Exhibit 10.2

Execution Version

AMENDED AND RESTATED

TRANSFER AND ADMINISTRATION AGREEMENT

dated as of January 18, 2013

by and among

UNITED STATIONERS RECEIVABLES, LLC,

UNITED STATIONERS SUPPLY CO.,

as Originator,

UNITED STATIONERS FINANCIAL SERVICES LLC,

as Seller and Servicer,

PNC BANK, NATIONAL ASSOCIATION,

as Agent, as a Class Agent and as an Alternate Investor,

THE OTHER ALTERNATE INVESTORS

FROM TIME TO TIME PARTIES HERETO

and

THE OTHER CONDUIT INVESTORS

FROM TIME TO TIME PARTIES HERETO

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Table of Contents

 

     Page  

Article I Definitions

     1   

Section 1.1 Certain Defined Terms

     1   

Section 1.2 Other Terms

     22   

Section 1.3 Computation of Time Periods; Calculations

     22   

Article II Purchases and Settlements

     23   

Section 2.1 Transfer of Affected Assets; Intended Characterization

     23   

Section 2.2 Purchase Price

     24   

Section 2.3 Investment Procedures

     24   

Section 2.4 Determination of Yield and Rate Periods

     27   

Section 2.5 Yield, Fees and Other Costs and Expenses

     31   

Section 2.6 Deemed Collections

     32   

Section 2.7 Reductions in Net Investment; Payments and Computations, Etc.

     32   

Section 2.8 Reports

     33   

Section 2.9 Collection Account

     34   

Section 2.10 Sharing of Payments, Etc.

     34   

Section 2.11 Right of Setoff

     34   

Section 2.12 Settlement Procedures

     35   

Section 2.13 Optional Reduction of Net Investment

     36   

Section 2.14 Application of Collections Distributable to SPV

     37   

Section 2.15 Collections Held in Trust

     37   

Article III Additional Alternate Investor Provisions

     37   

Section 3.1 Assignment to Alternate Investors

     37   

Section 3.2 Reserved

     39   

Section 3.3 Non-Renewing Alternate Investors

     39   

Section 3.4 New Alternate Investors and Liquidity Banks

     40   

Article IV Representations and Warranties

     41   

Section 4.1 Representations and Warranties of the Originator, the SPV, the
Seller and the Servicer

     41   

Section 4.2 Additional Representations and Warranties of the Servicer

     47   

Article V Conditions Precedent

     48   

Section 5.1 Conditions Precedent to Closing

     48   

Section 5.2 Conditions Precedent to All Investments and Reinvestments

     51   

Article VI Covenants

     52   

Section 6.1 Affirmative Covenants of the SPV and Servicer

     52   

Section 6.2 Negative Covenants of the SPV and Servicer

     58   

Section 6.3 Financial Covenants

     59   

 

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Article VII Administration and Collections

     60   

Section 7.1 Appointment of Servicer

     60   

Section 7.2 Duties of Servicer

     61   

Section 7.3 Blocked Account Arrangements

     62   

Section 7.4 Enforcement Rights After Designation of New Servicer

     63   

Section 7.5 Servicer Default

     64   

Section 7.6 Servicing Fee

     65   

Section 7.7 Protection of Ownership Interest of the Investors

     65   

Article VIII Termination Events

     66   

Section 8.1 Termination Events

     66   

Section 8.2 Termination

     69   

Article IX Indemnification; Expenses; Related Matters

     69   

Section 9.1 Indemnities by the SPV and the Servicer

     69   

Section 9.2 Indemnity for Taxes, Reserves and Expenses

     72   

Section 9.3 Taxes

     74   

Section 9.4 Other Costs and Expenses; Breakage Costs

     75   

Section 9.5 [Reserved]

     75   

Section 9.6 Indemnities by the Servicer

     75   

Section 9.7 Accounting Based Consolidation Event

     76   

Article X The Agent

     76   

Section 10.1 Appointment and Authorization of Agent

     76   

Section 10.2 Delegation of Duties

     76   

Section 10.3 Liability of Agent

     77   

Section 10.4 Reliance by Agent

     77   

Section 10.5 Notice of Termination Event, Potential Termination Event or
Servicer Default

     78   

Section 10.6 Credit Decision; Disclosure of Information by the Agent

     78   

Section 10.7 Indemnification of the Agent

     79   

Section 10.8 Agent in Individual Capacity

     79   

Section 10.9 Resignation of Agent

     79   

Section 10.10 Payments by the Agent

     80   

Section 10.11 Appointment and Authorization of Class Agents

     80   

Section 10.12 Delegation of Duties

     80   

Section 10.13 Reliance by Class Agents

     81   

Section 10.14 Notice of Termination Event, Potential Termination Event or
Servicer Default

     81   

Section 10.15 Credit Decision; Disclosure of Information by the Class Agents

     81   

Section 10.16 Indemnification of the Class Agent

     82   

Section 10.17 Class Agent in Individual Capacity

     83   

Section 10.18 Resignation of Class Agent

     83   

Section 10.19 Liability of Agent and the Class Agents

     83   

Article XI Miscellaneous

     84   

Section 11.1 Term of Agreement

     84   

Section 11.2 Waivers; Amendments

     84   

 

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Section 11.3 Notices; Payment Information

     85   

Section 11.4 Governing Law; Submission to Jurisdiction; Appointment of Service
Agent

     85   

Section 11.5 Integration; Amendment and Restatement

     86   

Section 11.6 Severability of Provisions

     87   

Section 11.7 Counterparts; Facsimile Delivery

     87   

Section 11.8 Successors and Assigns; Binding Effect

     87   

Section 11.9 Waiver of Confidentiality

     90   

Section 11.10 Confidentiality Agreement

     90   

Section 11.11 No Bankruptcy Petition Against the Conduit Investors

     91   

Section 11.12 No Recourse Against Conduit Investors

     91   

Schedules

 

Schedule I    Specified Ineligible Receivables Schedule 4.1(g)    List of
Actions and Suits Schedule 4.1(i)    Location of Certain Offices and Records
Schedule 4.1(j)    List of Subsidiaries, Divisions and Tradenames; FEIN
Schedule 4.1(r)    List of Blocked Account Banks and Blocked Accounts
Schedule 4.1(bb)    Disclosure Representations and Covenants Schedule 11.3   
Address and Payment Information

Exhibits

 

Exhibit A    Form of Assignment and Assumption Agreement Exhibit B            
   Credit and Collection Policies and Practices Exhibit C    Form of Investment
Request Exhibit D    Form of Blocked Account Agreement Exhibit E    Form of
Servicer Report Exhibit F    Form of SPV Secretary’s Certificate Exhibit G   
Forms of Originator/Servicer/Seller Secretary’s Certificate Exhibit H    Form of
Opinion of Counsel for the SPV, Originator, Seller and Servicer Exhibit I   
Scope of Agreed Upon Procedures Exhibit J    Form of Compliance Certificate
Exhibit K    Form of Interim Report

 

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AMENDED AND RESTATED

TRANSFER AND ADMINISTRATION AGREEMENT

This AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (as amended,
modified, supplemented, restated or replaced, this “Agreement”), dated as of
January 18, 2013, by and among United Stationers Receivables, LLC, an Illinois
limited liability company (the “SPV”), United Stationers Supply Co., an Illinois
corporation (the “Originator”), United Stationers Financial Services LLC, an
Illinois limited liability company (the “Seller”) and as Servicer, PNC Bank,
National Association, a national banking association (“PNC Bank”), as Agent, as
a Class Agent and as an Alternate Investor, and the financial institutions from
time to time parties hereto as Conduit Investors and Alternate Investors.

This Agreement amends and restates in its entirety that certain Transfer and
Administration Agreement, dated as of March 3, 2009 (as amended, supplemented or
otherwise modified to the date hereof, the “Original Agreement”), among the SPV,
the Originator, the Seller, the Servicer, the Agent, each Class Agent party
thereto and each Investor party thereto.

Article I

Definitions

Section 1.1 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):

Accounting Based Consolidation Event: Solely to the extent such entity is not
consolidated with such Indemnified Party on or prior to the date hereof, the
consolidation, for financial and/or regulatory accounting purposes, of all or
any portion of the assets and liabilities of any Conduit Investor that is the
subject of this Agreement or any other Transaction Document with all or any
portion of the assets and liabilities of the Agent or any Alternate Investor in
such Conduit Investor’s Class or any of their Affiliates as the result of the
occurrence of any change after the date hereof in accounting standards or the
issuance of any pronouncement, interpretation or release, by any accounting body
or any other governmental body charged with the promulgation or administration
of accounting standards, including the Financial Accounting Standards Board, the
International Accounting Standards Board, the American Institute of Certified
Public Accountants, the Federal Reserve Board of Governors and the Securities
and Exchange Commission.

Additional Costs: As defined in Section 9.2(d).

Adverse Claim: Except for Permitted Liens, any lien, security interest, charge
or encumbrance, or other right or claim in, of or on any Person’s assets or
properties in favor of any other Person.

Advertising Receivable: Any Receivable which arises from the Originator’s
business of selling catalogs and related advertising materials to its customers,
which Receivables are indicated as “advertising” on the Originator’s receivables
aging books and records.

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Affected Assets: Collectively, (i) the Receivables, (ii) the Related Security,
(iii) all rights and remedies of the SPV under the Second Tier Agreement,
together with all financing statements filed by the SPV against the Originator
and the Seller in connection therewith, (iv) all Blocked Accounts and all funds
and investments therein and all Blocked Account Agreements, and (v) all proceeds
of the foregoing.

Affiliate: As to any Person, any other Person which, directly or indirectly,
owns, is in control of, is controlled by, or is under common control with, such
Person, in each case whether beneficially, or as a trustee, guardian or other
fiduciary. A Person shall be deemed to control another Person if the controlling
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the other Person, whether through the
ownership of voting securities or membership interests, by contract, or
otherwise.

Agent: PNC Bank, in its capacity as agent for the Investors, and any successor
thereto appointed pursuant to Article X.

Agent-Related Persons: The Agent, or any Class Agent, as the case may be,
together with its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and their respective Affiliates.

Aggregate Unpaids: At any time, an amount equal to the sum of (i) the aggregate
unpaid Yield accrued and to accrue to maturity with respect to all Rate Periods
at such time, (ii) the Net Investment at such time and (iii) all other amounts
owed (whether or not then due and payable) hereunder and under the other
Transaction Documents by the SPV, the Seller and the Originator to the Agent,
the Class Agents, the Investors or the Indemnified Parties at such time.

Agreement: As defined in the Preamble.

Alternate Investor Percentage: At any time with respect to any Alternate
Investor, the percentage equivalent of a fraction the numerator of which is
equal to the Commitment of such Alternate Investor on such day and the
denominator of which is equal to the related Class Facility Limit on such day.

Alternate Investors: With respect to (a) the PNC Bank Class, PNC Bank and each
other financial institution identified as a member of the PNC Bank Class on the
signature pages hereof and any other financial institution that shall become a
party to this Agreement pursuant to Section 11.8 and who are identified as a
being a member of the PNC Bank Class and (b) any other Class, each financial
institution identified as a member of such Class on the signature pages hereof
and any other financial institution that shall become a party to this Agreement
pursuant to Section 11.8 and who are identified as a being a member of such
Class.

Alternate Rate: As defined in Section 2.4.

Asset Interest: As defined in Section 2.1(b).

Assignment Amount: With respect to an Alternate Investor at the time of any
assignment pursuant to Section 3.1, an amount equal to the least of (i) such
Alternate Investor’s Alternate Investor Percentage of the portion of the related
Class Net Investment requested by the related

 

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Conduit Investor to be assigned at such time; (ii) such Alternate Investor’s
unused Commitment (minus the unrecovered principal amount of such Alternate
Investor’s investments in the Asset Interest pursuant to the Program Support
Agreement to which it is a party); and (iii) in the case of an assignment on or
after the Conduit Investment Termination Date, such Alternate Investor’s
Alternate Investor Percentage of the Investor Percentage of the related Conduit
Investor of the sum of (A) the aggregate Unpaid Balance of the Receivables
(other than Defaulted Receivables), plus (B) all Collections received by the
Servicer but not yet remitted by the Servicer to the Agent, plus (C) any amounts
in respect of Deemed Collections required to be paid by the SPV at such time.

Assignment and Assumption Agreement: An Assignment and Assumption Agreement
substantially in the form of Exhibit A.

Assignment Date: As defined in Section 3.1(a).

Bankruptcy Code: The Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 101 et seq.

Base Rate: As defined in Section 2.4.

Blocked Account: Any account maintained by the SPV at a Blocked Account Bank
into which Collections are received or deposited, as set forth in Schedule
4.1(r), or any account added as a Blocked Account pursuant to and in accordance
with Section 4.1(r) and which, if not maintained at and in the name of the
Agent, is subject to a Blocked Account Agreement.

Blocked Account Agreement: An agreement among the SPV, the Agent and a Blocked
Account Bank in substantially the form of Exhibit D or in form and substance
reasonably satisfactory to the Agent.

Blocked Account Bank: Each of the banks set forth in Schedule 4.1(r), as such
Schedule 4.1(r) may be modified pursuant to Section 4.1(r).

Business Day: Any day excluding Saturday, Sunday and any day on which banks in
New York, New York and Charlotte, North Carolina, are authorized or required by
law to close, and, when used with respect to the determination of any Offshore
Rate or any notice with respect thereto, any such day which is also a day for
trading by and between banks in United States dollar deposits in the London
interbank market.

Capitalized Lease: Of a Person, means any lease of property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

Charged-off Receivable: Any Receivable that is, or should have been, charged-off
in accordance with the Credit and Collection Policy.

Class: Each group of Investors consisting of the related Class Agent, one or
more related Conduit Investors and the related Alternate Investors, and their
respective successors and permitted assigns.

 

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Class Agent: With respect to (i) the PNC Bank Class, PNC Bank and its successors
and permitted assigns and (ii) any other Class, the Person specified in any
supplement to this Agreement as the class agent for such Class and such Person’s
successors and permitted assigns.

Class Facility Limit: (i) With respect to the PNC Bank Class, $200,000,000 and
(ii) with respect to any other Class, the amount specified in any supplement to
this Agreement as the Class Facility Limit for such Class; provided, however,
that the Class Facility Limit with respect to any Class shall not at any time
exceed the aggregate Commitments for the related Alternate Investors.

Class Maximum Net Investment: At any time for any Class, an amount equal to the
related Class Facility Limit.

Class Net Investment: At any time with respect to any Class, the excess, if any
of (a) the sum, without duplication, of (i) the cash amounts paid by the related
Class Agent on behalf of the Investors in the related Class to the SPV pursuant
to Sections 2.2 and 2.3 and (ii) the amount of any funding under a Program
Support Agreement related to such Class that is allocated to the Interest
Component related to such Class at the time of such funding over (b) the
aggregate amount of Collections theretofore received and applied by such Class
Agent to reduce the related Class Net Investment pursuant to Section 2.12;
provided that the Class Net Investment of a Class shall be restored and
reinstated in the amount of any Collections so received and applied if at any
time the distribution of such Collections is rescinded or must otherwise be
returned for any reason; provided further, that the Class Net Investment of a
Class shall be increased by the amount described in Section 3.1(b) as described
therein.

Class Pro Rata Share: With respect to any Class on any date, the percentage
equivalent of a fraction, the numerator of which is the related Class Facility
Limit as of such date and the denominator of which is the Facility Limit as of
such date.

Class Termination Date: For any Class, unless the related Class Agent elects
otherwise, the date of termination of the commitment of any Program Support
Provider under a Program Support Agreement with respect to such Class.

Closing Date: March 3, 2009.

Code: The Internal Revenue Code of 1986, as amended.

Collateral Agent: PNC Bank, as collateral agent for any Program Support
Provider, the holders of Commercial Paper and certain other parties.

Collection Account: As defined in Section 2.9.

Collections: With respect to any Receivable, all cash collections and other cash
proceeds of such Receivable, including (i) all scheduled interest and principal
payments, and any applicable late fees, in any such case, received and collected
on such Receivable, (ii) all proceeds received by virtue of the liquidation of
such Receivable, net of necessary and reasonable expenses incurred in connection
with such liquidation, (iii) all proceeds received (net of any such proceeds
which are required by law to be paid to the applicable Obligor) under any
damage, casualty or other

 

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insurance policy with respect to such Receivable, (iv) all cash proceeds of the
Related Security related to or otherwise attributable to such Receivable,
(v) any repurchase payment received with respect to such Receivable pursuant to
any applicable recourse obligation of the Servicer, the Seller or the Originator
under this Agreement or any other Transaction Document and (vi) all Deemed
Collections received with respect to such Receivable.

Commercial Paper: The promissory notes issued or to be issued by any Conduit
Investor (or its related commercial paper issuer if any Conduit Investor does
not itself issue commercial paper) in the commercial paper market.

Commitment: With respect to each Alternate Investor, as the context requires,
(i) the commitment of such Alternate Investor to make Investments and to pay
Assignment Amounts in accordance herewith in an amount not to exceed the amount
described in the following clause (ii), and (ii) the dollar amount set forth
opposite such Alternate Investor’s signature on the signature pages hereof under
the heading “Commitment” (or in the case of an Alternate Investor which becomes
a party hereto pursuant to an Assignment and Assumption Agreement, as set forth
in such Assignment and Assumption Agreement), minus the dollar amount of any
Commitment or portion thereof assigned by such Alternate Investor pursuant to an
Assignment and Assumption Agreement, plus the dollar amount of any increase to
such Alternate Investor’s Commitment consented to by such Alternate Investor
prior to the time of determination; provided, however, that, except as otherwise
provided in Section 3.3(b), in the event that the Facility Limit is reduced, the
Commitment of each Alternate Investor shall be reduced by a pro rata amount of
such reduction.

Commitment Termination Date: January 18, 2016, or such later date to which the
Commitment Termination Date may be extended by the SPV, the Agent, the Class
Agents and some or all of the Alternate Investors (in their sole discretion).

Concentration Factor: For any Monthly Period, the ratio (expressed as a
percentage) computed as of the Month End Date immediately preceding the first
day of such Monthly Period by dividing (a) the largest of the aggregate Unpaid
Balance of (i) Receivables of the five (5) largest (by Unpaid Balance) Group D
Obligors, (ii) Receivables of the three (3) largest (by Unpaid Balance) Group C
Obligors, (iii) Receivables of the two (2) largest (by Unpaid Balance) Group B
Obligors or (iv) Receivables of the largest (by Unpaid Balance) Group A Obligor,
in each case, as of such Month End Date and taking into account any
Concentration Limit applicable to each such Obligor, by (b) the aggregate Unpaid
Balance of all Eligible Receivables as of such Month End Date. Solely for
purposes of calculating the Concentration Factor, W.B. Mason Co., Inc. shall,
regardless of its rating by S&P and/or Moody’s, be considered a Group D Obligor.

Concentration Limit: The aggregate Unpaid Balance of Receivables with respect to
a single Obligor and such Obligor’s Subsidiaries and Affiliates that constitute
more than the amount (expressed as a percentage) set forth in the table below of
the aggregate Unpaid Balance of all Eligible Receivables:

 

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Obligor Group:

   Concentration Limit:  

Group A Obligor

     20.0 % 

Group B Obligor

     15.0 % 

Group C Obligor

     12.0 % 

Group D Obligor

     3.50 % 

; provided that if any Obligor is not rated by either S&P or Moody’s, the
applicable Concentration Limit shall be the Concentration Limit applicable to
Group D Obligors. Notwithstanding the foregoing, the aggregate Unpaid Balance of
Receivables with respect to W.B. Mason Co., Inc. and its Subsidiaries and
Affiliates may not constitute more than 13.0% of the aggregate Unpaid Balance of
all Eligible Receivables.

Conduit Assignee: With respect to any Class, any special purpose entity that
finances its activities directly or indirectly through asset backed commercial
paper and is administered by the Class Agent for such Class and designated by
such Class Agent from time to time to accept an assignment from the related
Conduit Investor of all or a portion of the portion of the related Class Net
Investment funded by such Conduit Investor.

Conduit Investment Termination Date: With respect to any Conduit Investor, the
date of the delivery by such Conduit Investor to the SPV of written notice that
such Conduit Investor elects, in its sole discretion, to commence the
amortization of the related Class Net Investment funded by it or otherwise
liquidate its interest in the Asset Interest.

Conduit Investors: Any special purpose entity that finances its activities
directly or indirectly through asset backed commercial paper that becomes a
party to this Agreement in accordance with the terms hereof and any Conduit
Assignee of any of the foregoing.

Contract: In relation to any Receivable, any and all contracts, instruments,
agreements, leases, invoices, notes, or other writings pursuant to which such
Receivable arises or which evidence such Receivable or under which an Obligor
becomes or is obligated to make payment in respect of such Receivable.

Contractual Dilution: With respect to any Receivable and any Obligor, the
portion of the Unpaid Balance of such Receivable that is subject to reduction as
a result of any rebate, discount or other reduction pursuant to any provision of
the related Contract or otherwise pursuant to any program of the Originator or
the Seller that is in effect on or before the date such Receivable is acquired
by the SPV, regardless of whether the Originator, the Seller, the SPV or the
Servicer has accrued or established a reserve therefor. For the avoidance of
doubt, (i) any reference in this Agreement or any other Transaction Document to
the amount of any Contractual Dilution shall be to the greater of the reduction
that may apply to such Receivable and the accrual or reserve established by the
Originator, the Seller, the Servicer or the SPV, as applicable, in respect of
any such reduction and (ii) Contractual Dilutions do not include any reduction
in the Unpaid Balance of any Receivable to the extent such reduction is a
Dilution.

CP Rate: As defined in Section 2.4.

 

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Credit and Collection Policy: The Originator’s credit and collection policy and
practices, relating to Contracts and Receivables as in effect on the Closing
Date and set forth in Exhibit B, as modified, from time to time, in compliance
with Sections 6.1(a)(vii) and

6.2(c).

Days Sales Outstanding: For any Monthly Period, the number of calendar days
equal to the product of (a) ninety one (91) and (b) the amount obtained by
dividing (i) the aggregate Unpaid Balance of Receivables as of the last day of
the immediately preceding Monthly Period by (ii) the aggregate amount of sales
by the Originator giving rise to Receivables during the three (3) consecutive
Monthly Periods immediately preceding such monthly Reporting Date.

Deemed Collections: Any Collections on any Receivable deemed to have been
received pursuant to Sections 2.6.

Default Rate: On any day, a rate per annum equal to the Base Rate plus 2.00%.

Default Ratio: For any Monthly Period, the ratio (expressed as a percentage)
computed as of the related Month End Date next preceding the first day of such
Monthly Period by dividing (i) the sum of (a) the aggregate Unpaid Balance of
all Receivables (other than Specified Ineligible Receivables) which are 61-90
days past due as of such Month End Date and (b) the aggregate Unpaid Balance of
all Receivables which became Charged-off Receivables (other than Specified
Ineligible Receivables) during such Monthly Period, by (ii) the aggregate amount
of sales by Originator giving rise to Receivables (other than Specified
Ineligible Receivables) for the 3rd preceding month.

Defaulted Receivable: Without double counting for any Charged-off Receivable, a
Receivable (i) as to which any payment, or part thereof, remains unpaid for more
than 60 days from the original due date for such Receivable; (ii) as to which an
Event of Bankruptcy has occurred and is continuing with respect to the Obligor
thereof; (iii) which has been identified by the SPV, the Originator or the
Servicer as uncollectible; or (iv) which, consistent with the Credit and
Collection Policy, should be written off as uncollectible; provided, however, a
Receivable that is a Charged-off Receivable shall not be a Defaulted Receivable.

Defaulting Alternate Investor: As defined in Section 2.3(f).

Delinquency Ratio: For any Monthly Period, the ratio (expressed as a percentage)
computed as of the related Month End Date next preceding the first day of such
Monthly Period by dividing (i) the aggregate Unpaid Balance of all Delinquent
Receivables (other than Specified Ineligible Receivables) and Disputed
Receivables (other than Specified Ineligible Receivables) at such time by
(ii) the aggregate Unpaid Balance of all Receivables (other than Specified
Ineligible Receivables) at such time.

Delinquent Receivable: A Receivable: (i) as to which any payment, or part
thereof, remains unpaid for more than sixty (60) days from the original due date
for such Receivable and (ii) which is not a Disputed Receivable.

Dilution: With respect to any Receivable on any date, an amount equal to the
sum, without duplication, of the aggregate reduction effected on such day in the
Unpaid Balance of such Receivable attributable to any non-cash items including
credits, rebates, billing errors, sales or

 

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similar taxes, cash discounts, volume discounts, allowances, disputes (it being
understood that a Receivable is “subject to dispute” only if and to the extent
that, in the reasonable good faith judgment of the Originator (which shall be
exercised in the ordinary course of business) the Obligor’s obligation in
respect of such Receivable is reduced on account of any performance failure on
the part of the Originator), set-offs, counterclaims, chargebacks, returned or
repossessed goods, sales and marketing discounts, warranties, any unapplied
credit memos and other adjustments that are made in respect of Obligors;
provided, that Contractual Dilutions, Charged-off Receivables, Disputed
Receivables, Advertising Receivables and other write-offs related to an
Obligor’s bad credit shall not constitute Dilutions.

Dilution Horizon Ratio: For any Monthly Period, the ratio (expressed as a
percentage) computed as of the related Month End Date immediately preceding the
first day of such Monthly Period by dividing (a) the aggregate amount of sales
by Originator giving rise to Receivables for the most recent 2 months, by
(ii) the aggregate Unpaid Balance of all Eligible Receivables as of such Month
End Date.

Dilution Ratio: For any Monthly Period, the ratio (expressed as a percentage)
computed as of the Month End Date immediately preceding the first day of such
Monthly Period by dividing (a) the aggregate Dilutions incurred during the month
ended on such Month End Date by (b) the aggregate amount of sales by the
Originator giving rise to Receivables in the month that occurs prior to the
month ended on such Month End Date.

Dilution Reserve Ratio: For any Monthly Period, the sum of (a) the product of
(i) the Stress Factor and (ii) the Expected Dilution Ratio and (b) the product
of (i) the excess, if any, of the Dilution Spike over the Expected Dilution
Ratio, (ii) the Dilution Spike divided by the Expected Dilution Ratio multiplied
by (c) the Dilution Horizon Ratio, in each case, for such Monthly Period.

Dilution Spike: For any Monthly Period, the highest one-month Dilution Ratio for
the twelve months ending on the Month End Date next preceding the first day of
such Monthly Period.

Disputed Receivable: A Receivable (other than a Delinquent Receivable, a
Defaulted Receivable or a Receivable subject to a Contractual Dilution), as to
which, in the reasonable good faith judgment of the Originator, the Seller or
the Servicer (which shall be exercised in the ordinary course of business), the
Unpaid Balance thereof has been reduced (or should be reduced) on account of any
performance failure on the part of the Originator, the Seller or the Servicer.
For the avoidance of doubt, (i) any reference in this Agreement or any other
Transaction Document to the amount of any Disputed Receivable shall be to the
greater of the reduction that may apply to such Receivable and the accrual or
reserve established by the Originator, the Seller, the Servicer or the SPV, as
applicable, in respect of any such reduction and (ii) Disputed Receivable does
not include any reduction in the Unpaid Balance of any Receivable to the extent
such reduction is a Dilution.

Dollar or $: The lawful currency of the United States.

Downgrade Collateral Account: As defined in Section 3.2(a).

Downgrade Draw: As defined in Section 3.2(a).

 

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Eligible Investments: Highly rated short-term debt or the other highly rated
liquid investments in which the Conduit Investors are permitted to invest cash
pursuant to their respective commercial paper program documents.

Eligible Receivable: At any time, any Receivable:

(i) which was originated by the Originator in the ordinary course of its
business;

(ii) (A) which, arises pursuant to a Contract with respect to which each of the
Originator and the SPV has performed all obligations required to be performed by
it thereunder, including shipment of the merchandise and/or the performance of
the services purchased thereunder; (B) which has been billed to the relevant
Obligor; and (C) which according to the Contract related thereto, is required to
be paid in full within 60 days of the original billing date therefor;

(iii) which satisfies all applicable requirements of the Credit and Collection
Policy;

(iv) which has been sold or contributed to the SPV pursuant to (and in
accordance with) the Second Tier Agreement, and by the Originator to the Seller
pursuant to (and in accordance with) the First Tier Agreement (other than the
Receivables acquired by the Seller in respect of the termination of the existing
receivables securitization on or prior to the date of the initial funding
hereunder) which does not arise from the sale of any inventory subject to any
Adverse Claim unless such Receivable has upon the transfer thereof been released
from such Adverse Claim and to which the SPV has good and marketable title, free
and clear of all Adverse Claims;

(v) the Obligor of which is a United States resident, is not an Affiliate or
employee of any of the parties hereto, and is not an Official Body;

(vi) as to which amount due on such Receivable has not been extended;

(vii) the Obligor of which has been directed to make all payments to a Blocked
Account;

(viii) which under the related Contract and applicable Law is assignable without
the consent of, or notice to, the Obligor thereunder unless such consent has
been obtained and is in effect or such notice has been given;

(ix) which, together with the related Contract, is in full force and effect and
constitutes the legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms and is not subject
to any litigation, dispute, offset, counterclaim or other defense;

(x) which is denominated and payable only in Dollars in the United States;

(xi) which is neither a Defaulted Receivable nor a Charged-off Receivable;

 

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(xii) which is not due from an Obligor which is more than 60 days past due on
more than twenty-five percent (25%) of the aggregate Unpaid Balances of
Receivables of which it is the Obligor;

(xiii) which has not been compromised, adjusted or modified (including by the
extension of time for payment or the granting of any discounts, allowances or
credits); provided, however, that only such portion of such Receivable that is
the subject of such compromise, adjustment or modification shall be deemed to be
ineligible pursuant to the terms of this

clause (xiii);

(xiv) which is an “account” and is not evidenced by an instrument within the
meaning of Article 9 of the UCC of all applicable jurisdictions;

(xv) which is an “eligible asset” as defined in Rule 3a-7 under the Investment
Company Act of 1940;

(xvi) which, together with the Contract related thereto, does not contravene in
any material respect any Laws applicable thereto (including Laws relating to
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy);

(xvii) the assignments of which under the First Tier Agreement by the Originator
to the Seller, the Second Tier Agreement by the Seller to the SPV and hereunder
by the SPV to the Agent do not violate, conflict or contravene any applicable
Law or any contractual or other restriction, limitation or encumbrance;

(xviii) which (together with the Related Security related thereto) has been the
subject of either a valid transfer and assignment from, or the grant of a first
priority perfected security interest therein by, the SPV to the Agent, on behalf
of the Investors, of all of the SPV’s right, title and interest therein (unless
repurchased by the SPV at an earlier date pursuant to this Agreement);

(xix) which is not a Specified Ineligible Receivable, an Advertising Receivable
or a Set Aside Receivable; and

(xx) which has been sold or contributed to the Seller pursuant to the First Tier
Agreement in a “true sale” or “true contribution” transaction and which has been
subsequently sold or contributed by the Seller to the SPV in a “true sale” or
“true contribution” transaction.

ERISA: The U.S. Employee Retirement Income Security Act of 1974, as amended and
any regulations promulgated and rulings issued thereunder.

ERISA Affiliate: With respect to any Person, any corporation, partnership,
trust, sole proprietorship or trade or business which, together with such
Person, is treated as a single employer under Section 414(b) or (c) of the Code
or, with respect to any liability for contributions under Section 302(c) of
ERISA, Section 414(m) or Section 414(o) of the Code.

 

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Eurocurrency Liabilities: As defined in Section 2.4.

Event of Bankruptcy: With respect to any Person or Performance Guarantor,
(i) that such Person or Performance Guarantor (A) shall generally not pay its
debts as such debts become due or (B) shall admit in writing its inability to
pay its debts generally or (C) shall make a general assignment for the benefit
of creditors; (ii) any proceeding shall be instituted by or against such Person
or Performance Guarantor seeking to adjudicate it as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property; or (iii) such
Person or Performance Guarantor shall take any corporate, partnership or other
similar appropriate action to authorize any of the actions set forth in the
preceding clauses (i) or (ii).

Exception Funding Period: As defined in Section 2.8.

Excluded Taxes: As defined in Section 9.3.

Existing Law: (i) the final rule titled “Risk-Based Capital Guidelines; Capital
Adequacy Guidelines; Capital Maintenance: Regulatory Capital; Impact of
Modifications to Generally Accepted Accounting Principles; Consolidation of
Asset-Backed Commercial Paper Programs; and Other Related Issues,” adopted by
the United States bank regulatory agencies on December 15, 2009 (the “FAS
166/167 Capital Guidelines”); (ii) the Dodd-Frank Wall Street Reform and
Consumer Protection Act; (iii) the revised Basel Accord prepared by the Basel
Committee on Banking Supervision as set out in the publication entitled:
“International Convergence of Capital Measurements and Capital Standards: a
Revised Framework,” as updated from time to time (“Basel II”); or (iv) any
implementing rules, regulations, guidance, interpretations or directives from
any Official Body relating to the FAS 166/167 Capital Guidelines, the Dodd-Frank
Wall Street Reform and Consumer Protection Act or Basel II (whether or not
having the force of law).

Expected Dilution Ratio: For any Monthly Period, the average of the Dilution
Ratios for the twelve months ending on the Month End Date next preceding the
first day of such Monthly Period.

Facility Fee: (i) With respect to the PNC Bank Class, the fee payable by the SPV
to PNC Bank, the terms of which are set forth in the Fee Letter with respect to
the PNC Bank Class; and (ii) with respect to any other Class, the fee specified
in any supplement to this Agreement or any separate fee letter as the facility
fee payable by the SPV to the related Class Agent.

Facility Limit: As of any date, the sum of the Class Facility Limits as of such
date, which amount shall not exceed $200,000,000.

Federal Funds Rate: As defined in Section 2.4.

Fee Letter: As the context may require, any or all of: (i) with respect to the
PNC Bank Class, a confidential letter agreement between the SPV and the related
Class Agent with respect to the fees to be paid by the SPV; and (ii) with
respect to any other Class, a confidential letter agreement between the SPV and
the related Class Agent with respect to the fees to be paid by the SPV.

 

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Final Payout Date: The date, after the Termination Date, on which the Net
Investment has been reduced to zero, all accrued Servicing Fees have been paid
in full and all other Aggregate Unpaids have been paid in full in cash.

First Tier Agreement: The sale agreement, dated as of March 3, 2009, between the
Originator and the Seller, as amended, modified, supplemented, restated or
replaced from time to time.

Fitch: Fitch Ratings, Inc. or any successor that is a nationally recognized
statistical rating organization.

GAAP: Generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board in effect from time to time.

Group A Obligor: Any Obligor 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 its long-term senior unsecured and un-credit-enhanced
debt securities, and (b) “P-1” by Moody’s, or if such Obligor does not have a
short-term rating from Moody’s, “A2” or better by Moody’s on its long-term
senior unsecured and un-credit-enhanced debt securities. If both a short-term
and long-term rating exist for an Obligor, the short-term rating will be used
and if S&P and Moody’s ratings for an Obligor indicate a different group for
such Obligor, the lower of such ratings shall be used.

Group B Obligor: Any Obligor, other than 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 its long-term
senior unsecured and un-credit-enhanced debt securities, and (b) “P-2” by
Moody’s, or if such Obligor does not have a short-term rating from Moody’s,
“Baa1” or better by Moody’s on its long-term senior unsecured and
un-credit-enhanced debt securities. If both a short-term and long-term rating
exist for an Obligor, the short-term rating will be used and if S&P and Moody’s
ratings for an Obligor indicate a different group for such Obligor, the lower of
such ratings shall be used.

Group C Obligor: Any Obligor, other than 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
its long-term senior unsecured and un-credit-enhanced debt securities, and
(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 its long-term senior unsecured and
un-credit-enhanced debt securities. If both a short-term and long-term rating
exist for an Obligor, the short-term rating will be used and if S&P and Moody’s
ratings for an Obligor indicate a different group for such Obligor, the lower of
such ratings shall be used.

Group D Obligor: Any Obligor that is not a Group A Obligor, a Group B Obligor or
a Group C Obligor.

 

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Guaranty: With respect to any Person, any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assures any other creditor
of such other Person against loss, including any comfort letter, operating
agreement or take-or-pay contract and shall include the contingent liability of
such Person in connection with any application for a letter of credit.

Indebtedness: Without duplication, with respect to any Person such Person’s
(i) obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person’s business on terms customary in the trade,
(iii) obligations, whether or not assumed, secured by liens or payable out of
the proceeds or products of property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances (including
bankers acceptances), or other instruments, (v) Capitalized Lease obligations,
(vi) obligations for which such Person is obligated pursuant to a Guaranty,
(vii) reimbursement obligations with respect to any letters of credit and
(viii) any other liabilities which would be treated as indebtedness in
accordance with GAAP.

Indemnified Amounts: As defined specified in Section 9.1.

Indemnified Parties: As defined in Section 9.1.

Intercreditor Agreement: The Intercreditor Agreement, dated as of October 15,
2007, by and among JPMorgan Chase Bank, N.A., the Noteholders (as defined
therein) and the Lenders (as defined therein) and acknowledged by the
Performance Guarantor and the Originator.

Interest Component: At any time of determination, the aggregate Yield accrued
and to accrue through the end of the current Rate Period for the Portion of
Investment accruing Yield calculated by reference to the CP Rate at such time
(determined for such purpose using the CP Rate most recently determined by the
related Class Agent).

Interim Report: A report, in substantially the form attached hereto as Exhibit K
or in such other form as is mutually agreed to by the SPV, the Servicer and the
Agent, furnished by the Servicer pursuant to Section 2.8.

Investment: As defined in Section 2.2(a).

Investment Date: As defined in Section 2.3(a).

Investment Deficit: As defined in Section 2.3(f).

Investment Request: Each request substantially in the form of Exhibit C.

Investor: The Conduit Investors and/or the Alternate Investors, as the context
may require.

 

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Investor Percentage: At any time with respect to any Investor, the percentage
equivalent of a fraction the numerator of which is equal to the portion of the
Net Investment owned by such Investor on such day and the denominator of which
is equal to the Net Investment on such day.

Law: Any law (including common law), constitution, statute, treaty, regulation,
rule, ordinance, order, injunction, writ, decree, judgment or award of any
Official Body.

Liquidity Agreement: For any Class, any agreement entered into by any related
Conduit Investor (or any commercial paper issuer that finances such Conduit)
providing for the sale by such Conduit Investor (or any commercial paper issuer
that finances such Conduit) of interests in its investment in the Asset Interest
and the portion of the Class Net Investment funded by such Conduit Investor (or
any commercial paper issuer that finances such Conduit) (or portions thereof),
or the making of loans or other extensions of credit to such Conduit Investor
(or any commercial paper issuer that finances such Conduit) secured by security
interests such Conduit Investor’s (or any commercial paper issuer that finances
such Conduit) interest in the Asset Interest and the portion of the Class Net
Investment funded by such Conduit Investor, to support all or part of such
Conduit Investor’s (or any commercial paper issuer that finances such Conduit)
payment obligations under its Commercial Paper or to provide an alternate means
of funding such Conduit Investor’s investments in accounts receivable or other
financial assets, in each case as amended, modified, supplemented, restated or
replaced from time to time.

Liquidity Bank: Includes the various financial institutions that are, or may
become, parties to a Liquidity Agreement, as a purchaser or lender thereunder.

Loss Horizon Ratio: For any Monthly Period, the ratio, expressed as a
percentage, of (a) the aggregate amount of sales by Originator giving rise to
Receivables (other than Specified Ineligible Receivables) for the most recent 5
months preceding the related Month End Date, divided by (b) the aggregate Unpaid
Balance of all Eligible Receivables as of such recent Month End Date.

Loss Reserve Ratio: For any Monthly Period, the product of (i) Stress Factor,
(ii) the highest three-month average Default Ratio during the most recent 12
month period, and (iii) the Loss Horizon Ratio for such Monthly Period.

Majority Investors: At any time, those Alternate Investors which hold
Commitments aggregating in excess of 2/3 of the Facility Limit as of such date;
provided that at any time when there is 2 or fewer Conduit Investors, shall mean
100% of the Alternate Investors.

Master Note Purchase Agreement: The Master Note Purchase Agreement, dated as of
October 15, 2007, by and among the Performance Guarantor, the Originator and the
Purchasers (as defined therein).

Material Adverse Effect: With respect to any Person, any event or condition
which is reasonably likely to have a material adverse effect on (i) the
collectibility of the Receivables, (ii) the condition (financial or otherwise),
businesses or properties of the SPV, the Servicer or the Originator, (iii) the
ability of the SPV, the Servicer or the Originator to perform its respective
obligations under the Transaction Documents to which it is a party, or (iv) the
status, perfection or priority of the security interests of the Agent, any Class
Agent or any Investors under the Transaction Documents.

 

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Material Subsidiary: At any time, shall mean Lagasse, Inc and ORS Nasco, Inc.

Maximum Net Investment: At any time, an amount equal to the Facility Limit.

Minimum Reserve Ratio: For any Monthly Period, the sum of (a) the Concentration
Factor for such Monthly Period and (b) the product of the (i) the Expected
Dilution Ratio for such Monthly Period and (ii) the Dilution Horizon Ratio for
such Monthly Period.

Month End Date: The last day of each calendar month.

Monthly Period: The period from the Closing Date to and including the first
Month End Date after the Closing Date and each subsequent calendar month until
the Final Payout Date.

Moody’s: Moody’s Investors Service, Inc., or any successor that is a nationally
recognized statistical rating organization.

Multiemployer Plan: As defined in Section 4001(a)(3) of ERISA.

Net Investment: At any time, the sum of the Class Net Investments on such day.

Net Pool Balance: At any time, (i) the aggregate Unpaid Balances of Eligible
Receivables at such time, minus (ii) the sum of (a) the aggregate amount of the
portion of the Unpaid Balances of Eligible Receivables in excess of the
applicable Concentration Limits, (b) the then-current aggregate amount of
Contractual Dilutions related to all Eligible Receivables, (c) the then-current
aggregate amount of all sales and other taxes included in the Unpaid Balances of
all Eligible Receivables and (d) the then-current amount of reductions to the
Unpaid Balance of all Receivables that are Disputed Receivables.

Non-Defaulting Alternate Investor: As defined in Section 2.3(f).

Obligor: With respect to any Receivable, the Person obligated to make payments
in respect of such Receivable pursuant to a Contract.

Official Body: Any government or political subdivision or any agency, authority,
bureau, central bank, commission, department or instrumentality of any such
government or political subdivision, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.

Offshore Rate: As defined in Section 2.4.

Opinion: That certain opinion of Mayer Brown LLP, special counsel to the SPV,
the Seller, the Performance Guarantor and the Originator, dated the Closing Date
and delivered with respect to the transactions contemplated by this Agreement
and covering certain bankruptcy and insolvency matters i.e. “true sale” and
nonconsolidation.

 

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Originator: As defined in the Preamble.

Other SPV: Any Person other than the SPV that has entered into a receivables
purchase agreement, loan and security agreement, note purchase agreement,
transfer and administration agreement or any other similar agreement with the
Conduit Investors.

Pension Plan: An employee pension benefit plan as defined in Section 3(2) of
ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Plan)
and to which the Originator, the SPV or an ERISA Affiliate of either has, or is
reasonably expected to have, any liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
or by reason of being deemed to be a contributing sponsor under Section 4069 of
ERISA.

Performance Guarantee: The Performance Guarantee Agreement, dated as of March 3,
2009, by the Performance Guarantor and the SPV, as amended, modified,
supplemented, restated or replaced from time to time.

Performance Guarantor: United Stationers, Inc, an Delaware corporation.

Permitted Investment Date: Any Business Day prior to the Termination Date.

Permitted Liens: Any of (i) the liens of the Agent, on behalf of the Investors,
created pursuant to the Transaction Documents and (ii) liens created with the
consent of the Agent and Majority Investors.

Person: An individual, partnership, limited liability company, corporation,
joint stock company, trust (including a business trust), unincorporated
association, joint venture, firm, enterprise, Official Body or any other entity.

Pledge Agreement: The Pledge Agreement, dated as of May 21, 2003, by and among
the Originator, the Performance Guarantor and other Subsidiaries of the
Performance Guarantor (as set forth on the signature page thereto) and Bank One,
NA.

PNC Bank: As defined in the Preamble.

PNC Bank Class: The Class initially consisting of PNC Bank (in its capacities as
a Class Agent and an Alternate Investor) and its successors and assigns.

Portion of Investment: As defined in Section 2.4(a).

Potential Termination Event: An event which but for the lapse of time or the
giving of notice, or both, would constitute a Termination Event.

Principal Collections: For any Monthly Period, (i) all Collections received
during such Monthly Period other than finance charges and (ii) all payments
received on Eligible Investments for such Monthly Period.

 

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Pro Rata Share: For any Alternate Investor, the Commitment of such Alternate
Investor, divided by the sum of the Commitments of all Alternate Investors (or,
if the Commitments shall have been terminated, its pro rata share of the
Alternate Investor Percentage of the related Class Net Investment).

Program Fee: As defined in the Fee Letter.

Program Support Agreement: Any agreement, including any Liquidity Agreement,
entered into by any Program Support Provider providing for the issuance of one
or more letters of credit for the account of a Conduit Investor (or any related
commercial paper issuer that finances the Conduit Investor), the issuance of one
or more surety bonds for which any Conduit Investor (or such related issuer) is
obligated to reimburse the applicable Program Support Provider for any drawings
thereunder, the sale by any Conduit Investor (or such related issuer) to any
Program Support Provider of the Asset Interest (or portions thereof or
participations therein) and/or the making of loans and/or other extensions of
credit to any Conduit Investor (or such related issuer) in connection with such
Conduit Investor’s commercial paper program, together with any letter of credit,
surety bond or other instrument issued thereunder.

Program Support Provider: Any Person, including any Liquidity Bank, now or
hereafter extending credit or having a commitment to extend credit to or for the
account of, or to make purchases from, any Conduit Investor (or any related
commercial paper issuer that finances the Conduit Investor) or issuing a letter
of credit, surety bond or other instrument to support any obligations arising
under or in connection with such Conduit Investor’s (or such related issuer’s)
commercial paper program.

Purchase Termination Date: As defined in Section 8.1 of the Second Tier
Agreement.

Rate Period: As defined in Section 2.4.

Rate Type: As defined in Section 2.4.

Rating Agencies: Collectively, Fitch, Moody’s and S&P.

Receivable: Any indebtedness and other obligations owed by any Obligor to the
Originator (without giving effect to any transfer under the First Tier Agreement
and Second Tier Agreement) under a Contract or any right of the SPV to payment
from or on behalf of an Obligor, whether constituting an account, chattel paper,
instrument or general intangible, arising in connection with the sale or lease
of goods or the rendering of services, in either case, by the Originator, and
includes the obligation to pay any finance charges, fees and other charges with
respect thereto.

Recipient: As defined in Section 2.10.

Records: All Contracts and other documents, purchase orders, invoices,
agreements, books, records and any other media, materials or devices for the
storage of information (including tapes, disks, punch cards, computer programs
and databases and related property) maintained by the SPV, the Originator or the
Servicer with respect to the Receivables, any other Affected Assets or the
Obligors.

 

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Reinvestment: As defined in Section 2.2(b).

Reinvestment Period: The period commencing on the Closing Date and ending on the
Termination Date.

Related Security: With respect to any Receivable, all of the Originator’s
(without giving effect to any transfer under the First Tier Agreement and the
Second Tier Agreement) or the SPV’s rights, title and interest in, to and under:

(i) all other security interests or liens and property subject thereto from time
to time, if any, purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all financing statements and other filings signed by an Obligor relating
thereto;

(ii) the Contract and all guarantees, indemnities, warranties, insurance (and
proceeds and premium refunds thereof) or other agreements or arrangements of any
kind from time to time supporting or securing payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise;

(iii) all Records related to such Receivable; and

(iv) all Collections on and other proceeds of any of the foregoing.

Reportable Event: Any event, transaction or circumstance which is required to be
reported with respect to any Pension Plan under Section 4043 of ERISA and the
applicable regulations thereunder.

Reporting Date: As defined in Section 2.8.

Required Downgrade Assignment Period: As defined in Section 3.2(a).

Required Notice Days: With respect to any reduction of the Net Investment
pursuant to the provisions of Section 2.7(a) or Section 2.13, (i) two
(2) Business Days in the case of a reduction of Net Investment of less than
$10,000,000 and (ii) five (5) Business Days in the case of a reduction of Net
Investment of at least $20,000,000.

Required Reserves: At any time other than during an Exception Funding Period,
the sum of (i) the Net Pool Balance on such date of calculation multiplied by
the greater of (a) the sum of the Loss Reserve Ratio on such date of calculation
and the Dilution Reserve Ratio on such date of calculation; and (b) the Minimum
Reserve Ratio on such date of calculation; (ii) the Yield Reserve on such date
of calculation; and (iii) the Servicing Fee Reserve on such date of calculation
(such sum, the “Standard Reserves”). At any time during an Exception Funding
Period, the greater of (i) the Standard Reserves on such date of calculation and
(ii) 50% of the Net Pool Balance on such date of calculation.

Responsible Officer: With respect any Person, the Chairman of the Board,
President, Chief Financial Officer, any Vice President, Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary of such Person.

 

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Restricted Payments: As defined in Section 6.2(k).

Revolving Credit Agreement: The Third Amended and Restated Five-Year Revolving
Credit Agreement, dated September 21, 2011, by and among the Originator, the
Performance Guarantor, the Lenders from time to time parties thereto, U.S. Bank
National Association, Bank of America, N.A., PNC Bank, National Association,
Wells Fargo Bank, National Association, JPMorgan Securities LLC, Wells Fargo
Securities, LLC and JPMorgan Chase Bank, National Association as such agreement
exists as of September 21, 2011 without giving effect to any amendment,
modification, waiver, replacement or supplement thereto that is not consented to
in writing by each Class Agent.

Sale Termination Date: As defined in Section 8.1 of the First Tier Agreement.

Second Omnibus Amendment Closing Date: January 18, 2013.

Second Tier Agreement: The purchase agreement, dated as of March 3, 2009,
between the Seller and SPV, as amended, modified, supplemented, restated or
replaced from time to time.

Seller: As defined in the Preamble.

Servicer: As defined in Section 7.1.

Servicer Default: As defined in Section 7.5.

Servicer Report: A report, in substantially the form attached hereto as Exhibit
E or in such other form as is mutually agreed to by the SPV, the Servicer and
the Agent, furnished by the Servicer pursuant to Section 2.8.

Servicing Fee: The fees payable to the Servicer from Collections, in an amount
equal to either (a) at any time when the Servicer is the Seller or any of its
Affiliates, the Servicing Fee Rate on (i) the sum of (x) the Unpaid Balance of
Receivables as of the last day of the current calendar month, plus (y) the
Unpaid Balance of Receivables as of the last day of the immediately preceding
calendar month, divided by (ii) 2, or (b) at any time when the Servicer is not
the Seller or any of its Affiliates, the amount agreed between such Servicer and
the Agent, payable in arrears on each Settlement Date from Collections pursuant
to, and subject to the priority of payments set forth in, Section 2.12. With
respect to any Portion of Investment, the Servicing Fee allocable thereto shall
be equal to the Servicing Fee determined as set forth above, times a fraction,
the numerator of which is the amount of such Portion of Investment and the
denominator of which is the Net Investment.

Servicing Fee Rate: 1.0% per annum

Servicing Fee Reserve: At any time, an amount equal to the product of (i) the
Servicing Fee Rate (ii) a fraction having Days Sales Outstanding as the
numerator, and 360 as the denominator and (iii) the aggregate Unpaid Balance of
all Receivables (other than Specified Ineligible Receivables) on such date of
calculation.

 

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Set-Aside Receivable: Any Receivable with respect to which the Originator, the
Seller or the Servicer at any time evidences the payment obligation of the
related Obligor by a note or other instrument and agrees to any extended payment
date.

Settlement Date: (i) Prior to the Termination Date, the 25th day of each
calendar month (or, if such day is not a Business Day, the immediately
succeeding Business Day) or such other day as the SPV and the Agent may from
time to time mutually agree, and (ii) for any Portion of Investment for any
Class on and after the Termination Date, each day selected from time to time by
the related Class Agent (it being understood that the Class Agents may select
such Settlement Dates to occur as frequently as daily) or, in the absence of any
such selection, the date which would be the Settlement Date for such Portion of
Investment pursuant to clause (i) of this definition.

S&P: Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor that is a nationally recognized statistical
rating organization.

Specified Ineligible Receivable: (i) On and after the Closing Date, each
Receivable the Obligor of which is listed on Schedule I hereto and (ii) from
time to time after the Closing Date, each Receivable, the Obligor of which is
identified by the Servicer to the Class Agents in writing (it being understood
that for purposes of this clause (ii), the Servicer shall not designate as
Specified Ineligible Receivables, the Receivables of more than two Obligors per
calendar year). Any designation by the Servicer of a Receivable as a Specified
Ineligible Receivable shall be effective beginning with the Monthly Period
immediately following the date of such designation. Any Receivable that has been
designated as an Specified Ineligible Receivable shall not become an Eligible
Receivable without the prior written consent of the Agent. On the tenth
(10th) calendar day (or if such day is not a Business Day, the immediately
succeeding Business Day) following the Second Omnibus Amendment Closing Date and
each anniversary of the Second Omnibus Amendment Closing Date, the SPV may, but
shall not be required to, submit an updated Schedule I which shall be subject to
the review and approval of the Agent, in its sole discretion, in all respects.
Any updated Schedule I submitted by the SPV pursuant to the immediately
preceding sentence shall, upon receipt of the Agent’s approval thereof,
supersede and replace any previously effective Schedule I and shall become a
fully incorporated schedule to this Agreement.

SPV: United Stationers Receivables, LLC, an Illinois limited liability company.

Stress Factor: 2.25.

Sub-Servicer: As defined in Section 7.1(d).

Subsidiary: With respect to any Person, any corporation or other Person (i) of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions are at the time directly or indirectly owned by such Person or
(ii) that is directly or indirectly controlled by such Person within the meaning
of control under Section 15 of the Securities Act of 1933.

Taxes: As defined in Section 9.3.

 

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Termination Date: The earliest of (i) the latest occurring Class Termination
Date, (ii) the day upon which the Termination Date is declared or automatically
occurs pursuant to Section 8.2, (iii) the Commitment Termination Date, (iv) the
Sale Termination Date and (v) the Purchase Termination Date.

Termination Event: As defined in Section 8.1.

Transaction Costs: As defined in Section 9.4(a).

Transaction Documents: Collectively, this Agreement, the First Tier Agreement,
the Second Tier Agreement, the Fee Letter, the Blocked Account Agreements, and
all of the other instruments, documents and other agreements executed and
delivered by the Servicer, the Originator or the SPV in connection with any of
the foregoing.

Trigger Delinquency Ratio: For any Monthly Period, the ratio (expressed as a
percentage) computed as of the related Month End Date next preceding the first
date of such Monthly Period by dividing (i) the aggregate Unpaid Balance of all
Receivables (other than Specified Ineligible Receivables) which are Delinquent
Receivables (other than Specified Ineligible Receivables which are Delinquent
Receivables) plus Disputed Receivables (other than Specified Ineligible
Receivables which are Disputed Receivables), by (ii) the aggregate Unpaid
Balance of all Receivables (other than Specified Ineligible Receivables) at such
time.

Trigger Default Ratio: For any Monthly Period, the ratio (expressed as a
percentage) computed as of the related Month End Date next preceding the first
date of such Monthly Period by dividing (i) the sum of (a) the aggregate Unpaid
Balance of all Receivables (other than Specified Ineligible Receivables) which
are 61-90 days past due as of such Month End Date and (b) the aggregate Unpaid
Balance of all Receivables which became Charged-off Receivables during such
Monthly Period (other than Specified Ineligible Receivables which are Defaulted
Receivables), by (ii) the aggregate amount of sales by Originator giving rise to
Receivables for the 3rd most preceding month.

Trigger Dilution Ratio: For any Monthly Period, the ratio (expressed as a
percentage) computed as of the related Month End Date next preceding the first
date of such Monthly Period by dividing (i) the aggregate reduction in the
original balance of all Receivables attributable to Dilutions during such month,
by (ii) the aggregate amount of sales by the Originator in the most recent prior
month.

UCC: The Uniform Commercial Code as in effect in the applicable jurisdiction or
jurisdictions.

Unpaid Balance: Of any Receivable means at any time the unpaid principal amount
thereof.

U.S. or United States: The United States of America.

Yield: As defined in Section 2.4.

Yield Payment Date: The last day of each Rate Period.

 

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Yield Reserve: At any time, an amount equal to the product of (a) (i) 1.5
multiplied by the Days Sales Outstanding as of such day multiplied by (ii) the
Base Rate in effect as of such day, divided by (iii) 360, multiplied by (b) the
Net Pool Balance.

Section 1.2 Other Terms.

All terms defined directly or by incorporation herein shall have the defined
meanings when used in any certificate or other document delivered pursuant
hereto unless otherwise defined therein. For purposes of this Agreement and all
such certificates and other documents, unless the context otherwise requires:
(a) accounting terms not otherwise defined herein, and accounting terms partly
defined herein to the extent not defined, shall have the respective meanings
given to them under, and shall be construed in accordance with, GAAP; (b) 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; (c) references to
any amount as on deposit or outstanding on any particular date means such amount
at the close of business on such day; (d) the words “hereof,” “herein” and
“hereunder” and words of similar import refer to this Agreement (or the
certificate or other document in which they are used) as a whole and not to any
particular provision of this Agreement (or such certificate or document);
(e) references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement (or the certificate or other
document in which the reference is made) and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (f) the term “including” means “including without limitation”;
(g) references to any Law refer to that Law as amended from time to time and
include any successor Law; (h) references to any agreement refer to that
agreement as from time to time amended or supplemented or as the terms of such
agreement are waived or modified in accordance with its terms; (i) references to
any Person include that Person’s successors and permitted assigns; and
(j) headings are for purposes of reference only and shall not otherwise affect
the meaning or interpretation of any provision hereof.

Section 1.3 Computation of Time Periods; Calculations.

(a) Unless otherwise stated in this Agreement, in the computation of a period of
time from a specified date to a later specified date, the word “from” means
“from and including”, the words “to” and “until” each means “to but excluding”,
and the word “within” means “from and excluding a specified date and to and
including a later specified date”.

(b) With respect to Set-Aside Receivables, all calculations of triggers,
reserves and ratios herein shall be made based on the dates such Receivable or
portion thereof became a Set-Aside Receivable.

 

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Article II

Purchases and Settlements

Section 2.1 Transfer of Affected Assets; Intended Characterization.

(a) Sale of Asset Interest. In consideration of the payment by the Agent (on
behalf of the Conduit Investors or the related Alternate Investors as determined
pursuant to Section 2.3) of the amount of the initial Net Investment on the
Closing Date and the Agent’s agreement (on behalf of the Conduit Investors or
the related Alternate Investors as determined below) to make payments to the SPV
from time to time in accordance with Section 2.2, effective upon the SPV’s
receipt of payment for such initial Net Investment on the Closing Date, the SPV
hereby sells, conveys, transfers and assigns to the Agent, on behalf of the
Investors, as their interests may from time to time appear, (i) all Receivables
existing on the Closing Date or thereafter arising or acquired by the SPV from
time to time prior to the Final Payout Date, and (ii) all other Affected Assets,
whether existing on the Closing Date or thereafter arising at any time.

(b) Purchase of Asset Interest. Subject to the terms and conditions hereof, the
Agent (on behalf of the Investors) hereby purchases and accepts from the SPV the
Receivables and all other Affected Assets sold, assigned and transferred
pursuant to subsection (a). The Agent’s right, title and interest in and to the
Receivables and all other Affected Assets hereunder is herein called the “Asset
Interest”. The Agent shall hold the Asset Interest on behalf of the Conduit
Investors and the Alternate Investors, as applicable pro rata in accordance with
their respective Investor Percentages.

(c) Obligations Not Assumed. The foregoing sale, assignment and transfer does
not constitute and is not intended to result in the creation, or an assumption
by the Agent, the Class Agent or any Investor, of any obligation of the SPV, the
Seller, the Originator, or any other Person under or in connection with the
Receivables or any other Affected Asset, all of which shall remain the
obligations and liabilities of the SPV, the Seller and the Originator, as
applicable.

(d) Intended Characterization; Grant of Security Interest.

(i) The SPV, the Agent, the Class Agents and the Investors intend that the sale,
assignment and transfer of the Affected Assets to the Agent (on behalf of the
Conduit Investors and/or the Alternate Investors as applicable) hereunder shall
be treated as a sale for all purposes, other than federal and state income tax
and accounting purposes. If notwithstanding the intent of the parties, the sale,
assignment and transfer of the Affected Assets to the Agent (on behalf of the
Investors) is not treated as a sale for all purposes, other than federal and
state income tax and accounting purposes, the sale, assignment and transfer of
the Affected Assets shall be treated as the grant of, and the SPV hereby does
grant, a security interest in the Affected Assets to secure the payment and
performance of the SPV’s obligations to the Agent (on behalf of the Conduit
Investors and/or the Alternate Investors as applicable) hereunder and under the
other Transaction Documents or as may be determined in connection therewith by
applicable Law.

 

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(ii) Each of the parties hereto further expressly acknowledges and agrees that
the Commitments of the Alternate Investors hereunder, regardless of the intended
true sale nature of the overall transaction, are financial accommodations
(within the meaning of Section 365(c)(2) of the Bankruptcy Code) to or for the
benefit of SPV.

Section 2.2 Purchase Price.

Subject to the terms and conditions hereof, including Article V, in
consideration for the sale, assignment and transfer of the Affected Assets by
the SPV to the Agent (on behalf of the Conduit Investors and/or the Alternate
Investors, as applicable) hereunder:

(a) Investments. On the Closing Date, and thereafter from time to time during
the Reinvestment Period, on request of the SPV in accordance with Section 2.3,
each Class Agent (on behalf of the related Conduit Investors or the related
Alternate Investors, as determined pursuant to Section 2.3) shall pay to the SPV
an amount equal, in each instance, to the lesser of (i) the related Class Pro
Rata Share of the amount requested by the SPV under Section 2.3(a), and (ii) the
largest amount that will not cause (A) the Class Net Investment to exceed the
Class Maximum Net Investment, (B) the sum of the Class Net Investment and the
related Class Pro Rata Share of the Required Reserves to exceed the related
Class Pro Rata Share of the Net Pool Balance and (C) if such Investment Date
occurs during the period beginning on the Closing Date through and including the
Reporting Date in June 2009, the Net Investment to exceed $150,000,000. Each
such payment is herein called an “Investment”.

(b) Reinvestments. On each Business Day during the Reinvestment Period the
Servicer, on behalf of each Class Agent (for the benefit of the related Conduit
Investors and/or the related Alternate Investors, as applicable), shall apply
out of Collections of Receivables, the amount available for Reinvestment in
accordance with Section 2.14. Each such payment is hereinafter called a
“Reinvestment”. All Reinvestments shall be made ratably on behalf of each
Investor that has funded any portion of the Net Investment pro rata in
accordance with its respective Investor Percentage.

(c) SPV Payments Limited to Collections. Notwithstanding any provision contained
in this Agreement to the contrary, the Agent and the Class Agents shall not, and
shall not be obligated (whether on behalf of the Conduit Investors or the
Alternate Investors), to pay any amount to the SPV as the purchase price of
Receivables pursuant to subsection (b) above except to the extent of Collections
on Receivables available for distribution to the SPV in accordance with this
Agreement. Any amount which the Agent or any Class Agent (whether on behalf of
the related Conduit Investors or the related Alternate Investors) does not pay
pursuant to the preceding sentence shall not constitute a claim (as defined in
§101 of the Bankruptcy Code) against, or corporate obligation of, the Agent or
such Class Agent for any such insufficiency unless and until such amount becomes
available for distribution to the SPV under Section 2.12.

Section 2.3 Investment Procedures.

(a) Notice. The SPV shall request an Investment hereunder, by request to the
Agent and each Class Agent given by facsimile in the form of an Investment
Request at least two (2) Business Days prior to the proposed date of any
Investment (including the initial Investment).

 

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Each such Investment Request shall specify (i) the desired amount of such
Investment (which shall be at least $2,000,000 or an integral multiple of
$100,000 in excess thereof or, to the extent that the then available unused
portion of the Maximum Net Investment is less than such amount, such lesser
amount equal to such available unused portion of the Maximum Net Investment) and
(ii) the desired date of such Investment (the “Investment Date”) which shall be
a Permitted Investment Date.

(b) Conduit Investor Acceptance or Rejection; Investment Request Irrevocable.

(i) Each Class Agent will promptly notify the related Investors of its receipt
of any Investment Request with respect to its Class. If the Investment Request
is received prior to the Conduit Investment Termination Date, each Conduit
Investor shall instruct the related Class Agent to accept or reject such
Investment Request by notice given to the related Class Agent by telephone or
facsimile by no later than the close of its business on the Business Day
following its receipt of any such Investment Request. Following receipt of such
instructions from the related Conduit Investors, each Class Agent shall promptly
notify the SPV and the related Alternate Investors of the acceptance or
rejection by the related Conduit Investors of the Investment Request.

(ii) Each Investment Request shall be irrevocable and binding on the SPV, and
the SPV shall indemnify each Investor against any loss or expense incurred by
such Investor, either directly or indirectly (including, in the case of any
Conduit Investor, through a Program Support Agreement) as a result of any
failure by the SPV to complete such Investment, including any loss (including
loss of profit) or expense incurred by any Class Agent and any related Investor,
either directly or indirectly (including, in the case of any Conduit Investor,
pursuant to a Program Support Agreement) by reason of the liquidation or
reemployment of funds acquired by such Investor (or the applicable Program
Support Provider(s)) (including funds obtained by issuing commercial paper or
promissory notes or obtaining deposits or loans from third parties) in order to
fund such Investment.

(c) Alternate Investors’ Commitment. Subject to the satisfaction of the
conditions precedent set forth in Sections 5.1 and 5.2 and the other terms and
conditions hereof, each Alternate Investor hereby agrees to make available its
Alternate Investor Percentage of the related Class Pro Rata Share of each
Investment during the period from and including the Closing Date to but not
including the Commitment Termination Date in an amount up to its Commitment.
Subject to Section 2.2(b) concerning Reinvestments, at no time will the Conduit
Investors have any obligation to fund an Investment or Reinvestment. At all
times on and after the Conduit Investment Termination Date, all Investments and
Reinvestments shall be made by the related Class Agent on behalf of the related
Alternate Investors. In addition, at any time when a Conduit Investor has
rejected a request to fund its Class Pro Rata Share of an Investment, the
related Class Agent shall so notify the related Alternate Investors and such
Alternate Investors shall make available their respective Alternate Investor
Percentages of the related Class Pro Rata Share of such Investment.
Notwithstanding anything contained in this Section 2.3(c) or elsewhere in this
Agreement to the contrary, no Alternate Investor shall be obligated to provide
the related Class Agent or the SPV with funds in connection with an Investment
or Reinvestment in an amount that would result in the portion of the related
Class Net Investment then funded by

 

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it (after giving effect to any Investment to be funded on such day) exceeding
its Commitment then in effect (minus the unrecovered principal amount of such
Alternate Investor’s investments in the Asset Interest pursuant to the Program
Support Agreement to which it is a party). The obligation of each Alternate
Investor to remit its Alternate Investor Percentage of any such Class Pro Rata
Share of any Investment or Reinvestment shall be several from that of each other
Alternate Investor, and the failure of any Alternate Investor to so make such
amount available to the related Class Agent shall not relieve any other
Alternate Investor of its obligation hereunder.

(d) Payment of Investment. On any Investment Date, each Conduit Investor or the
related Alternate Investor, as the case may be, shall remit its pro rata share
of the aggregate amount of such Investment (determined pursuant to
Section 2.2(a)) to the account of the SPV specified therefor from time to time
by the Agent by notice to such Persons by wire transfer of same day funds.

(e) Agent May Advance Funds. Unless the Agent shall have received notice from
any Investor that such Person will not make its share of any Investment
available on the applicable Investment Date therefor, the Agent may (but shall
have no obligation to) make any such Investor’s share of any such Investment
available to the SPV in anticipation of the receipt by the Agent of such amount
from the applicable Investor. To the extent any such Investor fails to remit any
such amount to the Agent after any such advance by the Agent on such Investment
Date, such Investor, and if such Investor does not, upon the request of the
Agent, the SPV, shall be required to pay such amount to the Agent for payment to
the Agent for its own account, together with interest thereon at a per annum
rate equal to the Federal Funds Rate, in the case of such Investor, or the Base
Rate, in the case of the SPV, to the Agent for payment to such Agent (provided
that no Conduit Investor shall have any obligation to pay such interest amounts
except to the extent that it shall have sufficient funds to pay the face amount
of its respective Commercial Paper in full). Until such amount shall be repaid,
such amount shall be deemed to be Net Investment paid by the Agent and the Agent
shall be deemed to be the owner of an interest in the Asset Interest hereunder
to the extent of such Investment. Upon the payment of such amount to the Agent
(i) by the SPV, the amount of the Net Investment shall be reduced by such amount
or (ii) by such Investor, such payment shall constitute such Person’s payment of
its share of the applicable Investment. Notwithstanding the foregoing, each of
the parties hereto agrees that, prior to the Termination Date, any amount to be
paid by the SPV under this Section 2.3(e) will be payable on the next succeeding
Settlement Date pursuant to and in accordance with the priorities for payment
set forth in Section 2.12 hereof.

(f) Defaulting Alternate Investor. If, by 2:00 p.m. (New York City time),
whether or not the Agent has advanced the amount of the applicable Investment,
one or more Alternate Investors with respect to a Class (each, a “Defaulting
Alternate Investor”, and each Alternate Investor with respect to such Class
other than any Defaulting Alternate Investor being referred to as a
“Non-Defaulting Alternate Investor”) fails to make either (1) its Alternate
Investor Percentage of the related Class Pro Rata Share of any Investment
available to the Agent pursuant to Section 2.3(d) or (2) any Assignment Amount
payable by it pursuant to Section 3.1 (the aggregate amount not so made
available to the Agent being herein called in either case the “Investment
Deficit”), then the related Class Agent shall, by no later than 2:30 p.m. (New
York City time) on the applicable Investment Date or the applicable Assignment
Date, as the case may be, instruct each Non-Defaulting Alternate Investor to
pay, by no later than 3:00 p.m. (New York

 

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City time), in immediately available funds, to the account designated by the
related Class Agent, an amount equal to the lesser of (i) such Non-Defaulting
Alternate Investor’s proportionate share (based upon the relative Commitments of
the Non-Defaulting Alternate Investors) of the Investment Deficit and (ii) its
unused Commitment. A Defaulting Alternate Investor shall forthwith, upon demand,
pay to the related Class Agent for the ratable benefit of the Non-Defaulting
Alternate Investors all amounts paid by each Non-Defaulting Alternate Investor
on behalf of such Defaulting Alternate Investor, together with interest thereon,
for each day from the date a payment was made by a Non-Defaulting Alternate
Investor until the date such Non-Defaulting Alternate Investor has been paid
such amounts in full, at a rate per annum equal to the Default Rate. In
addition, if, after giving effect to the provisions of the immediately preceding
sentence, any Investment Deficit with respect to any Assignment Amount continues
to exist, each such Defaulting Alternate Investor shall pay interest to the
related Class Agent, for the account of the related Conduit Investor, on such
Defaulting Alternate Investor’s portion of such remaining Investment Deficit, at
a rate per annum, equal to the Default Rate, for each day from the applicable
Assignment Date until the date such Defaulting Alternate Investor shall pay its
portion of such remaining Investment Deficit in full to such Conduit Investor.

Section 2.4 Determination of Yield and Rate Periods.

(a) Portions of Investment. From time to time, for purposes of determining the
Rate Periods applicable to the different portions of the related Class Net
Investment and of calculating Yield with respect thereto, each Class Agent shall
allocate its related Class Net Investment to one or more tranches (each a
“Portion of Investment”). At any time, each Portion of Investment shall have
only one Rate Period and one Rate Type. For the avoidance of doubt, at any time
when the related Class Net Investment is not divided into more than one portion,
“Portion of Investment” means 100% of the related Class Net Investment.

(b) [Reserved].

(c) Definitions Applicable to Yield Calculation; Yield Calculation. As used in
this Section 2.4, 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):

Alternate Rate: For any Rate Period for any Portion of Investment, an interest
rate per annum equal to: (a) the daily average LMIR for such Rate Period or
(b) if the Base Rate is applicable pursuant to Section 2.4(d), the daily average
Base Rate for such Rate Period. The “Alternate Rate” for any date on or after
the declaration or automatic occurrence of Termination Date pursuant to
Section 8.2 shall be an interest rate equal to the Default Rate in effect on
such day.

Base Rate: For any day a fluctuating rate per annum equal to the highest of
(a) the Federal Funds Rate for such day, plus .50%, (b) the rate of interest in
effect for such day as publicly announced from time to time by the Agent as its
“reference rate” or “prime rate” and (c) the daily average LMIR for the related
Rate Period. The “reference rate” or “prime rate” is a rate set by the Agent
based upon various factors including the Agent’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing

 

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some loans, which may be priced at, above, or below such announced rate, and is
not necessarily the lowest rate charged to any customer. Any change in the
“reference rate” or “prime rate” announced by the Agent shall take effect at the
opening of business on the day specified in the public announcement of such
change.

CP Rate: For any Conduit Investor and any Rate Period for any Portion of
Investment, the per annum rate equivalent to the weighted average cost (as
determined by the related Class Agent and which shall include commissions of
placement agents and dealers, incremental carrying costs incurred with respect
to Commercial Paper related to the Conduit Investor that is a member of such
Class maturing on dates other than those on which corresponding funds are
received by such Conduit Investor (or its related commercial paper issuer if the
Conduit Investor does not itself issue commercial paper), other borrowings by
such Conduit Investor (other than under any Program Support Agreement) and any
other costs associated with the issuance of Commercial Paper related to the
Conduit Investor that is a member of such Class) of or related to the issuance
of Commercial Paper related to the Conduit Investor that is a member of such
Class that is allocated, in whole or in part, by such Conduit Investor or the
related Class Agent to fund or maintain such Portion of Investment (and which
may be also allocated in part to the funding of other assets of such Conduit
Investor); provided, however, that if any component of such rate is a discount
rate, in calculating the “CP Rate” for such Conduit Investor for such Portion of
Investment for such Rate Period, such Conduit Investor (or such related
commercial paper issuer) shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum.

Federal Funds Rate: For any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Agent on such
day on such transactions as determined by it.

LMIR: For any day, the one-month Eurodollar rate for U.S. dollar deposits (which
shall, for so long as such rate is compiled by the British Bankers Association,
be and refer to an average British Bankers Association Interest Settlement
Rate), as reported on the Reuters Screen LIBOR01 Page or any other page that may
replace such page from time to time for the purpose of displaying offered rates
for London interbank deposits in United States 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 Agent
from another recognized source for interbank quotation), in each case, changing
when and as such rate changes.

 

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Rate Period: Unless otherwise mutually agreed by a Class Agent for any Portion
of Investment funded by the related Class and the SPV, (a) with respect to any
Portion of Investment funded by the issuance of Commercial Paper, (i) initially
the period commencing on (and including) the date of the initial purchase or
funding of such Portion of Investment and ending on (and including) the last day
of the current calendar month, and (ii) thereafter, each period commencing on
(and including) the first day after the last day of the immediately preceding
Rate Period for such Portion of Investment and ending on (and including) the
last day of the current calendar month; and (b) with respect to any Portion of
Investment not funded by the issuance of Commercial Paper, (i) initially the
period commencing on (and including) the date of the initial purchase or funding
of such Portion of Investment and ending on (but excluding) the next following
Settlement Date, and (ii) thereafter, each period commencing on (and including)
a Settlement Date and ending on (but excluding) the next following Settlement
Date; provided, that:

(A) any Rate Period with respect to any Portion of Investment (other than any
Portion of Investment accruing Yield at the CP Rate) which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day; provided, however, if Yield in respect of such Rate Period is
computed by reference to LMIR, and such Rate Period would otherwise end on a day
which is not a Business Day, and there is no subsequent Business Day in the same
calendar month as such day, such Rate Period shall end on the next preceding
Business Day;

(B) in the case of any Rate Period for any Portion of Investment which commences
before the Termination Date and would otherwise end on a date occurring after
the Termination Date, such Rate Period shall end on such Termination Date and
the duration of each Rate Period which commences on or after the Termination
Date shall be of such duration as shall be selected by the related Class Agent;
and

(C) any Rate Period in respect of which Yield is computed by reference to the CP
Rate may be terminated at the election of the Class Agent for the Class funding
the related Portion of Investment at any time, in which case such Portion of
Investment shall be allocated by the related Class Agent to a new Rate Period
commencing on (and including) the date of such termination and ending on (but
excluding) the next following Settlement Date, and shall accrue Yield at the
Alternate Rate.

Rate Type: LMIR, the Base Rate or the CP Rate.

 

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Yield: For any Portion of Investment:

(i) during any Rate Period to the extent a Conduit Investor funds such Portion
of Investment through the issuance of Commercial Paper (directly or indirectly
through a related commercial paper issuer),

CPR x I x D

360

(ii) funded by an Alternate Investor and for any Portion of Investment to the
extent a Conduit Investor will not be funding such Portion of Investment through
the issuance of Commercial Paper (directly or indirectly through a related
commercial paper issuer),

AR x I x D

Year

where:

 

  AR    =    the Alternate Rate for such Portion of Investment for such Rate
Period,   CPR    =    the CP Rate for such Portion of Investment for such Rate
Period (as determined by the related Class Agent on or prior to the fifth
Business Day of the calendar month next following such Rate Period),   D    =   
the actual number of days during such Rate Period,   I    =    the weighted
average of such Portion of Investment during such Rate Period, and   Year    =
   if such Portion of Investment is funded at an Alternate Rate determined by
reference to (i) LMIR, 360 days and (ii) the Base Rate, 365 or 366 days, as
applicable;

provided that no provision of the Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
and provided, further, that at all times after the declaration or automatic
occurrence of the Termination Date pursuant to Section 8.2, Yield for all
Portion of Investment shall be determined as provided in clause (ii) of this
definition.

 

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(d) Inability to Determine LMIR.

(i) If, on any day (A) the Agent determines in its reasonable judgment that it
is unable to obtain on a timely basis the information necessary to determine
LMIR for any proposed Rate Period or (B) with respect to any outstanding Rate
Period, any Class Agent notifies the Agent that any of the Investors that
comprise any of its Class has determined in its reasonable judgment that
(1) deposits in U.S. dollars are not being offered to banks in the interbank
eurodollar market for such day or (2) the Alternate Rate determined by reference
to LMIR applicable to such Portion of Investment will not adequately reflect the
cost to the Person of funding or maintaining such Portion of Investment for such
Rate Period, then (I) the Agent shall forthwith so notify the SPV and the
Investors and (II) upon such notice and thereafter, until the Agent notifies the
SPV that such circumstances no longer exist, the Agent, the Class Agents and the
Investors shall not allocate any Portion of Investment or reallocate any Portion
of Investment, to a Rate Period with respect to which Yield is calculated by
reference to the Alternate Rate determined by reference to LMIR, all Portions of
Investment that have been allocated to a Rate Period to which the Alternate Rate
determined by reference to LMIR applies shall be automatically allocated to a
new Rate Period to which the Alternate Rate determined by reference to the Base
Rate (without reference to clause (c) of the definition thereof) applies, the
Rate Period to which such Alternate Rate determined by reference to LMIR applied
terminated on such day and all Portions of Investment that have been allocated
to a Rate Period to which the Alternate Rate determined by reference to the Base
Rate applies shall be automatically allocated to a new Rate Period to which the
Alternate Rate determined by reference to the Base Rate (without reference to
clause (c) of the definition thereof) applies.

(ii) Notwithstanding any other provision of this Agreement, if any Conduit
Investor or any Alternate Investor, as applicable, shall notify the Agent that
such Person has determined (which determination shall be final and conclusive)
or has been notified by any Program Support Provider that the introduction of or
any change in or in the interpretation of any Law makes it unlawful (either for
such Conduit Investor, such Alternate Investor, or such Program Support
Provider, as applicable), or any central bank or other Official Body asserts
that it is unlawful, for such Conduit Investor, such Alternate Investor or such
Program Support Provider, as applicable, to fund the purchases or maintenance of
any Portion of Investment accruing Yield calculated by reference to LMIR, then
(A) as of the effective date of such notice from such Person to the Agent, the
obligation or ability of such Conduit Investor or such Alternate Investor, as
applicable, to fund the making or maintenance of any Portion of Investment
accruing Yield calculated by reference to LMIR shall be suspended until such
Person notifies the Agent that the circumstances causing such suspension no
longer exist and (B) each Portion of Investment made or maintained by such
Person accruing Yield calculated by reference to LMIR shall be deemed to accrue
Yield at the Base Rate (without reference to clause (c) of the definition
thereof) from the effective date of such notice until the end of such Rate
Period.

Section 2.5 Yield, Fees and Other Costs and Expenses.

Notwithstanding any limitation on recourse herein, the SPV shall pay, as and
when due in accordance with this Agreement, all fees hereunder and under the Fee
Letters, Yield, all amounts payable pursuant to Article IX, if any, and the
Servicing Fees. On each Settlement Date, the SPV shall pay to the PNC Bank Class
Agent the Facility Fee, payable in arrears. On each

 

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Settlement Date, to the extent not paid pursuant to Section 2.12 for any reason,
the SPV shall pay to each Class Agent, on behalf of the Conduit Investors or the
Alternate Investors, as applicable, an amount equal to the accrued and unpaid
Yield for the related Rate Period. Nothing in this Agreement shall limit in any
way the obligations of the SPV to pay the amounts set forth in this Section 2.5.

Section 2.6 Deemed Collections.

(a) Dilutions. If on any day the Unpaid Balance of a Receivable is reduced or
such Receivable is canceled as a result of any Dilution, the SPV shall be deemed
to have received on such day a Collection of such Receivable in the amount of
the Unpaid Balance (as determined immediately prior to such Dilution) of such
Receivable (if such Receivable is canceled) or, otherwise in the amount of such
reduction, and the SPV shall pay to the Servicer an amount equal to such Deemed
Collection and such amount shall be applied by the Servicer as a Collection in
accordance with Section 2.12.

(b) Breach of Representation or Warranty. If on any day any of the
representations or warranties in Article IV was or becomes untrue with respect
to a Receivable (whether on or after the date of transfer thereof to the Agent,
for the benefit of the Investors, as contemplated hereunder), the SPV shall be
deemed to have received on such day a Collection of such Receivable in full and
the SPV shall on such day pay to the Servicer an amount equal to the Unpaid
Balance of such Receivable and such amount shall be allocated and applied by the
Servicer as a Collection in accordance with Section 2.12.

(c) Any payment by the SPV required to made under this Section 2.6 shall be paid
as soon as possible from the SPV’s share of Collections and, in any event, shall
become due and payable on the earlier to occur of (i) the next Settlement Date
after the obligation to make such payment arises and (ii) the Termination Date.

Section 2.7 Reductions in Net Investment; Payments and Computations, Etc.

(a) The SPV may, on any Settlement Date occurring at least the Required Notice
Days after the date of the SPV’s notice to the Agent and each Class Agent,
reduce all or any portion of the outstanding Net Investment at such time
(together with any accrued and unpaid interest thereon at such time and, in
connection with a reduction of all of the Net Investment, together with all
other Aggregate Unpaids). Any such reduction shall be accomplished by payment by
the SPV to each Class Agent, in reduction of the Net Investment, the related
Class Pro Rata Share of the amount of such reduction (together with any accrued
and unpaid interest thereon at such time and, in connection with a reduction of
all of the Net Investment, together with all other Aggregate Unpaids) (it being
understood that neither the Net Investment nor any Class Net Investment shall be
deemed reduced by such payment unless and until, and then only to the extent
that, such amount is finally paid to the related Class Agent); provided that the
amount of such repayment shall not be less than $1,000,000.

 

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(b) All amounts to be paid or deposited by the SPV or the Servicer hereunder
shall be paid or deposited in accordance with the terms hereof no later than
12:00 p.m. (noon) (New York City time) on the day when due in immediately
available funds; if such amounts are payable to the Agent (whether on behalf of
any Investor or otherwise) they shall be paid or deposited in the account
indicated under the heading “Payment Information” in Section 11.3, until
otherwise notified by the Agent. The SPV shall, to the extent permitted by Law,
pay to the Agent, for the benefit of the Investors, upon demand, interest on all
amounts not paid or deposited when due hereunder at a rate equal to the Default
Rate. All computations of Yield and all per annum fees hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed. Any computations by the Agent of
amounts payable by the SPV hereunder shall be binding upon the SPV absent
manifest error.

Section 2.8 Reports.

By no later than 4:00 p.m. (New York City time) on the 20th day of each calendar
month, or if such day is not a Business Day then on the next succeeding Business
Day (and, after the occurrence of a Termination Event, within two (2) Business
Days after a request from the Agent or any Class Agent) (each, a “Reporting
Date”), Servicer shall prepare and forward to the Agent and each Class Agent a
Servicer Report, certified by the Originator, the Seller and the Servicer. Prior
to the Closing Date and once a calendar year, the Servicer, at its expense, will
cause to be prepared a report by an accounting firm or other firm specializing
in due diligence matters, which firm shall be satisfactory to the Agent, setting
forth the results of such firm’s application of the agreed upon procedures set
forth on Exhibit I.

The Agent may require the Servicer to prepare more frequent reports. Upon
receipt of such request for more frequent reporting, the Servicer shall provide
to the Agent and each Class Agent all reports regarding the Receivables and
Collections that are available to the Servicer in accordance with its then
current accounts receivable system without the Servicer manually preparing such
reports. The Agent acknowledges that such additional reports may not include all
of the information provided in the monthly Servicer Reports.

If, on any day, (a) the average of the three (3) most recent Trigger Delinquency
Ratios exceeds five and one half percent (5.50%), (b) the average of the three
(3) most recent Trigger Default Ratios exceeds one and three quarters of one
percent (1.75%) or (c) the average of the three (3) most recent Trigger Dilution
Ratios exceeds seven and one half percent (7.50%), then for so long as any of
those conditions continue to exist (such period of time being an “Exception
Funding Period”), any Class Agent may require the Servicer to deliver to each
Class Agent, within one (1) Business Day after the end of each week any portion
of which constituted an Exception Funding Period, an Interim Report covering the
week most recently then-ended, in the form attached hereto as
Exhibit K.

Any Exception Funding Period shall terminate upon delivery to each Class Agent
by the Servicer of a Servicer Report evidencing that the conditions described in
clauses (a), (b) and (c), as applicable, of the immediately preceding paragraph
no longer exist.

 

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Section 2.9 Collection Account.

The Agent shall establish in its name on the day of the initial Investment
hereunder and shall maintain a segregated account (the “Collection Account”),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Agent, on behalf of the Investors. The Agent shall
have exclusive dominion and control over the Collection Account and all monies,
instruments and other property from time to time in the Collection Account. On
and after the occurrence of a Termination Event or a Potential Termination
Event, the Servicer shall remit within two Business Days of receipt to the
Collection Account all Collections received. Funds on deposit in the Collection
Account (other than investment earnings) shall be invested by the Agent, in the
name of the Agent, in Eligible Investments that will mature so that such funds
will be available so as to permit amounts in the Collection Account to be paid
and applied on the next Settlement Date and otherwise in accordance with the
provisions of Section 2.12; provided that such funds shall not reduce the Net
Investment or accrued Yield hereunder until so applied under Section 2.12. On
each Settlement Date, all interest and earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account shall be applied as
Collections in accordance with Section 2.12. On the Final Payout Date, any funds
remaining on deposit in the Collection Account shall be paid to the SPV.

Section 2.10 Sharing of Payments, Etc.

If any Investor (for purposes of this Section only, being a “Recipient”) shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of setoff, or otherwise) on account of the portion of the Asset Interest
owned by it (other than pursuant to the Fee Letter, Section 3.3(b) or Article IX
and other than as a result of the differences in the timing of the applications
of Collections pursuant to Section 2.12 and other than a result of the different
methods for calculating Yield) in excess of its ratable share of payments on
account of the Asset Interest obtained by the Investors entitled thereto, such
Recipient shall forthwith purchase from the Investors entitled to a share of
such amount participations in the portions of the Asset Interest owned by such
Persons as shall be necessary to cause such Recipient to share the excess
payment ratably with each such other Person entitled thereto; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such Recipient, such purchase from each such other Person shall be rescinded and
each such other Person shall repay to the Recipient the purchase price paid by
such Recipient for such participation to the extent of such recovery, together
with an amount equal to such other Person’s ratable share (according to the
proportion of (a) the amount of such other Person’s required payment to (b) the
total amount so recovered from the Recipient) of any interest or other amount
paid or payable by the Recipient in respect of the total amount so recovered.

Section 2.11 Right of Setoff.

Without in any way limiting the provisions of Section 2.10, each Class Agent and
each Investor is hereby authorized (in addition to any other rights it may have)
at any time after the occurrence of the Termination Date due to the occurrence
of a Termination Event or during the continuance of a Potential Termination
Event to set-off, 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 Class Agent or such Investor to, or for the
account of, the SPV against the amount of the Aggregate Unpaids owing by the SPV
to such Person or to the Agent on behalf of such Person (even if contingent or
unmatured).

 

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Section 2.12 Settlement Procedures.

(a) Daily Procedure. The Servicer, on behalf of the SPV and for the benefit of
the Agent, the Class Agents and the Investors, shall on a daily basis manage the
Collections of Receivables received or deemed received by the SPV or the
Servicer on such day in accordance with the provisions of this Agreement and in
such a manner that the SPV shall have sufficient funds available (to the extent
of the Collections of Receivables received or deemed received) at all times,
including on each Settlement Date, to pay its obligations due on such day,
including, without limitation, managing Investments, Reinvestments and Deemed
Collections and setting aside an amount equal to the excess, if any, of (i) the
greatest of: (A) if the SPV shall have elected to reduce the Net Investment
under Section 2.13, the amount of the proposed reduction, (B) the amount, if
any, by which the sum of the Net Investment and Required Reserves shall exceed
the Net Pool Balance (minus any portion of the Required Reserves attributable to
such excess), together with the amount, if any, by which the Net Investment
shall exceed the Maximum Net Investment, and (C) if such day is on or after the
Termination Date, the Net Investment; over (ii) the aggregate of the amounts
theretofore set aside for such purposes. To the extent and for so long as such
Collections may not be reinvested pursuant to Section 2.2(b), the Servicer shall
hold such Collections in trust for the benefit of the Agent.

(b) Settlement Procedures.

(i) The Servicer shall deposit into each Class Agent’s account, on each Business
Day selected by the SPV for a reduction of the Net Investment under Section 2.13
the related Class Pro Rata Share of the amount of Collections held for the Agent
pursuant to Section 2.12(a)(ii).

(ii) On any date on or prior to the Termination Date, if the sum of the Net
Investment and Required Reserves exceeds the Net Pool Balance the Servicer shall
immediately pay to each Class Agent’s account from amounts set aside pursuant to
clause (ii) or clause (iii) of Section 2.12(a) an amount equal to the related
Class Pro Rata Share of such excess (minus any portion of the Class Pro Rata
Share of Required Reserves attributable to such excess).

(iii) On each Settlement Date, the Servicer shall deposit to each Class Agent’s
account:

(A) out of the amounts set aside pursuant to clause (i) of Section 2.12(a) and
not theretofore deposited in accordance with Section 2.12(b), an amount equal to
the accrued and unpaid Yield, Servicing Fee, Program Fee and Facility Fee for
the related Rate Period together with any other Aggregate Unpaids (other than
Net Investment) then due to the related Class; and

(B) out of the amount, if any, set aside pursuant to clause (ii) and (to the
extent not theretofore reinvested) clause (iii) of Section 2.12(a) and not
theretofore deposited to such Class Agent’s account pursuant to this
Section 2.12(b), an amount equal to related Class Pro Rata Share of the lesser
of such amount and the Net Investment;

 

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provided, however, that if the Agent gives its consent (which consent may be
revoked at any time), the Servicer may retain amounts which would otherwise be
deposited in respect of accrued and unpaid Servicing Fee, in which case no
distribution shall be made in respect of such Servicing Fee under clause (c)
below. Any amounts set aside pursuant to Section 2.12(a) in excess of the amount
required to be deposited in the Class Agents’ accounts pursuant to this
subsection (b) shall continue to be set aside and held in trust by the Servicer
for application on the next succeeding Settlement Date(s).

(c) Order of Application. Upon receipt by a Class Agent on any Yield Payment
Date of funds deposited pursuant to subsection (b)(iii)(A) above, such Class
Agent shall distribute them to the Investors in its Class, pro rata based on the
amount of accrued and unpaid Yield owing to each of them, in payment of the
accrued and unpaid Yield on the related Portions of Investment for the related
Rate Period. Upon receipt by a Class Agent of funds deposited pursuant to any
other provision of subsection (b), such Class Agent shall distribute them to the
Persons, for the purposes and in the order of priority set forth below:

(i) to the related Investors, pro rata based on the amount of accrued and unpaid
Yield, Program Fee and Facility Fee owing to each of them, in payment of the
accrued and unpaid Yield, Program Fee and Facility Fee on the Portions of
Investment for the related Rate Period for such Class;

(ii) if the Seller or any Affiliate of the Originator is not then the Servicer,
to the Servicer in payment of the related Class Pro Rata Share of the accrued
and unpaid Servicing Fee payable on such Settlement Date;

(iii) to the related Investors, pro rata based on their respective interests in
the Asset Interest (based upon the respective portions of the Class Net
Investment owned by each of them) except as otherwise provided in
Section 3.3(b), in reduction of the related Class Net Investment;

(iv) to the Agent, itself, the related Investors or such other Person as may be
entitled to such payment, in payment of the related Class Pro Rata Share of any
other Aggregate Unpaids owed by the SPV hereunder to such Person (other than Net
Investment, Yield and Servicing Fee); and

(v) if the Seller or any Affiliate of the Originator is the Servicer, to the
Servicer in payment of the related Class Pro Rata Share of the accrued Servicing
Fee payable on such Settlement Date, to the extent not paid pursuant to clause
(ii) above or retained pursuant to subsection (b) above.

Section 2.13 Optional Reduction of Net Investment.

The SPV may at any time elect to cause the reduction of the Net Investment as
follows:

(a) the SPV shall instruct the Servicer to (and the Servicer shall) set aside
Collections and hold them in trust for the Agent under clause (ii) of
Section 2.12(a) until the amount so set aside shall equal the desired amount of
reduction; and

 

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(b) on each Settlement Date occurring at least the Required Notice Days after
the date of the SPV’s notice, the Servicer shall pay to each Class Agent, in
reduction of the Net Investment, the related Class Pro Rata Share of the amount
of such Collections so held or, if less, the related Class Net Investment (it
being understood that neither the Net Investment nor any Class Net Investment
shall be deemed reduced by any amount set aside or held pursuant to this
Section 2.13 unless and until, and then only to the extent that, such amount is
finally paid to the related Class Agent as aforesaid); provided that, the amount
of any such reduction shall be not less than $1,000,000.

Section 2.14 Application of Collections Distributable to SPV.

Unless otherwise instructed by the SPV, the Servicer shall allocate and apply,
on behalf of the SPV, Collections distributable to the SPV hereunder first, to
the payment to the Seller of the purchase price of new Receivables in accordance
with the Second Tier Agreement and/or to Reinvestments as described in
Section 2.2(b), second, to the payment or provision for payment of the SPV’s
operating expenses, as instructed by the SPV, third, to the repayment to the
Seller of Advances (as defined in the Second Tier Agreement) pursuant to
Section 3.2(b)(i) of the Second Tier Agreement, subject to Section 6.2(k),
fourth, to the payment of interest on Advances to the Seller pursuant to
Section 3.2(b)(ii) of the Second Tier Agreement, subject to Section 6.2(k) and
fifth, as directed from time to time by the SPV.

Section 2.15 Collections Held in Trust.

So long as the SPV or the Servicer shall hold any Collections or Deemed
Collections then or thereafter required to be paid by the SPV to the Servicer or
by the SPV or the Servicer to the Agent, it shall hold such Collections in
trust, and, if requested by the Agent after the occurrence and during the
continuance of a Termination Event or Potential Termination Event, shall deposit
such Collections within one Business Day of receipt thereof into the Collection
Account. The Net Investment shall not be deemed reduced by any amount held in
trust or in the Collection Account pursuant to Section 2.12 unless and until,
and then only to the extent that, such amount is finally paid to the Agent in
accordance with Section 2.12(b)

Article III

Additional Alternate Investor Provisions

Section 3.1 Assignment to Alternate Investors.

(a) Assignment Amounts. At any time on or prior to the Commitment Termination
Date, if any Class Agent on behalf of the related Conduit Investors so elects,
by written notice to the Agent, the SPV hereby irrevocably requests and directs
that such Conduit Investors assign, and each Conduit Investor does hereby assign
effective on the Assignment Date referred to below, all or such portions as may
be elected by such Conduit Investor of, the related Class Net Investment and the
Asset Interest at such time to the related Alternate Investors pursuant to this
Section 3.1 and the SPV hereby agrees to pay the amounts described in
Section 3.1(b); provided, however, that unless such assignment is an assignment
of all of such Class Net Investment, including the portion of the Asset Interest
related thereto, in whole on or after the Conduit

 

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Investment Termination Date, no such assignment shall take place pursuant to
this Section 3.1 if a Termination Event described in Section 8.1(g) shall then
exist; and provided, further, that no such assignment shall take place pursuant
to this Section 3.1 at a time when an Event of Bankruptcy with respect to such
Conduit Investor exists. No further documentation or action on the part of the
Conduit Investors or the SPV shall be required to exercise the rights set forth
in the immediately preceding sentence, other than the giving of the notice by a
Class Agent on behalf of the related Conduit Investor to the Agent and the
delivery by the related Class Agent of a copy of such notice to each related
Alternate Investor (the date of the receipt by the related Class Agent of any
such notice being the “Assignment Date”). Each Alternate Investor hereby agrees,
unconditionally and irrevocably and under all circumstances, without setoff,
counterclaim or defense of any kind, to pay the full amount of its Assignment
Amount on such Assignment Date to the related Conduit Investor in immediately
available funds to an account designated by the related Class Agent. Upon
payment of its Assignment Amount, such Alternate Investor shall acquire an
interest in the related Class Net Investment (and the portion of the Asset
Interest related thereto) equal to its pro rata share (based on the outstanding
portions of such Class Net Investment funded by it) of the related Class Net
Investment. Upon any assignment in whole by any Conduit Investor to the related
Alternate Investors on or after the Conduit Investment Termination Date as
contemplated hereunder, such Conduit Investor shall cease to make any additional
Investments or Reinvestments hereunder. At all times prior to the Conduit
Investment Termination Date, nothing herein shall prevent any Conduit Investor
from making a subsequent Investment or Reinvestment hereunder, in its sole
discretion, following any assignment pursuant to this Section 3.1 or from making
more than one assignment pursuant to this Section 3.1.

(b) SPV’s Obligation to Pay Certain Amounts; Additional Assignment Amount. The
SPV shall pay to the related Class Agent, for the account of the related Conduit
Investor, in connection with any assignment by such Conduit Investor to the
related Alternate Investors pursuant to this Section 3.1, an aggregate amount
equal to all Yield to accrue through the end of the current Rate Period to the
extent attributable to the portion of the Class Net Investment so assigned to
the related Alternate Investors (which Yield shall be determined for such
purpose using the CP Rate most recently determined by the related Class Agent)
(as determined immediately prior to giving effect to such assignment), plus all
other Aggregate Unpaids (other than the Class Net Investment and other than any
Yield not described above) related to such Class. If the SPV fails to make
payment of such amounts at or prior to the time of assignment by a Conduit
Investor to the related Alternate Investors, such amount shall be paid by the
related Alternate Investors (in accordance with their respective Alternate
Investor Percentages) to such Conduit Investor as additional consideration for
the interests assigned to such Alternate Investors and the amount of the related
Class Net Investment shall be increased by an amount equal to the additional
amount so paid by the Alternate Investors (which increase shall be allocated pro
rata to the Alternate Investors that have funded such amounts, based upon the
proportion that the amount funded by each such Alternate Investor bears to the
aggregate of such amounts). Any payment by the SPV required to made under this
Section 3.1(b) shall be paid as soon as possible from the SPV’s share of
Collections and, in any event, shall become due and payable on the earlier to
occur of (i) the next Settlement Date after the obligation to make such payment
arises and (ii) the Termination Date.

 

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(c) Administration of Agreement after Assignment from Conduit Investor to
Alternate Investors following the Conduit Investment Termination Date. After any
assignment in whole by a Conduit Investor to the related Alternate Investors
pursuant to this Section 3.1 at any time on or after the Conduit Investment
Termination Date (and the payment of all amounts owing to such Conduit Investor
in connection therewith), all rights of the related Class Agents or the related
Collateral Agent set forth herein shall be given to the related Class Agent on
behalf of the Alternate Investors instead of either such party.

(d) [Reserved].

(e) Recovery of Net Investment. In the event that the aggregate of the
Assignment Amounts related to any Class paid by the related Alternate Investors
pursuant to this Section 3.1 on any Assignment Date occurring on or after the
Conduit Investment Termination Date is less than the portion of the Class Net
Investment owned by the related Conduit Investor on such Assignment Date, then
to the extent Collections thereafter received by the Agent hereunder in respect
of such Class Net Investment exceed the aggregate of the unrecovered Assignment
Amounts for such Class and the Class Net Investment funded by the related
Alternate Investors (other than any portion thereof attributable to such
Assignment Amounts), such excess shall be remitted by the related Class Agent to
the related Conduit Investor for the account of the related Conduit Investor.

Section 3.2 Reserved.

Section 3.3 Non-Renewing Alternate Investors.

(a) The SPV may request that the Alternate Investors renew their Commitments
hereunder by providing written request for renewal to each Alternate Investors
no more than 60 days and not less than 45 days prior to the then-current
Commitment Termination Date.

(b) If at any time the SPV so requests that the Alternate Investors renew their
Commitments hereunder and some but less than all the Alternate Investors consent
to such renewal within 15 days prior to the then-current Commitment Termination
Date, the SPV may arrange for an assignment to one or more financial
institutions of all the rights and obligations hereunder of each such
non-consenting Alternate Investor in accordance with Section 11.8. Any such
assignment shall become effective on the then-current Commitment Termination
Date. Each Alternate Investor which does not so consent to any renewal shall
cooperate fully with the SPV in effectuating any such assignment.

(c) If at any time the SPV requests that the Alternate Investors extend the
Commitment Termination Date hereunder and some but less than all the Alternate
Investors consent to such extension within 15 days prior to the then-current
Commitment Termination Date, and if none or less than all the Commitments of the
non-renewing Alternate Investors are assigned as provided in Section 3.3(b),
then (without limiting the obligations of all the Alternate Investors to make
Investments and pay any Assignment Amount prior to the Commitment Termination
Date in accordance with the terms hereof) any related Conduit Investor may sell
an interest in the portion of the related Class Net Investment funded by it
(including the related interest in the Asset Interest) for an aggregate purchase
price equal to the lesser of (i) the

 

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maximum aggregate Assignment Amounts which would be payable if such Conduit
Investor assigned its entire interest in the Asset Interest at that time under
Section 3.1, and (ii) the aggregate unused Commitments of the non-renewing
Alternate Investors in such Class, which purchase price shall be paid solely by
such non-renewing Alternate Investors, pro rata according to their respective
Commitments. Following the payment of such purchase price, (i) the extended
Commitment Termination Date shall be effective with respect to the renewing
Alternate Investors, (ii) the related Class Facility Limit shall automatically
be reduced by the aggregate of the Commitments of all non-renewing Alternate
Investors (it being understood that amounts necessary to reduce the related
Class Facility Limit shall be payable solely in accordance with Section 2.12 and
shall not be an immediate payment obligation of the SPV) and (iii) this
Agreement and the Commitments of the renewing Alternate Investors shall remain
in effect in accordance with their terms notwithstanding the expiration of the
Commitments of the non-renewing Alternate Investors. Prior to the Termination
Date, all amounts which, under Section 2.12 are to be applied in reduction of
the related Class Net Investment, up to the aggregate Class Net Investment sold
to the non-renewing Alternate Investors as described above in this subsection,
shall be distributed to the non-renewing Alternate Investors ratably according
to the aggregate Investments held by them, in reduction of such Investments. On
and after the Termination Date, each non-renewing Alternate Investor shall be
entitled to receive distributions as otherwise provided in Section 2.12, such
that all distributions of Collections pursuant to Section 2.12 thereafter shall
be allocated among the non-renewing Alternate Investors and the other Alternate
Investors in accordance with each such Alternate Investor’s pro rata share
(based on the portion of the Net Investment funded by it as of the Termination
Date) of the Alternate Investor Percentage of the related Class Net Investment.
When (after the expiration of the Commitments of the non-renewing Alternate
Investors) the aggregate of the Investments described above in this subsection
shall have been reduced to zero and all accrued Yield allocable thereto and all
other Aggregate Unpaids owing to such non-renewing Alternate Investors shall
have been paid to such Alternate Investors in full, then such non-renewing
Alternate Investors shall cease to be parties to this Agreement for any purpose.

Section 3.4 New Alternate Investors and Liquidity Banks.

Notwithstanding anything to the contrary herein contained, (i) any Alternate
Investor may assign any portion or all of its Commitment and its investment in
the related Class Net Investment to any other Person, (ii) any Liquidity Bank
may assign any portion or all of its commitment under its Liquidity Agreement
and its investment in the related Class Net Investment to any other Person and
(iii) each Conduit Investor may add new Liquidity Banks to its Liquidity
Agreement relating to the Transactions contemplated hereby; provided, however,
in the case of clauses (i), (ii) and (iii) if such assignment or addition occurs
prior to the occurrence of any Termination Event, and the assignee or new
Liquidity Bank is not at the time a party to this Agreement, the consent of the
SPV to such assignment shall be required (such consent not to be unreasonably
withheld or delayed); provided, however, such consent of the SPV shall not be
required in the case of an assignment to PNC Bank or an Affiliate of PNC Bank
(or, for the avoidance of doubt, in the case of a sale of a participation
interest that does not affect the rights or obligations of such Alternate
Investor hereunder and does not permit such participant to vote on any matters
hereunder).

 

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Article IV

Representations and Warranties

Section 4.1 Representations and Warranties of the Originator, the SPV, the
Seller and the Servicer.

Each of the Originator, the SPV, the Seller and the Servicer represents and
warrants to the Agent, the Class Agents and the Investors, as to itself, that,
on the Closing Date and on each Investment Date and Reinvestment Date:

(a) Corporate Existence and Power. It (i) is duly organized, validly existing
and in good standing under the laws of Illinois, which, in each case is its sole
jurisdiction of formation, (ii) has all corporate power and all licenses,
authorizations, consents and approvals of all Official Bodies required to carry
on its business in each jurisdiction in which its business is now and proposed
to be conducted (except where the failure to have any such licenses,
authorizations, consents and approvals would not individually or in the
aggregate have a Material Adverse Effect) and (iii) is duly qualified to do
business and is in good standing in every other jurisdiction in which the nature
of its business requires it to be so qualified, except where the failure to be
so qualified or in good standing would not have a Material Adverse Effect.

(b) Corporate and Governmental Authorization; Contravention. The execution,
delivery and performance by it of this Agreement and the other Transaction
Documents to which it is a party are (i) within the its organizational powers,
(ii) have been duly authorized by all necessary organizational action,
(iii) require no action by or in respect of, or filing with, any Official Body
or official thereof (except as contemplated by Sections 5.1(f), 5.1(g) and 7.7,
all of which have been (or as of the Closing Date will have been) duly made and
in full force and effect), (iv) do not contravene or constitute a default under
(A) its organizational documents, (B) any Law applicable to it, (C) any
contractual restriction binding on or affecting it or its property or (D) any
order, writ, judgment, award, injunction, decree or other instrument binding on
or affecting it or its property, or (v) result in the creation or imposition of
any Adverse Claim upon or with respect to its property or the property of any of
its Subsidiaries (except as contemplated hereby), for purposes of clause
(iv) hereof except (other than with respect to the SPV) to the extent such
failure would not be reasonably expected to have a Material Adverse Effect.

(c) Binding Effect. Each of this Agreement and the other Transaction Documents
to which it is a party has been duly executed and delivered and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally.

(d) Perfection. In the case of the SPV, it is the owner of all of the
Receivables and other Affected Assets, free and clear of all Adverse Claims
(other than any Adverse Claim arising hereunder) and upon the making of the
initial Investment on the Closing Date and at all times thereafter until the
Final Payout Date, all financing statements and other documents required to be
recorded or filed in order to perfect and protect the interest of the Agent on
behalf of the Investors in the Asset Interest against all creditors of and
purchasers from the SPV and the Originator will have been duly filed in each
filing office necessary for such purpose and all filing fees and taxes, if any,
payable in connection with such filings shall have been paid in full.

 

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(e) Accuracy of Information. All information heretofore furnished by it
(including the Servicer Reports, any other reports delivered pursuant to
Section 2.8 and its financial statements) to any Investor, any Class Agent or
the Agent for purposes of or in connection with this Agreement or any
transaction contemplated hereby, taken as a whole, is, and all such information
hereafter furnished by it to any Investor, any Class Agent or the Agent will be,
true, complete and accurate in every material respect, on the date such
information is stated or certified, and no such item contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading.

(f) Tax Status. It has (i) timely filed all tax returns (federal, state and
local) required to be filed, (ii) paid or made adequate provision for the
payment of all taxes, assessments and other governmental charges except with
respect to the Originator, the Seller and the Servicer, in the case of clauses
(i) and (ii), for taxes which are being contested in good faith and for which
appropriate reserves are maintained in accordance with GAAP and (iii) in the
case of the SPV, accounted for the sale of the Asset Interest hereunder, in its
books and financial statements as sales, consistent with GAAP (except to the
extent that the SPV is consolidated for financial accounting purposes with the
Seller or its Affiliates).

(g) Action, Suits. The SPV is not in violation of any order of any Official Body
or arbitrator. The Originator, the Seller and the Servicer are not in violation
of any order of any Official Body or arbitrator, except where such violation
would not be reasonably expected to have a Material Adverse Effect. Except as
set forth in Schedule 4.1(g), there are no actions, suits, litigation or
proceedings pending, or to its knowledge, threatened, against or affecting it or
any of its Affiliates or their respective properties, in or before any Official
Body or arbitrator, which may, individually or in the aggregate, have a Material
Adverse Effect.

(h) Use of Proceeds. In the case of the SPV, the Seller and the Originator, no
proceeds of any Investment or Reinvestment will be used by it (i) to acquire any
security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, (ii) to acquire any equity security of a class
which is registered pursuant to Section 12 of such act or (iii) for any other
purpose that violates applicable Law, including Regulations U or X of the
Federal Reserve Board.

(i) Principal Place of Business; Chief Executive Office; Location of Records.
Its principal place of business, chief executive office and the offices where it
keeps all its Records, are located at the address(es) described on Schedule
4.1(i) or such other locations notified to the Conduit Investors in accordance
with Section 7.7 in jurisdictions where all action required by Section 7.7 has
been taken and completed.

(j) Subsidiaries; Tradenames, Etc. In the case of the SPV, as of the Closing
Date: (i) it has only the Subsidiaries and divisions listed on Schedule 4.1(j);
and (ii) it has, within the last five (5) years, operated only under the
tradenames identified in Schedule 4.1(j), and, within the last five (5) years,
has not changed its name, merged with or into or consolidated with any other
Person or been the subject of any proceeding under the Bankruptcy Code, except
as disclosed in Schedule 4.1(j). Schedule 4.1(j) also lists the correct Federal
Employer Identification Number of the SPV.

 

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(k) Good Title. In the case of the SPV, upon each Investment and Reinvestment,
the Agent shall acquire a valid and enforceable perfected first priority
ownership interest or a first priority perfected security interest in each
Receivable and all other Affected Assets that exist on the date of such
Investment or Reinvestment, with respect thereto, free and clear of any Adverse
Claim. In the case of the Seller, upon each transfer to the SPV pursuant to the
terms of the Second Tier Agreement, the SPV shall acquire a valid and
enforceable perfected first priority ownership interest in each Receivable and
all other Affected Assets that exist on the date of such transfer, with respect
thereto, free and clear of any Adverse Claim. In the case of the Originator,
upon each transfer to the Seller pursuant to the terms of the First Tier
Agreement, the Seller shall acquire a valid and enforceable perfected first
priority ownership interest in each Receivable and all other Affected Assets
that exist on the date of such transfer, with respect thereto, free and clear of
any Adverse Claim.

(l) Nature of Receivables. Each Receivable (i) represented by it to be an
Eligible Receivable in any Servicer Report or other report delivered pursuant to
Section 2.8 or (ii)included in the calculation of the Net Pool Balance in fact
satisfies at such time the definition of “Eligible Receivable” set forth herein.

(m) Coverage Requirement. In the case of the SPV, the sum of (i) the Net
Investment and (ii) the Required Reserves does not exceed the Net Pool Balance.

(n) Credit and Collection Policy. Since January 16, 2013, there have been no
material changes in the Credit and Collection Policy other than in accordance
with this Agreement. It has at all times complied with the Credit and Collection
Policy in all material respects with regard to each Receivable.

(o) No Termination Event or Potential Termination Event. In the case of the SPV,
no event has occurred and is continuing and no condition exists, or would result
from any Investment or Reinvestment or from the application of the proceeds
therefrom, which constitutes a Termination Event or a Potential Termination
Event.

(p) Not an Investment Company or Holding Company. It is not, and is not
controlled by, an “investment company” within the meaning of the Investment
Company Act of 1940, or is exempt from all provisions of such act.

(q) ERISA. Each employee benefit plan sponsored, maintained or contributed to by
the SPV, the Originator or any ERISA Affiliate which plan is tax qualified under
Section 401(a) of the Code is in compliance in all respects with the applicable
provisions of ERISA, the Code and any regulations and published interpretations
thereunder or, if not, any such non-compliance does not have a Material Adverse
Effect. Neither the SPV nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability to the Pension Benefit Guaranty Corporation
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA) that would have a Material
Adverse Effect. Neither the SPV nor any ERISA Affiliate sponsors, maintains,
makes contributions to, is obligated to make contributions to, or, during the
preceding six (6) plan years, has made or been obligated to make contributions
to, a Multiemployer Plan.

 

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(r) Blocked Accounts. The names and addresses of all the Blocked Account Banks,
together with the account numbers of the Blocked Accounts at such Blocked
Account Banks, are specified in Schedule 4.1(r) (or at such other Blocked
Account Banks and/or with such other Blocked Accounts as have been notified to
the Class Agents and the Collateral Agent and for which Blocked Account
Agreements have been executed in accordance with Section 7.3 and delivered to
the Agent). All Blocked Accounts not maintained at, and in the name of the
Agent, are subject to Blocked Account Agreements. All Obligors have been
instructed to make payment to a Blocked Account and only Collections are
deposited into the Blocked Accounts.

(s) Bulk Sales. In the case of the SPV, no transaction contemplated hereby or by
the Second Tier Agreement requires compliance with any bulk sales act or similar
law.

(t) Transfers Under First Tier Agreement. In the case of the Seller (except for
the Receivables acquired by the Seller in respect of the termination of the
existing receivables securitization on or prior to the date of the initial
funding hereunder), each Receivable has been purchased by it from the Originator
pursuant to, and in accordance with, the terms of the First Tier Agreement.

(u) Transfers Under Second Tier Agreement. In the case of the SPV, each
Receivable has been purchased by it from the Seller pursuant to, and in
accordance with, the terms of the Second Tier Agreement.

(v) Fair Value By SPV. In the case of the SPV, it shall have given reasonably
equivalent value to the Seller in consideration for the transfer to it of the
Affected Assets from the Seller, and each such transfer shall not have been made
for or on account of an antecedent debt owed by the Seller to it and no such
transfer is or may be voidable under any section of the Bankruptcy Code.

(w) Fair Value By Seller. In the case of the Seller, it shall have given
reasonably equivalent value to the Originator in consideration for the transfer
to it of the Affected Assets from the Originator, and each such transfer shall
not have been made for or on account of an antecedent debt owed by the
Originator to it and no such transfer is or may be voidable under any section of
the Bankruptcy Code.

(x) Nonconsolidation. The SPV is operated in such a manner that the separate
corporate existence of the SPV, on the one hand, and the Originator or any
Affiliate thereof, on the other, would not be disregarded in the event of the
bankruptcy or insolvency of the Originator or any Affiliate thereof and, without
limiting the generality of the foregoing:

(i) the SPV is a limited purpose entity whose activities are restricted in its
limited liability company agreement to activities related to purchasing or
otherwise acquiring receivables (including the Receivables) and related assets
and rights and conducting any related or incidental business or activities it
deems necessary or appropriate to carry out its primary purpose, including
entering into agreements like the Transaction Documents;

 

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(ii) the SPV has not engaged, and does not presently engage, in any activity
other than those activities expressly permitted hereunder and under the other
Transaction Documents, nor has the SPV entered into any agreement other than
this Agreement, the other Transaction Documents to which it is a party, and with
the prior written consent of the Investors and the Agent, any other agreement
necessary to carry out more effectively the provisions and purposes hereof or
thereof;

(iii) (A) the SPV maintains its own deposit account or accounts, separate from
those of any of its Affiliates, with commercial banking institutions, (B) the
funds of the SPV are not and have not been diverted to any other Person or for
other than the corporate use of the SPV and (C) except as may be expressly
permitted by this Agreement, the funds of the SPV are not and have not been
commingled with those of any of its Affiliates;

(iv) to the extent that the SPV contracts or does business with vendors or
service providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing are fairly allocated
to or among the SPV and such entities for whose benefit the goods and services
are provided, and each of the SPV and each such entity bears its fair share of
such costs; and all material transactions between the SPV and any of its
Affiliates shall be only on an arm’s-length basis;

(v) the SPV maintains a principal executive and administrative office through
which its business is conducted and a telephone number and stationery through
which all business correspondence and communication are conducted, in each case
separate from those of the Originator and its Affiliates (provided it may be
within the same offices as the Originator and its Affiliates);

(vi) the SPV conducts its affairs strictly in accordance with its organizational
documents and observes all necessary, appropriate and customary corporate
formalities, including (A) holding all regular and special members’ and
managers’ meetings appropriate to authorize all corporate action, (B) keeping
separate and accurate minutes of such meetings, (C) passing all resolutions or
consents necessary to authorize actions taken or to be taken, and
(D) maintaining accurate and separate books, records and accounts, including
intercompany transaction accounts;

(vii) all decisions with respect to its business and daily operations are
independently made by the SPV (although the officer making any particular
decision may also be an employee, officer or director of an Affiliate of the
SPV) and are not dictated by any Affiliate of the SPV (it being understood that
the Servicer, which is an Affiliate of the SPV, will undertake and perform all
of the operations, functions and obligations of it set forth herein and it may
appoint Sub-Servicers, which may be Affiliates of the SPV, to perform certain of
such operations, functions and obligations);

 

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(viii) the SPV acts solely in its own corporate name and through its own
authorized officers and agents, and no Affiliate of the SPV shall be appointed
to act as its agent, except as expressly contemplated by this Agreement;

(ix) no Affiliate of the SPV advances funds to the SPV, other than as is
otherwise provided herein or in the other Transaction Documents, and no
Affiliate of the SPV otherwise supplies funds to, or guaranties debts of, the
SPV; provided, however, that an Affiliate of the SPV may provide funds to the
SPV in connection with the capitalization of the SPV;

(x) other than organizational expenses and as expressly provided herein, the SPV
pays all expenses, indebtedness and other obligations incurred by it;

(xi) the SPV does not guarantee, and is not otherwise liable, with respect to
any obligation of any of its Affiliates;

(xii) any financial reports required of the SPV comply with generally accepted
accounting principles and are issued separately from, but may be consolidated
with, any reports prepared for any of its Affiliates;

(xiii) at all times the SPV is adequately capitalized to engage in the
transactions contemplated in its certificate of incorporation;

(xiv) the financial statements and books and records of the SPV and the
Originator reflect the separate corporate existence of the SPV;

(xv) the SPV does not act as agent for the Originator or any Affiliate thereof,
but instead presents itself to the public as a corporation separate from each
such member and independently engaged in the business of purchasing and
financing Receivables;

(xvi) the SPV maintains a three-person board of managers, including at least one
independent manager, who has never been, and shall at no time be a stockholder,
member, manager, officer, employee or associate, or any relative of the
foregoing, of the Originator or any Affiliate thereof (other than the SPV and
any other bankruptcy-remote special purpose entity formed for the sole purpose
of securitizing, or facilitating the securitization of, financial assets of the
Originator or any Affiliate thereof), all as provided in its certificate or
articles of incorporation, and is otherwise reasonably acceptable to the
Investors and the Agent; and

(xvii) the limited liability company agreement of the SPV requires the
affirmative vote of its independent manager before a voluntary petition under
Section 301 of the Bankruptcy Code may be filed by the SPV, and requires the SPV
to maintain correct and complete books and records of account and minutes of the
meetings and other proceedings of its member and board of managers.

(y) Solvency. In the case of the SPV, on the date of any Investment or
Reinvestment, the SPV is solvent before and after giving effect to such
Investment or Reinvestment.

 

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(z) Receivables Purchase Facility. (i) The transactions contemplated by the
Transaction Documents constitute a “Receivables Purchase Facility” (as defined
in the Revolving Credit Agreement and the Master Note Purchase Agreement, as
such documents are in effect on each date as of which this representation is
made) and is permitted under the Revolving Credit Agreement and the Master Note
Purchase Agreement, as such documents are in effect on the date as of which this
representation is made and (ii) it has not entered into any additional
Receivables Purchase Facilities (as defined in the Revolving Credit Agreement
and the Master Note Purchase Agreement, as such documents are in effect on the
date as of which this representation is made).

(aa) Notice of Amendment to Existing Credit Documents. It shall provide copies
of any amendments, modifications or supplements to the Revolving Credit
Agreement, Master Note Purchase Agreement, Intercreditor Agreement and Pledge
Agreement to the Agent.

(bb) Disclosure of the Transaction. The Performance Guarantor, the Originator,
the Seller and SPV each make the representations set forth in Schedule 4.1 (bb)
applicable to it which are incorporated herein by reference.

(cc) Representations and Warranties in other Related Documents. In the case of
the SPV, each of the representations and warranties made by it contained in the
Transaction Documents (other than this Agreement) is true, complete and correct
in all respects and it hereby makes each such representation and warranty to,
and for the benefit of, the Agent, the Class Agents and the Investors as if the
same were set forth in full herein.

(dd) No Servicer Default. In the case of the Servicer, no event has occurred and
is continuing and no condition exists, or would result from a purchase in
respect of, or Reinvestment in respect of the Asset Interest, any Investment or
from the application of the proceeds therefrom, which constitutes a Servicer
Default.

Section 4.2 Additional Representations and Warranties of the Servicer.

The Servicer represents and warrants on the Closing Date and on each Investment
Date and Reinvestment Date to the Agent, the Class Agents and the Investors,
which representation and warranty shall survive the execution and delivery of
this Agreement, that each of the representations and warranties of the Servicer
(whether made by the Servicer in its capacity as the Seller or as the Servicer)
contained in any Transaction Document is true, complete and correct on such date
(unless such statement specifically applies to an earlier date) and, if made by
the Servicer in its capacity as the Seller or other applicable capacity, applies
with equal force to the Servicer in its capacity as the Servicer, and the
Servicer hereby makes each such representation and warranty to, and for the
benefit of, the Agent, the Class Agents and the Investors as if the same were
set forth in full herein.

 

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Article V

Conditions Precedent

Section 5.1 Conditions Precedent to Closing.

The occurrence of the Closing Date and the effectiveness of the Commitments
hereunder shall be subject to the conditions precedent that (i) the SPV or the
Originator shall have paid in full (A) all amounts required to be paid by either
of them on or prior to the Closing Date pursuant to the Fee Letter and (B) the
fees and expenses described in clause (i) of Section 9.4 and invoiced prior to
the Closing Date, and (ii) the Agent shall have received, for itself and each of
the Investors and the Agent’s counsel, an original (unless otherwise indicated)
of each of the following documents, each in form and substance satisfactory to
the Agent.

(a) A duly executed counterpart of this Agreement, the First Tier Agreement, the
Second Tier Agreement, the Fee Letter and each of the other Transaction
Documents executed by the Originator, the SPV, the Seller and the Servicer, as
applicable.

(b) A certificate, substantially in the form of Exhibit F, of the secretary or
assistant secretary of the SPV, certifying and (in the case of clauses
(i) through (iii)) attaching as exhibits thereto, among other things:

(i) the articles of incorporation, charter or other organizing document
(including a limited liability company agreement, if applicable) of the SPV, the
Servicer, the Seller, the Originator and the Performance Guarantor (certified by
the Secretary of State or other similar official of the respective jurisdiction
of incorporation or organization, as applicable, as of a recent date);

(ii) resolutions of the board of managers or other governing body of the SPV,
the Servicer, the Seller, the Originator and the Performance Guarantor
authorizing the execution, delivery and performance of this Agreement and the
other Transaction Documents to be delivered by the SPV, the Servicer, the
Seller, the Originator and the Performance Guarantor hereunder or thereunder and
all other documents evidencing necessary corporate action (including shareholder
consents, if applicable) and government approvals, if any; and

(iii) the incumbency, authority and signature of each officer of the SPV, the
Servicer, the Seller, the Originator and the Performance Guarantor executing the
Transaction Documents or any certificates or other documents delivered hereunder
or thereunder on behalf of the SPV, the Servicer, the Seller, the Originator and
the Performance Guarantor.

(c) A certificate, substantially in the form of Exhibit G of the secretary or
assistant secretary of the Originator, the Servicer, the Seller and the
Performance Guarantor certifying and (in the case of clauses (i) through (iii))
attaching as exhibits thereto, among other things:

(i) the articles of incorporation, certificate of formation, charter or other
organizing document (including a limited liability company agreement, if
applicable) of the Originator, the Servicer, the Seller and the Performance
Guarantor (certified by the Secretary of State or other similar official of its
respective jurisdiction of incorporation or organization, as applicable, as of a
recent date);

 

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(ii) the by-laws and/or operating agreement of the Originator, the Servicer, the
Seller and the Performance Guarantor;

(iii) resolutions of the board of directors or managers or other governing body
of the Originator, the Servicer, the Seller and the Performance Guarantor
authorizing the execution, delivery and performance by it of this Agreement and
the other Transaction Documents to be delivered by it hereunder or thereunder
and all other documents evidencing necessary corporate action (including
shareholder consents) and government approvals, if any; and

(iv) the incumbency, authority and signature of each officer of the Originator,
the Servicer, the Seller and the Performance Guarantor executing the Transaction
Documents or any certificates or other documents delivered hereunder or
thereunder on its behalf.

(d) A good standing certificate for the SPV issued by the Secretary of State or
a similar official of the SPV’s jurisdiction of incorporation or organization,
as applicable, and certificates of qualification as a foreign corporation issued
by the Secretaries of State or other similar officials of each jurisdiction
where such qualification is material to the transactions contemplated by this
Agreement and the other Transaction Documents, in each case, dated as of a
recent date.

(e) A good standing certificate for each of the Originator, the Servicer and the
Seller issued by the Secretary of State or a similar official of its
jurisdiction of incorporation or organization, as applicable, and certificates
of qualification as a foreign corporation issued by the Secretaries of State or
other similar officials of each jurisdiction where such qualification is
material to the transactions contemplated by this Agreement and the other
Transaction Documents, in each case, dated as of a recent date.

(f) Acknowledgment copies or other evidence of filing acceptable to the Agent of
proper financing statements (Form UCC-1), filed on or before the initial
Investment Date naming the SPV, as debtor, in favor of the Agent, as secured
party, for the benefit of the Investors or other similar instruments or
documents as may be necessary or in the reasonable opinion of the Agent
desirable under the UCC of all appropriate jurisdictions or any comparable law
to perfect the Agent’s ownership or security interest in all Receivables and the
other Affected Assets.

(g) Acknowledgment copies or other evidence of filing acceptable to the Agent of
proper financing statements (Form UCC-1), filed on or before the initial
Investment naming the Originator, as the debtor, in favor of the SPV, as secured
party, and the Agent, for the benefit of the Investors, as assignee, or other
similar instruments or documents as may be necessary or in the reasonable
opinion of the Agent desirable under the UCC of all appropriate jurisdictions or
any comparable law to perfect the SPV’s ownership interest in all Receivables
and the other Affected Assets.

 

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(h) Acknowledgment copies or other evidence of filing acceptable to the Agent of
proper financing statements (Form UCC-1), filed on or before the initial
Investment naming the Seller, as the debtor, in favor of the SPV, as secured
party, and the Agent, for the benefit of the Investors, as assignee, or other
similar instruments or documents as may be necessary or in the reasonable
opinion of the Agent desirable under the UCC of all appropriate jurisdictions or
any comparable law to perfect the SPV’s ownership interest in all Receivables
and the other Affected Assets.

(i) Copies of proper financing statements (Form UCC-3), if any, filed on or
before the initial Investment Date necessary to terminate all security interests
and other rights of any Person in Receivables or the other Affected Assets
previously granted by SPV.

(j) Copies of proper financing statements (Form UCC-3), if any, filed on or
before the initial Investment Date necessary to terminate all security interests
and other rights of any Person in Receivables or the other Affected Assets
previously granted by the Originator.

(k) Certified copies of requests for information or copies (Form UCC-11) (or a
similar search report certified by parties acceptable to the Agent) dated a date
reasonably near the date of the initial Investment listing all effective
financing statements which name the SPV, the Seller or the Originator (under
their respective present names and any previous names) as debtor and which are
filed in jurisdictions in which the filings were made pursuant to clauses (f) or
(g) above and such other jurisdictions where the Agent may reasonably request
together with copies of such financing statements (none of which shall cover any
Receivables, other Affected Assets or Contracts unless such filings have been
terminated or released pursuant to paragraphs (i) or (j) above or unless such
Receivables, other Affected Assets or Contracts have been released under the
terms of the related agreement as contemplated in Section 4.1(z) above), and
similar search reports with respect to federal tax liens and liens of the
Pension Benefit Guaranty Corporation in such jurisdictions, showing no such
liens on any of the Receivables, other Affected Assets or Contracts.

(l) Executed copies of the Blocked Account Agreements relating to each of the
Blocked Accounts.

(m) [Reserved].

(n) (i) A favorable opinion of Mayer Brown LLP, special counsel to the SPV, the
Seller, the Servicer, the Performance Guarantor and the Originator, covering the
matters set forth in Exhibit H, including non-contravention as to the material
agreements (including the Revolving Credit Agreement and the Master Note
Purchase Agreement and all related documents), the creation, attachment,
perfection and priority of the interests created pursuant to each of the First
Tier Agreement, the Second Tier Agreement, and this Agreement, the
enforceability of each of the Transaction Documents against each of the
Originator, the Seller, the SPV and the Performance Guarantor and as to such
other matters as the Agent may reasonably request and (ii) a favorable opinion
of the general counsel to the Originator covering certain corporate matters,
each of the foregoing to be in form and substance acceptable to the Agent.

 

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(o) A favorable opinion of Mayer Brown LLP, special counsel to the SPV, the
Seller, the Performance Guarantor and the Originator, covering certain
bankruptcy and insolvency matters (i.e. “true sale”) and nonconsolidation in
form and substance satisfactory to the Agent and Agent’s counsel.

(p) [Reserved].

(q) Satisfactory results of a review and audit of the Originator’s collection,
operating and reporting systems, Credit and Collection Policy, historical
receivables data and accounts, including satisfactory results of a review of the
Originator’s operating location(s) and satisfactory review and approval of the
Eligible Receivables in existence on the date of the initial purchase under the
First Tier Agreement and Second Tier Agreement and a written outside audit
report of a nationally-recognized accounting firm as to such matters.

(r) A Servicer Report as of January 31, 2009 showing the calculation of the Net
Investment, each Class Net Investment and Required Reserves after giving effect
to the initial Investment.

(s) Evidence of the appointment of CT Corporation Systems as agent for process
as required by Section 11.4.

(t) [Reserved].

(u) Evidence of the termination of the existing receivables securitization
facility and the release of all liens related thereto.

(v) Such other approvals, documents, instruments, certificates and opinions as
the Agent, any Class Agent or any Investor, may reasonably request.

Section 5.2 Conditions Precedent to All Investments and Reinvestments.

Each Investment and Reinvestment hereunder (including the initial Investment)
shall be subject to the conditions precedent that (a) the Closing Date shall
have occurred, (b) if the Agent shall have requested, in accordance with any
provision of this Agreement, any additional information, report, document or
filing, it has received such information, report or document or such filing has
been made, and (c) on the date of such Investment and Reinvestment the following
statements shall be true (and the SPV by accepting the amount of such Investment
or Reinvestment shall be deemed to have certified that):

(i) The representations and warranties contained in Sections 4.1 and 4.2 are
true, complete and correct on and as of such day as though made on and as of
such day and shall be deemed to have been made on such day,

(ii) In the case of a Reinvestment, the amount of the Reinvestment will not
exceed the amount available therefor under Section 2.12, and in the case of an
Investment, the amount of such Investment will not exceed the amount available
therefor under Section 2.2 and after giving effect thereto, the sum of the Net
Investment and Required Reserves will not exceed the Net Pool Balance,

 

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(iii) In the case of an Investment, the Agent shall have received an Investment
Request, appropriately completed, within the time period required by
Section 2.3,

(iv) In the case of an Investment, the Agent shall have received a Servicer
Report dated no more than 31 days (or such other date at the Agent’s request)
prior to the proposed Investment Date and the information set forth therein
shall be true, complete and correct,

(v) The Termination Date has not occurred,

(vi) No Termination Event or Potential Termination Event has occurred or has not
been waived by the Agent,

(vii) The Days Sales Outstanding does not equal or exceed 50 days, and

(viii) Any challenge by any of the parties to the Revolving Credit Agreement or
the Master Note Purchase Agreement that the transactions contemplated by the
Transaction Documents are not a Receivable Purchase Facility (as defined in the
Revolving Credit Agreement or the Master Note Purchase Agreement, as such
document is in effect on the date as of the date of this Agreement) or are not
permitted under the Revolving Credit Agreement or the Master Note Purchase
Agreement, as such document is in effect on the date as of which this
representation is made.

No Investments or Reinvestments shall be made until all of the above conditions
have been satisfied or waived by each Class Agent and, if the condition to the
continued Investment or Reinvestment that was not satisfied is that set forth in
clause (vii) then a new Servicer Report has been received by the Class Agents,
which Servicer Report indicates that such condition has been satisfied.
Following the occurrence and continuance of a failure to satisfy one or more of
the above conditions, the Collections received shall be applied on the next
Settlement Date in accordance with the provisions of Section 2.12.

Article VI

Covenants

Section 6.1 Affirmative Covenants of the SPV and Servicer.

At all times from the date hereof to the Final Payout Date, unless the Class
Agents shall otherwise consent in writing:

(a) Reporting Requirements. The SPV and the Performance Guarantor shall
maintain, for itself and each of its Subsidiaries, a system of accounting
established and administered in accordance with GAAP, and furnish to the Agent
and each Class Agent:

(i) Annual Reporting.

(A) Within ninety (90) days after the close of the SPV’s and the Performance
Guarantor’s fiscal years, (1) unaudited financial statements, prepared

 

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in accordance with GAAP on a consolidated basis for the SPV and (2) audited
financial statements, prepared in accordance with GAAP on a consolidated basis
for the Performance Guarantor and its Subsidiaries, in each case, including
balance sheets as of the end of such period, related statements of operations,
shareholder’s equity and cash flows; provided that the audited financial
statements for the Performance Guarantor and its Subsidiaries shall be
accompanied by an unqualified audit report certified by independent registered
public accountants of national or regional recognition, acceptable to the Agent,
prepared in accordance with GAAP, and

(B) Within one hundred twenty-five (125) days after the close of the Seller and
the Servicer fiscal years, financial statements, prepared in accordance with
GAAP on a consolidated basis for the Seller and the Servicer, in each case,
including balance sheets as of the end of such period, related statements of
operations, shareholder’s equity and cash flows, all certified by an appropriate
Responsible Officer and a certificate of a Responsible Officer that, in the
course of the foregoing, they have obtained no knowledge of any Termination
Event or Potential Termination Event, or if, in the opinion of such Responsible
Officer, any Termination Event or Potential Termination Event shall exist,
stating the nature and status thereof;

(ii) Quarterly Reporting. Within forty-five (45) days after the close of the
first three quarterly periods of each of the SPV’s, the Seller’s, the Servicer’s
and the Performance Guarantor’s fiscal years, for (A) the SPV, the Seller and
the Servicer and (B) for Performance Guarantor and its Subsidiaries, in each
case, consolidated unaudited balance sheets as at the close of each such period
and consolidated related statements of operations, shareholder’s equity and cash
flows for the period from the beginning of such fiscal year to the end of such
quarter, all certified by a Responsible Officer of the appropriate entity. Each
such report by the Performance Guarantor shall include a certification that it
and its Affiliates are in compliance with all financial covenants under the
Revolving Credit Agreement and shall include calculations in reasonable detail
evidencing such compliance.

(iii) Compliance Certificate. Together with the financial statements required
hereunder, a compliance certificate in substantially the form set forth on
Exhibit J signed by an appropriate Responsible Officer of the SPV, the Seller
and the Servicer or the Performance Guarantor, as applicable, stating that
(A) the attached financial statements have been prepared in accordance with GAAP
and accurately reflect the financial condition of the SPV, the Seller and the
Servicer, or the Performance Guarantor and its Subsidiaries as applicable (which
in the case of quarterly financial statements may be subject to normal year-end
audit adjustments) and (B) to the best of such Person’s knowledge, no
Termination Event or Potential Termination Event exists, or if any Termination
Event or Potential Termination Event exists, stating the nature and status
thereof.

 

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(iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof
to the shareholders of the SPV, the Originator or the Performance Guarantor,
copies of all financial statements, reports and proxy statements so furnished.

(v) SEC Filings. Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which the
Originator or any Subsidiary of the Originator or the Performance Guarantor or
such Person files with the Securities and Exchange Commission.

(vi) Notice of Termination Events or Potential Termination Events; Etc. (A) as
soon as possible and in any event within two (2) Business Days after the
occurrence of each Termination Event or Potential Termination Event, a statement
of a Responsible Officer of the SPV setting forth details of such Termination
Event or Potential Termination Event and the action which the SPV proposes to
take with respect thereto, which information shall be updated promptly from time
to time; (B) promptly after the SPV obtains knowledge thereof, notice of any
litigation, investigation or proceeding that may exist at any time between the
SPV and any Person that could reasonably be expected to result in a Material
Adverse Effect or any litigation or proceeding relating to any Transaction
Document; and (C) promptly after the occurrence thereof, notice of a Material
Adverse Effect with respect to the SPV.

(vii) Change in Credit and Collection Policy and Debt Ratings. Within ten
(10) Business Days after the date any material change in or amendment to the
Credit and Collection Policy is made, a copy of the Credit and Collection Policy
then in effect indicating such change or amendment. Within five (5) days after
the date of any change in the Servicer’s, the Seller’s, the Originator’s or the
Performance Guarantor’s public or private debt ratings by any Rating Agency, if
any, a written certification of the SPV’s or the Originator’s and private debt
ratings after giving effect to any such change.

(viii) Credit and Collection Policy. Within ninety (90) days after the close of
each of the Originator’s and the SPV’s fiscal years, a complete copy of the
Credit and Collection Policy then in effect.

(ix) ERISA. Promptly after the filing, giving or receiving thereof, copies of
all reports and notices with respect to any Reportable Event pertaining to any
Pension Plan and copies of any notice by any Person of its intent to terminate
any Pension Plan, and promptly upon the occurrence thereof, written notice of
any contribution failure with respect to any Pension Plan sufficient to give
rise to a lien under Section 302(f) of ERISA.

(x) Change in Accountants or Accounting Policy. Promptly, notice of any change
in the accountants or any material change (other than as a result of the
application of a change in standards by the Financial Accounting Standards Board
or the American Institute of Certified Public Accountants) in accounting policy
of either the SPV or the Performance Guarantor.

 

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(xi) Agreed Upon Procedures. No later than 60 days prior to November 23rd of
each calendar year, the Servicer, at its expense, will cause to be prepared a
report prepared by a firm satisfactory to the Agent setting forth the results of
such firm’s application of the agreed upon procedures set forth on Exhibit I.

(xii) Other Information. Such other information (including non-financial
information) as the Agent or any Class Agent may from time to time reasonably
request with respect to the Originator, the SPV, the Seller or the Performance
Guarantor.

(b) Conduct of Business; Ownership. Each of the SPV and the Servicer shall 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 do
all things necessary to remain duly organized, validly existing and in good
standing as a domestic limited liability company in its jurisdiction of
organization. The SPV shall maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted. The Servicer
shall maintain all requisite authority to conduct its business in each
jurisdiction where failure maintain such authority would reasonably be expected
to have a Material Adverse Effect with respect to the Servicer. The SPV shall at
all times be a wholly-owned Subsidiary of the Seller.

(c) Compliance with Laws, Etc. Each of the SPV and the Servicer shall comply in
all material respects with all Laws to which it or its respective properties may
be subject and preserve and maintain its corporate existence, rights,
franchises, qualifications and privileges, in each case, except to the extent
that the failure to so comply in any such case could not be reasonably expected
to have a Material Adverse Effect.

(d) Furnishing of Information and Inspection of Records. Each of the SPV and the
Servicer shall furnish to the Agent from time to time such information with
respect to the Affected Assets as the Agent may reasonably request, including
listings identifying the Obligor and the Unpaid Balance for each Receivable
available to the Servicer in accordance with its then current accounts
receivable system without the Servicer manually preparing such reports. Each of
the SPV and the Servicer shall, at any time and from time to time during regular
business hours, as reasonably requested with reasonable prior notice by the
Agent or any Class Agent, permit the Agent, or its agents or representatives,
(i) to examine and make copies of and take abstracts from all books, records and
documents (including applicable computer systems following a Potential
Termination Event or Termination Event) relating to the Receivables or other
Affected Assets, including the related Contracts and (ii) to visit the offices
and properties of the SPV, the Originator or the Servicer, as applicable, for
the purpose of examining such materials described in clause (i), and to discuss
matters relating to the Affected Assets or the SPV’s, the Originator’s or the
Servicer’s performance hereunder, under the Contracts and under the other
Transaction Documents to which such Person is a party with any of the officers,
directors, managers, employees or independent public accountants of the SPV, the
Originator or the Servicer, as applicable, having knowledge of such matters;
provided, however that the Seller and Servicer shall only be responsible for the
costs and expenses associated with one such review per year unless a Termination
Event or Potential Termination Event has occurred.

 

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(e) Keeping of Records and Books of Account. Each of the SPV and the Servicer
shall maintain and implement administrative and operating procedures (including
an ability to recreate records evidencing Receivables and related Contracts in
the event of the destruction of the originals thereof), and keep and maintain,
all documents, books, computer tapes, disks, records and other information
reasonably necessary or advisable for the collection of all Receivables
(including records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each existing Receivable).
Each of the SPV and the Servicer shall give the Agent prompt notice of any
material change in its administrative and operating procedures referred to in
the previous sentence.

(f) Performance and Compliance with Receivables and Contracts and Credit and
Collection Policy. Each of the SPV and the Servicer shall, (i) at its own
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 Receivables; and (ii) timely and fully comply in all
material respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.

(g) Notice of Agent’s Interest. In the event that the SPV or the Originator
shall sell or otherwise transfer any interest in accounts receivable or any
other financial assets (other than as contemplated by the Transaction
Documents), any computer tapes or files or other documents or instruments
provided by the Servicer in connection with any such sale or transfer shall
disclose the SPV’s ownership of the Receivables and the Agent’s interest
therein.

(h) Collections. Each of the SPV and the Servicer shall instruct all Obligors to
cause all Collections to be deposited directly to a Blocked Account or to post
office boxes to which only Blocked Account Banks have access and shall cause all
items and amounts relating to such Collections received in such post office
boxes to be removed and deposited into a Blocked Account on a daily basis.

(i) Collections Received. Each of the SPV and the Servicer shall hold in trust,
and deposit, immediately, but in any event not later than two (2) Business Days
of its receipt thereof, to a Blocked Account or, if required by Section 2.9, to
the Collection Account, all Collections received by it from time to time.

(j) Blocked Accounts. Each Blocked Account shall at all times be subject to a
Blocked Account Agreement.

(k) Sale Treatment. The SPV shall not (i) record in its books (other than for
accounting and tax purposes), or otherwise treat, the transactions contemplated
by the Second Tier Agreement in any manner other than as a sale of Receivables
by the Seller to the SPV, or (ii) record in its books (other than for tax or
accounting purposes) or otherwise treat the transactions contemplated hereby in
any manner other than as a sale of the Asset Interest by the SPV to the Agent on
behalf of the Investors. In addition, the SPV shall disclose (in a footnote or
otherwise) in all of its financial statements (including any such financial
statements consolidated with any other Persons’ financial statements) the
existence and nature of the transaction contemplated hereby and by the Second
Tier Agreement and the interest of the SPV (in the case of the Originator’s
financial statements) and the Agent, on behalf of the Investors, in the Affected
Assets. Notwithstanding anything to the contrary herein, each of the parties
hereto hereby understands and agrees that for accounting purposes, the SPV may
be consolidated with any Affiliates of the Originator.

 

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(l) Separate Business; Nonconsolidation. The SPV shall not (i) engage in any
business not permitted by its limited liability company agreement as in effect
on the Closing Date or (ii) conduct its business or act in any other manner
which is inconsistent with Section 4.1(x). The officers and managers of the SPV
(as appropriate) shall make decisions with respect to the business and daily
operations of the SPV independent of and not dictated by Originator or any other
controlling Person.

(m) Corporate Documents. The SPV shall only amend, alter, change or repeal its
limited liability company agreement with the prior written consent of the Agent.

(n) [Reserved].

(o) Ownership Interest, Etc. The SPV shall, at its expense, take all action
necessary or desirable to establish and maintain a valid and enforceable
ownership or security interest in the Receivables, the Related Security and
proceeds with respect thereto, and a first priority perfected security interest
in the Affected Assets, in each case free and clear of any Adverse Claim, in
favor of the Agent for the benefit of the Investors, including taking such
action to perfect, protect or more fully evidence the interest of the Agent, as
the Agent may reasonably request.

(p) Enforcement of First Tier Agreement. The Seller, on its own behalf and on
behalf of the Agent and each Investor, shall promptly enforce all covenants and
obligations of the Originator contained in the First Tier Agreement. The Seller
shall deliver consents, approvals, directions, notices, waivers and take other
actions under the First Tier Agreement as may be directed by the Agent.

(q) Enforcement of Second Tier Agreement. The SPV, on its own behalf and on
behalf of the Agent and each Investor, shall promptly enforce all covenants and
obligations of the Seller contained in the Second Tier Agreement. The SPV shall
deliver consents, approvals, directions, notices, waivers and take other actions
under the Second Tier Agreement as may be directed by the Agent.

(r) Notice of Amendment. The SPV or the Originator shall promptly notify the
Agent of any amendment, modification or supplement to the Revolving Credit
Agreement, Master Note Purchase Agreement, Intercreditor Agreement or the Pledge
Agreement that could have any effect on the transactions contemplated by the
Transaction Documents.

(s) Disclosure of the Transaction. The Performance Guarantor, the Originator,
the Seller and the SPV each agree to the covenants set forth on Schedule 4.1
(bb) applicable to it which are incorporated herein by reference.

 

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Section 6.2 Negative Covenants of the SPV and Servicer.

At all times from the date hereof to the Final Payout Date, unless the Agent and
each Class Agent shall otherwise consent in writing:

(a) No Sales, Liens, Etc. (i) Except as otherwise provided herein and in the
Second Tier Agreement, neither the SPV nor the Servicer shall, or shall permit
the Seller or the Originator to, sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Adverse Claim upon (or
the filing of any financing statement) or with respect to (A) any of the
Affected Assets, or (B) any inventory or goods, the sale of which may give rise
to a Receivable, or assign any right to receive income in respect thereof
(except to the extent the Receivables have been excluded or otherwise excepted
or released from such transaction on or before the date such Receivables are
transferred by the Originator and by the Seller) and (ii) the SPV shall not
issue any security to, or sell, transfer or otherwise dispose of any of its
property or other assets (including the property sold, transferred or assigned
to it by the Seller) to, any Person other than an Affiliate (which Affiliate is
not a special purpose entity organized for the sole purpose of issuing asset
backed securities) or as otherwise expressly provided for in the Transaction
Documents.

(b) No Extension or Amendment of Receivables. Except as otherwise permitted in
Section 7.2, neither the SPV nor the Servicer shall extend, amend or otherwise
modify the terms of any Receivable, or amend, modify or waive any term or
condition of any Contract related thereto.

(c) No Change in Business or Credit and Collection Policy. Neither the SPV nor
the Servicer shall make any change in the character of its business or in the
Credit and Collection Policy, which change would, in either case, have a
Material Adverse Effect.

(d) No Subsidiaries, Mergers, Etc. The SPV shall not consolidate or merge with
or into, or sell, lease or transfer all or substantially all of its assets to,
any other Person. The Servicer shall not shall not consolidate or merge with or
into, or sell, lease or transfer all or substantially all of its assets to, any
other Person, unless either (i) the Servicer is the surviving entity or (ii) the
surviving entity is a wholly-owned subsidiary of the Performance Guarantor. The
SPV shall not form or create any Subsidiary.

(e) Change in Payment Instructions to Obligors. Neither the SPV nor the Servicer
shall add or terminate any bank as a Blocked Account Bank or any account as a
Blocked Account to or from those listed in Schedule 4.1(r) or make any change in
its instructions to Obligors regarding payments to be made to any Blocked
Account, unless (i) such instructions are to deposit such payments to another
existing Blocked Account or to the Collection Account or (ii) the Agent shall
have received written notice of such addition, termination or change at least
thirty (30) days prior thereto and the Agent shall have received a Blocked
Account Agreement executed by each new Blocked Account Bank or an existing
Blocked Account Bank with respect to each new Blocked Account, as applicable.

 

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(f) Deposits to Lock-Box Accounts. Neither the SPV nor the Servicer shall
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to any Blocked Account or the Collection Account, cash or cash proceeds other
than Collections.

(g) Change of Name, Etc. The SPV shall not change its name, identity or
structure (including by merger), its jurisdiction of formation or the location
of its chief executive office or any other change which could render any UCC
financing statement filed in connection with this Agreement or any other
Transaction Document to become “seriously misleading” under the UCC, unless at
least thirty (30) days prior to the effective date of any such change the SPV
delivers to the Agent (i) such documents, instruments or agreements, executed by
the SPV as are necessary to reflect such change and to continue the perfection
of the Agent’s ownership interests or security interests in the Affected Assets,
including an opinion of counsel that after giving effect to such change, the
Agent’s interest in the Receivables and the Related Security shall continue
unaffected by such change and (ii) new or revised Blocked Account Agreements
executed by the Blocked Account Banks which reflect such change and enable the
Agent to continue to exercise its rights contained in Section 7.3.

(h) Amendment to First or Second Tier Agreement. The SPV shall not and shall not
permit the Seller or the Originator to amend, modify, or supplement the First
Tier Agreement or the Second Tier Agreement or waive any provision thereof, in
each case except with the prior written consent of the Agent.

(i) Other Debt. Except as provided herein, the SPV shall not create, incur,
assume or suffer to exist any indebtedness whether current or funded, or any
other liability other than (i) indebtedness of the SPV representing fees,
expenses and indemnities arising hereunder or under the Second Tier Agreement
for the purchase price of the Receivables and other Affected Assets under the
Second Tier Agreement, and (ii) other indebtedness incurred in accordance with
the Transaction Documents.

(j) Payment to the Seller. The SPV shall not acquire any Receivable other than
through, under, and pursuant to the terms of, the Second Tier Agreement.

(k) Restricted Payments. The SPV shall not (i) purchase or redeem any of its
membership interest, (ii) prepay, purchase or redeem any Indebtedness,
(iii) lend or advance any funds or (iv) repay any loans or advances to, for or
from any of its Affiliates (the amounts described in clauses (i) through
(iv) being referred to as “Restricted Payments”), except that the SPV may
(A) make Restricted Payments out of funds received pursuant to Section 2.2
and/or otherwise permitted pursuant to the Transaction Documents and (B) may
make other Restricted Payments (including the payment of dividends) if, after
giving effect thereto, no Termination Event or Potential Termination Event shall
have occurred and be continuing.

Section 6.3 Financial Covenants.

(a) Leverage Ratio. During the term of this Agreement, unless the Agent shall
otherwise consent in writing, the Originator and the Performance Guarantor each
hereby agrees with the Alternate Investor and the Agent to maintain a Leverage
Ratio (as defined in the Revolving Credit Agreement) in accordance with the
provisions of Section 6.20 of the Revolving Credit Agreement.

 

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(b) Consolidated Net Worth. During the term of this Agreement, unless the Agent
shall otherwise consent in writing, the Originator and the Performance Guarantor
each hereby agrees with the Alternate Investor and the Agent to maintain a
positive Consolidated New Worth (as defined in the Revolving Credit Agreement)
in accordance with the provisions of Section 6.21 of the Revolving Credit
Agreement.

(c) For the purposes of subsections (a) and (b) of this Section, all defined
terms used in Sections 6.20 and 6.21 of the Revolving Credit Agreement and in
any defined terms included in any such defined terms shall have the meanings
given to such defined terms in the Revolving Credit Agreement

Article VII

Administration and Collections

Section 7.1 Appointment of Servicer.

(a) The servicing, administering and collection of the Receivables shall be
conducted by the Person (the “Servicer”) so designated from time to time as
Servicer in accordance with this Section 7.1. Each of the SPV, the Class Agents,
the Agent and the Investors hereby appoints as its agent the Servicer, from time
to time designated pursuant to this Section, to enforce its respective rights
and interests in and under the Affected Assets. To the extent permitted by
applicable law, each of the SPV, the Originator and the Seller (to the extent
not then acting as Servicer hereunder) hereby grants to any Servicer appointed
hereunder an irrevocable power of attorney to take any and all steps in the
SPV’s, the Originator’s and/or the Seller’s name and on behalf of the SPV, the
Originator or the Seller as necessary or desirable, in the reasonable
determination of the Servicer, to collect all amounts due under any and all
Receivables, including endorsing the SPV’s and/or the Originator’s name on
checks and other instruments representing Collections and enforcing such
Receivables and the related Contracts and to take all such other actions set
forth in this Article VII. Until the Agent gives notice to the Servicer (in
accordance with this Section 7.1) of the designation of a new Servicer, the
Seller 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 a Servicer Default, the Agent may, and upon the direction of the Class Agents
shall, designate as Servicer any Person (including itself) to succeed the Seller
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; provided, however, that if a Servicer Default
occurs solely as a result of the occurrence of a Termination Event and, on or
after the 60th day after such occurrence the Net Investment exceeds zero, then a
successor Servicer may, or upon the direction of the Majority Investors, shall,
be appointed by the Agent.

(b) Upon the designation of a successor Servicer as set forth above, the Seller
agrees that it will terminate its activities as Servicer hereunder in a manner
which the Agent determines will facilitate the transition of the performance of
such activities to the new Servicer, and the

 

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Seller shall cooperate with and assist such new Servicer. Such cooperation shall
include access to and transfer of records and use by the new Servicer of all
records, licenses, hardware or software (except to the extent any such licenses
or other items are not assignable and/or may not be shared or assigned)
necessary or desirable to collect the Receivables and the Related Security.

(c) The Seller acknowledges that the SPV, the Class Agents, the Agent and the
Investors have relied on the Seller’s agreement to act as Servicer hereunder in
making their decision to execute and deliver this Agreement. Accordingly, the
Seller agrees that it will not voluntarily resign as Servicer.

(d) The Servicer may not delegate any of its rights, duties or obligations
hereunder, or designate a substitute Servicer, without the prior written consent
of the Agent, and provided that the Servicer shall continue to remain solely
liable for the performance of the duties as Servicer hereunder notwithstanding
any such delegation hereunder. The Servicer may delegate its duties and
obligations hereunder to any Affiliate subservicer (each, a “Sub-Servicer”);
provided that, in each such delegation, (i) such Sub-Servicer shall agree in
writing to perform the duties and obligations of the Servicer pursuant to the
terms hereof, (ii) the Servicer shall remain primarily liable to the SPV, the
Agent, the Class Agents and the Investors for the performance of the duties and
obligations so delegated, (iii) the SPV, the Agent, the Class Agents and the
Investors shall have the right to look solely to the Servicer for performance
and (iv) the terms of any agreement with any Sub-Servicer shall provide that the
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 such
Sub-Servicer).

(e) The Seller 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,
the Seller shall conduct the data-processing functions of the administration of
the Receivables and the Collections thereon in substantially the same way that
the Seller conducted such data-processing functions while it acted as the
Servicer.

Section 7.2 Duties of Servicer.

(a) The Servicer shall take or cause to be taken all such action as may be
necessary or advisable to collect each Receivable from time to time, all in
accordance with this Agreement and all applicable Law, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy. The Servicer
shall set aside (and, if applicable, segregate) and hold in trust for the
accounts of the SPV, the Agent and the Investors the amount of the Collections
to which each is entitled in accordance with Article II. So long as no
Termination Event or Potential Termination Event shall have occurred and is
continuing, the Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity or adjust the Unpaid Balance of any Defaulted
Receivable, Delinquent Receivable or any Receivable that is otherwise not an
Eligible Receivable as the Servicer may determine to be appropriate to maximize
Collections thereof; provided, however, that (i) such adjustment shall not
alter, subject to Section 1.3(b), the status of such Receivable as a Defaulted
Receivable or a Delinquent Receivable or limit the rights of the SPV, the
Investors or the Agent under this Agreement and (ii) if a Termination Event or
Potential Termination Event has occurred and the Seller is still acting as
Servicer, the Seller may make such adjustment only upon the prior written
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the Agent. The SPV shall deliver to the Servicer and the Servicer shall hold in
trust for the SPV and the Agent, on behalf of the Investors, in accordance with
their respective interests, all Records which evidence or relate to any Affected
Asset. Notwithstanding anything to the contrary contained herein, the Agent
shall have the absolute and unlimited right to direct the Servicer (whether the
Seller or any other Person is the Servicer) to commence or settle any legal
action to enforce collection of any Receivable or to foreclose upon or repossess
any Affected Asset. The Servicer shall not make the Class Agents, the Agent or
any of the Investors a party to any litigation without the prior written consent
of such Person. At any time when a Termination Event exists, the Agent may
notify any Obligor of its interest in the Receivables and the other Affected
Assets.

(b) The Servicer shall, as soon as practicable following receipt thereof, turn
over to the Seller or the Originator, as determined by the Servicer, all
collections from any Person of indebtedness of such Person which are not on
account of a Receivable. Notwithstanding anything to the contrary contained in
this Article VII, the Servicer, if not the Seller, the Originator or any
Affiliate of the Seller or the Originator, shall have no obligation to collect,
enforce or take any other action described in this Article VII with respect to
any indebtedness that is not included in the Asset Interest other than to
deliver to the Seller or the Originator the Collections and documents with
respect to any such indebtedness as described above in this Section 7.2(b).

(c) Any payment by an Obligor in respect of any indebtedness owed by it to the
Originator shall, except as otherwise specified by such Obligor, required by
contract or law or clearly indicated by facts or circumstances (including by way
of example an equivalence of a payment and the amount of a particular invoice),
and unless otherwise instructed by the Agent, be applied as a Collection of any
Receivable of such Obligor (starting with the oldest such Receivable) to the
extent of any amounts then due and payable thereunder before being applied to
any other receivable or other indebtedness of such Obligor.

Section 7.3 Blocked Account Arrangements.

Prior to the initial purchase hereunder the Servicer and SPV shall enter into
Blocked Account Agreements with all of the Blocked Account Banks, and deliver
original counterparts thereof to the Agent. Upon the occurrence of a Termination
Event or a Potential Termination Event, the Agent may at any time thereafter
give notice to each Blocked Account Bank that the Agent is exercising its rights
under the Blocked Account Agreements to do any or all of the following: (a) to
have the exclusive ownership and control of the Blocked Account Accounts
transferred to the Agent and to exercise exclusive dominion and control over the
funds deposited therein, (b) to have the proceeds that are sent to the
respective Blocked Accounts be redirected pursuant to its instructions rather
than deposited in the applicable Blocked Account, and (c) to take any or all
other actions permitted under the applicable Blocked Account Agreement. Each of
the Servicer and SPV hereby agrees that if the Agent, at any time, takes any
action set forth in the preceding sentence, the Agent shall have exclusive
control of the proceeds (including Collections) of all Receivables and each of
the Servicer and SPV hereby further agrees to take any other action that the
Agent may reasonably request to transfer such control. Any proceeds of
Receivables received by the Seller, as Servicer or otherwise, or the SPV
thereafter shall be sent immediately to the Agent. The parties hereto hereby
acknowledge that if at any time the Agent

 

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takes control of any Blocked Account, the Agent shall not have any rights to the
funds therein in excess of the unpaid amounts due to SPV, the Agent and the
Investors or any other Person hereunder and the Agent shall distribute or cause
to be distributed such funds in accordance with Section 7.2(b) (including the
proviso thereto) and Article II (in each case as if such funds were held by the
Servicer thereunder); provided, however, that the Agent shall not be under any
obligation to remit any such funds to the Seller or any other Person unless and
until the Agent has received from the Seller or such Person evidence
satisfactory to the Agent that the Seller or such Person is entitled to such
funds hereunder and under applicable Law.

Section 7.4 Enforcement Rights After Designation of New Servicer.

(a) At any time following the occurrence of a Termination Event and the
designation of a Servicer (other than the Seller or an Affiliate of the Seller)
pursuant to Section 7.1:

(i) the Agent may direct the Obligors that payment of all amounts payable under
any Receivable be made directly to the Agent or its designee;

(ii) the SPV shall, at the Agent’s request and at the SPV’s expense, give notice
of the Agent’s, the SPV’s, and/or the Investors’ ownership of the Receivables
and (in the case of the Agent) interest in the Asset Interest to each Obligor
and direct that payments be made directly to the Agent or its designee, except
that if the SPV fails to so notify each obligor, the Agent may so notify the
Obligors; and

(iii) the SPV shall, at the Agent’s request, (A) assemble all of the Records and
shall make the same available to the Agent or its designee at a place selected
by the Agent or its designee, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections of
Receivables in a manner acceptable to such Agent and shall, promptly upon
receipt, remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to such Agent or its designee.

(b) Each of the SPV and the Seller hereby authorizes the Agent, and irrevocably
appoints the Agent as its attorney-in-fact with full power of substitution and
with full authority in the place and stead of the SPV or the Seller, as
applicable, which appointment is coupled with an interest, to take any and all
steps following the occurrence of a Termination Event or the occurrence and
continuation of a Potential Termination Event, in the name of the SPV or the
Seller, as applicable, and on behalf of the SPV or the Seller, as applicable,
necessary or desirable, in the determination of the Agent, to collect any and
all amounts or portions thereof due under any and all Receivables or Related
Security, including endorsing the name of the Seller on checks and other
instruments representing Collections and enforcing such Receivables, Related
Security and the related Contracts. Notwithstanding anything to the contrary
contained in this subsection (b), none of the powers conferred upon such
attorney-in-fact pursuant to the immediately 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.

 

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Section 7.5 Servicer Default.

The occurrence of any one or more of the following events shall constitute a
“Servicer Default”:

(a) The Servicer (i) shall fail to make any payment or deposit required to be
made by it hereunder when due and such failure continues for one (1) Business
Day or the Servicer shall fail to observe or perform any term, covenant or
agreement on the Servicer’s part to be performed under Sections 6.1(b) (conduct
of business, ownership), 6.1(f) (performance and compliance with receivables,
contracts and credit and collection policy), 6.1(h) (obligor payments), 6.1(i)
(handling collections), 6.2(a) (no sales or liens), 6.2(c) (no change in
business or credit and collection policy), 6.2(d) (no subsidiaries, mergers,
etc.), 6.2(e) (change in payment instructions to obligors), or 6.2(f) (deposits
to lock-box accounts) (any of the preceding parenthetical phrases in this clause
(i) are for purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof) and such failure continues
for two (2) Business Days, (ii) shall fail to observe or perform any other term,
covenant or agreement to be observed or performed by it under Sections 2.8, 2.9,
2.12 or 2.15 and such failure continues for two (2) Business Days, or
(iii) shall fail to observe or perform in any material respect any other term,
covenant or agreement hereunder or under any of the other Transaction Documents
to which such Person is a party or by which such Person is bound and such
failure shall remain unremedied for thirty (30) days after the earlier to occur
of (1) receipt of notice thereof from any Class Agent, any Investor or the Agent
or (2) the date a Responsible Officer of the Servicer first becomes aware of
such failure; or

(b) (i) any representation, warranty, certification or statement made by the
Servicer in this Agreement, the First Tier Agreement, the Second Tier Agreement
or in any of the other Transaction Documents or in any certificate or report
delivered by it pursuant to any of the foregoing (other than those covered by
clause (ii) below) shall prove to have been incorrect in any material respect
when made or deemed made and shall remain unremedied for 30 days after the
earlier to occur of (A) receipt of notice thereof from any Class Agent, any
Investor or the Agent or (B) the date a Responsible Officer of the Servicer
first becomes aware of such failure or (ii) any representation, warranty,
certification or statement made by the Servicer in Section 4.1(e) (accuracy of
information) or in any certificate or report delivered by it pursuant to the
foregoing shall prove to have been incorrect in any material respect when made
or deemed made and shall remain unremedied for 60 days after the earlier to
occur of (1) receipt of notice thereof from any Class Agent, any Investor or the
Agent or (2) the date a Responsible Officer of the Servicer first becomes aware
of such failure; or

(c) failure of the Servicer or any of its Subsidiaries (other than the SPV) to
pay when due any amounts due under any agreement under which any outstanding
Indebtedness greater than $25,000,000 is governed; or the default (beyond the
applicable grace period with respect thereto, if any) by the Servicer or any of
its Subsidiaries (other than the SPV) in the performance of any term, provision
or condition contained in any agreement under which any such Indebtedness
greater than $25,000,000 outstanding was created or is governed, regardless of
whether such event is an “event of default” or “default” under any such
agreement; or any Indebtedness of the Servicer or any of its Subsidiaries
greater than $25,000,000 outstanding shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior to
the scheduled date of maturity thereof; or

 

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(d) any Event of Bankruptcy shall occur with respect to the Servicer; or

(e) failure of the Servicer to deliver any Servicer Report when due and such
failure remains unremedied for 2 Business Days; or

(f) subject to Section 7.1(a), a Termination Event.

Section 7.6 Servicing Fee.

The Servicer shall be paid a Servicing Fee in accordance with Section 2.12 and
subject to the priorities therein. If the Servicer is not the SPV or the Seller
or an Affiliate of the SPV or the Seller, the Servicer, by giving three
(3) Business Days’ prior written notice to the Class Agents, may revise the
percentage used to calculate the Servicing Fee so long as the revised percentage
will not result in a Servicing Fee that exceeds 110% of the reasonable and
appropriate out-of-pocket costs and expenses of such Servicer incurred in
connection with the performance of its obligations hereunder as documented to
the reasonable satisfaction of the Class Agents; provided, however, that at any
time after the sum of (1) the Net Investment and (2) the Required Reserves
exceeds the Net Pool Balance, any compensation to the Servicer in excess of the
Servicing Fee initially provided for herein shall be an obligation of the SPV
and shall not be payable, in whole or in part, from Collections allocated to the
Investors.

Section 7.7 Protection of Ownership Interest of the Investors.

Each of the Originator, the Seller and the SPV agrees that it shall, from time
to time, at its expense, promptly execute and deliver all instruments and
documents and take all actions as may be necessary or as the Agent may
reasonably request in order to perfect or protect the Asset Interest or to
enable the Agent or the Investors to exercise or enforce any of their respective
rights hereunder. Without limiting the foregoing, each of the Originator and the
SPV shall, upon the request of the Agent or any of the Investors, in order to
accurately reflect this purchase and sale transaction, (a) execute and file such
financing or continuation statements or amendments thereto or assignments
thereof (as otherwise permitted to be executed and filed pursuant hereto) as may
be requested by the Agent or any of the Investors and (b) mark its respective
master data processing records and other documents with a legend describing the
conveyance to the to the Agent, for the benefit of the Investors, of the Asset
Interest. Each of the Originator, the Seller and the SPV (i) shall, upon request
of the Agent or any of the Investors, obtain such additional search reports as
the Agent or any of the Investors shall request and (ii) hereby authorize the
Agent to file continuation statements and amendments thereto and assignments
thereof without further consent or action by any of the Originator, the Seller
or the SPV. Carbon, photographic or other reproduction of this Agreement or any
financing statement shall be sufficient as a financing statement. Neither the
Originator nor the SPV shall change its respective name, identity, corporate
structure, jurisdiction of formation unless it shall have: (A) given the Agent
at least thirty (30) days prior notice thereof and (B) prepared at the SPV’s
expense and delivered to the Agent all financing statements, instruments and
other documents necessary to preserve and protect the Asset Interest or
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including an opinion of counsel that after giving effect to such change, the
Agent’s interest in the Receivables and the Related Security shall continue
unaffected by such change. All filings under the UCC or otherwise shall be made
at the expense of the SPV.

Article VIII

Termination Events

Section 8.1 Termination Events.

The occurrence of any one or more of the following events shall constitute a
“Termination Event”:

(a) (i) the SPV, the Seller, the Originator, the Performance Guarantor or the
Servicer shall fail to make any payment or deposit required to be made by it
hereunder with respect to a reduction in the Net Investment; or (ii) the Seller,
the Originator, the Performance Guarantor or the Servicer shall fail to make any
payment or deposit required to be made by it hereunder other than in respect of
a reduction in the Net Investment when due and such failure continues for two
(2) Business Days; or

(b) (i) any representation, warranty, certification or statement made or deemed
made by the SPV, the Seller, the Servicer, the Performance Guarantor or the
Originator in this Agreement, any other Transaction Document to which it is a
party or in any other information, report or document delivered pursuant hereto
or thereto (other than those covered by clause (ii) below) shall prove to have
been incorrect when made or deemed made or delivered and shall remain unremedied
for 30 days after the earlier to occur of (A) receipt of notice thereof from any
Class Agent, any Investor or the Agent or (B) the date a Responsible Officer of
the Servicer, the SPV, the Seller, the Performance Guarantor or the Originator,
as applicable, first becomes aware of such failure or (ii) any representation,
warranty, certification or statement made or deemed made by the SPV, the Seller,
the Servicer, the Performance Guarantor or the Originator in Section 4.1(e)
(accuracy of information) or in any other information, report or document
delivered pursuant to the foregoing shall prove to have been incorrect when made
or deemed made or delivered and shall remain unremedied for 60 days after the
earlier to occur of (A) receipt of notice thereof from any Class Agent, any
Investor or the Agent or (B) the date a Responsible Officer of the Servicer, the
SPV, the Seller, the Performance Guarantor or the Originator, as applicable,
first becomes aware of such failure; or

(c) the SPV, the Seller, the Originator or the Servicer shall default in the
performance of any undertaking (other than those covered by clause (a) above or
(p) below) (i) to be performed or observed under Sections 6.1(b) (conduct of
business, ownership), 6.1(f) (performance and compliance with receivables,
contracts and credit and collection policy), 6.1(h) (obligor payments), 6.1(i)
(handling collections), 6.2(a) (no sales or liens), 6.2(c) (no change in
business or credit and collection policy), 6.2(d) (no subsidiaries, mergers,
etc.), 6.2(e) (no change in payment instructions to obligors) or 6.2(f)
(deposits to lock-box accounts) (any of the preceding parenthetical phrases in
this clause (i) are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof) and such failure
continues for two (2) Business Days, or (ii) shall fail to observe or perform
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this Agreement (other than those covered by clause (a) above or Section 6.3) or
any provision of any other Transaction Document to which it is a party and such
default in the case of this clause (ii) shall continue for thirty (30) days
after the earlier to occur of (A) receipt of notice thereof from any Class
Agent, any Investor or the Agent or (B) the date a Responsible Officer of the
Servicer, the SPV, the Seller, the Performance Guarantor or the Originator, as
applicable, first becomes aware of such failure; or

(d) any Event of Bankruptcy shall occur with respect to the SPV, the Seller, the
Originator, the Servicer or the Performance Guarantor; or

(e) the Agent, on behalf of the Investors, shall for any reason fail or cease to
have a valid and enforceable perfected first priority ownership or security
interest in the Affected Assets, free and clear of any Adverse Claim; or

(f) a Servicer Default shall have occurred; or

(g) on any Settlement Date, the sum of (i) the Net Investment (as determined
after giving effect to all distributions pursuant to this Agreement on such
date) and (ii) the Required Reserves shall exceed the Net Pool Balance (as such
Required Reserves and Net Pool Balance are shown in the most recent Servicer
Report delivered on or prior to such date); or

(h) failure of the SPV, the Seller, the Originator, the Performance Guarantor or
any Subsidiary of the SPV or the Originator to pay when due any amounts due
under any agreement to which any such Person is a party and under which any
Indebtedness greater than $10,000 in the case of the SPV or any Subsidiary of
the SPV, or $25,000,000 outstanding, in the case of the Seller, the Performance
Guarantor, the Originator or any Subsidiary of any of the foregoing Persons
(other than the SPV) is governed; or the default (after any applicable grace
period, if any) by the SPV, the Seller, the Performance Guarantor, the
Originator or any Subsidiary of any of the foregoing Persons in the performance
of any term, provision or condition contained in any agreement to which any such
Person is a party and under which any Indebtedness owing by the SPV, the Seller,
the Performance Guarantor, the Originator or any Subsidiary of any of the
foregoing Persons greater than such respective amounts was created or is
governed, regardless of whether such event is an “event of default” or “default”
under any such agreement if the effect of such default is to cause, or to permit
the holder of such Indebtedness to cause, such Indebtedness to become due and
payable prior to its stated maturity; or any Indebtedness owing by the SPV, the
Seller, the Performance Guarantor, the Originator or any Subsidiary of any of
the foregoing Persons greater than such respective amounts shall be declared to
be due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the date of maturity thereof; or

(i) there shall be a “change of control” with respect to the Servicer, the SPV,
the Seller, the Performance Guarantor or the Originator (for the purposes of
this clause only “change in control” means:

(i) the failure of the Originator to own, free and clear of any Adverse Claim
(other than the pledge under the Revolving Credit Agreement) and on a fully
diluted basis, 100% of the equity interests in the SPV,

 

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(ii) the lien on the equity interests in the SPV shall be foreclosed upon,

(iii) the failure of the Performance Guarantor to own, directly or indirectly,
100% of the equity interests in each of the Originator, the Seller, the Servicer
and the SPV, or

(iv) the acquisition by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of
the outstanding shares of voting stock of the Performance Guarantor; or

(j) [Reserved];

(k) any material provision of this Agreement or any other Transaction Document
to which the Originator, the Seller, the Performance Guarantor or the SPV is a
party shall cease to be in full force and effect or the Originator, the Seller,
the Performance Guarantor or the SPV shall so state in writing; or

(l) the three-month average Trigger Delinquency Ratio shall exceed 6.25%; or

(m) the three-month average Trigger Default Ratio shall exceed 2.25%; or

(n) the three-month average Trigger Dilution Ratio shall exceed 8.25%, or

(o) the Days Sales Outstanding equals or exceeds 60 days; or

(p) a breach of Section 6.3; or

(q) the Performance Guarantor shall default on any payment obligation under the
Performance Guaranty when due; or

(r) the SPV shall become required to register as an “investment company” under
the Investment Company Act of 1940, as amended, or the arrangements contemplated
by the Transaction Document shall require registration as an “investment
company” within the meaning of the Investment Company Act of 1940; or

(s) the Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the Code with regard to any assets of the SPV, the Seller or the
Originator and such lien shall not have been released within five (5) Business
Days, or the Pension Benefit Guaranty Corporation shall file notice of a lien
pursuant to Section 4068 of ERISA with regard to any of the assets of the SPV,
the Seller or the Originator, such lien shall not have been released within five
(5) Business Days and, if such lien is against the assets of the Seller or the
Originator, such lien would reasonably be expected to result in liability to the
Seller or the Originator, as applicable, in excess of $25,000,000; or

(t) (i) any action or proceeding is commenced by any party to the Revolving
Credit Agreement or the Master Note Purchase Agreement claiming or asserting
that the transactions contemplated by the Transaction Documents are not a
Receivable Purchase Facility (as defined

 

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in the Revolving Credit Agreement or the Master Note Purchase Agreement, as such
document is in effect on the date as of which this representation is made) or
are not permitted under the Revolving Credit Agreement or the Master Note
Purchase Agreement, as such document is in effect on the date as of which this
representation is made or (ii) the Originator or the Performance Guarantor have
entered into an additional Receivable Purchase Facility (as defined in the
Revolving Credit Agreement or the Master Note Purchase Agreement, as such
document is in effect on the date as of which this representation is made).

(u) either (i) a Default (as defined in the Revolving Credit Agreement) shall
occur and be continuing under Section 7.6 or 7.7 of the Revolving Credit
Agreement or (ii) the Revolving Credit Agreement Agent shall deliver notice
under the Revolving Credit Agreement prohibiting dispositions of assets by the
Performance Guarantor or any of its Affiliates following the occurrence and
during the continuance of any Default (as defined in the Revolving Credit
Agreement) under clauses (i), (ii) or (iii) of Section 7.2 of the Revolving
Credit Agreement.

If a Termination Event occurs, the Agent shall have all rights of a secured
party under the UCC and, by notice to the SPV and the Servicer, may declare the
Termination Date to occur, at which time all Collections shall be applied in
accordance with the provisions of Section 2.12 and the Net Investment will
accrue interest at the Default Rate.

Section 8.2 Termination.

Upon the occurrence of any Termination Event, the Class Agents may, or at the
direction of the Majority Investors shall, by notice to the SPV and the
Servicer, declare the Termination Date to have occurred; provided, however, that
in the case of any event described in Section 8.1(d), 8.1(e), 8.1(g), 8.1(o),
8.1(s) or 8.1(t), the Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event. Upon any such declaration or
automatic occurrence, the Agent shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of the applicable jurisdiction and other applicable laws,
all of which rights shall be cumulative. Upon the occurrence of the Termination
Date, no Investments or Reinvestments shall be made by any Investors and all
Collections shall be applied as set forth in Section 2.12.

Article IX

Indemnification; Expenses; Related Matters

Section 9.1 Indemnities by the SPV and the Servicer.

Without limiting any other rights which the Indemnified Parties may have
hereunder or under applicable Law, the SPV hereby agrees to indemnify the
Investors, the Agent, each Class Agent, the Collateral Agent, the Program
Support Providers and their respective officers, directors, employees, counsel
and other agents (collectively, “Indemnified Parties”) from and against any and
all damages, losses, claims, liabilities, costs and expenses, including
reasonable attorneys’ fees (which such attorneys may be employees of the Program
Support Providers, the Agent, the Collateral Agent or the Class Agents, as
applicable) and disbursements (all of the foregoing being collectively referred
to as “Indemnified Amounts”) awarded against or incurred

 

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by any of them in any action or proceeding between the SPV and any of the
Indemnified Parties or between any of the Indemnified Parties and any third
party or otherwise arising out of or as a result of this Agreement, the other
Transaction Documents, the ownership or maintenance, either directly or
indirectly, by the Agent or any Investor of the Asset Interest or any of the
other transactions contemplated hereby or thereby, excluding, however,
(x) Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party, as finally determined by a
court of competent jurisdiction, or (y) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables. Without
limiting the generality of the foregoing, the SPV shall indemnify each
Indemnified Party for Indemnified Amounts relating to or resulting from:

(a) any representation or warranty made by the SPV, the Originator, the
Performance Guarantor or the Seller (including, the Seller or any of its
Affiliates in the capacity as the Servicer) or any officers of the SPV, the
Originator, the Performance Guarantor or the Seller (including, in its capacity
as the Servicer or any Affiliate of the Seller acting as Servicer) under or in
connection with this Agreement, the First Tier Agreement, the Second Tier
Agreement, any of the other Transaction Documents, any Servicer Report or any
other information or report delivered by the SPV or the Servicer pursuant
hereto, or pursuant to any of the other Transaction Documents which shall have
been incomplete, false or incorrect in any respect when made or deemed made;

(b) the failure by the SPV, the Originator, the Performance Guarantor or the
Seller (including, in its capacity as the Servicer or any Affiliate of the
Seller acting as Servicer) to comply with any applicable Law with respect to any
Receivable or the related Contract, or the nonconformity of any Receivable or
the related Contract with any such applicable Law;

(c) the failure (i) to vest and maintain vested in the Agent, on behalf of the
Investors, a first priority, perfected ownership interest in the Asset Interest
free and clear of any Adverse Claim or (ii) to create or maintain a valid and
perfected first priority security interest in favor of the Agent, for the
benefit of the Investors, in the Affected Assets, free and clear of any Adverse
Claim;

(d) the failure to file, or any delay in filing, financing statements,
continuation statements, or other similar instruments or documents under the UCC
of any applicable jurisdiction or other applicable laws with respect to any of
the Affected Assets;

(e) any dispute, claim, offset or defense (other than discharge in bankruptcy)
of the Obligor to the payment of any Receivable (including a defense based on
such Receivable or the related Contract not being the 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 merchandise or services related to
such Receivable or the furnishing or failure to furnish such merchandise or
services, or from any breach or alleged breach of any provision of the
Receivables or the related Contracts restricting assignment of any Receivables;

(f) any failure of the SPV or the Servicer to perform its duties or obligations
in accordance with the provisions hereof;

 

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(g) any products liability claim or personal injury or property damage suit or
other similar or related claim or action of whatever sort arising out of or in
connection with merchandise or services which are the subject of any Receivable;

(h) the transfer of an interest in any Receivable other than an Eligible
Receivable;

(i) the failure by the SPV, the Originator, the Performance Guarantor or the
Seller (individually or as Servicer) to comply with any term, provision or
covenant contained in this Agreement or any of the other Transaction Documents
to which it is a party or to perform any of its respective duties or obligations
under the Receivables or related Contracts;

(j) the sum of (i) the Net Investment and (ii) the Required Reserves shall
exceed the Net Pool Balance at any time;

(k) the failure of the SPV, the Originator or the Seller to pay when due any
sales, excise or personal property taxes payable in connection with any of the
Receivables;

(l) any repayment by any Indemnified Party of any amount previously distributed
in reduction of Net Investment which such Indemnified Party believes in good
faith is required to be made;

(m) the commingling by the SPV, the Originator, the Seller or the Servicer or
any of their Affiliates of Collections of Receivables at any time with any other
funds;

(n) any investigation, litigation or proceeding related to this Agreement, any
of the other Transaction Documents, the use of proceeds of Investments by the
SPV, the Seller or the Originator, the ownership of the Asset Interest, or any
Affected Asset;

(o) failure of any Blocked Account Bank to remit any amounts held in the Blocked
Accounts or any related lock-boxes pursuant to the instructions of the Servicer,
the SPV, the Originator or the Agent (to the extent such Person is entitled to
give such instructions in accordance with the terms hereof and of any applicable
Blocked Account Agreement) whether by reason of the exercise of set-off rights
or otherwise;

(p) any inability to obtain any judgment in or utilize the court or other
adjudication system of, any state in which an Obligor may be located as a result
of the failure of the SPV, the Originator or the Seller to qualify to do
business or file any notice of business activity report or any similar report;

(q) any attempt by any Person to void, rescind or set-aside any transfer by the
Originator to the Seller or the Seller to the SPV of any Receivable or Related
Security under statutory provisions or common law or equitable action, including
any provision of the Bankruptcy Code or other insolvency law;

(r) any action taken by the SPV, the Originator, or the Servicer (if the
Originator or any Affiliate or designee of the Originator) or any of their
Affiliates in the enforcement or collection of any Receivable;

 

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(s) the use of the proceeds of any Investment or Reinvestment; or

(t) the transactions contemplated hereby being characterized as other than debt
for the purposes of the Code.

Section 9.2 Indemnity for Taxes, Reserves and Expenses.

(a) If after the Closing Date, the adoption of any Law or bank regulatory
guideline or any amendment or change in the administration, interpretation or
application of any existing or future Law or bank regulatory guideline by any
Official Body charged with the administration, interpretation or application
thereof, or the compliance with any directive of any Official Body (in the case
of any bank regulatory guideline, whether or not having the force of Law):

(i) shall subject any Indemnified Party (or its applicable lending office) to
any tax, duty or other charge (other than Excluded Taxes) with respect to this
Agreement, the other Transaction Documents, the ownership, maintenance or
financing of the Asset Interest, or payments of amounts due hereunder, or shall
change the basis of taxation of payments to any Indemnified Party of amounts
payable in respect of this Agreement, the other Transaction Documents, the
ownership, maintenance or financing of the Asset Interest, or payments of
amounts due hereunder or its obligation to advance funds hereunder, under a
Program Support Agreement or the credit or liquidity support furnished by a
Program Support Provider or otherwise in respect of this Agreement, the other
Transaction Documents, the ownership, maintenance or financing of the Asset
Interest (except Excluded Taxes and for changes in the rate of general
corporate, franchise, net income or other income tax imposed on such Indemnified
Party by the jurisdiction in which such Indemnified Party’s principal executive
office is located); provided, that any such demand shall be made in good faith
(and not on an arbitrary and capricious basis) and consistent with similarly
situated customers of the applicable Person after consideration of factors as
such Person determines in its sole discretion to be reasonably relevant;

(ii) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement (including any such requirement imposed by the Board of
Governors of the Federal Reserve System) against assets of, deposits with or for
the account of, or credit extended by, any Indemnified Party or shall impose on
any Indemnified Party or on the United States market for certificates of deposit
or the London interbank market any other condition affecting this Agreement, the
other Transaction Documents, the ownership, maintenance or financing of the
Asset Interest, or payments of amounts due hereunder or its obligation to
advance funds hereunder, under a Program Support Agreement or the credit or
liquidity support provided by a Program Support Provider or otherwise in respect
of this Agreement, the other Transaction Documents, the ownership, maintenance
or financing of the Asset Interest; or

(iii) imposes upon any Indemnified Party any other condition or expense
(including any loss of margin, reasonable attorneys’ fees and expenses, and
expenses of litigation or preparation therefor in contesting any of the
foregoing) with respect to this Agreement, the other Transaction Documents, the
ownership, maintenance or financing

 

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of the Asset Interest, or payments of amounts due hereunder or its obligation to
advance funds hereunder under a Program Support Agreement or the credit or
liquidity support furnished by a Program Support Provider or otherwise in
respect of this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Asset Interests,

and the result of any of the foregoing is to increase the cost to or to reduce
the amount of any sum received or receivable by such Indemnified Party with
respect to this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Asset Interest, the Receivables, the obligations
hereunder, the funding of any purchases hereunder or a Program Support
Agreement, by an amount deemed by such Indemnified Party to be material, then,
within ten (10) days after demand in writing by such Indemnified Party through
the Agent, the SPV shall pay to the Agent, for the benefit of such Indemnified
Party, such additional amount or amounts as will compensate such Indemnified
Party for such increased cost or reduction.

(b) If any Indemnified Party shall have determined that after the date hereof
(i) the adoption (after the date hereof) of any applicable Law or bank
regulatory guideline regarding capital adequacy, or any change therein, or any
clarification or change in the interpretation or administration thereof by any
Official Body, (ii) any request, guidance or directive regarding capital
adequacy (in the case of any bank regulatory guideline, whether or not having
the force of law) of any Official Body, or (iii) the compliance, application or
implementation by the Indemnified Party of any of the foregoing clauses (i) or
(ii) or any Existing Law (in the case of any Existing Law, in a manner which is
not consistent with the methods employed by such Indemnified Party on the date
hereof), has or would have the effect of reducing the rate of return on capital
of such Indemnified Party (or its parent) as a consequence of such Indemnified
Party’s obligations hereunder or with respect hereto to a level below that which
such Indemnified Party (or its parent) could have achieved but for any of the
occurrences set forth in the foregoing (i), (ii) or (iii) (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Indemnified Party to be material, then from time to time, within ten
(10) days after demand by such Indemnified Party through the Agent, the SPV
shall pay to the Agent, for the benefit of such Indemnified Party, such
additional amount or amounts as will compensate such Indemnified Party (or its
parent) for such reduction. The amounts due and payable to an Indemnified Party
under this Section 9.2(b) shall be considered Aggregate Unpaids; provided, that
any such demand shall be made in good faith (and not on an arbitrary and
capricious basis) and consistent with similarly situated customers of the
applicable Person after consideration of factors as such Person determines in
its sole discretion to be reasonably relevant.

(c) The Agent shall promptly notify the SPV of any event of which it has
knowledge, occurring after the date hereof, which will entitle an Indemnified
Party to compensation pursuant to this Section 9.2; provided that no failure to
give or any delay in giving such notice shall affect the Indemnified Party’s
right to receive such compensation. A notice by the Agent or the applicable
Indemnified Party claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Agent or any
applicable Indemnified Party may use any reasonable averaging and attributing
methods.

 

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(d) Anything in this Section 9.2 to the contrary notwithstanding, if any Conduit
Investor enters into agreements for the acquisition of interests in receivables
from one or more Other SPVs, such Conduit Investor shall allocate the liability
for any amounts under this Section 9.2 which are in connection with a Program
Support Agreement or the credit or liquidity support provided by a Program
Support Provider (“Additional Costs”) to the SPV and each Other SPV; provided,
however, that if such Additional Costs are attributable to the SPV, the
Originator or the Servicer and not attributable to any Other SPV, the SPV shall
be solely liable for such Additional Costs or if such Additional Costs are
attributable to Other SPVs and not attributable to the SPV, the Originator or
the Servicer, such Other SPVs shall be solely liable for such Additional Costs.

Section 9.3 Taxes.

All payments and distributions made hereunder by the SPV or the Servicer (each,
a “payor”) to any Investor or the Agent (each, a “recipient”) shall be made free
and clear of and without deduction for any present or future income, excise,
stamp or franchise taxes and any other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority on any
recipient (or any assignee of such parties) (such non-excluded items being
called “Taxes”), but excluding franchise taxes and taxes imposed on or measured
by the recipient’s net income or gross receipts (“Excluded Taxes”). In the event
that any withholding or deduction from any payment made by the payor hereunder
is required in respect of any Taxes, then such payor shall:

(a) pay directly to the relevant authority the full amount required to be so
withheld or deducted;

(b) promptly forward to the Agent an official receipt or other documentation
satisfactory to the Agent evidencing such payment to such authority; and

(c) pay to the recipient such additional amount or amounts as is necessary to
ensure that the net amount actually received by the recipient will equal the
full amount such recipient would have received had no such withholding or
deduction been required.

Moreover, if any Taxes are directly asserted against any recipient with respect
to any payment received by such recipient hereunder, the recipient may pay such
Taxes and the payor will promptly pay such additional amounts (including any
penalties, interest or expenses) as shall be necessary in order that the net
amount received by the recipient after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such recipient would
have received had such Taxes not been asserted.

If the payor fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to the recipient the required receipts or other required
documentary evidence, the payor shall indemnify the recipient for any
incremental Taxes, interest, or penalties that may become payable by any
recipient as a result of any such failure.

 

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Section 9.4 Other Costs and Expenses; Breakage Costs.

(a) The SPV and the Servicer agree, upon receipt of a written invoice, to pay or
cause to be paid, and to save the Investors and the Agent harmless against
liability for the payment of, all reasonable out-of-pocket expenses (including
attorneys’, accountants’ and other third parties’ fees and expenses, any filing
fees and expenses incurred by officers or employees of any Investor and/or the
Agent) or intangible, documentary or recording taxes incurred by or on behalf of
the any Investor or the Agent (i) in connection with the preparation,
negotiation, execution and delivery of this Agreement, the other Transaction
Documents and any documents or instruments delivered pursuant hereto and thereto
and the transactions contemplated hereby or thereby (including the perfection or
protection of the Asset Interest) and (ii) from time to time (A) relating to any
amendments, waivers or consents under this Agreement and the other Transaction
Documents, (B) arising in connection with any Investor’s, the Collateral Agent’s
or the Agent’s enforcement or preservation of rights (including the perfection
and protection of the Asset Interest under this Agreement), or (C) arising in
connection with any rating agency review, audit (which shall be limited to the
associated cost of one audit per calendar year unless a Termination Event or
Potential Termination Event has occurred), dispute, disagreement, litigation or
preparation for litigation involving this Agreement or any of the other
Transaction Documents (all of such amounts, collectively, “Transaction Costs”).

(b) The SPV shall pay the Agent for the account of the Investors, as applicable,
on demand, such amount or amounts as shall compensate the Investors for any loss
(including loss of profit), cost or expense incurred by the Investors (as
reasonably determined by the Agent) as a result of any reduction of any Portion
of Investment other than on the maturity date of the Commercial Paper (or other
financing source) funding such Portion of Investment, such compensation to be
(i) limited to an amount equal to any loss or expense suffered by the Investors
during the period from the date of receipt of such repayment to (but excluding)
the maturity date of such Commercial Paper (or other financing source) and
(ii) net of the income, if any, received by the recipient of such reductions
from investing the proceeds of such reductions of such Portion of Investment.
The determination by the Agent of the amount of any such loss or expense shall
be set forth in a written notice to the SPV in reasonable detail and shall be
conclusive, absent manifest error.

Section 9.5 [Reserved].

Section 9.6 Indemnities by the Servicer.

Without limiting any other rights which the Agent or the Investors or the other
Indemnified Parties may have hereunder or under applicable law, the Servicer
hereby agrees to indemnify the Indemnified Parties from and against any and all
Indemnified Amounts arising out of or resulting from (whether directly or
indirectly) (a) the failure of any information contained in any Servicer Report
as of the specified date of such information to be true and correct as of the
date of such Servicer Report, or the failure of any other information provided
to any Indemnified Party by, or on behalf of, the Servicer to be true and
correct as of the specified date of such information, (b) the failure of any
representation, warranty or statement made or deemed made by the Servicer (or
any of its officers) under or in connection with this Agreement to have been
true and correct as of the date made or deemed made, (c) the failure by the
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with any applicable Law with respect to any Receivable or the related Contract,
(d) any dispute, claim, offset or defense of the Obligor to the payment of any
Receivable resulting from or related to the collection activities in respect of
such Receivable, or (e) any failure of the Servicer to perform its duties or
obligations in accordance with the provisions hereof.

Section 9.7 Accounting Based Consolidation Event.

If an Accounting Based Consolidation Event shall at any time occur, then, within
ten (10) days after demand in writing by the Indemnified Party affected thereby,
through the related Class Agent, the SPV shall pay to the relevant Class Agent,
for the benefit of such Indemnified Party, such amounts as such Indemnified
Party reasonably determines will compensate or reimburse the Indemnified Party
for any resulting (a) fee, expense or increased cost charged to, incurred or
otherwise suffered by such Indemnified Party or (b) regulatory capital charge,
internal capital charge or other imputed cost determined by such Indemnified
Party to be allocable to the transactions contemplated under this Agreement or
any Transaction Document in connection therewith. Amounts under this Section 9.7
may be demanded at any time without regard to the timing of issuance of any
financial statement by any Indemnified Party.

Article X

The Agent

Section 10.1 Appointment and Authorization of Agent.

Each Investor hereby irrevocably appoints, designates and authorizes the Agent
to take such action on its behalf under the provisions of this Agreement and
each other Transaction Document and to exercise such powers and perform such
duties as are expressly delegated to the Agent by the terms of this Agreement
and any other Transaction Document, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Transaction Document, the
Agent shall not have any duties or responsibilities, except those expressly set
forth in this Agreement, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Transaction Document or otherwise exist against the
Agent. Without limiting the generality of the foregoing sentence, the use of the
term “agent” in this Agreement with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.

Section 10.2 Delegation of Duties.

The Agent may execute any of its duties under this Agreement or any other
Transaction Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agent or attorney-in-fact that it selects with reasonable care.

 

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Section 10.3 Liability of Agent.

No Agent-Related Person shall (a) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or any other
Transaction Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (b) be responsible in any manner to
any Investor for any recital, statement, representation or warranty made by the
SPV, the Originator or the Servicer, or any officer thereof, contained in this
Agreement or in any other Transaction Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Transaction
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Transaction Document, or for any
failure of the SPV, the Originator, the Servicer or any other party to any
Transaction Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Investor to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Transaction
Document, or to inspect the properties, books or records of the SPV, the
Originator or the Servicer or any of their respective Affiliates.

Section 10.4 Reliance by Agent.

(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (including counsel to the SPV, the
Originator and the Servicer), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Transaction Document unless it
shall first receive such advice or concurrence of the Majority Investors as it
deems appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Investors against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The 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 consent of the Conduit Investors or Majority Investors or, if
required hereunder, all Investors and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Investors.

(b) For purposes of determining compliance with the conditions specified in
Article V on the Closing Date or the date of any Investment or Reinvestment,
each Investor that has executed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
either sent by the Agent to such Investor for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to such Investor.

 

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Section 10.5 Notice of Termination Event, Potential Termination Event or
Servicer Default.

The Agent shall not be deemed to have knowledge or notice of the occurrence of a
Potential Termination Event, a Termination Event or a Servicer Default, unless
the Agent has received written notice from any Class Agent, any Investor, the
Servicer or the SPV referring to this Agreement, describing such Potential
Termination Event, Termination Event or Servicer Default and stating that such
notice is a “Notice of Termination Event or Potential Termination Event” or
“Notice of Servicer Default,” as applicable. The Agent will notify the Class
Agents and the Investors of its receipt of any such notice. The Agent shall
(subject to Section 10.4) take such action with respect to such Potential
Termination Event, Termination Event or Servicer Default as may be requested by
the Majority Investors or the Class Agents, provided, however, that, unless and
until the Agent shall have received any such request, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Potential Termination Event, Termination Event or Servicer
Default as it shall deem advisable or in the best interest of the Investors.

Section 10.6 Credit Decision; Disclosure of Information by the Agent.

Each Investor acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it, and that no act by the Agent hereinafter
taken, including any consent to and acceptance of any assignment or review of
the affairs of the SPV, the Servicer, the Originator or any of their respective
Affiliates, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Investor as to any matter, including whether the
Agent-Related Persons have disclosed material information in their possession.
Each Investor, including any Investor by assignment, represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the SPV, the
Servicer, the Originator or their respective Affiliates, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the SPV
hereunder. Each Investor also represents that it shall, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Transaction Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the SPV, the Servicer or the Originator. Except for notices,
reports and other documents expressly herein required to be furnished to the
Investors by the Agent herein, the Agent shall not have any duty or
responsibility to provide any Investor with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the SPV, the Servicer, the Originator or their
respective Affiliates which may come into the possession of any of the
Agent-Related Persons.

 

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Section 10.7 Indemnification of the Agent.

Whether or not the transactions contemplated hereby are consummated, the
Alternate Investors shall indemnify upon demand each Agent-Related Person (to
the extent not reimbursed by or on behalf of the SPV and without limiting the
obligation of the SPV to do so), pro rata, and hold harmless each Agent-Related
Person from and against any and all Indemnified Amounts incurred by it;
provided, however, that no Alternate Investor shall be liable for the payment to
any Agent-Related Person of any portion of such Indemnified Amounts resulting
from such Person’s gross negligence or willful misconduct, as finally determined
by a court of competent jurisdiction; provided, however, that no action taken in
accordance with the directions of the Majority Investors shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Alternate Investor shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including attorney’s fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Transaction Document, or any document contemplated by or referred to
herein, to the extent that the Agent is not reimbursed for such expenses by or
on behalf of the SPV. The undertaking in this Section shall survive payment on
the Final Payout Date and the resignation or replacement of the Agent.

Section 10.8 Agent in Individual Capacity.

PNC Bank (and any successor acting as Agent) and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with any of the SPV, the
Originator and the Servicer or any of their Subsidiaries or Affiliates as though
PNC Bank were not the Agent or an Alternate Investor hereunder and without
notice to or consent of the Investors. The Investors acknowledge that, pursuant
to such activities, PNC Bank or its Affiliates may receive information regarding
the SPV, the Originator, the Servicer or their respective Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Person) and acknowledge that the Agent shall be under no obligation to provide
such information to them. With respect to its Commitment, PNC Bank (and any
successor acting as Agent) in its capacity as an Alternate Investor hereunder
shall have the same rights and powers under this Agreement as any other
Alternate Investor and may exercise the same as though it were not the Agent or
an Alternate Investor, and the term “Alternate Investor” or “Alternate
Investors” shall, unless the context otherwise indicates, include the Agent in
its individual capacity.

Section 10.9 Resignation of Agent.

The Agent may resign as Agent upon thirty (30) days’ notice to the Investors. If
the Agent resigns under this Agreement, the Majority Investors shall appoint
from among the Alternate Investors a successor agent for the Investors. If no
successor agent is appointed prior to the effective date of the resignation of
the Agent, the Agent may appoint, after consulting with the Investors a
successor agent from among the Alternate Investors. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights,

 

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powers and duties of the retiring Agent and the term “Agent” shall mean such
successor agent and the retiring Agent’s appointment, powers and duties as Agent
shall be terminated. After any retiring Agent’s resignation hereunder as Agent,
the provisions of this Section 10.9 and Sections 10.3 and 10.7 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
the Agent under this Agreement. If no successor agent has accepted appointment
as Agent by the date which is thirty (30) days’ following a retiring Agent’s
notice of resignation, the retiring Agent’s resignation shall nevertheless
thereupon become effective and the Alternate Investors shall perform all of the
duties of the Agent hereunder until such time, if any, as the Majority Investors
appoint a successor agent as provided for above.

Section 10.10 Payments by the Agent.

Unless specifically allocated to an Alternate Investor pursuant to the terms of
this Agreement, all amounts received by the Agent on behalf of the Alternate
Investors shall be paid by the Agent to the related Class Agent (for
distribution by such Class Agent to the related Alternate Investors), pro rata
in accordance with their respective Class Pro Rata Shares on the Business Day
received by the Agent, unless such amounts are received after 12:00 noon (New
York City time) on such Business Day, in which case the Agent shall use its
reasonable efforts to pay such amounts to the related Class Agents on such
Business Day, but, in any event, shall pay such amounts to the related Class
Agents not later than the following Business Day.

Section 10.11 Appointment and Authorization of Class Agents.

Each Investor hereby irrevocably appoints, designates and authorizes the related
Class Agent to take such action on its behalf under the provisions of this
Agreement and each other Transaction Document and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of this
Agreement and any other Transaction Document, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Transaction Document, the
Class Agents shall not have any duties or responsibilities, except those
expressly set forth in this Agreement, nor shall the Class Agents have or be
deemed to have any fiduciary relationship with any Investor, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Transaction Document or otherwise exist
against the Class Agents. Without limiting the generality of the foregoing
sentence, the use of the term “agent” in this Agreement with reference to the
Class Agents is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable Law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.

Section 10.12 Delegation of Duties.

Each Class Agent may execute any of its duties under this Agreement or any other
Transaction Document by or through agents, employees or attorneys in fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. No Class Agent shall be responsible for the negligence or misconduct of
any agent or attorney in fact that it selects with reasonable care.

 

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Section 10.13 Reliance by Class Agents.

(a) Each Class Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (including counsel to the SPV, the
Originator and the Servicer), independent accountants and other experts selected
by such Class Agent. Each Class Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Transaction
Document unless it shall first receive such advice or concurrence of the related
Investors as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Investors against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Each Class 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 consent of a majority of
the related Investors or, if required hereunder, all related Investors and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all of the Investors.

(b) For purposes of determining compliance with the conditions specified in
Article V on the Closing Date or the date of any Investment or Reinvestment,
each Investor that has executed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
either sent by the relevant Class Agent to such Investor for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to such Investor.

Section 10.14 Notice of Termination Event, Potential Termination Event or
Servicer Default.

No Class Agent shall be deemed to have knowledge or notice of the occurrence of
a Potential Termination Event, a Termination Event or a Servicer Default, unless
such Class Agent has received written notice from the Agent, any Investor, the
Servicer or the SPV referring to this Agreement, describing such Potential
Termination Event, Termination Event or Servicer Default and stating that such
notice is a “Notice of Termination Event or Potential Termination Event” or
“Notice of Servicer Default,” as applicable. Each Class Agent will notify the
related Investors of its receipt of any such notice. Each Class Agent shall
(subject to Section 10.5) take such action with respect to such Potential
Termination Event, Termination Event or Servicer Default as may be requested by
a majority of related Investors, provided, however, that, unless and until such
Class Agent shall have received any such request, such Class Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Potential Termination Event, Termination Event or Servicer
Default as it shall deem advisable or in the best interest of the related
Investors.

Section 10.15 Credit Decision; Disclosure of Information by the Class Agents.

Each Investor acknowledges that none of the Agent Related Persons has made any
representation or warranty to it, and that no act by the related Class Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of the SPV,

 

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the Servicer, any Originator or any of their respective Affiliates, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Investor as to any matter, including whether the Agent Related Persons
have disclosed material information in their possession. Each Investor,
including any Investor by assignment, represents to the related Class Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the SPV, the
Servicer, the Originator or their respective Affiliates, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the SPV
hereunder. Each Investor also represents that it shall, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Transaction Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the SPV, the Servicer or the Originator. Except for notices,
reports and other documents expressly herein required to be furnished to the
Investors by the related Class Agent herein, such Class Agent shall not have any
duty or responsibility to provide any Investor with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the SPV, the Servicer, the Originator
or their respective Affiliates which may come into the possession of any of the
Agent Related Persons.

Section 10.16 Indemnification of the Class Agent.

Whether or not the transactions contemplated hereby are consummated, the
Alternate Investors shall indemnify upon demand each Agent Related Person (to
the extent not reimbursed by or on behalf of the SPV and without limiting the
obligation of the SPV to do so), pro rata, and hold harmless each Agent Related
Person from and against any and all Indemnified Amounts incurred by it;
provided, however, that no Alternate Investor shall be liable for the payment to
any Agent Related Person of any portion of such Indemnified Amounts resulting
from such Person’s gross negligence or willful misconduct, as finally determined
by a court of competent jurisdiction; provided, however, that no action taken in
accordance with the directions of the Majority Investors shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Alternate Investor shall reimburse the
related Class Agent upon demand for its ratable share of any costs or out of
pocket expenses (including attorney’s fees) incurred by such Class Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Transaction Document, or any
document contemplated by or referred to herein, to the extent that such Class
Agent is not reimbursed for such expenses by or on behalf of the SPV. The
undertaking in this Section shall survive payment on the Final Payout Date and
the resignation or replacement of the Class Agents.

 

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Section 10.17 Class Agent in Individual Capacity.

PNC Bank (and any successor acting as Class Agent for the PNC Bank Class) and
its Affiliates and any other Class Agent who becomes a party to this Agreement
(and any successor acting as a Class Agent for any such Class) and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with any of
the SPV, the Originator and the Servicer or any of their Subsidiaries or
Affiliates as though PNC Bank was not a Class Agent or an Alternate Investor
hereunder and without notice to or consent of the Investors. The Investors
acknowledge that, pursuant to such activities, the Class Agents or their
respective Affiliates may receive information regarding the SPV, the Originator,
the Servicer or their respective Affiliates (including information that may be
subject to confidentiality obligations in favor of such Person) and acknowledge
that the Class Agents shall be under no obligation to provide such information
to them. With respect to its Commitment, the Class Agents, respectively, (and
any successor acting as Class Agent) in its capacity as an Alternate Investor
hereunder shall have the same rights and powers under this Agreement as any
other Alternate Investor and may exercise the same as though it were not the
Class Agent or an Alternate Investor, and the term “Alternate Investor” or
“Alternate Investors” shall, unless the context otherwise indicates, include the
Class Agents in each in its individual capacity.

Section 10.18 Resignation of Class Agent.

Each Class Agent may resign as Class Agent upon thirty (30) days’ notice to the
related Investors. If a Class Agent resigns under this Agreement, the majority
of related Investors shall appoint from among the related Alternate Investors a
successor agent for the related Investors. If no successor agent is appointed
prior to the effective date of the resignation of any Class Agent, such Class
Agent may appoint, after consulting with the related Investors a successor agent
from among the related Alternate Investors. Upon the acceptance of its
appointment as successor Class Agent hereunder, such successor agent shall
succeed to all the rights, powers and duties of the retiring Class Agent and the
term “Class Agent” shall mean such successor Class Agent and the retiring Class
Agent’s appointment, powers and duties as Class Agent shall be terminated. After
any retiring Class Agent’s resignation hereunder as a Class Agent, the
provisions of Section 10.10 and Sections 10.16 and 10.18 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Class Agent under this Agreement. If no successor agent has accepted appointment
as Class Agent by the date which is thirty (30) days’ following a retiring Class
Agent’s notice of resignation, the retiring Class Agent’s resignation shall
nevertheless thereupon become effective and the Alternate Investors shall
perform all of the duties of the Class Agent hereunder until such time, if any,
as the majority of related Investors appoint a successor agent as provided for
above.

Section 10.19 Liability of Agent and the Class Agents.

No Agent Related Person shall (a) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or any other
Transaction Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (b) be responsible in any manner to
any Investor for any recital, statement, representation or warranty made by the
SPV, any Originator or the Servicer, or any officer

 

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thereof, contained in this Agreement or in any other Transaction Document, or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agent or any Class Agent under or in connection with,
this Agreement or any other Transaction Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Transaction Document, or for any failure of the SPV, any Originator,
the Servicer or any other party to any Transaction Document to perform its
obligations hereunder or thereunder. No Agent Related Person shall be under any
obligation to any Investor to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Transaction Document, or to inspect the properties, books
or records of the SPV, the Originator or the Servicer or any of their respective
Affiliates.

Article XI

Miscellaneous

Section 11.1 Term of Agreement.

This Agreement shall terminate on the Final Payout Date; provided, however, that
(a) the rights and remedies of the Agent, the Investors and the Class Agents
with respect to any representation and warranty made or deemed to be made by the
SPV on or prior to the Final Payout Date pursuant to this Agreement, (b) the
indemnification and payment provisions of Article IX, (c) the provisions of
Section 10.7 and Section 10.16 and (d) the agreements set forth in Sections
11.11 and 11.12, shall be continuing and shall survive any termination of this
Agreement.

Section 11.2 Waivers; Amendments.

(a) No failure or delay on the part of the Agent, the Investors, any Class Agent
or any Alternate Investor in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law.

(b) Any provision of this Agreement or any other Transaction Document may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the SPV, the Originator, the Servicer, the Agent and the Majority
Investors; provided that no such amendment or waiver shall, unless signed by
each Investor directly affected thereby, (i) increase the Commitment of any
Alternate Investor, (ii) reduce the Net Investment, any Class Net Investment (or
portion thereof funded by any Investor) or rate of Yield to accrue thereon or
any fees or other amounts payable hereunder, (iii) postpone any date fixed for
the payment of any scheduled distribution in respect of the Net Investment or
Yield with respect thereto or any fees or other amounts payable hereunder or for
termination of any Commitment, (iv) change the percentage of the Commitments of
Alternate Investors which shall be required for the Alternate Investors or any
of them to take any action under this Section or any other provision of this
Agreement, (v) release all or substantially all of the property with respect to
which a security or ownership interest therein has been granted hereunder to the
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(vi) extend or permit the extension of the Commitment Termination Date (it being
understood that a waiver of a Termination Event shall not constitute an
extension or increase in the Commitment of any Alternate Investor); and
provided, further, that the signature of the SPV and the Originator shall not be
required for the effectiveness of any amendment which modifies the
representations, warranties, covenants or responsibilities of the Servicer at
any time when the Servicer is not the Originator or any Affiliate of the
Originator or a successor Servicer is designated by the Agent pursuant to
Section 7.1. In the event the Agent or a Class Agent requests an Investor’s
consent pursuant to the foregoing provisions and such Agent or a Class Agent
does not receive a consent (either positive or negative) from such Investor
within ten (10) Business Days of such Investor’s receipt of such request, then
such Investor (and its percentage interest hereunder) shall be disregarded in
determining whether such Agent or a Class Agent shall have obtained sufficient
consent hereunder.

Section 11.3 Notices; Payment Information.

Except as provided below, all communications and notices provided for hereunder
shall be in writing (including facsimile or electronic transmission or similar
writing) and shall be given to the other party at its address or facsimile
number set forth in Schedule 11.3 or at such other address or facsimile number
as such party may hereafter specify for the purposes of notice to such party.
Each such notice or other communication shall be effective (a) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section 11.3 and confirmation is received, (b) if given by mail, three
(3) Business Days following such posting, if postage prepaid, and if sent via
U.S. certified or registered mail, (c) if given by overnight courier, one
(1) Business Day after deposit thereof with a national overnight courier
service, or (d) if given by any other means, when received at the address
specified in this Section 11.3, provided that an Investment Request shall only
be effective upon receipt by the applicable Class Agent. The SPV agrees to
deliver promptly to the Investors or the Class Agents, as applicable a written
confirmation of each telephonic notice signed by an authorized officer of SPV.
However, the absence of such confirmation shall not affect the validity of such
notice. If the written confirmation differs in any material respect from the
action taken by the Investors or the Class Agents, as applicable, the records of
the Investors or the Class Agents, as applicable shall govern.

Section 11.4 Governing Law; Submission to Jurisdiction; Appointment of Service
Agent.

(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW). EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF
THE PARTIES HERETO HEREBY

 

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IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN
THIS SECTION 11.4 SHALL AFFECT THE RIGHT OF THE INVESTORS, THE AGENT OR THE
CLASS AGENTS TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE SPV, THE
ORIGINATOR, THE SELLER OR THE SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN
THE COURTS OF OTHER JURISDICTIONS.

(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS.

(c) The SPV, the Servicer, the Seller and the Originator each hereby appoint CT
Corporation System located at 111 Eighth Avenue, New York, New York 10011 as the
authorized agent upon whom process may be served in any action arising out of or
based upon this Agreement, the other Transaction Documents to which such Person
is a party or the transactions contemplated hereby or thereby that may be
instituted in the United States District Court for the Southern District of New
York and of any New York State court sitting in The City of New York by any
Investor, any Class Agent, the Agent, the Collateral Agent or any successor or
assignee of any of them.

Section 11.5 Integration; Amendment and Restatement.

This Agreement contains 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 amends and restates in its entirety the Original Agreement.
Nothing herein contained shall be construed (a) to be a novation of the
obligations secured under the Original Agreement or (b) to release, cancel,
terminate or otherwise impair the status or priority of the liens or security
for the obligations secured by the Original Agreement. Further, the SPV, the
Originator, the Seller and the Servicer acknowledge and agree that this
Agreement shall not be considered a new contract, and that all rights, titles,
powers, liens, security interests and estates created by or under the Original
Agreement or other agreements executed in connection with the transactions
contemplated by this Agreement and the Original Agreement and the Original
Agreement shall continue without interruption in full force and effect.

 

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Section 11.6 Severability of Provisions.

If any one or more of the provisions of this Agreement shall for any reason
whatsoever be held invalid, then such provisions shall be deemed severable from
the remaining provisions of this Agreement and shall in no way affect the
validity or enforceability of such other provisions.

Section 11.7 Counterparts; Facsimile Delivery.

This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same Agreement. Delivery by facsimile of an executed signature page
of this Agreement shall be effective as delivery of an executed counterpart
hereof.

Section 11.8 Successors and Assigns; Binding Effect.

(a) This Agreement shall be binding on the parties hereto and their respective
successors and assigns; provided, however, that none of the SPV, the Servicer or
the Originator may assign any of its rights or delegate any of its duties
hereunder or under the First Tier Agreement, the Second Tier Agreement or under
any of the other Transaction Documents to which it is a party without the prior
written consent of the Agent and each Class Agent. Except as provided in clause
(b) below, no provision of this Agreement shall in any manner restrict the
ability of any Investor to assign, participate, grant security interests in, or
otherwise transfer any portion of the Asset Interest.

(b) Any Alternate Investor may assign all or any portion of its Commitment and
its interest in the related Class Net Investment and the Asset Interest and its
other rights and obligations hereunder to any Person with the written approval
of the related Class Agent, on behalf of the related Conduit Investor, and the
Agent. In connection with any such assignment, the assignor shall deliver to the
assignee(s) an Assignment and Assumption Agreement, duly executed, assigning to
such assignee a pro rata interest in such assignor’s Commitment and other
obligations hereunder and in the related Class Net Investment, the Asset
Interest and other rights hereunder, and such assignor shall promptly execute
and deliver all further instruments and documents, and take all further action,
that the assignee may reasonably request, in order to protect, or more fully
evidence the assignee’s right, title and interest in and to such interest and to
enable the Agent, on behalf of such assignee, to exercise or enforce any rights
hereunder and under the other Transaction Documents to which such assignor is
or, immediately prior to such assignment, was a party. Upon any such assignment,
(i) the assignee shall have all of the rights and obligations of the assignor
hereunder and under the other Transaction Documents to which such assignor is
or, immediately prior to such assignment, was a party with respect to such
assignor’s Commitment and interest in the related Class Net Investment and the
Asset Interest for all purposes of this Agreement and under the other
Transaction Documents to which such assignor is or, immediately prior to such
assignment, was a party and (ii) the assignor shall have no further obligations
with respect to the portion of its Commitment which has been assigned and shall
relinquish its rights with respect to the portion of its interest in the related
Class Net Investment and the Asset Interest which has been assigned for all
purposes of this Agreement and under the other Transaction Documents to which
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such assignment, was a party. No such assignment shall be effective unless a
fully executed copy of the related Assignment and Assumption Agreement shall be
delivered to the related Class Agent, the Agent and the SPV. All costs and
expenses of the related Class Agent and the Agent incurred in connection with
the preparation and execution of any documentation related to any assignment
hereunder shall be borne by the assignee. No Alternate Investor shall assign any
portion of its Commitment hereunder without also simultaneously assigning an
equal portion of its interest in the Program Support Agreement to which it is a
party or under which it has acquired a participation.

(c) By executing and delivering an Assignment and Assumption Agreement, the
assignor and assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Assumption Agreement, the assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, the other
Transaction Documents or any other instrument or document furnished pursuant
hereto or thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value or this Agreement, the other Transaction
Documents or any such other instrument or document; (ii) the assignor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the SPV, the Originator or the Servicer or the
performance or observance by the SPV, the Originator or the Servicer of any of
their respective obligations under this Agreement, the First Tier Agreement, the
Second Tier Agreement, the other Transaction Documents or any other instrument
or document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, the First Tier Agreement, the Second Tier
Agreement, each other Transaction Document and such other instruments, documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Assumption Agreement and to purchase
such interest; (iv) such assignee will, independently and without reliance upon
the Agent or any Class Agent, or any of their respective Affiliates, or the
assignor and based on such agreements, documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Transaction
Documents; (v) such assignee appoints and authorizes the Agent and the related
Class Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement, the other Transaction Documents and any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Agent or such Class Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto and to enforce its respective rights
and interests in and under this Agreement, the other Transaction Documents and
the Affected Assets; (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement and the other Transaction Documents are required to be performed by it
as the assignee of the assignor; and (vii) such assignee agrees that it will not
institute against any Conduit Investor any proceeding of the type referred to in
Section 11.11 prior to the date which is one year and one day after the payment
in full of all Commercial Paper issued by such Conduit Investor.

(d) Without limiting the foregoing, each Conduit Investor may, from time to
time, with prior or concurrent notice to the SPV, the Servicer and the Agent, in
one transaction or a series of transactions, assign all or a portion of the
related Class Net Investment and its rights and obligations under this Agreement
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Conduit Assignee. Upon and to the extent of such assignment by such Conduit
Investor to a Conduit Assignee, (i) such Conduit Assignee shall be the owner of
the assigned portion of the related Class Net Investment, (ii) the related
administrator for such Conduit Assignee will act as the Class Agent for such
Conduit Assignee, with all corresponding rights and powers, express or implied,
granted to a Class Agent hereunder or under the other Transaction Documents,
(iii) such Conduit Assignee (and any related commercial paper issuer, if such
Conduit Assignee does not itself issue commercial paper) and their respective
liquidity support provider(s) and credit support provider(s) and other related
parties shall have the benefit of all the rights and protections provided to the
related Conduit Investor and its Program Support Provider(s) herein and in the
other Transaction Documents (including any limitation on recourse against such
Conduit Assignee or related parties, any agreement not to file or join in the
filing of a petition to commence an insolvency proceeding against such Conduit
Assignee, and the right to assign to another Conduit Assignee as provided in
this paragraph), (iv) such Conduit Assignee shall assume all (or the assigned or
assumed portion) of the related Conduit Investor’s obligations, if any,
hereunder or any other Transaction Document, and such Conduit Investor shall be
released from such obligations, in each case to the extent of such assignment,
and the obligations of such Conduit Investor and such Conduit Assignee shall be
several and not joint, (v) all distributions in respect of the related Class Net
Investment shall be made to the applicable agent or Agent, as applicable, on
behalf of the related Conduit Investor and such Conduit Assignee on a pro rata
basis according to their respective interests, (vi) the definition of the term
“CP Rate” with respect to the portion of the related Class Net Investment funded
with commercial paper issued by the related Conduit Investor from time to time
shall be determined in the manner set forth in the definition of “CP Rate”
applicable to such Conduit Investor on the basis of the interest rate or
discount applicable to commercial paper issued by such Conduit Assignee (or the
related commercial paper issuer, if such Conduit Assignee does not itself issue
commercial paper) rather than the Conduit Investor, (vii) the defined terms and
other terms and provisions of this Agreement and the other Transaction Documents
shall be interpreted in accordance with the foregoing, and (viii) if requested
by the Agent or administrative agent with respect to a Conduit Assignee, the
parties will execute and deliver such further agreements and documents and take
such other actions as the Agent or such administrative agent may reasonably
request to evidence and give effect to the foregoing. No assignment by a Conduit
Investor to a Conduit Assignee of all or any portion of the related Class Net
Investment shall in any way diminish the related Alternate Investors’ obligation
under Section 2.3 to fund any Investment not funded by the related Conduit
Investor or such Conduit Assignee or to acquire from such Conduit Investor or
such Conduit Assignee all or any portion of the related Class Net Investment
pursuant to Section 3.1.

(e) In the event that a Conduit Investor makes an assignment to a Conduit
Assignee in accordance with clause (d) above, the related Alternate Investors:
(i) if requested by the related Class Agent, shall terminate their participation
in the applicable Program Support Agreement to the extent of such assignment,
(ii) if requested by the related Class Agent, shall execute (either directly or
through a participation agreement, as determined by the related Class Agent) the
program support agreement related to such Conduit Assignee, to the extent of
such assignment, the terms of which shall be substantially similar to those of
the participation or other agreement entered into by such Alternate Investor
with respect to the applicable Program Support Agreement (or which shall be
otherwise reasonably satisfactory to the related Class Agent and the related
Alternate Investors), (iii) if requested by a related Conduit Investor, shall

 

89

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enter into such agreements as requested by such Conduit Investor pursuant to
which they shall be obligated to provide funding to such Conduit Assignee on
substantially the same terms and conditions as is provided for in this Agreement
in respect of such Conduit Investor (or which agreements shall be otherwise
reasonably satisfactory to such Conduit Investor and the related Alternate
Investors), and (iv) shall take such actions as the Agent shall reasonably
request in connection therewith.

(f) Each of the SPV, the Servicer, the Seller and the Originator hereby agrees
and consents to the assignment by the Conduit Investor from time to time of all
or any part of its rights under, interest in and title to this Agreement and the
Asset Interest to any Program Support Provider. In addition, each of the SPV,
the Servicer, the Seller and the Originator hereby agrees and consents to the
assignment by any Conduit Investor from time to time of all or any part of its
rights under, interest in and title to this Agreement and the Asset Interest to
the related Class Agent or the related Collateral Agent.

(g) Notwithstanding any other provision of this Agreement to the contrary, any
Investor may at any time pledge or grant a security interest in all or any
portion of its rights (including, without limitation, such Investor’s interest
in the Net Investment and any rights to payment of Yield) under this Agreement
and any other Transaction Document to secure obligations of such Investor to a
Federal Reserve Bank, without notice to or consent of the SPV or the
Administrative Agent or any other party; provided that no such pledge or grant
of a security interest shall release an Investor from any of its obligations
hereunder, or substitute any such pledgee or grantee for such Investor as a
party hereto.

Section 11.9 Waiver of Confidentiality.

Each of the SPV, the Servicer, the Seller and the Originator hereby consents to
the disclosure of any non-public information with respect to it received by the
Agent, any Investor or the Class Agents to any other Investor or potential
Investor, the Agent, any nationally recognized statistical rating organization
rating any Conduit Investor’s Commercial Paper, any dealer or placement agent of
or depositary for such Conduit Investor’s Commercial Paper, any Class Agent, any
Collateral Agent, any Program Support Provider or any of such Person’s counsel
or accountants in relation to this Agreement or any other Transaction Document
if such Persons are informed of the confidential nature of such information.

Section 11.10 Confidentiality Agreement.

Each of the SPV, the Servicer, the Seller and the Originator hereby agrees that
it will not disclose the contents of this Agreement or any other Transaction
Document or any other proprietary or confidential information of or with respect
to any Investor, the Agent, any Class Agent, any Collateral Agent or any Program
Support Provider to any other Person except (a) its auditors and attorneys,
employees or financial advisors (other than any commercial bank) and any
nationally recognized statistical rating organization, provided such auditors,
attorneys, employees, financial advisors or rating agencies are informed of the
highly confidential nature of such information or (b) as otherwise required by
applicable law (including securities laws and SEC filings) or order of a court
of competent jurisdiction.

 

90

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Section 11.11 No Bankruptcy Petition Against the Conduit Investors.

Each of the SPV, the Servicer, the Seller and the Originator hereby covenants
and agrees that, prior to the date which is one year and one day after the
payment in full of all outstanding Commercial Paper or other rated indebtedness
of any Conduit Investor (or its related commercial paper issuer), it will not
institute against, or join any other Person in instituting against, any Conduit
Investor any proceeding of a type referred to in the definition of Event of
Bankruptcy.

Section 11.12 No Recourse Against Conduit Investors.

Notwithstanding anything to the contrary contained in this Agreement, the
obligations of each Conduit Investor under this Agreement and all other
Transaction Documents are solely the corporate obligations of such Conduit
Investor and shall be payable solely to the extent of funds received from the
SPV in accordance herewith or from any party to any Transaction Document in
accordance with the terms thereof in excess of funds necessary to pay matured
and maturing Commercial Paper.

[Signatures Follow]

 

91

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In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the date first written above.

 

UNITED STATIONERS SUPPLY CO.,

as Originator

By:  

 

Name:  

 

Title:  

 

UNITED STATIONERS FINANCIAL SERVICES

LLC, as Seller and Servicer

By:  

 

Name:  

 

Title:  

 

UNITED STATIONERS RECEIVABLES, LLC, as SPV By:  

 

Name:  

 

Title:  

 

[Signatures Continued on Next Page]

 

[Signature page to Amended and Restated Transfer and Administration Agreement]

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

Acknowledged and consented to by:

UNITED STATIONERS INC.,

as the Performance Guarantor

By:  

 

Name:  

 

Title:  

 

[Signatures Continued on Next Page]

 

[Signature page to Amended and Restated Transfer and Administration Agreement]

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

Commitment: $200,000,000   PNC BANK, NATIONAL ASSOCIATION, as
Agent, as Class Agent and as an Alternate Investor   By:  

 

  Name:  

 

  Title:  

 

[End of Signatures]

 

[Signature page to Amended and Restated Transfer and Administration Agreement]

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

SCHEDULE I

Specified Ineligible Receivables

Dixie Office Products, Inc.

Nelson Office Supply

West Office Supply (San Angelo)

Dodson Group (a/k/a Save It Now)

AMO Office Supply

Karr LLC

Midwest Office Supply

American Product Distributors

Bennett Printing and Office Supply

Hurricane Office Center

RFV Ent., Inc DBA Vesco Business Products

ARWEBB Office Equipment (Newark, OH)

Costco, Inc.

Markelsz Office Products

Accurate O/E Wooster

Office Products America

Office Products, Inc. (Martin, TN)

Kerr Albert

Docs

Toner Express (a/k/a/ Veterans Office Products)

Mid Carolina Office

Fogels Stationary Co.

The Paper Clip Club LLC

Desjon Group

The Council Company G

IQ Business Products

Venable Office Equipment Co.

Franks Parson’s Paper Co.

AHI, LLC

Church & Stagg Office Supplies

Compnation

K Paul Properties

One Stop Shop

Dist Gama Digital

B&D Supplies

Mahogany Corp.

E-Max Group/Data Bazaar.com

Wyoming Stationary

Corporate Diversity Solutions

Megabyte Express

 

Schedule I - 1

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

SCHEDULE 4.1(g)

List of Actions and Suits

None.

 

Schedule 4.1(g) - 1

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

SCHEDULE 4.1(i)

Location of Certain Offices and Records

United Stationers Receivables, LLC

Jurisdiction of formation: Illinois

Principal Place of Business: One Parkway North Blvd., Deerfield, Illinois

President: Victoria J. Reich

Location of Records: One Parkway North Blvd., Deerfield, Illinois

United Stationers Supply Co.

Jurisdiction of formation: Illinois

Principal Place of Business: One Parkway North Blvd., Deerfield, Illinois

Chief Executive Officer: Richard W. Gochnauer

Location of Records: One Parkway North Blvd., Deerfield, Illinois

United Stationers Financial Services LLC

Jurisdiction of formation: Illinois

Principal Place of Business: One Parkway North Blvd., Deerfield, Illinois

President: Victoria J. Reich

Location of Records: One Parkway North Blvd., Deerfield, Illinois

 

Schedule 4.1(i) - 1

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

SCHEDULE 4.1(j)

List of Subsidiaries, Divisions and Tradenames; FEIN

1) United Stationers Receivables, LLC

 

Subsidiaries:    None Divisions:    None Tradenames:    None

Federal Employer Identification Number: 26-4146967

2) United Stationers Supply Co.

 

Subsidiaries:    Azerty de Mexico, S.A. de C.V.    Lagasse, Inc    ORS Nasco,
Inc.    United Stationers Receivables, LLC    United Stationers Financial
Services LLC    United Stationers Technology Services LLC    United Stationers
Hong Kong Limited    United Worldwide Limited Divisions:    United Supply US   
Azerty US Tradenames:    None

Federal Employer Identification Number:    36-2431718

3) United Stationers Financial Services LLC

 

Subsidiaries:    USS Receivables Company, Ltd. Divisions:    None Tradenames:   
None

Federal Employer Identification Number:    36-4428313

 

Schedule 4.1(j) - 1

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

SCHEDULE 4.1(r)

List of Blocked Account Banks and Blocked Accounts

 

(1) The following account (and all related lockboxes) maintained with PNC Bank,
National Association:

Demand Deposit Account #2149466

 

(2) The following account maintained with The Northern Trust Company:

Account Number #35100068

 

Schedule 4.1(r) - 1

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

SCHEDULE 4.1(bb)

Disclosure Representations and Covenants

Originator—Disclosure Representations and Covenants

Disclosure of the Transactions

 

1. The transactions referred to in the Opinion (the “Transactions”) have been or
will be publicly disclosed as follows: (a) the Transactions will be addressed in
notes relating to Performance Guarantor’s securitization activities in its
financial statements (on which Originator is consolidated); and (b) UCC
financing statements will be filed to perfect the transfer (the “Transfer”) of
receivables (the “Receivables”) by Originator to United Stationers Financial
Services LLC (“Seller”) pursuant to the receivables sale agreement referred to
in the Opinion (the “Receivables Sale Agreement”).

 

2. The footnotes that describe Performance Guarantor’s securitization activities
(which include the Transactions) in Performance Guarantor’s consolidated
financial statements (which will include Originator, Seller and the SPV) will
describe Performance Guarantor’s securitization activities, will inform readers
that securitized assets (such as the Receivables) are isolated in special
purpose entities and support the securities issued by those entities.

 

3. The computer records of Seller, as servicer (in such capacity, the
“Servicer”) relating to the Receivables will be marked to reflect the Transfer.

 

4. Originator will not conceal any transfers contemplated by the agreements
referred to on Schedule II to the Opinion (the “Agreements”) from any interested
party. Although obligors on the Receivables will not be affirmatively informed
of the transfers of their obligations, Originator will not conceal the transfers
from any obligor that inquires. Also, (other than certain rebates and allowances
in respect of Receivables) the obligors are not expected to be material
creditors of either Originator, Seller or the SPV.

Terms of the Transactions

 

5. In connection with the Transactions: (a) certain investors in the Receivables
rely on the Receivables and the other assets of the Issuer in making their
investment decision; (b) certain investors in the Receivables will rely on the
Transfer being characterized as a true sale, so as to isolate the Receivables
from Originator’s creditors; and (c) the indirect sale of the Receivables to the
SPV and its creditors and their financing through the Transactions is beneficial
to Originator because it, among other things, increases the liquidity of their
assets and, to a lesser extent, diversifies the funding sources for Originator’s
business.

 

6. The terms of the Receivables Sale Agreement and other transactions between
Originator and Seller are (a) consistent with those of arm’s-length
relationships and (b) fair and equitable to each of the parties.

 

Schedule 4.1(bb) - 1

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

7. Originator intends the Transfer to be a true sale by Originator to Seller
that is absolute and irrevocable and that provides Seller with the full benefits
of ownership of the Receivables. Originator will convey the Receivables as a
result of the credit to Seller without recourse for uncollectibility of the
Receivables as a result of the creditworthiness of the related Obligor and
without any warranty of collectibility or any unconventional warranty.

 

8. To finance its purchase, Originator will transfer the Receivables to the
Seller, which in turn will transfer the Receivables to the SPV.

 

9. The consideration received by Originator in the Transfer represents the fair
market value of the Receivables.

 

10. Immediately prior to the Transfer, Originator owned the Receivables free and
clear of any lien or other adverse claim.

 

11. Originator’s representations, warranties, covenants and indemnities in the
Receivables Sale Agreement with respect to the Receivables: (a) cover matters
ascertainable by Originator in the ordinary course of business and (b) are
intended to ensure that Seller will receive the type of assets that it has
bargained to purchase. Originator believes that such representations,
warranties, covenants and indemnities do not cause Originator to retain or
assume the risk of nonpayment or other material financial risks of the
Receivables based in part on the belief that the matters covered are within
Originator’s control, are unlikely to occur, or both. The representations,
warranties and covenants are not intended to cover material liabilities that are
reasonably likely to occur.

 

12. There are no agreements or understandings between the SPV, on one hand, and
Originator or any of Originator’s other affiliates that are relevant to the
Transactions other than the Agreements and any other agreements and
understandings specifically referenced in the Agreements. In particular, there
are no other agreements or understandings pursuant to which Originator or
another of its other affiliates (a) is responsible for maintaining Seller’s or
the SPV’s solvency or (b) provides recourse, guarantees or otherwise retains or
assumes financial risks with respect to the Receivables.

Relationship Between Originator and the SPV

 

13. The SPV is a wholly-owned subsidiary of Seller which is a wholly owned
subsidiary of Originator, and the SPV was formed for the special purpose of
consummating the Transactions.

 

14. Originator intends to act in a manner that is consistent with the SPV’s
separate and distinct existence and will correct any known misunderstanding
regarding its status as a separate entity.

 

 

Schedule 4.1(bb) - 2

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

15. Originator prepares and maintains separate corporate and financial records
from the SPV that accurately reflect its assets, liabilities and financial
affairs. Originator’s believes its assets and liabilities can be readily and
inexpensively segregated, ascertained and identified separate from those of the
SPV. All transactions between Originator and the SPV, including monetary
transactions, are and will be properly reflected in Originator’s books and
records and Originator believes that each transaction will be on terms and
conditions consistent with those of an arm’s length transaction.

 

16. Originator believes that the consolidation of Originator’s and the SPV’s
business operations would not result in any significant cost savings or in a
significantly greater efficiency or profitability of such combined business
operation.

 

17. Originator and the SPV do not intend to commingle their assets and
liabilities, except that Seller, as Servicer of the Receivables: (a) may
temporarily commingle collections pending identification and transfer to a
collection account for the Transactions; and (b) will retain books and records
pertaining to the Receivables. Originator does not maintain joint bank accounts
or other the SPV accounts to which the SPV has independent access.

 

18. An integration of business functions between Originator and the SPV, if any,
exists only to the extent summarized in this paragraph. The SPV is operated for
the exclusive purpose of purchasing Receivables from Seller. The SPV will have
no employees, and the SPV’s day-to-day business operations with respect to the
Receivables will be conducted through Seller, in its capacity as Servicer,
pursuant to the Amended and Restated Transfer and Administration Agreement and
that under that agreement, Seller has limited rights, in its capacity as
Servicer, to enter into modifications of Receivables on behalf of the SPV, and
Seller is generally not permitted to resign as Servicer. Originator and the SPV
may share some expenses, but these are not expected to be material and, in any
event, will be allocated between the entities on a basis reasonably related to
the cost of the services involved and each entity’s actual use of such services.
Obligors on the Receivables transferred to the SPV will not be notified that
their Receivables have been transferred to the SPV.

 

19. The SPV is held out to the public as a separate entity apart from
Originator, including as described under Part I: Description of the Transactions
in the Opinion.

 

20. Originator maintains its own stationery and other business forms separate
from the SPV’s and conducts business in its own name (including, without
limitation, its contracts and written communications).

 

21. Originator adheres in all material respects to corporate formalities in all
transfers of assets and other transactions between Originator and the SPV. In
general, Originator observes appropriate corporate formalities under applicable
law.

 

22. Originator does not currently, and does not intend to, guaranty, and is not
otherwise obligated to repay, the SPV’s liabilities.

 

 

Schedule 4.1(bb) - 3

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

23. At closing, Originator will: (a) be solvent; (b) be adequately capitalized
to conduct its business and affairs as a going concern, considering the size and
nature of its business and intended purposes and taking into account pending and
threatened claims; and (c) intends to, and believes that it will be able to, pay
its debts as they mature. As a result, Originator is intended to (and is
reasonably believed to) be able to survive as a stand-alone entity.

 

24. Originator does not pay the SPV’s expenses, except as specifically provided
in the Agreements. Any allocations of direct, indirect or overhead expenses for
items shared between Originator and the SPV are made among such entities to the
extent practical on the basis of actual use or value of services rendered and
otherwise on a basis reasonably related to actual use or the value of services
rendered.

 

25. Originator has not held itself out, nor does it intend to do so in the
future, as responsible for the SPV’s debts.

 

Schedule 4.1(bb) - 4

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

Seller—Disclosure Representations and Covenants

Disclosure of the Transactions

 

1. The transactions referred to in the Opinion (the “Transactions”) have been or
will be publicly disclosed as follows: (a) the Transactions will be addressed in
notes relating to Performance Guarantor’s securitization activities in its
financial statements (on which Seller is consolidated); and (b) UCC financing
statements will be filed to perfect the transfer (the “Transfer”) of receivables
by the Originator to Seller pursuant to the receivables sales agreement referred
to in the Opinion (the “Receivables Sale Agreement”) and the transfer of the
Receivables together with a portfolio of additional receivables previously
acquired by Seller (the “Receivables”) from Seller to United Stationers
Receivables, LLC (the “SPV”) pursuant to the receivables purchase agreement
referred to in the Opinion (the “Receivables Purchase Agreement”).

 

2. The computer records of Seller, as servicer (in such capacity, the
“Servicer”) relating to the Receivables will be marked to reflect the Transfer.

 

3. Seller will not conceal any transfers contemplated by the agreements referred
to on Schedule II to the Opinion (the “Agreements”) from any interested party.
Although obligors on the Receivables will not be affirmatively informed of the
transfers of their obligations, Seller will not conceal the transfers from any
obligor that inquires. Also, (other than certain rebates and allowances in
respect of Receivables) the obligors are not expected to be material creditors
of either Seller or the SPV.

Terms of the Transactions

 

4. In connection with the Transactions: (a) certain investors in the Receivables
rely on the Receivables and the other assets of the SPV in making their
investment decision; (b) certain investors in the Receivables will rely on the
Transfer being characterized as true sales, so as to isolate the Receivables
from Seller’s creditors; and (c) the sale of the Receivables to the SPV and
their financing through the Transactions is beneficial to Seller and its
creditors because it, among other things, increases the liquidity of their
assets.

 

5. The terms of each of the Receivables Sale Agreement and other transactions
between Originator and Seller and the Receivables Purchase Agreement and other
transactions between Seller and the SPV are (a) consistent with those of
arm’s-length relationships and (b) fair and equitable to each of the parties.

 

6. Seller intends the Transfer to be a true sale by Originator to Seller that is
absolute and irrevocable and that provides Seller with the full benefits of
ownership of the Receivables. Seller will receive the conveyance of the
Receivables from Originator without recourse for uncollectibility of the
Receivables as a result of the creditworthiness of the related Obligor and
without any warranty of collectibility or any unconventional warranty.

 

Schedule 4.1(bb) - 5

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

7. Seller intends the Transfer to be a true sale by Seller to the SPV that is
absolute and irrevocable and that provides the SPV with the full benefits of
ownership of the Receivables. Seller will convey the Receivables to the SPV
without recourse for uncollectibility of the Receivables as a result of the
creditworthiness of the related Obligor and without any warranty of
collectibility or any unconventional warranty.

 

8. To finance its purchase, Seller will transfer the Receivables to the SPV,
which will transfer the Receivables to PNC Bank, National Association (for the
benefit of certain investors).

 

9. The consideration received from Originator in the Transfer represents the
fair market value of the Receivables.

 

10. Immediately prior to the Transfer, Seller owned the Receivables free and
clear of any lien or other adverse claim.

 

11. Seller purchases the Receivables in good faith without knowledge of any
adverse claim against, interest in, lien on, or defense to payment of, such
assets (other than any adverse claim arising solely as a result of any action
taken by Seller under the Agreements).

 

12. Originator’s representations, warranties, covenants and indemnities in the
Receivables Sale Agreement with respect to the Receivables and Seller’s
representations, warranties, covenants and indemnities in the Receivables
Purchase Agreement with respect to the Receivables: (a) cover matters
ascertainable by Originator or Seller, as applicable, in the ordinary course of
business and (b) are intended to ensure that Seller or the SPV, as applicable,
will receive the type of assets that it has bargained to purchase. Seller
believes that such representations, warranties, covenants and indemnities do not
cause Originator or Seller, as applicable, to retain or assume the risk of
nonpayment or other material financial risks of the Receivables based in part on
the belief that the matters covered are within Originator’s or Seller’s control,
are unlikely to occur, or both. The representations, warranties and covenants
are not intended to cover material liabilities that are reasonably likely to
occur.

 

13. There are no agreements or understandings between the SPV or Seller or any
of Seller’s other affiliates that are relevant to the Transactions other than
the Agreements and any other agreements and understandings specifically
referenced in the Agreements. In particular, there are no other agreements or
understandings pursuant to which Seller or another of its other affiliates
(a) is responsible for maintaining Seller’s or the SPV’s solvency or
(b) provides recourse, guarantees or otherwise retains or assumes financial
risks with respect to the Receivables.

Relationship Between Seller and the SPV

 

14. The SPV is a wholly-owned subsidiary of Seller and was formed for the
special purpose of consummating the Transactions.

 

Schedule 4.1(bb) - 6

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

15. Seller intends to act in a manner that is consistent with the SPV’s separate
and distinct existence and will correct any known misunderstanding regarding its
status as a separate entity.

 

16. Seller prepares and maintains separate corporate and financial records from
the SPV that accurately reflect its assets, liabilities and financial affairs.
Seller believes that its assets and liabilities can be readily and inexpensively
segregated, ascertained and identified separate from those of the SPV. All
transactions between Seller and the SPV, including monetary transactions, are
and will be properly reflected in Seller’s books and records and Seller believes
that each transaction will be on terms and conditions consistent with those of
an arm’s length transaction.

 

17. Seller believes the consolidation of Seller’s and the SPV’s business
operations would not result in any significant cost savings or in a
significantly greater efficiency or profitability of such combined business
operation.

 

18. Seller and the SPV do not intend to commingle their assets and liabilities,
except that Seller, as Servicer of the Receivables: (a) may temporarily
commingle collections pending identification and transfer to a collection
account for the Transactions; and (b) will retain books and records pertaining
to the Receivables. Seller does not maintain joint bank accounts or other the
SPV accounts to which the SPV has independent access.

 

19. An integration of business functions between Seller and the SPV, if any,
exists only to the extent summarized in this paragraph. The SPV is operated for
the exclusive purpose of purchasing Receivables from Seller. The SPV will have
no employees, and the SPV’s day-to-day business operations with respect to the
Receivables will be conducted through Seller, in its capacity as Servicer,
pursuant to the Amended and Restated Transfer and Administration Agreement and
that under that agreement, Seller has limited rights, in its capacity as
Servicer, to enter into modifications of Receivables on behalf of the SPV, and
Seller is generally not permitted to resign as Servicer. Seller and the SPV may
share some expenses, but these are not expected to be material and, in any
event, will be allocated between the entities on a basis reasonably related to
the cost of the services involved and each entity’s actual use of such services.
Obligors on the Receivables transferred to the SPV will not be notified that
their Receivables have been transferred to the SPV.

 

20. The SPV is held out to the public as a separate entity apart from Seller,
including as described under Part I: Description of the Transactions in the
Opinion.

 

21. Seller maintains its own stationery and other business forms separate from
the SPV’s and conducts business in its own name (including, without limitation,
its contracts and written communications).

 

22. Seller adheres in all material respects to corporate formalities in all
transfers of assets and other transactions between Seller and the SPV. In
general, Seller observes appropriate corporate formalities under applicable law.

 

Schedule 4.1(bb) - 7

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23. Seller does not currently, and does not intend to, guaranty, and is not
otherwise obligated to repay, the SPV’s liabilities.

 

24. At closing, Seller will: (a) be solvent; (b) be adequately capitalized to
conduct its business and affairs as a going concern, considering the size and
nature of its business and intended purposes and taking into account pending and
threatened claims; and (c) intends to, and believes that it will be able to, pay
its debts as they mature. As a result, Seller is intended to (and is reasonably
believed to) be able to survive as a stand-alone entity.

 

25. Seller does not pay the SPV’s expenses, except as specifically provided in
the Agreements. Any allocations of direct, indirect or overhead expenses for
items shared between Seller and the SPV are made among such entities to the
extent practical on the basis of actual use or value of services rendered and
otherwise on a basis reasonably related to actual use or the value of services
rendered.

 

26. Seller has not held itself out, nor does it intend to do so in the future,
as responsible for the SPV’s debts.

 

Schedule 4.1(bb) - 8

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

SPV—Disclosure Representations and Covenants

Disclosure of the Transactions

 

1. The transactions referred to in the Opinion (the “Transactions”) have been or
will be publicly disclosed by the SPV as follows: (a) the Transactions will be
addressed in notes relating to Performance Guarantor’s securitization activities
in its financial statements (on which the SPV is consolidated) and (b) UCC
financing statements will be filed to perfect the transfer (the “Transfer”) of
receivables (the “Receivables”) by the Originator to United Stationers Financial
Services LLC (“Seller”) pursuant to the receivables sale agreement referred to
in the Opinion (the “Receivables Sale Agreement”) and subsequently the
Receivables together with a portfolio of additional receivables previously
acquired by Seller (the “Receivables”) by Seller to the SPV pursuant to the
receivables purchase agreement referred to in the Opinion (the “Receivables
Purchase Agreement”).

 

2. The SPV will not conceal any transfers contemplated by the agreements
referred to on Schedule II to the Opinion (the “Agreements”) from any interested
party. Although obligors on the Receivables will not be affirmatively informed
of the transfers of their obligations, the SPV will not conceal those transfers
from any obligor that inquires. Also, (other than certain rebates and allowances
in respect of Receivables) the obligors are not expected to be material
creditors of the SPV.

Terms of the Transactions

 

3. In connection with the Transactions: (a) the Investors rely on the
Receivables and the other assets of the SPV in making their investment decision
and will rely on the Transfers being characterized as true sales, so as to
isolate the Receivables from Performance Guarantor’s, Originator’s and Seller’s
creditors.

 

4. The terms of the transactions between the SPV and each of Performance
Guarantor, Originator and Seller are (a) consistent with those of arm’s-length
relationships and (b) fair and equitable to each of the parties.

 

5. The SPV intends the Transfer to be a true sale by Seller to the SPV that is
absolute and irrevocable and that provides the SPV with the full benefits of
ownership of the Receivables. The SPV will receive the conveyance of the
Receivables from Seller without recourse for bad debt or uncollectibility of the
Receivables and without any warranty of collectibility or any unconventional
warranty.

 

6. The consideration received by Seller in the Transfer is the fair market value
of the Receivables.

 

7. The SPV purchases the Receivables in good faith without knowledge of any
adverse claim against, interest in, lien on, or defense to payment of, such
assets (other than any adverse claim arising solely as a result of any action
taken by the SPV under the Agreements).

 

Schedule 4.1(bb) - 9

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

8. Seller’s representations, warranties, covenants and indemnities in the
Receivables Purchase Agreement with respect to the Receivables (a) cover matters
ascertainable by Seller in the ordinary course of business and (b) are intended
to ensure that the SPV will receive the type of assets that it has bargained to
purchase. Such representations, warranties, covenants and indemnities do not
cause Seller to retain or assume the risk of nonpayment or other material
financial risks of the Receivables.

 

9. There are no agreements or understandings between the SPV and Seller or any
of Seller’s other affiliates that are relevant to the Transactions other than
the Agreements and any other agreements and understandings specifically
referenced in the Agreements. In particular, there are no other agreements or
understandings pursuant to which Originator or another of its other affiliates
(a) is responsible for maintaining the SPV’s solvency or (b) provides recourse,
guarantees or otherwise retains or assumes financial risks with respect to the
Receivables.

Relationship Between the SPV and Performance Guarantor, Originator and Seller

 

10. The SPV is a wholly-owned subsidiary of Seller and was formed for the
special purpose of consummating the Transactions and other similar transactions
with respect to Seller’s Receivables. The SPV will comply with all separateness
covenants contained in the applicable Agreements, or in the SPV’s limited
liability company agreement.

 

11. The SPV intends to act in a manner that is consistent with the SPV’s
separate and distinct existence and will correct any known misunderstanding
regarding its status as a separate entity.

 

12. The SPV prepares and maintains separate corporate and financial records
(which will be subject to audit by independent public accountants) from
Originator and Seller that accurately reflect its assets, liabilities and
financial affairs. The SPV believes that its assets and liabilities can be
readily and inexpensively segregated, ascertained and identified separate from
those of Performance Guarantor, Originator and Seller. All transactions between
the SPV on the one hand and Performance Guarantor, Originator or Seller on the
other hand, including monetary transactions, are and will be properly reflected
in the SPV’s books and records and the SPV believes that each will be on terms
and conditions consistent with those of an arm’s length transaction.

 

13. The consolidation of each of Performance Guarantor’s, Originator’s or
Seller’s and the SPV’s business operations would not result in any significant
cost savings or in a significantly greater efficiency or profitability of such
combined business operation.

 

14. The SPV and each of Performance Guarantor, Originator and Seller will not
commingle their assets and liabilities, except that Seller, as Servicer of the
Receivables: (a) may temporarily commingle collections pending identification
and transfer to a collection account for the Transactions; and (b) will retain
books and records pertaining to the Receivables. The SPV does not otherwise
maintain joint bank accounts or other the SPV accounts to which either of
Originator or Seller has independent access.

 

Schedule 4.1(bb) - 10

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

15. An integration of business functions between any of Performance Guarantor,
Originator or Seller and the SPV, if any, exists only to the extent summarized
in this paragraph. The SPV is operated for the exclusive purpose of purchasing
Receivables from Seller. The SPV will have no employees, and the SPV’s
day-to-day business operations with respect to the Receivables will be conducted
through Seller, in its capacity as Servicer, pursuant to the Amended and
Restated Transfer and Administration Agreement. Under that agreement, Seller has
limited rights, in its capacity as Servicer, to enter into modifications of
Receivables on behalf of the SPV, and Seller is generally not permitted to
resign as Servicer. Each of Performance Guarantor, Originator, Seller and the
SPV may share some expenses not reflected in Servicer’s fees, but these are not
expected to be material and, in any event, will be allocated between the
entities on a basis reasonably related to the cost of the services involved and
each entity’s actual use of such services. Obligors on the Receivables
transferred to the SPV will not be notified that their Receivables have been
transferred to the SPV.

 

16. The SPV is held out to the public as a separate entity apart from each of
Originator and Seller, including as described under Part I: Description of the
Transactions in the Opinion.

 

17. The SPV maintains its own stationery and other business forms separate from
Originator’s and conducts business in its own name (including, without
limitation, its contracts and written communications).

 

18. The SPV has its own office, which is located in premises that are primarily
occupied by Originator but is separately demarcated and identified.

 

19. The SPV will adhere in all material respects to corporate formalities in all
transfers of assets and other transactions between the SPV and each of
Originator and Seller. In general, the SPV observes appropriate limited
liability company formalities under applicable law.

 

20. The SPV will not guaranty, or otherwise become obligated to repay, either
Originator’s or Seller’s liabilities, except to the extent that the SPV’s
indemnities in the Agreements may be considered guaranties. To the extent that
those indemnities cover either Originator’s or Seller’s actions or failures to
act, the SPV considers the likelihood that the SPV will incur liabilities under
those indemnities to be remote and immaterial.

 

21. At closing, the SPV will: (a) be solvent; (b) be adequately capitalized to
conduct its business and affairs as a going concern, considering the size and
nature of its business and intended purposes and taking into account pending and
threatened claims; and (c) intends to, and believes that it will be able to, pay
its debts as they mature. As a result, the SPV is intended to (and is reasonably
believed to) be able to survive as a stand-alone entity.

 

Schedule 4.1(bb) - 11

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

22. None of Performance Guarantor, Originator nor Seller pays the SPV’s
expenses, except as specifically provided in the Agreements. Any allocations of
direct, indirect or overhead expenses for items shared between the SPV and
Performance Guarantor, Originator or Seller, which are not expected to be
material, are made among such entities to the extent practical on the basis of
actual use or value of services rendered and otherwise on a basis reasonably
related to actual use or the value of services rendered.

 

23. The SPV has not held itself out, nor does it intend to do so in the future,
as responsible for either Performance Guarantor’s, Originator’s or Seller’s
debts.

 

Schedule 4.1(bb) - 12

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

SCHEDULE 11.3

Address and Payment Information

If to the SPV:

United Stationers Receivables, LLC

One Parkway North Boulevard

Deerfield, Illinois 60015-2559

Telephone:        (847) 627-7000

Facsimile:         (847) 627-7001

Payment Information:

Bank:                                The Northern Trust Company

ABA Routing No.:          071-000-152

Account No.:                   3510068

Reference:                        Credit United Stationers Receivables, LLC

If to the Originator:

United Stationers Supply Co.

One Parkway North Boulevard

Deerfield, Illinois 60015-2559

Telephone:        (847) 627-7000

Facsimile:          (847) 627-7001

If to the Seller or Servicer:

United Stationers Financial Services, LLC

One Parkway North Boulevard

Deerfield, Illinois 60015-2559

Telephone:        (847) 627-7000

Facsimile:          (847) 627-7001

If to the Agent:

PNC Bank, National Association

One PNC Plaza

225 Fifth Avenue

Pittsburgh, Pennsylvania 15222

Attention: William Falcon

Telephone: (412) 762-5442

Email: william.falcon@pnc.com

 

Schedule 11.3 - 1

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

Payment Information:

Bank:                                  PNC Bank, National Association

ABA Routing No.:            043-000-096

Account Name:                 Market Street Funding LLC

Account No.:                    1002422076

Reference:                         United Stationers

 

Schedule 11.3 - 2

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

Exhibit A

Form of Assignment and Assumption Agreement

Reference is made to the Amended and Restated Transfer and Administration
Agreement dated as of January 18, 2013 as it may be amended, modified,
supplemented, restated or replaced from time to time (as so amended or modified,
the “Agreement”) by and among United Stationers Receivables, LLC, an Illinois
limited liability company (the “SPV”), United Stationers Supply Co., an Illinois
corporation (the “Originator”), United Stationers Financial Services LLC, an
Illinois limited liability company (the “Seller”) and as Servicer, PNC Bank,
National Association, a national banking association (“PNC Bank”), as Agent, as
a Class Agent and as an Alternate Investor, and the financial institutions from
time to time parties thereto as Conduit Investors and Alternate Investors. Terms
defined in the Agreement are used herein with the same meaning.

[            ] (the “Assignor”) and [            ] (the “Assignee”) agree as
follows:

1. The Assignor hereby sells and assigns to the Assignee, without recourse and
without representation and warranty, and the Assignee hereby purchases and
assumes from the Assignor, an interest in and to all of the Assignor’s rights
and obligations under the Agreement and the other Transaction Documents. Such
interest expressed as a percentage of all rights and obligations of the
Alternate Investors, shall be equal to the percentage equivalent of a fraction
the numerator of which is $[            ] and the denominator of which is the
Facility Limit. After giving effect to such sale and assignment, the Assignee’s
Commitment will be as set forth on the signature page hereto.

2. [In consideration of the payment of $[            ], being [            ]% of
the existing Net Investment, and of $[            ], being [            ]% of
the aggregate unpaid accrued Discount, receipt of which payment is hereby
acknowledged, the Assignor hereby assigns to the Agent for the account of the
Assignee, and the Assignee hereby purchases from the Assignor, a [            ]%
interest in and to all of the Assignor’s right, title and interest in and to the
Net Investment purchased by the undersigned on [            ], [20][    ] under
the Agreement.]

3. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any Adverse Claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement, any other
Transaction Document or any other instrument or document furnished pursuant
thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement or the Receivables, any other Transaction
Document or any other instrument or document furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any of the SPV or the Servicer or the
Originator or the performance or observance by any of the SPV or the Servicer or
the Originator of any of its obligations under the Agreement, any other
Transaction Document, or any instrument or document furnished pursuant thereto.

 

Exhibit A - 1

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

4. The Assignee (i) confirms that it has received a copy of the Agreement, the
First Tier Agreement and the Second Tier Agreement together with copies of the
financial statements referred to in Sections 6.1(a)(i) and (ii) of the
Agreement, to the extent delivered through the date of this Assignment and
Assumption Agreement (the “Assignment”), and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment; (ii) agrees that it will, independently
and without reliance upon the Agent, any of its Affiliates, the Assignor or any
other Alternate Investor and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and any other Transaction
Document; (iii) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Agreement and
the other Transaction Documents as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; (iv) agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Agreement are required to be performed
by it as an Alternate Investor; and (v) specifies as its address for notices and
its account for payments the office and account set forth beneath its name on
the signature pages hereof[; and (vi) attaches the forms prescribed by the
Internal Revenue Service of the United States of America certifying as to the
Assignee’s status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty]. [To be included if the Assignee is organized under the laws of a
jurisdiction outside the United States]

5. The effective date for this Assignment shall be the later of (i) the date on
which the Agent receives this Assignment executed by the parties hereto and
receives the consent of [the SPV and] the Class Agents, on behalf of the Conduit
Investors, and (ii) the date of this Assignment (the “Effective Date”).
Following the execution of this Assignment and the consent of [the SPV and] the
Class Agents, on behalf of the Conduit Investors, this Assignment will be
delivered to the Agent for acceptance and recording.

6. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment, have the rights and obligations of an Alternate Investor thereunder
and (ii) the Assignor shall, to the extent provided in this Assignment,
relinquish its rights and be released from its obligations under the Agreement.

7. Upon such acceptance and recording, from and after the Effective Date, the
Agent shall make all payments under the Agreement in respect of the interest
assigned hereby (including, without limitation, all payments in respect of such
interest in Net Investment, Discount and fees) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Agreement
for periods prior to the Effective Date directly between themselves.

 

Exhibit A - 2

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

8. The Assignee shall not be required to fund hereunder an aggregate amount at
any time outstanding in excess of $[            ] [This should match the
commitment amount for this Alternate Investor], minus the aggregate outstanding
amount of any interest funded by the Assignee in its capacity as a participant
under the Liquidity Provider Agreement.

9. The Assignor agrees to pay the Assignee its pro rata share of fees in an
amount equal to the product of (a) [            ] per annum and (b) the
[Commitment] [Should match fees in Section [    ] of the Participation
Agreement] during the period after the Effective Date for which such fees are
owing and paid by the SPV pursuant to the Agreement. Amounts paid under this
section shall be credited against amounts payable to the Assignee under Section
[    ] of the Participation Agreement dated as of [date] by and between PNC Bank
and [Alternate Investor] (and vice versa).

10. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).

11. This agreement contains 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.

12. If any one or more of the covenants, agreements, provisions or terms of this
agreement shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this agreement and shall in no
way affect the validity or enforceability of the other provisions of this
agreement.

13. This agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery by facsimile of an
executed signature page of this agreement shall be effective as delivery of an
executed counterpart hereof.

14. This agreement shall be binding on the parties hereto and their respective
successors and assigns.

 

Exhibit A - 3

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

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

 

[ASSIGNOR]

By:

 

 

Name:

 

 

Title:

 

 

 

[ASSIGNEE]

By:

 

 

Name:

 

 

Title:

 

 

 

Exhibit A - 4

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

Address for notices and Account for payments:

 

For Credit Matters:    For Administrative Matters: [NAME]    [NAME] Attention:
   Attention: Telephone:    [(            )     -            ]   
Telephone:    [(            )     -            ]
Telefax:         [(            )     -            ]   
Telefax:         [(            )     -            ]

Account for Payments:

NAME

ABA Number:                  [    -        -             ]

Account Number:             [                        ]

Attention:                           [                        ]

 

  Re: [                             ]

Consented to this [            ] day of Accepted this[            ] day of
[            ], [20][        ] [            ], [20][        ]

 

[                        ], as    [                        ], as Agent Class
Agent   

 

By:  

 

    By:  

 

Name:  

 

    Name:  

 

Title:  

 

    Title:  

 

 

[SPV] By:  

 

Name:  

 

Title:  

 

 

Exhibit A - 5

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

Exhibit B

Credit and Collection Policies and Practices

The following are the practices generally followed by the servicer (United
Stationers Financial Services, LLC) for extension of credit to United Stationers
Supply Co. customers and collection of outstanding balances:

 

  1. Extension of Credit

 

  a. Prospective Customers

 

  i. Credit reviews are completed prior to an agreement to sell any products to
a prospective customer

 

  ii. Prospective customers are requested to provide financial statements and
any other information deemed necessary to make a credit decision. Additional
security (personal guarantees, UCC-1 or letter of credit) may be required in
certain instances.

 

  b. Current Customers

 

  i. The Credit Department reviews all active accounts each year and more
frequently as it deems necessary

 

  ii. Management maintains documented credit files for each customer

 

  iii. Increases in credit limits are accompanied by a complete credit review.
Similarly, any change in payment terms which will require a credit limit change
will require a complete credit review.

 

  2. Credit Limits

 

  a. Credit limits are determined to ensure that business can be transacted
normally without the customer exceeding their credit limit

 

  b. Credit limits are reviewed annually. Sr. Group Credit Managers have credit
authority up to $1 million for unrated or speculative grade rated credits and up
to $2.5 million for investment grade rated credits. All credit lines above this
amount must be approved by the Vice President and Treasurer. Any credit limit
over $1 million must be further ratified by the Credit Committee within 90 days
of approval. The Credit Committee meets at a minimum once a quarter. The
Committee may meet more often at the request of the Treasurer to consider larger
or more difficult credits.

 

  c. Hard Credit Limit

 

  i. Customer has a specific credit limit on the maximum amount of outstanding
sales

 

Exhibit B - 1

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

  ii. Breeching the limit results in an order being placed on automatic hold

 

  iii. A process is in place to review order requests and customers when a
customer exceeds its credit limit

 

  d. Soft Credit Limit

 

  i. Does not result in an automatic hold is an order is placed on an account
which exceeds its assigned credit limit

 

  ii. Credit department periodically reviews accounts which are close to
breaching their credit limit

 

  3. Collections Policy

 

  a. The Credit Department is responsible for contacting customers with past due
accounts

 

  i. Collection activities are generally prioritized by a worklist strategy
within SAP based upon a variety of factors (such as amount of delinquency, aging
of past dues, credits scoring driven by Paydex and financial stress ratings,
etc.).

 

  b. Charge-offs

 

  i. Credit Department reviews past due accounts on a regular basis

 

  1. Write-offs must be approved by Management

 

  2. Bad debt write-offs are taken monthly

 

  c. Third-party Collections

 

  i. The Company contracts with third party agencies to collect past due
accounts

 

  ii. Material amounts require written documentation from a collection agency
prior to writing off the account

 

  4. Credit Department Oversight

 

  a. Reporting

 

  i. Company utilizes SAP for its general ledger and accounts receivable systems

 

  ii. Company maintains an off-site emergency restoration and recovery systems
and procedure

 

  iii. Meetings with the Credit Department occur on a regular basis, quarterly
if possible, to discuss any problematic accounts, write-offs, or any other issue
which may need to be discussed

 

Exhibit B - 2

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

Exhibit C

Form of Investment Request

United Stationers Receivables, LLC (the “SPV”), pursuant to Section 2.2(a) of
the Amended and Restated Transfer and Administration Agreement, dated as of
January 18, 2013 (as amended, modified, supplemented, restated or replaced from
time to time, the “Agreement”), among the SPV, United Stationers Supply Co., an
Illinois corporation (the “Originator”), United Stationers Financial Services
LLC, an Illinois limited liability company (the “Seller”) and as Servicer, PNC
Bank, National Association, a national banking association (“PNC Bank”), as
Agent, as a Class Agent and as an Alternate Investor, and the financial
institutions from time to time parties thereto as Conduit Investors and
Alternate Investors, hereby requests that the [Conduit Investors] [Alternate
Investors] effect an Investment from it pursuant to the following instructions:

Investment Date:                                                          ]

Purchase Price: [                                                           ]1

Funding Period(s):                                                      ]

Account to be credited:

[bank name]

ABA No.[                                                                     ]

Account No. [                                                         ]

Reference No.[                                                     ]

Please credit the above-mentioned account on the Investment Date. Capitalized
terms used herein and not otherwise defined herein have the meaning assigned to
them in the Agreement.

The SPV hereby certifies as of the date hereof that the conditions precedent to
such Investment set forth in Section 4.2 of the Agreement have been satisfied,
and that all of the representations and warranties made in Section 3.1 of the
Agreement are true and correct on and as of the Investment Date, both before and
after giving effect to the Investment.

 

    UNITED STATIONERS RECEIVABLES, LLC Dated:                            
             By:  

 

    Name:  

 

    Title:  

 

 

1  At least [$5,000,000] and in integral multiples of [$1,000,000].

 

Exhibit C - 1

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

Exhibit D

Form of Blocked Account Agreement

[Date]

[Name and Address of Blocked Account Bank]

 

  Re: United Stationers Receivables, LLC (the “SPV”)

Blocked Account

No[s]. [            ]

Ladies and Gentlemen:

[            ] (the “Owner”) hereby notifies you (the “Bank”) that in connection
with certain transactions involving its accounts receivable, it has transferred
exclusive ownership and dominion of its [blocked] [lock-box] account no[s].
[            ] [and the related lock-boxes no[s].[            ] maintained with
you (collectively the “Accounts”) to PNC Bank, National Association, a national
banking association, as agent (the “Agent”), and that the SPV will transfer
exclusive control of the Accounts to the Agent effective upon delivery to you of
the Notice of Effectiveness (as hereinafter defined). Each of the parties hereto
agrees that, from and after the date you receive the Notice of Effectiveness,
you will comply with instructions originated by the Agent directing disposition
of the funds in the Accounts without further consent by the SPV.

In furtherance of the foregoing, the Owner and the Agent hereby instruct you,
beginning on the date of your receipt of the Notice of Effectiveness
substantially in the form attached hereto as Annex I and you agree, without
further consent by the SPV (which consent the SPV hereby irrevocably waives):
(i) to collect the monies, checks, instruments and other items of payment mailed
to the Accounts; (ii) to deposit into the Accounts all such monies, checks,
instruments and other items of payment or all funds collected with respect
thereto (unless otherwise instructed by the Agent); and (iii) to transfer all
funds deposited and collected in the Accounts pursuant to instructions given to
you by the Agent from time to time.

You are hereby further instructed and you agree, without further consent by the
SPV (which consent the SPV hereby irrevocably waives): (i) unless and until the
Agent notifies you to the contrary at any time after your receipt of the Notice
of Effectiveness, to make such transfers from the Accounts at such times and in
such manner as the Owner, in its capacity as collection agent for the Agent,
shall from time to time instruct to the extent such instructions are not
inconsistent with the instructions set forth herein, and (ii) to permit the
Owner (in its capacity as collection agent for the Agent) and the Agent to
obtain upon request any information relating to the Accounts, including, without
limitation, any information regarding the balance or activity of the Accounts.

 

Exhibit D - 1

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

The SPV also hereby notifies you that, beginning on the date of your receipt of
the Notice of Effectiveness and notwithstanding anything herein or elsewhere to
the contrary, the Agent shall be irrevocably entitled to exercise, without
further consent by the SPV, any and all rights in respect of or in connection
with the Accounts, including, without limitation, the right to specify when
payments are to be made out of or in connection with the Accounts. The Agent has
a continuing interest in all of the checks and their proceeds and all monies and
earnings, if any, thereon in the Accounts, and you shall be the Agent’s agent
for the purpose of holding and collecting such property. The monies, checks,
instruments and other items of payment mailed to, and funds and wire transfers
deposited to, the Accounts will not be subject to deduction, set-off, banker’s
lien, or any other right in favor of any person other than the Agent (except
that you may set off (i) all amounts due to you in respect of your customary
fees and expenses for the routine maintenance and operation of the Accounts, and
(ii) the face amount of any checks which have been credited to the Accounts but
are subsequently returned unpaid because of uncollected or insufficient funds).

This Agreement may not be terminated at any time by the SPV or you without the
prior written consent of the Agent. Neither this Agreement nor any provision
hereof may be changed, amended, modified or waived orally but only by an
instrument in writing signed by the Agent and the SPV.

You shall not assign or transfer your rights or obligations hereunder (other
than to the Agent) without the prior written consent of the Agent and the SPV.
Subject to the preceding sentence, this Agreement shall be binding upon each of
the parties hereto and their respective successors and assigns, and shall inure
to the benefit of, and be enforceable by, the Agent, each of the parties hereto
and their respective successors and assigns.

You hereby represent that the person signing this Agreement on your behalf is
duly authorized by you to so sign.

You agree to give the Agent and the SPV prompt notice if the Accounts become
subject to any writ, garnishment, judgment, warrant of attachment, execution or
similar process.

Any notice, demand or other communication required or permitted to be given
hereunder shall be in writing and may be personally served or sent by facsimile
or by courier service or by United States mail and shall be deemed to have been
delivered when delivered in person or by courier service or by facsimile or
three (3) Business Days after deposit in the United States mail (registered or
certified, with postage prepaid and properly addressed). For the purposes
hereof, (i) the addresses of the parties hereto shall be as set forth below each
party’s name below, or, as to each party, at such other address as may be
designated by such party in a written notice to the other party and the Agent
and (ii) the address of the Agent shall be:

 

Exhibit D - 2

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

PNC Bank, National Association

One PNC Plaza

225 Fifth Avenue

Pittsburgh, Pennsylvania 15222

Attention: William Falcon

Telephone: 412/762-5442

Email: william.falcon@pnc.com

, or at such other address as may be designated by the Agent in a written notice
to each of the parties hereto.

Please agree to the terms of, and acknowledge receipt of, this notice by signing
in the space provided below.

 

Very truly yours,

UNITED STATIONERS RECEIVABLES, LLC

By:

 

 

Name:

 

 

Title:

 

 

Address:

 

Attention:

 

Facsimile:

 

PNC BANK, NATIONAL ASSOCIATION

By:

 

 

Name:

 

 

Title:

 

 

Address:

 

Attention:

 

Facsimile:

 

 

Exhibit D - 3

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

ACKNOWLEDGED AND AGREED:

[NAME OF BLOCKED ACCOUNT BANK]

By:

 

 

Title:

 

 

Date:

 

 

[Address]

Attention:

Facsimile:

 

Exhibit D - 4

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

ANNEX 1

TO BLOCKED ACCOUNT AGREEMENT

[FORM OF NOTICE OF EFFECTIVENESS]

DATED: [            ],20[__]

 

TO: [Name of Blocked Account Bank]

[Address]

ATTN: [                                                 ]

 

  Re: Blocked Account No[s]. [                ]

Ladies and Gentlemen:

We hereby give you notice that effective on the date you receive this letter,
exclusive control of the above-referenced Blocked Account[s], as described in
our letter agreement with you dated [            ], 20[    ] shall be exercised
by the Agent. You are hereby instructed to comply immediately with the
instructions set forth in [that letter agreement] [as set forth herein].

[Add instructions regarding disposition of proceeds in Accounts.]

 

Very truly yours, PNC BANK, NATIONAL ASSOCIATION, as Agent By:  

 

Name:  

 

Title:  

 

Address: Attention: Facsimile:

 

ACKNOWLEDGED AND AGREED:

[NAME OF BLOCKED ACCOUNT BANK]

By:

 

 

Title:

 

 

Date:

 

 

Address:

Attention:

Facsimile:

 

Exhibit D - 5

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

Exhibit E

Form of Servicer Report

 

United Stationers Supply Co.

              

Trade Receivable

              

Securitization Monthly

              

Information Package

              

Cut-off Date:

        

 

     

Aggregate Net Investment:

        

 

     

Facility Limit:

        

 

     

Borrowing Base:

        

 

      I. Settlement Period Activity:              United Stationers Supply Co.
         

Beginning Accounts Receivable

              

Collections

              

Gross New Receivables (Sales)

              

Charge-offs

              

Total Dilutions

              

Other Adjustment

              

Ending Accounts Receivable

              

II. Aging Statistics

              

Current

              

1-30 days

              

31-60 days

              

61-90 days

              

91 + Days

              

Deferred Receivables Disputed

              

Receivables Total Receivables

              

III. Excess Concentrations

               Largest 10 Oblig    Group    Balance    % of Eligible   
Maximum %    Excess Amt

1

              

2

              

3

              

4

              

5

              

6

              

7

              

8

              

9

              

10

              

Excess Concentrations

               IV. Calculation of Net Receivables Pool Balance
Ending Accounts Receivable                   United Stationers Supply Co.

Less Ineligibles:

              

Delinquent Receivables

              

(61+) Notes

              

Credit Control

              

Designated Obligor

              

Bankrupt Obligor

              

Advertisment

              

Receivables Cross

              

Aged Receivables

              

Specified Ineligible

              

Receivables Foreign

              

Receivables Government

              

Receivables Intercompany

              

Contra Receivables

              

Disputed Receivables

              

Other Ineligible Receivables

              

Total Ineligible Receivables

              

Eligible Receivables

              

Less: Excess Concentrations

              

 

Exhibit E - 1

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

Less: Disputed Receivables

    

Less: Excess Deferred Receivables

    

Less: Independent Edge Rebate Reserve

    

Less: National Account Rebate Reserve

    

Less: VCD/DBP Rebate Reserve

    

Less: EFT Rebate Reserve

    

Less: LPR Rebate Reserve

    

Less: PIR Rebate Reserve

    

Net Pool Balance

    

V. Calculation of Required Reserves

    

Loss Reserve Ratio

    

Loss Reserve Ratio (“LRR”):

     (A )   

Concentration Reserve

    

Concentration Reserve (“CR”):

     (B )   

greatest of (a) Largest 1 Group A obligor

    

or (b) Largest 1 Group B obligor

    

or (c) Largest 2 Group C obligors

    

or (d) Largest 4 Group D obligors

    

Dilution Reserve Ratio

    

Dilution Reserve Ratio (“DRR”):

     (C )   

Minimum Dilution Ratio:

     (D )   

Yield Reserve

    

Base Rate (“BR”)

    

Servicer’s Fee Rate (“SFR”):

    

Days Sales Outstanding (“DSO”)

    

Yield Reserve Percentage {(DSO * BR * 1.5)}/360

     (E )   

Servicing Fee Reserve

    

Servicing Fee Reserve (DSO * 1.00%) / 360

     (F )   

Required Reserves % = (Greater of 1){A+C} or 2) {B+D}) + E + F

    

Required Reserves $

    

(A) Greater of 1) Loss Reserve Ratio + Dilution Reserve Ratio or 2) Minimum
Reserve Ratio * NPB

    

(B) Servicing Fee Reserve * Total Receivables

    

Required Reserves $ (A+B)

    

VI. Calculation of Purchased Interest

    

Aggregate Net Investment (NI)

    

Required Reserves (RR)

    

Net Pool Balance (NPB)

    

NI/(NRB-RR)

    

VII. Calculation of Key Ratios

 

      Actual    Weekly
Trigger     Termination
Trigger     Complies

(1) 3-Month Rolling Average Delinquency Ratio

        5.50 %      6.25 %   

(2) 3-Month Rolling Average Default Ratio

        1.75 %      2.25 %   

(3) 3-Month Rolling Average Dilution Ratio

        7.50 %      8.25 %   

(4) 3-Month Rolling Average DSO (days)

        50.0        60.0     

(5) Purchaser’s Interest {(Net Investment / (NPB—Required Reserves) }

          100.00 %   

(6) Facility Limit {Net Investment / Facility Limit}

          100.00 %   

(7) Leverage Ratio

          3.5x     

 

VIII. Signature

     

The undersigned hereby represents and warrants that the foregoing and
attachments represent a true and accurate accounting with respect to
outstandings as of the Cut-Off Date show above and is in accordance with the
Transfer and Administration Agreement dated as of March 3, 2009, and that all
representations and warranties are restated and reaffirmed.

 

United Stationers Supply Co.

     

          Signature:                                          
                     

   Date:                                      

          Printed Name:                                          
               

   Title:                                      

 

Exhibit E - 2

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

Exhibit F

Form of SPV Secretary’s Certificate

SECRETARY’S CERTIFICATE

[                                 ], [20][        ]

I, [            ], the undersigned [            ] of [SPV] (the “SPV”), a
[            ] corporation, DO HEREBY CERTIFY that:

1. Attached hereto as Annex A is a true and complete copy of the [            ]
[Insert appropriate organizational document] of the SPV as in effect on the date
hereof.

2. Attached hereto as Annex B is a true and complete copy of the [By-laws]
[Insert appropriate organizational document] of the SPV as in effect on the date
hereof.

3. Attached hereto as Annex C is a true and complete copy of the resolutions
duly adopted by the Board of Managers of the SPV [adopted by consent] as of
[            ], [20][        ], authorizing the execution, delivery and
performance of each of the documents mentioned therein, which resolutions have
not been revoked, modified, amended or rescinded and are still in full force and
effect.

4. The below-named persons have been duly qualified as and at all times since
[            ], [20][        ], to and including the date hereof have been
officers or representatives of the SPV holding the respective offices or
positions below set opposite their names and are authorized to execute on behalf
of the SPV the below-mentioned Amended and Restated Transfer and Administration
Agreement and all other Transaction Documents (as defined in such Amended and
Restated Transfer and Administration Agreement) to which the SPV is a party and
the signatures below set opposite their names are their genuine signatures:

 

Name    Signature    Office

 

  

 

  

 

 

  

 

  

 

 

  

 

  

 

[Remainder of Page Intentionally Left Blank]

 

Exhibit F - 1

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

WITNESS my hand and seal of the SPV as of the day first above written.

 

   Secretary

I, [            ] the undersigned, [Title] of the SPV, DO HEREBY CERTIFY that
[            ] is the duly elected and qualified Secretary of the SPV and the
signature above is his/her genuine signature.

WITNESS my hand as of the day first above written.

 

 

[Title]

 

Exhibit F - 2

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

Exhibit G

Form of [Originator/Servicer/Seller] Secretary’s Certificate

SECRETARY’S CERTIFICATE

[                                 ], [20][        ]

I, [            ], the undersigned [            ] of
[Originator/Servicer/Seller] (the “[Originator/Servicer/Seller]”), a
[            ] corporation, DO HEREBY CERTIFY that:

1. Attached hereto as Annex A is a true and complete copy of the [            ]
[Insert appropriate organizational document] of the [Originator/Servicer/Seller]
as in effect on the date hereof.

2. Attached hereto as Annex B is a true and complete copy of the [By-laws]
[Insert appropriate organizational document] of the [Originator/Servicer/Seller]
as in effect on the date hereof.

3. Attached hereto as Annex C is a true and complete copy of the resolutions
duly adopted by the Board of Directors of the [Originator/Servicer/Seller]
[adopted by consent] as of [                ], [20][        ], authorizing the
execution, delivery and performance of each of the documents mentioned therein,
which resolutions have not been revoked, modified, amended or rescinded and are
still in full force and effect.

4. The below-named persons have been duly qualified as and at all times since
[            ], [20][        ], to and including the date hereof have been
officers or representatives of the [Originator/Servicer/Seller] holding the
respective offices or positions below set opposite their names and are
authorized to execute on behalf of the [Originator/Servicer/Seller] the
below-mentioned [First Tier Agreement/Second Tier Agreement], the Amended and
Restated Transfer and Administration Agreement dated as of January 18, 2013
among the United Stationers Receivables, LLC, an Illinois limited liability
company (the “SPV”), United Stationers Supply Co., an Illinois corporation (the
“Originator”), United Stationers Financial Services LLC, an Illinois limited
liability company (the “Seller”) and as Servicer, PNC Bank, National
Association, a national banking association (“PNC Bank”), as Agent, as a Class
Agent and as an Alternate Investor, and the financial institutions from time to
time parties thereto as Conduit Investors and Alternate Investors and certain
financial institutions named therein (the “Agreement”) and all other Transaction
Documents to which the [Originator/Servicer/Seller] is a party and the
signatures below set opposite their names are their genuine signatures:

 

Exhibit G - 1

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

Name    Signature    Office

 

  

 

  

 

 

  

 

  

 

 

  

 

  

 

WITNESS my hand and seal of the [Originator/Servicer/Seller] as of the date
first above written.

 

   Secretary

I, the undersigned, [Title] of the [Originator/Servicer/Seller], DO HEREBY
CERTIFY that [            ] is the duly elected and qualified Secretary of the
[Originator/Servicer/Seller] and the signature above is his/her genuine
signature.

WITNESS my hand as of the date first above written.

 

   [Title]

 

Exhibit G - 2

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

Exhibit H

Form of Opinion of Counsel for the SPV, Originator, Seller and Servicer

[                         ], 20[        ]

PNC Bank, National Association

One PNC Plaza

225 Fifth Avenue

Pittsburgh, Pennsylvania 15222

Ladies and Gentlemen:

This opinion is furnished to you pursuant to Section 5.1(n) of the Amended and
Restated Transfer and Administration Agreement dated as of January 18, 2013 (the
“Agreement”) United Stationers Receivables, LLC, an Illinois limited liability
company (the “SPV”), United Stationers Supply Co., an Illinois corporation (the
“Originator”), United Stationers Financial Services LLC, an Illinois limited
liability company (the “Seller”) and as Servicer, PNC Bank, National
Association, a national banking association (“PNC Bank”), as Agent, as a Class
Agent and as an Alternate Investor, and the financial institutions from time to
time parties thereto as Conduit Investors and Alternate Investors and certain
financial institutions from time to time parties hereto as Alternate Investors.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given such terms in the Agreement.

We have acted as counsel to the Originator, the Seller and the SPV in connection
with the preparation of the Agreement, the First Tier Agreement, the Second Tier
Agreement, the other Transaction Documents and the transactions contemplated
thereby.

We have examined, on the date hereof, the Agreement and all exhibits thereto,
the First Tier Agreement, the Second Tier Agreement and all exhibits thereto,
certificates of public officials and of officers of the SPV, the Seller and the
Originator and certified copies of the Originator’s, the Seller’s and the SPV’s
[Modify the following for appropriate type of entity] [certificate of
incorporation, by-laws, the Board of Directors’ resolutions] authorizing the
Originator’s, the Seller’s and the SPV’s participation in the transactions
contemplated by the Agreement, the First Tier Agreement, the Second Tier
Agreement, the other Transaction Documents, copies of each of the above having
been delivered to you, copies of the financing statements on Form UCC-1 filed in
the filing offices listed in Schedule I hereto executed by the Originator, as
debtor, in favor of the SPV, as secured party and showing the Agent, on behalf
of the Conduit Investors and the Alternate Investors, as the assignee of the
secured party, substantially in the form attached hereto as Exhibit A (the
“Originator Financing Statements”) and the Seller, as debtor, in favor of the
SPV, as secured party and showing the Agent, on behalf of the Conduit Investors
and the Alternate Investors, as the assignee of the secured party, substantially
in the form attached hereto as Exhibit B (the “Seller Financing Statements”) and
copies of the financing statements on Form UCC-1 filed in the filing offices
listed in Schedule II hereto executed by SPV, as debtor, in favor of the Agent,
on behalf of the Conduit Investor and

 

Exhibit H - 1

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

the Alternate Investors, as secured party, substantially in the form attached
hereto as Exhibit C [Should track the granting clause of the Agreement or if the
SPV will only be used for a single transaction a blanket lien may be given by
the SPV to the Agent covering: all accounts, chattel paper, instruments, general
intangibles, inventory, investment property and other property of the SPV,
whether now or hereafter owned or existing, and all proceeds of the foregoing]
(the “SPV Financing Statements”). We have also examined the closing documents
delivered pursuant to the Agreement, the First Tier Agreement, the Second Tier
Agreement and copies of all such documents and records, and have made such
investigations of law, as we have deemed necessary and relevant as a basis for
our opinion. With respect to the accuracy of material factual matters which were
not independently established, we have relied on certificates and statements of
officers of the Originator, the Seller and the SPV.

On the basis of the foregoing, we are of the opinion that:

1. The SPV is a corporation duly [incorporated], validly existing and in good
standing under the laws of [            ], has the [corporate] power and
authority to own its properties and to carry on its business as now being
conducted, and had at all relevant times, and now has, all necessary power,
authority, and legal right to acquire and own the Receivables and other Affected
Assets, and is duly qualified and in good standing as a foreign [corporation]
and is authorized to do business in each jurisdiction in which the character of
its properties or the nature of its business requires such qualification or
authorization.

2. The Originator is a [corporation] duly incorporated, validly existing and in
good standing under the laws of [            ], has the [corporate] power and
authority to own its properties and to carry on its business as now being
conducted, and had at all relevant times, and now has, all necessary power,
authority, and legal right to acquire and own the Receivables and other Affected
Assets, and is duly qualified and in good standing as a foreign [corporation]
and is authorized to do business in each jurisdiction in which the character of
its properties or the nature of its business requires such qualification or
authorization.

3. The Seller is a [corporation] duly incorporated, validly existing and in good
standing under the laws of [            ], has the [corporate] power and
authority to own its properties and to carry on its business as now being
conducted, and had at all relevant times, and now has, all necessary power,
authority, and legal right to acquire and own the Receivables and other Affected
Assets, and is duly qualified and in good standing as a foreign [corporation]
and is authorized to do business in each jurisdiction in which the character of
its properties or the nature of its business requires such qualification or
authorization.

4. The SPV has the power, [corporate] and other, and has taken all necessary
[corporate] action to execute, deliver and perform the Agreement and the other
Transaction Documents to which it is a party, each in accordance with its
respective terms, and to consummate the transactions contemplated thereby. The
Transaction Documents to which the SPV is a party have been duly executed and
delivered by the SPV and constitute the legal, valid and binding obligations of
the SPV enforceable against the SPV in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors’ rights generally and by general
equitable principles.

 

Exhibit H - 2

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

5. The Originator has the power, [corporate] and other, and has taken all
necessary corporate action to execute, deliver and perform the First Tier
Agreement and the other Transaction Documents to which it is a party, each in
accordance with its respective terms, and to consummate the transactions
contemplated thereby. The Transaction Documents to which the Originator is a
party have been duly executed and delivered by the Originator and constitute the
legal, valid and binding obligations of the Originator enforceable against the
Originator in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles.

6. The Seller has the power, [corporate] and other, and has taken all necessary
corporate action to execute, deliver and perform the Second Tier Agreement and
the other Transaction Documents to which it is a party, each in accordance with
its respective terms, and to consummate the transactions contemplated thereby.
The Transaction Documents to which the Seller is a party have been duly executed
and delivered by the Seller and constitute the legal, valid and binding
obligations of the Seller enforceable against the Seller in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles.

7. The execution, delivery and performance in accordance with their terms by the
SPV of the Agreement and the other Transaction Documents and the consummation of
the transactions contemplated thereby, do not and will not (i) require (a) any
governmental approval or (b) any consent or approval of any stockholder of the
SPV that has not been obtained, (ii) violate or conflict with, result in a
breach of, or constitute a default under (a) the [certificate of incorporation
or the by-laws] of the SPV, (b) any other agreement to which the SPV is a party
or by which the SPV or any of its properties may be bound, or (c) any Law
applicable to the SPV of any court or of any Official Body having jurisdiction
over the SPV or any of its properties, or (iii) result in or require the
creation or imposition of any Adverse Claim upon any of the assets, property or
revenue of the SPV other than as contemplated by the Agreement.

8. The execution, delivery and performance in accordance with their terms by the
Originator of the First Tier Agreement and the other Transaction Documents and
the consummation of the transactions contemplated thereby, do not and will not
(i) require (a) any governmental approval or (b) any consent or approval of any
stockholder of the Originator that has not been obtained, (ii) violate or
conflict with, result in a breach of, or constitute a default under (a) the
certificate of incorporation or the by-laws of the Originator, (b) any other
agreement to which the Originator is a party or by which the Originator or any
of its properties may be bound, or (c) any Law applicable to the Originator of
any Official Body having jurisdiction over the Originator or any of its
properties, or (iii) result in or require the creation or imposition of any
Adverse Claim upon any of the assets, property or revenue of the Originator
other than as contemplated by the First Tier Agreement.

9. The execution, delivery and performance in accordance with their terms by the
Seller of the Second Tier Agreement and the other Transaction Documents and the
consummation of the transactions contemplated thereby, do not and will not
(i) require (a) any governmental approval or (b) any consent or approval of any
stockholder of the Originator that has not been obtained, (ii) violate or
conflict with, result in a breach of, or constitute a default

 

Exhibit H - 3

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

under (a) the certificate of incorporation or the by-laws of the Seller, (b) any
other agreement to which the Seller is a party or by which the Seller or any of
its properties may be bound, or (c) any Law applicable to the Seller of any
Official Body having jurisdiction over the Seller or any of its properties, or
(iii) result in or require the creation or imposition of any Adverse Claim upon
any of the assets, property or revenue of the Seller other than as contemplated
by the Second Tier Agreement.

10. Except as set forth in the schedules attached hereto, there are not, in any
court or before any arbitrator of any kind or before or by any governmental or
non-governmental body, any actions, suits, proceedings, litigation or
investigations, pending or to the best of our knowledge, after due inquiry,
threatened, (i) against the SPV or the business or any property of the SPV
except actions, suits or proceedings that, if adversely determined, would not,
singly or in the aggregate, have a Material Adverse Effect or (ii) relating to
the Agreement or any other Transaction Document.

11. Except as set forth in the schedules attached hereto, there are not, in any
court or before any arbitrator of any kind or before or by any governmental or
non-governmental body, any actions, suits, proceedings, litigation or
investigations, pending or to the best of our knowledge, after due inquiry,
threatened, (i) against the Originator or the business or any property of the
Originator except actions, suits or proceedings that, if adversely determined,
would not, singly or in the aggregate, have a Material Adverse Effect or
(ii) relating to the First Tier Agreement or any other Transaction Document.

12. Except as set forth in the schedules attached hereto, there are not, in any
court or before any arbitrator of any kind or before or by any governmental or
non-governmental body, any actions, suits, proceedings, litigation or
investigations, pending or to the best of our knowledge, after due inquiry,
threatened, (i) against the Seller or the business or any property of the Seller
except actions, suits or proceedings that, if adversely determined, would not,
singly or in the aggregate, have a Material Adverse Effect or (ii) relating to
the Second Tier Agreement or any other Transaction Document.

13. The Receivables constitute [accounts] [general intangibles][chattel paper]
[instruments] [certificated securities] [uncertificated securities] [investment
property] as [that] [such] term[s] [is] [are] defined in the Uniform Commercial
Code as in effect in [Insert the state whose law governs] [XYZ].

14. The First Tier Agreement creates a valid and enforceable security interest
(as that term is defined in Section 1-201(37) of the Uniform Commercial Code
(including the conflict of laws rules thereof) (the “UCC”) as in effect in New
York (the “New York UCC”) and [            ] (the “[XYZ] UCC”), under Article 9
of the New York UCC (“First Tier Security Interest”) in favor of the SPV in the
Receivables and other Affected Assets and the proceeds thereof (except that the
First Tier Security Interest will attach to any Receivable created after the
date hereof only when the Originator possesses rights in such Receivable). The
internal laws of [XYZ] govern the perfection by the filing of financing
statements of the First Tier Security Interest in the Receivables and the
proceeds thereof. The Originator Financing Statement(s) have been filed in the
filing office(s) located in [XYZ] listed in Schedule I hereto, which [is] [are]
the only office(s) in which filings are required under the [XYZ] UCC to perfect
the First Tier Security

 

Exhibit H - 4

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

Interest in the Receivables and the proceeds thereof, and accordingly the First
Tier Security Interest in each Receivable and the proceeds thereof will, on the
date of the initial transfer under the First Tier Agreement, be perfected under
Article 9 of the [XYZ] UCC. All filing fees and all taxes required to be paid as
a condition to or upon the filing of the Originator Financing Statement(s) in
[XYZ] have been paid in full. As of the date hereof, there were no (i) UCC
financing statements naming the Originator as debtor, Originator or assignor and
covering any Receivables or other Affected Assets or any interest therein or
(ii) notices of the filing of any federal tax lien (filed pursuant to
Section 6323 of the Internal Revenue Code) or lien of the Pension Benefit
Guaranty Corporation (filed pursuant to Section 4068 of the Employment
Retirement Income Security Act) covering any Receivable or other Affected Asset
or any interest therein. The filing of the Originator Financing Statement(s) in
the filing offices listed in Schedule I will create a first priority security
interest in each Receivable. Such perfection and priority will continue,
provided that appropriate continuation statements are timely filed where and
when required under the UCC.

15. The Second Tier Agreement creates a valid and enforceable security interest
(as that term is defined in Section 1-201(37) of the Uniform Commercial Code
(including the conflict of laws rules thereof) (the “UCC”) as in effect in New
York (the “New York UCC”) and [            ] (the “[XYZ] UCC”), under Article 9
of the New York UCC (“Second Tier Security Interest”) in favor of the SPV in the
Receivables and other Affected Assets and the proceeds thereof (except that the
Second Tier Security Interest will attach to any Receivable created after the
date hereof only when the Seller possesses rights in such Receivable). The
internal laws of [XYZ] govern the perfection by the filing of financing
statements of the Second Tier Security Interest in the Receivables and the
proceeds thereof. The Seller Financing Statement(s) have been filed in the
filing office(s) located in [XYZ] listed in Schedule I hereto, which [is] [are]
the only office(s) in which filings are required under the [XYZ] UCC to perfect
the Second Tier Security Interest in the Receivables and the proceeds thereof,
and accordingly the Second Tier Security Interest in each Receivable and the
proceeds thereof will, on the date of the initial transfer under the Second Tier
Agreement, be perfected under Article 9 of the [XYZ] UCC. All filing fees and
all taxes required to be paid as a condition to or upon the filing of the Seller
and/or Seller Financing Statement(s) in [XYZ] have been paid in full. As of the
date hereof, there were no (i) UCC financing statements naming the Seller as
debtor, Seller or assignor and covering any Receivables or other Affected Assets
or any interest therein or (ii) notices of the filing of any federal tax lien
(filed pursuant to Section 6323 of the Internal Revenue Code) or lien of the
Pension Benefit Guaranty Corporation (filed pursuant to Section 4068 of the
Employment Retirement Income Security Act) covering any Receivable or other
Affected Asset or any interest therein. The filing of the Seller Financing
Statement(s) in the filing offices listed in Schedule I will create a first
priority security interest in each Receivable. Such perfection and priority will
continue, provided that appropriate continuation statements are timely filed
where and when required under the UCC.

16. The Agreement creates a valid and enforceable security interest (as that
term is defined in Section 1-201(37) of the New York UCC and [            ] the
[Note that the states in this paragraph 11 may be different that the stated in
paragraph 10] ( the “[ABC] UCC”), under Article 9 of the New York UCC (“Third
Tier Security Interest”) in favor of the Agent in each Receivable and other
Affected Assets (except that the Third Tier Security Interest will attach only
when the SPV possesses rights in such Receivable). The internal laws of [ABC]
govern the

 

Exhibit H - 5

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perfection by the filing of financing statements of the Third Tier Security
Interest in the Receivables and the proceeds thereof. The SPV Financing
Statement(s) have been filed in the filing office(s) located in [ABC] listed in
Schedule II hereto, which [is] [are] the only office(s) in which filings are
required under the [ABC] UCC to perfect the Third Tier Security Interest in the
Receivables and the proceeds thereof, and accordingly the Third Tier Security
Interest in each Receivable and the proceeds thereof will, on the date of the
initial transfer under the Agreement, be perfected under Article 9 of the [ABC]
UCC. All filing fees and all taxes required to be paid as a condition to or upon
the filing of the SPV Financing Statement(s) in [ABC] have been paid in full. As
of the date hereof, there were no (i) UCC financing statements naming SPV as
debtor, Originator or assignor and covering any Receivables or other Affected
Assets or any interest therein or (ii) notices of the filing of any federal tax
lien (filed pursuant to Section 6323 of the Internal Revenue Code) or lien of
the Pension Benefit Guaranty Corporation (filed pursuant to Section 4068 of the
Employment Retirement Income Security Act) covering any Receivable or other
Affected Assets or any interest therein. The filing of the SPV Financing
Statement(s) in the filing offices listed in Schedule II will create a first
priority security interest in each Receivable. Such perfection and priority will
continue, provided that appropriate continuation statements are timely filed
where and when required under the UCC. [If the Receivables constitute
instruments, certificated securities or uncertificated securities, this
paragraph should be redrafted to reflect different perfection requirements]

17. Neither the SPV, the Seller nor the Originator is, nor is controlled by, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

In giving the opinions in paragraphs 14, 15 and 16, we have assumed that the
Originator’s, the Seller’s and the SPV’s chief executive office will continue to
be located in [XYZ][ABC][, as applicable]. The conclusions expressed in
paragraphs 14, 15 and 16 are subject to the accuracy of the personnel in the
filing offices referred to above with regard to the filing, indexing and
recording of financing statements and notices of Adverse Claim, and to the
correctness of reports to us by [Insert name of search company.] [            ],
who performed the searches of such records and who made the filings on behalf of
the Originator, the Seller and the SPV in [XYZ][ABC][, as applicable].

In giving the opinions set forth in paragraphs 14, 15 and 16, we have assumed
that all filings as appropriate in the event of a change in the name, identity
or corporate structure of the debtor (or the Originator or assignor) named in
any financing statements and all continuation statements necessary under the UCC
to maintain the perfection of the First Tier Security Interest and the Second
Tier Security Interest in the Receivables and the proceeds thereof will be duly
and timely filed. In giving such opinions, we also do not express any opinion as
to (a) transactions excluded from Article 9 of the UCC by virtue of
Section 9-104 of the UCC, (b) any security interest in proceeds except to the
extent that the validity and perfection of any interest in proceeds (as such
term is defined under the UCC) thereof that is covered by the Originator
Financing Statements, the Seller Financing Statements or the SPV Financing
Statements or any duly filed financing statement referred to above may be
permitted by Section 9-306 of the UCC, and (c) any security interest that is
terminated or released.

 

Exhibit H - 6

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

The foregoing opinions and conclusions were given only in respect of the laws of
[XYZ] [, ABC], the State of New York and, to the extent specifically referred to
herein, the Federal laws of the United States of America.

This opinion has been delivered at your request for the purposes contemplated by
the Agreement. Without our prior written consent, this opinion is not to be
utilized or quoted for any other purpose and no one other than you is entitled
to rely thereon; provided, that any Alternate Investor, any Program Support
Provider [and any placement agent or dealer of any Conduit Investor’s commercial
paper] may rely on this opinion as of it were addressed to them.

Very truly yours,

 

Exhibit H - 7

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Exhibit I

Scope of Agreed Upon Procedures

 

Exhibit I - 1

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Exhibit J

Form of Compliance Certificate

To: PNC Bank, National Association, as Agent

This Compliance Certificate (the “Certificate”) is furnished pursuant to
Section 6.1(a)(iii) of that certain Amended and Restated Transfer and
Administration Agreement dated as of January 18, 2013 as it may be amended or
otherwise modified from time to time (as so amended or modified, the
“Agreement”) by and among United Stationers Receivables, LLC, an Illinois
limited liability company (the “SPV”), United Stationers Supply Co., an Illinois
corporation, United Stationers Financial Services LLC, an Illinois limited
liability company (the “Servicer”), PNC Bank, National Association, a national
banking association, as Agent and as an Alternate Investor. Capitalized terms
used and not otherwise defined herein are used with the meanings attributed
thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am the duly elected [Treasurer or CFO] of the Performance Guarantor and
[Treasurer or President] of the SPV.

2. I have reviewed the terms of the Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the transactions and
conditions of the SPV, the Seller, the Servicer and the Performance Guarantor
during the accounting period covered by the attached financial statements.

3. The examinations described in Paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Termination Event or Potential Termination Event 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 data and computations
evidencing the compliance with certain covenants of the Agreement, including the
financial covenants in Section 6.3 of the Agreement, all of which data and
computations are true, complete and correct and have been prepared in accordance
with GAAP.

5. Described below are the exceptions, if any, to Paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the SPV or the Performance Guarantor has taken, is
taking, or proposes to take with respect to each such condition or event:

 

Exhibit J - 1

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

6. As of the date hereof, the jurisdiction of organization of the SPV is the
State of Illinois, the place where the SPV is “located” for the purposes of
Section 9-307 of the UCC is the State of Illinois, and the SPV has not changed
its jurisdiction of organization or its “location’ for the purposes of
Section 9-307 of the UCC since the date of the original Agreement.

The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements as of [            ] delivered
with the Certificate in support hereof, are made and delivered this [    ] day
of [            ], 201[    ].

 

UNITED STATIONERS, INC.

By:

 

 

Name:

 

Title:

 

UNITED STATIONERS RECEIVABLES, LLC

By:

 

 

Name:

 

Title:

 

 

Exhibit J - 2

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SCHEDULE I TO COMPLIANCE CERTIFICATE2

Schedule of Compliance as of            ,             with Section 6.3 of the
Agreement.

A. LEVERAGE RATIO Section 6.3(a) (calculated as of [last day of most recently
ended fiscal quarter]

 

     (1 )    Consolidated Funded Indebtedness            (a)   Consolidated
Indebtedness for borrowed money       $                              (b)  
Undrawn amount of all standby Letters of Credit3    +    $                     
        (c)   Principal component of all Capitalized Lease Obligations    +    $
                             (d)   Off-Balance Sheet Liabilities    +    $
                             (e)   Disqualified Stock    +    $
                             (f)   Sum of (a) through (e), inclusive       $
                             (2 )    Consolidated EBITDA            (a)  
Consolidated Net Income       $                              (b)   Consolidated
Interest Expense    +    $                              (c)   Taxes    +    $
                             (d)   Depreciation    +    $                     
        (e)   Amortization    +    $                              (f)   Losses
attributable to equity in Affiliates    +    $                              (g)
  Non-cash charges related to employee compensation    +    $
                       

 

2  Capitalized terms used on this Schedule I to Compliance Certificate shall
have the meanings given such terms in the Revolving Credit Agreement.

3  Exclude (i) up to $10,000,000 of Letters of Credit supporting worker’s
compensation obligations and (ii) all Letters of Credit supporting indebtedness
identified in clauses (a) through (e), inclusive, of this Section A.(1).

 

Exhibit J - 3

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

     (h)   Extraordinary non-cash or nonrecurring non-cash charges or losses   
+    $                              (i)   Extraordinary non-cash or nonrecurring
non-cash gains    –    $                              (j)   Consolidated EBITDA
   =    $                              (3 )    Leverage Ratio (Ratio of (1) to
(2))                  to 1.00         (4 )    State whether the Leverage Ratio
exceeded 3.504 to 1.00         Yes/No   

B. CONSOLIDATED NET WORTH Section 6.3(b)

State whether, on any day during the most recently ended fiscal quarter, the
Originator’s or the Performance Guarantor’s Consolidated Net Worth was less than
(i) $600,000,000, minus (ii) write-downs of goodwill and intangibles and
non-cash pension adjustments and, to the extent permitted under the Agreement,
dividends or repurchases or redemptions of its capital stock, all to the extent
deducted from Consolidated Net Worth on or after July 1, 2011 plus (iii) fifty
percent (50%) of the sum of Consolidated Net Income (if positive) calculated
separately for each fiscal quarter commencing with the fiscal quarter ending on
June 30, 2011 plus (iv) 50% of net cash proceeds resulting from issuances of
USI’s or any Subsidiary’s capital stock at any time from and after the
Restatement Effective Date.

 

  (1)    Originator:    Yes/No   (2)    Performance Guarantor:    Yes/No

 

 

4  The Leverage Ratio may be increased to 3.75 after a Permitted Acquisition
occurs for the first three (3) fiscal quarters (inclusive of the fiscal quarter
in which a Permitted Acquisition occurs) ending immediately after such Permitted
Acquisition, subject to the proviso set forth in Section 6.20 of the Credit
Agreement.

 

Exhibit J - 4

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Exhibit K

Form of Interim Report

 

United Stationers Supply Co.

        Weekly Settlement Report   

Trade Receivable Securitization

     

Monthly Information Package

     

Cut-off Date:

  

                      

  

Aggregate Net Investment:

  

                      

  

Facility Limit:

  

                      

  

Borrowing Base:

  

                      

  

 

I.    Settlement      

Period

     

Activity

     

Beginning

     

Pool

     

Balance

     

Collections

     

Credit Sales

     

Receivables Plug Amount

     

Ending Balance of Receivables

   II.    Calculation of Net       Pool Balance      

Total Receivables

     

Less Ineligibles:

     

Totel Eligible Receivables

     

Total Eligible Receivables

     

Less Excess Concentrations

     

Less Other Excess Concentrations

     

Total Net Pool Balance (“NPB”)

   III.    Calculation of Reserves (From the Prior Month’s      

Calculation) Servicing Fee Reserve

     

Plus

     

Yield Reserve

     

Plus the greater of (A) or (B)

     

Dilution Reserve Ratio

     

Loss Reserve Ratio

     

(A) Dynamic Reserve

     

Concentration Reserve

     

Minimum Dilution Reserve

     

(B) Minimum Reserve Ratio

     

Greater of (A) or (B)

     

Required Reserves

   IV.    Calculation of Purchased Interest      

Calculation of Purchased Interest

     

Aggregate Net Investment (NI)

     

Required Reserves (RR)

     

Net Pool Balance (NPB)

     

NI/(NRB-RR)

   V.    Signature      

The undersigned hereby represents and warrants that the foregoing and
attachments represent a true and accurate accounting with respect to
outstandings as of the Cut-Off Date show above and is in accordance with the
Transfer and Administration Agreement dated as of March 3, 2009, and that all
representations and warranties are restated and reaffirmed.

     

United Stationers Supply Co.

     

Signature:                                                                    
                   

   Date:                   

Printed Name:                                        
                                        

     

Title:                                                                    
                             

  

 

The “Information Package” is due not later than two Business Days prior to the
Monthly Settlement Date. The “Monthly Settlement Date” means the 25th calendar
day of each calendar month or if such day is not a Business Day the next
succeeding Business Day

 

Exhibit K - 1