Exhibit 10.7


 


EXECUTION COPY


 


RECEIVABLES FUNDING AND ADMINISTRATION AGREEMENT


 


Dated as of November 25, 2005


 


by and among


 


VERTIS RECEIVABLES II, LLC,


 


as Borrower,


 


THE FINANCIAL INSTITUTIONS SIGNATORY HERETO FROM TIME TO TIME,


 


as Lenders,


 


and


 


GENERAL ELECTRIC CAPITAL CORPORATION,


 


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


 


Receivables Funding and Administration Agreement


 





















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I.
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.01. Definitions

  	
  1

  
	
   

  	
  Section 1.02. Rules of Construction

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. AMOUNTS AND TERMS OF ADVANCES

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.01. Advances

  	
  2

  
	
   

  	
  Section 2.02. Optional Changes in Aggregate Commitment

  	
  4

  
	
   

  	
  Section 2.03. Procedures for Making Advances

  	
  5

  
	
   

  	
  Section 2.04. Pledge and Release of Transferred Receivables

  	
  8

  
	
   

  	
  Section 2.05. Commitment Termination Date

  	
  8

  
	
   

  	
  Section 2.06. Interest; Charges

  	
  8

  
	
   

  	
  Section 2.07. Fees

  	
  9

  
	
   

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

  	
  9

  
	
   

  	
  Section 2.09. Capital Requirements; Additional Costs

  	
  14

  
	
   

  	
  Section 2.10. Breakage Costs

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. CONDITIONS PRECEDENT

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.01. Conditions to Effectiveness of Agreement

  	
  15

  
	
   

  	
  Section 3.02. Conditions Precedent to All Advances

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV. REPRESENTATIONS AND WARRANTIES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.01. Representations and Warranties of the Borrower

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. GENERAL COVENANTS OF THE BORROWER

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.01. Affirmative Covenants of the Borrower

  	
  26

  
	
   

  	
  Section 5.02. Reporting Requirements of the Borrower

  	
  27

  
	
   

  	
  Section 5.03. Negative Covenants of the Borrower

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI. ACCOUNTS

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.01. Establishment of Accounts

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII. GRANT OF SECURITY INTERESTS

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.01. Borrower’s Grant of Security Interest

  	
  34

  
	
   

  	
  Section 7.02. Borrower’s Agreements

  	
  36

  
	
   

  	
  Section 7.03. Delivery of Collateral

  	
  36

  



 


i





















 


	
   

  	
  Section 7.04. Borrower Remains Liable

  	
  36

  
	
   

  	
  Section 7.05. Covenants of the Borrower Regarding the Borrower
  Collateral

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII. TERMINATION EVENTS

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.01. Termination Events

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX. REMEDIES

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 9.01. Actions Upon Termination Event

  	
  43

  
	
   

  	
  Section 9.02. Exercise of Remedies

  	
  45

  
	
   

  	
  Section 9.03. Power of Attorney

  	
  46

  
	
   

  	
  Section 9.04. Continuing Security Interest

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X. INDEMNIFICATION

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.01. Indemnities by the Borrower

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI. ADMINISTRATIVE AGENT

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.01. Authorization and Action

  	
  48

  
	
   

  	
  Section 11.02. Reliance

  	
  48

  
	
   

  	
  Section 11.03. GE Capital and Affiliates

  	
  49

  
	
   

  	
  Section 11.04. Lender Credit Decision

  	
  49

  
	
   

  	
  Section 11.05. Indemnification

  	
  50

  
	
   

  	
  Section 11.06. Successor Administrative Agent

  	
  50

  
	
   

  	
  Section 11.07. Setoff and Sharing of Payments

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII. MISCELLANEOUS

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 12.01. Notices

  	
  51

  
	
   

  	
  Section 12.02. Binding Effect; Assignability

  	
  52

  
	
   

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

  	
  55

  
	
   

  	
  Section 12.04. Costs, Expenses and Taxes

  	
  55

  
	
   

  	
  Section 12.05. Confidentiality

  	
  57

  
	
   

  	
  Section 12.06. Complete Agreement; Modification of Agreement

  	
  58

  
	
   

  	
  Section 12.07. Amendments and Waivers

  	
  58

  
	
   

  	
  Section 12.08. No Waiver; Remedies

  	
  60

  
	
   

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

  	
  60

  
	
   

  	
  Section 12.10. Counterparts

  	
  62

  
	
   

  	
  Section 12.11. Severability

  	
  62

  
	
   

  	
  Section 12.12. Section Titles

  	
  62

  
	
   

  	
  Section 12.13. Further Assurances

  	
  62

  
	
   

  	
  Section 12.14. No Proceedings

  	
  63

  
	
   

  	
  Section 12.15. Limitation on Payments

  	
  63

  



 


ii





















 


	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
  Exhibit 2.01(a)(ii)

  	
   

  	
  Form of Revolving Note

  	
   

  
	
  Exhibit 2.01(b)(ii)

  	
   

  	
  Form of Swing Line Note

  	
   

  
	
  Exhibit 2.02(a)

  	
   

  	
  Form of Commitment Reduction Notice

  	
   

  
	
  Exhibit 2.02(b)

  	
   

  	
  Form of Commitment Termination Notice

  	
   

  
	
  Exhibit 2.03(a)

  	
   

  	
  Form of Borrowing Request

  	
   

  
	
  Exhibit 2.03(h)

  	
   

  	
  Form of Repayment Notice

  	
   

  
	
  Exhibit 5.02(b)

  	
   

  	
  Form of Borrowing Base Certificate

  	
   

  
	
  Exhibit 9.03

  	
   

  	
  Form of Power of Attorney

  	
   

  
	
  Exhibit 12.02(b)

  	
   

  	
  Form of Assignment Agreement

  	
   

  
	
  Exhibit A

  	
   

  	
  Credit and Collection Policy

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.01(b)

  	
   

  	
  Jurisdiction of organization/organizational
  number; Executive Offices; Collateral Locations; Corporate or Other Names

  	
   

  
	
  Schedule 4.01(i)

  	
   

  	
  Taxes

  	
   

  
	
  Schedule 4.01(q)

  	
   

  	
  Deposit and Disbursement Accounts

  	
   

  
	
  Schedule 4.01(v)

  	
   

  	
  Supplementary Representations

  	
   

  
	
  Schedule 5.01(b)

  	
   

  	
  Trade Names/Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annex 5.02(a)

  	
   

  	
  Reporting Requirements of the Borrower
  (including Form of Monthly Report)

  	
   

  
	
  Annex W

  	
   

  	
  Administrative Agent’s Account/Lenders’
  Accounts

  	
   

  
	
  Annex X

  	
   

  	
  Definitions and Interpretations

  	
   

  
	
  Annex Y

  	
   

  	
  Schedule of Documents

  	
   

  
	
  Annex Z

  	
   

  	
  Special Concentration Percentages

  	
   

  



 


iii





















 


THIS RECEIVABLES FUNDING AND ADMINISTRATION AGREEMENT (as amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Agreement”) is entered into as of November 25,
2005 by and among VERTIS RECEIVABLES II, LLC, a Delaware limited liability
company (the “Borrower”), the financial
institutions signatory hereto from time to time as lenders (the “Lenders”), and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation, as a Lender, as swing line lender (in such
capacity, the “Swing Line Lender”) and as administrative agent for the
Lenders hereunder (in such capacity, the “Administrative
Agent”).


 


RECITALS


 


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


 


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


 


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


 


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


 


AGREEMENT


 


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


 


ARTICLE I.


 


DEFINITIONS AND INTERPRETATION


 


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


 


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


 





















 


ARTICLE II.


 


AMOUNTS AND TERMS OF ADVANCES


 


Section 2.01.  Advances.


 


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


 


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


 


(b)           Swing Line Advances.  (i) From and after the Effective Date
and until the Commitment Termination Date and subject to the terms and
conditions hereof, the Swing Line Lender agrees to make advances (each such
advance hereunder, a “Swing Line Advance”)
to the Borrower from time to time.  The
aggregate amount of the Swing Line Loan shall not at any time exceed the Swing
Line Commitment.  Under no circumstances
shall the Swing Line Lender make a Swing Line Advance if, after giving effect
thereto, the aggregate amount of the Swing Line Loan would exceed the Swing
Line Commitment.  The Swing Line Lender
shall not make any Swing Line Advance, if after giving effect thereto, a
Funding Excess would exist. The Borrower may from time to time borrow, repay
and reborrow Swing Line Advances hereunder on the terms and conditions set
forth herein.  Unless the Swing Line
Lender has received at least one Business Day’s prior written notice from the
Lenders instructing it not to make a Swing Line Advance, the Swing Line Lender
shall, notwithstanding the failure of any condition precedent set forth in Section 3.01 or 3.02,
be entitled to fund such Swing Line Advance, and to have the Lenders make
Revolving Credit Advances in accordance with Section 2.01(b)(iii) or
purchase participating interests in accordance with Section 2.01(b)(iv).  Subject to Section 12.15(b), the


 


2





















 


Borrower shall repay the
aggregate outstanding principal amount of the Swing Line Loan in full in
immediately available funds on the Commitment Termination Date.


 


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


 


(iii)          The Swing Line
Lender, at any time and from time to time no less frequently than once per
month, shall on behalf of the Borrower (and the Borrower hereby irrevocably
authorizes the Swing Line Lender to so act on its behalf) request each Lender
(excluding the Swing Line Lender) to make a Revolving Credit Advance to the
Borrower in an amount equal to such Lender’s Pro Rata Share of the principal
amount of the Swing Line Loan (the “Refunded Swing
Line Loan”) outstanding on the date such notice is given.  Unless the Commitment Termination Date  has occurred (in which event the procedures
of subsection (iv) below
shall apply) and regardless of whether the conditions precedent set forth in Sections 3.01 and 3.02
to the making of a Revolving Credit Advance are then satisfied, each Lender
shall disburse directly to the Administrative Agent, its Pro Rata Share of a
Revolving Credit Advance on behalf of the Swing Line Lender, prior to 3:00 p.m.
(New York time), in immediately available funds on the Business Day next
succeeding the date on which such notice is given; provided
that (i) no Lender shall be required to make such a Revolving Credit
Advance if the Swing Line Advance to be financed was made in violation of the
fourth sentence of Section 2.01(b)(i) and
the Funding Excess resulting therefrom has not yet been cured, (ii) no
Lender shall be required to make such a Revolving Credit Advance if, after
giving effect to such Revolving Credit Advance, the Outstanding Principal
Amount of the Revolving Credit Advances made by such Lender would exceed such
Lender’s several Commitment and (iii) no Lender shall be required to make
such a Revolving Credit Advance after the Final Advance Date.  The proceeds of such Revolving Credit
Advances shall be immediately paid to the Swing Line Lender and applied to
repay the Refunded Swing Line Loan.


 


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


 


3





















 


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


 


Section 2.02.  Optional Changes in Aggregate Commitment.


 


(a)           So long as no
Incipient Termination Event or Termination Event shall have occurred and be continuing,
the Borrower may reduce the Aggregate Commitment permanently; provided, that (i) the Borrower shall give
ten Business Days’ prior written notice of any such reduction to the
Administrative Agent substantially in the form of Exhibit 2.02(a) (each
such notice, a “Commitment Reduction Notice”),
(ii) any partial reduction of the Aggregate Commitment shall be in a
minimum amount of $5,000,000 or an integral multiple thereof and (iii) no
such partial reduction shall reduce the Aggregate Commitment below the greater
of (x) the Outstanding Principal Amount at such time and (y) $100,000,000.  Any such reduction in the Aggregate
Commitment shall result in (i) a reduction in each Lender’s Commitment in
an amount equal to such Lender’s Pro Rata Share of the amount by which the
Aggregate Commitment is being reduced and (ii) a proportional reduction in
the Swing Line Commitment; provided, however, that no such partial reduction shall
reduce the Swing Line Commitment below the aggregate amount of the Swing Line
Loan.


 


(b)           The Borrower may, at
any time, on at least 30 days’ prior written notice by the Borrower to the
Administrative Agent, irrevocably terminate the Aggregate Commitment; provided, that (i) such notice of
termination shall be substantially in the form of Exhibit 2.02(b)
(the “Commitment Termination Notice”) and (ii) the
Borrower shall reduce the aggregate outstanding amount of Advances to zero on
the date specified in such notice, and make all payments required by Section 2.03(h) at the
time and in the manner specified therein. 
Upon such termination, the Borrower’s right to request that any Lender
make any Advances hereunder shall simultaneously terminate and the Commitment
Termination Date shall automatically occur.


 


(c)           Each written notice
required to be delivered pursuant to Sections 2.02(a) and
(b) shall be
irrevocable and shall be effective (i) on the day of receipt if received
by the Administrative Agent and the Lenders not later than 2:00 p.m. (New
York time) on any Business Day and (ii) on the immediately succeeding
Business Day if received by the Administrative


 


4





















 


Agent and the Lenders after
such time on such Business Day or if any such notice is received on a day other
than a Business Day (regardless of the time of day such notice is
received).  Each such notice of
termination or reduction shall specify, respectively, the amount of, or the
amount of the proposed reduction in, the Aggregate Commitment.


 


Section 2.03.  Procedures for Making Advances.


 


(a)           Borrowing Requests.  Except as provided in Section 2.06(c),
each Borrowing shall be made upon notice by the Borrower to the Administrative
Agent in the manner provided herein.  Any
such notice must be given in writing so that it is received no later than 12:00
noon (New York time) on the Business Day of the proposed Advance Date set forth
therein. Each Borrowing requested pursuant to a Borrowing Request shall be in
the form of an Swing Line Advance until such Swing Line Advance is refunded or
otherwise refinanced in accordance with Section 2.01(b)(iii) or
(b)(iv). Each such notice (a “Borrowing Request”)
shall (i) be substantially in the form of Exhibit 2.03(a),
(ii) be irrevocable and (iii) specify the amount of the requested
Borrowing (which shall be in a minimum amount of $1,000,000 or an intergral
multiple of $100,000 in excess of $1,000,000) and the proposed Advance Date
(which shall be a Business Day), and shall include such other information as
may be required by the Lenders and the Administrative Agent.  Unless a LIBOR Rate Disruption Event shall
have occurred, each Advance shall be a LIBOR Rate Advance. The Administrative
Agent shall review the Borrowing Base Certificate delivered in connection with
each Borrowing Request to confirm whether a Funding Excess exists or would
arise after giving effect to the Borrowing requested in the related Borrowing
Request.  If, in connection with such
review, the Administrative Agent determines that a Funding Excess exists or
would arise after giving effect to the Borrowing requested in the related
Borrowing Request, the Administrative Agent shall promptly notify each Lender
thereof.


 


(b)           Advances; Payments.


 


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


 


(ii)           On each Interest Payment Date, the
Administrative Agent will advise each Lender (other than the Swing Line Lender)
by telephone or telecopy of the


 


5





















 


amount of such
Lender’s Pro Rata Share of principal, interest and Fees (to the extent payable
to all Lenders) paid for the benefit of Lenders with respect to each applicable
Revolving Credit Advance.  Provided that
such Lender has made all payments required to be made by it and purchased all
participations required to be purchased by it under this Agreement and the
other Related Documents as of such Interest Payment Date, the Administrative
Agent will pay to each Lender such Lender’s Pro Rata Share of principal,
interest and Fees (to the extent payable to all Lenders) with respect to each
applicable Revolving Credit Advance, paid by the Borrower since the previous
Interest Payment Date for the benefit of that Lender.  Such payments shall be made by wire transfer
to such Lender’s account (as specified by such Lender in Annex
W or the applicable Assignment Agreement) not later than 2:00 p.m.
(New York time) on each Interest Payment Date.


 


(iii)          On each Interest Payment Date, the
Administrative Agent will advise the Swing Line Lender of the amount of
principal, interest and Fees paid for the benefit of the Swing Line Lender with
respect to the Swing Line Loan.  The
Administrative Agent will pay to the Swing Line Lender the amount of principal,
interest and Fees paid by the Borrower since the previous Interest Payment Date
for the benefit of the Swing Line Lender. 
Such payments shall be made by wire transfer or by book balance to the
Swing Line Lender’s account (as specified by the Swing Line Lender in Annex W
or the applicable Assignment Agreement) not later than 2:00 p.m. (New York
time) on each Interest Payment Date.


 


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


 


(d)           Return of Payments.  (i)  If the Administrative Agent pays an
amount to a Lender under this Agreement in the belief or expectation that a
related payment has been or will be received by the Administrative Agent from
the Borrower and such related payment is not received by the Administrative
Agent, then the Administrative Agent will be entitled to recover


 


6





















 


such amount from such Lender on
demand without set-off, counterclaim or deduction of any kind.


 


(ii)           If at any time any amount received by
the Administrative Agent under this Agreement must be returned to the Borrower
or paid to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other
Related Document, the Administrative Agent will not be required to distribute
any portion thereof to any Lender.  In
addition, each Lender will repay to the Administrative Agent on demand any
portion of such amount that the Administrative Agent has distributed to such
Lender, together with interest at such rate, if any, as the Administrative
Agent is required to pay to the Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.


 


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


 


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


 


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


 


(h)           Principal Repayments.  Subject to Section 12.15(b), the
Borrower may at any time repay outstanding Advances hereunder; provided that (i) the Borrower shall give
not


 


7





















 


less than one Business Day’s
prior written notice of any such repayment to the Administrative Agent
substantially in the form of Exhibit 2.03(h) (each
such notice, a “Repayment Notice”), (ii) each
such notice shall be irrevocable, (iii) each such notice shall specify the
amount of the requested repayment and the proposed date of such repayment
(which shall be a Business Day),  (iv) any
such repayment shall be applied first to the Swing Line Loan until the
Outstanding Principal Amount thereof has been reduced to zero, and second to
the outstanding Revolving Credit Advances (provided,
that if a Funding Excess exists and any outstanding Swing Line Advances were
made in violation of the fourth sentence of Section 2.01(b)(i) or were
funded after the Commitment Termination Date, then such Swing Line Advance will
be repaid after the Revolving Credit Advances) and (v) any such repayment
must be accompanied by payment of (A) all interest accrued and unpaid on
the portion of the outstanding principal balance of the Advances to be repaid
through but excluding the date of such repayment and (B) the amounts
required to be paid in accordance with Section 2.10,
if any.  Any such notice of repayment
must be received by the Administrative Agent no later than 4:00 p.m. (New
York time) on the Business Day immediately preceding the date of the proposed
repayment; provided, further,
that the foregoing requirements shall not apply to repayment of the outstanding
principal amount of Advances as a result of the application of Collections
pursuant to Section 2.08.


 


Section 2.04.  Pledge and Release of Transferred Receivables.


 


(a)           Pledge. 
The Borrower shall indicate in its Records that the Transferred
Receivables have been pledged hereunder and that the Administrative Agent has a
lien on and security interest in all such Transferred Receivables for the
benefit of the Lenders.  The Borrower
shall, and shall cause the Servicer to, hold all Contracts and other documents
relating to such Transferred Receivables in trust for the benefit of the
Administrative Agent on behalf of the Lenders in accordance with their interests
hereunder.


 


(b)           Repurchases of Transferred Receivables.  If an Originator is required to repurchase
Transferred Receivables from the Borrower pursuant to Section 4.04
of the Sale Agreement, upon payment by such Originator to a Collection Account
of the applicable repurchase price thereof (which repurchase price shall not be
less than an amount equal to the Billed Amount of such Transferred Receivable minus the sum of (A) Collections received in
respect thereof and (B) the amount of any Dilution Factors taken into
account in the calculation of the Sale Price therefor), the Administrative
Agent on behalf of the Lenders shall  be
deemed to have released their liens on and security interests in the
Transferred Receivables being so repurchased without any requirement of further
action by the Agent or any Lender.


 


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


 


Section 2.06.  Interest; Charges.


 


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


 


8





















 


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


 


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


 


(c)           The Administrative
Agent is authorized to, and at its sole election may, charge to the Borrower as
Revolving Credit Advances and cause to be paid all Fees, Rating Agency fees,
expenses, charges, costs, interest and principal, other than principal of the
Advances, owing by the Borrower under this Agreement or any of the other
Related Documents if and to the extent the Borrower fails to pay any such
amounts as and when due, and any charges so made shall constitute part of the
Outstanding Principal Amount hereunder even if such charges would cause the
aggregate balance of the Outstanding Principal Amount to exceed the Borrowing
Base.


 


Section 2.07.  Fees.


 


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


 


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


 


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


 


Section 2.08.  Application of Collections; Time and Method of Payments.  The entirety of this Section 2.08
shall be subject to Section 12.15(b) (including, without
limitation, subsections (a), (b), (c), (d) and
(e)).


 


9





















 


(a)           Each Advance shall
mature, and be payable, on the earlier of (i) the date funds are allocated
to such Advance pursuant to clause (iii) or
(iv) of subsection (c) below (and
in such case only to the extent of the funds so allocated), and (ii) the
Commitment Termination Date (in which case such Advance shall be payable in
full).


 


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


 


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


 


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


 


(iii)          third,
unless an Event of Servicer Termination (other than the type specified in
Section 8.01(i) of the Sale Agreement) has occurred and is continuing, to be
retained in the Agent Account and paid in accordance with clause (iii)
of the following subsection (c), an amount equal to the aggregate
Servicing Fees and accrued and unpaid through such date;


 


(iv)          fourth, to be retained in the
Agent Account and paid in accordance with clause (iv) of the
following subsection (c) or set aside and applied by the
Administrative Agent in accordance with the following subsection (d),
as applicable, an amount equal to all outstanding Advances which are then due
and payable on such Business Bay; it being understood that if and to extent a
Funding Excess is determined to exist on such Business Day, Advances in an
amount equal to such Funding Excess are due and payable in accordance with the
following subsection (d);


 


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


 


(vi)          sixth,
if any of the conditions precedent set forth in Section 3.02 shall
not be satisfied, to be retained in the Agent Account until paid in accordance
with the following subsection (c) or
all such conditions are satisfied;


 


(vii)         seventh, to be retained in the
Agent Account and paid in accordance with the following subsection (c),
an amount equal to the aggregate amount


 


10





















 


of all other
accrued and unpaid Borrower Obligations which are then required to be paid
according to such subsection, including, without limitation, the expenses of
the Lenders reimbursable under Section 12.04;
and


 


(viii)        eighth, unless a Termination
Event or Incipient Termination Event has occurred and is continuing, (A) to
be paid as directed by the applicable Originator to the Borrower and the Agent
in writing, first, an amount equal to the purchase
price for Sold Receivables payable on that date, then to
the extent of remaining amounts available to the payment of the balance due on
the applicable Subordinated Note, and (B) then
any remaining amounts available after such payment shall be paid to the
Borrower Account (if a Termination Event or Incipient Termination Event has
occurred and is continuing, all such amounts payable under this clause seventh,
shall remain in the Agent Account).


 


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


 


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


 


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


 


(iii)          third,
unless an Event of Servicer Termination (other than the type specified in
Section 8.01(i) of the Sale Agreement) has occurred and is continuing, to the
payment of all Servicing Fees accrued and unpaid through such date;


 


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


 


(v)           fifth,
if any of the conditions precedent set forth in Section 3.02
shall not be satisfied, to the payment of the Outstanding Principal Amount of
all other Advances, first,
in respect of Swing Line Advances (provided,
that if a Funding Excess exists and any outstanding Swing Line Advances were
made in violation of the fourth sentence of Section 2.01(b)(i),
then such Swing Line Advance will be repaid after the Revolving Credit
Advances), and second,
in respect of Revolving Credit Advances, together with amounts payable with
respect thereto under Section 2.10, if
any, pro rata;


 


11





















 


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


 


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


 


(viii)        eighth, unless a Termination
Event or Incipient Termination Event has occurred and is continuing, (A) to
be paid as directed by the applicable Originator to the Borrower and the Agent
in writing, first, an amount equal to the purchase price
for Sold Receivables payable on that date, then to the
extent of remaining amounts available to the payment of the balance due on the
applicable Subordinated Note, and (B) then any
remaining amounts available after such payment shall be paid to the Borrower
Account (if a Termination Event or Incipient Termination Event has occurred and
is continuing, all such amounts payable under this clause seventh, shall remain
in the Agent Account).


 


(d)           If and to the extent
a Funding Excess is determined to exist on any Business Day, (i) by no later than 4:00 p.m. (New York
time) on the Business Day immediately succeeding the Business Day that
such Funding Excess was determined to exist, the Administrative Agent shall
allocate the amounts set aside pursuant to clause (b)(iv) of Section 2.08
to reduce such Funding Excess and (ii) if such Funding Excess is greater
than the amounts set aside pursuant to clause (b)(iv) of Section 2.08
to reduce such Funding Excess, the Borrower shall deposit in the Agent Account,
by no later than 4:00 p.m. (New York time) on the Business Day immediately
succeeding the Business Day that such Funding Excess was determined to exist,
an amount equal to the amount of such shortfall.  Such amounts paid or allocated pursuant to
the foregoing sentence shall be applied by the Administrative Agent first, in
immediate repayment of the outstanding amount of Swing Line Advances, and if no
Swing Line Advances are outstanding, and second, in immediate repayment of the
outstanding amount of Revolving Credit Advances (together with amounts payable
with respect thereto under Section 2.10).


 


(e)           To the extent that
amounts on deposit in the Agent Account on any day are insufficient to pay
amounts due on such day in respect of the matured portion of any Advances or
any interest, Fees or any other amounts due and payable by the Borrower
hereunder, the Borrower shall pay, upon notice from the Administrative Agent,
the amount of such insufficiency to the Administrative Agent in Dollars, in
immediately available funds (for the account of the Administrative Agent, the
applicable Lenders, Affected Parties or Indemnified Persons) not later than
4:00 p.m. (New York time) on such day. 
Any such payment made on such date but after such time shall be deemed
to have been made on, and interest shall continue to accrue and be payable
thereon at the LIBOR Rate (in the case of LIBOR Rate Advances) or the Index
Rate (in all other cases), until the next succeeding Business Day.


 


(f)            The Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of the Borrower, and the Borrower hereby


 


12





















 


irrevocably agrees that any and
all such payments shall be applied by the Administrative Agent in accordance
with this Section 2.08.


 


(g)           All payments of
principal of the Advances and all payments of interest, Fees and other amounts
payable by the Borrower hereunder shall be made in Dollars, in immediately
available funds.  If any such payment
becomes due on a day other than a Business Day, the maturity thereof will be
extended to the next succeeding Business Day and interest thereon at the LIBOR
Rate (in the case of LIBOR Rate Advances) or Index Rate (in all other cases)
shall be payable during such extension. 
Payments received at or prior to 4:00 p.m. (New York time) on any
Business Day shall be deemed to have been received on such Business Day.  Payments received after 4:00 p.m. (New
York time) on any Business Day or on a day that is not a Business Day shall be
deemed to have been received on the following Business Day.


 


(h)           Any and all payments
by the Borrower hereunder shall be made in accordance with this Section 2.08 without setoff or counterclaim
and free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, Charges or withholdings (excluding any tax
imposed on or measured by the net income or profits or any franchise or other
tax in lieu thereof (including branch profits or similar taxes) of any Affected
Party by (i) the jurisdiction under the laws of which such Affected Party
is organized or any political subdivision thereof, or (ii) the
jurisdiction of such Affected Party’s applicable lending office or any
political subdivision thereof) (such non-excluded taxes, levies, imposts,
deductions, Charges and withholdings being “Indemnified
Taxes”).  If the Borrower
shall be required by law to deduct any Indemnified Taxes from or in respect of
any sum payable hereunder, (i) the sum payable shall be increased as much
as shall be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.08) the Affected Party entitled to
receive any such payment receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions, and (iii) the Borrower shall pay the full amount deducted
to the relevant taxing or other authority in accordance with applicable
law.  Within 30 days after the date of
any payment of Indemnified Taxes, the Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof.  The Borrower shall indemnify
any Affected Party from and against, and, within ten days of demand therefor,
pay any Affected Party for, the full amount of Indemnified Taxes (together with
any taxes imposed by any jurisdiction on amounts payable under this Section 2.08) paid by such Affected Party
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally asserted.  The
foregoing notwithstanding, the Borrower shall have no obligation to increase
the amount paid or indemnify any Affected Party under this Section 2.08(h) to
the extent such amounts are payable as a result of, (i) in the case of an
Affected Party that is a U.S person as defined in I.R.C. § 7701(a)(30) but
is not a person to whom a payment of interest may be made under Treas. Reg. § 1.6049-4(c) without
the payor being required to file an information return, the failure of the
Affected Party to provide the Borrower with a validly prepared and executed Form W-9
or, (ii) in the case of an Affected Party that is not a U.S. person as
defined in I.R.C. § 7701(a)(30), the failure of such person to provide the
Borrower with a validly prepared and executed Form W-8BEN, W-8EXP or W-8ECI
demonstrating that such Affected Party is eligible for the portfolio interest
exemption under I.R.C. § 871(h) and 881(c) or other exemption
under U.S. law or applicable treaty


 


13





















 


providing for no withholding on
the relevant payment; provided, however, that the Affected Party shall
have no obligation to deliver such forms to the extent it is no longer able to
deliver such forms due to a change in law.


 


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


 


Section 2.09.  Capital Requirements; Additional Costs.


 


(a)           If, due to any
Regulatory Change or any other adoption or any change in any law, treaty,
governmental (or quasi governmental) rule, regulation, guideline or order,
there shall be (i) any increase the cost to any Affected Party of agreeing
to make or making, funding or maintaining any commitment hereunder or under any
other Related Document, including with respect to any Advances or other
Outstanding Principal Amount, (ii) any reduction in any amount receivable
by such Affected Party hereunder or thereunder, including with respect to any
Advances, or other Outstanding Principal Amount or (iii) any increase in
the amount of capital, reserves or other funds required to be maintained by
such Affected Party against commitments made by it under this Agreement or any
other Related Document and the result of such increase is a reduction in the
rate of return on such Affected Party’s capital as a consequence of its
commitments hereunder or thereunder (any such increase in cost or reduction in
amounts receivable or rate of return are hereinafter referred to as “Additional Costs”), then the Borrower shall from
time to time and within 15 days after notice and demand from the Administrative
Agent to the Borrower (together with the certificate referred to in the next
sentence) pay to the Administrative Agent on behalf of such Affected Party
additional amounts sufficient to compensate such Affected Party for such
Additional Costs together with interest thereon from the date demanded until
payment in full thereof at the applicable Index Rate.  A certificate as to the amount of such
Increased Costs and showing the basis of the computation thereof submitted by
the Affected Party to the Borrower shall be final, binding and conclusive on
the parties hereto (absent manifest error) for all purposes. Each Affected
Party agrees that, as promptly as practicable after it becomes aware of any
circumstance referred to above that would result in any such Additional Costs,
it shall, to the extent not inconsistent with its internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by the Borrower pursuant to this Section 2.09(a).


 


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


 


(c)           Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law or regulation (or any change in the interpretation thereof) shall
make it unlawful, or any central bank or other Governmental Authority shall
assert


 


14





















 


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


 


Section 2.10.  Breakage Costs. 
To induce the Lenders to provide the LIBOR Rate on the terms provided
herein, if (i) any LIBOR Rate Advances are, except by reason of the
requirements in Section 2.03(c),
repaid in whole or in part on any date other than an Interest Payment Date
(whether that repayment is made pursuant to any other provision of this
Agreement or any other Related Document or is the result of acceleration, by
operation of law or otherwise); (ii) the Borrower shall default in payment
when due of the principal amount of or interest on any LIBOR Rate Advance; (iii) the
Borrower shall default in making any borrowing of LIBOR Rate Advances after the
Borrower has given notice requesting the same in accordance herewith (including
any failure to satisfy conditions precedent to the making of any LIBOR Rate
Advances); or (iv) the Borrower shall fail to make any prepayment of a
LIBOR Rate Advance after the Borrower has given a notice thereof in accordance
herewith, then, in any such case, the Borrower shall indemnify and hold
harmless each Lender from and against all losses, costs and expenses resulting
from or arising from any of the foregoing (any such loss, cost or expense, “Breakage Costs”). 
Such indemnification shall include any loss (including loss of margin)
or expense arising from the reemployment of funds obtained by it or from fees
payable to terminate deposits from which such funds were obtained (if
any).  For the purpose of calculating
amounts payable to a Lender under this subsection, each Lender shall be deemed
to have actually funded its relevant LIBOR Rate Advance through the purchase of
a deposit bearing interest at the LIBOR Rate in an amount equal to the amount
of that LIBOR Rate Advance; provided, however, that each Lender may fund each of its
LIBOR Rate Advances in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
subsection.  This covenant shall survive
the termination of this Agreement and the payment of the Revolving Notes and
all other amounts payable hereunder.  The
determination by any Lender of the amount of any such loss or expense shall be
set forth in a written notice to the Borrower in reasonable detail and shall be
final, binding and conclusive on the Borrower (absent manifest error) for all
purposes.  Notwithstanding the foregoing,
the Borrower shall in no case be liable for any Breakage Costs incurred
pursuant to clause (i) of the first sentence of this Section 2.10
if the principal amount of any repayment of LIBOR Rate Advances made on any
date of determination is less than $25,000,000.


 


ARTICLE III.


 


CONDITIONS PRECEDENT


 


Section 3.01.  Conditions to Effectiveness of Agreement.  This Agreement shall not be effective until
the date on which each of the following conditions have been satisfied, in


 


15





















 


the sole discretion of, or
waived in writing by, the Lenders and the Administrative Agent (such date, the “Effective Date”):


 


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


 


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


 


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


 


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


 


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


 


(f)            No Termination Event.  No Incipient Termination Event or Termination
Event hereunder shall have occurred and be continuing or would result after
giving effect to any of the transactions contemplated on the Closing Date.


 


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


 


(h)           Material Adverse Change.  There will have been (i) since September 30,
2005 no material adverse change individually or in the aggregate, (x) in the
business, the


 


16





















 


financial or other condition of
the Transaction Parties, taken as a whole, or (y) in the Receivables or Related
Property, taken as a whole and (ii) no litigation commenced which is
reasonably likely to be adversely determined, and if so determined, would have
a Material Adverse Effect on the Borrower or the Transaction Parties taken as a
whole, their business, or which challenges the transactions contemplated under
this Agreement, the Sale Agreement and the other Related Documents.


 


(i)            Prior Obligations.  Evidence satisfactory to the Administrative
Agent that all obligations under the Existing Securitization Program will have
been satisfied concurrently with the making of the initial Advance and that all
Liens upon any of the Receivables to be transferred to Borrower under the Sale
Agreement shall have been terminated and released immediately upon such payment.


 


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


 


(k)           Rating Agency
Confirmations.   The Administrative
Agent shall have received such confirmations or assurances from the Rating
Agencies related to the transactions contemplated by this Agreement and the
other Related Documents deemed necessary or desirable by the Administrative
Agent.


 


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


 


(a)           any representation
or warranty of the Borrower, the Servicer or any Originator contained herein or
in any of the other Related Documents shall be untrue or incorrect in any
material respect (without duplication of any materiality qualifier contained
therein) as of such date (unless the giving of any such untrue or incorrect
representation or warranty has been cured in accordance with Section 4.04
of the Sale Agreement), either before or after giving effect to the Advances to
be made on such date and to the application of the proceeds therefrom, except
to the extent that such representation or warranty expressly relates to an
earlier date and except for changes therein expressly permitted by this
Agreement;


 


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


 


(c)           the Commitment
Termination Date shall have occurred;


 


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


 


(e)           any Originator, the
Borrower or the Servicer shall fail to have taken such other action, including
delivery of approvals, consents, opinions, documents and instruments to


 


17





















 


the Lenders and the
Administrative Agent, as any Lender or the Administrative Agent and, if
applicable, either Rating Agency, may reasonably request;


 


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


 


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


 


The delivery by the Borrower of a Borrowing Request and the acceptance
by the Borrower of the funds from the related Borrowing on any Advance Date
shall be deemed to constitute, as of any such Advance Date, as the case may be,
a representation and warranty by the Borrower that the conditions in this Section 3.02 have been satisfied.


 


ARTICLE IV.


 


REPRESENTATIONS AND WARRANTIES


 


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


 


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


 


(b)           Executive Offices; Collateral Locations; Corporate or Other
Names; FEIN.  The state of
organization and the organization identification number of the Borrower and


 


18





















 


current location of the
Borrower’s chief executive office, principal place of business, other offices,
the premises within which any Borrower Collateral is stored or located, and the
locations of its records concerning the Borrower Collateral (including
originals of the Borrower Assigned Agreements) are set forth in Schedule 4.01(b) or such
other locations identified in writing by the Borrower to the Administrative
Agent after the Closing Date and none of such locations has changed since the
date of the formation of the Borrower. 
Except as set forth in Schedule 4.01(b),
the Borrower has not been known as or used any fictitious or trade name.  In addition, Schedule 4.01(b) lists
the federal employer identification number of the Borrower.


 


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


 


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


 


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


 


19





















 


(f)            Material Adverse Effect.  Since the date of the Borrower’s
organization, (i) the Borrower has not incurred any obligations,
contingent or non-contingent liabilities, liabilities for Charges, long-term
leases or unusual forward or long-term commitments, other than in connection
with the transaction contemplated by the Related Documents, (ii) no
contract, lease or other agreement or instrument has been entered into by the
Borrower or has become binding upon the Borrower’s assets, other than in
connection with the Related Documents, and no law or regulation applicable to
the Borrower has been adopted that has had or could reasonably be expected to
have a Material Adverse Effect within the meaning of clauses (a)(ii) and (b) through
(e) of the definition thereof and (iii) the Borrower is not in
default and no third party is in default under any material contract, lease or
other agreement or instrument to which the Borrower is a party.  Since the date of the Borrower’s
organization, no event has occurred with respect to the Borrower that alone or
together with other events could reasonably be expected to have a Material
Adverse Effect within the meaning of clauses (a)(ii) and (b) through (e) of
the definition thereof.


 


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


 


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


 


(i)            Taxes.  All
Tax Returns required to be filed by the Borrower have been timely and properly
filed and (ii) all taxes that are payable by the Borrower (other than
taxes being or about to be contested in good faith by appropriate proceedings
and for which adequate reserves have been provided for in accordance with GAAP)
have been paid, except where the failure to file Tax Returns or pay Taxes would
not have a Material Adverse Effect within the meaning of clauses (a)(ii) and
(b) through (e) of the definition thereof and has not resulted in a
Lien which has attached to the Receivables. 
No Governmental Authority has asserted any claim for taxes, or to the
Borrower’s knowledge, has threatened to assert any claim for taxes that


 


20





















 


would, if not paid, have a
Material Adverse Effect within the meaning of clauses (a)(ii) and (b) through
(e) of the definition thereof or would result in a Lien which would attach
to the Receivables.  All taxes required
by law to be withheld or collected and remitted (including, without limitation,
income tax, unemployment insurance and workmen’s compensation premiums) with
respect to the Borrower have been withheld or collected and paid to the
appropriate Governmental Authorities (or are properly being held for such
payment), except for amounts the nonpayment of which would not be reasonably likely
to have a Material Adverse Effect within the meaning of clauses (a)(ii) and
(b) through (e) of the definition thereof.  It is not necessary that this Agreement or
any other Related Document be filed, registered, recorded or enrolled in
connection with any Taxes with any court, public office or other authority in
any jurisdiction or that any ad valorem stamp duty, stamp duty, documentary,
registration or similar tax or duty be paid on the execution or delivery of
this Agreement or any other Related Document. Except as described on Schedule 4.01(i), as of the Effective Date,
neither the Borrower nor any Affiliate that files tax returns including tax
items for the Borrower has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any
Charges.  As of the Effective Date, (i) Borrower
has elected to be disregarded as an entity separate from its owner for federal
income tax purposes under Section 301.7701-3(b)(1) of the United
States Treasury Regulations and is therefore not an association taxable as a
corporation for federal income tax purposes, and (ii) neither the Borrower
nor any of its Affiliates has agreed or been requested to make any adjustment
under IRC 481(a), by reason of a change in accounting method or otherwise, that
could reasonably be expected to have a Material Adverse Effect.  The Advances will constitute Debt for federal
income tax purposes.


 


(j)            Full Disclosure. 
No representation or warranty of the Borrower contained in this
Agreement, any Borrowing Base Certificate, any of the other Related Documents
or any other document, certificate or written statement furnished by on behalf
of the Borrower to the Administrative Agent or any Lender relating to this
Agreement, the Transferred Receivables or any of the other Related Documents
contains any untrue statement of a material fact or omitted, omits or will omit
to state a material fact necessary in order to make the statements contained
herein or therein not misleading in any material respect in light of the
circumstances in which the same were made. All information contained in this
Agreement, any Borrowing Base Certificate or any of the other Related
Documents, or any other written statement or information furnished to any
Lender or the Administrative Agent has been prepared in good faith by the
management of the Borrower with the exercise of reasonable diligence.


 


(k)           ERISA.  The
Borrower is in compliance with ERISA and has not incurred and does not expect
to incur any liabilities (other than (x) premium payments arising in the
ordinary course of business, (y) liabilities arising under Section 4041(b) of
ERISA and (z) interest or penalties in connection with late premium payments
that have not remained outstanding for more than thirty (30) days from the day
such interest or penalties were incurred) payable to the PBGC under Title IV of
ERISA.


 


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


 


21





















 


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


 


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


 


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


 


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


 


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


 


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


 


(iii)          Borrower shall compensate all
employees, consultants and agents directly or indirectly through reimbursement
of the Parent, from its own funds, for services provided to the Borrower by
such employees, consultants and agents and, to the


 


22





















 


extent any
employee, consultant or agent of the Borrower is also an employee, consultant
or agent of such member of the Parent Group on a basis which reflects the
respective services rendered to the Borrower and such member of the Parent
Group and in accordance with the terms of the Administrative Services
Agreement;


 


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


 


(v)           other than the purchase and
acceptance through capital contribution of Transferred Receivables pursuant to
the Sale Agreement, the acceptance of Subordinated Loans therein, the payment
of distributions and the return of capital to the Member, the servicing
arrangements with the Servicer under the Sale Agreement and the transactions
contemplated under the Administrative Services Agreement, the Borrower engages
and has engaged in no intercorporate transactions with any member of the Parent
Group;


 


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


 


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


 


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


 


23





















 


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


 


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


 


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


 


(xii)          the Borrower presents itself to the
public as a legal entity separate from each such member and independently
engaged in the business of purchasing and financing Receivables;


 


(xiii)         the Borrower maintains at least one
independent manager each of whom (A) is not a Stockholder, director,
officer, employee or associate, or any relative of the foregoing, of any member
of the Parent Group (other than the Borrower), all as provided in its limited
liability company agreement, (B) has (1) prior experience as an
independent director for an entity whose organizational documents required the
unanimous consent of all independent managers thereof before such corporation
could consent to the institution of bankruptcy or insolvency proceedings
against it or could file a petition seeking relief under any applicable federal
or state law relating to bankruptcy and (2) at least three years of
employment experience with one or more entities that provide, in the ordinary
course of their respective businesses, advisory, management, independent
director services or placement services to issuers of securitization or
structured finance instruments, agreements or securities, and (C) is
otherwise acceptable to the Administrative Agent;


 


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


 


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


 


(q)           Deposit and Disbursement Accounts.  Schedule 4.01(q)
lists all banks and other financial institutions at which the Borrower
maintains deposit or other bank accounts as of the Closing Date, including any
Account, and such schedule correctly identifies the name, address and
telephone number of each depository, the name in which the account is held, a
description of the purpose of the account, and the complete account number
therefor.  Each Account constitutes a
deposit account or a securities account within the meaning of the applicable
UCC.  The Borrower (or the Servicer on
its behalf) has delivered to the Administrative Agent a fully executed agreement
pursuant to which the Borrower Account Bank


 


24





















 


(with respect to the Borrower
Account), the Concentration Account Bank (in the case of the Concentration
Account) and each Collection Account Bank (with respect to each Collection
Account) has agreed to comply with all instructions originated by the
Administrative Agent directing the disposition of funds in the Accounts without
further consent by the Borrower, the Servicer or any Originator.  None of the Transaction Parties has access to
any of the Accounts. No Account is in the name of any person other than the
Borrower or the Administrative Agent, and the Borrower has not consented to any
Bank following the instructions of any Person other than the Administrative
Agent.  Accordingly, the Administrative
Agent has a first priority perfected security interest in each Account, and all
funds on deposit therein.


 


(r)            Transferred Receivables.


 


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


 


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


 


(iii)          Nonavoidability
of Transfers.  The Borrower
shall (A) have received each Contributed Receivable as a contribution to
the capital of the Borrower by the Member as a member of the Borrower and (B) (1) have
purchased each Sold Receivable from the applicable Originator for cash
consideration or with the proceeds of a Subordinated Loan and (2) have
accepted assignment of any Eligible Receivables transferred pursuant to clause (b) of Section 4.04
of the Sale Agreement, in each case in an amount that constitutes fair
consideration and reasonably equivalent value therefor. No Sale has been made
for or on account of an antecedent debt (other than any contractual obligation
to purchase Receivables from the Originators under the Sale Agreement) owed by
any Originator to the Borrower and no such Sale is or may be avoidable or
subject to avoidance under any bankruptcy laws, rules or regulations.


 


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


 


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


 


(u)           Representations and Warranties in Other Related Documents.  Each of the representations and warranties of
the Borrower contained in the Related Documents (other than this Agreement) is
true and correct in all respects and the Borrower hereby makes each such


 


25





















 


representation and warranty to,
and for the benefit of, the Lenders and the Administrative Agent as if the same
were set forth in full herein.


 


(v)           Supplementary Representations.  Each of the representations and warranties of
the Borrower set forth on Schedule 4.01(v) is
true and correct in all respects.


 


(w)          Intent. The
Borrower has not entered into this Agreement or any of the other Related
Documents with the intent of hindering, delaying or defrauding present or
future creditors of itself or any Transaction Party.  The Borrower has not removed or concealed any
assets from its creditors or participated in the removal or concealing of assets
of any Transaction Party or any other Person, nor will any of them do so in the
future.   The transfers contemplated by
this Agreement and the other Transaction Documents are being undertaken in good
faith by the Borrower for bona fide business purposes.


 


ARTICLE V.


 


GENERAL COVENANTS OF THE
BORROWER


 


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


 


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


 


(b)           Maintenance of Existence and Conduct of Business.  The Borrower shall:  (i) do or cause to be done all things
necessary to preserve and keep in full force and effect its limited liability
company existence and its rights and franchises; (ii) continue to conduct
its business substantially as now conducted or as otherwise permitted hereunder
and in accordance with (1) the terms of its limited liability company
agreement and (2) Section 4.01(p);
(iii) at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, including all
licenses, permits, charters and registrations, and keep the same in good
repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to
be made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices; and (iv) transact business
only in the name of “Vertis Receivables II, LLC” or such trade names as are set
forth in Schedule 5.01(b) or upon 30 days’ prior written notice to
Administrative Agent, in any other legal name with respect to which all action
requested by Administrative Agent pursuant to Section 12.13 shall
have been taken with respect to the Transferred Receivable


 


(c)           Deposit of Collections.  The Borrower shall deposit or cause to be
deposited promptly into a Collection Account, and in any event no later than
the first Business


 


26





















 


Day after receipt thereof, all
Collections it may receive with respect to any Transferred Receivable.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


27





















 


(b)           No later than 11:00 a.m.
on any Advance Date and at the same time each Monthly Report, Weekly Report or
Daily Report, as applicable, is required to be delivered pursuant to the terms
of Annex 5.02(a), a completed certificate
in the form attached hereto as Exhibit 5.02(b)
(each, a “Borrowing Base Certificate”), provided, that if (i) an Incipient
Termination Event or a Termination Event shall have occurred and be continuing
or (ii) the Administrative Agent, in good faith, believes that an
Incipient Termination Event or a Termination Event is imminent or reasonably
deems the Lenders’ rights or interests in the Transferred Receivables or the
Borrower Collateral insecure, then such Borrowing Base Certificates shall be
delivered daily; and each Borrowing Base Certificate shall be prepared by the
Borrower or the Servicer as of the last day of the previous month or week, in
the event Borrowing Base Certificates are required to be delivered on a monthly
or weekly basis, and as of the close of business on the previous Business Day,
in the event Borrowing Base Certificates are required to be delivered on each
Business Day.


 


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


 


Section 5.03.  Negative Covenants of the Borrower.  The Borrower covenants and agrees that,
without the prior written consent of the Requisite Lenders and the
Administrative Agent (other than in connection with the waiver of any of the
covenants set forth in subsections  (c), (d), (n) or (p) of
this Section 5.03 which shall only
require the prior written consent of the Administrative Agent), from and after
the Effective Date until the Termination Date:


 


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


 


(b)           Liens. 
Except to the extent contemplated in Section 7.03(c) of the
Sale Agreement, the Borrower shall not create, incur, assume or permit to exist
(i) any Adverse Claim on or with respect to its Transferred Receivables or
(ii) any Adverse Claim on or with respect to its other properties or
assets (whether now owned or hereafter acquired) except for Permitted
Encumbrances.  In addition, the Borrower
shall not become a party to any agreement, note, indenture or instrument or
take any other action that would prohibit the creation of a Lien on any of its
properties or other assets in favor of the Lenders as additional collateral for
the Borrower Obligations, except as otherwise expressly permitted by this Agreement
or any of the other Related Documents.


 


(c)           Modifications of Receivables, Contracts or Credit and
Collection Policies.  The
Borrower shall not, without the prior written consent of the Administrative
Agent, extend, amend, forgive, discharge, compromise, waive, cancel or
otherwise modify the terms of any Transferred Receivable or amend, modify or
waive any term or condition of any Contract related thereto, provided, that the Borrower may (i) take,
and may authorize the Servicer on its behalf to


 


28





















 


take, such actions as are
expressly permitted by the terms of any Related Document or the Credit and
Collection Policies so long as, after giving effect to any such action, no
Receivables which constituted Eligible Receivables prior to such action would
no longer constitute Eligible Receivables as a result of such action, and (ii) sell
or otherwise transfer Transferred Receivables for which the applicable Obligor
is a BK Obligor to a third party that is not an Affiliate of Holdings; provided,
that with respect to the sales or transfers contemplated by this Section 5.03(c)(iii),
(A) until the Termination Date, no such transfers shall be permitted under
this Section 5.03(c)(iii) if either a Termination Event or an
Incipient Termination Event shall have occurred and be continuing prior to or
after the consummation of any such transfer, (B) the Outstanding Balance
of any Transferred Receivables sold or otherwise transferred in any transaction
pursuant to this Section 5.03(c)(iii) shall not exceed
$3,000,000, (C) the aggregate Outstanding Balance of all Transferred
Receivables sold or otherwise transferred pursuant to this Section 5.03(c)(iii) from
and after the Closing Date shall not exceed $10,000,000, (D) each sale or
transfer of Transferred Receivables pursuant to this Section 5.03(c)(iii) shall
be made without any recourse to the Borrower and (E) any buyer of any
Transferred Receivables sold or otherwise transferred pursuant to this Section 5.03(c)(iii) shall
agree in writing that, until the date that is one year plus one day following
the date on which all Borrower Obligations have been indefeasibly paid in full
in cash, such Person shall not, directly or indirectly, institute or cause to
be instituted against Borrower any proceeding of the type referred to in Sections
8.01(d) or 8.01(e) of this Agreement.


 


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


 


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


 


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


 


29





















 


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


 


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


 


(i)            Indebtedness. 
The Borrower shall not create, incur, assume or permit to exist any
Debt, except (i) Debt of the Borrower to any Affected Party, Indemnified
Person, the Servicer or any other Person expressly permitted by this Agreement
or any other Related Document, (ii) Subordinated Loans pursuant to the
Subordinated Notes, (iii) deferred taxes, and (iv) endorser liability
in connection with the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business.


 


(j)            Prohibited Transactions.  The Borrower shall not enter into, or be a
party to, any transaction with any Person except as expressly permitted
hereunder or under any other Related Document except as reasonably necessary or
advisable to its performance of its obligations hereunder and under the other
Related Documents.


 


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


 


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


 


30

















 


(m)          ERISA.  The
Borrower shall not cause or permit to occur an event that (i) could
reasonably be expected to result in the imposition of a Lien on any Borrower
Collateral under Section 412 of the IRC or Section 302 or 4068 of
ERISA, or (ii) could reasonably be expected to result in the incurrence by
Borrower of any liabilities under Title IV of ERISA (other than (x) premium
payments arising in the ordinary course of business, (y) liabilities arising
under Section 4041(b) of ERISA and (z) interest or penalties in
connection with late premium payments that have not remained outstanding for
more than thirty (30) days from the day such interest or penalties were
incurred).


 


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


 


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


 


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


 


ARTICLE VI.


 


ACCOUNTS


 


Section 6.01.  Establishment of Accounts.


 


(a)           Collection Accounts.


 


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


 


(ii)           The Borrower (or an Originator on
Borrower’s behalf) has instructed all existing Obligors of Transferred
Receivables, and shall instruct all future Obligors of such Receivables, to
make payments in respect thereof only (A) by check or money order mailed
to one or more lockboxes or post office boxes under the control of the
Administrative Agent (each a “Lockbox” and
collectively the “Lockboxes”) or (B) by
wire transfer or moneygram directly to a Collection Account.  Schedule 4.01(q)
lists all Lockboxes and all Collection Account Banks at which the Borrower
maintains Collection Accounts as of the Effective Date, and such schedule correctly
identifies (1) with respect to each such Collection Account Bank, the
name, address and telephone number thereof,


 


31

















 


(2) with
respect to each Collection Account, the name in which such account is held and
the complete account number therefor, and (3) with respect to each
Lockbox, the lockbox number and address thereof.  The Borrower (or the Servicer on Borrower’s
behalf) shall endorse, to the extent necessary, all checks or other instruments
received in any Lockbox so that the same can be deposited in the Collection
Account, in the form so received (with all necessary endorsements), on the
first Business Day after the date of receipt thereof.  In addition, the Borrower shall deposit or
cause to be deposited into a Collection Account all cash, checks, money orders
or other proceeds of Transferred Receivables or Borrower Collateral received by
it other than in a Lockbox or a Collection Account, in the form so received
(with all necessary endorsements), not later than the close of business on the
first Business Day following the date of receipt thereof, and until so
deposited all such items or other proceeds shall be held in trust for the
benefit of the Administrative Agent.  The
Borrower shall not make and shall not permit the Servicer to make any deposits
into a Lockbox or any Collection Account except in accordance with the terms of
this Agreement or any other Related Document.


 


(iii)          If, for any reason, a Collection
Account Agreement terminates or any Collection Account Bank fails to comply
with its obligations under the Collection Account Agreement to which it is a
party, then the Borrower shall promptly notify all Obligors of Transferred
Receivables who had previously been instructed to make payments to a Collection
Account maintained at any such Collection Account Bank to make all future
payments to a new Collection Account in accordance with this Section 6.01(a)(iii).  Neither the Borrower nor the Servicer on the
Borrower’s behalf shall close any Collection Account unless it shall have (A) received
the prior written consent of the Administrative Agent, (B) established a
new account with the same Collection Account Bank or with a new depositary
institution satisfactory to the Administrative Agent, (C) entered into an
agreement covering such new account with such Collection Account Bank or with
such new depositary institution substantially in the form of the predecessor
Collection Account Agreement or that is satisfactory in all respects to the
Administrative Agent (whereupon, for all purposes of this Agreement and the
other Related Documents, such new account shall become a Collection Account,
such new agreement shall become a Collection Account Agreement and any new
depositary institution shall become a Collection Account Bank), and (D) taken
all such action as the Administrative Agent shall reasonably require to grant
and perfect a first priority Lien in such new Collection Account to the Lender
under Section 7.01 of this Agreement.  Except as permitted by this Section 6.01(a), the Borrower shall not, and
shall not permit the Servicer to, open any new Lockbox or Collection Account
without the prior written consent of the Administrative Agent.


 


(b)           Concentration Account.


 


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


 


32

















 


(ii)           The Borrower (or the Servicer on
Borrower’s behalf) shall require all Collection Account Banks to automatically
transfer to the Concentration Account on a daily basis all collected and
available funds on deposit in each Collection Account.  The Borrower (or the Servicer on Borrower’s
behalf) will require the Concentration Account Bank to automatically transfer
all collected and available funds on deposit in the Concentration Account to
the Agent Account on a daily basis.


 


(iii)          If, for any reason, the Concentration
Account Agreement relating to the Concentration Account terminates or the
Concentration Account Bank fails to comply with its obligations under such
Concentration Account Agreement, then the Borrower shall promptly notify the
Administrative Agent thereof and the Borrower, the Servicer or the
Administrative Agent, as the case may be, shall instruct all Collection Account
Banks who had previously been instructed to make transfers to the Concentration
Account maintained at any such Concentration Account Bank to make all future
payments to a new Concentration Account in accordance with this Section 6.01(b)(iii).  Neither the Borrower nor the Servicer on the
Borrower’s behalf shall close the Concentration Account unless it shall have (A) received
the prior written consent of the Administrative Agent, (B) established a
new account with the same Concentration Account Bank or with a new depositary
institution satisfactory to the Administrative Agent, (C) entered into an
agreement covering such new account with such Concentration Account Bank or
with such new depositary institution substantially in the form of the
Concentration Account Agreement or that is satisfactory in all respects to the
Administrative Agent (whereupon, for all purposes of this Agreement and the
other Related Documents, such new account shall become the Concentration
Account, such new agreement shall become a Concentration Account Agreement and
any new depositary institution shall become the Concentration Account Bank),
and (D) taken all such action as the Administrative Agent shall reasonably
require to grant and perfect a first priority Lien in such new Concentration Account
to the Lender under Section 7.01 of
this Agreement.  Except as permitted by
this Section 6.01(b), the Borrower
shall not, and shall not permit the Servicer to open a new Concentration
Account without the prior written consent of the Administrative Agent.


 


(c)           Agent Account.


 


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


 


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


 


(iii)          If, for any reason, the Depositary
wishes to resign as depositary of the Agent Account or fails to carry out the
instructions of the Administrative Agent, then


 


33

















 


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


 


(d)           Borrower Account.


 


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


 


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


 


ARTICLE VII.


 


GRANT OF SECURITY INTERESTS


 


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


 


(a)           all Receivables;


 


(b)           the Sale Agreement,
all Collection Account Agreements, the Concentration Account Agreement and all
other Related Documents now or hereafter in effect relating to the purchase,
servicing, processing or collection of Receivables (collectively, the “Borrower Assigned Agreements”), including (i) all
rights of the Borrower to receive moneys


 


34

















 


due and to become due
thereunder or pursuant thereto, (ii) all rights of the Borrower to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect
thereto, (iii) all claims of the Borrower for damages or breach with
respect thereto or for default thereunder and (iv) the right of the
Borrower to amend, waive or terminate the same and to perform and to compel
performance and otherwise exercise all remedies thereunder;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(e)           all other personal
property of the Borrower of every kind and nature not described above including
without limitation all goods (including inventory, equipment and any accessions
thereto), instruments (including promissory notes), documents, accounts, chattel
paper (whether tangible or electronic), deposit accounts, letter-of-credit
rights, commercial tort claims, securities and all other investment property,
supporting obligations, any other contract rights or rights to the payment of
money, insurance claims and proceeds, and all general intangibles (including
all payment intangibles); and


 


35

















 


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


 


Section 7.02.  Borrower’s Agreements.  The Borrower hereby (a) collaterally
assigns, transfers and conveys the benefits of the representations, warranties
and covenants of each Originator made to the Borrower under the Sale Agreement
to the Administrative Agent for the benefit of the Lenders hereunder; (b) acknowledges
and agrees that the rights of the Borrower to require payment of a Rejected
Amount from an Originator under the Sale Agreement may be enforced by the
Lenders and the Administrative Agent; and (c) certifies that the Sale
Agreement provides that the indemnification and payment provisions of Article V thereof and the provisions of Sections
4.03(j), Section 4.04, 6.12, 6.14 and 6.15
thereof shall survive the sale of the Transferred Receivables (and undivided
percentage ownership interests therein) and the termination of the Sale
Agreement and this Agreement.


 


Section 7.03.  Delivery of Collateral.  All certificates or instruments representing
or evidencing all or any portion of the Borrower Collateral shall be delivered
to and held by or on behalf of the Administrative Agent and shall be in
suitable form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent.  The Administrative Agent shall have the right
(a) at any time to exchange certificates or instruments representing or
evidencing Borrower Collateral for certificates or instruments of smaller or
larger denominations and (b) upon the occurrence of a Termination Event,
to exercise its rights and remedies with respect to such Collateral under the
UCC.


 


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


 


36

















 


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


 


(a)           Offices and Records.  The Borrower shall maintain its principal
place of business and chief executive office and the office at which it stores
its Records at the respective locations specified in Schedule 4.01(b)
or, upon 30 days’ prior written notice to the Administrative Agent, at such
other location in a jurisdiction where all action requested by the
Administrative Agent pursuant to Section 12.13
shall have been taken with respect to the Borrower Collateral.  The Borrower shall, and shall cause the
Servicer to at its own cost and expense, maintain adequate and complete records
of the Transferred Receivables and the Borrower Collateral, including records
of any and all payments received, credits granted and merchandise returned with
respect thereto and all other dealings therewith.  The Borrower shall, and shall cause the Servicer
to, by no later than the Effective Date, mark conspicuously with a legend, in
form and substance satisfactory to the Administrative Agent, its computer
records pertaining to the Borrower Collateral and its file cabinets or other
storage facilities where it maintains information pertaining to Substantial
Contracts that constitute the Borrower Collateral, to evidence this Agreement
and the assignment and Liens granted pursuant to this Article VIII.  Upon the occurrence and during the
continuance of a Termination Event, the Borrower shall, and shall cause the
Servicer to, deliver and turn over such books and records to the Administrative
Agent or its representatives at any time on demand of the Administrative
Agent.  Prior to the occurrence of a
Termination Event and upon notice from the Administrative Agent, the Borrower
shall, and shall cause the Servicer to, permit any representative of the
Administrative Agent to inspect such books and records and shall provide
photocopies thereof to the Administrative Agent as more specifically set forth
in Section 7.05(b).


 


(b)           Access. 
The Borrower shall, and shall cause the Servicer to, at its or the
Servicer’s own expense, during normal business hours, from time to time upon
ten (10) Business Day’s prior notice (or, if a Termination Event has
occurred and in continuing, one (1) Business Day’s prior notice) as
frequently as the Administrative Agent determines to be appropriate:  (i) provide the Administrative Agent and
any of its officers, employees and agents access to its properties (including
properties utilized in connection with the collection, processing or servicing
of the Transferred Receivables), facilities, advisors and employees (including
officers) and to the Borrower Collateral, (ii) permit the Administrative
Agent and any of its officers, employees and agents to inspect, audit and make
extracts from its books and records, including all Records, (iii) permit
the Administrative Agent and its officers, employees and agents to inspect,
review and evaluate the Transferred Receivables and the Borrower Collateral and
(iv) permit the Administrative Agent and its officers, employees and
agents to discuss matters relating to the Transferred Receivables or its
performance under this Agreement or the other Related Documents or its affairs,
finances and accounts with any of its officers, directors, employees,
representatives or agents (in each case, with those persons having knowledge of
such matters) and with its independent certified public accountants as specified
in Section 7.05(c); provided, however, that, so long
as no Termination Event or Incipient Termination Event has occurred and is
continuing, (i) the Administrative Agent shall be limited to two (2) audits
pursuant to this Section 7.05(b) during each calendar year and
(ii) the Borrower’s obligations to reimburse out-of-pocket expenses in
respect of each such audit shall not exceed (x) $50,000 minus (y) the amounts
incurred by the Originators pursuant to Section 4.02(b) of the Sale
Agreement in connection with any contemporaneous audit of the Originators. The
Borrower agrees that it shall not request any audit of any Originator under Section 4.02(b) of
the Sale Agreement unless directed in writing to do so by the Administrative
Agent. If (i) the Administrative Agent in good


 


37

















 


faith deems any Lender’s rights
or interests in the Transferred Receivables, the Borrower Assigned Agreements
or any other Borrower Collateral insecure or the Administrative Agent in good faith
believes that an Incipient Termination Event or a Termination Event is imminent
or (ii) an Incipient Termination Event or a Termination Event shall have
occurred and be continuing, then the Borrower shall, and shall cause the
Servicer to, at its own expense, provide such access at all times without prior
notice from the Administrative Agent and provide the Administrative Agent with
access to the suppliers and customers of the Borrower and the Servicer; provided,
that, the Borrower shall have the opportunity to be present at the time of any
such access to it’s the Borrower’s suppliers or customers.  The Borrower shall, and shall cause the
Servicer to, make available to the Administrative Agent and its counsel, as
quickly as is possible under the circumstances, copies of all books and
records, including Records, that the Administrative Agent may request.  The Borrower shall, and shall cause the
Servicer to, and the Servicer shall deliver any document or instrument necessary
for the Administrative Agent, as the Administrative Agent may from time to time
request, to obtain records from any service bureau or other Person that
maintains records for the Borrower or the Servicer, and shall maintain
duplicate records or supporting documentation on media, including computer
tapes and discs owned by the Borrower or the Servicer.


 


(c)           Communication with Accountants.  The Borrower hereby authorizes (and shall
cause the Servicer to authorize) the Lenders and the Administrative Agent to
communicate directly with its independent certified public accountants and
authorizes and shall instruct those accountants and advisors to disclose and
make available to the Lenders and the Administrative Agent any and all
financial statements and other supporting financial documents, schedules and
information relating to the Borrower or the Servicer (including copies of any
issued management letters) and to discuss matters with respect to its business,
financial condition and other affairs; provided, that the Administrative
Agent shall notify the Borrower or the Servicer, as applicable, prior to any
contact with such accountants and advisors and shall give the Borrower or the
Servicer, as applicable, the opportunity to participate in such discussions.


 


(d)           Collection of Transferred Receivables.  In connection with the collection of amounts
due or to become due to the Borrower under the Transferred Receivables, the
Borrower Assigned Agreements and any other Borrower Collateral pursuant to the
Sale Agreement, the Borrower shall, or shall cause the Servicer to, take such
action as it, and from and after the occurrence and during the continuance of a
Termination Event, the Administrative Agent, may deem necessary or desirable to
enforce collection of the Transferred Receivables, the Borrower Assigned
Agreements and the other Borrower Collateral; provided
that the Borrower may, rather than commencing any such action or taking any
other enforcement action, at its option, elect to pay to the Administrative
Agent, for deposit into the Agent Account, an amount equal to the Outstanding
Balance of any such Transferred Receivable; provided,
further, that if a Termination Event shall
have occurred and be continuing, then the Administrative Agent may, without
prior notice to the Seller or the Servicer, (x) exercise its rights under the
Account Agreements (in which case the Servicer shall be required, pursuant to
the Sale Agreement, to deposit any Collections it then has in its possession or
at any time thereafter receives, immediately in a Collection Account or, if
directed by the Administration Agent, in the Agent Account) and (y) notify any
Obligor under any Transferred Receivable or obligors under the Borrower
Assigned Agreements of the pledge of such Transferred Receivables or Borrower


 


38

















 


Assigned Agreements, as the
case may be, to the Administrative Agent on behalf of the Lenders hereunder and
direct that payments of all amounts due or to become due to the Borrower
thereunder be made directly to the Administrative Agent or any servicer,
collection agent or lockbox or other account designated by the Administrative
Agent and, upon such notification and at the sole cost and expense of the
Borrower, the Administrative Agent may enforce collection of any such Transferred
Receivable or the Borrower Assigned Agreements and adjust, settle or compromise
the amount or payment thereof.  The
Administrative Agent shall provide prompt notice to the Borrower and the
Servicer of any such notification of pledge or direction of payment to the
Obligors under any Transferred Receivables.


 


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


 


(f)            License for Use of Software and Other Intellectual Property.  Unless expressly prohibited by the licensor
thereof or any provision of applicable law, if any, the Borrower hereby grants
to the Administrative Agent on behalf of the Lenders a limited license to use,
without charge, the Borrower’s rights to use its own and the Servicer’s
computer programs, software, printouts and other computer materials, technical
knowledge or processes, data bases, materials, trademarks, registered trademarks,
trademark applications, service marks, registered service marks, service mark
applications, patents, patent applications, trade names, rights of use of any
name, labels, fictitious names, inventions, designs, trade secrets, goodwill,
registrations, copyrights, copyright applications, permits, licenses,
franchises, customer lists, credit files, correspondence, and advertising
materials or any property of a similar nature, as it pertains to the Borrower
Collateral, or any rights to any of the foregoing, only as reasonably required
in connection with the collection of the Transferred Receivables and the
advertising for sale, and selling any of the Borrower Collateral, or exercising
of any other remedies hereto, and the Borrower agrees that its rights under all
licenses and franchise agreements shall inure to the Administrative Agent’s
benefit (on behalf of the Lenders) for purposes of the license granted
herein.  Except upon the occurrence and
during the continuation of a Termination Event, the Administrative Agent and
the Lenders agree not to use any such license without giving the Borrower prior
written notice.


 


ARTICLE VIII.


 


TERMINATION EVENTS


 


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


 


(a)           (i) the
Borrower shall fail to pay, (A) any installment or other payment of
principal of any Advance when due, or to repay Advances to reduce their balance
to the


 


39

















 


maximum amount of Revolving
Loans then permitted to be outstanding when due or (B) within three (3) Business
Days after the due date, any interest on any Advances, any other Borrower
Obligations or any other amount due under this Agreement or any of the other
Related Documents or (ii) any Transaction Party shall fail to pay, within
three (3) Business Days after the due date, any amount due under the Sale
Agreement or any of the other Related Documents; provided, that no
Termination Event shall occur if such any failure to pay arises solely as a
result of the failure of the Administrative Agent to make transfers of amounts
available in the Agent Account on any Settlement Date in accordance with Section 2.08;
or


 


(b)           (i) the
Borrower or any Transaction Party shall fail or neglect to perform, keep or
observe any requirement set forth in Section 5.01(c) or Section 5.03
of this Agreement or Section 4.02(l) or Section 4.03 of the Sale
Agreement, (ii) the Borrower or any Transaction Party shall fail or
neglect to perform, keep or observe any requirement set forth in Section 5.02
of this Agreement and the same shall remain unremedied for five (5) Business
Days after the date specified for performance of any such requirement or (iii) the
Borrower or any Transaction Party shall fail or neglect to perform, keep or
observe any other covenant or other provision of this Agreement or the other
Related Documents (other than any provision embodied in or covered by any other
clause of this Section 8.01) and the
same shall remain unremedied for thirty (30) Business Days or more following
the earlier to occur of an Authorized Officer of the Borrower or the applicable
Transaction Party becoming aware of such breach and the Borrower’s receipt of
notice thereof; or


 


(c)           (1) any Transaction
Party or the Borrower shall fail to pay when due or within any applicable grace
period any principal or interest on Debt (other than the Advances with respect
to the Borrower) or any Contingent Obligations or (2) a breach or default
of any Transaction Party or the Borrower, or the occurrence of any condition or
event, with respect to any Debt (other than the Advances with respect to the
Borrower) or any Contingent Obligations, in each case if the effect of such
breach, default or occurrence is to cause or to permit the holder or holders
then to cause, Debt and/or Contingent Obligations having an aggregate principal
amount in excess of $5,000,000 to become or be declared due prior to their
stated maturity; or


 


(d)


 


(i)            (1) A court enters a decree or order
for relief with respect to any Transaction Party in an involuntary case under
the Bankruptcy Code, which decree or order is not stayed or other similar
relief is not granted under any applicable federal or state law; or (2) the
continuance of any of the following events for sixty (60) days unless
dismissed, bonded or discharged:  (a) an
involuntary case is commenced against any Transaction Party under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect; or (b) a decree or order of a court for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian, administrator or other
officer having similar powers over any
Transaction Party or over all or a substantial part of its property, is
entered; or (c) a receiver, trustee or other custodian is appointed
without the consent of a Transaction Party for, or an encumbrance takes
possession of, all or a substantial part of the property of such
Transaction Party; or


 


40

















 


(ii)           a case or proceeding shall have been
commenced against the Borrower seeking a decree or order in respect of the
Borrower under the Bankruptcy Code or any other applicable federal, state or
foreign bankruptcy or other similar law, (i) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for the Borrower or for any substantial part of the Borrower’s assets, or (ii) ordering
the winding up or liquidation of the affairs of any such Person;


 


(e)           (1) Any Transaction
Party or the Borrower commences a voluntary case under the Bankruptcy Code, or
consents to the entry of an order for relief in an involuntary case or to the
conversion of an involuntary case to a voluntary case under any such law or
consents to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or (2) any
Transaction Party or the Borrower makes any assignment for the benefit of
creditors; or (3) the board of directors (or equivalent thereof) or the
shareholders (or equivalent thereof) of any Transaction Party or the Borrower
adopts any resolution or otherwise authorizes action in connection with the
administration, liquidation, winding-up or dissolution of such Transaction
Party or the Borrower or to approve any of the actions referred to in this Section 8.01(e);


 


(f)            (i) any
Originator, the Borrower or the Servicer generally does not pay its debts as
such debts become due (within the meaning of Section 303(h) of the
Bankruptcy Code of the United States), (ii) any Authorized Officer of any
Originator, the Borrower or the Servicer admits in writing its inability to, or
is generally unable to, pay its debts as such debts become due or (iii) any
Originator, the Borrower or the Servicer is not Solvent; or


 


(g)           any money judgment,
writ or warrant of attachment, or similar process (other than those described
elsewhere in this Section 8.01) involving an amount in the
aggregate at any time in excess of $5,000,000 (to the extent not adequately
covered by insurance provided by a reputable and solvent insurance company) is
entered or filed against one or more of the Transaction Party or the Borrower
or any of their respective assets and remains undischarged, unvacated, unbonded
or unstayed for a period of thirty (30) days or in any event later than five (5) Business
Days prior to the date of any proposed sale thereunder; or


 


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


 


(i)            (i) any
information contained in any Borrowing Base Certificate or any Borrowing
Request is untrue or incorrect in any respect other than an Immaterial
Misstatement, or (ii) any representation or warranty of any Originator or
the Borrower herein or in any other Related Document or in any statement,
report, financial statement or certificate (other than a Borrowing Base
Certificate or any Borrowing Request) made or delivered by or on behalf of such
Originator or the Borrower to any Affected Party hereto or thereto is untrue or
incorrect in any material respect (without duplication of any materiality
qualifier contained therein) as of the date when made or deemed made (unless
previously cured by such Originator pursuant to Section 4.04 of the
Sale Agreement); or


 


(j)            any Governmental
Authority (including the IRS or the PBGC) shall file notice of a Lien with
regard to any assets of any Originator or any of such Originator’s ERISA


 


41

















 


Affiliates (other than a Lien (i) limited
by its terms to assets other than Receivables and (ii) not materially
adversely affecting the financial condition of such Originator or such ERISA
Affiliate or the ability of any Transaction Party or the Borrower to perform
its duties hereunder or under the Related Documents); or


 


(k)           any Governmental
Authority (including the IRS or the PBGC) shall file notice of a Lien with
regard to any of the assets of the Borrower, including, without limitation, any
Lien on any Borrower Collateral under Section 412 of the IRC or Section 302
or 4068 of ERISA; or


 


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


 


(m)          the Sale Agreement
shall for any reason cease to evidence the transfer to the Borrower of the
legal and equitable title to, and ownership of, the Transferred Receivables; or


 


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


 


(o)           (i) any Event
of Servicer Termination specified in Section 8.01(a) through (m) of
the Sale Agreement shall have occurred, or (ii) an Event of Servicer
Termination specified in Section 8.01(n) of the Sale Agreement shall have
occurred; or


 


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


 


(q)           a Change of Control
shall occur; or


 


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


 


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


 


(t)            (i) the
Default Ratio shall exceed 3.0%; (ii) the Delinquency Ratio shall exceed
2.5%; (iii) the Dilution Trigger Ratio shall exceed 3.0% or (iv) the
Receivables Collection Turnover shall exceed 45 days; or


 


42

















 


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


 


(v)           the incurrence of a
liability to the PBGC under Title IV of ERISA by any Originator or the Servicer
or any of their respective ERISA Affiliates (except for premium payments
arising in the ordinary course of business and liabilities arising under Section 4041(b) of
ERISA), in excess of $500,000;


 


(w)          any member of the
Parent Group shall create, incur, assume or permit to exist any Debt, except (i) Debt
of such Person to any Affected Party, Buyer Indemnified Person or any other
Person expressly permitted by the Sale Agreement or any other Related Document,
and (ii) other Debt permitted pursuant to Section 5.1 of the Existing
Credit Agreement as in effect as of the Closing Date; or


 


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


 


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


 


ARTICLE IX.


 


REMEDIES


 


Section 9.01.  Actions Upon Termination Event.  Except as provided in Section 9.01(f) below,
if any Termination Event shall have occurred and be continuing and the
Administrative Agent shall have declared the Commitment Termination Date to
have occurred or the Commitment Termination Date shall be deemed to have
occurred pursuant to Section 8.01,


 


43

















 


then the Administrative Agent
may exercise in respect of the Borrower Collateral, in addition to any and all
other rights and remedies granted to it hereunder, under any other Related
Document or under any other instrument or agreement securing, evidencing or
relating to the Borrower Obligations or otherwise available to it, all of the
rights and remedies of a secured party upon default under the UCC (such rights
and remedies to be cumulative and nonexclusive), and, in addition, may take the
following actions:


 


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


 


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


 


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


 


44

















 


Borrower shall confirm any such
sale or transfer by executing and delivering to such purchaser all proper
instruments of conveyance and transfer and releases as may be designated in any
such request.


 


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


 


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


 


(f)            If only a
Termination Event specified in Section 8.01(o)(ii) hereof
shall have occurred and be continuing, the Administrative Agent’s remedies
shall be limited to the rights expressly provided for in this Section 9.01(f) and
those incidental to the exercise thereof. 
Administrative Agent shall have the right to, or the right to direct the
Buyer to: (i) terminate the Servicer and take all actions in furtherance
thereof in accordance with Article 9 of the Sale Agreement, (ii) exercise
all rights of the Buyer or the Administrative Agent, under the terms of the
Sale Agreement, to direct the conduct of the Servicer thereunder, and (iii) to
collect and enforce the Borrower Collateral in as provided in Section 9-607
of the applicable UCC and to apply Collections to the Borrower Obligations in
accordance Article II hereof; provided, Administrative Agent
shall not have any right to foreclose on the Borrower Collateral in the manner
provided in Section 9-610 or 9-620 of the applicable UCC.   For the avoidance of doubt, (i) upon
the occurrence and during the continuance of a Termination Event specified in Section 8.01(o)(ii) hereof,
no Lender shall have any obligation to make any Advances pursuant to this
Agreement and (ii) if, in addition to the Termination Event specified in Section 8.01(o)(ii) hereof,
any other Termination Event shall have occurred and be continuing, the
Administrative Agent shall be entitled to exercise any of the other remedies
set forth in this Article IX.


 


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


 


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Section 9.03.  Power of Attorney.  On the Closing Date, the Borrower shall
execute and deliver a power of attorney substantially in the form attached
hereto as Exhibit 9.03 (a “Power of Attorney”).  The Power of Attorney is a power coupled with
an interest and shall be irrevocable until this Agreement has terminated in
accordance with its terms and all of the Borrower Obligations are indefeasibly
paid or otherwise satisfied in full.  The
powers conferred on the Administrative Agent under each Power of Attorney are
solely to protect the Liens of the Administrative Agent and the Lenders upon
and interests in the Borrower Collateral and shall not impose any duty upon the
Administrative Agent to exercise any such powers.  The Administrative Agent shall not be
accountable for any amount other than amounts that it actually receives as a
result of the exercise of such powers and none of the Administrative Agent’s
officers, directors, employees, agents or representatives shall be responsible
to the Borrower, any Originator, the Servicer or any other Person for any act
or failure to act, except to the extent of damages attributable to their own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction.


 


Section 9.04.  Continuing Security Interest.  This Agreement shall create a continuing Lien
in the Borrower Collateral until the Termination Date.


 


ARTICLE X.


 


INDEMNIFICATION


 


Section 10.01.  Indemnities by the Borrower.


 


(a)           Without limiting any
other rights that the Lenders or the Administrative Agent or any of their
respective officers, directors, employees, attorneys, agents, representatives,
transferees, successors or assigns (each, an “Indemnified
Person”) may have hereunder or under applicable law, the Borrower
hereby agrees to indemnify and hold harmless each Indemnified Person from and
against any and all Indemnified Amounts that may be claimed or asserted  by any Person other than the Borrower against
or incurred by any such Indemnified Person in connection with or arising out of
the transactions contemplated under this Agreement or under any other Related
Document or any actions or failures to act in connection therewith, including
any and all Rating Agency costs and any and all legal costs and expenses
arising out of or incurred in connection with disputes between or among any
parties to any of the Related Documents; provided,
that the Borrower shall not be liable for any indemnification to an Indemnified
Person to the extent that any such Indemnified Amount (v) in the case of
an Affected Party that is a U.S person as defined in I.R.C. § 7701(a)(30)
but is not a person to whom a payment of interest may be made under Treas. Reg.
§ 1.6049-4(c) without the payor being required to file an information
return, results from a failure of the Affected Party to provide the Borrower
with a validly prepared and executed Form W-9, (w) in the case of an
Affected Party that is not a U.S. person as defined in I.R.C. § 7701(a)(30),
results from a failure of the Affected Party to provide Borrower with a validly
prepared and executed Form W-8BEN, W-8EXP or W-8ECI demonstrating that
such Affected Party is eligible for the portfolio interest exemption under
I.R.C. § 871(h) and 881(c) or other exemption under U.S. law or
applicable treaty providing for no withholding on the relevant payment; provided,
however, that the Affected Party shall have no obligation to deliver such forms
to the extent it is no longer able to deliver such forms due to a change in
law,  (x) results from such Indemnified
Person’s gross


 


46

















 


negligence or willful
misconduct, in each case as determined by a court of competent jurisdiction,
(y) constitutes recourse for uncollectible or uncollected Transferred
Receivables as a result of the insolvency, bankruptcy or the failure (without
cause or justification) or inability on the part of the related Obligor to
perform its obligations thereunder or (z) includes any tax imposed on or
measured by the net income or profits or any franchise or other tax in lieu thereof
(including branch profits or similar taxes) of any Indemnified Person by (i) the
jurisdiction under the laws of which such Indemnified Person is organized or
any political subdivision thereof or (ii) the jurisdiction of such
Indemnified Person’s applicable lending office or any political subdivision
thereof.  Without limiting the generality
of the foregoing, the Borrower shall pay on demand to each Indemnified Person
any and all Indemnified Amounts relating to or resulting from:


 


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


 


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


 


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


 


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


 


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


 


47

















 


(vi)          the commingling of Collections with
respect to Transferred Receivables by the Borrower at any time with its other
funds or the funds of any other Person except as contemplated pursuant to Section 7.03
of the Sale Agreement;


 


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


 


(viii)        any investigation, litigation or
proceeding related to this Agreement or the ownership of Receivables or
Collections with respect thereto;


 


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


 


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


 


If and to the extent that this Section 10.01 may be unenforceable
for any reason, the Borrower agrees to make the maximum contribution to the
payment and satisfaction thereof which is permissible under applicable law.


 


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


 


ARTICLE XI.


 


ADMINISTRATIVE AGENT


 


Section 11.01.  Authorization and Action.


 


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


 


Section 11.02.  Reliance. 
None of the Administrative Agent, any of its Affiliates or any of their
respective directors, officers, agents or employees shall be liable for any
action


 


48

















 


taken or omitted to be taken by
any of them under or in connection with this Agreement or the other Related
Documents, except for damages solely caused by its or their own gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction.  Without limiting the
generality of the foregoing, and notwithstanding any term or provision hereof
to the contrary, the Borrower and each Lender hereby acknowledge and agree that
the Administrative Agent as such (a) has no duties or obligations other
than as set forth expressly herein, and has no fiduciary obligations to any
person, (b) acts as a representative hereunder for the Lenders and has no
duties or obligations to, shall incur no liabilities or obligations to, and
does not act as an agent in any capacity for, the Borrower (other than, with
respect to the Administrative Agent, under the Power of Attorney with respect
to remedial actions) or the Originators, (c) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts, (d) makes
no representation or warranty hereunder to any Affected Party and shall not be
responsible to any such Person for any statements, representations or
warranties made in or in connection with this Agreement or the other Related
Documents, (e) except to the extent set forth in Section 2.03(a),
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or
the other Related Documents on the part of the Borrower, the Servicer, any
Originator, the Parent, Holdings or any Lender, or to inspect the property
(including the books and records) of the Borrower, the Servicer, any
Originator, the Parent, Holdings or any Lender, (f) shall not be
responsible to the Borrower, the Servicer, any Lender or any other Person for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Related Documents or any other
instrument or document furnished pursuant hereto or thereto, (g) shall
incur no liability under or in respect of this Agreement or the other Related
Documents by acting upon any notice, consent, certificate or other instrument
or writing believed by it to be genuine and signed, sent or communicated by the
proper party or parties and (h) shall not be bound to make any
investigation into the facts or matters stated in any notice or other
communication hereunder and may conclusively rely on the accuracy of such facts
or matters.


 


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


 


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


 


49

















 


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


 


Section 11.06.  Successor Administrative Agent.  The Administrative Agent may resign at any
time by giving not less than thirty (30) days’ prior written notice thereof to
each of the Lenders and the Borrower. 
Upon any such resignation, the Requisite Lenders shall have the right to
appoint a successor Administrative Agent that meets the qualifications of an
assignee of a Lender hereunder; provided, that, so long as no
Termination Event or an Incipient Termination Event shall have occurred and be
continuing, such successor Administrative Agent shall require the approval by
the Borrower, which approval shall not be unreasonably withheld or delayed. If
no successor Administrative Agent shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment within 30 days after the
resigning the Administrative Agent’s giving notice of resignation, then the
resigning Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a Lender, if a Lender is willing
to accept such appointment, or otherwise shall be a commercial bank or
financial institution or a subsidiary of a commercial bank or financial
institution which commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof which has a
long-term debt rating from S&P of “A–” or better and Moody’s of “A3” or
better and has a combined capital and surplus of at least $300,000,000.  If no successor Administrative Agent has been
appointed pursuant to the foregoing, by the 30th day after the date such notice
of resignation was given by the resigning Administrative Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder until such time,
if any, as the Requisite Lenders appoint a successor Administrative Agent as
provided above.  Upon the acceptance of
any appointment as the Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning Administrative Agent.  Upon the
earlier of the acceptance of any appointment as the Administrative Agent
hereunder by a successor Administrative Agent or the effective date of the
resigning Administrative Agent’s resignation, the resigning Administrative
Agent shall be discharged from its duties and obligations under this Agreement


 


50

















 


and the other Related
Documents, except that any indemnity rights or other rights in favor of such
resigning Administrative Agent shall continue. 
After any resigning Administrative Agent’s resignation hereunder, the
provisions of this Article XI shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Administrative Agent under this Agreement and the other Related
Documents.


 


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


 


ARTICLE XII.


 


MISCELLANEOUS


 


Section 12.01.  Notices. 
Except as otherwise provided herein, whenever it is provided herein that
any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered (a) upon the earlier of actual receipt and three Business Days
after deposit in


 


51

















 


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


 


	
  Borrower:

  
	
   

  
	
  Vertis Receivables II, LLC

  
	
  250 W. Pratt Street

  
	
  Baltimore, MD 21201

  
	
  Attention: Chief Financial Officer and
  Chief Legal Officer

  
	
  Telephone:

  
	
  Facsimile:

  
	
   

  
	
  Administrative Agent:

  
	
   

  
	
  General Electric Capital Corporation

  
	
  201 Merritt 7

  
	
  Norwalk, Connecticut 06851

  
	
  Attention: Vice President, Portfolio
  Underwriting

  
	
  Telephone:

  
	
  Facsimile:

  



 


Section 12.02.  Binding Effect; Assignability.


 


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


 


52

















 


(b)           The Borrower hereby
consents to any Lender’s assignment or pledge of, and/or sale of participations
in, at any time or times after the Effective Date of the Related Documents,
Advances, and any Commitment or of any portion thereof or interest therein,
including any Lender’s rights, title, interests, remedies, powers or duties
thereunder  (including, without
limitation, an assignment by the Swing Line Lender of all or any portion of its
Swing Line Commitment), whether evidenced by a writing or not, made in
accordance with this Section 12.02(b).  Any assignment by a Lender shall (i) require
the execution of an assignment agreement (an “Assignment
Agreement”) substantially in the form attached hereto as Exhibit 12.02(b) or
otherwise in form and substance satisfactory to the Administrative Agent, and
acknowledged by, the Administrative Agent and other than in the case of an
assignment by a Lender to one of its Affiliates, the consent of the
Administrative Agent and, so long as no Termination Event has occurred and is
continuing, the Borrower (which consent shall not be unreasonably withheld or
delayed); (ii) so long as no Termination Event or an Incipient Termination
Event shall have occurred and be continuing, each assignee of a Lender (other
than a SPV) shall require the approval by the Borrower, which approval shall
not be unreasonably withheld or delayed; provided, further that assignments by
a Lender to any Affiliate of the Agent or any Lenders shall not be subject to
the consent of the Borrower; (iii) if a partial assignment, be in an
amount at least equal to $5,000,000 and, after giving effect to any such
partial assignment, the assigning Lender shall have retained Commitments in an
amount at least equal to $5,000,000; (iv) require the delivery to the
Administration Agent by the assignee or participant, as the case may be, of any
forms, certificates or other evidence with respect to United States tax
withholding matters, and (iv) other than in the case of an assignment by a
Lender to one of its Affiliates, include a payment to the Administrative Agent
by the assignor or assignee Lender of an assignment fee of $3,500.  In the case of an assignment by a Lender
under this Section 12.02, the assignee
shall have, to the extent of such assignment, the same rights, benefits and
obligations as it would if it were a Lender hereunder.  The assigning Lender shall be relieved of its
obligations hereunder with respect to its 
Commitments or assigned portion thereof from and after the date of such
assignment.  The Borrower hereby
acknowledges and agrees that any assignment made in accordance with this Section 12.02(b) will give
rise to a direct obligation of the Borrower to the assignee and that the
assignee shall thereupon be a “Lender” for all purposes.  In all instances, each Lender’s obligation to
make Revolving Credit Advances hereunder shall be several and not joint and
shall be limited to such Lender’s Pro Rata Share of the applicable
Commitment.  In the event any Lender
assigns or otherwise transfers all or any part of a Revolving Note or the Swing
Line Note, such Lender shall so notify the Borrower and the Borrower shall,
upon the request of  such Lender, execute
new Revolving Notes or Swing Line Notes in exchange for the Revolving Notes or
Swing Line Notes, as the case may be, being assigned.  Notwithstanding the foregoing provisions of
this Section 12.02(b), any Lender may
at any time pledge or assign all or any portion of such Lender’s rights under
this Agreement and the other Related Documents to any Federal Reserve Bank or
to any holder or trustee of such Lender’s securities; provided,
however, that no such pledge or assignment
to any Federal Reserve Bank, holder or trustee shall release such Lender from
such Lender’s obligations hereunder or under any other Related  Document and no such holder or trustee shall
be entitled to enforce any rights of such Lender hereunder unless such holder
or trustee becomes a Lender hereunder through execution of an Assignment
Agreement as set forth above.  A Lender
may not grant an assignment or participation to a Person who is (x) not a “United
States person” (within the meaning of IRC Section 7701(a)(30) unless such
Person is exempt from United States withholding tax as of the date of such


 


53

















 


participation and provides a Form W-8BEN,
W-8ECI or W-8IMY, as applicable, to the Administrative Agent before giving
effect to such assignment.


 


(c)           In addition to the
foregoing right, any Lender may, without notice to or consent from the
Administrative Agent or the Borrower, (x) grant to an SPV the option to make
all or any part of any Advance that such Lender would otherwise be required to
make hereunder (and the exercise of such option by such SPV and the making of
Loans pursuant thereto shall satisfy the obligation of such Lender to make such
Loans hereunder); (y) assign to an SPV all or a portion of its rights (but not
its obligations) under the Related Documents, including a sale of any Advances
or other Borrower Obligations hereunder and such Lender’s right to receive
payment with respect to any such Borrower Obligation and (z) sell
participations to one or more Persons in or to all or a portion of its rights
and obligations under the Related Documents (including all its rights and
obligations with respect to the Advances); provided,
however, that (x) no such SPV or participant shall have a commitment, or be
deemed to have made an offer to commit, to make Advances hereunder, and none
shall be liable to any Person for any obligations of such Lender hereunder (it being
understood that nothing in this Section 12.02(c) shall
limit any rights the Lender may have as against such SPV or participant under
the terms of the applicable option, sale or participation agreement between or
among such parties); and (y) no such SPV or holder of any such participation
shall be entitled to require such Lender to take or omit to take any action
hereunder except actions directly affecting (i) any reduction in the
principal amount of, or interest rate or Fees payable with respect to, any
Advance in which such holder participates, (ii) any extension of any
scheduled payment of the principal amount of any Advance in which such holder
participates or the final maturity date thereof, and (iii) any release of
all or substantially all of the Borrower Collateral (other than in accordance
with the terms of this Agreement or the other Related Documents).  Solely for purposes of Sections
2.08, 2.09, 2.10, and 9.01,
Borrower acknowledges and agrees that each such sale or participation shall
give rise to a direct obligation of the Borrower to the participant or SPV and
each such participant or SPV shall be considered to be a “Lender” for purposes
of such sections.  Except as set forth in
the preceding sentence, such Lender’s rights and obligations, and the rights
and obligations of the other Lenders and the Administrative Agent towards such
Lender under any Related Document shall remain unchanged and none of the
Borrower, the Administrative Agent or any Lender (other than the Lender selling
a participation or assignment to an SPV) shall have any duty to any participant
or SPV and may continue to deal solely with the assigning or selling Lender as
if no such assignment or sale had occurred.


 


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


 


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


 


54

















 


initial syndication of the
Commitments hereunder, assist in the preparation of informational materials for
such syndication.


 


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


 


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


 


(a)           This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
Termination Date.


 


(b)           Except as otherwise
expressly provided herein or in any other Related Document, no termination or
cancellation (regardless of cause or procedure) of any commitment made by any
Affected Party under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Borrower or the rights of any
Affected Party relating to any unpaid portion of the Borrower Obligations, due
or not due, liquidated, contingent or unliquidated or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date.  Except as otherwise expressly provided herein
or in any other Related Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon the Borrower and all rights
of any Affected Party hereunder, all as contained in the Related Documents,
shall not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination
Date; provided, that the rights and
remedies provided for herein with respect to any breach of any representation
or warranty made by the Borrower pursuant to Article IV,
the indemnification and payment provisions of Article X
and Sections 11.05, 12.05, 12.14
and 12.15 shall be continuing and shall
survive the Termination Date.


 


Section 12.04.  Costs, Expenses and Taxes.  (a)  Subject to the terms of Section 7.05(b) hereof,
the Borrower shall reimburse the Administrative Agent for all reasonable out of
pocket expenses incurred in connection with the negotiation and preparation of
this Agreement and the other Related Documents (including the reasonable fees
and expenses of all of its special counsel, advisors, consultants and auditors
retained in connection with the transactions contemplated thereby and advice in
connection therewith).  The Borrower
shall reimburse each Lender and the Administrative Agent for all fees,
reasonable costs and expenses, including the fees, costs and expenses of
counsel or other advisors for advice, assistance, or other representation in
connection with:


 


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


 


55

















 


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


 


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


 


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


 


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


 


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


 


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


 


56

















 


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


 


Section 12.05.  Confidentiality.


 


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


 


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


 


(c)           The Administrative
Agent and each Lender agrees to maintain the confidentiality of the Information
(as defined below), and will not use such confidential Information for any
purpose or in any matter except in connection with this Agreement, except that
Information may be disclosed (1) to (i) each Affected Party (ii) its
and each Affected Party’s and their respective Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential and to not disclose or use such Information in
violation of Regulation FD (17 C.F.R. § 243.100-243.103)) and (iii) industry
trade organizations for inclusion in league table measurements, (2) any
regulatory authority (it being understood that it will to the extent reasonably
practicable provide the Borrower with an opportunity to request confidential
treatment from such regulatory authority), (3) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (4) to
any other party to this Agreement, (5) to the extent required in
connection with the exercise of any remedies hereunder or any suit,


 


57

















 


action or proceeding relating
to this Agreement or any other Related Document or the enforcement of rights
hereunder or thereunder, (6) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of (or
participant in), or any prospective assignee of (or participant in), any of its
rights or obligations under this Agreement, (7) with the consent of the
Borrower or (8) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or any other
confidentiality agreement to which it is party with the Borrower or Holdings or
any subsidiary thereof or (ii) becomes available to the Administrative
Agent, or any Lender on a nonconfidential basis from a source other than
Holdings or any subsidiary thereof.  For
the purposes of this Section, “Information” means all information received from the
Borrower and Servicer relating to the Borrower, the Servicer, Holdings or any
subsidiary thereof or their businesses, or any Obligor, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by Borrower or Servicer; provided that in the case of information received
from the Borrower or Servicer after the date hereof, such information is
clearly identified at the time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.


 


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


 


Section 12.07.  Amendments and Waivers.


 


(a)           Except for actions
expressly permitted to be taken by the Administrative Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any
Note, or any consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed (1) by
the Borrower, (2) by the Requisite Lenders or, to the extent required
under clause (b) below, by all affected
Lenders and the Swing Line Lender, as applicable, (3) to the extent
required under clause (b) or clause (c) below, by the Administrative Agent and
(4) if such amendment, modification or waiver modifies the activities  in which the Borrower is permitted to engage,
by the Lenders then holding more than 50% of the Outstanding Principal Amount.  Except as set forth in clause
(b) below, all amendments, modifications, terminations or waivers
requiring the consent of any Lenders without specifying the required percentage
of Lenders shall require the written consent of the Requisite Lenders.


 


(b)           (i) No
amendment, modification, termination or waiver shall, unless in writing and
signed by each Lender directly affected thereby, do any of the following: (1) increase
the principal amount of any Lender’s Commitment; (2) reduce the principal
of, rate of interest on or Fees payable with respect to any Advance made by any
affected Lender; (3) extend any scheduled payment date or final maturity
date of the principal amount of any Advance of any affected Lender; (4) waive,
forgive, defer, extend or postpone any payment of interest or Fees as to any
affected Lender; (5) change the percentage of the Aggregate Commitments or
of the


 


58

















 


aggregate Outstanding Principal
Amount which shall be required for Lenders or any of them to take any action
hereunder; (6) release all or substantially all of the Borrower
Collateral; or (7) amend or waive this Section 12.07
or the definition of the term “Requisite Lenders”  insofar as such definition affects the
substance of this Section 12.07.  Furthermore, no amendment, modification,
termination or waiver shall be effective to the extent that it (y) affects the
rights or duties of the Administrative Agent under this Agreement or any other
Related Document unless in writing and signed by the Administrative Agent or
(z) affects the rights or duties of the Swing Line Lender under this Agreement
or modifies or amends any other provision of this Agreement or any other
Related Document relating the Swing Line Loan, Swing Line Advances or the Swing
Line Lender unless in writing and signed by the Swing Line Lender.


 


(ii)           Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. 
No amendment, modification, termination or waiver shall be required for
the Administrative Agent to take additional Borrower Collateral pursuant to any
Related Document. No amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of the
holder of such Note.  No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.  Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 12.07
shall be binding upon each holder of a Note at the time outstanding and each
future holder of a Note.


 


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


 


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


 


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


 


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


 


(d)           Upon indefeasible
payment in full in cash and performance of all of the Borrower Obligations
(other than indemnification obligations under Section 10.01),
termination


 


59

















 


of the Aggregate Commitment and
a release of all claims against the Administrative Agent and Lenders, and so
long as no suits, actions, proceedings or claims are pending or threatened
against any Indemnified Person asserting any damages, losses or liabilities
that are Indemnified Liabilities, the Administrative Agent shall deliver to the
Borrower termination statements and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Borrower
Obligations.


 


Section 12.08.  No Waiver; Remedies.  The failure by any Lender or the
Administrative Agent, at any time or times, to require strict performance by
the Borrower or the Servicer of any provision of this Agreement, any
Receivables Assignment or any other Related Document shall not waive, affect or
diminish any right of any Lender or the Administrative Agent thereafter to
demand strict compliance and performance herewith or therewith.  Any suspension or waiver of any breach or
default hereunder shall not suspend, waive or affect any other breach or
default whether the same is prior or subsequent thereto and whether the same or
of a different type.  None of the undertakings,
agreements, warranties, covenants and representations of the Borrower or the
Servicer contained in this Agreement, any Receivables Assignment or any other
Related Document, and no breach or default by the Borrower or the Servicer
hereunder or thereunder, shall be deemed to have been suspended or waived by
any Lender or the Administrative Agent unless such waiver or suspension is by
an instrument in writing signed by an officer of or other duly authorized
signatory of the applicable Lenders and the Administrative Agent and directed
to the Borrower or the Servicer, as applicable, specifying such suspension or
waiver.  The rights and remedies of the
Lenders and the Administrative Agent under this Agreement and the other Related
Documents shall be cumulative and nonexclusive of any other rights and remedies
that the Lenders and the Administrative Agent may have hereunder, thereunder,
under any other agreement, by operation of law or otherwise.  Recourse to the Borrower Collateral shall not
be required.


 


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


 


(a)           THIS
AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT ANY
RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS
ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) EXCEPT TO THE EXTENT THAT THE
PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE
ADMINISTRATIVE AGENT IN THE RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN
RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.


 


(b)           EACH
PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN THE BOROUGH OF


 


60

















 


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


 


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


 


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


 


Section 12.11.  Severability. 
Wherever possible, each provision of this Agreement shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Agreement.


 


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


 


Section 12.13.  Further Assurances.


 


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


 


(b)                                 Without
limiting the generality of the foregoing, the Borrower hereby authorizes the
Lenders and the Administrative Agent, and each of the Lenders hereby authorizes
the Administrative Agent, to file one or more financing or continuation
statements, or amendments thereto or assignments thereof, relating to all or
any part of the Transferred Receivables, including Collections with respect
thereto, or the Borrower Collateral without the signature of the Borrower or,
as applicable, the Lenders, as applicable, to the extent permitted by
applicable law.  A carbon, photographic
or other reproduction of this Agreement or of any notice


 


62





















 


or financing
statement covering the Transferred Receivables, the Borrower Collateral or any
part thereof shall be sufficient as a notice or financing statement where
permitted by law.


 


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


 


Section 12.15.  Limitation
on Payments.


 


(a)                                  Notwithstanding
any provision in any other section of this Agreement to the contrary, the
obligation of the Borrower to pay any amounts payable to Lender or any other
Affected Party pursuant to Sections 2.09, 2.10 and 10.01
of this Agreement shall be paid pursuant hereto only if the Borrower has Excess
Funds, the excess of the amounts due hereunder over the amounts paid shall not
constitute a “claim” under Section 101(5) of the Bankruptcy Code
against the Borrower until such time as the Borrower has Excess Funds.  The foregoing shall not operate to limit the
rights of the Administrative Agent or any other Affected Party to enforce any
claims of Borrower or its assigns against the Originators under the Sale
Agreement or any other Related Document.


 


(b)                                 Without
limiting Section 12.15(a), all payments required to be made by the
Borrower to the Agent, the Lenders, the Affected Parties and the Indemnified
Persons pursuant to this Agreement and the other Related Documents shall be
made only from (i) Collections, (ii) proceeds from the repurchase of
Transferred Receivables from the Borrower by the Originators pursuant to
Section 4.04 of the Sale Agreement, (iii) indemnification and
reimbursement payments made by the Originators and the Servicer pursuant the
Sale Agreement, including, without limitation Article V thereof and (iv) payments
made by the Parent pursuant to the Originator Support Agreement and in no event
shall be made from cash contributions made by the Parent.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


63





















 


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


 


	
   

  	
  VERTIS RECEIVABLES II, LLC, as the Borrower

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ John V. Howard, Jr.

  	
   

  
	
   

  	
  Name:

  	
  John V. Howard, Jr.

  
	
   

  	
  Title:

  	
  Chief Legal Officer and Secretary

  
						



 


S-1





















 


	
  Commitment: $130,000,000

  	
  GENERAL ELECTRIC CAPITAL CORPORATION,

  
	
   

  	
  as a Lender and as Swing Line Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Kelly Stotler

  	
   

  
	
   

  	
  Name:

  	
  Kelly Stotler

  
	
   

  	
  Title:

  	
  Duly Authorized
  Signatory

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Kelly Stotler

  	
   

  
	
   

  	
  Name:

  	
  Kelly Stotler

  
	
   

  	
  Title:

  	
  Duly Authorized Signatory

  	
   

  
								



 


S-2





















 


Exhibit 2.01(a)(ii) to
Funding Agreement


 


FORM OF REVOLVING NOTE


 


	
  $130,000,000

  	
  November 25, 2005

  



 


FOR VALUE RECEIVED, the undersigned, VERTIS RECEIVABLES II, LLC, a
Delaware limited liability company (the “Borrower”), HEREBY PROMISES TO PAY to
the order of GENERAL ELECTRIC CAPITAL CORPORATION (the “Lender”), at the
offices of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as
agent for the Lender (the “Administrative Agent”), at its address at 201
Merritt 7, Norwalk, CT 06851, or at such other place as the Administrative
Agent may designate from time to time in writing, in lawful money of the United
States of America and in immediately available funds, the amount of ONE HUNDRED
THIRTY MILLION DOLLARS AND NO CENTS ($130,000,000) or, if less, the aggregate
unpaid amount of all Revolving Credit Advances made to the undersigned under
the “Funding Agreement” (as hereinafter defined).  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Funding Agreement or in Annex X thereto.


 


This Revolving Note is one of the Revolving Notes issued pursuant to
that certain Receivables Funding and Administration Agreement dated as of November 25,
2005 by and among the Borrower, the Lender (and any other “Lender” party
thereto), and the Administrative Agent (including all annexes, exhibits and
schedules thereto, and as from time to time amended, restated, supplemented or
otherwise modified, the “Funding Agreement”), and is entitled to the benefit
and security of the Funding Agreement and all of the other Related Documents
referred to therein.  Reference is hereby
made to the Funding Agreement for a statement of all of the terms and
conditions under which the Revolving Credit Advances evidenced hereby are made
and are to be repaid.  The date and
amount of each Revolving Credit Advance made by the Lender to the Borrower, the
rates of interest applicable thereto and each payment made on account of the
principal thereof, shall be recorded by the Administrative Agent on its books;
provided that the failure of the Administrative Agent to make any such
recordation shall not affect the obligations of the Borrower to make a payment
when due of any amount owing under the Funding Agreement or this Revolving Note
in respect of the Revolving Credit Advances actually made by the Lender to the
Borrower.


 


The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Funding Agreement, the
terms of which are hereby incorporated herein by reference.  Interest thereon shall be paid until such
principal amount is paid in full at such interest rates and at such times, and
pursuant to such calculations, as are specified in the Funding Agreement.


 


If any payment on this Revolving Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.


 





















 


Upon and after the occurrence of any Termination Event, this Revolving
Note may, as provided in the Funding Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.


 


Time is of the essence of this Revolving Note.  Demand, presentment, protest and notice of
nonpayment and protest are hereby waived by the Borrower.


 


Except as provided in the Funding Agreement, this Revolving Note may
not be assigned by the Lender to any Person.


 


THIS REVOLVING
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE.


 


	
   

  	
  VERTIS RECEIVABLES II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


S-2





















 


Exhibit 2.01(b)(ii) to
Funding Agreement


 


FORM OF SWING LINE NOTE


 


	
  $130,000,000

  	
  November 25, 2005

  



 


FOR VALUE RECEIVED, the undersigned, VERTIS RECEIVABLES II, LLC, a
Delaware limited liability company (the “Borrower”), HEREBY PROMISES TO PAY to
the order of GENERAL ELECTRIC CAPITAL CORPORATION (“GE Capital”), a Delaware
corporation (the “Swing Line Lender”), at the offices of GE Capital, as agent
(in such capacity, the “Administrative Agent”), at the Agent’s address at 201
Merritt 7, Norwalk, CT 06851, or at such other place as the Administrative
Agent may designate from time to time in writing, in lawful money of the United
States of America and in immediately available funds, the amount of ONE HUNDRED
THIRTY MILLION DOLLARS AND NO CENTS ($130,000,000) or, if less, the aggregate
unpaid amount of all Swing Line Advances made to the undersigned under the “Funding
Agreement” (as hereinafter defined).  All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Funding Agreement or in Annex X
thereto.


 


This Swing Line Note is issued pursuant to that certain Receivables
Funding and Administration Agreement dated as of November 25, 2005 by and
among the Borrower, the Swing Line Lender, the other “Lenders” party thereto,
and the Administrative Agent (including all annexes, exhibits and schedules
thereto and as from time to time amended, restated, supplemented or otherwise
modified, the “Funding Agreement”), and is entitled to the benefit and security
of the Funding Agreement and all of the other Related Documents referred to
therein.  Reference is hereby made to the
Funding Agreement for a statement of all of the terms and conditions under
which the Swing Line Advances evidenced hereby are made and are to be
repaid.  The date and amount of each
Swing Line Advance made by Swing Line Lender to the Borrower, the rate of
interest applicable thereto and each payment made on account of the principal
thereof, shall be recorded by the Administrative Agent on its books; provided
that the failure of the Administrative Agent to make any such recordation shall
not affect the obligations of the Borrower to make a payment when due of any
amount owing under the Funding Agreement or this Swing Line Note in respect of
the Swing Line Advances made by Swing Line Lender to the Borrower.


 


The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Funding Agreement, the
terms of which are hereby incorporated herein by reference.  Interest thereon shall be paid until such
principal amount is paid in full at such interest rates and at such times, and
pursuant to such calculations, as are specified in the Funding Agreement.


 


If any payment on this Swing Line Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.


 





















 


Upon and after the occurrence of any Termination Event, this Swing Line
Note may, as provided in the Funding Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.


 


Time is of the essence of this Swing Line Note.  Demand, presentment, protest and notice of
nonpayment and protest are hereby waived by Borrower.


 


THIS SWING
LINE NOTE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE.


 


	
   

  	
  VERTIS RECEIVABLES II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


P-2





















 


Exhibit 2.02(a) to
Funding Agreement


 


FORM OF COMMITMENT REDUCTION NOTICE


 


[Insert Date]


 


General Electric Capital Corporation,

as Administrative Agent

201 Merritt 7

Norwalk, Connecticut 06851

Attention:  Vice President –
Portfolio/Underwriting


 


Re:                               Receivables
Funding and Administration

Agreement dated as of November 25, 2005


 


Ladies and
Gentlemen:


 


This notice is given pursuant to Section 2.02(a) of
that certain Receivables Funding and Administration Agreement dated as of November 25,
2005 (the “Funding
Agreement”), by and among Vertis Receivables II, LLC (the “Borrower”), the
financial institutions party thereto as lenders (the “Lenders”) and General Electric
Capital Corporation, as Lender, Swing Line Lender and as administrative agent
for the Lenders (in such capacity, the “Administrative Agent”). 
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Funding Agreement.


 


Pursuant to Section 2.02(a) of
the Funding Agreement, the Borrower hereby irrevocably notifies the Lenders and
the Administrative Agent of its election to permanently reduce the Aggregate
Commitment to [$       ], effective as of [              
       ], [       ].(1) After
such reduction, the Aggregate Commitment will not be less than the Outstanding
Principal Amount.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  VERTIS RECEIVABLES II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
							



 










(1)          This day shall be a Business Day at least ten
Business Day after the date this notice is given.


 





















 


Exhibit 2.02(b) to
Funding Agreement


 


FORM OF COMMITMENT TERMINATION NOTICE


 


[Insert Date]


 


General Electric Capital
Corporation,

as Administrative Agent


201 Merritt 7

Norwalk, Connecticut 06851

Attention:  Vice President –
Portfolio/Underwriting


 


Re:                               Receivables
Funding and Administration

Agreement dated as of November 25, 2005


 


Ladies and
Gentlemen:


 


This notice is given pursuant to Section 2.02(b) of
that certain Receivables Funding and Administration Agreement dated as of November 25, 2005 (the “Funding Agreement”), by and
among Vertis Receivables II, LLC (the “Borrower”), the financial institutions party thereto as
lenders (the “Lenders”)
and General Electric Capital Corporation, as a Lender, Swing Line Lender and as
administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to them in the
Funding Agreement.


 


Pursuant to Section 2.02(b) of
the Funding Agreement, the Borrower hereby irrevocably notifies the Lenders and
the Administrative Agent of its election to terminate the Aggregate Commitment
effective as of [              ],
[      ](2). 
In connection therewith, the Borrower shall reduce Outstanding Principal
Amount to zero on or prior to such date and make all other payments required by
Section 2.03(h) and pay any other
fees that are due and payable pursuant to the Fee Letter at the time and in the
manner specified therein.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  VERTIS RECEIVABLES II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
							



 










(2)          Which day shall be a Business Day at least 30
days after the date this notice is given


 





















 


Exhibit 2.03(a) to
Funding Agreement


 


FORM OF BORROWING REQUEST


 


[Insert Date]


 


General Electric Capital
Corporation,

as Administrative Agent


201 Merritt 7


Norwalk, Connecticut 06851


Attention:  Vice President –
Portfolio/Underwriting


 


Re:                               Receivables
Funding and Administration

Agreement dated as of November 25, 2005


 


Ladies and
Gentlemen:


 


This notice is given pursuant to Section 2.03(a) of
that certain Receivables Funding and Administration Agreement dated as of November 25,
2005 (the “Funding Agreement”), by
and among Vertis Receivables II, LLC (the “Borrower”),
the financial institutions party thereto as lenders (the “Lenders”) and General Electric Capital
Corporation, as a lender, a Swing Line Lender and as administrative agent for
the Lenders (in such capacity, the “Administrative
Agent”).  Capitalized terms
used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Funding Agreement.


 


Pursuant to Section 2.01 of
the Funding Agreement, the Borrower hereby requests that a Borrowing be made to
the Borrower on [               ],
[         ], in the amount of [$         ]
which shall be a Swing Line Advance consisting of [Index Rate Advances](3) [LIBOR
Rate Advances], to be disbursed to the Borrower in accordance with Section 2.04(a) of the Funding
Agreement.  The Borrower hereby
represents and warrants that the conditions set forth in Section 3.02
of the Funding Agreement have been satisfied. 
Attached hereto is a certificate setting forth a pro forma calculation
of the Borrowing Base after giving effect to the acquisition by the Borrower of
new Transferred Receivables and the receipt of Collections since the date of
the most recent Borrowing Base Certificate, and the making of such Borrowing.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  VERTIS RECEIVABLES II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
							



 










(3)          Unless a LIBOR Rate Disruption Event shall
have occurred, all Revolving Credit Advances shall be LIBOR Rate Advances.


 





















 


Exhibit to Borrowing Request


 


Pro Forma Calculation of Borrowing Base


 


[Attached]


 


2





















 


Exhibit 2.03(h) to
Funding Agreement


 


FORM OF REPAYMENT NOTICE


 


[Insert Date]


 


General Electric Capital
Corporation,

as Administrative Agent


201 Merritt 7


Norwalk, Connecticut 06851


Attention:  Vice President –
Portfolio/Underwriting


 


Re:                               Receivables
Funding and Administration

Agreement dated as of November 25, 2005


 


Ladies and
Gentlemen:


 


This notice is given pursuant to Section 2.03(h) of
that certain Receivables Funding and Administration Agreement dated as of November 25,
2005 (the “Funding
Agreement”), by and among Vertis Receivables II, LLC (the “Borrower”), the
financial institutions party thereto as lenders (the “Lenders”), and General Electric
Capital Corporation, as a lender (in such capacity, the “Lender”) and as administrative
agent for the Lenders (in such capacity, the “Administrative Agent”).  Capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to them in the
Funding Agreement.


 


Pursuant to Section 2.03(h) of
the Funding Agreement, the Borrower hereby notifies the Lenders and the
Administrative Agent of its request to repay the principal amount of
outstanding Advances in an amount equal to [$        ]
on [               
    ], [      ] (which is a
Business Day), from [Collections/other sources].  In connection therewith, the Borrower will
pay to the Administrative Agent (1) all interest accrued on the
outstanding principal balance of Advances being repaid through but excluding
the date of such repayment and (2) any and all Breakage Costs payable
under Section 2.10 of the Funding
Agreement by virtue thereof.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  VERTIS RECEIVABLES II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
							



 





















 


Exhibit 5.02(b) to
Funding Agreement


 


Form of


 


BORROWING BASE CERTIFICATE


 


[Attached]


 





















 


Exhibit 9.03
to Funding Agreement


 


Form of


 


POWER OF ATTORNEY


 


This Power of Attorney is executed and delivered by Vertis Receivables
II, LLC, as Borrower, (“Grantor”) under the
Funding Agreement (as defined below), to General Electric Capital Corporation,
as Administrative Agent under the Funding Agreement (hereinafter referred to as
“Attorney”),
pursuant to that certain Receivables Funding and Administration Agreement dated
as of November 25, 2005 (the “Funding Agreement”), by and among Grantor, the other parties
thereto and Attorney and the other Related Documents.  Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Funding
Agreement.  No person to whom this Power
of Attorney is presented, as authority for Attorney to take any action or
actions contemplated hereby, shall be required to inquire into or seek
confirmation from Grantor as to the authority of Attorney to take any action
described below, or as to the existence of or fulfillment of any condition to
this Power of Attorney, which is intended to grant to Attorney unconditionally
the authority to take and perform the actions contemplated herein, and Grantor
irrevocably waives any right to commence any suit or action, in law or equity,
against any person or entity that acts in reliance upon or acknowledges the
authority granted under this Power of Attorney. 
The power of attorney granted hereby is coupled with an interest and may
not be revoked or cancelled by Grantor until all Borrower Obligations under the
Related Documents have been indefeasibly paid in full and Attorney has provided
its written consent thereto.


 


Grantor hereby irrevocably constitutes and appoints Attorney (and all
officers, employees or agents designated by Attorney), with full power of
substitution, as its true and lawful attorney in fact with full irrevocable
power and authority in its place and stead and in its name or in Attorney’s own
name, from time to time in Attorney’s discretion, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments that may be necessary or desirable to accomplish the purposes of
the Funding Agreement, and, without limiting the generality of the foregoing,
hereby grants to Attorney the power and right, on its behalf, without notice to
or assent by it, upon the occurrence and during the continuance of any
Termination Event, to do the following:  (a) open
mail for it, and ask, demand, collect, give acquaintances and receipts for,
take possession of, or endorse and receive payment of, any checks, drafts,
notes, acceptances, or other instruments for the payment of moneys due in
respect of Transferred Receivables, and sign and endorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, and notices in connection with any
Borrower Collateral; (b)  pay or discharge any taxes, Liens, or other
encumbrances levied or placed on or threatened against any Borrower Collateral;
(c) defend any suit, action or proceeding brought against it or any
Borrower Collateral if the Grantor does not defend such suit, action or
proceeding or if Attorney believes that it is not pursuing such defense in a
manner that will maximize the recovery to Attorney, and settle, compromise or
adjust any suit, action, or proceeding described above and, in connection
therewith, give such 


 





















 


discharges or releases as Attorney may deem appropriate;
(d) file or prosecute any claim, Litigation, suit or proceeding in any
court of competent jurisdiction or before any arbitrator, or take any other
action otherwise deemed appropriate by Attorney for the purpose of collecting
any and all such moneys due with respect to any Borrower Collateral or
otherwise with respect to the Related Documents whenever payable and to enforce
any other right in respect of its property; (e) sell, transfer, pledge,
make any agreement with respect to, or otherwise deal with, any Borrower
Collateral, and execute, in connection with such sale or action, any
endorsements, assignments or other instruments of conveyance or transfer in
connection therewith; and (f) cause the certified public accountants then
engaged by it to prepare and deliver to Attorney at any time and from time to
time, promptly upon Attorney’s request, any and all financial statements or
other reports required to be delivered by or on behalf of Grantor under the
Related Documents, all as though Attorney were the absolute owner of its
property for all purposes, and to do, at Attorney’s option and its expense, at
any time or from time to time, all acts and other things that Attorney
reasonably deems necessary to perfect, preserve, or realize upon the Borrower
Collateral and the Lenders’ Liens thereon, all as fully and effectively as it
might do.  Grantor hereby ratifies, to
the extent permitted by law, all that said attorneys shall lawfully do or cause
to be done by virtue hereof.


 


IN WITNESS
WHEREOF, this Power of Attorney is executed by
Grantor, and Grantor has caused its seal to be affixed pursuant to the
authority of its board of directors this       day of
November, 2005.


 


 


	
  Grantor

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  (SEAL)

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
									



[Notarization
in appropriate form for the state of execution is required.]


 


2





















 


Exhibit 12.02(b) to
Funding Agreement


 


FORM OF ASSIGNMENT AGREEMENT


 


This Assignment Agreement (this “Agreement”) is made as of                  
    ,        by and between                                                                        
(“Assignor Lender”) and                                                  
(“Assignee Lender”) and acknowledged and consented to by GENERAL ELECTRIC
CAPITAL CORPORATION, as administrative agent (“Administrative Agent”).  All capitalized terms used in this Agreement
and not otherwise defined herein will have the respective meanings set forth in
the Funding Agreement as hereinafter defined.


 


RECITALS:


 


WHEREAS, Vertis Receivables II, LLC, a Delaware limited liability
company (the “Borrower”), the financial institutions signatory thereto from
time to time as lenders (the “Lenders”), and the Administrative Agent have
entered into that certain Receivables Funding and Administration Agreement
dated as of November 25, 2005 (as amended, restated, supplemented or
otherwise modified from time to time, the “Funding Agreement”) pursuant to
which the Lenders (including the Assignor Lender) have agreed to make certain
Advances to Borrower;


 


WHEREAS, Assignor Lender desires to assign to Assignee Lender [all/a portion] of its interest
in the Advances (as described below) and the Borrower Collateral and to
delegate to Assignee Lender [all/a portion] of its Commitment and other duties
with respect to such Advances and Borrower Collateral;


 


WHEREAS, Assignee Lender desires to become a Lender under the Funding
Agreement and to accept such assignment and delegation from Assignor Lender;
and


 


WHEREAS, Assignee Lender desires to appoint the Administrative Agent to
serve as agent for Assignee Lender under the Funding Agreement;


 


NOW, THEREFORE, in consideration of the premises and the agreements,
provisions, and covenants herein contained, Assignor Lender and Assignee Lender
agree as follows:


 


1.                                      ASSIGNMENT,
DELEGATION, AND ACCEPTANCE


 


1.1                                 Assignment. 
Assignor Lender hereby transfers and assigns to Assignee Lender, without
recourse and without representations or warranties of any kind (except as set
forth in Section 3.2 below), [all/such percentage] of Assignor
Lender’s right, title, and interest in the Advances, Related Documents and
Borrower Collateral as will result in Assignee Lender having as of the
Effective Date (as hereinafter defined) a Pro Rata Share thereof, as follows:


 





















 


 


	
  Assignee Lender’s Loans

  	
   

  	
  Principal Amount

  	
   

  	
  Pro Rata Share

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Advances

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  	
   

  
										



 


1.2                                 Delegation. 
Assignor Lender hereby irrevocably assigns and delegates to Assignee
Lender [all/a portion] of its Commitments and its other duties and obligations
as a Lender under the Related Documents equivalent to [100%/      %] of Assignor
Lender’s Commitment (such percentage representing a commitment of $                 ).


 


1.3                                 Acceptance by Assignee Lender.  By its execution of this Agreement, Assignee
Lender irrevocably purchases, assumes and accepts such assignment and
delegation and agrees to be a Lender with respect to the delegated interest
under the Related Documents and to be bound by the terms and conditions
thereof.  By its execution of this
Agreement, Assignor Lender agrees, to the extent provided herein, to relinquish
its rights and be released from its obligations and duties under the Funding
Agreement.


 


1.4                                 Effective Date. 
Such assignment and delegation by Assignor Lender and acceptance by
Assignee Lender will be effective and Assignee Lender will become a Lender
under the Related Documents as of the date of this Agreement (“Effective Date”)
and upon payment of the Assigned Amount and the Assignment Fee (as each term is
defined below).


 


2.                                      INITIAL PAYMENT
AND DELIVERY OF NOTES


 


2.1                                 Payment of the Assigned Amount.  Assignee Lender will pay to Assignor Lender,
in immediately available funds, not later than 12:00 noon (New York City time)
on the Effective Date, an amount equal to its Pro Rata Share of the then
outstanding principal amount of the Advances as set forth above in Section 1.1 together with accrued interest,
fees and other amounts as set forth on Schedule 2.1
(the “Assigned Amount”).


 


2.2                                 Payment of Assignment Fee.  [Assignor Lender]  [Assignee
Lender] will
pay to the Administrative Agent, for its own account in immediately available
funds, not later than 12:00 noon (New York City time) on the Effective Date, an
assignment fee in the amount of $3,500 (the “Assignment Fee”) as required
pursuant to Section 12.02(b) of the Funding Agreement.


 


2.3                                 Execution and Delivery of Notes.  Following payment of the Assigned Amount and
the Assignment Fee, Assignor Lender will deliver to the Administrative Agent
the Revolving Notes previously delivered to Assignor Lender for redelivery to
Borrower and the Administrative Agent will obtain from Borrower for delivery to
[Assignor Lender and] Assignee Lender, new executed Revolving Notes evidencing
Assignee Lender’s [and Assignor Lender’s respective] Pro Rata Share[s] in the
Advances after giving effect to the assignment described in Section 1. 
Each new Revolving Note will be issued in the aggregate maximum
principal amount of the Commitment of [the Assignee Lender] [and the Assignor
Lender].


 


2





















 


3.                                      REPRESENTATIONS, WARRANTIES
AND COVENANTS


 


3.1                                 Assignee Lender’s Representations, Warranties and Covenants.  Assignee Lender hereby represents, warrants,
and covenants the following to Assignor Lender and the Administrative Agent:


 


(a)                                  This Agreement is a
legal, valid, and binding agreement of Assignee Lender, enforceable according
to its terms;


 


(b)                                 The execution and
performance by Assignee Lender of its duties and obligations under this
Agreement and the Related Documents will not require any registration with,
notice to, or consent or approval by any Governmental Authority;


 


(c)                                  Assignee Lender is
familiar with transactions of the kind and scope reflected in the Related
Documents and in this Agreement;


 


(d)                                 Assignee Lender has
made its own independent investigation and appraisal of the financial condition
and affairs of the Borrower and its Affiliates, has conducted its own
evaluation of the Advances, the Related Documents and the Borrower’s and its
Affiliates’ creditworthiness, has made its decision to become a Lender to
Borrower under the Funding Agreement independently and without reliance upon
Assignor Lender, any other Lender or the Administrative Agent, and will
continue to do so;


 


(e)                                  Assignee Lender is
entering into this Agreement in the ordinary course of its business, and is
acquiring its interest in the Advances for its own account and not with a view
to or for sale in connection with any subsequent distribution; provided,
however, that at all times the distribution of Assignee Lender’s property
shall, subject to the terms of the Funding Agreement, be and remain within its
control;


 


(f)                                    No future
assignment or participation granted by Assignee Lender pursuant to Section 12.02 of the Funding Agreement will
require Assignor Lender, the Administrative Agent, or Borrower to file any
registration statement with the Securities and Exchange Commission or to apply
to qualify under the blue sky laws of any state;


 


(g)                                 Assignee Lender will
not enter into any written or oral agreement with, or acquire any equity or
other ownership interest in, the Borrower or any of its Affiliates without the
prior written consent of the Administrative Agent; and


 


(h)                                 As of the Effective
Date, Assignee Lender is entitled to receive payments of principal and interest
under the Funding Agreement without deduction for or on account of any taxes
imposed by the United States of America or any political subdivision
thereof  and Assignee Lender will
indemnify the Administrative Agent from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, or
expenses that are not paid by the Borrower pursuant to the terms of the Funding
Agreement.


 


3





















 


3.2                                 Assignor Lender’s Representations, Warranties and Covenants.  Assignor Lender hereby represents, warrants
and covenants the following to Assignee Lender:


 


(a)                                  Assignor Lender is
the legal and beneficial owner of the Assigned Amount;


 


(b)                                 This Agreement is a
legal, valid and binding agreement of Assignor Lender, enforceable according to
its terms;


 


(c)                                  The execution and
performance by Assignor Lender of its duties and obligations under this
Agreement will not require any registration with, notice to or consent or
approval by any Governmental Authority;


 


(d)                                 Assignor Lender has
full power and authority, and has taken all action necessary to execute and
deliver this Agreement and to fulfill the obligations hereunder and to
consummate the transactions contemplated hereby;


 


(e)                                  Assignor Lender is
the legal and beneficial owner of the interests being assigned hereby, free and
clear of any adverse claim, lien, encumbrance, security interest, restriction
on transfer, purchase option, call or similar right of a third party; and


 


(f)                                    This Agreement
complies, in all material respects, with the terms of the Related Documents.


 


4.             LIMITATIONS OF LIABILITY


 


Neither Assignor Lender (except as provided in Section 3.2)
nor the Administrative Agent makes any representations or warranties of any kind,
nor assumes any responsibility or liability whatsoever, with regard to (a) the
Related Documents or any other document or instrument furnished pursuant
thereto or the Advances or other Borrower Obligations, (b) the creation,
validity, genuineness, enforceability, sufficiency, value or collectibility of
any of them, (c) the amount, value or existence of the Borrower
Collateral,  (d) the perfection or
priority of any Lien upon the Borrower Collateral, or (e) the financial
condition of Borrower or any of its Affiliates or other obligor or the
performance or observance by Borrower or any of its Affiliates of its
obligations under any of the Related Documents. 
Neither Assignor Lender nor the Administrative Agent has or will have
any duty, either initially or on a continuing basis, to make any investigation,
evaluation, appraisal of, or any responsibility or liability with respect to
the accuracy or completeness of, any information provided to Assignee Lender
which has been provided to Assignor Lender or the Administrative Agent by
Borrower or any of its Affiliates. 
Nothing in this Agreement or in the Related Documents shall impose upon
the Assignor Lender or the Administrative Agent any fiduciary relationship in
respect of the Assignee Lender.


 


5.                                      FAILURE TO ENFORCE


 


No failure or delay on the part of the Administrative Agent or Assignor
Lender in the exercise of any power, right, or privilege hereunder or under any
Related Document will impair such power, right, or privilege or be construed to
be a waiver of any default or


 


4





















 


acquiescence therein.  No single or partial exercise of any such
power, right, or privilege will preclude further exercise thereof or of any
other right, power, or privilege.  All
rights and remedies existing under this Agreement are cumulative with, and not
exclusive of, any rights or remedies otherwise available.


 


6.                                      NOTICES


 


Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and
addressed to the respective party as set forth below its signature hereunder,
or to such other address as the party may designate in writing to the other.


 


7.                                      AMENDMENTS AND WAIVERS


 


No amendment, modification, termination, or waiver of any provision of
this Agreement will be effective without the written concurrence of Assignor
Lender, the Administrative Agent and Assignee Lender.


 


8.                                      SEVERABILITY


 


Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law.  In the event any provision of this Agreement
is or is held to be invalid, illegal, or unenforceable under applicable law,
such provision will be ineffective only to the extent of such invalidity,
illegality, or unenforceability, without invalidating the remainder of such
provision or the remaining provisions of the Agreement.  In addition, in the event any provision of or
obligation under this Agreement is or is held to be invalid, illegal, or
unenforceable in any jurisdiction, the validity, legality, and enforceability
of the remaining provisions or obligations in any other jurisdictions will not
in any way be affected or impaired thereby.


 


9.                                      SECTION TITLES


 


Section and Subsection titles in this Agreement are included
for convenience of reference only, do not constitute a part of this Agreement
for any other purpose, and have no substantive effect.


 


10.                               SUCCESSORS AND ASSIGNS


 


This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.


 


11.                               APPLICABLE LAW


 


THIS AGREEMENT
WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.


 


5





















 


12.                               COUNTERPARTS


 


This Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which, when so executed and delivered, will
be deemed an original and all of which shall together constitute one and the
same instrument.


 


6





















 


 


IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.


 


	
  Assignee Lender

  	
   

  	
  Assignor Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Notice Address

  	
   

  	
   

  	
  Notice Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Account Information

  	
   

  	
   

  	
  Account Information

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged
  and Consented to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Acknowledged and Consented to:

  VERTIS RECEIVABLES II, LLC, as 

  Borrower

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:(4)

  	
   

  	
   

  	
   

  
															



 










(4)          Include if the Borrower has a consent right
under the Section 12.02 of the Funding Agreement.


 


7





















 


SCHEDULE 2.1


 


Assignor
Lender’s Loans


 


Principal Amount


 


	
  Advances

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accrued Interest

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unused Line Fee

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other + or -

  	
  $

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
  $

  	
   

  	
   

  	
   

  	
   

  
							



 


All determined as of the Effective Date


 










 













 


Exhibit A to Funding Agreement


 


CREDIT AND COLLECTION POLICY


 


[Attached]


 

















 


SCHEDULE 4.01(b)

to

FUNDING AGREEMENT


 


JURISDICTION OF ORGANIZATION; EXECUTIVE OFFICES; COLLATERAL

LOCATIONS; CORPORATE, LEGAL AND OTHER NAMES; IDENTIFICATION

NUMBERS


 


[Attached]


 

















 


SCHEDULE 4.01(i)

to

FUNDING AGREEMENT


 


TAXES


 


[Attached]


 

















 


SCHEDULE 4.01(q)

to

FUNDING AGREEMENT


 


DEPOSIT AND DISBURSEMENT ACCOUNTS


 


[Attached]


 

















 


SCHEDULE 4.01(v)

to

FUNDING AGREEMENT


 


SUPPLEMENTARY REPRESENTATIONS


 


In addition to the representations, warranties and covenants contained
in Section 4.01 hereof, the Borrower, hereby makes the following
additional representations, warranties and covenants:


 


1.             Receivables;
Accounts.


 


(a)           Each Eligible
Receivable constitutes an “account” or a “general intangible” within the
meaning of the applicable UCC.


 


(b)           Each Account
constitutes a “deposit account” or “securities account” within the meaning of
the applicable UCC.


 


(c)           With respect to each
Account which constitutes a “securities account” within the meaning of the
applicable UCC:


 


i.              The securities
intermediary for each such Account has agreed to treat all assets credited to
such Account as “financial assets” within the meaning of the UCC.


 


ii.             The Borrower has
received all consents and approvals required by the terms of the applicable
Account Agreement and related Bank to the transfer to the Administrative Agent
of its interest and rights in the Account hereunder.


 


iii.            No such Account is
in the name of any Person other than the Borrower or the Administrative
Agent.  The Borrower has not consented to
the securities intermediary of any Account to comply with entitlement orders of
any person other than the Administrative Agent.


 


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


 


3.             Perfection.


 


(a)           The Borrower has
caused the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law and entered into
Account Agreements in order to perfect the sale of the Receivables from the
Originators to the Borrower pursuant to the Sale Agreement and the security
interest granted by the Borrower to the Administrative Agent (on behalf of
itself and the Lenders) in the Receivables hereunder.


 

















 


(b)           With respect to the
Borrower Account, the Borrower has delivered to the Administrative Agent (on
behalf of itself and the Lenders), a fully executed Borrower Account Agreement
pursuant to which the applicable Borrower Account Bank has agreed, following
the occurrence and continuation of a Termination Event, to comply with all
instructions given by the Administrative Agent with respect to all funds on
deposit in the Borrower Account, without further consent by the Borrower, the
Servicer or any Originator.


 


(c)           With respect to each
Account other than the Borrower Account, the Borrower has delivered to the
Administrative Agent (on behalf of itself and the Lenders), a fully executed
Account Agreement pursuant to which the applicable Bank has agreed to comply
with all instructions given by the Administrative Agent with respect to all
funds on deposit in the Accounts and the related Lockboxes, without further
consent by the Borrower, the Servicer or any Originator.


 


5.             Priority.


 


(a)           Other than the
transfer of the Receivables by the Originators to the Borrower pursuant to the
Sale Agreement and the grant of security interest by the Borrower to the
Administrative Agent (on behalf of itself and the Lenders) in the Receivables,
the Accounts and the Lockboxes hereunder, the Borrower has not pledged,
assigned, sold, conveyed, or otherwise granted a security interest in any of
the Receivables, the Accounts and the Lockboxes to any other Person.


 


(b)           The Borrower has not
authorized, or is aware of, any filing of any financing statement against the
Borrower that include a description of collateral covering the Receivables or
all other collateral pledged to the Administrative Agent (on behalf of the
Lenders) pursuant to the Related Documents, other than any financing statement
filed pursuant to the Sale Agreement and this Agreement or financing statements
that have been validly terminated prior to the date hereof.


 


(c)           The Borrower is not
aware of any judgment, ERISA or tax lien filings against either the Borrower or
any Originator.


 


(d)           None of the Accounts
or Lockboxes is in the name of any Person other than the Borrower or the
Administrative Agent.  The Borrower has
not consented to any Bank complying with instructions of any person other than
the Administrative Agent.


 


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


 


7.             Borrower to
Maintain Perfection and Priority.  In
order to evidence the interests of the Administrative Agent and the Lenders
under this Agreement, the Borrower shall, from time to time take such action,
or execute and deliver such instruments (other than filing financing
statements) as may be necessary or advisable (including, such actions as are
reasonably


 


2

















 


requested by the Administrative
Agent) to maintain and perfect, as a first-priority interest, the
Administrative Agent’s (on behalf of itself and the Lenders) security interest
in the Receivables and all other collateral pledged to the Administrative Agent
(on behalf of itself and the Lenders) pursuant to the Related Documents.  The Borrower shall, from time to time and
within the time limits established by law, prepare and present to the
Administrative Agent for the Administrative Agent’s authorization and approval
all financing statements, amendments, continuations or initial financing
statements in lieu of a continuation statement in the, or other filings
necessary to continue, maintain and perfect the Administrative Agent’s (on
behalf of itself and the Lenders) security interest in the Receivables and all
other collateral pledged to the Administrative Agent (on behalf of itself and
the Lenders) pursuant to the Related Documents as a first-priority interest.
The Administrative Agent’s approval of such filings shall authorize the
Borrower to file such financing statements under the UCC without the signature
of the Borrower, any Originator or the Administrative Agent where allowed by
applicable law.  Notwithstanding anything
else in the Related Documents to the contrary, neither the Borrower, the
Servicer, nor any Originator, shall have any authority to file a termination,
partial termination, release, partial release or any amendment that deletes the
name of a debtor or excludes collateral of any such financing statements,
without the prior written consent of the Administrative Agent.


 


3

















 


SCHEDULE 5.01(b)

to

FUNDING AGREEMENT


 


TRADE NAMES/BORROWER


 


None.


 

















 


ANNEX 5.02(a)

to

FUNDING AGREEMENT


 


REPORTING REQUIREMENTS OF THE BORROWER


 


The Borrower shall furnish, or cause to be furnished, to each Lender
and the Administrative Agent:


 


(a)           Reporting.


 


(i)            Monthly Report. 
As soon as available, and in any event no later than 11:00 a.m.
(New York time) on the fifteenth day of each calendar month, a monthly report
(a “Monthly Report”) in the form attached hereto prepared by the
Borrower as of the last day of the previous calendar month, together with an
unaudited monthly balance sheet of the Borrower certified by an officer of the
Borrower.  It is hereby understood and
agreed that the Borrower shall be required to deliver a Monthly Report pursuant
to the terms of this subsection (a)(i) notwithstanding that the
Borrower may also be required to deliver Weekly Reports and Daily Reports as
hereinafter described.


 


(ii)           Weekly Report. 
No later than 5:00 p.m. (New York time) on each Tuesday, a Weekly
Report, prepared by the Borrower as of the last day of the immediately
preceding week. It is hereby understood and agreed that the Borrower shall be
required to deliver a Weekly Report pursuant to the terms of this subsection (a)(ii) notwithstanding
that the Borrower may also be required to deliver Daily Reports as hereinafter
described.


 


(iii)          Daily Report. 
In the event of (A) a downgrade in the rating of the long-term
unsecured indebtedness of Holdings below B3 by Moody’s or (B) the
withdrawal of the rating of Moody’s of the long-term unsecured indebtedness of
Holdings, no later than 5:00 p.m.
(New York time) on each  subsequent
Business Day, a Daily Report, prepared by the Borrower as of the close of
business on the immediately preceding Business Day.


 


(b)           Annual Audited Financials.  As soon as available and in any event within
ninety-five (95) days after the end of each fiscal year of Holdings and the
Parent, as applicable, (1) the consolidated (accompanied by mutually
acceptable supplemental non-consolidated information customarily prepared by
management) balance sheets of (A) the Parent and its Subsidiaries as at
the end of such year and (B) Holdings and its Subsidiaries as at the end
of such year, and, the related consolidated (accompanied by mutually acceptable
supplemental non-consolidated information customarily prepared by management)
statements of income, stockholders’ equity and cash flow for such fiscal year, (2) a
report with respect to the consolidated (together with division-by-division
analysis) financial statements described in clauses (1)(A) and (1)(B) above
from Deloitte & Touche LLP or another firm of certified public
accountants selected by Parent and reasonably acceptable to Administrative
Agent, which report shall be prepared in accordance with Statement of Auditing
Standards No. 58 (the “Statement”)


 

















 


“Reports on Audited Financial
Statements” and such report shall be “Unqualified” (as such term is defined in
such Statement) and (3) the unaudited balance sheet of  the Borrower as at the end of such year, and,
the related statement of income for such fiscal year.


 


(c)           Quarterly Financials. As soon as available and in
any event within fifty (50) days after the end of each fiscal quarter
(including the last fiscal month of each fiscal quarter) of Holdings and the
Parent, as applicable, (1) the consolidated (accompanied by mutually
acceptable supplemental non-consolidated information customarily prepared by
management) balance sheets of (A) the Parent and its Subsidiaries as at
the end of such fiscal quarter and (B) Holdings and its Subsidiaries as at
the end of such fiscal quarter, and the related consolidated (accompanied by
mutually acceptable supplemental non-consolidated information customarily
prepared by management) statements of income, stockholders’ equity and cash
flow for such fiscal quarter and for the period from the beginning of the then
current fiscal year of Holdings to the end of such fiscal quarter, (2) the
unaudited balance sheet of the Borrower as at the end of such fiscal quarter,
and, the related statement of income for such fiscal quarter, and (3) a
report setting forth in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding figures
from the most recent Financial Projections for the current fiscal year
delivered pursuant to clause (e). In addition, the Borrower shall
furnish, or cause to be furnished, to the Administrative Agent and the Lenders,
within fifty (50) days after the end of each fiscal quarter, a statement in
reasonable detail (each, a “Compliance Certificate”)
showing the calculations used in determining compliance with the test set forth
on Annex Z to the Sale Agreement.


 


(d)           Monthly Financials.  As soon as available and in any event within
thirty-five (35) days after the end of each fiscal month (or forty-five (45)
days for the last fiscal month of each fiscal year) of Holdings and the Parent,
as applicable, (1) the consolidated (accompanied by mutually acceptable
supplemental non-consolidated information customarily prepared by management)
balance sheets of (A) the Parent and its Subsidiaries and (B) Holdings
and its Subsidiaries, as at the end of such month, and the related consolidated
(accompanied by mutually acceptable supplemental non-consolidated information
customarily prepared by management) statements of income, stockholders’ equity
and cash flow for such fiscal month and for the period from the beginning of
the then current fiscal year of Holdings to the end of such fiscal month, (2) the
unaudited balance sheet of the Borrower as at the end of such fiscal month,
and, the related statement of income for such fiscal month and (3) a
report setting forth in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding figures
from the most recent Financial Projections for the current fiscal year
delivered pursuant to clause (e).


 


(e)           Financial
Projections.  As soon as available
and in any event no later than thirty (30) days following the last day of each
of Holdings’ fiscal year, Financial Projections of Holdings and its Subsidiaries for the forthcoming three (3) fiscal
years, year by year, and for the forthcoming fiscal year, fiscal month by
fiscal month.


 


(f)            Accountants’
Reports.  Promptly upon receipt
thereof, copies of all significant reports submitted by Holdings’ or any of its
Subsidiaries’ firm of certified public


 


2

















 


accountants in connection with
each annual, interim or special audit or review of any type of the financial
statements or related internal control systems of Holdings or any of its
Subsidiaries made by such accountants, including any comment letter submitted
by such accountants to management in connection with their services.


 


(g)           Default Notices.  As soon as practicable, and in any event
within five Business Days after an Authorized Officer of the Borrower has
actual knowledge of the existence thereof, telephonic or telecopied notice of
each of the following events, in each case specifying the nature and
anticipated effect thereof and what action, if any, the Borrower proposes to
take with respect thereto, which notice, if given telephonically, shall be
promptly confirmed in writing on the next Business Day:


 


(i)            any Incipient
Termination Event or Termination Event;


 


(ii)           any Adverse Claim
made or asserted against any of the Borrower Collateral of which it becomes
aware;


 


(iii)          the occurrence of
any event that would have a material adverse effect on the aggregate value of
the Borrower Collateral or on the assignments and Liens granted by the Borrower
pursuant to the Funding Agreement;


 


(iv)          the occurrence of
any event of the type described in Sections 4.02(h)(i), (ii) or
(iii) of the Sale Agreement involving
any Obligor obligated under Transferred Receivables with an aggregate
Outstanding Balance at such time of $500,000 or more;


 


(v)           the commencement of
a case or proceeding by or against the Borrower, the Parent, the Servicer, any
Originator or any other Subsidiary of Holdings seeking a decree or order in
respect of the Borrower, the Parent, the Servicer, any Originator or any other
Subsidiary of Holdings (A) under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law, (B) appointing
a custodian, receiver, liquidator, assignee, trustee or sequestrator (or
similar official) for the Borrower, the Parent, the Servicer, any Originator or
any other Subsidiary of Holdings or for any substantial part of its respective
assets, or (C) ordering the winding up or liquidation of the affairs of
the Borrower, the Parent, the Servicer, any Originator or any other Subsidiary
of Holdings;


 


(vi)          the receipt of
notice that (A) the Borrower, the Parent, the Servicer, any Originator,
any other Subsidiary of Holdings is being placed under regulatory supervision, (B) any
license, permit, charter, registration or approval necessary for the conduct of
the business of the Borrower, the Parent, the Servicer or any Originator is to
be, or may be, suspended or revoked, or (C) the Borrower, the Parent, the
Servicer, any Originator or any other Subsidiary of Holdings is to cease and
desist any practice, procedure or policy employed by it in the conduct


 


3

















 


of its
business if such cessation could reasonably be expected to have a Material
Adverse Effect; or


 


(vii)         any other event,
circumstance or condition that has had or could reasonably be expected to have
a Material Adverse Effect.


 


(h)           SEC Filings and Press Releases.  Promptly upon their becoming available,
copies of:  (i) all financial
statements, reports, notices and proxy statements made publicly available by
Holdings, the Borrower, the Parent or any Originator to its security holders; (ii) all
regular and periodic reports and all registration statements and prospectuses,
if any, filed by Holdings, the Borrower, the Parent or any Originator with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases
and other statements made available by Holdings, the Borrower, the Parent or
any Originator to the public concerning material adverse changes or
developments in the business of any such Person.


 


(i)            ERISA Notices.  Promptly after the filing or receiving
thereof, copies of all reports and notices that the Borrower, any Transaction
Party or any of their ERISA Affiliates files under ERISA with the Internal
Revenue Services or the PBGC or the U.S. Department of Labor or that the
Borrower, any Transaction Party or any of their ERISA Affiliates receives from
any of the foregoing or from any multiemployer plan (within the meaning of Section 4001(a)(3) of
ERISA) to which the Borrower, any Transaction Party or any of their ERISA
Affiliates is or was, within the preceding five years, a contributing employer,
in each case in respect of any accumulated funding deficiency under ERISA, any “Reportable
Event” under ERISA, or any assessment of withdrawal liability under ERISA or ay
other event or condition which could, in the aggregate, result in the
imposition of liability on the Borrower, any Transaction Party or any of their
ERISA Affiliates in excess of $500,000.


 


(j)            Litigation. 
Promptly upon learning thereof, written notice of any Litigation
affecting the Borrower, the Transferred Receivables or the Borrower Collateral,
whether or not fully covered by insurance, and regardless of the subject matter
thereof that (i) seeks damages in excess of $100,000, (ii) seeks
injunctive relief, (iii) that seeks damages in excess of $500,000 and is
asserted or instituted against any Plan, its fiduciaries (in their capacity as
a fiduciary of any such Plan) or its assets or against the Borrower or any
ERISA Affiliate of the Borrower in connection with any Plan, (iv) alleges
criminal misconduct by the Borrower or (v) would, if determined adversely,
have a Material Adverse Effect.


 


(k)           Other Documents. 
With reasonable promptness, such other financial and other information
respecting the Transferred Receivables, the Contracts therefor or the condition
or operations, financial or otherwise, of the Borrower, any Originator,
Holdings or any of its other Subsidiaries as any Lender or Administrative Agent
shall, from time to time, reasonably request.


 


(l)            Good Standing Certificates.  As soon as available, and in any event within
30 days after the end of each fiscal quarter of each Originator and the
Borrower, the Borrower


 


4

















 


shall deliver to the
Administrative Agent or make available to the Administrative Agent via “Powerbrief”
or a similar website, good standing certificates for each Originator and the
Borrower certified as of a recent date by the Secretary of State of the State
of organization or incorporation for each Originator and the Borrower.


 


5

















 


Form of Monthly Report


 


[Attached]


 

















 


ANNEX W

ADMINISTRATIVE AGENT’S ACCOUNT/

LENDERS’ ACCOUNTS


 


	
  Deutsche Bank Trust Company Americas

  
	
  90 Hudson Street, 5th
  Floor

  
	
  Jersey City, NJ 07302

  
	
   

  
	
  ABA#   021-001-033

  
	
  Account Name:   GECC CAF
  Depository

  
	
  Account #   50-232-854

  
	
  Reference:   Vertis

  



 

















 


ANNEX X


 


DEFINITIONS


 


[Attached]


 

















 


ANNEX Y


 


SCHEDULE OF DOCUMENTS


 


[Attached]


 

















 


ANNEX Z


 


SPECIAL CONCENTRATION PERCENTAGES


 


OBLIGOR PERCENTAGE


 


	
  Obligor

  	
   

  	
  Special Concentration Percentage

  
	
  The Kroger Company

  	
   

  	
  So long as the short term debt of this
  Obligor is rated A-2 or better by S&P and P-2 or better by Moody’s, 8%