Association
Purchaser
$50,000,000

Party
Capacity
Period 2 Commitment
PNC Bank, National Association
Purchaser
$100,000,000

Schedule I

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

SCHEDULE II
Lock-Boxes, Collection Accounts and Collection Account Banks

Schedule II

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

SCHEDULE III
Notice Addresses
(A)    in the case of the Borrower, at the following address:
 
 
 
Compass Minerals Receivables LLC
 
9900 W. 109th Street, Suite 100
 
Overland Park, KS 66210
 
Attn: Treasury Department
 
Facsimile: 913-433-9652
 
 
 
With a copy to:
 
 
 
Compass Minerals Receivables LLC
 
9900 W. 109th Street, Suite 100
 
Overland Park, KS 66210
 
Attn: Legal Department
 
Email: legal@compassminerals.com
 
 
(B)    in the case of the Servicer, at the following address:
 
 
 
Compass Minerals America Inc.
 
9900 W. 109th Street, Suite 100
 
Overland Park, KS 66210
 
Attn: Treasury Department
 
Facsimile: 913-433-9652
 
 
 
With a copy to:
 
 
 
Compass Minerals America Inc.
 
9900 W. 109th Street, Suite 100
 
Overland Park, KS 66210
 
Attn: Legal Department
 
Email: legal@compassminerals.com
 
 
(C)    in the case of the Administrative Agent, at the following address:
 
 
 
PNC Bank, National Association
 
300 Fifth Avenue
 
Pittsburgh, PA 15222
 
Telephone: (412) 768-3090
 
Facsimile: (412) 762-9184
 
Attention: Asset Backed Finance
 
PNC Bank, National Association

Schedule III

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

(D)    in the case of any other Person, at the address for such Person specified
in the other Transaction Documents; in each case, or at such other address as
shall be designated by such Person in a written notice to the other parties to
this Agreement.

Schedule III

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

SCHEDULE IV
Locations of Mining Operations and Mineheads

Schedule IV