Document:

Document

AMENDMENT NO. 1 TO RIGHTS AGREEMENT

This Amendment No. 1 to Rights Agreement (this “Amendment”), dated as of November 4, 2020, between Groupon, Inc., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agent”), amends that certain Rights Agreement, dated as of April 10, 2020, by and between the Company and the Rights Agent (the “Rights Agreement”); all capitalized terms not defined herein shall have the meanings ascribed to such terms in the Rights Agreement.

WHEREAS, the Board of Directors of the Company has determined that it is desirable to amend the Rights Agreement as set forth herein;

WHEREAS, subject to certain limited exceptions, Section 27 of the Rights Agreement provides that the Company may, in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, amend any provision of the Rights Agreement in any respect without the approval of any holders of the Rights;

WHEREAS, this Amendment is permitted by Section 27 of the Rights Agreement; and

WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company hereby directs that the Rights Agreement shall be amended as set forth in this Amendment.

NOW THEREFORE, in consideration of the foregoing premises and mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Rights Agent hereby agree as follows:

Section 1. Amendments to Section 1. 

(a)Section 1(b) of the Rights Agreement is hereby amended to read in its entirety “[intentionally omitted]”.

(b)Clause (A) of Section 1(d)(iii) of the Rights Agreement is hereby amended to read in its entirety “[intentionally omitted]”.

Section 2. Effective Date; Certification. This Amendment shall be deemed effective as of the date first written above, as if executed on such date.  The duly authorized officer of the Company executing this Amendment hereby certifies to the Rights Agent that the amendment to the Rights Agreement set forth in this Amendment is in compliance with Section 27 of the Rights Agreement and the certification contained in this Section 2 shall constitute the certification required by Section 27 of the Rights Agreement.
Section 3. Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.
Section 4. Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and 
1

effect and shall in no way be affected, impaired or invalidated.  If any such excluded term, provision, covenant or restriction shall affect the rights, immunities, duties or obligations of the Rights Agent in a materially adverse manner, then the Rights Agent shall be entitled to resign immediately upon written notice to the Company.

Section 5. Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.  Delivery of an executed signature page of this Amendment by facsimile or other customary means of electronic transmission (e.g., “pdf”) shall be as effective as delivery of a manually executed counterpart hereof.

Section 6. No Modification. Except as expressly set forth herein, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Rights Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect.

Section 7. Headings. The headings of the sections of this Amendment have been inserted for convenience of reference only and shall in no way restrict or otherwise modify any of the terms or provisions hereof.

[Signature Page Follows]

2

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date and year first above written.
									
		GROUPON, INC.
			
			
		

By: 
	/s/ Melissa Thomas
		Name: Melissa Thomas
		Title: Chief Financial Officer
			
			
		COMPUTERSHARE TRUST COMPANY, N.A.,

		as Rights Agent
			
			
		

By: 
	/s/ Fred Papenmeier
		Name: Fred Papenmeier
		Title: Vice President & Manager

3receivablespurchaseagree

                      SECOND AGREEMENT OF AMENDMENT                                                  Dated as of September 17, 2020              Reference is made to that certain Receivables Purchase Agreement dated as of  March 5, 2020, as amended by the Agreement of Amendment dated as of April 17, 2020 (as amended, supplemented, waived or modified from time to time prior to the date hereof, the “Agreement”) among ADT LLC, individually (in such capacity, “ADT”) and as servicer (in such  capacity, the “Servicer”), ADT Finance LLC, as seller (the “Seller”), the various purchasers (the  “Purchasers”) and purchaser agents (the “Purchaser Agents”) from time to time party thereto, and  Mizuho Bank, Ltd., as administrative agent, arranger, collateral agent (in such capacity, the  “Collateral Agent”) and structuring agent. Capitalized terms used herein but not defined shall have  the meaning assigned to such terms in the Agreement.              The parties to the Agreement hereby agree that, effective as of the Amendment  Effective Date (as defined below), the Agreement is hereby amended as reflected in the document  comparison attached hereto as Annex A, with deleted text being struck through and added text  being double underlined.              As used herein, the term “Amendment Effective Date” shall mean the first date upon which the Collateral Agent shall have executed and delivered one or more counterparts of this  second agreement of amendment (the “Second Agreement of Amendment”) and shall have received  one or more counterparts of this Second Agreement of Amendment executed by the other parties  hereto.              Each of the Servicer and the Seller represents and warrants to each of the Collateral Agent, the Purchasers and the Purchaser Agents that (i) immediately after the Amendment Effective  Date, its representations and warranties set forth in the Agreement are true and correct in all  material respects, (ii) no Event of Termination or Unmatured Event of Termination has occurred  and is continuing or will result from the amendment contemplated by this Second Agreement of  Amendment, and (iii) this Second Agreement of Amendment has been duly and validly executed  and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in  accordance with its terms, except as enforceability may be limited by applicable insolvency,  bankruptcy, or other laws affecting creditor’s rights generally, or general principals of equity,  whether such enforceability is considered in a proceeding in equity or at law.              This Second Agreement of Amendment may be executed in any number of  counterparts and by different parties hereto in separate counterparts, each of which when so  executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart hereof by facsimile or other  electronic means shall be equally effective as delivery of an originally executed counterpart. By its  signature hereto, each Purchaser and Purchaser Agent hereby authorizes and directs the Collateral  Agent to execute and deliver this Second Agreement of Amendment.              The terms of Section 13.7 of the Agreement shall apply to this Second Agreement of  Amendment mutatis mutandis as if fully set forth herein.  SK 28677 0004 8589002 v4

 

            The words “execution,” “signed,” “signature,” and words of like import in this  Second Agreement of Amendment shall be deemed to include electronic signatures or the keeping  of records in electronic form, each of which shall be of the same legal effect, validity or  enforceability as a manually executed signature or the use of a paper-based recordkeeping system,  as the case may be, to the extent and as provided for in any applicable law, including the Federal  Electronic Signatures in Global and National Commerce Act, the New York State Electronic  Signatures and Records Act, or any other similar state laws based on the Uniform Electronic  Transactions Act.              THIS SECOND AGREEMENT OF AMENDMENT, INCLUDING THE RIGHTS  AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED  IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING  SECTION 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF  NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW  PROVISIONS THEREOF).                                 [Signature Pages Follow]   SK 28677 0004 8589002 v4

 

 

       MIZUHO BANK, LTD.,        as Collateral  Agent         By:____________________________           Name:            Title:           MIZUHO BANK, LTD.,        as Administrative  Agent, Arranger, and Structuring  Agent         By:____________________________           Name:            Title:           MIZUHO BANK, LTD.,        as a Purchaser Agent for Mizuho  Bank, Ltd., as Purchaser         By:____________________________           Name:            Title:           MIZUHO BANK, LTD.,        as a Purchaser          By:____________________________           Name:            Title:   [Signature Page to Agreement of Amendment]

 

                                                     ANNEX A                                                    AGREEMENT   SK 28677 0004 8589002 v4

 

                    RECEIVABLES PURCHASE AGREEMENT                               Dated as of March 5, 2020                                       among                                     ADT LLC,                              individually and as Servicer,                                ADT FINANCE LLC,                                      as Seller,   THE VARIOUS PURCHASERS AND PURCHASER AGENTS FROM TIME TO TIME                                PARTY HERETO,                                        and                               MIZUHO BANK, LTD.,           as Administrative Agent, Arranger, Collateral Agent and Structuring Agent                                and as amended by the                    Agreement of Amendment dated as of April 17, 2020              Second Agreement of Amendment dated as of September 17, 2020   SK 28677 0004 8494650 v1217

 

                             TABLE OF CONTENTS                                                                           Page  ARTICLE I PURCHASE OF RECEIVABLES                                           1       SECTION 1.1    Purchase of Pool Receivables and Related Assets; Purchase                      Price                                                  1       SECTION 1.2    Purchase Procedures; Assignment of the Seller’s Interests. 2 ARTICLE II COMPUTATIONAL RULES                                              7       SECTION 2.1    Selection of Rate Tranches                             7       SECTION 2.2    Computation of each Purchaser’s Investment and each                      Purchaser’s Tranche Investment                         7       SECTION 2.3    Computation of Yield                                   8       SECTION 2.4    Yield Rate, Fees, Etc                                  8       SECTION 2.5    Benchmark Replacement                                  8 ARTICLE III SETTLEMENTS                                                     9       SECTION 3.1    Settlement Procedures.                                 9       SECTION 3.2    Deemed Collections; Reduction of Purchasers’ Pool                      Investment, Etc                                       12       SECTION 3.3    Payments and Computations, Etc                        15       SECTION 3.4    Treatment of Collections and Deemed Collections       21       SECTION 3.5    Extension of the Purchase Termination Date            21       SECTION 3.6    Account Control                                       22 ARTICLE IV FEES AND YIELD PROTECTION                                       23       SECTION 4.1    Fees                                                  23       SECTION 4.2    Yield Protection.                                     23       SECTION 4.3    Funding Losses                                        26       SECTION 4.4    Mitigation; Replacement of Purchasers.                26 ARTICLE V CONDITIONS OF PURCHASES                                          27       SECTION 5.1    Conditions Precedent to Effectiveness                 27       SECTION 5.2    Conditions Precedent to All Purchases                 29       SECTION 5.3    Condition Subsequent                                  30 ARTICLE VI REPRESENTATIONS AND WARRANTIES                                  30       SECTION 6.1    Representations and Warranties of the Seller          30       SECTION 6.2    Representations and Warranties of ADT                 36                                        -i- SK 28677 0004 8494650 v1217

 

                             TABLE OF CONTENTS                                    (continued)                                                                          Page   ARTICLE VII GENERAL COVENANTS                                              41       SECTION 7.1    Affirmative Covenants of the Seller                   41       SECTION 7.2    Reporting Requirements of the Seller                  45       SECTION 7.3    Negative Covenants of the Seller                      46       SECTION 7.4    Affirmative Covenants of ADT                          49       SECTION 7.5    Reporting Requirements of ADT                         54       SECTION 7.6    Negative Covenants of ADT                             56       SECTION 7.7    Nature of Obligations                                 58       SECTION 7.8    Corporate Separateness; Related Matters and Covenants 58 ARTICLE VIII ADMINISTRATION AND COLLECTION                                 61       SECTION 8.1    Designation of the Servicer.                          61       SECTION 8.2    Duties of the Servicer                                62       SECTION 8.3    Rights of the Collateral Agent                        64       SECTION 8.4    Responsibilities of the Servicer                      65       SECTION 8.5    Further Action Evidencing Purchases                   66       SECTION 8.6    Application of Collections                            66 ARTICLE IX SECURITY INTEREST                                               66       SECTION 9.1    Grant of Security Interest                            66       SECTION 9.2    Waiver                                                67 ARTICLE X EVENTS OF TERMINATION                                            67       SECTION 10.1   Events of Termination                                 67       SECTION 10.2   Remedies                                              70 ARTICLE XI PURCHASER AGENTS; COLLATERAL AGENT;  ADMINISTRATIVE                AGENT;  CERTAIN RELATED MATTERS                             71       SECTION 11.1   Limited Liability of Purchasers, Purchaser Agents, Collateral                      Agent, and the Administrative Agent                   71       SECTION 11.2   Authorization and Action of each Purchaser Agent      72       SECTION 11.3   Authorization and Action of the Administrative Agent and                      Collateral Agent                                      72       SECTION 11.4   Delegation of Duties of each Purchaser Agent          72                                         -iv-

 

                             TABLE OF CONTENTS                                    (continued)                                                                           Page        SECTION 11.5   Delegation of Duties of the Administrative Agent and the                      Collateral Agent                                      72       SECTION 11.6   Successor Administrative Agent and Collateral Agent   73       SECTION 11.7   Indemnification                                       74       SECTION 11.8   Reliance, etc                                         74       SECTION 11.9   Purchasers and Affiliates                             74       SECTION 11.10  Sharing of Recoveries                                 75       SECTION 11.11  Non-Reliance                                          75 ARTICLE XII INDEMNIFICATION                                                75       SECTION 12.1   Indemnities by the Seller                             75       SECTION 12.2   Indemnities by ADT and the Servicer                   78 ARTICLE XIII MISCELLANEOUS                                                 79       SECTION 13.1   Amendments, Etc                                       79       SECTION 13.2   Notices, Etc                                          80       SECTION 13.3   Successors and Assigns; Participations; Assignments   80       SECTION 13.4   No Waiver; Remedies; Set-Off                          83       SECTION 13.5   Binding Effect; Survival                              84       SECTION 13.6   Costs and Expenses                                    84       SECTION 13.7   No Proceedings; Limited Recourse                      85       SECTION 13.8   Confidentiality                                       87       SECTION 13.9   Captions and Cross References                         91       SECTION 13.10  Integration                                           91       SECTION 13.11  Governing Law                                         91       SECTION 13.12  Waiver of Jury Trial                                  91       SECTION 13.13  Consent to Jurisdiction; Waiver of Immunities         91       SECTION 13.14  Execution in Counterparts                             92       SECTION 13.15  Pledge to a Federal Reserve Bank                      92       SECTION 13.16  Severability                                          92       SECTION 13.17  Acknowledgement and Consent to Bail-In of EEA Financial                      Institutions                                          93       SECTION 13.18  PATRIOT Act Notice                                    93                                        -iii- SK 28677 0004 8494650 v1217

 

                             TABLE OF CONTENTS                                    (continued)                                                                            Page   APPENDIX A          Definitions  EXHIBIT A           Purchase Request EXHIBIT B           Paydown Notice EXHIBIT C           Form of Compliance Certificate EXHIBIT D           Form of Information Package EXHIBIT E-1         Form of Customer-Owned Equipment Contract Originated on or prior to                     December 15, 2019 EXHIBIT E-2         Form of Customer-Owned Equipment Contract Originated after  December 15, 2019 EXHIBIT E-3         Form of ADT-Owned Equipment Contract Originated after April 17,  2020 EXHIBIT F           Credit and Collection Policy EXHIBIT G-1         Form of Lock-Box Account Payment Direction EXHIBIT G-2         Form of Collection Account Payment Direction EXHIBIT G-3         Form of Omnibus Account Payment Direction EXHIBIT H           Form of Joinder   SCHEDULE I          Addresses for Notices SCHEDULE II         Payment Instructions SCHEDULE III        Advance Rate Matrix SCHEDULE IV         Pool Limits SCHEDULE V          Lock-box and Account Information SCHEDULE VI         Certain UCC Details                                         -v-  SK 28677 0004 8494650 v1217

 

                    RECEIVABLES PURCHASE AGREEMENT        This  RECEIVABLES  PURCHASE  AGREEMENT  dated  as  of  March  5,  2020  (this “Agreement”), is entered into by and among ADT LLC, a Delaware limited liability company (“ADT”), individually  and as Servicer (as defined below), ADT FINANCE LLC, a Delaware limited  liability  company,  (the  “Seller”),  the  various  PURCHASERS  and  PURCHASER AGENTS  (as  such  terms  are  defined  below)  from  time  to  time  party  hereto  and  MIZUHO BANK, LTD. (“Mizuho”), as Administrative Agent, Arranger, Structuring Agent and Collateral Agent (as such terms are defined below).        PRELIMINARY STATEMENT. ADT will, pursuant to the Sale Agreement (as defined below) from time to time, sell, or contribute, transfer and assign certain Receivables (as defined below)  and  the  Related  Assets  (as  defined  below)  to  the  Seller.  Subject  to  the  terms  and conditions of this Agreement, the Purchasers may, from time to time, purchase from the Seller certain Receivables of the Seller on the terms set forth herein. Accordingly, the parties hereto agree as follows:        Capitalized terms used and not otherwise defined in this Agreement are used as defined in (or by reference in) Appendix A, and the other interpretive provisions set out in Appendix A shall be applied in the interpretation of this Agreement.                                    ARTICLE I                           PURCHASE OF RECEIVABLES        SECTION 1.1       Purchase of Pool Receivables and Related Assets; Purchase Price. In  accordance  with  the  procedures  set  forth  in Section  1.2(a)  and  subject  to  the  terms  and conditions of this Agreement, including Article V, the Seller may, from time to time, elect to sell the Receivables identified in Annex A to the related Purchase Request, together with all Related Assets in respect thereof, to the Collateral Agent on behalf of the Purchasers and the Purchasers may in their sole discretion agree to purchase such Receivables and Related Assets. On each Purchase Date, in consideration of the payment to the Seller of the cash purchase price payable pursuant to Section 1.2(b), if any, (the “Cash Purchase Price”) by the participating Purchasers on such Purchase Date and the agreement to pay the deferred purchase price payable to the Seller pursuant to Section  1.2(g)  (the “RPA  Deferred Purchase Price”) the Seller shall sell,  convey, transfer and assign to the Collateral Agent, on behalf of such Purchasers, each of the Receivables identified in Annex A to the related Purchase Request together with all Related Assets in respect thereto,  in  each  case,  as  existing  on  the  immediately  preceding  Cut-off  Date  (each, a “Purchase”). The Collateral Agent shall hold the Receivable Pool and Related Assets on behalf of the Purchasers in each Purchaser Group in accordance with the Proportionate Share of each Purchaser Group from time to time. Within each Purchaser Group each Purchaser Agent shall hold such Purchaser Group’s Proportional Share of the Receivable Pool and the Related Assets on  behalf  of  the  Purchasers  in  such  Purchaser  Group  in  accordance  with  the  respective outstanding  portions  of  the  Investment  funded  by  such  Purchasers.  The  amount  of  the  RPA Deferred Purchase Price determined on any Purchase Date relating to Receivables purchased by the Collateral Agent on behalf of the Purchasers on any Purchase Date in accordance with the   SK 28677 0004 8494650 v1217

 

terms of this Agreement shall be an amount equal to the aggregate Unpaid Balance of all such Eligible Receivables less the Cash Purchase Price, if any, paid for such Eligible Receivables.        SECTION 1.2 Purchase Procedures; Assignment of the Seller’s Interests.            (a)   Purchase  Requests.  Each  Purchase  of  Receivables  under  this  Agreement       shall be made at the written request of the Seller or the Servicer (on behalf of the Seller)       to the Administrative Agent (each a “Purchase Request”) not later than 11:00 a.m. (New       York City time) on the fifth (5th) Business Day preceding the proposed Purchase Date (or       in the case of the initial Purchase Date, such Purchase Date).  Any such Purchase Request       shall be in substantially the form of Exhibit A hereto and shall specify (A) the desired       date of such proposed Purchase (which shall be a Business Day occurring prior to the       Purchase  Termination  Date  and  shall  be  a  Settlement  Date)  and  the  Cut-off  Date       immediately preceding such proposed Purchase Date, (B) whether or not such proposed       Purchase  is  a  Non-Cash  Purchase,  (C) unless  such  proposed  Purchase  is  to  be  a  Non-       Cash Purchase, the proposed Cash Purchase Price in respect of such proposed Purchase       (which shall be an amount at least equal to $1,000,000 in the aggregate for all Purchaser       Groups, or to the extent that the then available aggregate Purchasers’ Pool Limit is less       than  such  amount,  such  lesser  amount  equal  to  such  available  unused  portion  of  the       aggregate  Purchasers’  Pool  Limit),  (D) the  RPA  Deferred  Purchase  Price  as  of  such       proposed Purchase Date in respect thereof, (E) a detailed list of the Receivables proposed       to be sold to the Purchaser on such proposed Purchase Date, including in respect of each       Receivable  the  name  and  Billing  Address  of  the  related  Obligor  (or  the  identification       number or code of such Obligor, provided that it includes the State (or commonwealth) in       the United States in respect  of such Billing Address), the account number  or Contract       identification number, the Remaining Term as of the proposed Purchase Date, the ADT       Credit  Score,  the  Product  Type,  whether  a  credit  check  was  completed,  the  Unpaid       Balance,  the  Financed  Unpaid  Balance,  the  aggregate  Unpaid  Balance  of  all  such       Receivables, and such additional detail that the Administrative Agent may from time to       time  reasonably  request,  of  each  Receivable  as  of  the  immediately  preceding  Cut-off       Date, and (F) unless such proposed Purchase is to be a Non-Cash Purchase, the allocation       of  such  proposed  Purchase  based  on  the  Ratable  Share  of  each  Purchaser  Group’s       Purchase Limit; provided, however, that, the Seller (or the Servicer on its behalf) shall       not  submit  a  Purchase  Request  hereunder  following  the  Purchase  Termination  Date.       Each Purchase Request shall be accompanied by an Information Package (or in the case       of  the  initial  Purchase  Date,  a  pro  forma  Information  Package)  in  respect  of  the       Settlement Period immediately preceding such proposed Purchase Date specified in such       Purchase  Request  which  shall  also  contain  the  pro  forma  information  regarding  such       proposed Purchase required by Section 3.1(c). Upon the written request of the Seller or       the  Servicer,  the  Administrative  Agent  shall  confirm  to  such  requesting  party  each       Purchasers Group’s Purchase Limit. A Purchase Request shall be irrevocable.              Not later than 1:00 pm (New York City time) on the same Business Day of its       receipt of a Purchase Request together with the related Information Package pursuant to       the  foregoing  paragraph  (it  being  understood  that  if  any  such  Purchase  Request  or       Information Package is received by the Administrative Agent after 11:00 a.m. (New York                                         2

 

      City time) such Purchase Request and Information Package shall be deemed to have been       received on the following Business Day), the Administrative Agent shall deliver a copy       of such Purchase Request and Information Package to each Purchaser Agent. Except in       respect  of  a  proposed  Non-Cash  Purchase,  each  Purchaser  Agent  shall  notify  the       Administrative Agent no later than 4:00 pm (New York City time) on the second (2nd)       Business Day preceding the date of such proposed Purchase of whether the Purchasers in       its Purchaser Group approve or reject the proposed Purchase; provided, that to the extent       that any Purchaser Agent does not notify the Administrative Agent that it approves such       proposed Purchase on or before 4:00 pm (New York City time) on such day, it shall be       deemed  to  have  rejected  the  proposed  Purchase,  unless  on  such  day  and  prior  to  any       proposed reallocation by the Administrative Agent of such Purchaser Group’s deemed       rejected  portion  of  the  Ratable  Share  of  the  Cash  Purchase  Price  in  respect  of  such       proposed  Purchase,  such  non-responding  Purchaser  Agent  approves  in  writing  such       proposed  Purchase  in  the  full  amount  of  such  requested  Cash  Purchase  Price.  In  the       event that some but not all of the Purchaser Groups agree to fund their Ratable Share of       the Cash Purchase Price a proposed Purchase, the Seller may request the Administrative       Agent  to  re-allocate  the  rejected  portion  of the proposed  Purchase,  and  seek  approval       among the Purchaser Groups that approved the original proposed Purchase, based on the       Ratable Share of the Purchase Limits of such Purchaser Groups; provided, that there shall       be no obligation of any Purchaser in any Purchaser Group to fund any such incremental       Purchase.  Except  in  respect of  a proposed Non-Cash Purchase, upon  final allocation,       which shall in no event result in the Purchaser Group Investment of any Purchaser Group       to  exceed  its  Purchaser  Group  Limit,  the  Administrative  Agent  shall  advise  each       Purchaser Agent of the amount of the requested Purchase to be funded by each Purchaser       in its Purchaser Group and the allocated share of each Purchaser of such Purchase (the       “Allocated Share”), and each such approving Purchaser shall pay its Allocated Share of       the applicable Cash Purchase Price on the proposed date of such Purchase (the “Purchase       Date”) in accordance with clause (b) below. For the avoidance of doubt, no Purchaser       shall  have  any  obligation  to  approve  any  Purchase  Request  and  except  for  the  initial       Purchase  no  Purchase  shall  be  made  on  a  day  which  does  not  constitute  a  Settlement       Date. Neither the approval of any Purchaser Agent nor any other party will be required       for any proposed Non-Cash Purchase and such Purchase shall be deemed to be made on       the Settlement Date immediately following the date such Purchase Request is made in       writing  to  the  Administrative  Agent  (which  Settlement  Date  shall  be  treated  as  the       “Purchase  Date”  for  such  Non-Cash  Purchase); provided,  that  (i) any  Receivables       included in such Non-Cash Purchase shall be treated as Eligible Receivables solely to the       extent  satisfying the definition thereof and (ii) each applicable condition precedent set       forth in Section 5.2 shall be satisfied.              In  connection  with  each  Purchase  Date,  and  in  recognition  of  the  sale  of  the       Receivables  hereunder  and  the  sale  of  the  Collections  as  existing  on  the  immediately       preceding Cut-off Date, the Servicer and Seller shall as promptly as practicable, and in       any event within three (3) Business Days of such Purchase Date, deposit, or cause to be       deposited,  to  the  Collateral  Agent’s  Account,  an  amount  equal  to  all  Collections  and       other proceeds actually received by any ADT Entity with respect to such Pool Receivable       that were collected during the period from (and including) the immediately preceding       Cut-off Date and to (and including) such Purchase Date, and such deposit shall satisfy                                         3 SK 28677 0004 8494650 v1217

 

Seller’s and Servicer’s obligation to deposit or remit the corresponding portion of such Collections  and  other  proceeds.  For  the  avoidance  of  doubt,  all  Collections  and  other proceeds actually received after each Purchase Date, whether relating to a period prior to or after the related Purchase Date, shall be remitted to the Collateral Agent’s Account in accordance with this Agreement.      (b)   Payment of Cash Purchase. On each Purchase Date for any Purchase (other than any Non-Cash Purchase) which has been requested and approved in accordance with clause  (a)  above,  the  applicable  Purchasers  shall,  upon  satisfaction  of  the  applicable conditions  set  forth  herein  (including  in Article V)  and  upon  the  completion  of  the application  of  Collections  in  accordance  with Section  3.1(d)  with  respect  to  such Purchase Date, pay their Allocated Share of the Cash Purchase Price with respect to such Purchase, which Cash Purchase Price shall equal the lesser of: (i) the amount requested by  the  Seller under  clause (a)  above, and  (ii) the amount  which,  after  giving effect to such Purchase and the application of all Collections on such Purchase Date in accordance with Section  3.1(d)  is  the  largest  amount  that  will  not  cause  (a) the  Purchasers’  Pool Investment to exceed the Purchasers’ Pool Limit, or (b) the sum of the Purchasers’ Pool Investment and the Required Reserves to exceed the Net Portfolio Balance. The Cash Purchase  Price  payable  on  any  Purchase  Date  shall  be  paid  in  immediately  available funds to the Seller at the account of the Seller specified on Schedule II or at such other account  designated  from  time  to  time  by  the  Seller  or  the  Servicer  (on  behalf  of  the Seller) in the related Purchase Request.      (c)   Sale of Receivables.  On each Purchase Date, the Seller hereby sells, assigns, and  transfers  to  the  Collateral  Agent  (for  the  benefit  of  the  Purchasers)  (ratably, according  to  each  Purchaser’s  Investment),  in  consideration  of  the  aggregate  Cash Purchase Price paid on each such Purchase Date, if any, and the agreement to pay the RPA  Deferred  Purchase  Price  in  accordance  with  and  subject  to  the  terms  of  this Agreement, effective upon Seller’s receipt of payment of such Cash Purchase Price for such  Receivables  (or  in  the case of  a  Non-Cash  Purchase,  effective on  the Settlement Date immediately following the date such Purchase Request is  made in  writing  to the Administrative Agent), all of the Seller’s right, title and interest in, to and under (i) each of  the  Receivables  specified  on  Annex  A  to  the  related  Purchase  Request,  and  (ii) all Related  Assets  with  respect  to  such  Receivables,  in  each  case,  as  existing  on  the immediately  preceding  Cut-off  Date.  Notwithstanding  such  sale,  assignment  and transfer,  neither  the  Collateral  Agent  nor  any  Purchaser  shall  have  any  right  to  sell, transfer or assign any Pool Receivables or Related Assets (or any interest therein) other than (x) pursuant to and in accordance with Section 10.2 following the Acceleration Date or (y) transfers of interests in the Receivable Pool and Related Assets in accordance with Section 13.3. On the Final Payout Date, all right, title and interest in, to and under the Pool Receivables and Related Assets shall revert back to the Seller, and any obligation to pay any RPA Deferred Purchase Price shall thereupon be extinguished.      (d)   Characterization as a Purchase and Sale; Recharacterization.                    (i)   It is the intention of the parties to this Agreement that the       transfer and conveyance of the Seller’s right, title and interest in, to and under the                                  4

 

            Receivable Pool and Related Assets to the Collateral Agent (for the benefit of the             Purchasers) pursuant to this Agreement shall constitute a purchase and sale and             not a pledge for security, and such purchase and sale of the Receivable Pool and             Related  Assets  to  the  Collateral  Agent  (for  the  benefit  of  the  Purchasers)             hereunder  shall  be  treated  as  a  sale  for  all  purposes  (except  for  financial             accounting purposes and except as may be permitted for tax purposes as provided             in Section 1.2(d)(ii)).  The provisions of this Agreement and the other Transaction             Documents  shall  be  construed  to  further  these  intentions  of  the  parties.  If,             notwithstanding  the  foregoing,  the  transfer  and  conveyance  of  the  Receivable             Pool and Related Assets to the Collateral Agent (for the benefit of the Purchasers)             is characterized by any bankruptcy trustee or any other Person as a pledge and not             a  sale,  the  parties  intend  that  the  Seller  shall  be  deemed  hereunder  to  have             granted, and the Seller does hereby grant, to the Collateral Agent (for the benefit             of  the  Purchasers)  a  security  interest  in  and  general  lien  on  all  of  the  Seller’s             right,  title,  and  interest  now  or  hereafter  existing  in,  to  and  under  all  of  the             Seller’s assets, whether now owned or hereafter acquired, and wherever located             (whether  or not  in  the  possession or control of  the Seller), including  all  of  the             Seller’s  right,  title  and  interest  in,  to  and  under  the  Receivable  Pool  and  the             Related Assets in respect thereof. For the avoidance of doubt, the foregoing shall             not  be  construed  to  require  any  party  hereto  to  characterize  the  transfer  and             conveyance  of  any  Receivables  hereunder  as  a  sale  for  financial  accounting             purposes. Each of the parties hereto further expressly acknowledges and agrees             that the Purchases by the Purchasers hereunder, regardless of the intended true             sale nature of the overall transaction, are financial accommodations (within the             meaning of Section 365(c)(2) of the Bankruptcy Code to or for the benefit of the             Seller.  For the avoidance of doubt, the Receivables and Related Assets purchased             by the Collateral Agent on behalf of the participating Purchasers on a Purchase             Date, includes the right to receive all Collections and other proceeds payable or             received by the Seller in respect of such Receivables on and after the Cut-off Date             immediately preceding such Purchase Date, which Collections shall be applied in             accordance with the terms of this Agreement, including without limitation Section             7.1(h).                          (ii)  Tax Treatment.                          (A)   It is the intention of the Seller (or, if applicable, ADT), the                   Servicer, the Administrative Agent, and the Purchasers that, for purposes                   of  U.S.  federal  income  tax  and  state  and  local  taxes  measured  by  net                   income,  each  Purchase  will  be  treated  as  a  loan  from  the  applicable                   Purchaser to ADT or the Seller, as the case may be, under applicable tax                   laws  (it  being  understood  that  all  payments  to  the  Purchasers,  in  their                   capacity  as  such,  representing  Yield,  fees  and  other  amounts  accrued                   under  this  Agreement  or  the  other  Transaction  Documents  shall  be                   deemed to constitute interest payments or other payments in connection                   with  such  loan),  and  none  of  the  Seller  (or,  if  applicable,  ADT),  the                   Servicer,  the  Administrative  Agent,  the  Collateral  Agent  nor  the                   Purchasers  shall  take  any  position  inconsistent  therewith  for  such  tax                                         5 SK 28677 0004 8494650 v1217

 

            purposes, unless otherwise required by applicable laws as confirmed in the             opinion  of  nationally  recognized tax  counsel  and  the  person  taking  any             such  inconsistent  position  provides  written  advance  notice  to  the  other             Affected Parties of such change in position, it being understood that the             parties to this Agreement will otherwise defend in good faith such agreed-             upon position prior to such change in position.                    (B)   ADT and the Seller, by entering into this Agreement, and             the  Purchasers,  by  funding  the  Purchase  of  the  Receivable  Pool  and             Related Assets, agree to treat the Purchase of the  Receivable Pool and             Related Assets, for purposes of U.S. federal income tax and state and local             taxes  measured  by  net  income,  and  for  state  and  local  sales  and  other             transactional  tax  purposes,  as  creating  indebtedness  secured  by  the             Receivable  Pool  and  Related  Assets.  Accordingly,  the  Seller  (or,  if             applicable,  ADT),  rather  than  the  Collateral  Agent,  the  Administrative             Agent, the Purchasers, or any other Affected Party, shall be entitled to and             shall  retain  the  benefit  of  (1) any  bad  debt  deduction  for  written-off             receivables  for  purposes  of  U.S.  federal  income  tax  and  state  and  local             taxes  measured  by  net  income,  and  (2) any  deduction,  credit,  or  refund             with respect to state and local sales and other transactional taxes paid or             collected  and  remitted  to  the  appropriate  Governmental  Authority  on             written-off receivables. The provisions of this Agreement and all related             Transaction Documents  shall be  construed to further these intentions of             the parties. For purposes of this Section 1.2(d)(ii)(B), the term “Affected             Party” shall include any assignee pursuant to Section 13.3(c) or 13.3(d).      (e)   Purchasers  Limitation  on  Payments.  Notwithstanding  any  provision contained in this Agreement or any other Transaction Document to the contrary, none of the Purchasers, Purchaser Agents, the Collateral Agent or the Administrative Agent shall be obligated (whether on behalf of a Purchaser or otherwise), to pay any amount to the Seller  in  respect  of  any  portion  of  the  RPA  Deferred  Purchase  Price  relating  to  the Receivable  Pool, except in accordance with Section 1.2(g), from  available Collections deposited  in  the  Collateral  Agent’s  Account.  Any  amount  which  the  Administrative Agent, the Collateral Agent, a Purchaser Agent or a Purchaser is not obligated to pay pursuant  to  the  operation  of  the  preceding  sentence  shall  not  constitute  a  claim  (as defined in § 101 of the Bankruptcy Code) against, or obligation of, any Purchaser Agent, the Collateral Agent, any Purchaser, or the Administrative Agent, as applicable, for any such insufficiency unless and until such amount becomes available for distribution to the Seller pursuant to the terms hereof and such party is contractually obliged to make such payment.      (f)   Obligations  Not  Assumed.  The  foregoing  sale,  assignment,  transfer,  and conveyance  does  not  constitute,  and  is  not  intended  to  result  in,  the  creation  or  an assumption by the Administrative Agent, any Purchaser Agent, the Collateral Agent or any Purchaser of any obligation or liability of the Seller, ADT, the Servicer, or any other Person under or in connection with all, or any portion of, the Receivable Pool or Related                                   6

 

      Assets, all of which shall remain the obligations and liabilities of the Seller, ADT, the       Servicer, and such other Persons, as applicable.            (g)   RPA Deferred Purchase Price. In accordance with the terms of, and subject       to  the  limitations  set  forth  in,  this  Agreement,  the  Collateral  Agent  (on  behalf  of  the       Purchasers in each Purchaser Group) shall pay to the Seller the RPA Deferred Purchase       Price relating to the Receivable Pool on each Settlement Date from the related Monthly       Collections  that  are  available  for  allocation  therefor  (if  any)  pursuant  to Section       3.1(d)(vii).  Any  payment  of  any  amount  of  RPA  Deferred  Purchase  Price  shall  be       deemed to be made by each Purchaser Group according to its Proportionate Share of such       amount. Any amounts properly distributed to the Seller in accordance with this Section       1.2(g)  in  respect  of  the  RPA  Deferred  Purchase  Price  shall  be  for  the  account  of  the       Seller,  and  may  be  applied  by  the  Seller  for  so  long  as  no  Event  of  Termination  or       Unmatured  Event  of  Termination  would  be  continuing  immediately  after  such       application, toward the purchase of additional Receivables and Related Assets or may be       distributed to ADT.                                    ARTICLE II                             COMPUTATIONAL RULES        SECTION 2.1       Selection of Rate Tranches. Subject to the requirements set forth in this Article II, each Purchaser Agent shall from time to time, only for purposes of computing Yield  with  respect  to  each  Purchaser  in  its  Purchaser  Group,  account  for  such  Purchaser’s Investment in terms of one or more Rate Tranches and the applicable Yield Rate, which may be different for each Rate Tranche. Each Purchaser’s Investment in respect of the Receivable Pool shall be allocated to each Rate Tranche by the related Purchaser Agent to reflect the funding sources for each portion of the Receivable Pool so that:            (a)   there will be one or more Rate Tranches in respect of the Receivable Pool,       selected  by  each  Purchaser  Agent,  reflecting  the  portion,  if  any,  of  the  aggregate       Investment  of  the  Purchasers  in  its  Purchaser  Group  funded  or  maintained  by  such       Purchasers  other  than  through  the  issuance  of  Commercial  Paper  Notes  (including  by       outstanding Liquidity Advances or by funding under an Enhancement Agreement); and            (b)   there will be a Rate Tranche in respect of the Receivable Pool, selected by       each Purchaser Agent, equal to the excess of the aggregate Investment of the Purchasers       in  its  Purchaser  Group  over  the  aggregate  amounts  allocated  at  such  time  pursuant  to       clause (a)  above,  which  Rate  Tranche  shall  reflect  the  portion  of  such  aggregate       Investment funded or maintained by such Purchasers through the issuance of Commercial       Paper Notes.        Each  Purchaser  Agent  may  in  its  sole  discretion,  allocate  all  or  any  portion  of  any Purchaser’s Investment in respect of any Purchaser in its Purchaser Group to one or more Rate Tranches as such Purchaser Agent shall select.                                          7 SK 28677 0004 8494650 v1217

 

      SECTION 2.2       Computation of each Purchaser’s Investment and each Purchaser’s Tranche  Investment.  In  making  any  determination  of  the  Purchasers’  Pool  Investment,  any Purchaser’s Investment and any Purchaser’s Tranche Investment, the following rules shall apply:            (a)   (a)     each  Purchaser’s  Investment  shall  not  be  considered  reduced       unless  Collections  available  for  distribution  pursuant  to Section  3.1(d)(iv)  shall  have       been actually paid to, and received by, the applicable Purchaser Agent for application       hereunder to reduce such Purchaser’s Investment in accordance with the terms hereof;            (b)   each  Purchaser’s  Investment  (or  any  other  amounts  payable  under  any       Transaction Document) shall not be considered reduced (or paid) by any distribution of       any  portion  of  Collections  or  other  payments,  as  applicable,  if  at  any  time  such       distribution or payment is rescinded or must otherwise be returned for any reason; and            (c)   if  there  is  any  reduction  in  any  Purchaser’s  Investment,  there  shall  be  a       corresponding reduction (in the aggregate) in such Purchaser’s Tranche Investment with       respect  to  one  or  more  Rate  Tranches  selected  by  the  related  Purchaser  Agent  in  its       reasonable discretion.        SECTION 2.3       Computation of Yield. In making any determination of Yield, the following rules shall apply:            (a)   Yield  shall  accrue  daily on the Purchasers’ Pool Investment on such day.       Each  Purchaser  Agent  shall  determine  the  Yield  accruing  with  respect  to  each  Rate       Tranche for the Purchasers in its Purchaser Group daily, in accordance with the definition       of Yield;            (b)   no  provision  of  this  Agreement  shall  require  the  payment  or  permit  the       collection of Yield in excess of the maximum permitted by applicable Law; and            (c)   Yield for any Rate Tranche shall not be considered paid by any distribution       or  other  payment  if  at  any  time  such  distribution  or  payment  is  rescinded  or  must       otherwise be returned for any reason.        SECTION 2.4       Yield  Rate,  Fees,  Etc.  It  is  understood  and  agreed  that  (a) the Yield Rate for any Rate Tranche may change from one applicable Yield Period or Settlement Period to the next, and the applicable Bank Rate, Base Rate, CP Rate or Hedge Rate used to calculate the applicable Yield Rate  may change  from time to time  and  at any time during an applicable  Yield  Period  or  Settlement  Period,  (b) any  rate  information provided  by  any Purchaser Agent to the Seller or the Servicer shall be based upon such Purchaser Agent’s good faith estimate.        SECTION 2.5       Benchmark  Replacement.  (a) Notwithstanding  anything  to  the contrary  herein  or  in  any  other  Transaction  Document,  upon  the  occurrence  of a  Benchmark Transition Event or an Early Opt-in Election, as applicable, the Administrative Agent and the Seller may mutually agree to amend this Agreement to replace the LIBO Rate with a Benchmark Replacement. Any such amendment will become effective without any further action or consent                                         8

 

of the Purchase Agents, Purchasers or the Servicer: at 5:00 p.m. on the fifth (5th) Business Day (or  such  earlier  Business  Day  set  forth  in  the  notice  of  such  proposed  amendment)  after  the Administrative Agent and the Seller have provided such proposed amendment to the Purchaser Agents  and  the  Servicer  in  all  cases.  No  replacement  of  the  LIBO  Rate  with  a  Benchmark Replacement  pursuant  to  this Section  2.5  will  occur  prior  to  the  applicable  Benchmark Transition Start Date.            (a)   Benchmark  Replacement  Conforming  Changes.  In  connection  with  the       implementation of a Benchmark Replacement, the Administrative Agent and the Seller       will  have  the  right  to  mutually  agree  to  make  Benchmark  Replacement  Conforming       Changes from time to time and, notwithstanding anything to the contrary herein or in any       other  Transaction  Document,  any  amendments  implementing  such  Benchmark       Replacement Conforming Changes will become effective without any further action or       consent of the Purchaser Agents or the Purchasers.            (b)   Notices;  Standards  for  Decisions  and  Determinations.  The  Administrative       Agent will promptly notify the Seller, the Servicer and each Purchaser Agent of (i) any       occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable,       and  its  related  Benchmark  Replacement  Date  and  Benchmark  Transition  Start  Date,       (ii) the  implementation  of  any  Benchmark  Replacement,  (iii) the  effectiveness  of  any       Benchmark  Replacement  Conforming  Changes,  and  (iv) the  commencement  or       conclusion  of  any  Benchmark  Unavailability  Period.  Any  determination,  decision  or       election that may be made by the Administrative Agent and the Seller pursuant to this       Section 2.5, including any determination with respect to a tenor, rate or adjustment or of       the occurrence or non-occurrence of an event, circumstance or date and any decision to       take or refrain from taking any action, will be conclusive and binding absent manifest       error and may be made in the Administrative Agent’s sole discretion and without consent       from  any  Purchaser  Agent,  any  Purchaser  or  the  Servicer,  except,  in  each  case,  as       expressly required pursuant to this Section 2.5.            (c)   Benchmark  Unavailability  Period.  During  any  Benchmark  Unavailability       Period, the Yield that would be computed using the LIBO Rate shall be computed using       the Base Rate.                                   ARTICLE III                                  SETTLEMENTS        SECTION 3.1       Settlement Procedures.        The parties hereto will take the following actions with respect to each Settlement Date:            (a)   Information Package. By no later than the fifth (5th) Business Day prior to       each Settlement Date (or in the case of the initial Settlement Date, such Settlement Date)       specified in clause (a) of the definition thereof, (each a “Reporting Date” for and related       to the Settlement Period ending immediately prior to such date and, to the extent required       in clause (b) below, the Yield Period ending immediately prior to such Settlement Date),                                         9 SK 28677 0004 8494650 v1217

 

the Servicer shall deliver to the Collateral Agent and the Administrative Agent, which the Administrative Agent  shall,  upon  receipt,  forward  to  each  Purchaser  Agent,  an e-mail attaching an Excel file and a file in .pdf or similar format signed by a Responsible Officer of  the  Servicer  containing  the  information  described  in  Exhibit  D,  including  the information calculated by the Servicer pursuant to this Section 3.1 (each, an “Information Package”)  for  and  related  to  the  Settlement  Period  ending  immediately  prior  to  such Reporting Date; provided, that the loan level data tape set forth in Exhibit D shall only be required  to  be  provided  in  connection  with  the  Settlement Dates  occurring  in  March, June,  September  and  December,  and upon  request  thereof by  Mizuho,  within  ten  (10) Business  Days  of  such  request;  provided  further,  that  during  the  continuance  of  an Unmatured Event of Termination or Event of Termination, the Administrative Agent may (or at the request of the Required Purchasers shall) request, in its reasonable discretion, the Servicer to, and the Servicer agrees to, deliver any information related to the Pool Receivables  and  Related  Assets,  or  the  transactions  contemplated  hereby  as  the Administrative Agent or the Required Purchasers shall request (including a calculation of the Net Portfolio Balance, the Required Reserves and each component or subcomponent thereof  (including  as  determined  on  dates  other  than  as  set  forth  therein),  the  daily Collections, etc.) on each Business Day.      (b)   Yield;  Other  Amounts Due.  On  or  before  the  second  (2nd)  Business  Day prior to each Reporting Date, each Purchaser Agent shall notify the Administrative Agent and  the  Servicer  of  (i) the  amount  of  Yield  accrued  in  respect  of  each  related  Rate Tranche  funded  by  the  Purchasers  in  each  Purchaser  Group  for  each  day  during,  in respect of Yield calculated at the CP Rate, the most recently ended Settlement Period, and in respect of Yield calculated at the Bank Rate, the Yield Period ending immediately prior to the related Settlement Date, and (ii) all Fees accrued each day during the most recently ended Settlement Period, and (iii) all other amounts payable or to be paid by the Seller under this Agreement and the other Transaction Documents on the immediately succeeding Settlement Date (other than amounts described in clause (c) below) to such Purchaser Agent or any Purchaser in, or Affected Party related to, any Purchaser Group. Such Yield, Fees and other amounts accrued in respect of such immediately preceding Settlement Period or Yield Period, as applicable, shall be due and payable by the Seller on the next succeeding Settlement Date (notwithstanding any limitation on recourse or other  liability  limitation  contained  (other  than  for  the  avoidance  of  doubt,  the  usury savings clause set forth in this Agreement) herein to pay such amounts).      (c)   Settlement  Computations.  On  each  Reporting  Date,  the  Servicer  shall include in the Information Package, calculations, as of the most recent Cut-off Date for the  related  Settlement  Period  or  Yield  Period,  as  applicable,  the  following  (I) without taking into account any Receivables included in a Purchase to be made on the Settlement Date next succeeding such Reporting Date, (A) the Unpaid Balance and Financed Unpaid Balance of each of the Pool Receivables, the Purchasers’ Pool Investment, the Purchaser Group  Investment  of  each  Purchaser  Group,  the  Required  Reserves,  the  Net  Portfolio Balance, and each component of each of the foregoing, (B) the amount of the reduction or  increase  (if  any)  in  each  of  the  Required  Reserves,  the  Net  Portfolio  Balance,  the Purchasers’ Pool Investment and the Purchaser Group Investment since the Cut-off Date                                  10

 

      immediately preceding the Cut-off Date for the most recently ended Settlement Period,       and each component of each of the foregoing (including a breakdown of Collections and       Deemed Collections and any related Dilutions or other reductions, if any, during such       Settlement Period), (C) the excess (if any) of the sum of the Purchasers’ Pool Investment       and the Required Reserves, over the Net Portfolio Balance, (D) the excess (if any) of the       Purchasers’ Pool Investment, over the Purchasers’ Pool Limit, (E) the excess (if any) of       the  Purchaser  Group  Investment  of  each  Purchaser  Group,  over  the  Purchaser  Group       Limit  of  each  such  Purchaser  Group,  (F) the  aggregate  Investment  of  any  Exiting       Purchasers,  (G) the  total  Pool  Deficiency  Amount  (if  any),  (H) the  total  Deemed       Collections for such Settlement Period, (I) the amount of all other Obligations payable on       the next Settlement Date, (J) the Excess Concentration Amount, (K) the Pool Receivables       (and the aggregate Financed Unpaid Balance thereof) that are subject to the Conditional       Service  Guaranty  and  have  been  originated  within  the  six  (6)  months  prior  to  such       Reporting  Date,  and  (L)  the  amount  of  Monthly  Collections;  and  (II) if  any  Purchase       Request  is  being  delivered  contemporaneously  with  the  delivery  of  such  Information       Package, the information specified in clauses (A),  (C) through (I), (K) and (L) above,       determined on a pro forma basis after giving effect the proposed Purchase to be made on       the  Settlement  Date  next  succeeding  such  Reporting  Date,  the  computation  of  the       Collections  available  for  allocation  pursuant  to  each  sub-section  (i)  through  (vii)  of       Section  3.1(d),  the  computation  of  the  Cash  Purchase  Price,  if  any,  to  be  paid  by  the       Purchasers  on  such  next  succeeding  Settlement  Date  in  respect  of  any  Purchase  in       accordance with Section 1.2(b).            (d)   Order of Application. The Collateral Agent shall, on each Settlement Date,       to the extent funds are available in the Collateral Agent’s Account, distribute the related       Monthly Collections for the following purposes and in the following order of priority:                          (i)   to the Servicer, all accrued then due and unpaid Servicing             Fee;                          (ii)  to  the  Collateral  Agent  and  the  Administrative  Agent  in             respect  of  all  costs,  expenses,  Fees  and  Indemnified  Amounts  then  due  and             payable  to  the  Collateral  Agent  and  the  Administrative  Agent  (solely  in  their             capacities as such) under this Agreement and the other Transaction Documents;             provided, that the expenses and Indemnified Amounts payable under this clause             (i) on any Settlement Date shall not in the aggregate exceed $500,000;                          (iii) on  a pari  passu basis,  to  each  Purchaser  Agent  ratably             (based on the aggregate accrued and unpaid Yield and Fees due and payable to             them and the members of their respective Purchaser Groups) Yield accrued and             unpaid on all Rate Tranches relating to the Receivable Pool for the Purchasers in             its  Purchaser  Group  howsoever  funded  or  maintained  during  (x) in  respect  of             Yield calculated at the CP Rate, the related Settlement Period and (y) in respect of             Yield calculated at the Bank Rate, the Yield Period ending immediately prior to             such Settlement Date and to the accrued and unpaid Fees for its Purchaser Group             then due and payable;                                        11 SK 28677 0004 8494650 v1217

 

                  (iv)  to the Purchaser Agents to the reduction of the Purchasers’       Pool Investment (A) if clause (C) below does not apply, to reduce, to the extent       necessary, the Pool Deficiency Amount to zero in the priority set forth in Section       3.1(e),  ratably  (based  upon  the  respective  amounts  of  reduction  of  Investment       owed to each Purchaser Group in respect of each application to the Purchasers in       each such Purchaser Agent’s Purchaser Group), determined without taking into       account  any  Receivables  to  be  acquired  by  the  Purchasers  on  such  Settlement       Date, (B) if clause (C) below does not apply, in the amount required pursuant to       Section  3.2(b),  ratably  (based  upon  their  respective  Purchaser  Group       Investments),  determined  without  taking  into  account  any  Receivables  to  be       acquired  by  the  Purchasers  on  such  Settlement  Date,  or  (C) during  the       continuance of an Event of Termination or an Unmatured Event of Termination or       following  the  Purchase  Termination  Date,  ratably  (based  upon  their  respective       Purchaser Group Investments) to reduce the Purchasers’ Pool Investment to zero;       provided,  that  for  the  avoidance  of  doubt,  any  amounts  paid  to  any  Purchaser       Agent pursuant to this clause (iv) shall be applied in reduction of the Investment       of the relevant Purchasers in such Purchaser Agent’s Purchaser Group;                    (v)   to the Purchaser Agents and the Purchasers ratably (based       on the aggregate accrued and unpaid Seller Obligations owing) in respect of all       costs,  expenses  and  Indemnified  Amounts  due  and  payable  to  the  Purchaser       Agents  and  the  Purchasers  (solely  in  their  capacities  as  such)  under  this       Agreement and the other Transaction Documents;                    (vi)  first, ratably (based upon the amounts due and payable), to       the  Collateral  Agent  and  the  Administrative  Agent  in  respect  of  expenses  and       Indemnified  Amounts  due  and  payable  to  the  Collateral  Agent  and  the       Administrative  Agent,  to  the  extent  such  amounts  were  not  paid  pursuant  to       clause  (i)  above,  and  second,  to  each  Purchaser  Agent  ratably  (based  on  the       aggregate  accrued  and  unpaid  Seller  Obligations  owing  to  their  respective       Purchaser  Groups)  all  accrued  and  unpaid  other  Seller  Obligations  due  and       payable to any Affected Parties in such Purchaser Agent’s Purchaser Group;                    (vii) to  the  Seller,  for  its  own  account,  amounts  in  respect  of       payment of the RPA Deferred Purchase Price; and                    (viii) to the Seller, for its own account, any remaining amounts.      (e)   Priority  for  Investments  Reductions.  The  Collateral  Agent  shall  apply Monthly Collections in the Collateral Agent’s Account which are available to reduce the Pool  Deficiency  Amount  in  accordance  with clause  (iv)(A)  of Section  3.1(d)  to  the applicable  Purchaser  Agents,  pari  passu  based  upon  respective amounts  owed  to  each Purchaser  in  the  related  Purchaser  Groups  for  each  such  specified  applications  in  the following order: (i) first, to reduce the Purchasers’ Pool Investment to an amount equal to the Net Portfolio Balance, minus the Required Reserves at such time, (ii) second, to reduce  the  Purchasers’  Pool  Investment  to  an  amount  equal  to  the  Purchasers’  Pool Limit, (iii) third, to reduce each Purchaser Group Investment to an amount equal to the                                  12

 

      related Purchaser Group Pool Limit, and (iv) fourth to reduce the aggregate Investment of       all Exiting Purchasers to zero.        SECTION 3.2       Deemed  Collections;  Reduction  of  Purchasers’  Pool  Investment, Etc.            (a)   Deemed Collections.  If on any day:                          (i)   the  Unpaid  Balance  of  any  Pool  Receivable  is  reduced,             cancelled, subject to set-off, offset, netting, special refund or credit as a result of             Dilution or for any other reason,  including pursuant to the Conditional Service             Guaranty  (other  than  solely  as  a  result  of  such  Pool  Receivable  becoming  a             Defaulted Receivable in accordance with the Credit and Collection Policy as a             result of the bankruptcy or insolvency of the related Obligor or a payment default             of the related Obligor);                          (ii)  the  Financed  Unpaid  Balance  of  any  Pool  Receivable  is             less  than  the  amount  included  to  represent  such  amount  in  calculating  the  Net             Portfolio Balance for purposes of any Information Package;                          (iii) any Pool Receivable (or the terms of any related Contract             governing  such  Pool  Receivable)  is  extended,  amended,  waived,  or  otherwise             modified  or  adjusted  (except  as  set  forth  in clause  (iv)  below)  or  as  expressly             permitted under Section 8.2(b);                          (iv)  the  due  date  for  payment  of  any  Pool  Receivable  is             extended to a date that is more than thirty (30) days after such Pool Receivable’s             original due date;                          (v)   (A) any of the representations or warranties of the Seller set             forth in clauses (j) or (n) or (bb) of Section 6.1 or the Servicer set forth in Section             6.2(t) were untrue when made with respect to any Pool Receivable, or (B) if the             Level 1 Ratings Trigger is in effect, any Pool Receivable is a Conditional Service             Guaranty Receivable; or                          (vi)  any  Collection  Agent  Fee  is  paid,  including  by  setoff,             offset or reduction of any Collections;  then,  on  such  day,  the  Seller  shall  be  deemed  to  have  received  a  Collection  of  such  Pool Receivable and, in respect of such Collections deemed received during any Settlement Period, the Seller shall, unless such amounts are permitted to be netted as provided below, pay to the Collateral  Agent’s  Account by  the  date  which  is no  later  than  three  (3) Business Days  (x) in respect of clause (ii) or (v) above, after the Seller, ADT or the Servicer has knowledge thereof or has received notice thereof, and (y) in respect of any other clause above, prior to the Settlement Date  immediately  succeeding  such  Settlement  Period  or  after  the  occurrence  of  an  Event  of Termination that remains continuing, within one (1) Business Day from the event giving rise to                                         13 SK 28677 0004 8494650 v1217

 

such Deemed Collection) for application by the Collateral Agent pursuant to Section 3.1(d) as provided in this Agreement an amount equal to:                                (1)   in the case of clause (i) above, the amount of such                   reduction, set-off, offset, netting, special refund, credit or cancellation; in                   the case of clause (ii) above, the difference between the actual Financed                   Unpaid  Balance  and  the  amount  included  to  represent  such  amount  in                   respect of such Pool Receivable in calculating the Net Portfolio Balance in                   such  Information  Package;  or,  in  the  case  of clause  (iv)  above,  in  the                   amount  that  such extension affects the  Financed  Unpaid Balance  of the                   related  Pool  Receivable  in  the  sole  determination  of  the  Administrative                   Agent,  as  applicable,  by  notice  to  ADT,  the  Seller  and  the  Servicer;                   provided, that the aggregate amount of Deemed Collections paid by the                   Seller pursuant to this clause 1 in respect of any Pool Receivable shall not                   exceed its Financed Unpaid Balance; or                                (2)   in the case of clause (iii) or (v) above, the amount                   of the entire Financed Unpaid Balance of the relevant Pool Receivable or                   Pool  Receivables  (as  determined  immediately  prior  to  the  applicable                   event)  with  respect  to  which  such  extension,  amendment,  waiver,  or                   modification  occurs  or  such  representations  or  warranties  were  or  are                   untrue, or from and after the date of the Level 1 Ratings Trigger which                   constitutes  or  constituted  a  Conditional  Service  Guaranty  Receivable                   while the Level 1 Ratings Trigger is in effect; or                                (3)   in  the  case  of clause  (vi)  above,  the  amount  by                   which  such  Collection  Agent  Fee  exceeds  the  lesser  of  (i) the  ordinary                   course and customary collection fees and expenses payable to Collection                   Agents by the Servicer and consistent with its past practices as reasonably                   demonstrated  by  the  Servicer  to  the  Administrative  Agent,  and  (ii) an                   amount equal to 20% of the Financed Unpaid Balance of the applicable                   Pool Receivable as determined immediately prior to the payment of such                   Collection Agent Fee;  provided, that so long as no Event of Termination or Unmatured Event of Termination shall have occurred and be continuing, in the event the Seller has paid Deemed Collections in respect of a Pool Receivable at least equal to the amount of the full Financed Unpaid Balance thereof to the Collateral  Agent’s  Account,  in  accordance  with  and  pursuant  to  this Section  3.2,  such  Pool Receivable and the Related Assets thereof shall be deemed repurchased by the Seller and shall be automatically released from the security interest of the Collateral Agent upon such payment in full of such Deemed Collections to the Collateral Agent’s Account, and upon such repurchase, the  portion  of  the  RPA  Deferred  Purchase  Price  relating  to  such  Pool  Receivable  shall  be deemed to be fully satisfied and discharged, without any further action on the part of any Person; provided, further, that for the avoidance of doubt, no ADT Entity shall initiate any amendments to any Pool Receivable or otherwise take any action that would result in a Deemed Collection for                                         14

 

the purpose of repurchasing any Pool Receivable, and any such action shall constitute an Event of Termination under Section 10.1(q).              Collections  deemed  received  by  the  Seller  under  this Section  3.2(a)  are  herein       referred to as “Deemed Collections”. To the extent no Pool Deficiency Amount would       result  therefrom,  the  Seller  may,  at  its  option,  net  the  amount  of  Deemed  Collections       required to be deposited in the Collateral Agent’s Account prior to any Settlement Date,       from the amount of the RPA Deferred Purchase Price payable to the Seller on the next       Settlement  Date  after  the  due  date  of  payment  of  such  Deemed  Collections  by  Seller       hereunder.            (b)   The Sellers’ Optional Reduction of Purchasers’ Pool Investment. The Seller       may at any time and from time to time elect to reduce (in whole or in part) Purchasers’       Pool Investment by giving or causing the Servicer to give the Collateral Agent and the       Administrative Agent at least five (5) Business Days’ prior written notice (which shall be       in  substantially  the form  of  Exhibit  B  hereto)  of such  elected  reduction, which  notice       shall include (i) the proposed date of such reduction, which shall be a Settlement Date,       and (ii) the amount of any such proposed reduction (which amount shall be not less than       $5,000,000 and shall be an integral multiple of $100,000 thereafter). Any such requested       reduction in the Purchasers’ Pool Investment shall be applied to reduce the Investments       of each Purchaser to the extent Monthly Collections are available therefor in accordance       with Section 3.1(d).        SECTION 3.3       Payments and Computations, Etc.            (a)   Payments. All amounts to be paid to, or deposited by the Seller, the Servicer       or ADT with, the Collateral Agent, the Administrative Agent, any Purchaser Agent, or       any other Person hereunder shall, except as otherwise expressly provided herein, be paid       or deposited in accordance with the terms hereof no later than 1:006:00 p.m. (New York       City  time)  on  the  day  when  due  in  U.S.  Dollars  in  same  day  funds  to  the  Collateral       Agent’s  Account  or  to  such  other  account  as  the  Collateral  Agent  shall  designate  in       writing to the Seller and the Servicer from time to time.              All ADT Obligations to be paid by any ADT Entity (other than the Seller) to the       Collateral  Agent,  the  Administrative  Agent,  any  Purchaser  Agent,  any  Purchaser,  any       Indemnified Party or any Affected Party shall, except as otherwise expressly provided       herein, be paid or deposited in accordance with the terms hereof no later than 1:006:00       p.m. (New York City time) on the day when due in U.S. Dollars in same day funds to the       Administrative Agent’s Account.              Amounts  remitted  to  the  Administrative  Agent’s  Account  in  respect  of  ADT       Obligations  shall  be  distributed  on  each  Settlement  Date  for  the  payment  of  ADT       Obligations due and payable on or prior to such Settlement Date (i) to the Administrative       Agent  and  the  Collateral  Agent  for  ADT  Obligations  then  due  and  payable  to  it  in       accordance with the terms of this Agreement, and (ii) to the applicable Purchaser Agent       for  ADT  Obligations  then  due  and  payable  to  it,  its  related  Purchasers,  its  related       Affected  Parties  and  its  related  Indemnified  Parties.  For  purposes  of  making  the                                        15 SK 28677 0004 8494650 v1217

 

applications set forth in the immediately preceding sentence, the Administrative Agent shall rely upon the certifications (the “Demand Certifications”) of each of the Collateral Agent (if other than the Administrative Agent) and each of the Purchaser Agents (if other than the Administrative Agent) as to the ADT Obligations then due and payable to it (or in respect of a Purchaser Agent owing to it and its related Purchasers, Affected Parties and Indemnified Parties). Each of the Collateral Agent (if other than the Administrative Agent) and each Purchaser Agent shall provide the Administrative Agent with a Demand Certification upon making any demand or claim for payment of any ADT Obligations, which Demand Certification shall specify the date upon which such ADT Obligations are due  and  payable  and  the  ADT  Obligation  giving  rise  to  such  payment.  If  amounts remitted  in  respect  of  ADT  Obligations  which  are  on  deposit  in  the  Administrative Agent’s  Account  on  any  Settlement  Date  are  insufficient  to  pay  in  full  all  ADT Obligations which are then due and payable on such Settlement Date, the Administrative Agent shall distribute such funds on a pro rata basis to the relevant parties based upon the ADT  Obligations  then  due  and  payable  to  such  parties  based  upon  the  amount  of  the ADT  Obligations  then  due  and  payable  to  it  (in  respect  of  each  of  its  capacities hereunder) and the Demand Certifications which the Administrative Agent has received. The Administrative Agent shall have no liability for making payments in accordance with this Section 3.3(a) based upon the Demand Certifications.      (b)   Late  Payments.  Each  ADT  Entity,  shall  pay  to  the  applicable  Purchaser Agent, for the benefit of the applicable Affected Party, interest on all amounts not paid or deposited by such party on the date when due hereunder at an annual rate equal to 2.00% above the Base Rate, payable on demand, provided, that such interest rate shall not at any time exceed the maximum rate permitted by applicable Law.      (c)   Method  of  Computation.  All  computations  of  interest,  Yield,  Liquidation Discount, Yield and Fee Reserve, any Fees payable under Section 4.1, and any other fees payable by the Seller to the Collateral Agent, any Purchaser, any Purchaser Agent, the Administrative  Agent,  or  any  other  Affected  Party  in  connection  with  Purchases hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) elapsed (except that calculations with respect to the Prime Rate shall be on the basis of a year of 365 or 366 days, as the case may be).      (d)   Payment of Currency and Setoff. All payments by any ADT Entity or the Servicer to any Affected Party or any other Person in connection with the Transaction Documents shall be made in U.S. Dollars and without set-off or counterclaim, except, for the  avoidance  of  doubt,  any  netting  expressly  permitted  herein.  Any  ADT  Entity’s obligations hereunder shall not be satisfied by any tender or recovery of another currency except to the extent such tender or recovery results in receipt of the full amount of U.S. Dollars.      (e)   Taxes.                    (i)   Except to the extent required by applicable Law, any and       all  payments  and  deposits  required  to  be  made  hereunder,  under  any  other                                  16

 

            Transaction Document or under any instrument delivered hereunder or thereunder             to any Affected Party or otherwise hereunder or thereunder by the Seller or the             Servicer shall be made free and clear of, and without withholding or deduction             for, any and all present or future Indemnified Taxes. If the Seller or the Servicer             shall be required by applicable Law to make any such withholding or deduction,             (A) the Seller (or the Servicer, on its behalf) shall make an additional payment to             such  Affected  Party,  in  an  amount  sufficient  so  that,  after  making  all  required             withholdings or deductions (including withholdings or deductions applicable to             additional sums payable under this Section 3.3(e)), such Affected Party receives             an amount equal to the sum it would have received had no such withholdings or             deductions been made, (B) the Seller (or the Servicer, on its behalf) shall make             such deductions, and (C) the Seller (or the Servicer, on its behalf) shall pay the             full  amount  deducted  to  the  relevant  taxation  authority  or  other  Governmental             Authority in accordance with applicable Law.                          (ii)  The Seller will indemnify each Affected Party for the full             amount of (A) Indemnified Taxes (including any Indemnified Taxes imposed by             any jurisdiction  on amounts payable under this Section) paid by such  Affected             Party, as the case may be, and any reasonable expenses payable by such Affected             Party  arising  therefrom  or  with  respect  thereto;  and  (B) any  incremental  U.S.             federal  income  or  withholding  Taxes  or  state  or  local  Taxes  measured  by  net             income that arise because a Purchase of the Receivable Pool or Related Assets is             not treated by a taxing authority as intended for purposes of U.S. federal income             Tax or state or local Taxes measured by net income under Section 1.2(d)(ii)(A)             (such  indemnification  described  in  this clause  (B)  will  include  U.S.  federal             income and withholding Taxes and state and local Taxes measured by net income             necessary  to  make  such  Affected  Party  whole  on  an  after-tax basis taking  into             account  the  taxability  of  receipt  of  payments  under  this clause  (B)  and  any             reasonable  expenses  (other  than  Taxes)  arising  out  of,  relating  to,  or  resulting             from the foregoing); provided, however, that no Affected Party shall be entitled to             indemnification  under  this clause  (B)  for  Taxes  other  than  Taxes  attributable             solely  and  directly  to  income  derived  from  the  transactions  effectuated  by  the             Transaction  Documents.  Notwithstanding  anything  to  the  contrary  in  this             Agreement,  no  Affected  Party  shall  recover,  whether  through  a  payment  of             additional  amounts  pursuant  to Section  3.3(e)(i)  or  a  payment  pursuant  to  the             indemnification obligations of this Section 3.3(e)(ii), more than once for any Tax             imposed. Any indemnification under this Section 3.3(e)(ii) shall be paid by the             Seller to the Collateral Agent’s Account by the date which is no later than three             (3)  Business  Days  prior  to  the  Settlement  Date  immediately  succeeding  the             Settlement  Period  in  which  written  demand  therefor  is  made  by  any  Affected             Party , together with a statement of reasons for such demand and the calculations             of such amount. Such calculations, if made in good faith, absent manifest error,             shall be final and conclusive on all parties.                          (iii) Within five (5) days after the date of any payment of Taxes             withheld by the Seller or the Servicer, as applicable, in respect of any payment to             any Affected Party, the Seller or the Servicer, as applicable, will furnish to the                                        17 SK 28677 0004 8494650 v1217

 

Administrative  Agent,  the  original  or  a  certified  copy  of  a  receipt  evidencing payment thereof (or other evidence reasonably satisfactory to the Administrative Agent).              (iv)  Without  prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section shall survive  the  resignation  or  replacement  of,  or  any  assignment  by,  any  Affected Party, and the payment in full of Obligations hereunder.              (v)   (A)   Any Affected Party that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Servicer (on behalf of the Seller) and the Administrative Agent, at the time or times reasonably requested by the Seller or  the  Servicer  and  at  the  time  or  times  prescribed  by  applicable  Law,  such properly  completed  and  executed  documentation  reasonably  requested  by  the Seller  or  the  Servicer  as  will  permit  such  payments  to  be  made  without withholding or at a reduced rate of withholding. In addition, any Affected Party, if  reasonably  requested  by  the  Seller  or  the  Servicer,  shall  deliver  such  other documentation  prescribed  by  applicable  Law  or  reasonably  requested  by  the Seller  or  the  Servicer  as  will  enable  the  Seller  or  the  Servicer  to  determine whether  or  not  such  Affected  Party  is  subject  to  backup  withholding  or information reporting requirements. Notwithstanding the foregoing, submission of  such  documentation  (other  than  any  documentation  required  by clause  (B) below)  shall  not  be  required  if  in  the  Purchaser’s  reasonable  judgment  such completion,  execution,  or  submission  would  subject  such  Purchaser  to  any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Purchaser.              (B)   Without limiting the generality of the foregoing,                    (1)   Each  Affected  Party  that  is  not  a  “United  States       person,” within the meaning of Section 7701(a)(30) of the Code, shall, on       or  before  the  date  it  becomes  a  party  to  this  Agreement,  deliver  to  the       Servicer  (on  behalf  of  the  Seller)  and  the  Administrative  Agent  such       certificates,  documents,  or  other  evidence,  as  required  by  the  Code  or       Treasury Regulations issued pursuant thereto, including Internal Revenue       Service  Form  W-8BEN,  Form  W-8BEN-E,  Form  W-8ECI,  W-IMY  (or       any successor form), with appropriate attachments, or any other applicable       certificate  or  statement  of  exemption,  properly  completed  and  duly       executed by such Affected Party establishing that any payment made or       deemed made to such Affected  Party is (i) not subject to United States       Federal  withholding  Tax  under  the  Code  because  such  payments  are       effectively connected with the conduct by such Affected Party of a trade       or business in the United States, (ii) exempt or entitled to a reduction from       United States Federal withholding tax under a provision of an applicable       Tax  treaty,  (iii) eligible  for  the  benefits  of  the  exemption  for  portfolio       interest  under  Section 881(c)  of  the  Code,  in  which  case  such  Affected                           18

 

                  Party shall also deliver a certificate to the effect that such Affected Party                   is  not  (A) a  “bank”  within  the  meaning  of  Section 881(c)(3)(A)  of  the                   Code, (B) a “10 percent shareholder” of the Seller, within the meaning of                   Section 881(c)(3)(B)  of  the  Code,  or  (C) a  “controlled  foreign                   corporation” described in Section 881(c)(3)(C) of the Code, or (iv) made                   to a person who is not the beneficial owner of the payments. In addition,                   each such Affected Party shall, if legally able to do so, thereafter deliver                   such  certificates,  documents  or  other  evidence  from  time  to  time                   establishing  that  payments  received  hereunder  are  not  subject  to,  or                   subject to a reduced rate of, such withholding upon receipt of a written                   request therefor from the Seller or the Administrative Agent.                                (2)   Each  Affected  Party  that  is  a  “United  States                   person,” shall, on or before the date it becomes a party to this Agreement,                   deliver  to  the  Servicer  (on  behalf  of  the  Seller)  and  the  Administrative                   Agent such certificates, documents, or other evidence, as required by the                   Code or Treasury Regulations issued pursuant thereto, including Internal                   Revenue  Service  Form  W-9  (or  any  successor  form)  or  any  other                   applicable certificate or statement of exemption properly completed and                   duly executed by such Affected Party establishing that payment made to                   such  Affected  Party  is  not  subject  to  United  States  Federal  backup                   withholding Tax under the Code. In addition, each such Affected Party                   shall,  if  legally  able  to  do  so,  thereafter  deliver  such  certificates,                   documents, or other evidence from time to time establishing that payments                   received hereunder are not subject to such withholding upon receipt of a                   written request therefor from the Seller or the Administrative Agent.                                (3)   Each  Affected  Party  that  is  entitled  to  any                   exemption or reduction of non-U.S. withholding tax with respect to any                   payment under this Agreement shall, on or before the date it becomes a                   party to this Agreement, deliver to the Servicer (on behalf of the Seller)                   and  the  Administrative  Agent  such  certificates,  documents,  or  other                   evidence as may reasonably be requested by the Servicer (on behalf of the                   Seller) or the Administrative Agent, establishing that such payment is not                   subject  to,  or  is  subject  to  a  reduced  rate  of,  withholding.  In  addition,                   each such Affected Party shall, if legally able to do so, thereafter deliver                   such  certificates,  documents,  or  other  evidence  from  time  to  time                   establishing  that  payments  received  hereunder  are  not  subject  to  such                   withholding, or are subject to a reduced rate of withholding, upon receipt                   of a written request therefor from the Servicer (on behalf of the Seller) or                   the Administrative Agent.                                (4)   If a payment made to an Affected Party under any                   Transaction Document would be subject to U.S. federal withholding Tax                   imposed by FATCA if such Affected Party were to fail to comply with the                   applicable reporting requirements of FATCA (including those contained                   in Section 1471(b) or 1472(b) of the Code, as applicable), such Affected                                        19 SK 28677 0004 8494650 v1217

 

      Party shall deliver to the Seller (or the Servicer on behalf of the Seller)       and the Administrative Agent at the time or times prescribed by law and at       such time or times reasonably requested by the Seller (or the Servicer on       behalf  of  Seller)  or  the  Administrative  Agent  such  documentation       prescribed  by  applicable  Law  (including  as  prescribed  by  Section       1471(b)(3)(C)(i)  of  the  Code)  and  such  additional  documentation       reasonably requested by the Seller (or the Servicer on behalf of Seller) or       the  Administrative  Agent  as  may  be  necessary  for  the  Seller  (or  the       Servicer on behalf of the Seller) and the Administrative Agent to comply       with their obligations under FATCA and to determine that such Affected       Party has complied with such Affected Party’s obligations under FATCA       or to determine the amount to deduct and withhold from such payment.              (vi)  For  purposes  of  this  Section  3.3(e),  “applicable  Law” includes FATCA.              (vii) Each Purchaser (or in respect of a Conduit Purchaser, the Purchaser Agent on behalf of such Conduit Purchaser) shall severally indemnify the Administrative Agent, within five (5) days after demand therefor, for (i) any Indemnified Taxes attributable to such Purchaser (but only to the extent that the Seller  or  ADT  has  not  already  indemnified  the  Administrative  Agent  for  such Indemnified Taxes and without limited the obligation of the Seller or ADT to do so),  (ii) any  Taxes  attributable  to  such  Purchaser’s  failure  to  comply  with  the provisions  of  Section  13.3(b)  relating  to  the  maintenance  of  a  Participant Register,  and  (iii) any  Excluded  Taxes  attributable  to  such  Purchaser,  in  each case, that are payable or paid by the Administrative Agent in connection with any Transaction  Document,  and  any  reasonable  expenses  arising  therefrom  or  with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant taxing authority. A certificate as to the amount of such payment or liability delivered to any Purchaser by the Administrative Agent to set off and apply any and all amounts at any time owing to such Purchaser under any Transaction Document or otherwise payable by the Administrative Agent to the Purchase  from  any  other  source  against  any  amount  due  to  the  Administrative Agent under this paragraph (e)(vii).              (viii) Any  Affected  Party  claiming  compensation  under Section 4.2(a) or any Indemnified Taxes or additional amounts payable pursuant to this Section 3.3 shall use reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to, at the expense of the Servicer, file any certificate  or  document  reasonably  requested  in  writing  by  the  Seller  or  the Servicer or to change the jurisdiction of its applicable lending office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination  of  such  Affected  Party,  be  otherwise  disadvantageous  to  such Affected Party.                             20

 

                        (ix)  If  any Affected  Party  receives  a  refund in  respect of any             Indemnified  Taxes  as  to  which  it  has  been  indemnified  by  the  Seller  or  with             respect to which the Seller has paid additional amounts, in each case pursuant to             this  Section, it  shall  promptly repay such refund to  the Seller  (to the extent of             amounts that have been paid by the Seller (or the Servicer, on its behalf) under             this  Section with  respect  to  such  refund),  net  of  all  out-of-pocket  expenses             (including Taxes imposed with respect to such refund) of such Affected Party and             without  interest  (other  than  interest  paid  by  the  relevant  taxing  authority  with             respect to such refund); provided, however, that the Seller (or the Servicer, on its             behalf) upon the request of such Affected Party, agrees to return such refund (plus             penalties,  interest,  or  other  charges)  to  such  Affected  Party  in  the  event  such             Affected  Party  or  the  Administrative  Agent  is  required  to  repay  such  refund.             Nothing in this Section shall obligate any Affected Party to apply for any such             refund.                          (x)   If  ADT  determines  that  a  reasonable  basis  exists  for             contesting  an  Indemnified  Tax  for  which  it  has  paid  additional  amounts  or             indemnification  payments,  each  applicable  Affected  Party  shall  use  reasonable             efforts to cooperate with ADT as ADT may reasonably request in challenging             such  Tax.  ADT  shall  indemnify  and  hold  each  such  Affected  Party  harmless             against any out-of-pocket expenses incurred by such person in connection with             any request made by ADT pursuant to this Section 3.3(e)(x).                          (xi)  Subject  to  the  provisions  of  this Section  3.3,  if  any             Affected Party shall, to its knowledge, have received notice of any attempt by a             taxing  authority  to  impose  or  collect  any  Indemnified  Tax from  such  Affected             Party, such Affected Party shall use commercially reasonable efforts to notify the             Servicer (on the Seller’s behalf) of such attempt, and the Seller shall, provided             that  the  Seller  shall  first  deposit  with  the  applicable  Purchaser  Agent  amounts             sufficient to indemnify the Affected Party as provided under Section 3.3(e)(ii),             have the right, at their sole expense, (A) if such Affected Party is contesting the             imposition of any such Tax in good faith by appropriate proceedings, to be kept             reasonably  informed  by  such  Affected  Party  about  the  progress  of  such             proceedings,  or  (B) if  such  Affected  Party  is  not  so  contesting,  to  initiate  any             proceedings resisting or objecting to the imposition or collection of any such Tax.                          (xii) The Servicer (on behalf of the Seller) shall pay, or at the             option of the Administrative Agent timely reimburse it for the payment of, Other             Taxes.                          (xiii) Nothing  contained  in  this  Section shall  require  any             Affected Party to make available any of its Tax returns (or any other information             relating to its Taxes which it deems to be confidential).                          (xiv) For purposes of this Section 3.3, the term “Affected Party”             shall include any assignee pursuant to Section 13.3(c) or 13.3(d).                                        21 SK 28677 0004 8494650 v1217

 

      SECTION 3.4       Treatment of Collections and Deemed Collections. So long as the Seller or the Servicer shall hold any Collections (including Deemed Collections) required to be paid to the Collateral Agent’s Account, the Seller and the Servicer shall hold such Collections in trust for the Collateral Agent and shall clearly mark its records to reflect the same. The Seller shall promptly enforce all obligations of ADT under the Sale Agreement, including, payment of Deemed Collections (as defined in the Sale Agreement).        SECTION 3.5       Extension  of  the  Purchase  Termination  Date.  Provided  that  no Unmatured Event of Termination or Event of Termination has occurred and is continuing, no earlier than three (3) months prior to (but no later than forty-five (45) days prior to) the then current  Purchase  Termination  Date,  the  Seller  (or  the  Servicer  on  the  Seller’s  behalf)  may request an extension of the then current Purchase Termination Date by submitting a request for an  extension  (each,  an  “Extension  Request”)  to  the  Collateral  Agent  and  the  Administrative Agent, which the Administrative Agent shall, upon receipt, forward to each Purchaser Agent. Such Extension Request must specify (i) the date (which must be at least thirty (30) days after the  applicable  Extension  Request  is  delivered  to  the  Collateral  Agent  and  the  Administrative Agent) as of which each Purchaser is requested to respond to such Extension Request by (each, a “Response Date”). Promptly upon receipt of an Extension Request, each Purchaser Agent (on behalf of its Purchasers) shall notify the Servicer (on behalf of the Seller) as to whether each Purchaser  in  its  Purchaser  Group  approves  such  Extension  Request  (it  being  understood  that each Purchaser in a Purchaser Group may accept or decline such Extension Request in its sole discretion). The failure of any Purchaser to affirmatively notify the Servicer (on behalf of the Seller)  of  such  Purchaser’s  election  regarding  such  Extension  Request  by  the  applicable Response  Date  shall  be  deemed  to  be  a  refusal  by  such  Purchaser  to  grant  the  requested extension.  In the event that the Administrative Agent and the Purchasers with Pool Limits which aggregate to an amount at least equal to 75% of the then current Purchasers’ Pool Limit shall approve of such request (such date, the “Approval Date”), then the current Purchase Termination Date shall be extended to the date which is 364 days after such Approval Date and each such Purchaser and the other parties hereto that approved such Extension Request shall enter into such documents as the Administrative Agent and such Purchasers may deem necessary or appropriate to reflect such extension. In the event that the Purchasers relating to a Purchaser Group decline an Extension Request (each such declining Purchaser, an  “Exiting Purchaser”), the Purchaser Agent  for  such  Exiting  Purchasers  shall  so  notify  the  Servicer  (on  behalf  of  the  Seller),  the Collateral Agent, the Administrative Agent, and each of the other parties hereto of such Exiting Purchaser’s determination. If the Purchasers of a Purchaser Group become Exiting Purchasers, such Purchaser Groups’ Pool Limit shall automatically be reduced to zero on the then-current Purchase Termination Date, without giving effect to any other Purchasers of any other Purchaser Group’s agreement to extend the Purchase Termination Date, if any. This Section 3.5 shall not be deemed to limit or restrict the ability of the parties hereto to extend the Purchase Termination Date pursuant to an amendment in accordance with Section 13.1.        SECTION 3.6       Account Control.            (a)   The Servicer acknowledges, represents and agrees that it has established each       of the Lock-box Accounts, each of the Collection Accounts and the Omnibus Account       and  further  acknowledges,  represents  and  agrees  that  each  such  Account  is  a  deposit                                        22

 

      account  maintained  at  an  Eligible  Bank.  Without  limiting  the  Servicer’s  obligation       pursuant to Clauses (c) or (d) of Section 7.6, if, at any time, any Lock-box Account, any       Collection  Account  or  the  Omnibus  Account  ceases  to  be  with  an  Eligible  Bank,  the       Servicer shall, as promptly as practicable and in any event within thirty (30) days after       the Servicer or the Seller has knowledge thereof, (i) establish a new Lock-box Account,       Collection  Account  or  Omnibus  Account,  as  the  case  may  be,  with  a  depository       institution that is an Eligible Bank, (ii) transfer any amounts held in such Account to such       new Lock-box Account, Collection Account or Omnibus Account, as the case may be,       and (iii) cause a Payment Direction or Control Agreement to be in full force and effect in       respect of such Eligible Bank. The Servicer shall not terminate any Collection Account       or the Omnibus Account  except  as contemplated  by this Section 3.6 without the prior       written consent of the Collateral Agent.            (b)   The Collateral Agent hereby agrees that it shall (i) not deliver a Remittance       Notice unless an Event of Termination shall have occurred and be continuing, (ii) deliver       a Remittance Notice to ADT simultaneously with delivery of such Remittance Notice to       the applicable account bank, and (iii) promptly rescind such Remittance Notice upon the       cure or waiver of such Event of Termination, so long as no other Event of Termination or       the  Acceleration  Date  shall  have  occurred.  ADT  and  the  Collateral  Agent  hereby       acknowledge  and  agree  that  the  Daily  Remittance  Amount  is  intended  to  reflect  the       estimated  amount  of  Collections.  Accordingly,  (i)  ADT  hereby  agrees  that  after  the       delivery of the Remittance Notice, it shall not direct the account bank in respect of the       Omnibus Account to distribute, apply or otherwise transfer any amounts to an account       other than the Collateral Agent’s Account or the Reserve Account unless it has certified       to  the Collateral  Agent  that  such amounts do not  constitute Collections, together with       reasonably detailed evidence supporting such certification and (ii) the Collateral Agent       hereby agrees, and the parties hereto hereby acknowledge,  that the Collateral Agent shall       (A)  promptly  (following  a  two  Business  Day  reconciliation  period),  cause  an  amount       equal to the amount of Collections actually deposited to the Collateral Agent’s Account       from the Omnibus Account since the date of delivery of such Remittance Notice, to be       remitted  (without  duplication  of  any  such  amounts  previously  remitted)  from  the       Reserve Account, to the extent funds are available therein, to the Omnibus Account, (B)       remit amounts on deposit in the Reserve Account to the Collateral Agent’s Account in an       amount  equal  to  Collections  (including  Deemed  Collections)  that  it  reasonably       determines in good faith (based upon ADT’s certification set forth in clause (i) above, the       evidence supporting such certification, and the other reports, documents, certification and       other  information  received  by  the  Collateral  Agent  hereunder  or  under  the  other       Transaction Documents) should have been deposited into the Collateral Agent’s Account       but were not so deposited other than by reason of bankruptcy or insolvency, financial or       credit  condition  or  financial  default,  of  the  applicable  Obligor  (the  “Missing       Collections”); provided,  that to the extent  any  such Missing Collections are otherwise       subsequently deposited to the Collateral Agent’s Account with notice from ADT to the       Collateral  Agent  that  such  amounts  constitute  Missing  Collections  and  evidence       reasonably satisfactory to the Collateral Agent that such amounts constitute such Missing       Collections, the Collateral Agent shall promptly credit such received Missing Collections       (without any interest) to the Reserve Account to avoid duplication of Collections, and (C)       notwithstanding  any  security  interest  in  the  Reserve  Account,  no  amount  from  the                                        23 SK 28677 0004 8494650 v1217

 

      Reserve Account may be applied towards the payment of Obligations other than as set       forth  in  subclause  (B)  above,  and  the  Collateral  Agent  shall  cause  any  amounts  that       remain in the Reserve Account (less any amounts owed to the applicable account bank)       after  the  Final  Payout  Date  to  be  distributed  to  or  at  the  direction  of  ADT  promptly       following the Final Payout Date.            (c)   In  addition,  the  Collateral  Agent  agrees  that  in  the  event  any  Lock-box       Account,  any  Collection  Account  or  the  Omnibus  Account  is  subject  to  a  Payment       Direction,  and  such  account  subsequently  becomes  subject  to a  Control Agreement or       ADT  certifies  to  the  Collateral  Agent,  Administrative  Agent  and  each  Purchaser  and       Purchaser Agent, with evidence reasonably satisfactory to the Collateral Agent, that no       Collections  are  on  deposit  in  such  account  and  no  further  Collections  on  Pool       Receivables  can  be  deposited  in  such  account,  the  Collateral  Agent  shall  promptly       terminate the Payment Direction relating to such account.                                   ARTICLE IV                          FEES AND YIELD PROTECTION        SECTION 4.1       Fees.  From  the  Closing  Date  until  the  Final  Payment  Date,  the Seller  shall  pay  to  the  Collateral  Agent  for  distribution  to  each  Purchaser  Agent  and  each Purchaser, as applicable, on each Settlement Date subject to Section 3.1(d) all Fees.        SECTION 4.2       Yield Protection.            (a)   If any Change in Law:                          (i)   shall subject an Affected Party to any duty, cost or other             charge (other than Taxes, which shall be governed by Section 3.3(e)) with respect             to any  Investment  or interest  in the Receivable  Pool or  Related Assets  owned,             maintained  or  funded  by  it  (or  its  participation  in  any  of  the forgoing),  or any             obligations  or  right  to  make  Purchases  or  to  provide  funding  or  maintenance             therefor (or its participation in any of the foregoing);                          (ii)  shall  impose,  modify,  or  deem  applicable  any  reserve,             special  deposit,  or  similar  requirement  against  assets  of  any  Affected  Party,             deposits, or obligations with or for the account of any Affected Party or with or             for the account of any Affiliate (or entity deemed by the Federal Reserve Board or             other Governmental Authority to be an affiliate) of any Affected Party, or credit             extended by any Affected Party;                          (iii) shall impose any other condition affecting any Investment             or the Receivable Pool or Related Assets owned, maintained, or funded in whole             or in part by any Affected Party, or its obligations or rights, if any, to make (or             participate in) Purchases or to provide (or participate in) funding therefor or the             maintenance thereof;                                        24

 

                        (iv)  shall change the rate for, or changes the manner in which             the  Federal  Deposit  Insurance  Corporation  (or  a  successor  thereto)  or  similar             Person  assesses,  deposit  insurance  premiums,  or  similar  charges  which  an             Affected Party is obligated to pay; or                          (v)   shall  (i) change  the  amount  of  capital  maintained  or             required  or  requested  or  directed  to  be  maintained  by  any  Affected  Party  or             (ii) subject any Affected Party to any Taxes (other than (A) Indemnified Taxes,             and (B) Excluded Taxes) on its Purchases, the Receivable Pool or Related Assets,             commitments, or other obligations, or its deposits, reserves, other liabilities, or             capital attributable thereto;  and  the  result  of  any  of  the  foregoing  is  or  would  be,  in  each  case,  as  determined  by  the applicable Purchaser Agent or the applicable Affected Party:                          (A)   to increase the cost to (or impose a cost on) (1) an Affected                   Party funding or making or maintaining any Purchases, any purchases, or                   loans or  other extensions  of  credit  under any Liquidity Agreement,  any                   Enhancement  Agreement,  or  any  commitment  (hereunder  or  under  any                   Liquidity Agreement or any Enhancement Agreement) of such Affected                   Party with respect to any of the foregoing, or (2) the Collateral Agent, any                   Purchaser  Agent,  or  the  Administrative  Agent  for  continuing  its                   relationship with any Purchaser;                          (B)   to reduce the amount of any sum received or receivable by                   an Affected Party under this Agreement, any Liquidity Agreement or any                   Enhancement  Agreement  (or  its  participation  in  any  such  Liquidity                   Agreement or Enhancement Agreement) with respect thereto; or                          (C)   to reduce the rate of return on the capital of such Affected                   Party as a consequence of its obligations hereunder, under any Liquidity                   Agreement or under any Enhancement Agreement (or its participation in                   any such Liquidity Agreement or Enhancement Agreement), including its                   funding  or  maintenance  of  any  portion  of  any  Investment  or  the                   Receivable Pool or Related Assets, or arising in connection herewith (or                   therewith)  to  a  level  below  that  which  such  Affected  Party  could                   otherwise have achieved hereunder or thereunder,  then, within three (3) Business Days following its receipt of notice from such Affected Party (or by  the  Administrative  Agent  or  a  Purchaser  Agent  on  its  behalf)  in  accordance  with Section 4.2(c), the Seller shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost or such reduction.            (b)   Each Affected Party (or the Administrative Agent or a Purchaser Agent on its       behalf),  shall  use  commercially  reasonable  efforts  to  promptly  notify  the  Servicer  (on       behalf of the Seller) and the Administrative Agent of any event of which it has actual       knowledge  which  will  entitle  such  Affected  Party  to  compensation  pursuant  to  this                                        25 SK 28677 0004 8494650 v1217

 

      Section 4.2; provided,  that the Seller shall  not  be required to compensate  an Affected       Party pursuant  to  this Section 4.2  for  any  increased costs or reductions  incurred more       than 180 days prior to the date that such Affected Party notifies the Seller of the Change       in  Law giving  rise  to  such  increased costs  or reductions and of such  Affected  Party’s       intention to claim compensation therefor; provided, further, that, if the Change in Law       giving rise to such increased costs or reductions is retroactive, then the 180 day period       referred to above shall be extended to include the period of retroactive effect thereof.            (c)   In determining any amount provided for or referred to in this Section 4.2, an       Affected Party may use any reasonable averaging and attribution methods that it, in its       sole discretion, shall deem applicable. Any Affected Party (or the Administrative Agent       or a Purchaser Agent on its behalf) when making a claim under this Section 4.2 shall       submit to the Servicer (on behalf of the Seller) and the Administrative Agent a written       statement of such increased cost or reduced return, which statement, in the absence of       manifest error, shall be conclusive and binding.            (d)   Except as set forth in Section 4.2(b), no failure or delay on the part of any       Affected  Party  (or  the  Administrative  Agent  or  any  Purchaser  Agent)  to  demand       compensation pursuant to this Section 4.2 shall not constitute a waiver of such Affected       Party’s (or the Administrative Agent’s or any Purchaser Agent’s on its behalf) right to       demand such compensation or otherwise adversely affect the rights of any Affected Party       to such compensation.            (e)   The Seller acknowledges that any Affected Party may institute measures in       anticipation of a Change in Law (including, without limitation, the imposition of internal       charges on such Affected Party’s interests or obligations under this Agreement), and may       commence  allocating  charges  to  or  seeking  compensation  from  the  Seller  under  this       Section 4.2 in connection with such measures, in advance of the effective date of such       Change  in  Law,  and  the  Seller  agrees  to  pay  such  charges  or  compensation  to  such       Affected Party (except for Taxes contemplated by clause (ii) of Section 4.2(a)(v)), to the       extent such charges or compensation would otherwise be payable by the Seller under this       Section 4.2 after such effective date of such Change in Law, following demand therefor       without regard to whether such effective date has occurred but only to the extent of, and       on or after such Affected Party’s measures must be implemented prior to such effective       date  at  the  demand  of  the  applicable  prudential  regulator.  The  Seller  further       acknowledges that any charge or compensation demanded hereunder may take the form       of a monthly charge to be assessed by such Affected Party.        SECTION 4.3       Funding  Losses.  If  any  Affected  Party  incurs  any  cost,  loss,  or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits  or  other  funds  acquired  by  such  Affected  Party),  at  any  time,  as  a  result  of  (a) any optional or required settlement or repayment with respect to any Purchaser’s Tranche Investment of any Rate Tranche, howsoever funded, being made on any day other than the scheduled last day of an applicable Yield Period with respect thereto, (b) any Purchase not being completed by the Seller in accordance with its request therefor under Section 1.2, or (c) the failure to exercise or complete (in accordance with Section 3.2(b)) any reduction in Purchasers’ Pool Investment elected  to  be  made  under Section  3.2(b),  (d) any  reduction  in  Purchasers’  Pool  Investment                                       26

 

elected under Section 3.2(b) exceeding the total amount of Rate Tranches, howsoever funded, with respect to which the last day of the related Yield Period is the date of such reduction, or (e) the  failure  to  reduce  Purchasers’  Pool  Investment,  then,  upon  written  notice  from  such Affected Party (or the Administrative Agent or a Purchaser Agent on its behalf) to the Servicer (on behalf of the Seller), the Seller shall pay to the Collateral Agent’s Account by the date which is no later than three (3) Business Days prior to the Settlement Date immediately succeeding the Settlement Period in which such written notice is delivered by such Affected Party.  Such written notice shall, in the absence of manifest error, be conclusive and binding upon the Seller and the Servicer. If an Affected Party incurs any cost, loss, or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Party), at any time, and is not entitled to reimbursement for such loss or expense in the manner set forth above, such Affected Party shall individually bear such loss or expense without recourse to, or payment from, any other Affected Party.        SECTION 4.4       Mitigation; Replacement of Purchasers.            (a)   If  any  Affected  Party  requests  compensation  under  Section  4.2,  or  if  the       Seller  is  required  to  pay  any  additional  amount  to  any  Affected  Party  or  any       Governmental Authority for the account of any Affected Party pursuant to Section 3.3(e),       then such Affected Party and its related Purchaser Agent shall use reasonable efforts to       designate  a  different  office,  branch  or  Affiliate  for  funding  or  booking  its  Investment       hereunder  or  to  assign  its  rights  and  obligations  hereunder  to  another  of  its  offices,       branches  or  Affiliates,  if,  in  the  reasonable  judgment  of  such  Affected  Party  or  such       Purchaser Agent, such designation or assignment (i) would eliminate or reduce amounts       payable pursuant to Section 4.2 or Section 3.3(e), in the future, and (ii) would not subject       such Affected Party or its related Purchaser Agent to any unreimbursed cost or expense       and  would  not  otherwise  be  disadvantageous  to  such  Affected  Party  or  its  related       Purchaser Agent. ADT hereby agrees to pay all reasonable costs and expenses incurred       by  such  Affected  Party  and  its  related  Purchaser  Agent  in  connection  with  any  such       designation or assignment.            (b)   If (i) any Purchaser (or Affiliated Party relating to such Purchaser) requests       compensation under Section 4.2 or (ii) any Purchaser has become an Exiting Purchaser,       so long as no Event of Termination or Unmatured Event of Termination has occurred and       remains continuing, the Seller may, at ADT’s sole expense and effort (including payment       of any applicable processing and recordation fees), upon notice to the Collateral Agent,       the related Purchaser Agent and the Administrative Agent, require all Purchasers in the       Purchaser Group relating to such Purchaser to assign and delegate, without recourse (in       accordance with and subject to the restrictions contained in this Agreement), all of their       respective  interests,  rights,  and  obligations  under  this  Agreement  and  the  other       Transaction Documents to a willing assignee that is an Eligible Assignee and that shall       assume such interests, rights, and obligations pursuant to a written agreement reasonably       acceptable  to  the  Collateral  Agent,  the  Administrative  Agent,  and  the  assigning       Purchasers; provided, that (x) the Seller shall have received the prior written consent of       the Collateral Agent and the Administrative Agent with respect to any assignee that is not       already a member of a Purchaser Group hereunder, which consent shall not unreasonably       be withheld, conditioned, or delayed, and (y) each member of such assigning Purchaser                                        27 SK 28677 0004 8494650 v1217

 

      Group shall have received payment of an amount equal to all outstanding Investments       and Yield in respect thereof, accrued fees and all other amounts payable to it hereunder,       from the assignee or the Seller; provided, further, that any such assigning Purchaser shall       be a beneficiary of any of this Agreement’s terms that expressly survive termination of       this  Agreement;  and  provided,  still  further,  that  if  the  Person  then  serving  as  the       Collateral Agent and/or the Administrative Agent is a member of the Purchaser Group       being removed pursuant to this Section, such Person shall cease to be the Administrative       Agent and/or Collateral Agent, as applicable, upon the foregoing assignment and such       assignment shall not be effective until a successor Collateral Agent and/or Administrative       Agent,  as  the  case  may  be,  has  been  appointed  by  the  Required  Purchasers  and  has       accepted such appointment and assumed all of the obligations of such Person.                                    ARTICLE V                           CONDITIONS OF PURCHASES        SECTION 5.1       Conditions Precedent to Effectiveness. The initial Purchase Date hereunder  is  subject  to the  conditions precedent that the Collateral Agent, the Administrative Agent  and  each  Purchaser  Agent  shall  have  received  (unless  otherwise  waived),  each  of  the following  in  form  and  substance  reasonably  satisfactory  to  the  Collateral  Agent,  the Administrative Agent and each Purchaser Agent:            (a)   a copy of the resolutions or unanimous written consents, as applicable, of the       board of directors or managers or member (or any authorized sub-committee), as the case       may be, of each of the ADT Entities required to authorize the execution, delivery, and       performance by such ADT Entity of each Transaction Document to be delivered by it       hereunder, certified by its secretary or any other authorized person;            (b)   good standing certificates (or the equivalent) for each of the ADT Entities       issued by the Secretary of State (or the equivalent) of the jurisdiction in which each such       entity is organized;            (c)   a certificate of the secretary or assistant secretary of each of the ADT Entities       certifying the names and true signatures of the officers authorized on its behalf to sign the       Transaction Documents to be delivered by it (on which certificate the Collateral Agent,       the Administrative Agent, each Purchaser and each Purchaser Agent may conclusively       rely  until  such  time  as  such  party  shall  have  received  from  any  such  ADT  Entity,  a       revised certificate meeting the requirements of this clause (c));            (d)   copies  of  the  Constituent  Documents  of  each  of  the  ADT  Entities  duly       certified by the secretary or an assistant secretary of each such ADT Entity, and in in the       case of any certificates or articles of incorporation, formation or organization, certified       by the Secretary of State (or the equivalent) of the jurisdiction in which each such entity       is organized;            (e)   a search report by a nationally recognized search firm provided in writing to       the Collateral Agent and the Administrative Agent by the Servicer listing all financing                                        28

 

      statements, state and federal tax, or ERISA liens and judgments that name the Seller or       ADT, as debtor and that are filed in the jurisdictions in which filings were made pursuant       to clause (f) and any other jurisdictions that the Collateral Agent or the Administrative       Agent shall reasonably request together with copies of such financing statements;            (f)   copies of proper financing statements (form UCC-3) (including amendment       and  termination  statements)  and  release  documentation  each  in  form  and  substance       reasonably satisfactory to the Collateral Agent and the Administrative Agent with respect       to any financing statement included in the search report described in clause (e) above, to       the extent that any such financing statement set forth therein covers any Pool Receivables       or Related Assets, other than financing statements filed pursuant to this Agreement;            (g)   proper financing statements naming the Seller as debtor, and the Collateral       Agent  as  secured  party,  to  be  filed  in  all  applicable  jurisdictions  in  respect  of  the       Collateral;            (h)   favorable  opinions  of  Paul,  Weiss, Rifkind,  Wharton  &  Garrison  LLP       (including  with  respect  to  creation  and  perfection  of  security  interests  under  the       applicable UCC) counsel to the ADT Entities; non-consolidation, and true sale matters;       and other customary opinions required by the Collateral Agent and the Administrative       Agent;            (i)   completion of satisfactory due diligence in respect of the Receivable Pool by       Purchasers, Purchaser Agents, the Collateral Agent, and the Administrative Agent;            (j)   duly executed copies of each of the Fee Letters;            (k)   duly  executed  copies  of  the  Transaction  Documents,  including  a  Payment       Direction  in  respect  of  each  Lock-box  Account,  each  Collection  Account  and  the       Omnibus  Account  which  shall  each  be in  full  force  and  effect,  and  completion of the       form  of  each  Exhibit  to  this  Agreement  not  attached  hereto  as  of  the  Closing  Date       together with an amendment hereto attaching such Exhibits;            (l)   payment by or on behalf of the Seller of each Purchaser’s, each Purchaser       Agent’s,  the  Collateral  Agent’s,  and  the  Administrative  Agent’s  reasonable  and       documented out-of-pocket costs and expenses, including all reasonable and documented       invoiced legal fees of counsel to such parties and all audit fees of Protiviti Inc. and all       Fees required to be paid on the Closing Date under any Fee Letter;            (m)   a pro-forma Information Package, which shall evidence compliance with the       terms  of  this  Agreement,  after  giving  credit  to  the  initial  transfer  of  an  interest  in       Receivables under this Agreement;            (n)   entry into a mutually satisfactory agreement, together with an amendment to       this  Agreement  to  reflect  such  agreement,  in  respect  of  applicable  confidentiality  and       information protection requirements in respect of Non-Public Borrower Data, including                                         29 SK 28677 0004 8494650 v1217

 

      reasonable  and  adequate  safeguards  for  the  protection  of  such  Non-Public  Borrower       Data;  and            (o)   such  other  agreements,  instruments,  certificates,  opinions,  and  other       documents as the Collateral Agent or the Administrative Agent may reasonably request       reasonably in advance of (and in any event at least five (5) Business Days prior to) the       initial Purchase Date.        SECTION 5.2       Conditions Precedent to All Purchases. Each Purchase (including the initial Purchase) shall be subject to the further conditions precedent that on the date of such Purchase, the following statements shall be true (and the Seller, on such Purchase Date, shall be deemed to have certified that):            (a)   each of the representations and warranties contained in this Agreement and in       each other Transaction Document are true and correct on and as of such day as though       made on and as of such day and shall be deemed to have been made on such day (except       to the extent such representations and warranties explicitly refer solely to another date, in       which case they shall be true and correct as of such other date);            (b)   no event has occurred, or would result from such Purchase that constitutes an       Event  of  Termination  or  an  Unmatured  Event  of  Termination  that  remains  continuing       (other than, solely with respect to a Non-Cash Purchase, pursuant to Section 10.1(o));            (c)   immediately after giving effect to such Purchase on such Purchase Date and       the  application  of  Collections  in  accordance  with  Section  3.1(d),  no  Pool  Deficiency       Amount under clauses (i), (iii) or (iv) of the definition thereof will exist;            (d)   the Purchase Termination Date has not occurred;            (e)   immediately after giving effect to such Purchase on such Purchase Date, the       Daily Remittance Amount shall be an amount at least equal to (i) the Purchasers’ Pool       Investment divided by (ii) 1000; and            (f)   except with respect to a Non-Cash Purchase, the applicable Purchaser Agent       has approved of the related Purchase Request in accordance with Section 1.2(a).        SECTION 5.3       Condition Subsequent.            (a)   Each of ADT and the Seller hereby covenant and agree that as promptly as       practicable after the Closing Date, but in any event no later than the twelve (12) month       anniversary  of  the  Closing  Date,  it  shall  (i) establish  new  accounts  in  to  which  only       Collections in respect of Pool Receivables shall be deposited directly from the respective       Obligors without any intermittent commingling, including with respect to Direct Deposit       Obligors on the Pool Receivables, (ii) cause the Collateral Agent to have a first priority       perfected  interest,  free  of  any  Adverse  Claims,  in  all  such  collections  and  accounts       including pursuant to one or more Control Agreements, (iii) enter into amendments to the       Transactions Documents to  reflect such changes, and take all  other actions reasonable                                        30

 

      and necessary to effectuate the purposes thereof, and (iv) deliver such certifications and       opinions of counsel as the Collateral Agent or the Administrative Agent shall reasonably       request,  in  each  case  in  form,  scope  and  manner  reasonably  satisfactory  to  the       Administrative Agent, Collateral Agent and each Purchaser Agent; and            (b)   Each of ADT and the Seller hereby covenants and agree that as promptly as       practicable after April 17, 2020, but in no event later than 30 days thereafter, the Seller       shall  enter  into  a  Control  Agreement  in  respect  of  the  Reserve  Account,  in  form  and       scope reasonably satisfactory to the Collateral Agent, and deliver such certifications and       opinions  of  counsel  as  the  Collateral  Agent  shall  reasonably  request,  in  each  case  in       form, scope and manner reasonably satisfactory to the Collateral Agent.                                   ARTICLE VI                      REPRESENTATIONS AND WARRANTIES        SECTION 6.1       Representations  and  Warranties  of  the  Seller.  The  Seller represents and warrants, as of the Closing Date, each Purchase Date, each Settlement Date upon which the Purchasers’ Pool Investment is reduced pursuant to Section 3.2(b) and in respect of clause (k) and (n) below, as of the date of each Information Package, as follows:            (a)   Organization  and  Good  Standing.  It  has  been  duly  organized  in,  and  is       validly existing and in good standing under the Laws of its jurisdiction of organization,       with organizational power and authority to own its properties and to conduct its business       as such properties are presently owned and such business is presently conducted.            (b)   Due  Qualification.  It  has  obtained  all  necessary  licenses,  approvals,  and       qualifications, if any, in connection with its execution and delivery of the Transaction       Documents  to  which  it  is  a  party  and  the  performance  by  it  of  its  obligations       contemplated in the Transaction Documents.            (c)   Power and Authority; Due Authorization. It (i) has all necessary power and       authority  to  (A) execute  and  deliver  this  Agreement  and  the  other  Transaction       Documents to which it is a party in any capacity and (B) perform its obligations under       the Transaction Documents applicable to it and (ii) has duly authorized by all necessary       limited  liability  company  action  the  execution,  delivery,  and  performance  of  this       Agreement and the other Transaction Documents to which it is a party.            (d)   Valid  Sale;  Binding Obligations. This  Agreement constitutes either  (x) an       absolute and irrevocable valid sale, transfer, and assignment of the Pool Receivables and       Related Assets to the Collateral Agent (on behalf of the Purchasers), enforceable against       creditors  of  and  purchasers  from  the  Seller,  or  (y) a  security  agreement  granting  a       security interest in the Pool Receivables and Related Assets to the Collateral Agent (on       behalf of the Purchasers and the other Affected Parties); and this Agreement and each       other Transaction Document to which it is a party when duly executed and delivered by it       will constitute its legal, valid, and binding obligation enforceable against it in accordance       with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,                                        31 SK 28677 0004 8494650 v1217

 

or  other  laws  affecting  creditors’  rights  generally  and  subject  to  general  principles  of equity, regardless of whether considered in a proceeding in equity or at law.      (e)   No  Violation.  The  execution  and  delivery  of  each  of  the  Transaction Documents to which it is a party, the consummation of the transactions contemplated by this Agreement and the other Transaction Documents and the performance by it of the terms  hereof  and  thereof  will  not  (i) violate  or  result  in  a  default  under,  (A) its Constituent Documents, (B) any indenture, agreement, or instrument binding on it or any of its assets or properties, or (C) the ADT Credit Agreement, any ADT Indenture or any ADT Collateral Agreement, (ii) result in the creation or imposition of any Adverse Claim upon  any  of  its  assets  or  properties  pursuant  to  the  terms  of  any  such  indenture, agreement, or instrument to which it is a party or by which it or any of its properties is bound, other than any Adverse Claim created in connection with this Agreement and the other Transaction Documents, or (iii) violate any Law applicable to it or any of its assets or properties.      (f)   No Proceedings. There are no actions, suits, or proceedings by or before any arbitrator or  Governmental  Authority  pending  against  or,  to  its  knowledge,  threatened against or affecting it, the Receivable Pool or Related Assets or any of its other assets or properties (i) as to which, if assuming there were to be an adverse determination thereof, could  reasonably  be expected, individually  or  in  the aggregate,  to  result in  a Material Adverse Effect, (ii) seeking to prevent the sale and assignment of all or any portion of the Receivable  Pool  or  Related  Assets  or  the  consummation  of  the  purposes  of  this Agreement  or  of  any  of  the  other  Transaction  Documents,  or  (iii) that  involve  this Agreement or any other Transaction Document or the purposes thereof.      (g)   Bulk Sales Act. No transaction contemplated hereby requires compliance by the Seller with any bulk sales act or similar Law.      (h)   Governmental Approvals. No authorization or approval or other action by, and  no  notice  to  or  filing  with,  any  Governmental  Authority  is  required  for  its  due execution,  delivery,  and  performance  of  this  Agreement  or  any  other  Transaction Document  or  the  transactions  contemplated  thereby,  except  for  the  filing  of  the  UCC financing statements referred to in Article V.      (i)   Use of Proceeds. The use of all funds obtained by it under this Agreement will not conflict with or contravene any of Regulations T, U, and X promulgated by the Board of Governors of the Federal Reserve System.      (j)   Quality  of  Title.  It  has  acquired  from  ADT,  for  fair  consideration  and reasonably equivalent value, all of the right, title, and interest in each Pool Receivable and the Related Assets in respect thereof and such acquisition constitutes a True Sale. Each Contract and Pool Receivable and the Related Assets related thereto, are owned by it free and clear of any Adverse Claim; and upon any Purchase the Collateral Agent (for the  benefit  of  the  Purchasers)  shall  have  acquired  and  shall  at  all  times  thereafter continuously  maintain a valid perfected  ownership  interest  or  a first priority perfected security interest in each Pool Receivable, together with the Related Assets, free and clear                                  32

 

      of  any  Adverse  Claim;  and  no  valid  effective financing  statement  or  other  instrument       similar in effect covering any Pool Receivable, any interest therein or the Related Assets       is on file in any recording office except such as may be filed (i) in favor of ADT or the       Seller  in  accordance  with  any  Transaction  Document  (and  assigned  to  the  Collateral       Agent),  or  (ii) in  favor  of  the  Collateral  Agent  for  the  benefit  of  the  Purchasers  in       accordance  with  this  Agreement  or  any  Transaction  Document.  Without  limiting  the       foregoing, no Chattel Paper evidencing Pool Receivables (x) is in the possession of (or,       in the case of electronic Chattel Paper, under the control of) any Person other than the       Servicer (for the benefit of the Collateral Agent and the Seller), the Collateral Agent or       the Collateral Agent’s designee, or (y) has any marks or notations indicating that it has       been pledged, assigned, or otherwise conveyed to any Person other than the Seller or the       Collateral Agent.            (k)   Accurate Reports. None of the reports, financial statements, certificates, or       other  written  information  (other  than  forward-looking  statements,  projections,  and       statements of a general industry nature, as to which it represents only that it acted in       good faith and utilized assumptions reasonable at the time made and due care in the       preparation of such statement or projection) furnished or to be furnished by or on behalf       of it or any other ADT Entity (including, without limitation, by electronic delivery) to the       Administrative  Agent,  any  Purchaser,  or  any  Purchaser  Agent  in  connection  with  this       Agreement  or any other  Transaction Document or any amendment hereto or delivered       hereunder or thereunder (as modified or supplemented by other information so furnished)       including without limitation, each Purchase Request, each Information Package and the       reports  and  information  provided  pursuant  to  Section  7.5(f)  contains  any  material       misstatement of fact or omits to state any material fact necessary to make the statements       therein,  in  the  light  of  the  circumstances  under which they  were made,  not  materially       misleading.  The  Seller  has  disclosed  to  the  Collateral  Agent  and  the  Administrative       Agent  (a) all  agreements,  instruments,  and  corporate or other  restrictions to which  the       Seller is subject, and (b) all other matters known to any ADT Entity, the Servicer or any       of their Affiliates, that individually or in the aggregate with respect to (a) or (b) above       could reasonably be expected to result in a Material Adverse Effect.            (l)   UCC Details.  It is a “registered organization” (as defined in Section 9-102(a)       of the UCC) that is formed or organized solely under the laws of the State of Delaware       and is “located” in Delaware for purposes of Section 9-307 of the UCC and the offices       where  it  keeps  all its  physical Records  (to  the  extent  not  electronically available) and       tangible  chattel  paper  or  other  physical  collateral,  if  any,  are  located  at  the  addresses       specified in Schedule VI (or at such other locations, notified to the Collateral Agent and       the Administrative Agent in accordance with Section 7.1(f)), in jurisdictions where all       action required by Section 8.5 has been taken and completed. It has never had any, trade       names, fictitious names, assumed names, or “doing business as” names and is “located”       in Delaware for purposes of Section 9-307 of the UCC. It is organized only in a single       jurisdiction.            (m)   Accounts. The Lock-boxes and names and addresses of all of the Lock-box       Banks, together with the account numbers of the Lock-box Accounts at such Lock-box       Banks,  are  specified  in Schedule V  (or  have  been  notified  to  and  approved  by  the                                        33 SK 28677 0004 8494650 v1217

 

Collateral Agent and the Administrative Agent in accordance with Section 7.3(d)). The Collection Accounts and Omnibus Accounts, the account numbers for each such account and the account banks maintaining each such account are specified in Schedule V except for such changes as are expressly permitted by Section 3.6.      (n)   Eligible Receivables. Each Pool Receivable listed as an Eligible Receivable in any Purchase Request or Information Package or included as an Eligible Receivable in the calculation of Net Portfolio Balance on any date is an Eligible Receivable as of the effective  date  of  the  information  reported  in  such  Purchase  Request  or  Information Package  or  as  of  the  date  of  such  calculation,  as  the  case  may  be,  or  has  been  cured through  a  repurchase  in  accordance  with  Section  3.2.  In  selecting  the  Receivables specified in each Purchase Request, and in selecting the Receivables that it acquired from ADT under the Sale Agreement (i) it did not utilize any selection process for choosing such Receivables that was, in any respect, adverse to the interests of the Purchasers and such  selection  process  did  not  disadvantage  the  Purchasers  in  any  way,  it  being understood that any selection solely on the basis of satisfying the eligibility requirements set forth in the definitions of “Eligible Contract”, or “Eligible Receivable” or in order to limit  the  Excess  Concentration  Amount  for purposes  of  inclusion  in  the  Net  Portfolio Balance  shall  not  in  and  of  itself  be  deemed  adverse  or  disadvantageous  to  the Purchasers,  (ii) ADT,  the  Seller  and  Servicer  has  no  reason  to  expect  that  the performance  of  the  Receivables  in  any  Purchase  Request  would  be  worse  than  any Receivables that it is not offering for sale hereunder or under the Sale Agreement, and (iii) each  such  Receivable  adheres  to  the  Credit  and  Collection  Policy.  As  of  each Purchase Date, it has no knowledge of any fact (including any defaults by the Obligor thereunder or any Service Charge Receivable) that would cause it to expect any payment on any Eligible Receivable not to be paid in full when due.      (o)   Adverse  Change.  Since  the  Closing  Date,  (i) there  has  been  no  material adverse change in the value, validity, collectability, or enforceability of all or a material portion of the Pool Receivables, and (ii) there has been no Material Adverse Effect with respect to the Seller.      (p)   Credit and Collection Policy. It has engaged the Servicer to service the Pool Receivables in accordance with the Credit and Collection Policy and all applicable Law. It has complied in all material respects with all applicable Law and with the Credit and Collection Policy.      (q)   Financial  Information.  All  of  its  and  its  Affiliates’  financial  statements delivered to the Administrative Agent in accordance with this Agreement present fairly, in all material respects, the actual financial position and results of operations of it and its Affiliates, as the case may be, as of the date and for the period presented or provided, in each case in accordance with GAAP.      (r)   Investment Company Act; Covered Fund. It is not required to register as an “Investment Company” under (and as defined in) the Investment Company Act. It is not                                   34

 

      a “covered fund” as defined in Section 619 of the Dodd-Frank Wall Street Reform and       Consumer Protection Act.            (s)   No Other Obligations. It does not have outstanding any security of any kind       except membership interests issued to ADT in connection with its organization and has       not incurred, assumed, guaranteed or otherwise become directly or indirectly liable for,       or in respect of, any Debt, and no Person has any commitment or other arrangement to       extend credit to the Seller, other than as will occur in accordance with the Transaction       Documents.            (t)   Representations and Warranties in Other Transactions Documents. It hereby       makes for the benefit of the Collateral Agent, the Administrative Agent, each Purchaser       Agent and each Purchaser all of the representations and warranties that the Seller makes,       in  any  capacity,  under  the  Sale  Agreement,  as  if  such  representations  and  warranties       (together with the related and ancillary provisions) were set forth in full herein.            (u)   Ordinary Course of Business.  Each remittance of Collections by or on behalf       of the Seller to the Purchasers (or to the Collateral Agent, the Administrative Agent or       any Purchaser Agent on their behalf) under this Agreement will have been (i) in payment       of a debt incurred by the Seller in the ordinary course of business or financial affairs of       the  Seller,  and  (ii) made  in  the  ordinary  course  of  business  or  financial  affairs  of  the       Seller.            (v)   Tax  Matters.  It  has  filed  all  federal  income  tax  returns  and  all  other  tax       returns  that  are  required  to  be  filed  by  it  and  has  paid  all  taxes  due  pursuant  to  such       returns  or  pursuant  to  any  assessment  received  by  it,  except  for  any  such  taxes  or       assessments, if any, that are being appropriately contested in good faith by appropriate       proceedings and with respect to which adequate reserves in conformity with GAAP have       been provided. No tax lien has been filed, and, to the knowledge of the Seller, no claim       is being asserted, with respect to any such tax or assessment, except where such tax or       lien is being contested as set forth above or as could not reasonably be expected to have a       Material Adverse Effect.  It has paid all sales taxes to be paid by it in connection with the       Equipment and installation related to each Pool Receivable in compliance with Section       7.1(p), and has promptly notified the Administrative Agent of (i) any failure to pay any       sales taxes with respect to any Receivable and whether or not such sales taxes are being       contested as set forth above, and (ii) any asserted tax lien relating to any such sales taxes       and whether or not such lien is being contested as set forth above.            (w)   Tax Status. It has not made, at any time, any entity classification election       under Treas. Reg. Sec. 301.7701-3 nor is it otherwise treated as an association or publicly       traded partnership taxable as a corporation for U.S. federal income tax purposes. It has       not  taken  any  action  that  could  subject  it  nor  is  it  otherwise  subject  to  any  material       amount of Tax imposed by a state or local taxing authority.                                         35 SK 28677 0004 8494650 v1217

 

    (x)   No Event of Termination, Etc. No event has occurred and is continuing, or would result from any Purchase that constitutes or would constitute an Unmatured Event of Termination or Event of Termination.      (y)   Anti-Corruption Laws, Anti-Terrorism Laws, and Sanctions.                    (i)   Each  ADT  Entity  and  their  respective  Subsidiaries  is  in       compliance  in  all  material  respects  with  the  material  provisions  of  the  USA       PATRIOT Act, and, on or prior to the Closing Date, the Seller has provided or       caused to be provided to the Administrative Agent all information related to the       ADT  Entities  (including  names,  addresses  and  tax  identification  numbers  (if       applicable)) reasonably requested in writing by the Administrative Agent not less       than  10  Business  Days  prior  to  the  Closing  Date  and  mutually  agreed  to  be       required  under  “know  your  customer”  and  anti-money  laundering  rules  and       regulations,  including  the  USA  PATRIOT  Act,  to  be  obtained  by  the       Administrative Agent or any Purchaser.                    (ii)  None  of  the  ADT  Entities,  any  of  their  respective       Subsidiaries,  nor,  to  the  knowledge  of  the  Seller,  any  director,  officer,  agent,       employee or Affiliate of any ADT Entity is currently the target of any sanctions       administered by the United States, including the Office of Foreign Assets Control       of the U.S. Treasury Department (“OFAC”) and the U.S. State Department, the       United Nations Security Council, Her Majesty’s Treasury, the European Union or       relevant member states of the European Union (collectively, the “Sanctions”) and       each ADT Entity and, to the knowledge of the Seller, their respective directors,       officers,  employees  and  agents  are  in  compliance  with  sanctions  laws  and       regulations administered by the United States, including OFAC and the U.S. State       Department,  the  United  Nations Security  Council,  Her Majesty’s  Treasury,  the       European Union or relevant member states of the European Union (collectively,       the  “Sanctions  Laws”)  in  all  material  respects.  The Seller  will  not  directly  or       indirectly  use the proceeds  of any Purchases or otherwise make  available such       proceeds to any person, for the purpose of financing the activities of any person       that  is  currently  the  target  of  any  Sanctions  or  for  the  purpose  of  funding,       financing  or  facilitating  any  activities,  business  or  transaction  with  or  in  any       country that is the target of the Sanctions, to the extent such activities, businesses       or transaction would be prohibited by the Sanctions Laws, or in any manner that       would  result  in  the  violation  of  any  Sanctions  Laws  applicable  to  any  party       hereto.                    (iii) Each ADT Entity, each of their respective Subsidiaries, and       to the knowledge of the Seller, their directors, officers, agents or employees, are       in compliance with the U.S. Foreign Corrupt Practices Act of 1977 or similar law       of a jurisdiction in which the ADT Entities conduct their business and to which       they are lawfully subject (“Anti-Corruption Laws”), in each case, in all material       respects. No part of the proceeds of any Purchases made hereunder will be used                                   36

 

            to make any unlawful bribe, rebate, payoff, influence payment, kickback or other             unlawful payment.            (z)   The  Seller  does  not  hold  (nor  will  it  hold  throughout  the  term  of  this       Agreement)  “plan  assets”  within  the  meaning  of  the  Department  of  Labor  regulations       located at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.            (aa)  Accounting  Treatment.  The  Seller  and  ADT  expect  that  the  Receivables,       Related Assets, and Collections relating to the Receivable Pool will be included on the       consolidated balance sheet of the Parent and ADT for purposes of GAAP to the extent       they are outstanding as of the end of any reporting period.            (bb)  Advertisements,  Promotions.  No  Pool  Receivable  is  subject  to  any       advertisement, promotion  or  other arrangement  offered  by any ADT Entity, subject to       which  such  Pool  Receivable  or  the  Contract  related  to  such  Pool  Receivable  can  be       cancelled or  terminated, in any manner which would excuse the related Obligor of its       obligation to pay all or any part of the Unpaid Balance thereof, except pursuant to the       Conditional Service  Guaranty.            (cc)  Pool Deficiency Amount.  Immediately after giving effect to any Purchase on       a Purchase Date and the application of the Collections in accordance with Section 3.1(d)       on such Purchase Date, no Pool Deficiency Amount under clauses (i), (iii) or (iv) of the       definition thereof will exist.            (dd)  Payment Directions; Control. A Payment Direction in the form of Exhibit G-       1 is in full force and effect in respect of each Lock-box Account, a Payment Direction in       the form of Exhibit G-2 is in full force and effect in respect of each Collection Account,       and a Payment Direction in the form of Exhibit G-3 is in full force and effect in respect       of  the  Omnibus  Account,  other  than,  in  each  case,  to  the  extent  any  such  Lock-Box       Account, Collection Account or the Omnibus Account is subject to a Control Agreement.        SECTION 6.2       Representations and Warranties of ADT. ADT, individually and when acting as the Servicer, represents and warrants, as of the Closing Date and each Settlement Date, upon which the Purchaser’s Pool Investment is reduced pursuant to Section 3.2(b) and in respect of clause (j) and (l) below, as of the date of each Information Package, as follows:            (a)   Organization and Good Standing. It has been duly organized and is validly       existing as a limited liability company in good standing under the Laws of its jurisdiction       of  organization,  with  power  and  authority  to  own  its  properties  and  to  conduct  its       business  as  such  properties  are  presently  owned  and  such  business  is  presently       conducted.            (b)   Due Qualification. It  is  duly qualified  to do  business  as a foreign  limited       liability  company  in  good  standing,  and  has  obtained  all  necessary  qualifications,       licenses, and approvals, in all jurisdictions in which the ownership or lease of property or       the  conduct  of  its  business  (including  the  servicing  of  the  Pool  Receivables)  requires       such qualifications, licenses, or approvals, except where the failure to do so could not                                        37 SK 28677 0004 8494650 v1217

 

reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.      (c)   Power and Authority; Due Authorization. It (i) has all necessary power and authority  to  (A) execute  and  deliver  this  Agreement  and  the  other  Transaction Documents  to  which  it  is  a  party  in  any  capacity,  and  (B) carry  out  the  terms  of  and perform  its  obligations  under  the  Transaction  Documents  applicable  to  it,  and  (ii) has duly authorized by all necessary limited liability company action the execution, delivery, and performance of this Agreement and the other Transaction Documents to which it is a party.      (d)   Binding  Obligations.  This  Agreement  constitutes,  and  each  other Transaction Document to be signed  by it when duly executed and delivered by it will constitute,  the  legal,  valid,  and  binding  obligation  of  it,  enforceable  against  it  in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,  or  other  laws  affecting  creditors’  rights  generally  and  subject  to  general principles of equity, regardless of whether considered in a proceeding in equity or at law.      (e)   No  Violation.  The  execution  and  delivery  of  each  of  the  Transaction Documents to which it is a party and the consummation of the transactions contemplated by this Agreement and the other Transaction Documents and the performance by it of the terms  hereof  and  thereof  will  not  (i) violate  or  result  in  a  default  under,  (A) its Constituent Documents, (B) any indenture, agreement or instrument binding on it or its assets or properties or (C) the ADT Credit Agreement, any ADT Indenture or any ADT Collateral Agreement, (ii) result in the creation or imposition of any Adverse Claim upon any of its assets or properties pursuant to the terms of any such indenture, agreement, or instrument,  or  (iii) violate  any  Law  applicable  to  it  or  any  of  its  assets  or  properties, except in the case of this clause (iii) to the extent that any such violations individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect.      (f)   No Proceedings. There are no actions, suits, or proceedings by or before any arbitrator  or  Governmental  Authority  pending  against  or,  to  the  knowledge  of  the Servicer,  threatened against  or affecting  the  Servicer  or any of its  assets or properties (i) as  to  which,  if  assuming  there  were  to  be  an  adverse  determination  thereof,  could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect,  or  (ii) seeking  to  prevent  the  servicing  of  the  Receivables  relating  to  the Receivable  Pool or  otherwise involving or affecting any Transaction Document or the purposes thereof.      (g)   Governmental Approvals. No authorization or approval or other action by, and  no  notice  to  or  filing  with,  any  Governmental  Authority  is  required  for  its  due execution,  delivery,  and  performance  of  this  Agreement  or  any  other  Transaction Document or the transactions contemplated thereby, except for (x) the filing of the UCC financing  statements  referred  to  in  Article V,  and  (y) such  authorizations,  approvals, actions, notices or filings as have been obtained or made or for which the failure to obtain                                   38

 

      or make the same, individually or in the aggregate, could not reasonably be expected to       result in a Material Adverse Effect.            (h)   Quality of Title. The Seller has acquired from ADT, for fair consideration       and  reasonably  equivalent  value,  all  of  the  right,  title,  and  interest  in  each  Pool       Receivable and the Related Assets in respect thereof and such acquisition constitutes a       True Sale. Immediately prior to each sale or contribution of a Receivable under the Sale       Agreement,  ADT  owned  each  Contract  and  Pool  Receivable  and  the  Related  Assets       related thereto free and clear of any Adverse Claim; and upon any Purchase hereunder,       the  Collateral  Agent  (for  the  benefit  of  the  Purchasers)  has  acquired  and  at  all  times       thereafter continuously maintains a valid perfected ownership interest or a first priority       perfected security interest in each Pool Receivable, together with the Related Assets, free       and  clear  of  any  Adverse  Claim;  and  no  valid  effective  financing  statement  or  other       instrument  similar  in  effect  covering  any  Pool  Receivable,  any  interest  therein  or  the       Related Assets is on file in any recording office except such as may be filed (i) in favor       of ADT or the Seller in accordance with any Transaction Document (and assigned to the       Collateral Agent), or (ii) in favor of the Collateral Agent for the benefit of the Purchasers       in accordance with this Agreement or any Transaction Document. Without limiting the       foregoing, no Chattel Paper evidencing Pool Receivables (x) is in the possession of (or,       in the case of electronic Chattel Paper, under the control of) any Person other than the       Servicer (for the benefit of the Collateral Agent and the Seller), the Collateral Agent or       the Collateral Agent’s designee, or (y) has any marks or notations indicating that it has       been pledged, assigned, or otherwise conveyed to any Person other than the Seller or the       Collateral Agent.            (i)   Financial Condition. All financial statements of the ADT Entities and their       respective Subsidiaries (including the notes thereto) delivered to the Collateral Agent, the       Administrative  Agent,  and  each  Purchaser  Agent  pursuant  to  Section  7.5(a),  present       fairly, in all material respects, the actual financial position and results of operations and       cash flows of such entities as of the dates and for the periods presented or provided other       than in the case of annual financial statements, in each case in accordance with GAAP,       subject  to  year-end  audit  adjustments  and  the  absence  of  footnotes  in  the  case  of  all       interim balance sheets of the Parent and ADT.            (j)   Accurate Reports. None of the reports, financial statements, certificates, or       other  written  information  (other  than  forward-looking  statements,  projections,  and       statements of a general industry nature, as to which it represents only that it acted in       good faith and utilized assumptions reasonable at the time made and due care in the       preparation of such statement or projection) furnished or to be furnished by or on behalf       of it or any other ADT Entity (including each Purchase Request and each Information       Package furnished by the Servicer and each report furnished pursuant to Section 7.5(f))       (including,  without  limitation,  by  electronic  delivery)  to  the  Collateral  Agent,  the       Administrative  Agent,  any  Purchaser,  or  any  Purchaser  Agent  in  connection  with  this       Agreement  or any other  Transaction Document or any amendment hereto or delivered       hereunder or thereunder (as modified or supplemented by other information so furnished)       contains any material misstatement of fact or omits to state any material fact necessary to       make  the  statements  therein,  in  the  light  of  the  circumstances  under  which  they  were                                        39 SK 28677 0004 8494650 v1217

 

made, not materially misleading. ADT, its Affiliates and subsidiaries have disclosed to the Collateral Agent and the Administrative Agent (a) all agreements, instruments, and corporate or other restrictions to which any ADT Entity or its Subsidiaries are subject, and (b) all other matters known to any ADT Entity, the Servicer or any of their Affiliates, that individually or in the aggregate with respect to (a) or (b) above could reasonably be expected to result in a Material Adverse Effect.      (k)   Accounts.  The  Lock-boxes,  names  and  addresses  of  all  of  the  Lock-box Banks, together with the account numbers of the Lock-box Accounts at such Lock-box Banks,  are  specified  in Schedule V  (or  have  been  notified  to  and  approved  by  the Collateral Agent and the Administrative Agent in accordance with Section 7.3(d)). The Collection Accounts and Omnibus Accounts, the account numbers for each such account and the account bank maintaining each such account are specified in Schedule V, except for such changes as are expressly permitted by Section 3.6.      (l)   Eligible Receivables. Each Pool Receivable listed as an Eligible Receivable in any Purchase Request or Information Package or included as an Eligible Receivable in the calculation of Net Portfolio Balance on any date is an Eligible Receivable as of the effective  date  of  the  information  reported  in  such  Purchase  Request  or  Information Package  or  as  of  the  date  of  such  calculation,  as  the  case  may  be,  or  has  been  cured through a repurchase in accordance with Section 3.2. In selecting the Receivables to be sold or contributed to the Seller pursuant to the Sale Agreement (i) it did not utilize any selection process for choosing such Receivables that was, in any respect, adverse to the interests of the Seller or the Purchasers and such selection process did not disadvantage the Seller or the Purchasers in any way it being understood that any selection solely on the basis of satisfying the eligibility requirements set forth in the definitions of “Eligible Contract”, or “Eligible Receivable” or in order to limit the Excess Concentration Amount for purposes of inclusion in the Net Portfolio Balance shall not in and of itself be deemed adverse or disadvantageous to the Purchasers, (ii) ADT, the Seller and Servicer has no reason to expect that the performance of the Receivables in any Purchase Request would be worse than any Receivables that it is not offering for sale hereunder or under the Sale Agreement, and (iii) each such Receivable adheres to the Credit and Collection Policy. As of each Purchase Date of Eligible Receivables hereunder it has no knowledge of any fact (including any defaults by the Obligor thereunder or any Service Charge Receivable) that would cause it to expect any payment on such Eligible Receivable not to be paid in full when due.      (m)   Adverse  Change.  Since  the  Closing  Date,  (i) there  has  been  no  material adverse change in the validity, collectability, or enforceability of all or a material portion of the Pool Receivables, and (ii) there has been no Material Adverse Effect with respect to ADT or the Parent.      (n)   Credit  and  Collection  Policy;  Law.  It  has  complied  with  the  Credit  and Collection Policy and such policies have not changed in any respect since the Closing Date,  except  as  permitted  under  Sections 7.3(c)  and  7.5(g).  It  has  complied  with  all                                   40

 

      applicable Law, except where the failure to so comply, individually or in the aggregate       could not reasonably be expected to result in a Material Adverse Effect.            (o)   Investment Company Act. It is not required to register as an “Investment       Company” under (and as defined in) the Investment Company Act.            (p)   ERISA. No ERISA Event has occurred or is reasonably expected to occur,       except as could not reasonably be expected to have a Material Adverse Effect.            (q)   Tax Returns and Payments. It has filed all federal income tax returns and all       other tax returns that are required to be filed by it and has paid all taxes due pursuant to       such returns or pursuant to any assessment received by it, except for any such taxes or       assessments, if any, that are being appropriately contested in good faith by appropriate       proceedings and with respect to which adequate reserves in conformity with GAAP have       been  provided.  No  tax  lien  has  been  filed,  and, to the knowledge of  the  Servicer, no       claim is being asserted, with respect to any such tax or assessment, except where such tax       or lien is being contested as set forth above or as could not reasonably be expected to       have a Material Adverse Effect. It has paid all sales taxes to be paid by it in connection       with the Equipment and installation related to each Pool Receivable in compliance with       Section 7.4(l), and has promptly notified the Administrative Agent of (i) any failure to       pay any sales taxes with respect to any Receivable and whether or not such sales taxes       are being contested as set forth above, and (ii) any asserted tax lien relating to any such       sales taxes and whether or not such lien is being contested as set forth above.            (r)   No Event of Termination, Etc. No event has occurred and is continuing, or       would result from any Purchase of Receivables, that constitutes or would constitute an       Unmatured Event of Termination or Event of Termination.            (s)   Anti-Corruption Laws, Anti-Terrorism Laws, and Sanctions.                          (i)   Each ADT Entity is in compliance in all material respects             with the material provisions of the USA PATRIOT Act, and, on or prior to the             Closing  Date,  the  Servicer  has  provided  or  caused  to  be  provided  to  the             Administrative  Agent  all  information  related  to  the  ADT  Entities  (including             names,  addresses  and  tax  identification  numbers  (if  applicable))  reasonably             requested in writing by the Administrative Agent not less than 10 Business Days             prior to the Closing Date and mutually agreed to be required under “know your             customer” and anti-money laundering rules and regulations, including the USA             PATRIOT Act, to be obtained by the Administrative Agent or any Purchaser.                          (ii)  None  of  the  ADT  Entities,  or  an  of  their  respective             Subsidiaries, nor, to the knowledge of the Servicer, any director, officer, agent,             employee or Affiliate of any ADT Entity is currently the target of any Sanctions             and  each  ADT  Entity  and,  to  the  knowledge  of  the  Servicer,  their  respective             directors, officers, employees and agents are in compliance with Sanctions Laws             in  all  material  respects.  The  Servicer  will  not  directly  or  indirectly  cause  the             proceeds of any Purchases to be used or otherwise make available such proceeds                                        41 SK 28677 0004 8494650 v1217

 

      to  any  person,  for  the  purpose  of financing  the  activities  of  any  person  that  is       currently the target of any Sanctions or for the purpose of funding, financing or       facilitating any activities, business or transaction with or in any country that is the       target  of  the  Sanctions,  to  the  extent  such  activities,  businesses  or  transaction       would be prohibited by the Sanctions Laws, or in any manner that would result in       the violation of  any Sanctions Laws applicable to any party hereto.                    (iii) Each ADT Entity, each of their respective Subsidiaries, and       to the knowledge of the Servicer, their directors, officers, agents or employees,       are in compliance with Anti-Corruption Laws in all material respects. No part of       the proceeds of any Purchases made hereunder will be used to make any unlawful       bribe, rebate, payoff, influence payment, kickback or other unlawful payment.      (t)   Advertisements,  Promotions.  No  Pool  Receivable  is  subject  to  any advertisement, promotion  or  other arrangement  offered  by any ADT Entity, subject to which  such  Pool  Receivable  or  the  Contract  related  to  such  Pool  Receivable  can  be cancelled or  terminated, in any manner which would excuse the related Obligor of its obligation to pay all or any part of the Unpaid Balance thereof, except pursuant to the Conditional Service Guaranty.      (u)   Pool Deficiency Amount.  Immediately after giving effect to any Purchase on a Purchase Date and the application of Collections in accordance with Section 3.1(d), on such  Purchase  Date,  no  Pool  Deficiency  Amount  under  clauses  (iii)  or  (iv)  of  the definition thereof will exist.      (v)   Payment Directions. A Payment Direction in the form of Exhibit G-1 is in full force and effect in respect of each Lock-box Account, a Payment Direction in the form of Exhibit G-2 is in full force and effect in respect of each Collection Account, and a Payment Direction in the form of Exhibit G-3 is in full force and effect in respect of the Omnibus Account, other than, in each case, to the extent any such Lock-Box Account, Collection Account or the Omnibus Account is subject to a Control Agreement.      (w)   Permitted  Securitization  Financing.  The  transfer  and  purchase  of Receivables  contemplated  by  the  Transaction  Documents  constitute  a  Permitted Securitization  (as  defined  in  the  ADT  Credit  Agreement)  and  the  entry  by  any  ADT Entity  into  any  Transaction  Document  and  their  respective  performance  thereunder  is permitted by the ADT Credit Agreement, each ADT Indenture and each ADT Collateral Agreement, and will not conflict with or violate the terms of the ADT Credit Agreement, any  ADT  Indenture  or  any  ADT  Collateral  Agreement.  The  Pool  Receivables,  the Related Assets, related Collections and other Collateral are free and clear of any Adverse Claim.                                   42

 

                                 ARTICLE VII                              GENERAL COVENANTS        SECTION 7.1       Affirmative Covenants of the Seller. From the date hereof until the Final Payout Date, the Seller shall:            (a)   Compliance with Laws, Etc. Comply with all applicable Laws, in respect of       the  conduct  of  its  business,  the  Pool  Receivables,  and  each  of  the  related  Contracts,       except  where  the  failure  to  so  comply,  individually  or  in  the  aggregate  could  not       reasonably be expected to adversely affect any Pool Receivable, or (otherwise give rise       to a Material Adverse Effect.            (b)   Preservation  of  Existence.  Preserve  and  maintain  its  existence,  rights,       franchises, and privileges in the jurisdiction of its organization, and qualify and remain       qualified  in  good  standing  in  each  jurisdiction,  except  where  the  failure  to  qualify  or       preserve  or  maintain  such  existence,  rights,  franchises,  or  privileges  could  not,       individually  or  in  the  aggregate,  reasonably  be  expected  to  have  a  Material  Adverse       Effect.            (c)   Inspections.  From time to time, at the expense of ADT upon reasonable prior       notice, upon the request by the Administrative Agent or the Required Purchasers (or any       Purchaser  Agent  if  an  Unmatured  Event  of  Termination  or  Event  of  Termination  has       occurred  and  is  continuing)  and  during  regular  business  hours,  permit  the  Collateral       Agent, the Administrative Agent, and  the Purchaser Agents, or any of their respective       representatives to visit and inspect its properties, to examine and make extracts from its       Records,  and  to  discuss  its  affairs,  finances,  and  condition  with  its  officers  and       independent  accountants,  all  at  such  reasonable  times  and  as  often  as  reasonably       requested;  provided  that,  unless  an  Event  of  Termination,  or  an  Unmatured  Event  of       Termination has occurred and is continuing at the time of any such inspection, ADT shall       only  be  required  to  reimburse  the  reasonable  documented  out-of-pocket  costs  and       expenses related to one such inspection of the Seller during any 12-month period, which       inspection  shall  be  requested  and  scheduled  by  the  Administrative  Agent;  provided,       further,  that  the  Collateral  Agent,  the  Administrative  Agent  and  the  Purchaser  Agents       shall use reasonable efforts to coordinate the timing of any inspections made of the Seller       pursuant to this Section 7.1(c) and of ADT pursuant to Section 7.4(c).            (d)   Keeping  of  Records  and  Books  of  Account;  Delivery.  Maintain  and       implement,  or  cause  to  be  maintained  and  implemented,  administrative  and  operating       procedures (including an ability to recreate records evidencing the Pool Receivables, the       Related Assets and the Service Charge Receivables in the event of the destruction of the       originals thereof, backing up on at least a daily basis on a separate backup computer from       which electronic file copies can be readily produced and distributed to third parties being       agreed  to  suffice  for  this  purpose),  and  keep  and  maintain,  or  cause  to  be  kept  and       maintained, all documents, books, records, and other information necessary or advisable       for the collection of the Pool Receivables and Related Assets (including records adequate       to permit the daily identification of (i) each new Pool Receivable, all Collections relating                                        43 SK 28677 0004 8494650 v1217

 

to  each  Pool  Receivable  and  adjustments  to  each  existing  Pool  Receivable  received, made or otherwise processed  on that day,  and (ii) the portion of  the amounts received from  each  Obligor that  constitute  Collections  on  the related  Pool  Receivables  and  the portion that relates to Collections in respect of Service Charge Receivables in order to effect the priority of payments set forth in the related Contracts.      (e)   Performance  and  Compliance  with  Pool  Receivables  and  Contracts. At ADT’s expense, timely and fully perform and comply with all provisions, covenants and other  promises  required  to  be  observed  by  it  under  the  Contracts  related  to  the  Pool Receivables,  except  where  the  failure  to  so  perform  or  comply,  individually  or  in  the aggregate could not reasonably be expected to adversely affect any Pool Receivable or Related Assets or otherwise result in a Material Adverse Effect.      (f)   Location  of  Records.  Keep  all  its  physical  Records  (to  the  extent  not electronically available) and tangible chattel paper or other physical collateral (and any original documents relating thereto), if any, at the address(es) of the Seller referred to in Section 6.1(l) or, upon thirty (30) days’ prior written notice to the Collateral Agent and the  Administrative  Agent,  at  such  other  locations  in  jurisdictions  where  all  action required  to  protect  and  perfect  the  Collateral  Agent’s  first  priority  perfected  security interest  in  the  Receivable  Pool  and  the  Related  Assets  free  and  clear  of  any  Adverse Claim shall have been taken and completed.      (g)   Credit  and  Collection  Policy.  Cause  the  Servicer  to  service  the  Pool Receivables,  Related  Assets,  and  Contracts  in  respect  of  the  Receivable  Pool  in accordance with the Credit and Collection Policy and not agree to any changes thereto, except as permitted under Section 7.3(c).      (h)   Collections.  Cause  the  Servicer  to  promptly  withdraw  from  the  bank accounts  and/or  charge  the  credit  or  debit  cards  of  the  Direct  Deposit  Obligors  all amounts necessary to effect the timely payment when due of the Unpaid Balance of the Pool Receivables relating to such Direct Deposit Obligors and immediately remit such amounts within one (1) Business Day of the date of withdrawal, debit or credit, directly to a Collection Account, without any commingling of such amounts with any other funds other  than  Other  Permitted  Amounts.  Instruct,  or  cause  the  Servicer  to  instruct,  each Obligor that to the extent any payment in respect of the related Pool Receivable is not to be made through the Servicer’s withdrawal from the bank account of each such Obligor and/or through the charge of the credit or debit card of each such Obligor, all Collections in respect of the Pool Receivables of each such Obligor shall be made to a Lock-box and remitted directly to a Lock-box that remits such amounts directly to a Lock-box Account covered  by  a  Payment  Direction  or  Control  Agreement.  Cause  the  Servicer  to  as promptly as practicable and in any event within one (1) Business Day of receipt in any Lock-box Account (and within two (2) Business Days of receipt in the related Lock-box) of any Collections, remit, or cause to be remitted, such amounts directly to the Omnibus Account,  without  any  commingling  of  such  amounts  with  any  other  funds  other  than Other Permitted Amounts. Cause the Servicer to as promptly as practicable and in any event within one (1) Business Day of receipt of any Collections in respect of any Pool Receivable  in  any  Collection  Account,  remit  or  cause  to  be  remitted  such  amounts                                 44

 

      directly to the Omnibus Account, without any commingling with any Funds other than       Other  Permitted  Amounts,  all  amounts  which  constitute  Collections  on  the  Pool       Receivables. Cause the Servicer to as promptly as practicable and in any event within       two (2) Business Days of receipt of any Collections in the Omnibus Account, segregate       Collections on Pool Receivables from any Other Permitted Amounts and remit or cause       to  be  remitted  directly  to  the  Collateral  Agent’s  Account,  without  any  intervening       commingling,  all  amounts  which  constitute  Collections  on  the  Pool  Receivables  and       ensure that no amounts other than Collections on Pool Receivables are remitted to or are       on deposit in the Collateral Agent’s Account. To the extent any Lock-box Account or       Collateral Account is subject to a Control Agreement rather than a Payment Direction, all       amounts therein, after removal of any amounts, if any, that do not constitute Collections       in respect of Pool Receivables, shall be remitted within two (2) Business Days of receipt       to the Collateral Agent’s Account rather than to the Omnibus Account.            (i)   Right and Title. Hold all right, title, and interest in each Pool Receivable,       except to the extent that any such right, title, or interest has been transferred or granted to       the Collateral Agent (on behalf of the Purchasers).            (j)   Transaction  Documents.  Without  limiting  its  covenants  or  agreements  set       forth herein or in any other Transaction Document, (i) comply with each and every of its       covenants and agreements under the Sale Agreement and its Constituent Documents, and       (ii) take  all  actions  reasonably  necessary  to  ensure  that  each  Transaction  Document       remains enforceable and in effect.            (k)   Enforcement  of  Sale  Agreement.  On  its  own  behalf  and  on  behalf  of       Purchasers,  Purchaser  Agents,  the  Collateral  Agent,  and  the  Administrative  Agent,       (x) promptly  enforce  all  covenants  and  obligations  of  ADT  contained  in  the  Sale       Agreement, and (y) deliver to the Collateral Agent and the Administrative Agent (which       will deliver such consents to each Purchaser Agent) all consents, approvals, directions,       notices,  and  waivers  and  take  other  actions  under  the  Sale  Agreement  as  may  be       reasonably directed by the Collateral Agent, the Administrative Agent or the Required       Purchasers.            (l)   Filing  of  Financing  Statements.  At  ADT’s  expense,  take  all  actions       necessary  (including  all  filings)  to  vest  in,  and  maintain  in  the  Collateral  Agent  (on       behalf  of  the  Purchasers)  a  valid,  first  priority  perfected  security  interest  or  perfected       ownership  interest  in  the  Pool  Receivables  and  Related  Assets  free  and  clear  of  any       Adverse  Claims.  Without  limiting  the  foregoing,  at  ADT’s  expense,  as  promptly  as       practicable (within five (5) Business Days) following such request execute, authorize and       deliver  all  instruments  and  documents  and  take  all  action,  necessary  or  reasonably       requested  by  the  Collateral  Agent,  the  Administrative  Agent,  or  any  Purchaser  Agent       (including  the  filing  of  financing  or  continuation  statements,  amendments  thereto,  or       assignments  thereof)  to  enable  the  Collateral  Agent  to  exercise  and  enforce  all  of  its       rights  hereunder  and  to  vest  and  maintain  vested in  the  Collateral  Agent  a valid,  first       priority  perfected  security  interest  or  perfected  ownership  interest  in  the  Pool       Receivables, the Related Assets with respect thereto, the Sale Agreement, the Collections       with respect thereto and the other Collateral free and clear of any Adverse Claim. The                                        45 SK 28677 0004 8494650 v1217

 

Seller hereby authorizes the Administrative Agent and the Collateral Agent to file any continuation statements, amendments thereto, and assignments thereof as the Collateral Agent,  the  Administrative  Agent,  or  any  Purchaser  Agent  may  from  time  to  time determine to be necessary or desirable to perfect or maintain the perfection or priority of its  security  interest  in  the  Pool  Receivables,  the  Collections  with  respect  thereto,  the Related Assets with respect thereto, the Sale Agreement, and the other Collateral free and clear of any Adverse Claims.      (m)   Location. Maintain at all times its jurisdiction of organization and its chief executive office within a jurisdiction in the United States in which Article 9 of the UCC (2001 or later revision) is in effect.      (n)   Tax Matters. Pay all applicable taxes required to be paid by it when due and payable in connection with the transfer of the Pool Receivables and Related Assets by the Seller;  the  Seller  acknowledges  that  none  of  the  Collateral  Agent,  the  Administrative Agent, any Purchaser Agent, or any Purchaser shall have any responsibility with respect thereto. Pay and discharge, or cause the payment and discharge of, all federal income taxes  (and  all  other  material  taxes)  when  due  and  payable,  except  such  as  may  be contested in good faith by appropriate proceeding and for which an adequate reserve has been established and is maintained in accordance with GAAP.      (o)   Credit  Risk  Retention.  From  and  after  the  EU  Retention  Effective  Date, cooperate  with  each  Purchaser  (including  by  providing  such  information  and  entering into or delivering such additional agreements or documents reasonably requested by such Purchaser  or  its  Purchaser  Agent)  to  the  extent  reasonably  necessary  to  assure  such Purchaser  that  ADT  retain  credit  risk  in  the  amount  and  manner  required  by  the  EU Securitization  Rules  and  the  CRR  and  to  permit  such  Purchaser  to  perform  its  due diligence and monitoring obligations (if any) under the EU Securitization Rules and the CRR.      (p)   Certain  Governmental  Fees,  Surcharges,  and  Taxes.  With  respect  to  any portion of a Receivable attributable to governmental fees, surcharges, or taxes, pay (or cause  to  be  paid)  such  governmental  fees,  surcharges,  or  taxes  to  the  applicable Governmental Authority when due in accordance with applicable Law (except for any such  governmental  fees,  surcharges,  or taxes  that  are  being  appropriately  contested in good  faith  by appropriate proceedings  and  with respect to  which  adequate reserves  in conformity  with  GAAP  have  been  provided),  and  none  of  the  Collateral  Agent,  the Administrative Agent, any Purchaser Agent, or any Purchaser shall have any obligation to make any such payment or shall have any other responsibility with respect thereto. Pay all sales taxes to be paid in connection with the Equipment and installation related to each Pool Receivable by the due date thereof (except for any such sales taxes that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided).      (q)   Anti-Corruption  Laws,  Anti-Terrorism  Laws,  and  Sanctions.  Maintain  in effect and enforce policies and procedures reasonably designed to ensure compliance in all material respects, by the Seller and its directors, officers, employees, and agents with                                  46

 

      Anti-Corruption  Laws  and  applicable  Sanctions  Laws  in  connection  with  its  business       operations, except where the failure to do so, individually or in the aggregate, could not       reasonably be expected to result in a Material Adverse Effect.            (r)   Accounting Treatment. Provide the Collateral Agent and the Administrative       Agent with written notice delivered not less than twenty (20) days prior to the last day of       each fiscal quarter or fiscal year, if the Receivables relating to the Receivable Pool will       not be included on the consolidated balance sheet of ADT for purposes of GAAP as of       such date.        SECTION 7.2       Reporting Requirements of the Seller. From the date hereof until the Final Payout Date, the Seller shall furnish to the Collateral Agent and the Administrative Agent (who shall promptly send the same to the Purchaser Agents):            (a)   Financial Statements. As soon as available and in any event within 75 days       after  the  end  of  its  fiscal  year,  copies  of  the  unaudited  annual  income  statement  and       balance sheet of the Seller, prepared in conformity with GAAP.            (b)   Events  of  Termination,  Etc.  Notice  of  the  occurrence  of  any  Event  of       Termination or Unmatured Event of Termination accompanied by a written statement of       an appropriate officer of the Seller (or the Servicer on its behalf) setting forth details of       such event and the action that the Seller proposes to take with respect thereto, such notice       to be provided promptly (but not later than two (2) Business Days) after any Responsible       Officer of the Seller or the Servicer obtains actual knowledge thereof.            (c)   Other  Information.  Promptly,  from  time  to  time,  such  Records  or  other       information,  documents,  records,  or  reports  respecting  the  condition  or  operations,       financial or otherwise, of the Seller, its performance under the Transaction Document and       the  Pool  Receivables  and  Related  Assets  as  the  Collateral  Agent,  the  Administrative       Agent, or any Purchaser Agent may from time to time reasonably request.            (d)   Notices Under Sale Agreement.  A copy of each notice received by the Seller       from ADT pursuant to any provision of the Sale Agreement.            (e)   ERISA.  Written notice of any ERISA Event.        SECTION 7.3       Negative Covenants of the Seller. From the date hereof until the Final Payout Date, the Seller shall not:            (a)   Sales, Adverse Claims, Etc. Except as otherwise explicitly provided herein       or in the Sale Agreement, sell, assign, or otherwise dispose of, or create or suffer to exist       any Adverse Claim (by operation of Law or otherwise) upon or with respect to (in each       case, other than its or ADT’s ownership interest or contingent claim to ownership), any       of its assets or properties (including any Pool Receivable or Related Assets, any other       Receivable, any Contract relating to a Receivable, any related Equipment, any Service       Charge Receivable or any proceeds of any of the foregoing, or any interest therein, any       Collection Account, the Omnibus Account, any Lock-box Account or any other account                                        47 SK 28677 0004 8494650 v1217

 

to which any Collections on Pool Receivables are sent, or any right to receive income or proceeds from or in respect of any of the foregoing).      (b)   Extension  or  Amendment  of  Receivables.  Except  as  provided  in  Section 8.2(b) and to the extent resulting from the Conditional Service Guaranty, extend, amend or otherwise modify the terms of any Pool Receivable (in each case, including, without limitation,  by  means  of  any  promotional  activity,  advertising  or  other  statement  or warranty (including on any ADT Entity’s website)), or amend, modify or waive any term or condition of any Contract related thereto or permit the Servicer to do the same.      (c)   Change in Credit and Collection Policy, Business, or Constituent Documents. (i) Make or consent to any change or amendment to the Credit and Collection Policy or permit the Servicer to make any such change or amendment if such proposed change or amendment  could  reasonably  be  expected  to  adversely  affect  the  value,  validity, collectability, or enforceability of any Pool Receivables or the Related Assets or decrease the credit quality of any Pool Receivable or the Related Assets or otherwise give rise to a Material Adverse Effect without (x) the prior written consent of the Collateral Agent, the Administrative Agent, and each Purchaser Agent, or (y) in the case of any such change or amendment  required  by  Law,  upon  delivery  to  the  Collateral  Agent  and  the Administrative Agent of a certificate of a Responsible Officer of ADT which certifies, that based upon advice of reputable counsel, such change or amendment is required to be made  as  a  result  of  a  change  in  Law,  or  (ii) make  any  change  in  the  character  of  its business or amend or otherwise modify its Constituent Documents in any respect without the  prior  written  consent  of  the  Collateral  Agent,  the  Administrative  Agent  and  the Required Purchasers.      (d)   Change  in  Lock-box  Bank,  Lock-box  or  Lock-Box  account.  (i) Add  any bank, lock-box or lock-box account not listed on Schedule V as a Lock-box Bank, Lock- box or Lock-box Account unless the Collateral Agent and the Administrative Agent shall have previously approved and received duly executed copies of Payment Directions in the form of Exhibit G-1 or a Control Agreement  duly executed by the parties thereto, (ii) terminate any Lock-box Bank, or related Lock-box, or Lock-box Account without the prior written consent of the Collateral Agent, the Administrative Agent and, in each case, only if all of the payments from Obligors that were being sent to such Lock-box Bank will, upon termination of such Lock-box Bank and at all times thereafter, be deposited in a Lock-box Account with another Lock-box Bank covered by a Payment Direction in the form of Exhibit G-1 or a Control Agreement, or (iii) amend, supplement, or otherwise modify any Lock-box agreement.      (e)   Deposits to Accounts. Deposit or otherwise credit, or cause or permit to be so deposited or credited, or direct any Obligor to deposit or remit, any Collections on Pool  Receivables  to  any  account  not  covered  by  the  proper  Payment  Direction  or  a Control Agreement or (ii) permit any amount to be deposited, credited or remitted to any Lock-box  Account,  any  Collection  Account,  or  the  Omnibus  Account  other  than Collections in respect of Pool Receivables and Other Permitted Amounts. Except for the Collateral Agent’s Account, permit any Collections in respect of Pool Receivables to be                                  48

 

      deposited, or credited in any account which is not subject to a Payment Direction or a       Control Agreement which is in full force and effect.            (f)   Name Change, Mergers, Acquisitions, Sales, etc. (i) Change its name or the       location  of  any  office  at  which  its  physical  Records  (to  the  extent  not  electronically       available) and tangible chattel paper or other physical collateral, if any, are maintained,       (ii) be  a  party  to  any  merger or  consolidation,  or  purchase  or otherwise  acquire  all  or       substantially  all of  the assets  or  any  stock  of any  class  of,  or any  partnership  or joint       venture  interest  (or  similar  ownership  interest)  in,  any  other  Person;  or,  sell,  transfer,       convey, contribute, or lease all or any substantial part of its assets, or sell or assign with       or  without  recourse  any  Pool  Receivables  or  any  interest  therein  (other  than  pursuant       hereto and to the Sale Agreement) to any Person, or (iii) have any subsidiaries.            (g)   Debt and Business Activity. Incur, assume, guarantee, or otherwise become       directly or indirectly liable for or in respect of any Debt or other obligation, purchase any       asset (or make any investment by share purchase loan or otherwise), or engage in any       other  activity  (whether  or  not  pursued  for  gain  or  other  pecuniary  advantage),  in  any       case, other than as will occur in accordance with this Agreement or the other Transaction       Documents.            (h)   Change in Organization, Etc. Change its jurisdiction of organization or its       name, identity, or corporate structure or make any other change such that any financing       statement filed or other action taken to perfect the Collateral Agent’s interests under this       Agreement would become misleading or would otherwise be rendered ineffective, unless       the Seller shall have given the Administrative Agent and the Collateral Agent not less       than  thirty  (30)  days’  prior  written  notice  of  such  change  and  shall  have  cured  such       circumstances. The Seller shall not amend or otherwise modify or waive its Constituent       Documents or any provision thereof without the prior written consent of the Collateral       Agent and the Administrative Agent.            (i)   Actions Impairing Quality of Title.  Take any action that could reasonably be       expected to cause any Pool Receivable, together with the Related Assets, not to be owned       by  it  free  and  clear  of  any  Adverse  Claim;  or  take  any  action  that  could  cause  the       Collateral  Agent  not  to  have  a  valid  perfected  ownership  interest  or  first  priority       perfected security interest in the Receivable Pool and Related Assets and all products and       proceeds of the foregoing, free and clear of any Adverse Claim, or suffer the existence of       any financing statement or other instrument  similar in effect covering any Receivable,       any Related Asset, any Contract, or any proceeds thereof on file in any recording office       except  such  as  may  be  filed  (i) in  favor  of  the  Seller  pursuant  to  the  Transaction       Document,  (ii) in  favor  of  the  Collateral  Agent  (for  the  benefit  of  the  Purchasers)  in       accordance with this Agreement or any Transaction Documents, or (iii)  in favor of any       other Person (other than an Affiliate of any ADT Entity, or in respect of the ADT Credit       Agreement,  any  ADT  Indenture  or  any  ADT  Collateral  Agreement  to  the  extent  such       filings  are  in  effect  on  the  Closing  Date  and  any  continuation  statement  in  respect       thereof) which the Seller in good faith believes is filed in error or is invalid, has notified       the  Administrative  Agent  and  the  Collateral  Agent  of  its  determination,  the  Seller  is       diligently  contesting  the  filing  of  such  financing  statement,  and  which  the  Seller  has                                        49 SK 28677 0004 8494650 v1217

 

      terminated or caused to be terminated within the earlier to occur of (x) sixty (60) days of       the filing thereof, and (y) thirty (30) days of the discovery thereof.            (j)   Actions by ADT. Notwithstanding anything to the contrary set forth in the       Sale  Agreement,  consent  to  (i) any  change  or  removal  of  any  notation  required  to  be       made by ADT pursuant to Section 3.3 of the Sale Agreement, or (ii) any waiver of or       departure from any term set forth in Section 5.4 of the Sale Agreement, in each case,       without the prior written consent of the Collateral Agent, the Administrative Agent and       each Purchaser Agent.            (k)   Tax Status. Take (or permit any other Person to take) any action that could       (or could reasonably be expected to) cause the Seller to be treated as an association or       publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.       The Seller shall not take (or permit any other Person to take) any action that could cause       it to be subject to any material amount of Tax imposed by a state or local taxing authority       (which shall not be deemed to include, for the avoidance of doubt, any annual Taxes,       franchise Taxes or similar Taxes).            (l)   Chattel Paper. Permit any Chattel Paper relating to the Pool Receivable or       Related  Assets  to  be  in  the  possession  of  (or,  in  the  case  of  electronic  Chattel  Paper,       under the control of) any Person other than the Servicer (for the benefit of the Collateral       Agent and the Seller), the Collateral Agent or the Collateral Agent’s designee.            (m)   Distributions.  If  an  Event  of  Termination  or  Unmatured  Event  of       Termination has  occurred  and  is  continuing,  distribute  any amounts  that  it receives  in       respect of the RPA Deferred Purchase Price to the Parent or any other Affiliate of the       Parent.        SECTION 7.4       Affirmative  Covenants  of ADT. From the date hereof until the Final Payout Date, ADT, individually and when acting as the Servicer, shall:            (a)   Compliance with Laws, Etc. Comply with all applicable Laws in respect of       the conduct of its  business, its assets  and properties, the Pool Receivables, the related       Contracts and the servicing and collection thereof, except where the failure to so comply,       individually or in the aggregate could not reasonably be expected to adversely affect any       Pool Receivable, or otherwise give rise to a Material Adverse Effect.            (b)   Preservation  of  Corporate  Existence.  Preserve  and  maintain  its  corporate       existence, rights, franchises, and privileges in the jurisdiction of its incorporation, and       qualify  and  remain  qualified  in  good  standing  in  each  jurisdiction  except  where  the       failure to preserve or maintain such existence, rights, franchises, or privileges or to be so       qualified could not, individually or in the aggregate, reasonably be expected to have a       Material Adverse Effect.            (c)   Inspections. From time to time, at its expense, upon reasonable prior notice,       upon the reasonable request by the Administrative Agent or the Required Purchasers (or       any Purchaser Agent if an Unmatured Event of Termination or Event of Termination has                                        50

 

      occurred and is continuing) and during regular business hours, permit the Administrative       Agent,  the  Collateral  Agent,  and  the  Purchaser  Agents,  or  any  of  their  respective       representatives to visit and inspect its properties, to examine and make extracts from its       Records,  and  to  discuss  its  affairs,  finances,  and  condition  with  its  officers  and       independent accountants with respect to the Pool Receivables and the Related Assets and       the  performance  of  its  obligations  (as  Servicer  or  otherwise)  under  the  Transaction       Documents  as  often  as  reasonably  requested;  provided  that,  unless  an  Event  of       Termination, or an Unmatured Event of Termination has occurred and is continuing at       the  time  of  any  such  inspection,  the  Servicer  shall  only  be  required  to  reimburse  the       reasonable documented out-of-pocket costs and expenses related to one such inspection       during any 12-month period, which inspection shall be requested and scheduled by the       Administrative  Agent;  provided,  further,  that  the  Collateral  Agent,  the  Administrative       Agent and the Purchaser Agents shall use reasonable efforts to coordinate the timing of       any inspections made of ADT pursuant to this Section 7.4(c) and of the Seller pursuant to       Section 7.1(c).            (d)   Keeping of Records and Books of Account; Delivery; Location of Records.       Maintain and implement, or cause to be maintained and implemented, administrative and       operating  procedures  (including  an  ability  to  recreate  records  evidencing  the  Pool       Receivables, the Related Assets and the Service Charge Receivables in the event of the       destruction  of  the originals  thereof,  backing  up  on  at  least  a daily  basis  on  a separate       backup  computer  from  which  electronic  file  copies  can  be  readily  produced  and       distributed  to  third  parties  being  agreed  to  suffice  for  this  purpose),  and  keep  and       maintain, or cause to be kept and maintained, all documents, books, records, and other       information necessary or advisable for the collection of all Pool Receivables, and Related       Assets including records adequate to permit the daily identification of (i) each new Pool       Receivable and all Collections relating to the Receivable Pool of and adjustments to each       existing Pool Receivable received, made, or otherwise processed on that day, and (ii) the       portion of the Collections received from each Obligor that represents Collections of Pool       Receivables from such Obligor and collections of Service Charge Receivables from such       Obligor in order to effect the priority of payments set forth in the related Contracts. In       addition, it shall keep its physical Records (to the extent not electronically available) and       tangible chattel paper or other physical collateral (and any original documents relating       thereto), if any, at the address(es) referred to in Annex 2 of the Sale Agreement or at such       other  address(es)  as  set  forth  in  the  Sale  Agreement  or,  upon  thirty  (30)  days’  prior       written  notice  to  the  Collateral  Agent  and  the  Administrative  Agent,  at  such  other       locations in jurisdictions where all action required by Section 8.5 hereof shall have been       taken and completed.            (e)   Performance  and  Compliance  with  Receivables  and  Contracts.  At  its       expense, timely and fully perform and comply with all provisions, covenants, and other       promises  required  to  be  observed  by  it  under  the  Contracts  and  the  Pool  Receivables       relating  to  the  Receivable  Pool,  except  where  the  failure  to  so  perform  or  comply,       individually or in the aggregate, could not reasonably be expected to adversely affect any       Pool Receivable or Related Assets or otherwise result in a Material Adverse Effect.                                         51 SK 28677 0004 8494650 v1217

 

    (f)   Credit and Collection Policy. Comply with the Credit and Collection Policy in regard to each Pool Receivable, the Related Assets, each Service Charge Receivable, the related Contract and the servicing and collection thereof.      (g)   Collections. Promptly withdraw from the bank accounts and/or charge the credit or debit cards of the Direct Deposit Obligors all amounts necessary to effect the timely payment when due of the Unpaid Balance of the Pool Receivables relating to such Direct Deposit Obligors and immediately remit such amounts, within one (1) Business Day of the date of withdrawal, debit or credit directly to a Collection Account, without any  commingling  of  such  amounts  with  any  other  funds  other  than  Other  Permitted Collections.  Instruct each Obligor that to the extent any payment in respect of the related Pool  Receivable  is  not  to  be  made  through  the  Servicer’s  withdrawal  from  the  bank account of each such Obligor and/or through the charge of the credit or debit card of each such  Obligor,  all  Collections  in  respect  of the Pool Receivables of each  such  Obligor shall  be  made  to  a  Lock-box  and  remitted  directly  to  a  Lock-box  that  remits  such amounts  directly  to  a  Lock-box  Account  covered  by  a  Payment  Direction  or  Control Agreement. As promptly as practicable and in any event within one (1) Business Day of receipt  in any  Lock-box Account  (and  within two  (2)  Business  Days  of  receipt in the related  Lock-box)  of  any  Collections,  remit,  or  cause  to  be  remitted,  such  amounts directly to the Omnibus Account, without any commingling of such amounts with any other funds other than Other Permitted Amounts. As promptly as practicable and in any event within one (1) Business Day of receipt of any Collections in respect of any Pool Receivables  in  any  Collection  Account,  remit  or  cause  to  be  remitted  such  amounts directly to the Omnibus Account, without any commingling, all amounts which constitute Collections on the Pool Receivables. As promptly as practicable and in any event within two (2) Business Days of receipt of any Collections in the Omnibus Account, segregate Collections  on  the  Pool  Receivables  from  any  Other  Permitted  Amounts  and  remit  or cause to be remitted directly to the Collateral Agent’s Account, without any intervening commingling,  all  amounts  which  constitute  Collections  on  the  Pool  Receivables  and ensure that no amounts other than Collections on Pool Receivables are remitted to or are on deposit in the Collateral Agent’s Account. To the extent any Lock-box Account or Collateral Account is subject to a Control Agreement rather than a Payment Direction, all amounts therein, after removal of any amounts, if any, that do not constitute Collections in respect of Pool Receivables, shall be remitted within two (2) Business days of receipt to the Collateral Agent’s Account rather than to the Omnibus Account.      (h)   Filing  of  Financing Statements.  At  its  expense, take all  actions  necessary (including all filings) to vest in, and maintain in the Collateral Agent (on behalf of the Purchasers)  a  valid,  first  priority  perfected  security  interest  or  perfected  ownership interest in the Pool Receivables and Related Assets free and clear of any Adverse Claims. Without  limiting  the  foregoing,  cause  the  financing  statements  described  in  Sections 5.1(f), that have not previously been filed, to be duly filed in the appropriate jurisdictions at  its  expense,  as  promptly  as  practicable  (and  in  any  event,  within  five  (5)  Business Days) following such request and to execute, authorize, and deliver all instruments and documents and take all action, necessary or reasonably requested by the Collateral Agent, the Administrative Agent, or any Purchaser Agent (including the filing of financing or                                  52

 

      continuation  statements,  amendments  thereto,  or  assignments  thereof)  to  enable  the       Collateral  Agent  to  exercise  and  enforce  all  of  its  rights  hereunder  and  to  vest  and       maintain vested in the Collateral Agent a valid, first priority perfected security interest or       perfected  ownership  interest  in  the  Pool  Receivables,  the  Related  Assets  with  respect       thereto, the Sale Agreement, the Collections with respect thereto, and the other Collateral       free  and  clear  of  any  Adverse  Claim.  The  Servicer  hereby  authorizes  the Collateral       Agent  and  the  Administrative  Agent  to  file  any  continuation  statements,  amendments       thereto, and assignments thereof as the Collateral Agent, the Administrative Agent, or       any Purchaser Agent may from time to time determine to be necessary or desirable to       perfect  or  maintain  the  perfection  or  priority  of  its  security  interest  in  the  Pool       Receivables, the Collections with respect thereto, the Related Assets with respect thereto,       the Sale Agreement, and the other Collateral free and clear of any Adverse Claims.            (i)   Transaction  Documents.  Without  limiting  its  covenants  or  agreements  set       forth herein or in any other Transaction Document, (i) comply with each and every of its       covenants and agreements under the Sale Agreement and its Constituent Documents, and       (ii) take  all  actions  reasonably  necessary  to  ensure  that  each  Transaction  Document       remains enforceable and in effect.            (j)   Tax Matters. Pay all applicable taxes required to be paid by it when due and       payable in connection with the transfer of the Receivables to the Seller under the Sale       Agreement;  ADT  acknowledges  that  none  of  the  Collateral  Agent,  the  Administrative       Agent, any Purchaser Agent, or any Purchaser shall have any responsibility with respect       thereto. Pay and discharge, or cause the payment and discharge of, all federal income       taxes  (and  all  other  material  taxes)  when  due  and  payable,  except  such  as  may  be       contested in good faith by appropriate proceeding and for which an adequate reserve has       been established and is maintained in accordance with GAAP.            (k)   Credit  Risk  Retention.  After  the  EU  Retention  Effective  Date,  include  in       each  Information  Package delivered  hereunder,  a  confirmation  as  to  ADT’s  continued       compliance with clauses (i), (ii), and (iii) of Section 5.2(k) of the Sale Agreement. After       the EU Retention Effective Date, cooperate with each Purchaser (including, to the extent       not  prohibited  by  Law,  by  providing  such  information  and  entering  into  or  delivering       such additional agreements or documents reasonably requested by such Purchaser or its       Purchaser Agent) to the extent reasonably necessary to assure such Purchaser that ADT       retains credit risk in the amount and manner required by the EU Securitization Rules and       the  CRR  and  to  permit  such  Purchaser  to  perform  its  due  diligence  and  monitoring       obligations (if any) under the EU Securitization Rules and the CRR; provided however,       that  no ADT Entity shall  be required to take actions that  could  cause a  change  in  the       accounting or tax treatment of the transactions contemplated by this Agreement.                          (i)   Until  the  later  to  occur  of  (x) the  Purchase  Termination             Date, or (y) the date on which the Purchasers’ Pool Investment is equal to zero:                          (A)   as  an  “originator”  for  the  purposes  of  the  Securitization                   Regulation, hold and maintain the Retained Interest on an ongoing basis;                                        53 SK 28677 0004 8494650 v1217

 

                  (B)   not short, hedge, otherwise mitigate its credit risk or sell,             transfer  or  otherwise  surrender  all  or  part  of  the  rights,  benefits  or             obligations arising from or associated with the Retained Interest, except to             the extent permitted by the EU Securitization Rules;                    (C)   From and after the EU Retention Effective Date, confirm to             each  Purchaser  (which  may  be  in  electronic  form)  that  it  continues  to             comply with paragraphs (A) and (B) above in each Information Package;                    (D)   After  the  EU  Retention  Effective  Date,  provide  notice             promptly to each Purchaser in the event of any breach of paragraphs (A)             or (B) above;                    (E)   After  the  EU  Retention  Effective  Date,  promptly  notify             each  Purchaser  of  any  change  to  the  form  of  retention  of  the  Retained             Interest;                    (F)   After  the  EU  Retention  Effective  Date,  to  the  extent             necessary in order for any Purchaser to comply with its obligations under,             or  in  relation  to,  the  EU  Securitization  Rules,  to  the  extent  reasonably             requested  by  such  Purchaser,  provide  all  information,  documents,  and             reports regarding the Receivables and the transaction contemplated by this             Agreement which  are  in ADT’s possession or control, unless subject to             confidentiality restrictions or restricted by Law (provided that ADT shall             undertake reasonable efforts to obtain consent for the disclosure of such             information,  documents  and  reports;  provided  further  that  such  efforts             shall not include payment of any amounts to any Person or any violation             of Law);                    (G)   Originate  the  Receivables  pursuant  to  a  sound  and  well-             defined credit granting criteria,  and  maintain  clearly  established criteria             and  processes  for  approving,  amending,  renewing  and  financing  the             Receivables (“Originations and Revisions”) and have effective systems in             place  to  apply  those  criteria  and  processes  to  ensure  that  any  such             Originations and Revisions are granted and approved based on a thorough             assessment of each Obligor’s creditworthiness; and                    (H)   own 100% of the equity interests of the Seller.      (l)   Certain  Governmental  Fees,  Surcharges,  and  Taxes.  With  respect  to  any portion of a Receivable attributable to governmental fees, surcharges, or taxes, pay (or cause  to  be  paid)  such  governmental  fees,  surcharges,  or  taxes  to  the  applicable Governmental Authority when due in accordance with applicable Law (except for any such  governmental  fees,  surcharges,  or taxes  that  are  being  appropriately  contested in good  faith  by appropriate proceedings  and  with respect to  which  adequate reserves  in conformity  with  GAAP  have  been  provided,  and  none  of  the  Collateral  Agent,  the Administrative Agent, any Purchaser Agent, or any Purchaser shall have any obligation                                  54

 

      to make any such payment or shall have any other responsibility with respect thereto.       Pay all sales taxes to be paid in connection with the Equipment and installation related to       each Pool Receivable by the due date thereof (except for any such sales taxes that are       being appropriately contested in good faith by appropriate proceedings and with respect       to which adequate reserves in conformity with GAAP have been provided).            (m)   Anti-Corruption  Laws,  Anti-Terrorism  Laws,  and  Sanctions.  Maintain  in       effect and enforce policies and procedures reasonably designed to ensure compliance in       all  material  respects,  by  ADT,  its  Subsidiaries  and  their  respective  directors,  officers,       employees,  and  agents  with  Anti-Corruption  Laws  and  applicable  Sanctions  Laws  in       connection with ADT’s or its Subsidiaries’ business operations, except where the failure       to do so, individually or in the aggregate, could not reasonably be expected to result in a       Material Adverse Effect.            (n)   Application  of  Obligor  Payments.  Apply  payments  made  by  an  Obligor       under  a  Contract  relating  to  a  Pool  Receivable  to  amounts  billed  on  such  Obligor’s       invoice in the following order: (i) first, to amounts due in respect of the related Pool       Receivables;  (ii) second,  to  amounts  due  in  respect  of  the  related  Service  Charge       Receivables; and (iii) third, other amounts owing by such Obligor. For the avoidance of       doubt, any amounts paid by any Obligor in respect of Service Charge Receivables that       must  be  applied  pursuant  to clause  (i)  above,  shall  be  deemed  to  be  Collections  and       remitted to the Collateral Agent’s Account pursuant to the terms of this Agreement and       the other Transaction Documents as such.            (o)   Servicing Programs. If a license or approval is required for the Collateral       Agent’s, the Administrative Agent’s, or such successor Servicer’s use of any software or       other  computer  program  used  by  ADT  in  the  servicing  of  the  Receivables,  then,       following  delivery  of  a  Successor  Notice,  at  its  own  expense  make  commercially       reasonable efforts to arrange for the Collateral Agent, the Administrative Agent, or such       successor Servicer to receive any such required license or approval.            (p)   Corporate Separateness; Related Matters and Covenants. Cause the Seller to       fully  comply  with  its  covenants  in Section  7.8,  it  being understood  that  the  foregoing       shall in no event be deemed to obligate ADT to make any capital or other contributions       to the Seller. Maintain in place all policies and procedures, and take and continue to take       all actions, applicable to it described in the assumptions as to the facts set forth in, and       forming  the  basis  of,  the  opinions  set  forth  in  the  opinion  letters  delivered  by  Paul,       Weiss, Rifkind, Wharton & Garrison LLP to the Collateral Agent, Administrative Agent,       Purchasers and Purchaser Agent on April 17, 2020, except to the extent that any failure to       maintain  in  place  such  policies  and  procedures  or  failure  to  continue  to  take  all  such       actions could not materially and adversely affect the conclusions set forth in such opinion       letters.            (q)   Permitted  Securitization.  Cause  the  trustee,  administrative  agent  and/or       collateral agent, as applicable, in respect of the ADT Indentures, ADT Credit Agreement,       ADT Intercreditor and the ADT Collateral Agreements to promptly take any actions from       time  to  time,  as  may  be  reasonably  requested  by  the  Collateral  Agent,  to  facilitate  or                                        55 SK 28677 0004 8494650 v1217

 

      cause the transfer of any Pool Receivables and the Related Assets or proceeds thereof to       the extent then in the possession or control of such trustee, administrative agent and/or       collateral agent, as applicable, to or at the direction of ADT or the Collateral Agent.        SECTION 7.5       Reporting Requirements of ADT. From the date hereof until the Final Payout Date, ADT shall furnish to the Collateral Agent and the Administrative Agent (who shall promptly send the same to the Purchaser Agents):            (a)   (i)     Quarterly Financial Statements. Within forty-five (45) days after       the close of each of the first three fiscal quarters of each fiscal year of ADT and the       Parent, the Parent’s Form 10-Q as filed with the SEC (which shall be deemed delivered       upon the filing of such Form 10-Q on the SEC’s website).                          (ii)  Annual Financial Statements.  Within ninety (90) days after             the  end  of  each  fiscal  year  of  ADT  and  the  Parent,  the  audited  consolidated             statements of operations, changes in stockholders’ equity and cash flows of each             of ADT and the Parent and their respective Subsidiaries for such fiscal year, and             the related audited consolidated balance sheet for ADT and the Parent and their             respective Subsidiaries as of the end of such fiscal year, setting forth in each case             in  comparative  form  the  corresponding  figures  for  the  previous  fiscal  year,  all             reported  on  by  PricewaterhouseCoopers  LLP  or  other  independent  public             accountants of recognized national standing (without a “going concern” or like             qualification  or  exception  and  without  any  qualification  or  exception  as  to  the             scope  of  such  audit  that  are  inconsistent  with  the  standards  of  the  Public             Company  Accounting  Oversight  Board),  to  the  effect  that  such  audited             consolidated  financial  statements  present  fairly  in  all  material  respects  the             financial  condition  and  results  of  operations  of  ADT  and  the  Parent  and  their             respective  Subsidiaries  on  a  consolidated  basis  in  accordance  with  GAAP             consistently  applied  (which  shall  be  deemed  delivered  upon  the  filing  of  the             Parent’s Form 10-K on the SEC’s website).                          (iii) Compliance  Certificate.  Together  with  the  financial             statements required hereunder, a compliance certificate in substantially the form             of Exhibit C signed by an authorized officer of ADT and the Parent, respectively             and dated the date of such annual financial statement or such quarterly financial             statement, as the case may be.            (b)   Financial Statements and Other Information.  The following:                          (i)   promptly after the same become publicly available, copies             of all proxy statements, financial statements and regular or special reports which             ADT or the Parent files with the SEC (which shall be deemed delivered upon the             filing thereof on the SEC’s website);                          (ii)  promptly following a request therefor, any documentation             or other information (including with respect to the Seller and the Parent) that the             Collateral  Agent,  the  Administrative  Agent,  any  Purchaser  Agent  or  any                                        56

 

            Purchaser  reasonably  requests  in  order  to  comply  with  its  ongoing  obligations             under the applicable “know your customer” and anti-money laundering rules and             regulations,  including  the  USA  PATRIOT  Act  including  the  provision  of             information regarding beneficial ownership required by 31 C.F.R. §1010.230; and                          (iii) from  time  to  time  such  further  information  regarding  the             business, affairs and financial condition of the Seller, ADT, the Parent and their             Affiliates  as  the  Collateral  Agent,  the  Administrative  Agent  or  the  Required             Purchasers shall reasonably request.            (c)   Written notice of any ERISA Event.            (d)   Events  of  Termination,  Etc.  Notice  of  the  occurrence  of  any  Event  of       Termination or Unmatured Event of Termination, accompanied by a written statement of       an appropriate officer of the Servicer setting forth details of such event and the action       that it proposes to take with respect thereto, such notice to be provided promptly (but not       later  than  two  (2)  Business  Days)  after  a  Responsible  Officer  of  the  Servicer  obtains       actual knowledge thereof.            (e)   Litigation. As soon as possible,  and in any event within two (2) Business       Days  of  knowledge  of  any  Responsible  Officer  thereof,  notice  of  any  litigation,       investigation,  or  proceeding  initiated  against  the  Seller  or,  to  the  extent  it  could,       individually  or  in  the  aggregate,  reasonably  be  expected  to  have  a  Material  Adverse       Effect, against ADT, the Servicer, and/or the Parent.            (f)   Agreed Upon Procedures Report. Not later than three (3) months after the       end of each fiscal year of the Servicer (at the sole cost and expense of the Servicer), a       copy  of  an  agreed  upon  procedures  report  of  an  accounting  firm  or  consulting  firm       reasonably acceptable to the Collateral Agent and the Administrative Agent (who shall       promptly send the same to the Purchaser Agents), addressed to the Collateral Agent, the       Administrative  Agent,  and  each  Purchaser  Agent  and  setting  forth  the  results  of  such       firm’s  performance  of agreed  upon  procedures  with  respect  to  the performance of the       Servicer for the prior fiscal year or twelve (12) month period, as reasonably requested by       the Collateral Agent, the Administrative Agent or any Purchaser Agent.  The scope of the       above agreed upon procedures report shall be as reasonably requested by the Collateral       Agent, the Administrative Agent and the Required Purchasers.            (g)   Change  in  Credit  and  Collection  Policy  or  Business.  Prior  to  (i) the       effectiveness  of  any  change  in  or  amendment  to  the  Credit  and  Collection  Policy,  a       description or, if available, a copy of the Credit and Collection Policy then in effect and a       written  notice  (A) indicating  such  change  or  amendment,  and  (B) if  such  proposed       change  or  amendment  could  reasonably  be  expected  to  adversely  affect  the  value,       validity, collectability, or enforceability of the Pool Receivables or decrease the credit       quality  of  any  Pool  Receivables  or  otherwise  give  rise  to  a  Material  Adverse  Effect,       requesting  the  Collateral  Agent’s,  the  Administrative  Agent’s  and  each  Purchaser       Agent’s consent thereto.                                         57 SK 28677 0004 8494650 v1217

 

          (h)   Other  Information.  Promptly,  from  time  to  time,  such  Records  or  other       information,  documents,  records,  or  reports  respecting  the  condition  or  operations,       financial or otherwise, of ADT, the Parent and their Affiliates, ADT’s and the Seller’s       performance  under  the  Transaction  Documents  and  the  Pool  Receivables,  the  Related       Assets, and the Service Charge Receivables as the Collateral Agent, the Administrative       Agent, or any Purchaser Agent may from time to time reasonably request and ADT can       deliver  without violating applicable Law.        SECTION 7.6       Negative Covenants of ADT. From the date hereof until the Final Payout Date, ADT shall not:            (a)   Extension  or  Amendment  of  Receivables.  Except  as  provided  in  Section       8.2(b) and to the extent resulting from the Conditional Service Guaranty, extend, amend       or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any       term or condition of any Contract (in each case, including, without limitation, by means       of any promotional activity, advertising or other statement or warranty (including on any       ADT Entity’s website)) related thereto.            (b)   Change in Credit and Collection Policy or Business. (i) Make or consent to       any change or amendment to the Credit and Collection Policy if such proposed change or       amendment  could  reasonably  be  expected  to  adversely  affect  the  value,  validity,       collectability, or enforceability of any Pool Receivable or the Related Assets or decrease       the credit quality of any Pool Receivables or the Related Assets, or otherwise give rise to       a Material Adverse Effect, without (x) the prior written consent of the Collateral Agent,       the Administrative Agent and each Purchaser Agent or (y) in the case of any such change       or  amendment  required  by  Law,  upon  delivery  to  the  Collateral  Agent  and  the       Administrative Agent of a certificate of a Responsible Officer of ADT which certifies,       that based upon advice of reputable counsel, such change or amendment is required to be       made as a result of a change in Law, or (ii) make a change in the character of its business       that could, individually or in the aggregate, reasonably be expected to have a Material       Adverse  Effect,  without  the  prior  written  consent  of  the  Collateral  Agent,  the       Administrative Agent, and the Required Purchasers.            (c)   Change in Lock-box Banks. (i) Add any bank, lock-box or lock-box account       not listed on Schedule V as a Lock-box Bank, Lock-box or Lock-box Account unless the       Collateral  Agent  and  the  Administrative  Agent  shall  have  previously  approved  and       received  duly  executed  copies  of Payment  Directions  in  the  form  of  Exhibit G-1  or a       Control  Agreement,  duly  executed  by  the  parties  thereto,  (ii) terminate  any  Lock-box       Bank, or related Lock-box, or Lock-box Account without the prior written consent of the       Collateral Agent, the Administrative Agent and, in each case, only if all of the payments       from Obligors that were being sent to such Lock-box Bank will, upon termination of such       Lock-box  Bank  and  at  all  times  thereafter,  be  deposited  in  a  Lock-box  Account  with       another Lock-box Bank covered by a Payment Direction in the form of Exhibit G-1 or a       Control  Agreement,  or  (iii) amend,  supplement,  or  otherwise  modify  any  Lock-box       agreement.                                         58

 

          (d)   Deposits to Accounts. Deposit or otherwise credit, or cause or permit to be       so deposited or credited, or direct any Obligor to deposit or remit, any Collections on       Pool  Receivables  to  any  account  not  covered  by  the  proper  Payment  Direction  or  a       Control Agreement. Except for the Collateral Agent’s Account, permit any Collections       in respect of Pool Receivables to be deposited, or credited in any account which is not       subject to a Payment Direction or a Control Agreement which is in full force and effect.            (e)   Mergers,  Acquisitions,  Sales, Etc.  Consolidate  or  merge  with  or  into  any       other Person or sell, lease or transfer all or substantially all of its property and assets, or       agree to do any of the foregoing, unless (i) no Event of Termination or Unmatured Event       of Termination has occurred and is continuing or would result immediately after giving       effect thereto, (ii) if ADT is not the surviving entity or if ADT sells or transfers all or       substantially all of its property and assets, the surviving entity or the Person purchasing       the assets  is  an Affiliate of ADT and agrees to be bound by the terms and provisions       applicable to ADT hereunder, (iii) no Change of Control shall result, (iv) the Parent has       reaffirmed in a writing, in form and substance reasonably satisfactory to the Collateral       Agent, the Administrative Agent and the Required Purchasers, that its obligations under       the Performance Support Agreement shall apply to the surviving entity and are in full       force and effect, (v) no Material Adverse Effect could reasonably be expected to result       therefrom, and (vi) the Collateral Agent, the Administrative Agent and each Purchaser       Agent  receive  such  additional  certifications  and  opinions  of  counsel  as  the  Collateral       Agent, the Administrative Agent or the Required Purchasers shall reasonably request.            (f)   Sales, Adverse Claims, Liens, Etc.  Except as otherwise provided herein or in       the  Sale  Agreement,  (I)  sell,  assign  (by  operation  of  Law  or  otherwise),  or  otherwise       dispose of, or create or suffer to exist any Adverse Claim (other than its or the Seller's       ownership interest or contingent claim to ownership) upon or with respect to, (i) any Pool       Receivable,  (ii)  any  other  Receivable  the  proceeds  of  which  are commingles  with  the       proceeds of any Pool Receivable, (iii) any Service Charge Receivable related to any Pool       Receivable,  (iv)  any  Contract  or  Related  Assets,  the  related  Equipment,  ,  or  any       proceeds, in each case, in respect of any of the foregoing or any interest therein, (v) any       Collection  Account,  the  Omnibus  Account  or  any  Lock-box  Account  or  any  other       account to which any Collections of any Pool Receivable are sent, or (vi) any right to       receive income or proceeds from or in respect of any of the foregoing or (II) purport to       do any of the foregoing.            (g)   Chattel Paper. Permit any Chattel Paper relating to any Pool Receivable to       be in the possession of (or, in the case of electronic Chattel Paper, under the control of)       any Person other than the Servicer (for the benefit of the Collateral Agent and the Seller),       the Collateral Agent, or the Collateral Agent’s designee.            (h)   Corporate Separateness; Related Matters and Covenants.  Take any action, on       its part, to cause the Seller to violate its covenants in Section 7.8, it being understood that       the foregoing shall in no event be deemed to obligate ADT to make any capital or other       contributions to the Seller.                                         59 SK 28677 0004 8494650 v1217

 

      SECTION 7.7       Nature of Obligations. Notwithstanding anything to the contrary contained  herein or in  any  other  Transaction  Document,  the Seller’s  obligations hereunder to remit  (or  repay,  to  the  extent  the  transactions  hereunder  is  treated  as  a  financing)  in  full  the Purchasers’ Pool Investment and to remit (or pay, to the extent the transactions hereunder are treated as a financing) all Yield, Fees, the Purchasers and all other Seller Obligations are full recourse general obligations of the Seller, and all obligations of ADT (as Servicer or otherwise) so specified hereunder shall be full recourse general obligations of ADT.        SECTION 7.8       Corporate  Separateness;  Related  Matters  and  Covenants.  The Seller covenants and agrees to take such actions as shall be necessary in order that:            (a)   Special Purpose Entity. The Seller will be a special purpose limited liability       company whose activities are restricted in its Constituent Documents to: (i) negotiating,       authorizing, executing, delivering, entering into and performing its obligations under the       Transaction Documents to which it is a party and undertaking any other activities related       thereto,  including  (A) purchasing  or  otherwise  acquiring  Pool  Receivables,  Related       Assets and other assets from ADT, and owning, holding, transferring, assigning, selling,       contributing to capital, pledging and otherwise dealing with such assets, (B) entering into       and performing its obligations under agreements for the selling, servicing and financing       of  the  Receivable  Pool,  (C) opening,  maintaining  and/or  terminating  any  accounts  in       connection therewith, (D) making all payments of Yield, Fees and other amounts owed       by it under or in connection with this Agreement and the other Transaction Documents,       and (E) receiving cash payments of the RPA Deferred Purchase Price, and making cash       payments  from  such  amounts  to  ADT  as  purchase  price  in  accordance  with  the  Sale       Agreement or paying dividends and distributions to ADT; and (ii) engaging in any lawful       act  or  activity  and  exercising  any  powers  not  prohibited  under  the  Transaction       Documents and permitted to limited liability companies organized under the laws of the       State of Delaware that are related or incidental to, and necessary, convenient or advisable       for the accomplishment of the above-mentioned purposes.            (b)   Commingling. Except as otherwise expressly permitted by this Agreement,       the  Seller  shall  not  commingle  any  of  its  assets  or  funds  with  those  of  any  of  its       Affiliates.            (c)   Independent Manager.  At least one member of the Seller’s board of directors       shall  be  an  Independent  Manager  and  the  limited  liability  company  agreement  of  the       Seller shall provide: (i) for substantially the same definition of “Independent Manager”       as used herein, (ii) that prior to the Final Payout Date, no Person shall be authorized or       empowered to, and the Seller shall not, without the prior unanimous written consent of       the Seller’s board of managers and the Independent Manager, file a voluntary bankruptcy       petition or file or consent to the filing of any bankruptcy, insolvency or reorganization       petition under any applicable federal or state law relating to bankruptcy naming the Seller       as debtor or otherwise institute bankruptcy or insolvency proceedings by or against the       Seller or otherwise seek with respect to such entity relief under any laws relating to the       relief  from  debts  or  the  protection  of  debtors  generally,  and  (iii) that  the  provisions       required  by  clauses  (i)  and  (ii)  of  this  sentence  cannot  be  amended  prior  to  the  Final       Payout  Date  without  the  prior  written  consent  of  the  Administrative  Agent  and  the                                       60

 

      Collateral  Agent,  and  the  prior  unanimous  written  consent  of  the  Seller’s  board  of       managers and the Independent Manager.            (d)   Corporate Formalities. The Seller will strictly observe corporate formalities       in its dealings with the Servicer, ADT, and any Affiliates thereof. Except as expressly       contemplated  by  this  Agreement,  the  Seller  shall  not  maintain  joint  bank  accounts  or       other depository accounts to which the Servicer, ADT, and any Affiliates (other than the       Seller)  thereof  has  independent  access.  The  Seller  shall  maintain  its  Constituent       Documents in conformity with this Agreement.            (e)   Conduct  of  Business.  The  Seller  shall  conduct  its  affairs  strictly  in       accordance with its organizational documents and observe all necessary, appropriate, and       customary  company  formalities,  including,  but  not  limited  to,  holding  all  regular  and       special  members’  and  board  of  directors’  (or  managers’)  meetings  appropriate  to       authorize  all  corporate  action,  keeping  separate  and  accurate  minutes  of  its  meetings,       passing all resolutions or consents necessary to authorize actions taken or to be taken,       and maintaining accurate and separate books, records and accounts, including, but not       limited to, payroll and intercompany transaction accounts (to the extent applicable).            (f)   No Other Business or Debt. The Seller shall not engage in any business or       activity except as set forth in the Transaction Documents nor, incur any Debt other than       pursuant  to  this  Agreement  and  the  other  Transaction  Documents  and  Debt  which  is       incidental thereto, incurred in the ordinary course of business.            (g)   Books and Records. The Seller shall maintain (or cause to be maintained)       company records, books of account and financial statements separate from those of any       of  its  Affiliates,  in  a  manner  such  that  it  will  not  be  difficult  or  costly  to  segregate,       ascertain, or otherwise identify the assets and liabilities of the Seller from the assets and       liabilities of its Affiliates, including ADT and the Parent.            (h)   Operating Expenses. Except as expressly contemplated by the Transaction       Documents,  and  except  from  capital  contributions  from  its  members,  the  Seller’s       operating  expenses  will  not  be  borne  by  any  of  its  Affiliates,  including  ADT  and  the       Parent.            (i)   Disclosure of Transactions. All financial statements of the Parent, ADT and       any other Affiliates of the Seller that are consolidated to include the Seller will include       notes or other disclosure that will clearly reflect that the assets of the Seller are owned by       the  Seller,  and  not  available  to  pay  creditors  of  Parent,  ADT  or  the  Seller’s  other       Affiliates.            (j)   Arm’s-Length  Relationships.  The  Seller  shall  maintain  an  arm’s-length       relationship with the Parent, ADT, and its other Affiliates. Neither the Seller on the one       hand, or ADT, or any of its other Affiliates on the other hand will be or will hold itself       out to be liable for the debts of the other. The Seller, ADT, and its other Affiliates will       immediately correct any known misrepresentation with respect to the foregoing, and they                                         61 SK 28677 0004 8494650 v1217

 

will not operate or purport to operate as an integrated single economic unit with respect to each other or in their dealing with any other entity.      (k)   Allocation of Overhead. To the extent that the Seller, on the one hand, and ADT or any Affiliate of ADT (other than the Seller), on the other hand, have offices in the  same  location,  there  shall  be  a  fair  and  appropriate  allocation  of  overhead  costs between them, and the Seller shall bear its fair share of such expenses, which may be paid through the Servicing Fee or otherwise.      (l)   Identification. The Seller shall at all times hold itself out to the public under its  own name as a legal entity separate and distinct from its equity holders, members, managers, ADT, the Parent or any of its other Affiliates.      (m)   Capital.  The  Seller  shall  maintain  adequate  capital  in  light  of  its contemplated business operations.      (n)   In respect of the Seller:                    (i)   the Seller shall not issue any security of any kind except       membership interests issued to ADT in accordance with the Seller’s Constituent       Documents,  or  incur,  assume,  guarantee,  or  otherwise  become  directly  or       indirectly liable for or in respect of any Debt or other obligation other than (i) in       connection  with  the  Transaction  Documents,  and  (ii) ordinary  course operating       expenses;                    (ii)  the  Seller  shall  not  sell,  pledge,  or  dispose  of  any  of  its       assets, except as permitted by, or as provided in, the Transaction Documents;                    (iii) the  Seller  shall  not  purchase  any  asset  (or  make  any       investment, by share purchase, loan, or otherwise) except as permitted by, or as       provided in, the Transaction Documents;                    (iv)  the  Seller  shall  not  make  any  payment,  directly  or       indirectly, to, or for the account or benefit of, any owner of any Voting Securities,       security interest, or equity interest in the Seller or any Affiliate of any such owner       (except, in each case, as expressly permitted by the Transaction Documents);                    (v)   the Seller shall not make, declare, or otherwise commence       or  become  obligated  in  respect  of,  any  dividend,  stock,  or  other  security       redemption or purchase, distribution, or other payment to, or for the account or       benefit  of,  any  owner  of  any  Voting  Securities  or  other  equity  interest  in  the       Seller to any such owner or any Affiliate of any such owner other than from funds       received by it in respect of the RPA Deferred Purchase Price or under Article III,       or  the  issuance  of  additional  equity  interests  to  ADT  in  connection  with       contributions of cash or other assets, and so long as, in any case, the result would       not directly or indirectly cause the Seller to be considered insolvent;                                  62

 

                        (vi)  The Seller shall not have any employees or subsidiaries;                          (vii) The Seller will provide for not less than ten (10) Business             Days’ prior written notice to the Collateral Agent and the Administrative Agent             of  any  removal,  replacement,  or  appointment  of  any  manager  that  is  currently             serving or is proposed to be appointed as an Independent Manager of the Seller,             such  notice  to  include  the  identity  of  the  proposed  replacement  Independent             Manager,  together  with  a  certification  that  such  replacement  satisfies  the             requirements  for  an  Independent  Manager  set  forth  in  this  Agreement  and  the             limited liability company agreement of the Seller; and                          (viii) The  Seller  will  maintain  in  place  all  policies  and             procedures, and take and continue to take all actions, applicable to it described in             the assumptions as to the facts set forth in, and forming the basis of, the opinions             set  forth  in  the  opinion  letters  delivered  by  Paul,  Weiss, Rifkind,  Wharton  &             Garrison  LLP  to  the  Collateral  Agent,  Administrative  Agent,  Purchasers  and             Purchaser  Agent  on  April  17,  2020,  except  to  the  extent  that  any  failure  to             maintain in place such policies and procedures or failure to continue to take all             such actions could not materially and adversely affect the conclusions set forth in             such opinion letters.                                   ARTICLE VIII                       ADMINISTRATION AND COLLECTION        SECTION 8.1       Designation of the Servicer.            (a)   ADT as  the  Servicer.  The  servicing,  administering,  and  collection  of  the       Pool Receivables on behalf of the Seller, the Administrative Agent, Purchaser Agents,       the  Collateral  Agent,  and  Purchasers  shall  be  conducted  in  accordance  with  this       Agreement by the Person designated as the Servicer hereunder (the “Servicer”) from time       to time in accordance with this Section 8.1. Until the Collateral Agent (with the consent,       or acting at the direction of, the Required Purchasers) delivers to ADT and the Seller a       Successor Notice in accordance with Section 8.1(b), ADT is hereby designated as, and       hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms       hereof.  The  Servicer  shall  receive  a  daily  Servicing  Fee in respect  of the Receivable       Pool,  payable  monthly  in  arrears  for  each  Settlement  Period  on  each  subsequent       Settlement  Date,  subject  to  the  priorities  of  payments  in  Section  3.1(d),  for  the       performance of its duties hereunder.  The Seller, the Administrative Agent, the Collateral       Agent,  Purchasers,  and  Purchaser  Agents  hereby  acknowledge  and  agree  to  this       appointment of the Servicer.            (b)   Successor Notice. In the event that an Event of Termination has occurred       and  is  continuing,  upon  the  written  direction  of  the  Required  Purchasers  or  the       Administrative  Agent,  the  Collateral  Agent  shall,  by  notice  to  ADT  and  the  Seller,       immediately designate a successor Servicer pursuant to the terms hereof (a “Successor       Notice”) which successor shall be selected by the Administrative Agent with the written                                        63 SK 28677 0004 8494650 v1217

 

      consent of the Required Purchasers (which consent shall not be unreasonably withheld,       conditioned  or  delayed);  it  being  understood  and  agreed  that,  in  any  event,  the       Administrative  Agent,  with  the  written  consent  of  the  Required  Purchasers  (which       consent shall not be unreasonably withheld, conditioned or delayed), may (but shall not       be obligated to) serve as successor Servicer. Upon receipt of a Successor Notice, ADT       agrees that it shall terminate its activities as the Servicer hereunder in a manner that the       Administrative Agent determines will facilitate the transition of the performance of such       activities to the successor Servicer, and successor Servicer shall assume each and all of       ADT’s  rights  and  obligations  to  service  and  administer  the  Pool  Receivables,  on  the       terms  and  subject  to  the  conditions  herein  set  forth,  and  ADT  shall  do  all  things       necessary or appropriate to assist such successor Servicer in assuming such obligations.       The  Collateral  Agent  shall  not give,  and  the Administrative Agent and the Purchasers       shall not instruct the Collateral Agent to give, ADT a Successor Notice except after the       occurrence of any Event of Termination that remains continuing.            (c)   Subservicers;  Subcontracts.  The  Servicer  may  not  subcontract  with  any       Person or otherwise delegate any of its duties or obligations hereunder except (at its own       expense) (i) to Collection Agents to collect amounts owed from the Obligors in respect of       Defaulted Receivables, or (ii) with the prior written consent of the Collateral Agent, the       Administrative Agent and the Required Purchasers (such consents not to be unreasonably       withheld, conditioned, or delayed); provided, that, notwithstanding any such designation,       delegation,  or  subcontract  or  any  replacement  or  substitution  of  Servicer  pursuant  to       clause (a)  or  (b)  above,  the Servicer  shall  remain  primarily  and directly  liable for  the       performance of all the duties and obligations of the Servicer pursuant to the terms hereof.        SECTION 8.2       Duties of the Servicer.  The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect, administer, and service each Pool Receivable from time to time with reasonable care and diligence and, in any event, with no less care and diligence than it uses in the collection, administration and servicing of its own assets, and in accordance with (i) applicable Laws, (ii) the Credit and Collection Policy, and (iii) this Agreement. During the continuance of an Event of Termination, the Collateral Agent shall have the sole right to direct the Servicer to commence or settle any legal actions to enforce collection of any Pool Receivables; provided, that the Servicer shall have no obligation to commence any legal  actions  or  enforce  collection  of  any  Pool  Receivable  in  a  commercially  unreasonable manner,  taking  into  account  the  costs  and  recoveries  expected  in  connection  with  such  legal action or enforcement.            (a)   Allocation of Collections; Segregation. The Servicer shall apply and remit       Collections in accordance with the terms of this Agreement, including without limitation,       Section 7.4(g).            (b)   Extension  and  Modification  of  Receivables.  So  long  as  no  Event  of       Termination or Unmatured Event of Termination is continuing or would result therefrom,       the  Servicer,  may  solely,  in  accordance  with  the  Credit  and  Collection  Policy  extend,       waive, amend, or otherwise modify the terms of any Pool Receivables as the Servicer       may reasonably determine to be appropriate to maximize Collections thereof, in a manner       that does not adversely affect any Pool Receivable, including the validity, enforceability                                       64

 

      or collectability of any Pool Receivable or result in such Pool Receivable not constituting       an Eligible Receivable,  or otherwise  give rise  to  a Material Adverse Effect; provided,       that, (A) after giving effect to such extension, amendment, waiver, or other modification,       the sum of Purchasers’  Pool Investment and the Required Reserves in respect of such       Receivable Pool at such time shall not exceed the Net Portfolio Balance at such time,       (B) no  such  extension,  amendment,  waiver,  or  other  modification shall  make  or  be       deemed to make any such Pool Receivable current or otherwise modify the aging thereof,       or limit or reduce the rights of the Seller or any Secured Party under this Agreement, and       (C) following the occurrence of the Purchase Termination Date, during the continuation       of an Unmatured Event of Default or Event of Default, the Servicer may only extend,       waive, amend or otherwise modify the terms of the any Pool Receivables with the prior       written consent of the Administrative Agent.            (c)   Documents and Records. The Seller and ADT shall deliver to the Servicer,       and the Servicer shall hold in trust for the Seller, the Administrative Agent, the Collateral       Agent,  each  Purchaser  Agent,  and  each  Purchaser,  all  Records  (and  any  original       documents  relating  thereto)  (and  after  the  occurrence  of  an  Event  of  Termination  or       Unmatured Event of Termination that remains continuing, shall deliver the same to the       Collateral Agent or its designees promptly upon the Collateral Agent’s written request).       Upon the reasonable written request of the Collateral Agent, the Administrative Agent or       any Purchaser Agent, the Servicer shall provide the Collateral Agent, the Administrative       Agent  and  each  Purchaser  Agent  with  the  location(s)  of  all  physical  Records  (to  the       extent not electronically available) and tangible chattel paper or other physical collateral       (and any original documents relating thereto), if any.            (d)   Termination.  ADT’s authorization  as  Servicer under this  Agreement shall       terminate upon the earlier to occur of (i) the Final Payout Date, and (ii) the effective date       of the replacement of the Servicer with a successor servicer in accordance with Section       8.1(b).            (e)   Power of Attorney. The Seller hereby grants to the Servicer, an irrevocable       power of attorney, with full power of substitution, coupled with an interest, to take in the       name  of  the  Seller  any  and  all  steps  which  are  necessary  or  advisable  to  endorse,       negotiate,  or  otherwise  realize  on  any  writing  or  other  right  of  any  kind  held  or       transmitted by the Seller or transmitted or received by the Seller in connection with any       Pool Receivable or under the related Records.  Each of the Seller and the Servicer hereby       grants during the continuance of an Event of Termination to the Administrative Agent       and  the  Collateral  Agent,  an  irrevocable  power  of  attorney,  with  full  power  of       substitution, coupled with an interest, to take in the name of the Seller and the Servicer       any and  all  steps  which are  necessary or advisable to endorse, negotiate, or otherwise       realize on any writing or other right of any kind held or transmitted by the Seller or the       Servicer or transmitted or received by the Seller or the Servicer in connection with any       Pool  Receivable  or  under  the  related  Records,  including  such  actions  as  may  be       necessary or desirable, in the reasonable determination of the Administrative Agent and       the  Collateral  Agent,  as  the  case  may  be,  to  collect  any  and  all  amounts  or  portions       thereof due under the Pool Receivables, Related Assets and all other Collateral, including       indorsing  the  name  of  the  Seller  on  checks  and  other  instruments  representing                                        65 SK 28677 0004 8494650 v1217

 

      Collections and enforcing all of the rights and remedies of the Collateral Agent and the       Administrative  Agent  under  and  in  connection  with  this  Agreement  and  the  other       Transaction Documents.            (f)   Resignation of ADT as the Servicer. ADT shall not resign in its capacity as       the  Servicer  hereunder  without  the  prior  written  consent  of  the  Collateral  Agent,  the       Administrative  Agent  and  each  Purchaser  Agent,  which  consent  shall  be  given  or       withheld in the sole and absolute discretion of the Collateral Agent, the Administrative       Agent, and each Purchaser Agent, except following the receipt of a Successor Notice and       in accordance with Section 8.1(b).            (g)   Servicing  Expenses.  For  the  avoidance  of  doubt,  in  consideration  of  the       Servicing Fee payable hereunder, the Servicer shall pay all of the costs and expenses it       incurs in connection with the servicing and administration of the Receivable Pool and       Related Assets and the performance of its obligations under the Transaction Documents,       including, without limitation, all costs and expenses of enforcement of the Receivables       against the Obligors and all Collection Agent Fees.        SECTION 8.3       Rights of the Collateral Agent. In addition to all of its other rights herein including under Articles IX and X, under the other Transaction Documents or at Law or in equity, the Administrative Agent and Collateral Agent shall have the other following rights set forth in this Section 8.3:            (a)   Notice  to  Obligors.  At  any  time  during  the  continuance  of  any  Event  of       Termination upon the written direction of the Required Purchasers or the Administrative       Agent, (A) the Collateral Agent may notify the Obligors of Pool Receivables, or any of       them, of its interests in the Receivable Pool or Related Assets and instruct them to make       payments on the Pool Receivables as instructed by, the Collateral Agent, and may debit       and/or charge Obligors accounts and credit cards directly or through automated clearing       house  or  ACH,  and  (B) the  Servicer  shall  (on  behalf  of  the  Seller),  at  the  Servicer’s       expense, give notice of the Collateral Agent’s interest in the Pool Receivables to each       said Obligor and instruct them to make payments on the Pool Receivables as instructed in       writing by, the Collateral Agent or the Administrative Agent.            (b)   Other  Rights.  At  any  time  during  the  continuance  of  any  Event  of       Termination,  the  Servicer  shall,  (A) at  the  Collateral  Agent’s  request  and  at  the       Servicer’s  expense,  assemble  all  of  the  Records  and  deliver  such  Records  to  the       Collateral  Agent  or  its  designee,  and  (B) at  the  request  of  the  Collateral  Agent  or  its       designee, exercise or enforce any of their respective rights hereunder, under any other       Transaction  Document,  Pool  Receivable,  or  under  any  Related  Asset  (to  the  extent       permitted hereunder or thereunder). Without limiting the generality of the foregoing, at       any time, each of the Servicer and the Seller shall upon the request of the Administrative       Agent, the Collateral Agent, any of their respective designee or the Required Purchasers       and at the Servicer’s expense:                    (I)   authorize, execute (if required) and file such financing or             continuation  statements,  or  amendments  thereto  or  assignments  thereof,                                        66

 

            and such other instruments or notices, as may be necessary or appropriate;             and                    (II)  mark its master data processing records evidencing that the             Pool Receivables have been sold in accordance with this Agreement.            (c)   Additional Financing Statements; Performance by the Administrative Agent.       The Seller hereby authorizes the Collateral Agent and the Administrative Agent or their       respective  designees  to  file  one  or  more  financing  or  continuation  statements,  and       amendments thereto and assignments thereof, or any similar instruments in any relevant       jurisdiction  relative  to  all  or  any  of  the  Pool  Receivables,  and  Related  Assets  now       existing or hereafter arising in the name of the Seller. The Seller agrees that a similar       filing  against  it  may  also  be  filed  for  the  purposes  hereof  and  to  perfect  the  security       interest and transfers created hereby. If the Seller or the Servicer fails to perform any of       its agreements or obligations under this Agreement or any other Transaction Document,       the Collateral Agent, the Administrative Agent, or any of their respective designees may       (but shall not be required to) itself perform, or cause performance of, such agreement or       obligation, and the expenses of the Collateral Agent or the Administrative Agent or its       designee incurred in connection therewith shall be payable by the Seller as provided in       Section 13.6.            (d)   Investment  of  Funds  on  Deposit  in  the  Collateral  Agent’s  Account.  The       Collateral Agent may invest and reinvest, in its own name or in the name of its nominee,       amounts  on  deposit  in  the  Collateral  Agent’s  Account,  in  Cash  Equivalents,  having       maturities  not  exceeding  the  next  succeeding  Settlement  Date.  All  such  Cash       Equivalents and interest and income thereon and the net proceeds realized on the sale or       redemption thereof shall for all purposes of this Agreement be deemed to be Collections       credited  to  the  Collateral  Agent’s  Account.  The  Collateral Agent  may  liquidate  Cash       Equivalents  from  time  to  time  to  the  extent  necessary  or  appropriate,  in  the  sole       discretion of the Collateral Agent, to effect the applications of Collections to be made on       each Settlement Date pursuant to Section 3.1(d).              The Collateral Agent shall have no liability for (i) the investment performance of       any amounts invested by the Collateral Agent pursuant to this Section 8.3(d), (ii) failing       to  invest  any  amount  on  deposit  in  the  Collateral  Agent’s  Account,  or  (iii) any  loss       resulting from the sale or liquidation of any such investment prior to its stated maturity       date.        SECTION 8.4       Responsibilities of the Servicer. Anything herein to the contrary notwithstanding:            (a)   Contracts.  The Servicer shall perform all of its obligations under the Records       to  the  same  extent  as  if  the  Receivable  Pool  and  Related  Assets  had  not  been  sold       hereunder and the exercise by the Collateral Agent or its designee of its rights hereunder       shall not relieve the Servicer from such obligations.                                         67 SK 28677 0004 8494650 v1217

 

          (b)   Limitation  of  Liability.  None  of  the  Collateral  Agent,  the  Administrative       Agent, any Purchaser, or any Purchaser Agent shall have any obligation or liability with       respect to any Pool Receivables, Related Assets or Contracts related thereto, nor shall       any of them be obligated to perform any of the obligations of the Servicer, ADT, or the       Seller thereunder.        SECTION 8.5       Further Action Evidencing Purchases. ADT agrees that from time to time, at its expense, it shall (or cause the Servicer to) promptly execute and deliver all further instruments  and  documents,  and  take  all  further  actions,  that  the  Collateral  Agent,  the Administrative  Agent,  any  of  their  respective  designees  or  the  Required  Purchasers  may reasonably request or that are necessary in order to perfect, protect or more fully evidence the transactions contemplated by the other Transaction Documents.        SECTION 8.6       Application of Collections. Subject to Section 7.4(n), unless the Collateral  Agent  instructs  otherwise,  any  payment  by  an  Obligor  in  respect  of  any  Pool Receivable shall, except as otherwise specified in writing or otherwise by such Obligor, required by Law or by the underlying Contract, or except solely to the extent necessary to accomplish a segregation  of  Collections  from  proceeds  of  other  Receivables  or  assets  of  the  Originator through a different coding mechanism implemented through software changes, be applied using the same systems, practices, and procedures as the Servicer uses for the application of payments on all of the residential receivables serviced by it for itself and its Affiliates whether or not such payments are being made with respect to Pool Receivables.                                   ARTICLE IX                               SECURITY INTEREST        SECTION 9.1       Grant of Security Interest. Without limiting Section 1.2(c) or (d), to secure all Seller Obligations of the Seller and all other amounts owing by the Seller to any Affected Party under or in connection with this Agreement and the other Transaction Document, whether  now  or  hereafter  existing,  due  or  to  become  due,  direct  or  indirect,  or  absolute  or contingent, including, all Indemnified Amounts payable pursuant to Section 12.1, payments on account  of  Collections  received  or  deemed  to  be  received  and  fees  and  expenses,  the  Seller hereby assigns and pledges to the Collateral Agent, for the benefit of the Affected Parties (and each of the Affected Parties is hereby deemed to appoint the Collateral Agent as its agent and representative for purposes of this Section 9.1), and hereby grants to the Collateral Agent, for the benefit of the Affected Parties, a security interest in all of the following: all of the Seller’s right, title, and interest now or hereafter existing in, to and under the following of the Seller’s assets, whether now owned or existing or hereafter acquired, and wherever located (whether or not in the  possession  or  control  of  the  Seller),  and  all  proceeds  of  the  foregoing  (collectively,  and together with  the  Receivable  Pool  and  Related  Assets,  the  “Collateral”):  (I) all  Receivables comprising  the  Receivable  Pool;  (II) the  Related  Assets  in  respect  of  the  Receivable  Pool; (III) the Collections in respect of the Receivable Pool; (IV) all Transaction Documents; (V) all Chattel  Paper  in  respect  of  the  Receivable  Pool;  (VI) all  Contracts  related  to  the  Receivable Pool;  (VII) all  Deposit  Accounts;  (VIII) all  Documents  in  respect  of  the  Receivable  Pool; (IX) all Payment  Intangibles in respect  of the  Receivable Pool; (X) all General  Intangibles  in respect of the Receivable Pool; (XI) all Instruments in respect of the Receivable Pool; (XII) all                                       68

 

Inventory  in  respect  of  the  Receivable  Pool;  (XIII) all  Investment  Property  in  respect  of  the Receivable  Pool;  (XIV) all  letter  of  credit  rights  and  supporting  obligations  in  respect  of  the Receivable Pool; (XV) the Sale Agreement and all rights and remedies of the Seller thereunder; (XVI) all other assets in the Receivable Pool and Related Assets; (XVII) the Reserve Account; (XVIII) all rights, interests, remedies, and privileges of the Seller relating to any of the foregoing including the right to sue for past, present, or future infringement of any or all of the foregoing; and (XIX) to the extent not otherwise included, all products and Proceeds (the capitalized term in clauses (I) through (XIX) not otherwise defined in this Agreement, as defined in the UCC) of the  of  the  foregoing clauses  (I)  through (XIX)  and  all  accessions  to,  substitutions  and replacements for, and rents, profits, and products of the of the foregoing (including insurance proceeds), and all distributions (whether in money, securities, or other property) and collections from or with respect to any of the foregoing, and all accession to, substitutions and replacements for, and rents, profits, and products of the of the foregoing (including insurance proceeds), and all distributions (whether in money, securities, or other property) and collections from or with respect to any of the foregoing.              The Seller and the Servicer hereby authorize the filing of financing statements, including those filed under Section 8.3(c), describing the collateral covered thereby, and in respect of the Seller, as “all of debtor’s personal property and assets” or words to that effect, notwithstanding that such wording may be broader in scope than the collateral described in this Section 9.1.  This Agreement shall constitute a security agreement under applicable Law.        SECTION 9.2       Waiver. To the fullest extent it may lawfully so agree, the Seller and the Servicer agree that it will not at any time insist upon, claim, plead, or take any benefit or advantage of any appraisal, valuation, stay, extension, moratorium, redemption, or similar Law now  or  hereafter  in  force  in  order  to  prevent,  delay,  or  hinder  the  enforcement  hereof  or  the absolute sale of any part of the Collateral; the Seller and the Servicer, each for itself and all who claim  through  it,  so  far  as  it  or  they  now  or hereafter lawfully  may  do  so,  hereby  waive  the benefit  of  all  such  Laws  and  all  right  to  have  the  Collateral  marshaled  upon  any  foreclosure hereof, and agrees that any court having jurisdiction to foreclose this Agreement may order the sale of the Collateral in its entirety. Without limiting the generality of the foregoing, the Seller and the Servicer hereby waive and release any and all right to require the Collateral Agent or the Administrative Agent to collect any of such obligations from any specific item or items of the Collateral or from any other party liable as guarantor or in any other manner in respect of any of such obligations or from any collateral for any of such obligations.                                    ARTICLE X                            EVENTS OF TERMINATION        SECTION 10.1      Events of Termination. The following events shall be “Events of Termination” hereunder:            (a)   Any of the following events:                          (i)   the  Servicer,  or  any  ADT  Entity  shall  fail  to  perform  or             observe any covenant or agreement as and when required hereunder or under any                                        69 SK 28677 0004 8494650 v1217

 

      other Transaction Document (other than any covenant or agreement referred to in       clause (a)(ii) below) and such failure remains unremedied for twenty (20) days       after the earlier of the date (A) such Person receives notice of such failure from       the  Collateral  Agent,  the  Administrative  Agent  or  the  Required  Purchasers,  or       (B) a Responsible Officer obtains knowledge of such failure;                    (ii)  any of the following shall occur: (A) any ADT Entity or       the  Servicer  shall  fail  to  make  any  payment  or  deposit  or  transfer  of  monies       required to be made by it hereunder or under any other Transaction Document       (including, without limitation, any ADT Obligation) as and when due and such       failure  is  not  remedied  within  two  (2)  Business  Days,  or  (B) the  conditions       subsequent set forth in Section 5.3 is not satisfied on or prior to the date that is the       twelve (12) month anniversary of the Closing Date,;                    (iii) the Servicer shall fail to deliver any Information Package       when due pursuant to Section 3.1(a) and such failure is not remedied within three       (3) Business Days; or      (b)   any representation or warranty made or deemed to be made by any Servicer, ADT  Entity  (or  any  of  their  officers)  under  or  in  connection  with  any  Transaction Document or any certificate, Purchase Request, Paydown Notice, Information Package, or  any  other  report,  financial  statement  or  other  written  information  delivered  in connection therewith shall prove to have been false or incorrect in any material respect when made or deemed to be made (without duplication as to any materiality modifiers, qualifications, or limitations applicable thereto) and solely to the extent capable of cure, shall  continue  unremedied  for  twenty  (20)  days  after  the  earlier  of  the  date  (A) such Person  receives  notice  of  such  breach  from  the  Collateral  Agent,  the  Administrative Agent  or  the  Required  Purchasers,  or  (B) a Responsible  Officer obtains  knowledge of such breach; or      (c)   an Event of Bankruptcy shall have occurred with respect to any ADT Entity; or      (d)   a Change of Control shall occur; or      (e)   the Collateral Agent, for the benefit of the Affected Parties, fails at any time to have a valid perfected ownership interest or first priority perfected security interest in the Pool Receivables and the Related Assets (or any portion thereof) and all proceeds of any of the foregoing, in each case, free and clear of any Adverse Claim; or      (f)   the  occurrence  of  any  ERISA  Event  that,  individually  or  together  with  all other ERISA Events that have occurred, could reasonably be expected to have a Material Adverse Effect; or      (g)   any  ADT  Entity  shall  be  required  to  register  as  an  “investment  company” under (and as defined in) the Investment Company Act; or                                  70

 

          (h)   any  material  provision  of  this  Agreement  or  any  other  Transaction       Documents  shall  cease  to  be  the  valid  and  binding  obligation  enforceable  against  any       ADT Entity, as applicable; or            (i)   the Seller shall fail to pay in full all of its Seller Obligations to the Collateral       Agent, the Administrative Agent, or any Purchaser hereunder by the Legal Final or any       ADT Entity shall fail to pay in full all of its ADT Obligations to the applicable person or       the Administrative Agent on their behalf in accordance with the terms of this Agreement       by the Legal Final; or            (j)   one  or  more  final  judgments  for  the  payment  of  money  in  an  aggregate       amount in excess of $84,000,000 in the case of ADT, the Parent or any other Material       Subsidiary of the Parent or $1,000,000 in the case of the Seller and the same shall not be       vacated,  discharged  or  stayed  or  bonded  pending  appeal  for  a  period  of  sixty  (60)       consecutive days, or any action shall be legally taken by a judgment creditor to attach or       levy  upon  any  assets  of  ADT,  the  Parent  or  any  Material  Subsidiary  of  the  Parent  to       enforce any such judgment; or            (k)   the Seller, ADT, the Parent or any of their respective Material Subsidiaries       shall  fail  to  pay  any  principal  of  or  premium  or  interest  on  any  of  its  Debt  which  is       outstanding in a principal amount of at least, in respect of the Seller, $1,000,000, or in       respect  of the Seller,  ADT, the Parent or any of their respective Material Subsidiaries       $84,000,000  in  the  aggregate  when  the  same  becomes  due  and  payable  (whether  by       scheduled maturity, required prepayment, acceleration, demand or otherwise), and such       failure  shall  continue  after  the  applicable  grace  period  specified  in  the  agreement  or       instrument relating to such Debt; or any other event shall occur or condition shall exist       under any agreement or instrument relating to any such Debt and shall continue after the       applicable grace period, if any, specified in such agreement or instrument, if the effect of       such event or condition is to accelerate, or to permit the acceleration of, the maturity of       such Debt; or any such Debt shall be declared to be due and payable, or required to be       prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased       or defeased, or an offer to repay, redeem, purchase or defease such Debt shall be required       to be made, in each case prior to the stated maturity thereof; or            (l)   the  breach  of  any  of  the  financial  covenants  set  forth  in  the  ADT  Credit       Agreement, any ADT Indenture or any ADT Collateral Agreements as in effect on the       Closing Date or an event of default (or similar event) shall have occurred thereunder, in       each case without regard to any waivers of such breaches or defaults; or            (m)   from  and  after  the  Ratio  Effective  Date,  the  average  of  the  Delinquency       Ratios for the three preceding Settlement Periods, as determined on any Reporting Date,       shall exceed 3%; or            (n)   from and after the Ratio Effective Date, the average of the Loss Ratios for the       three preceding Settlement Periods, as determined on any Reporting Date, shall exceed       2.5%; or                                         71 SK 28677 0004 8494650 v1217

 

          (o)   (x)  on  any  Reporting  Date,  the  sum  of  the  aggregate  Purchasers’  Pool       Investment and the Required Reserves exceeds the Net Portfolio Balance, as calculated       on  a  pro  forma  basis  after taking  into  account  the  application  of Monthly  Collections       pursuant to Section 3.1(d) on the immediately following Settlement Date, and solely to       the  extent  a  Purchase  Request  has  been  delivered  by  the  Seller  on  or  prior  to  such       Reporting  Date  in  accordance  with Section  1.2(a)  in  respect  of  the  Settlement  Date       immediately succeeding such Reporting Date, which would, on a pro forma basis, after       giving  effect  to  the  related  Purchase  (as  set  forth  in  the  definition  of  Net  Portfolio       Balance) and the application of Monthly Collections in accordance with Section 3.1(d),       cure  such  circumstance,  has  not  been  so  cured  on  such  immediately  succeeding       Settlement Date, or (y) on any Settlement Date, after giving effect to the related Purchase       (as set forth in the definition of Net Portfolio Balance) and the application of Collections       in accordance with Section 3.1(d), the sum of the aggregate Purchasers’ Pool Investment       and the Required Reserves exceeds the Net Portfolio Balance; or            (p)   the  Performance  Support  Agreement  is  canceled,  rescinded,  amended,  or       modified without the prior written consent of the Collateral Agent, the Administrative       Agent and each Purchaser Agent; or            (q)   the  Servicer  or  any  ADT  entity  shall  take  any  action  that  materially  and       adversely  affects  the  collectability  of  all  or  any  significant  portion  of  the  Pool       Receivables or the ability of the Seller, or ADT (as Servicer or otherwise) or the Parent to       perform  its  respective  obligations  under  this  Agreement  or  any  other  Transaction       Document; or            (r)   ADT ceases to provide Monitoring Services generally; or            (s)   any Lock-box Account, any Collection Account or the Omnibus Account to       which Collections are remitted shall cease to be subject to the proper Payment Direction       or a Control Agreement, or any Payment Direction or Control Agreement shall cease to       be in full force and effect, in each case, without being simultaneously replaced with a       proper  Payment  Direction  or  Control  Agreement  or  with  the  consent  of  the       Administrative Agent, the Collateral Agent and each Purchaser Agent; or            (t)   the average ADT Managed Pool Delinquency Ratios for the three preceding       Settlement Periods shall at any time exceed 0.70%.        An Event of Termination shall be deemed to be continuing until waived in writing by the Administrative Agent, the Collateral Agent and the Required Purchasers.        SECTION 10.2      Remedies. Upon, or any time after, the occurrence of an Event of Termination  (other  than  an  Event  of  Termination  described  in Section  10.1(c))  that  remains continuing, the Collateral Agent or the Administrative Agent shall, at the request, or may with the consent, of the Required Purchasers, by notice to the Servicer (on the Seller’s behalf) declare the  Acceleration  Date  to  have  occurred  and  shall  have  all  of  the  remedies  herein,  including without limitation Section 8.1(b) and this Section 10.2. In addition, upon the occurrence of an Event of Termination, (A) the Administrative Agent may (i) designate another person to succeed                                        72

 

ADT as Servicer, which successor may be the Administrative Agent in accordance with Section 8.1(b),  and  (ii) direct  the  Obligors  in  respect  of  each  Pool  Receivables  to,  or  direct  ADT  to instruct  such  Obligors  to,  pay  all  amounts  payable  under  the  Contracts  related  to  the  Pool Receivables directly to such account as the Administrative Agent shall designate, and (B) subject to Section 3.6(b), the Collateral Agent may deliver a Consent Notice.  Upon the occurrence of an Event  of  Termination  described  in Section  10.1(c),  the  Acceleration  Date  shall  occur automatically.  Upon, or at any time after, the occurrence of the Acceleration Date, no Purchases thereafter will be made. Upon the declaration or automatic occurrence of the Acceleration Date pursuant to this Section 10.2, the Collateral Agent, on behalf of the Purchasers and the other Affected Parties, shall have, in addition to all other rights and remedies under this Agreement, any  other  Transaction  Document,  or  under  applicable  Law,  all  other rights  and  remedies provided under the UCC of each applicable jurisdiction and other applicable Laws (including all the rights and remedies of a secured party upon default under the UCC (including the right to sell any or all of the Collateral subject hereto)), all of which rights shall be cumulative. Subject to Section 11.1, upon, or at any time after, the Acceleration Date, the Administrative Agent and the Collateral Agent shall in respect of the exercise of the rights and remedies under this Section 10.2 act or refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Purchasers.                                   ARTICLE XI                   PURCHASER AGENTS; COLLATERAL AGENT;                           ADMINISTRATIVE AGENT;                         CERTAIN RELATED MATTERS        SECTION 11.1      Limited  Liability  of  Purchasers,  Purchaser  Agents,  Collateral Agent,  and  the  Administrative  Agent.  The  obligations  of  the  Collateral  Agent,  the Administrative  Agent,  each  Purchaser  and  each  Purchaser  Agent  under  the  Transaction Documents are solely the corporate obligations of such Person.  Except with respect to any claim arising out of the willful misconduct or gross negligence of such Person, no claim may be made by the Seller, the Servicer or ADT, against the Collateral Agent, the Administrative Agent, any Purchaser, or any Purchaser Agent, or their respective Affiliates, directors, members, managers, officers,  employees,  attorneys,  or  agents  for  any  special,  indirect,  consequential,  or  punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of  or  related  to  the  transactions  contemplated  by  this  Agreement  or  any  other  Transaction Document, or any act, omission, or event occurring in connection therewith; and the Seller and ADT hereby waives, releases, and agrees not to sue upon any claim for any such damages not expressly permitted by this Section 11.1, whether or not accrued and whether or not known or suspected to exist in its favor. Notwithstanding any provision of this Agreement or any other Transaction  Document  to  the  contrary:  (i) in  no  event  shall  the  Collateral  Agent,  the Administrative Agent, or any Purchaser Agent ever be required to take any action which exposes it  to  personal  liability  or  which  is  contrary  to  the  provision  of  any  Transaction  Document  or applicable  Law,  and  (ii) neither  the  Collateral  Agent,  the  Administrative  Agent,  nor  any Purchaser Agent shall have any duties or responsibilities, except those expressly set forth herein, or  any  fiduciary  relationship  with  any  party  hereto  or  any  other  Person,  and  no  implied covenants,  functions,  responsibilities,  duties,  obligations,  or  liabilities  on  the  part  of  the Collateral  Agent,  the  Administrative  Agent,  or  any  Purchaser  Agent  shall  be  read  into  this                                        73 SK 28677 0004 8494650 v1217

 

Agreement or the other Transaction Documents or otherwise exist against the Collateral Agent, the Administrative Agent, or any Purchaser Agent. Neither the Administrative Agent nor the Collateral Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Purchasers. Nothing herein or in any other Transaction Document or related documents shall obligate the Administrative Agent or the Collateral Agent to advance, expend or risk its own funds, or to take any action which in its reasonable judgment may cause it to incur any expense or financial or other liability for which it does not reasonably expect to be indemnified to its satisfaction. Neither the Administrative Agent nor the Collateral Agent shall be liable for any action taken or omitted to be taken by it or them under or in connection with this  Agreement  or  any  of  the  other  Program  Documents,  except  for  its  or  their  own  gross negligence  or  willful  misconduct. In  performing  its  functions  and  duties  hereunder,  the Collateral Agent and the Administrative Agent shall act solely as the agent of the Purchasers and the Purchaser Agents, as applicable, and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any ADT Entity or any other Person.        SECTION 11.2      Authorization  and  Action  of  each  Purchaser  Agent.  By  its execution  hereof,  in  the  case  of  each  Purchaser,  and  by  accepting  the  benefits  hereof,  each Enhancement Provider and Liquidity Provider, each such party hereby designates and appoints its related Purchaser Agent to take such action as agent on its behalf and to exercise such powers as are delegated to such Purchaser Agent by the terms hereof, together with such powers as are reasonably incidental thereto. Each Purchaser Agent reserves the right, in its sole discretion, to take any actions and exercise any rights or remedies, in each case, authorized or provided for under  this  Agreement  or  any  other  Transaction  Document  and  any  related  agreements  and documents.        SECTION 11.3      Authorization  and  Action  of  the  Administrative  Agent  and Collateral Agent.  By its execution hereof, in the case of each Purchaser and Purchaser Agent, each such party hereby designates and appoints Mizuho as the Administrative Agent and Mizuho as the Collateral Agent to take such action as agent on its behalf and to exercise such powers as are delegated to such party by the terms hereof, together with such powers as are reasonably incidental thereto. Subject to Section 10.2, The Administrative Agent and the Collateral Agent reserve the right, in its sole discretion, to take any actions and exercise any rights or remedies, in each case, authorized or provided for under this Agreement or any other Transaction Document and  any  related  agreements  and  documents.  If  any  provision  of  any  Transaction  Document permits the Collateral Agent or the Administrative Agent to take any action in its discretion, this paragraph shall not limit such discretionary right.        SECTION 11.4      Delegation  of  Duties  of  each  Purchaser  Agent.  Each  Purchaser Agent may execute any of its duties through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Purchaser Agent shall be responsible  to  any  Purchaser  in  its  Purchaser  Group for  the negligence or  misconduct of any agents or attorneys in fact selected by it with reasonable care.        SECTION 11.5      Delegation  of  Duties  of  the  Administrative  Agent  and  the Collateral Agent. The Collateral Agent and the Administrative Agent may execute any of its duties through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  Neither the Collateral Agent nor the Administrative Agent                                       74

 

shall  be  responsible  to  any  Purchaser,  any  Purchaser  Agent,  or  any  other  Person  for  the negligence or misconduct of any agents or attorneys in fact selected by it with reasonable care.        SECTION 11.6      Successor  Administrative  Agent  and  Collateral  Agent; Termination. (a) The Administrative Agent may, upon at least thirty (30) days’ notice to the Servicer,  the  Seller  and  each  Purchaser  Agent,  resign  as  an  Administrative  Agent.  Such resignation shall not become effective until a successor agent (i) is appointed by the Required Purchasers and so long as no Event of Termination has occurred and is continuing, and such assignment is not to an Affiliate of Mizuho, is consented to by the Servicer and the Seller (each such consent not to be unreasonably withheld, conditioned, or delayed), and (ii) has accepted such  appointment.  Upon  such  acceptance  of  its  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 and duties of the Administrative Agent, and such retiring Administrative Agent shall be discharged from its duties and obligations under the Transaction Documents.            (a)   The  Collateral  Agent  may,  upon  at  least  thirty  (30)  days’  notice  to  the       Servicer (on the Seller’s behalf), the Administrative Agent, and each Purchaser Agent,       resign  as  Collateral  Agent.  Such  resignation  shall  not  become  effective  until  (1) a       successor Collateral Agent (i) is appointed by the Required Purchasers and so long as no       Event of Termination has occurred and is continuing, and such assignment is not to an       Affiliate of Mizuho, is consented to by the Servicer and the Seller (each such consent not       to  be  unreasonably  withheld,  conditioned,  or  delayed),  and  (ii) has  accepted  such       appointment, and (2) such successor Collateral Agent has established a new Collateral       Agent’s Account with a depository institution that is an Eligible Bank and the resigning       Collateral Agent  has  transferred  all  amounts  held in its Collateral  Agent’s Account  to       such new Collateral Agent’s Account. Upon such acceptance of its appointment as the       Collateral Agent  hereunder by a successor  Collateral Agent, such successor Collateral       Agent shall succeed to and become vested with all the rights and duties of such retiring       Collateral Agent, and such retiring Collateral Agent shall be discharged from its duties       and obligations under the Transaction Documents.            (b)   If the Collateral Agent (i) is no longer an Eligible Collateral Agent, or (ii) if       the Collateral Agent  breaches  in any material respect any of its obligations under this       Agreement  and such breach is not cured (if capable of being cured) within thirty (30)       days after the Collateral Agent receives notice of such breach from any Purchaser Agent,       the  Required  Purchasers  may,  upon  at  least  ten  (10)  Business  Days’  notice  to  the       Servicer, the Seller, the Collateral Agent, the Administrative Agent, and each Purchaser       Agent, terminate the Collateral Agent and appoint a successor to the Collateral Agent.       Such  termination  shall  not  become  effective  until  a  successor  Collateral  Agent  (i) is       appointed  by  the  Required  Purchasers  and  so  long  as  no  Event  of  Termination  has       occurred  and  is  continuing,  consented  to  by  the  Servicer  and  the  Seller  (each  such       consent not to be unreasonably withheld, conditioned, or delayed), and (ii) has accepted       such  appointment  and  is  made  a  party  to  this  Agreement  and  each  other  Transaction       Document  to  which  the  Collateral  Agent  is  a  party.  Upon  such  acceptance  of  its       appointment  as  the  Collateral  Agent  hereunder  by  a  successor  Collateral  Agent,  such       successor Collateral Agent shall  succeed to and become vested  with all the rights and                                        75 SK 28677 0004 8494650 v1217

 

      duties  of  such  retiring  Collateral  Agent,  and  such  retiring  Collateral  Agent  shall  be       discharged from its duties and obligations under the Transaction Documents.            (c)   The  appointment  and  authorization  of  any  Collateral  Agent  and  the       Administrative Agent under this Agreement shall terminate upon the earlier to occur of       (i) the Final Payout Date, and (ii) the effective date of the replacement of such Collateral       Agent or Administrative Agent, as applicable, with a successor in accordance with this       Section 11.6.        SECTION 11.7      Indemnification. Each  Purchaser  (or  in  the  case  of  a  Conduit Purchaser, the related Purchaser Agent) shall indemnify and hold harmless the Collateral Agent and the Administrative Agent and their respective officers, directors, employees, representatives, and agents (to the extent not reimbursed by the Seller or the Servicer and without limiting the obligation of the Seller or the Servicer to do so), ratably in accordance with its aggregate Pool Limits  from  and  against  any  and  all  liabilities,  obligations,  losses,  damages,  penalties, judgments, settlements, costs, expenses, and disbursements of any kind whatsoever (including in connection  with  any  investigative  or  threatened  proceeding,  whether  or  not  such  Person  is designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Collateral Agent or the Administrative Agent for such Person as a result of, or related to, any of the transactions contemplated by the Transaction Documents or the execution, delivery, or performance  of  the  Transaction  Documents  or  any  other  document  furnished  in  connection therewith.        SECTION 11.8      Reliance, etc. Without limiting the generality of Section 11.1, the Collateral Agent, the Administrative Agent, and each Purchaser Agent: (a) may  consult with legal counsel, independent certified public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants, or experts; (b) makes no warranty or representation to any Purchaser or any other holder of any interest in Pool Receivables and shall not be responsible to any Purchaser or any such other holder for any statements, warranties, or representations made by other Persons in or in connection with any Transaction Document; (c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants, or conditions  of  any  Transaction  Document  on  the  part  of  the  Seller  or  to  inspect  the  property (including the books and records) of the Seller; (d) shall not be responsible to any Purchaser or any  other  holder  of  any  interest  in  Pool  Receivables  for  the  due execution,  legality,  validity, enforceability,  genuineness,  sufficiency,  or  value  of  any  Transaction  Document;  and  (e) shall incur no liability under or in respect of this Agreement or any other Transaction Document by acting upon any notice (including notice by telephone), consent, certificate, or other instrument or writing (which may be by facsimile or telex) believed by it to be genuine and signed or sent by the proper party or parties.        SECTION 11.9      Purchasers and Affiliates. Each of the Purchasers, the Purchaser Agents, the Collateral Agent, the Administrative Agent,  and any of their respective Affiliates may engage in any kind of business with any ADT Entity or any Obligor, any of their respective Affiliates, and any Person who may do business with or own securities of any ADT Entity, any Obligor or any of their respective Affiliates.                                        76

 

      SECTION 11.10     Sharing of Recoveries. Each Purchaser agrees that if it receives any recovery, through set-off, judicial action or otherwise (including pursuant to Section 13.4), on any amount payable or recoverable hereunder in a greater proportion than should have been received  hereunder or  otherwise  inconsistent  with the provisions  hereof,  then the  recipient of such recovery shall purchase for cash an interest in amounts owing to the other Purchasers (as return  of  Investment  or  otherwise),  without  representation  or  warranty  except  for  the representation and warranty that such interest is being sold by each such other Purchaser free and clear of any Lien created or granted by such other Purchaser, in the amount necessary to create proportional participation (based on proportional Investments before giving effect to such recovery) by the Purchaser in such recovery. If all or any portion of such amount is thereafter recovered from the recipient, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.        SECTION 11.11     Non-Reliance. Each Purchaser expressly acknowledges that none of  the  Collateral  Agent,  the  Administrative  Agent,  the  Purchaser  Agents  nor  any  of  their respective  officers,  directors,  members,  partners,  certificateholders,  employees,  agents, attorneys-in-fact, or Affiliates has made any representations or warranties to it and that no act by the  Collateral  Agent,  the  Administrative  Agent,  or  any  Purchaser  Agent  hereafter  taken, including  any  review  of  the  affairs  of  any  ADT  Entity,  shall  be  deemed  to  constitute  any representation or warranty by the Collateral Agent, the Administrative Agent, or any Purchaser Agent.  Each  Purchaser  represents  and  warrants  to  the  Collateral  Agent,  the  Administrative Agent, and each Purchaser Agent that, independently and without reliance upon the Collateral Agent,  the  Administrative Agent,  any  Purchaser  Agent,  or  any  other  Purchaser  and  based on such documents and information as it has deemed appropriate, it has made and will continue to make its own appraisal of and investigation into the business, operations, property, prospects, financial, and other conditions and creditworthiness of any ADT Entity and the Receivables and its own decision to enter into this Agreement and to take, or omit, action under any Transaction Document.  Without  limiting  the  foregoing,  the  Purchasers  and  the  Purchasers  Agents acknowledge and agree that (i) the Administrative Agent has made certain of its own analytics, credit  evaluations,  models  and/or  projections  regarding  the  performance  and  expected performance  of  the  Receivable  Pool  available to  certain  Purchasers  and/or  Purchaser  Agents, (ii) such information was made available to it solely as an accommodation by the Administrative Agent and that it has made its own independent credit analysis and investigation regarding the performance  and  expected  performance  of  the  Receivable  Pool,  and  (iii) the  Administrative Agent  shall  have  no  responsibility  or  liability  for  the  accuracy  or  completeness  of  any  such information.  Except  for  items  specifically  required  to  be  delivered  hereunder,  neither  the Collateral Agent nor the Administrative Agent shall have any duty or responsibility to provide any Purchaser Agent or Purchaser with any information concerning any ADT Entity, or any of their Affiliates that comes into its possession or any of its officers, directors, members, partners, certificateholders, employees, agents, attorneys-in-fact, or Affiliates.                                   ARTICLE XII                                INDEMNIFICATION        SECTION 12.1      Indemnities by the Seller.                                        77 SK 28677 0004 8494650 v1217

 

    (a)   General Indemnity.  Without limiting any other rights which any such Person may  have  hereunder  or  under  applicable  Law,  the Seller  agree  to  indemnify  and  hold harmless the Collateral Agent, the Administrative Agent, each Purchaser, each Purchaser Agent, each other Affected Party, each of their respective Affiliates, and all members, managers, directors, shareholders, officers, employees, and attorneys, or agents of any of the foregoing (each an “Indemnified Party”), forthwith on demand, from and against any and  all  damages,  losses,  claims,  liabilities,  and  related  costs  and  expenses,  including reasonable and documented attorneys’ fees and disbursements (subject to the limitations in respect of attorneys’ fees and disbursements set forth in the proviso to Section 13.6) but excluding Taxes (indemnification for which shall be governed by Section 3.3(e)) (all of  the  foregoing  being  collectively  referred  to  as  “Indemnified  Amounts”)  awarded against or incurred by any of them arising out of, relating to or in connection with this Agreement  or  the  other  Transaction  Documents,  any  of  the  transactions  contemplated hereby or thereby, or the ownership, maintenance or funding, directly or indirectly, of the Pool Receivables or Related Assets (or any portion thereof) or otherwise arising out of or relating to or resulting from the actions or inactions of any ADT Entity, the Servicer or any  of  their  respective  Affiliates,  provided,  however,  notwithstanding  anything  to  the contrary in this Article XII, excluding Indemnified Amounts solely to the extent resulting from  the  fraud,  bad  faith,  gross  negligence  or  willful  misconduct  on  the  part  of  such Indemnified  Party  as  determined  by  a  final  non-appealable  judgment  by  a  court  of competent jurisdiction. Without limiting the generality of the foregoing but subject to the express limitations set forth in this Section 12.1, the Seller shall indemnify and hold harmless  each  Indemnified  Party  for  any  and  all  Indemnified  Amounts  arising  out  of, relating to, or resulting from:                    (i)   the  transfer  by  the  Seller  of  any  interest  in  any  Pool       Receivable or Related Asset;                    (ii)  any representation or warranty made by the Seller under or       in  connection  with  any  Transaction  Document,  any  Purchase  Request,  any       Information Package, or any other information or report delivered by or on behalf       of  the  Seller  pursuant  hereto,  which  shall  have  been  untrue,  false,  or incorrect       when made or deemed made;                    (iii) the failure  of  the Seller  to  comply  with  the  terms  of  any       Transaction Document, any applicable Law any Contract, any Pool Receivable, or       Related Assets or the nonconformity of any Contract, Pool Receivable, or Related       Assets with any such Law;                    (iv)  the  failure  to  vest  in  favor  of  the  Collateral  Agent  of  an       enforceable  perfected  ownership  interest,  or  a  first  priority  perfected  security       interest,  in  any  Pool  Receivables  and  all  Related  Assets  against  all  Persons       including any bankruptcy trustee or similar Person;                    (v)   the  failure  to  file,  or  any  delay  in  filing  of,  financing       statements  or  other  similar  instruments  or  documents  under  the  UCC  of  any                                  78

 

            applicable  jurisdiction  or  under  any  other  applicable  Laws  with  respect  to  any             Pool Receivable whether at the time of any Purchase or at any time thereafter;                          (vi)  any  suit  or  claim  related  to  the  Pool  Receivables  or  any             Transaction Document (including any products liability or environmental liability             claim arising out of or in connection with merchandise or services that are the             subject of any Pool Receivable);                          (vii) failure  by  the  Seller  to  comply  with  the  “bulk  sales”  or             analogous Laws of any jurisdiction;                          (viii) any  loss  arising,  directly  or  indirectly,  as  a  result  of  the             imposition of sales or similar transfer type taxes or the failure  by the Seller to             timely collect and remit to the appropriate authority any such taxes;                          (ix)  any commingling  of any Collections  of Pool Receivables             with any other funds;                          (x)   the failure or delay to provide any Obligor with an invoice             or other evidence of indebtedness;                          (xi)  any  failure  of  the  Seller,  or  ADT  to  assign  any  Pool             Receivable or Related Asset as contemplated under the Transaction Documents;             or the violation or breach by any ADT Entity of any confidentiality provision, or             of any similar covenant of non-disclosure, with respect to any Contract, or any             other Indemnified Amount payable hereunder with respect to or resulting from             any such violation or breach;                          (xii) the existence or assertion of any Adverse Claim in favor of             any Governmental Authority or any other Person against any Omnibus Account,             Collection  Account,  Lock-box,  Lock-box  Account,  Collections,  Receivable,             Service Charge Receivable, or any  related  Contract or any portion or proceeds             thereof,  including,  without  limitation,  as  a  result  of  any  portion  of  any  such             Omnibus  Account,  Collection  Account,  Lock-box,  Lock-box  Account,             Collections,  Receivable,  Service  Charge  Receivable,  or  any  related  Contract             being attributable to governmental fees, surcharges, or taxes;                          (xiii) any  Pool  Receivable  failing  to  constitute  an  Eligible             Receivable;                          (xiv) any dispute, claim, offset or defense (other than discharge             in  bankruptcy  of  the  Obligor)  of  the  Obligor  to  the  payment  of  any  Pool             Receivable in,  or purporting  to  be  in, the Receivables Pool (including, without             limitation, a defense based on such Receivable or the related Contract not being a             legal,  valid  and  binding  obligation  of  such  Obligor  enforceable  against  it  in             accordance  with  its  terms),  or  any  other  claim  resulting  from  the  sale  of  the             merchandise or services related to such Receivable or the furnishing or failure to                                        79 SK 28677 0004 8494650 v1217

 

            furnish  such  merchandise  or  services  or  relating  to  collection  activities  with             respect to such Pool Receivable;                          (xv)  any  investigation,  litigation  or  proceeding  related  to  any             Transaction Document or the use of proceeds, of Purchases or the ownership of             Pool Receivables or the Related Assets;                          (xvi) any claim brought by any Person other than an Indemnified             Party  arising  from  any  activity  by  the  Seller  or  any  Affiliate  of  the  Seller  in             servicing, administering or collecting any Receivable;                          (xvii) the  facts  or  circumstances  giving  rise  to  any  Event  of             Termination or Unmatured Event of Termination; or                          (xviii) any  inability  to  litigate  any  claim  against  any  Obligor  in             respect of any Pool Receivable as a result of such Obligor being immune from             civil  and  commercial  law  and  suit  on  the  grounds  of  sovereignty  or  otherwise             from any legal action, suit or proceeding.            (b)   Contribution. If for any reason the indemnification provided above in this       Section  12.1  is  unavailable  to  an  Indemnified  Party  or  is  insufficient  to  hold  an       Indemnified  Party  harmless,  then  the  Seller  shall  contribute  to  the  amount  paid  or       payable by such Indemnified Party as a result of such loss, claim, damage, or liability in       such proportion as is appropriate to reflect not only the relative benefits received by such       Indemnified Party on the one hand and the Seller on the other hand but also the relative       fault of such Indemnified Party as well as any other relevant equitable considerations.            (c)   For the avoidance of doubt, there shall be no recourse to the Servicer for the       Seller’s  indemnification  obligations  under  this Section  12.1  other  than  to  the  extent       expressly provided for in this Agreement or in any other Transaction Document.        SECTION 12.2      Indemnities by ADT and the Servicer. Without limiting any other rights which any such Person may have hereunder or under applicable Law, each of ADT and the  Servicer  agree  to  indemnify  and  hold  harmless  each  Indemnified  Party  from  any  and  all Indemnified Amounts incurred by any of them and arising out of, relating to or resulting from: (i) any breach by it (in any capacity) of any of its obligations or duties under this Agreement or any other Transaction Document; (ii) the untruth or inaccuracy of any representation or warranty made by it (in any capacity) hereunder or under any other Transaction Document; (iii) the failure of any information contained in any Purchase Request or Information Package to be true and correct, or the failure of any other information provided to any such Indemnified Party by, or on behalf of, the Servicer (in any capacity) to be true and correct; (iv) any negligence or willful misconduct  on  its  part  (in  any  capacity)  arising  out  of,  relating  to,  in  connection  with,  or affecting any transaction contemplated by the Transaction Documents, any Contract, any Pool Receivable  or  any  Related  Asset;  (v) the  failure  by  it  (in  any  capacity)  to  comply  with  any applicable Law, rule, or regulation with respect to any Pool Receivable or the related Contract or its servicing thereof; (vi) any commingling of any funds by it (in any capacity) relating to any Pool  Receivables  or  Related  Assets  with  any  of  its  funds  or  the  funds  of  any  other  Person;                                        80

 

(vii) the  failure  or  delay  to  provide  any  Obligor  with  an  invoice  or  other  evidence  of indebtedness; (viii) any failure of the Seller or it to assign any Pool Receivable or Related Asset purported to be assigned as contemplated under the Transaction Documents, or the violation or breach by any ADT Entity of any confidentiality provision, or of any similar covenant of non- disclosure, with respect to any Contract, or any other Indemnified Amount payable hereunder with respect to or resulting from any such violation or breach; (ix) the existence or assertion of any  Adverse  Claim  in  favor of  any  Governmental  Authority  or  any  other  Person  against  any Omnibus Account, Collection Account, Lock-box, Lock-box Account, Collections, Receivable, Service  Charge  Receivable,  or  any  related  Contract,  or  any  portion  or  proceeds  thereof, including, without limitation, as a result of any portion of such Omnibus Account, Collection Account, Lock-box, Lock-box Account, Collections, Receivable, Service Charge Receivable, or any  related  Contract  being  attributable  to  governmental  fees,  surcharges,  or  taxes  and  (x) Mizuho’s entry into the Payment Direction with respect to the Omnibus Account and the Control Agreement  with  respect  to  the  Reserve  Account,  and  the  arrangements  and  transactions contemplated  thereby;  provided,  however,  notwithstanding  anything  to  the  contrary  in  this Article XII, excluding Indemnified Amounts solely to the extent (w) resulting from the fraud, bad  faith,  gross  negligence  or  willful  misconduct  on  the  part  of  such  Indemnified  Party  as determined by a final non-appealable judgment by a court of competent jurisdiction, (x) resulting from the uncollectability of any such Pool Receivables not arising from any action or breach of any  ADT  entity, (y)  they  constitute recourse  with respect  to  a Pool  Receivable by  reason of bankruptcy or insolvency, or the financial or credit condition or financial default, of the related Obligor, or (z) constitute special, indirect, consequential, or punitive damages.                                   ARTICLE XIII                                MISCELLANEOUS        SECTION 13.1      Amendments, Etc.            (a)   No amendment, modification, or waiver of any provision of this Agreement       or  consent  to  any  departure  by  the  Seller  or  ADT  therefrom  shall  in  any  event  be       effective unless the same shall be in writing and signed by the Seller, ADT, the Collateral       Agent, the Administrative Agent, and the Required Purchasers, and then such waiver or       consent shall be effective only in the specific instance and for the specific purpose for       which given; provided, however, that no such amendment, waiver, or modification shall       (i) decrease  the  outstanding  amount  of,  or  extend  the  repayment  of  or  any  scheduled       payment date for the payment of, any Yield in respect of the Purchasers’ Pool Investment       or any Fees owed  to any Purchaser, the Collateral  Agent, any Purchaser Agent or the       Administrative  Agent  without  the  prior  written  consent  of  such  Person;  (ii) forgive  or       waive or otherwise excuse any repayment of the Purchasers’ Pool Investment without the       prior written consent of each Purchaser and the related Purchaser Agent affected thereby;       (iii) increase  the  Purchase  Group  Limit  in  respect  of  any  Purchaser  Group  without  its       prior  written  consent;  (iv) amend  or modify  the provisions of this  Section 13.1, or the       definition  of  “Acceleration  Date”,  “Delinquent  Receivable”,  “Defaulted  Receivable”,       “Eligible  Receivable”,  “Event  of  Termination”,  “Unmatured  Event  of  Termination”,       “Required  Purchasers”,  “Net  Portfolio  Balance”,  “Purchase  Termination  Date”  (other       than  pursuant  to  an  extension  thereof  in  accordance  with  Section  3.5),  “Required                                        81 SK 28677 0004 8494650 v1217

 

      Reserves”, “Yield Period” or “Settlement Period” (or any of the definitions used in any       such  preceding  definition  in  a  manner  that  would  circumvent  the  intention  of  the       restrictions set forth in this Section 13.1), in each case, without the prior written consent       of each Purchaser and Purchaser Agent, or (v) release all or any material part of the Pool       Receivables  or  Related  Assets  from  the  security  interest  granted  by  the  Seller  to  the       Collateral  Agent  hereunder  without  the  prior  written  consent  of  each  Purchaser  and       Purchaser Agent; provided, further, that the consent of ADT and the Seller shall not be       required for the effectiveness of any amendment which modifies on a prospective basis,       the representations, warranties, covenants, or responsibilities of the Servicer at any time       when the Servicer is not an Affiliate of ADT or the fees and expenses payable to any       such Servicer. Notwithstanding anything in any Transaction Document to the contrary,       none  of  the  Seller  or  ADT  shall  amend,  waive,  or  otherwise  modify  any  other       Transaction Document, or consent to any such amendment or modification, without the       prior written consent of the Collateral Agent, the Administrative Agent, and the Required       Purchasers.            (b)   To the extent that the Seller and ADT consent to an Initial Syndication, and it       or any other assignment is to a Conduit Purchaser, the parties hereto agree to negotiate in       good faith to amend or amend and restate this Agreement to reflect prevailing terms in       receivables  financing  transactions  which  include  Conduit  Purchasers;  provided,  that       nothing in this Section 13.1(b) shall require any party to this Agreement to consent to an       amendment that adversely affects such party in any significant manner.        SECTION 13.2      Notices, Etc. All notices and other communications provided for hereunder  shall,  unless  otherwise  stated  herein,  be  in  writing  (including  facsimile  and  email communication)  and  shall  be  personally  delivered  or  sent  by  express  mail  or  nationally recognized overnight courier or by certified mail, first class postage prepaid, or by facsimile or email, to the intended party at the address, facsimile number, or email address of such party set forth  in Schedule  I  or  at  such  other  address,  facsimile  number,  or  email  address  as  shall  be designated by such party in a written notice to the other parties hereto. All such notices and communications shall be effective, (a) if personally delivered or sent by express mail or courier or if sent by certified mail, when received, and (b) if transmitted by facsimile or email, when receipt is confirmed by telephonic or electronic means.        SECTION 13.3      Successors and Assigns; Participations; Assignments.            (a)   Successors and Assigns. This Agreement shall be binding upon and inure to       the benefit of the parties hereto and their respective successors and assigns. Except as       otherwise provided herein, the Seller and ADT may not assign or transfer any of their       rights  or  delegate  any  of  their  duties  hereunder  or  under  any  Transaction  Document       without  the  prior  consent  of  the  Collateral  Agent,  the  Administrative  Agent  and  each       Purchaser Agent.            (b)   Participations.  Any  Purchaser  may  sell  to  one  or  more  Persons  (each  a       “Participant”)  participating  interests  in  the  interests  of  such  Purchaser  hereunder;       provided,  however,  that  no  Purchaser  shall  grant  any  participation  under  which  the       Participant shall have rights to approve any amendment, waiver or other modification of                                        82

 

      this Agreement or any other Transaction Document. Such Purchaser shall remain solely       responsible for performing its obligations hereunder, and the Seller, ADT, the Servicer,       the Collateral Agent, each Purchaser Agent, each other Purchaser and the Administrative       Agent shall continue to deal solely and directly with such Purchaser in connection with       such Purchaser’s rights and obligations hereunder. Each Participant shall be subject to       the requirements under Section 3.3(e)(v) as if such Participant were a Purchaser, it being       understood that the documentation required under such section shall be delivered to the       participating Purchaser. A Purchaser shall not agree with a Participant to restrict such       Purchaser’s right to agree to any amendment hereto, except amendments that require the       consent  of  all  Purchasers  or  all  Purchaser  Agents.  Each  Purchaser  that  sells  a       participation shall, acting solely for this purpose as a non-fiduciary agent of the Seller,       maintain a register on which it enters the name and address of each Participant and the       Purchases  (and  Yield,  fees,  and  other  similar  amounts  under  this  Agreement)  of  each       Participant’s interest in the interests of such Purchaser under the Transaction Documents       (the  “Participant  Register”);  provided  that  no  Purchaser  shall  have  any  obligation  to       disclose  all  or  any  portion  of  the  Participant  Register  (including  the  identity  of  any       Participant or any information relating to a Participant’s interest in any Pool Receivables       or Related Assets or other obligations under any Transaction Document) to any Person       except  to the extent  that such  disclosure is necessary  to establish  that  such interest  or       other  obligation  is  in  registered  form  under  Section  5f.103-1(c)  of  the  United  States       Treasury Regulations. The entries in the Participant Register shall be conclusive absent       manifest error, and such Purchaser shall treat each Person whose name is recorded in the       Participant Register as the owner of such participation for all purposes of this Agreement       notwithstanding  any  notice  to  the  contrary.  For  the  avoidance  of  doubt,  neither  the       Collateral Agent nor the Administrative Agent (in its capacity as Administrative Agent)       shall have any responsibility for maintaining a Participant Register.            (c)   Assignment  by  Conduit  Purchasers.  This  Agreement  and  each  Conduit       Purchaser’s rights and obligations under this Agreement (including its interest in the Pool       Receivables  or  Related  Assets)  or  any  other  Transaction  Document  shall  be  freely       assignable  in  whole  or  in  part  by  such  Conduit  Purchaser  and  its  successors  and       permitted assigns to any Eligible Assignee without the consent of ADT, the Servicer or       the Seller except to the extent such consent may be required solely in accordance with       clause (iv) of the definition of Eligible Assignee. Each assignor of all or a portion of its       interest in the Pool Receivables or Related Assets shall notify the Collateral Agent, the       Administrative Agent, each Purchaser Agent, and ADT (on its and the Seller’s behalf) of       any  such  assignment.  Each  assignor  of  all  or  a  portion  of  its  interest  in  the  Pool       Receivables or Related Assets may, in connection with such assignment and subject to       Section 13.8, disclose to the assignee any information relating to the Pool Receivables or       Related Assets, furnished to such assignor by or on behalf of the Seller, the Servicer, the       Collateral Agent, or the Administrative Agent.  Furthermore, notwithstanding anything to       the contrary set forth herein (other than Section 13.3(f)), each Conduit Purchaser may at       any time pledge, grant a security interest in, or otherwise transfer all or any portion of its       interest in the Pool Receivables or Related Assets or under this Agreement to a Collateral       Trustee, in each case without notice to or the consent of any other party hereto, but such       pledge, grant, or transfer shall not relieve any Person from its obligations hereunder.                                        83 SK 28677 0004 8494650 v1217

 

    (d)   Assignment  by  Non-Conduit  Purchasers.  Each  Purchaser  which  does  not constitute a Conduit Purchaser may freely assign to any Eligible Assignee without the consent of the Seller, ADT or the Servicer except as required pursuant to clause (iv) of the definition of Eligible Assignee all or a portion of its rights and obligations under this Agreement  or  in  any  other  Transaction  Document  (including  all  or  a  portion  of  its interest  in  the  Pool  Receivables  or  Related  Assets)  in  each  case,  with  prior  written consent  (such  consent  not  to  be  unreasonably  withheld)  of  the  Collateral  Agent,  the Administrative  Agent,  the  related  Purchaser  Agent  and  with  prior  written  notice  to Servicer  (on  its  and  the  Sellers’  behalf);  provided,  however,  the  parties  to  each  such assignment (other than an assignment described in clause (B) above) shall execute and deliver to the Collateral Agent, the Administrative Agent, each Purchaser Agent and the Servicer (on its and the Seller’s behalf), for its recording in the Register, a duly executed and enforceable joinder to this Agreement in substantially the form of Exhibit F hereto (“Joinder”).        From and after the effective date specified in such Joinder, (x) the assignee thereunder shall be a party to this Agreement and, to the extent that rights and obligations under this Agreement have been assigned to it pursuant to such Joinder, have the rights of a Purchaser thereunder and (y) the assigning Purchaser shall, to the extent that rights and obligations have been assigned by it pursuant to such Joinder, relinquish such rights and be released from such obligations under this Agreement.  In addition, any Purchaser that constitutes a banking institution may assign all or any portion of its rights (including its interest in the Pool Receivables or Related Assets) under this Agreement to any Federal Reserve Bank or any central bank having jurisdiction over such Purchaser without notice to or consent of the Seller, the Servicer, any other Purchaser, the Collateral Agent, or the Administrative Agent.        Notwithstanding anything to the contrary in this Section 13.3, but subject to Section 13.1(b), the Initial Syndication shall require the prior written consent of the Seller and ADT, which may be withheld in their sole respective discretions.      (e)   Register.                    (i)   The Administrative Agent (on behalf of the Sellers) shall in       respect of the Receivable Pool maintain a register for the recordation of the names       and addresses of the Purchasers,  and  the  Purchases (and  Yield, fees, and other       similar amounts under this Agreement) pursuant to the terms hereof from time to       time  (the  “Register”).  The  entries  in  the  Register  shall  be  conclusive  absent       manifest  error,  and  the  Seller,  the  Servicer,  the  Administrative  Agent,  the       Collateral Agent, and the Purchasers shall be entitled to conclusively rely on the       information contained in the Register for all purposes hereunder (including with       respect to the identities of the Purchasers and the amount of their Investment) and       otherwise treat each Person whose name is recorded in the Register pursuant to       the terms hereof as a Purchaser for all  purposes hereunder and under the other       Transaction  Documents.  The  Register  shall  be  available  for  inspection  by  the                                   84

 

            Seller, the Servicer and any Purchaser, at any reasonable time and from time to             time upon reasonable prior notice.                          (ii)  The  Administrative  Agent  shall  also  maintain  in  the             Register each assignee’s interest or obligations under the Transaction Documents             with respect to each assignment pursuant to Section 13.3(c) or 13.3(d) and shall             record such assignment upon notice from the applicable Purchaser.  The entries in             the Register shall be conclusive absent manifest error.            (f)   Status of Receivables. Notwithstanding the foregoing, unless disposed of or       assigned  by  the  Servicer  or  the  Collateral  Agent  in  accordance  with  the  terms  of  this       Agreement  (including  pursuant  to Section  10.2),  each  Purchaser’s  interest  in  the  Pool       Receivables or Related Assets shall remain subject to the provisions of this Agreement,       including the provisions relating to the re-conveyance of Receivables to the Seller or the       Servicer, notwithstanding any sale or assignment of such interest by such Purchaser.            (g)   Status of Conduit Purchasers. So long as any Conduit Purchaser holds any       Investment,  such  Conduit  Purchaser  shall  be  a  multi-seller  asset-backed  commercial       paper conduit.        SECTION 13.4      No  Waiver;  Remedies;  Set-Off.  No  failure on  the part of the Collateral Agent, the Administrative Agent, any Liquidity Provider, any Enhancement Provider, any Affected Party, any Purchaser, any Purchaser Agent, or any Indemnified Party to exercise, and  no  delay  in  exercising,  any  right,  power,  or  remedy  hereunder  shall  operate  as  a  waiver thereof;  nor  shall  any  single  or  partial  exercise  of  any  right,  power,  or  remedy  hereunder preclude  any  other  or  further  exercise  thereof  or  the  exercise  of  any  other  right,  power,  or remedy.  The rights and remedies herein provided are cumulative and not exclusive of any rights, or  remedies  provided  by  Law.  Any  waiver  of  this  Agreement  shall  be  effective  only  in  the specific instance and for the specific purpose for which given. Without limiting the foregoing, each  Purchaser,  each  Purchaser  Agent,  the  Administrative  Agent,  the  Collateral  Agent,  each Enhancement Provider, each Liquidity Provider, each Affected Party, and any of their Affiliates (each  a “Set-off  Party”) are  each  hereby  authorized  at  any  time  during  the  continuance  of an Event of Termination, (in addition to any other rights it may have) to setoff, appropriate, and apply (without presentment, demand, protest, or (subject to the last sentence hereof) any other notice, each of which are hereby expressly waived) any deposits and any other indebtedness held or owing by such Set-off Party (including by any branches or agencies of such Set-off Party) to, or for the account of,  any  ADT Entity  against amounts owing by any ADT Entity under this Agreement  or  the  other  Transaction  Documents  (even  if  contingent  or  unmatured).  For  the avoidance of doubt, the applicable Set-off Party shall not set off against any deposits of ADT with respect to any obligations of the Seller or against the Seller for any obligations of ADT. Each  Set-off  Party  (or  its  related  Purchaser  Agent,  if  applicable)  shall  promptly  notify  the Administrative Agent, the Collateral Agent, each Purchaser Agent, the Seller and the Servicer of its  exercise  of  set-off  rights  pursuant  to  this Section  13.4,  which  notice  shall  specify  (i) the amount of the Obligations setoff, (ii) whether such Obligations constitute Seller Obligations or ADT Obligations, (iii) if the setoff was against amounts payable to any ADT Entity (other than                                         85 SK 28677 0004 8494650 v1217

 

the Seller), the type of ADT Obligation to which such setoff relates, and (iv) the effective date of such setoff.              Following the Administrative Agent’s receipt of any such notice from a Set-off       Party  (or  its  related  Purchaser  Agent,  if  applicable)  in  respect  of  an  ADT  Obligation       which  had  been  setoff,  the  Administrative  Agent  shall,  if  it  had  received  a  Demand       Collection  in  respect  of  such  ADT  Obligation,  make  appropriate  adjustments  to  the       amounts distributable by it pursuant to Section 3.3(a) to reflect such setoff to the extent       that  such  ADT  Obligation  Payments  were  not  previously  applied  pursuant  to Section       3.3(a).              Following the Collateral Agent’s receipt of any such notice from a Set-off Party       (or its related Purchaser Agent, if applicable) in respect of a Seller Obligation which had       been  setoff,  the  Collateral  Agent  shall  make  appropriate  adjustments  to  the  amounts       allocated and distributed pursuant to Section 3.1(d) to reflect such setoff of such Seller       Obligation  by  such  Set-off  Party;  provided  that  the  Collateral  Agent  shall  have  no       obligation  to  make any  such adjustment  in  respect  of a Settlement  Date unless,  it  has       received the applicable notice of setoff on or prior to the Reporting Date immediately       preceding such Settlement Date.  For purposes of the above adjustments by the Collateral       Agent,  all  setoff,  effected  by  a Set-off  Party  shall  be  deemed to  have  been  applied to       Seller Obligations in the reverse order of application of the Seller Obligations as set forth       in Section 3.1(d).        SECTION 13.5      Binding Effect; Survival.            (a)   This Agreement shall be binding upon and inure to the benefit of the Seller,       ADT, the Servicer, the Collateral Agent, the Administrative Agent, each Purchaser, and       the provisions of Section 4.2 and Article XII shall inure to the benefit of the Affected       Parties and Indemnified Parties, respectively, and their respective successors and assigns.            (b)   Each  Liquidity  Provider,  each  Enhancement  Provider,  and  each  other       Affected  Party  are  express  third  party  beneficiaries  hereof.  Subject  to clause  (i)  of       Section B of Appendix A hereto, this Agreement shall not confer any rights or remedies       upon any other Person, other than the third party beneficiaries specified in this Section       13.5(b).            (c)   This Agreement shall create and constitute the continuing obligations of the       parties hereto in accordance with its terms, and shall remain in full force and effect until       the  Final  Payout  Date.  The  rights  and  remedies  with  respect  to  any  breach  of  any       representation  and  warranty  made  by  the  Seller  pursuant  to  Article  VI  and  the       indemnification and payment provisions of Article XII and Sections 1.2(e), 3.2, 3.3, 4.1,       4.2, 4.3, 11.7, 13.4, 13.5, 13.6, 13.7, 13.8, 13.11, 13.12, 13.13,  and 13.16  shall  be       continuing and shall survive any termination of this Agreement.        SECTION 13.6      Costs  and  Expenses.  The  Seller  shall  promptly  pay,  (x) on  the Closing Date, with respect to all such costs and expenses incurred on or prior to the Closing Date and  for  which  invoices  have  been  provided  reasonably  prior  to  the  Closing  Date  and  (y) by                                        86

 

remittance to the Collateral Agent’s Account within three (3) Business Days of demand, with respect to all other such costs and expenses, all reasonable and documented out-of-pocket costs and expenses incurred by or on behalf of the Collateral Agent, the Administrative Agent, each Purchaser and each Purchaser Agent in connection with:            (a)   the negotiation, preparation, execution, and delivery of this Agreement and       the other Transaction Documents and any amendment of or consent or waiver under any       of the Transaction Documents (whether or not consummated), or the enforcement of, or       any  actual  or  claimed  breach  of,  this  Agreement  or  any  of  the  other  Transaction       Documents including reasonable and documented accountants’, auditors’, consultants’,       and  attorneys’  fees  and  expenses  to  any  of  such  Persons  and  the  reasonable  and       documented fees and charges of any nationally recognized statistical rating agency or any       independent  accountants,  auditors,  consultants,  or  other  agents  incurred  in  connection       with any of the foregoing or in advising such Persons as to their respective rights and       remedies  under  any  of  the  Transaction  Documents  in  connection  with  any  of  the       foregoing; and            (b)   subject  only  to  the  limitations  in Sections  7.1(c)  and 7.4(c),  the       administration (including periodic auditing and inspections as provided for herein) of this       Agreement  and  the  other  Transaction  Documents  and  the  transactions  contemplated       thereby,  including  all  reasonable  and  documented  expenses  and  accountants’,       consultants’,  and  attorneys’  fees  incurred  in  connection  with  the  administration  and       maintenance  of  this  Agreement  and  the  other  Transaction  Documents  and  the       transactions contemplated thereby;        provided, that so long as no Unmatured Event of Termination or Event of Termination       has  occurred  and  remains  continuing,  the  Seller’  obligation  to  pay  the reasonable and       documented  attorneys’  fees  and  expenses  incurred  by  the  Collateral  Agent,  the       Administrative Agent, the Purchasers and the Purchaser Agents shall be limited to paying       the reasonable and documented fees and expenses of two (one if the Collateral Agent and       the Administrative Agent are Affiliates or the same Person) law firms, each one selected       by  the  Collateral  Agent  and  the  Administrative Agent  in  its  sole  discretion;  provided,       however,  that  such  limitation  shall  not  be  applicable  in  respect  of  any  Person  if  such       limitation on representation would be inappropriate due to an actual or potential conflict       of interest between the Collateral Agent, the Administrative Agent, any Purchaser Agent       or  any  Purchaser,  including  situations  in  which  there  are  one  or  more  legal  defenses       available to one such Person that are different from or additional to those available to any       other such Person; provided, further, that, for the avoidance of doubt, no limitation on the       reasonable  and  documented  attorneys’  fees  and  expenses  incurred  by  the  Collateral       Agent,  the  Administrative  Agent,  any  Purchaser,  or  any  Purchaser  Agent  during  the       continuance  of  an  Unmatured  Event  of  Termination  or  Event  of  Termination  shall  be       applicable even if such event subsequently ceases to be continuing.        SECTION 13.7      No Proceedings; Limited Recourse.            (a)   The  Seller,  ADT,  the  Servicer,  the  Collateral  Agent,  the  Administrative       Agent,  each  Purchaser,  and  each  Purchaser  Agent,  each  hereby  agrees  that  it  will  not                                        87 SK 28677 0004 8494650 v1217

 

institute against any Conduit Purchaser, or join any other Person in instituting against any Conduit Purchaser, any proceeding of the type referred to in the definition of Event of Bankruptcy from the Closing Date until one year plus one day following the last day on which all Commercial Paper Notes and other publicly or privately placed indebtedness of such Conduit Purchaser shall have been indefeasibly paid in full.  The foregoing shall not limit  any  such  Person’s  right  to  file  any  claim  in  or  otherwise  take  any  action  with respect to any insolvency proceeding that was instituted by any Person other than such parties.      (b)   The  Servicer,  ADT,  the  Collateral  Agent,  the  Administrative  Agent,  each Purchaser,  and  each  Purchaser  Agent,  each  hereby  agrees,  and  each  Affected  Party, Indemnified Party, Set-off Party and each other Person (other than the Seller) obtaining any benefits from this Agreement and the Transaction Documents, by its acceptance of such benefits, shall be deemed to have agreed, that it will not institute against the Seller, or  join  any  other  Person  in  instituting  against  the  Seller,  any  proceeding  of  the  type referred to in the definition of Event of Bankruptcy. The foregoing shall not limit the right of any such Person (each, a “Seller Creditor”) right to file any claim in or otherwise take  any  action  with  respect  to  any  insolvency  proceeding  that  was  instituted  by  any Person  other  than  such  Seller  Creditor,  to  the  extent  such  Seller  Creditor  has  not otherwise caused the institution of such proceeding. All claims against the Seller of any Seller Creditor that has instituted or has caused the institution of such a proceeding shall be subordinated to the claims of each Seller Creditor that has not instituted or caused the institution  of  such  a  proceeding,  and  the  foregoing  agreement  shall  constitute  a “subordination agreement” within the meaning of Section 510 of the Bankruptcy Code. Notwithstanding anything to the contrary contained herein or in any other Transaction Document,  the  obligations  of  the  Seller  hereunder  and  thereunder  are  solely  the obligations of the Seller, payable solely from the Seller’s own assets.      (c)   Notwithstanding anything to the contrary contained herein, the obligations of any Conduit Purchaser under this Agreement are solely the obligations of such Conduit Purchaser and shall be payable at such time as funds are received by or are available to such  Conduit  Purchaser  in  excess  of  funds  necessary  to  pay  in  full  all  outstanding Commercial  Paper  Notes  of such  Conduit  Purchaser  and,  if applicable,  all  obligations and liabilities of such Conduit Purchaser to any related Commercial Paper Note issuer, and,  to  the  extent  funds  are  not  available  to  pay  such  obligations,  the  claims  relating thereto shall not constitute a claim against such Conduit Purchaser but shall continue to accrue. Each party hereto agrees that the payment of any claim (as defined in Section 101 of Title 11, of the Bankruptcy Code) of any such party shall be subordinated to the payment in full of all Commercial Paper Notes; provided, however, that each party hereto agrees  that  for  purposes  of  this  Section  13.7(c),  a  Conduit  Purchaser  does  not  own  a direct interest in the Pool Receivables, the Related Assets, Collections and the proceeds therefrom,  but  only  a  right  to  the  amounts  set  forth  as  payable  to  it  herein,  and accordingly this Section 13.7(c) does not contemplate that amounts payable to the Seller or  Servicers  from  the  proceeds  of  Pool  Receivables  and  Related  Assets,  including                                   88

 

      Collections, all as set forth herein, would be subordinated to the payment of a Conduit       Purchaser’s Commercial Paper Notes.            (d)   No  recourse  under  any  obligation,  covenant  or  agreement  of  any  Conduit       Purchaser  contained  in  this  Agreement  shall  be  had  against  any  member,  manager,       officer, director, employee or agent of such Conduit Purchaser or any of their Affiliates       (solely by virtue of such capacity) by the enforcement of any assessment or by any legal       or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed       and understood  that  this  Agreement  is  solely an obligation  of each Conduit Purchaser       individually, and that no personal liability whatever shall attach to or be incurred by any       incorporator, stockholder, officer, director, member, employee or agent of any Conduit       Purchaser or any of their Affiliates (solely by virtue of such capacity) or any of them       under or by reason of any of the obligations, covenants or agreements of such Conduit       Purchaser  contained  in  this  Agreement,  or  implied  therefrom,  and  that  any  and  all       personal  liability  for  breaches  by  any  Conduit  Purchaser  of  any  of  such  obligations,       covenants  or  agreements,  either  at  common  law  or  at  equity,  or  by  statute,  rule  or       regulation,  of  every  such  member,  manager,  officer,  director,  employee  or  agent  is       hereby expressly waived as a condition of and in consideration for the execution of this       Agreement;  provided  that  the  foregoing  shall  not  relieve  any  such  Person  from  any       liability it might otherwise have as a result of fraudulent actions taken or omissions made       by them.            (e)   Except as expressly provided in any Transaction Document, no recourse shall       be had for the payment of any amount owing by the Seller in respect of this Agreement       or the other Transaction Documents or for the payment of any fee hereunder or for any       other  obligation  or  claim  arising  out  of  or  based  upon  this  Agreement  against  the       Servicer, any other ADT Entity or any Affiliate of any of the foregoing (other than the       Seller), or any stockholder, employee, officer, director, incorporator or beneficial owner       of any of the foregoing; provided, however, that the foregoing shall not in any manner       affect, limit or waive any of the obligations of the Servicer, any other ADT Entity or any       Affiliate  of  any  of  the  foregoing  that  such  Person  may  have  under  any  Transaction       Document.        SECTION 13.8      Confidentiality.            (a)   Each party hereto acknowledges that the Collateral Agent, the Administrative       Agent, each Purchaser, and each Purchaser Agent regards the terms of the transactions       contemplated by this Agreement to be proprietary and confidential, and each such party       severally agrees that:                          (i)   it  will  not  disclose  without  the  prior  consent  of  the             Collateral Agent, the Administrative Agent (other than to its Collateral Trustee (if             any), and its and its Affiliates’ directors, officers, employees, agents, accountants,             auditors, and counsel or other advisors (collectively,  “representatives”) of such             party, each of whom shall be informed by such party of the confidential nature of             the Program Information (as defined below) and of the terms of this Section 13.8),             (1) any information regarding the pricing terms in, or copies of, this Agreement,                                        89 SK 28677 0004 8494650 v1217

 

any  other  Transaction  Document  or  any  transaction  contemplated  hereby  or thereby, (2) any information regarding the organization, business, or operations of any Purchaser generally or the services performed by the Collateral Agent or the Administrative  Agent  for  any  Purchaser,  or  (3) any  information  which  is furnished by the Collateral Agent or the Administrative Agent to such party and is designated by the Collateral Agent or the Administrative Agent to such party in writing as confidential (the information referred to in clauses (1), (2), and (3) is collectively referred to as the “Program Information”); provided that such party may  disclose  any  such  Program  Information:  (A) to  any  other  party  to  this Agreement  (and  any  representatives  so  long  as  they  are  informed  that  such information is confidential and agree to keep such information confidential) for the purposes contemplated hereby, (B) to the extent requested by any regulatory authority  or  by  applicable  Laws,  (C) as may be required by any Governmental Authority  having  jurisdiction  over  such  party,  (x) in  order  to  comply  with  any Law applicable to such party or (y) subject to subsection (c), in the event such party is legally compelled (by interrogatories, requests for information or copies, subpoena,  civil  investigative  demand,  or  similar  process) to  disclose  any  such Program  Information,  (D) to  any  permitted  assignee  of  such  party’s  rights  and obligations hereunder to the extent they agree to be bound by this Section 13.8, (E) in connection with the exercise of any remedies hereunder or any suit, action, or proceeding relating to this Agreement or the enforcement of rights hereunder, or (F) to any nationally recognized statistical rating organization as contemplated by Section 17g-5 of the 1934 Act or in connection with obtaining or monitoring a rating  on  any  Commercial  Paper  Notes,  or  (G) in  connection  with  filings (including exhibit filings) required under the 1934 Act, as reasonably determined by the applicable filing party to be necessary or appropriate for the purposes of complying with applicable Law;              (ii)  it, and any Person to which it discloses such information, will  use  the  Program  Information  solely  for  the  purposes  of  evaluating, administering,  performing  and  enforcing  the  transactions  contemplated  by  this Agreement and making any necessary business judgments with respect thereto; and              (iii) it, and any Person to which it discloses such information, will, upon written demand from the Collateral Agent or the Administrative Agent, return (and cause each of its representatives to return) to the Collateral Agent or the  Administrative  Agent or  destroy (whether  to return or destroy  being in the sole discretion  of such party), all documents or other written material received from  the  Collateral  Agent  or  the  Administrative  Agent,  as  the  case  may  be, pursuant to clauses (2) or (3) of subsection (i) above and all copies thereof made by such party which contain all Program Information; provided however that it may retain one copy of such document or material and any Program Information incorporated into any of its credit review documentation, or as it otherwise deem necessary in order to comply with ordinary and customary retention requirements of  financial  institutions,  sound  banking  practices  and  audit  and  examination                            90

 

            requirements or as otherwise may be required by applicable Law. Any Person             required  to  maintain  the  confidentiality  of  any  information  as  provided  in  this             Section 13.8(a) 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.            (b)   Availability of Confidential Information.  Section 13.8(a) shall be inoperative       as to such portions of the Program Information which are or become generally available       to  the  public  or  such  party  on  a  nonconfidential  basis  from  a  source  other  than  the       Collateral  Agent  or  the  Administrative  Agent  or  were  known  to  such  party  on  a       nonconfidential basis prior to its disclosure by the Collateral Agent or the Administrative       Agent.            (c)   Legal  Compulsion  to  Disclose.  In  the  event  that  any  party  or  anyone  to       whom such party or its representatives transmits the Program Information is requested or       becomes legally compelled (by interrogatories, requests for information or documents,       subpoena, civil investigative demand, or similar process) to disclose any of the Program       Information, to the extent permitted by applicable Law and if practical to do so under the       circumstances, such party shall provide the Collateral Agent, the Administrative Agent,       each Purchaser Agent, and ADT with prompt written notice so that the Collateral Agent       or the Administrative Agent may at the expense of ADT seek a protective order or other       appropriate  remedy  and/or  if  it  so  chooses,  agree  that  such  party  may  disclose  such       Program Information pursuant to such request or legal compulsion.  In the event that such       protective  order  or  other  remedy  is  not  obtained,  or  the  Collateral  Agent  and  the       Administrative Agent waive compliance with the provisions of this Section 13.8(c), such       party will furnish only that portion of the Program Information which (in such party’s       good faith judgment) is legally required to be furnished and will exercise commercially       reasonable  efforts  to  obtain  reliable  assurance  that  confidential  treatment  will  be       accorded the Program Information.            (d)   Disclosure of Tax Treatment and Structure.  Notwithstanding anything herein       to  the contrary, each  party (and each employee, representative,  or other agent of each       party) hereto may disclose to any and all Persons, without limitation of any kind, any       information  with  respect  to  the  United States federal income  “tax treatment” and “tax       structure” (in each case, within the meaning of U.S. Treasury Regulation Section 1.6011-       4)  of  the  transactions  contemplated  hereby  and  all  materials  of  any  kind  (including       opinions or other Tax analyses) that are provided to such parties (or their representatives)       relating  to  such  tax  treatment  and  tax  structure;  provided,  that  with  respect  to  any       document  or  similar  item  that  in  either  case  contains  information  concerning  the  tax       treatment or tax structure of the transaction as well as other information, this sentence       shall only apply to such portions of the document or similar item that relate to the United       States  federal  income  tax  treatment  or  tax  structure  of  the  transactions  contemplated       hereby.            (e)   Confidentiality  of  the  Collateral  Agent,  the  Administrative  Agent,  and       Purchasers.  The  Collateral  Agent,  the  Administrative  Agent,  each  Purchaser,  each                                        91 SK 28677 0004 8494650 v1217

 

Purchaser  Agent,  each  Affected  Party,  and  their  successors  and  assigns  agrees  to maintain  the  confidentiality  of  the  Information  (as  defined  below),  except  that Information  may  be  disclosed  (i) to  its  Collateral  Trustee  (if  any)  and  its  and  its Affiliates’  directors,  officers,  employees,  and  agents,  including  accountants,  auditors, 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 be instructed  and  agree  or  be  otherwise  bound  to  keep  such  Information  confidential  on terms at least as restrictive as this Section 13.8(e)), (ii) to the extent requested by any regulatory authority or by applicable Laws, (iii) to the extent required by any subpoena or similar legal process, provided, however, to the extent permitted by applicable Law and if practical to do so under the circumstances, that the Person relying on this clause (iii) shall provide ADT and the Seller with prompt notice of any such required disclosure so that ADT or the Seller, as applicable, may seek a protective order or other appropriate remedy, and in the event that such protective order or other remedy is not obtained, such Person will furnish only that portion of the Information which is legally required, (iv) to any other Affected Party (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and be instructed and agree or be otherwise bound to keep such Information confidential on terms at least as restrictive as this Section 13.8(e)), (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) to any prospective participant or assignee provided such person agrees to be bound by this Section 13.8(e), (vii) with the consent of the Seller and ADT, (viii) to the extent such Information becomes publicly available other than as a result of a breach of this Section 13.8(e) or any agreement contemplated by this Section 13.8(e) or (ix) to  any  nationally  recognized  statistical  rating  organization  as  contemplated  by Section 17g-5 of the 1934 Act or in connection with obtaining or monitoring a rating on any Commercial Paper Notes. For the purposes of this Section, “Information” means all information  received  from  ADT  or  any  Affiliate  of  ADT,  including  any  Borrower Information (and to the extent applicable, any Non-Public Borrower Data, which shall remain  subject  to  the  applicable  provisions  of Section  13.8(f)),  other  than  any  such information that is available to such Person on a nonconfidential basis prior to disclosure by ADT or any Affiliate of ADT.      (f)   Privacy  Requirements.  Notwithstanding  anything  to the  contrary  in  this agreement,  Mizuho,  as  Administrative  Agent,  the  Collateral  Agent,  Purchaser  and Purchaser  Agent  agrees  that  it  is,  and  will  remain,  in  compliance  with  the  Privacy Requirements, will not utilize, and will not permit any affiliate or any representative to utilize,  Non-Public  Borrower  Data  for  any  purpose  not  in  connection  with  the transactions contemplated under this Agreement or the related Transaction Documents, and  will  maintain  reasonable  and  adequate  safeguards  for  the  protection  of  all  Non- Public Borrower Data, in accordance with its internal privacy policies and as required by the Privacy Requirements and other applicable Law. Mizuho has provided ADT with a true and correct copy of its information security policies and procedures as in effect on March 12, 2020. None of the Administrative Agent, the Collateral Agent, any Purchaser or  any  Purchaser  Agent  shall  provide  any  Non-Public  Borrower  Data  to  any  other Purchaser, Purchaser Agent, successor Collateral Agent or Administrative Agent, or any                                  92

 

      other  prospective  participant  or  assignee  thereof,  unless  ADT  shall  have  provided  its       consent  thereto  to  the  Administrative  Agent.  For  the  avoidance  of  doubt,  once  ADT       provides its consent in respect of a Person, no additional ADT consent shall be required       for future disclosure of Non-Public Borrower Data to such Person. Upon receipt of such       consent, the Administrative Agent shall forward a copy thereof to the Purchasers and the       Purchaser  Agents.  In  respect  of  each  such  Person,  ADT  shall  provide  the  consent       contemplated  above  if  such  Person  has  agreed  to  maintain  reasonable  and  adequate       safeguards for the protection of all Non-Public Borrower Data in a manner reasonably       satisfactory  to ADT. Notwithstanding anything to  the  contrary herein or  in  any  other       Transaction Document, (i) subject to clause (iii) below, each ADT Entity shall be entitled       to  remove  any  Non-Public  Borrower  Data  from  any  report,  document  or  information       required to be delivered hereunder, including the Information Package, and shall not be       liable to any Person by reason thereof, (ii) delivery by the Administrative Agent or the       Collateral Agent of any notice or information required to be provided by it under this       Agreement or the other Transaction Documents, including the Information Package, shall       not  be  deemed  to  be  a  breach  of  this Section  13.8(f),  and  (iii)  upon  request  by  the       Collateral Agent or the Administrative Agent, each ADT Entity shall separately provide       to  the Collateral  Agent  and  the Administrative  Agent  with  each report,  document  and       information from which any Non-Public Borrower Data has been removed, without such       Non-Public Borrower Data removed; provided, that neither the Collateral Agent nor the       Administrative Agent shall provide (and shall not be deemed to be required to provide)       such  Non-Public  Borrower  Data  to  any  other  Purchaser,  Purchaser  Agent,  successor       Collateral  Agent  or  Administrative  Agent,  or  any  other  prospective  participant  or       assignee thereof except in accordance with this Section 13.8(f) or with ADT’s consent,       and in no event shall Mizuho, as the Collateral Agent or the Administrative Agent, be       obligated to provide (or be liable for not providing) any Non-Public Borrower Data to       any other Person. Each of the Administrative Agent, Collateral Agent, each Purchaser       and each Purchaser Agent also agree that it will not, and will not permit any affiliate or       representative other than the Servicer or its authorized delegees to, contact any Obligor       for any purpose; provided, however, that such it (or its agents) may contact an Obligor       following an Event of Termination, to the extent expressly set forth herein, or if ADT is       terminated as the Servicer and a successor servicer is acting as servicer or a collection       agent in respect of the applicable Pool Receivables. Except to the extent expressly set       forth  herein  following  an  Event  of  Termination,  each  the  Administrative  Agent,       Collateral Agent, each Purchaser and each Purchaser Agent (or its agents) shall not take       any action to service, collect or administer any Pool Receivable during the period that       ADT has the right to act as the Servicer under this Agreement.        SECTION 13.9      Captions and Cross References. The various captions (including the table of contents) in this Agreement are provided solely for convenience of reference and shall  not  affect  the  meaning  or  interpretation  of  any  provision  of  this  Agreement.  Unless otherwise indicated, references in this Agreement to any Section, Article, Appendix, Schedule, or  Exhibit  are  to  such  Section  or  Article  of,  or  Appendix,  Schedule,  or  Exhibit  to  this Agreement,  as  the  case  may  be,  and  references  in  any  Section,  subsection,  or  clause  to  any subsection,  clause,  or  subclause  are to  such  subsection,  clause,  or subclause  of  such  Section, subsection, or clause.                                        93 SK 28677 0004 8494650 v1217

 

      SECTION 13.10     Integration. This Agreement, together with the other Transaction Documents,  contains  a  final  and  complete  integration  of  all  prior  expressions  by  the  parties hereto  with  respect  to  the  subject  matter  hereof  and  shall  constitute  the  entire  understanding among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.        SECTION 13.11     Governing  Law.  THIS  AGREEMENT,  INCLUDING  THE RIGHTS  AND DUTIES  OF  THE PARTIES  HERETO,  SHALL  BE  GOVERNED  BY,  AND CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE  STATE  OF  NEW  YORK (INCLUDING  SECTIONS  5-1401  AND  5-1402  OF THE GENERAL OBLIGATIONS  LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF, EXCEPT TO THE EXTENT THAT THE PERFECTION, THE  EFFECT  OF  PERFECTION  OR  PRIORITY  OF  THE  INTERESTS  OF  THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT, OR ANY PURCHASER IN THE POOL  RECEIVABLES,  OR  RELATED  ASSETS  IS  GOVERNED  BY  THE  LAWS  OF  A JURISDICTION OTHER THAN THE STATE OF NEW YORK).        SECTION 13.12     Waiver  of  Jury  Trial.  EACH  PARTY  HERETO  HEREBY EXPRESSLY  WAIVES  ANY  RIGHT  TO  A  TRIAL  BY  JURY  IN  ANY  ACTION  OR PROCEEDING TO  ENFORCE OR DEFEND ANY  RIGHTS UNDER THIS AGREEMENT, ANY  OTHER  TRANSACTION  DOCUMENT,  OR  UNDER  ANY  AMENDMENT, INSTRUMENT,  OR  DOCUMENT  DELIVERED  OR  WHICH  MAY  IN  THE  FUTURE  BE DELIVERED  IN  CONNECTION  HEREWITH  OR  ARISING  FROM  ANY  BANKING  OR OTHER  RELATIONSHIP  EXISTING  IN  CONNECTION  WITH  THIS  AGREEMENT  OR ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.        SECTION 13.13     Consent  to  Jurisdiction;  Waiver  of  Immunities.  EACH  PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:            (a)   IT  IRREVOCABLY  (i) SUBMITS  TO  THE  JURISDICTION,  FIRST,  OF       ANY  UNITED  STATES  FEDERAL  COURT,  AND  SECOND,  IF  FEDERAL       JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN       EITHER CASE SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR       PROCEEDING  ARISING  OUT  OF  OR  RELATING  TO  THIS  AGREEMENT  AND       ANY OTHER TRANSACTION DOCUMENT, (ii) AGREES THAT ALL CLAIMS IN       RESPECT  OF  SUCH  ACTION  OR  PROCEEDING  MAY  BE  HEARD  AND       DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL COURT AND       NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT       MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO       THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.            (b)   TO  THE  EXTENT  THAT  IT  HAS  OR  HEREAFTER  MAY  ACQUIRE       ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY       LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT       PRIOR  TO  JUDGMENT,  ATTACHMENT  IN  AID  TO  EXECUTION,  EXECUTION       OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY                                        94

 

      IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS       UNDER OR IN CONNECTION WITH THIS AGREEMENT.        SECTION 13.14     Execution in Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Delivery of an executed counterpart hereof by facsimile  or  other  electronic  means  shall  be  equally  effective  as  delivery  of  an  originally executed counterpart.        SECTION 13.15     Pledge to a Federal Reserve Bank. Notwithstanding anything to the  contrary  set  forth  herein  (including  in  Section  13.3),  (i) each  Purchaser  that  constitutes  a banking  institution  or  any  assignee  or  participant  thereof  other  than  a  Conduit  Purchaser,  or (ii) in the event that any Conduit Purchaser assigns any of its interest in, to and under the Pool Receivables  or  Related  Assets  to  any  Liquidity  Provider  or  Enhancement  Provider,  any  such Person,  may  at  any  time  pledge,  grant  a  security  interest  in  or  otherwise  transfer  all  or  any portion  of  its  interest  in  the  Pool  Receivables  or  Related  Assets  or  under  this  Agreement  to secure  the  obligations  of  such  Person  to  a  Federal  Reserve  Bank  or  otherwise  to  any  other federal  Governmental  Authority  or  special  purpose  entity  formed  or  sponsored  by  any  such federal  Governmental  Authority  or  any  central  bank  having  jurisdiction  over  such  Person,  in each case without notice to or the consent of the Seller, ADT or the Servicer, but such pledge, grant, or transfer shall not relieve any Person from its obligations hereunder, and each of the other parties hereto shall be entitled to treat such Purchaser’s Investment and its interest in the Pool  Receivables  or  Related  Assets  or  under  this  Agreement  as  not  having  been  assigned, pledged or otherwise transferred for all purposes under this Agreement.        SECTION 13.16     Severability.  Any  provisions  of  this  Agreement  which  are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent  of  such  prohibition  or  unenforceability  without  invalidating  the  remaining  provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.        SECTION 13.17     Acknowledgement  and  Consent  to  Bail-In  of  EEA  Financial Institutions. Notwithstanding anything to the contrary in any Transaction Document or in any other  agreement,  arrangement,  or  understanding  among  any  such  parties,  each  party  hereto acknowledges that any liability of any EEA Financial Institution arising under any Transaction Document,  to  the  extent  such  liability  is  unsecured,  may  be  subject  to  the  write-down  and conversion  powers  of  an  EEA  Resolution  Authority  and  agrees  and  consents  to,  and acknowledges and agrees to be bound by:            (a)   the  application  of  any  Write-Down  and  Conversion  Powers  by  an  EEA       Resolution Authority to any such liabilities arising hereunder which may be payable to it       by any party hereto that is an EEA Financial Institution; and            (b)   the  effects  of  any  Bail-in  Action  on  any  such  liability,  including,  if       applicable:                                         95 SK 28677 0004 8494650 v1217

 

                        (i)   a  reduction  in  full  or  in  part  or  cancellation  of  any  such             liability;                          (ii)  a conversion of all, or a portion of, such liability into shares             or other instruments of ownership in such EEA Financial Institution, its parent             undertaking, or a bridge institution that may be issued to it or otherwise conferred             on it, and that such shares or other instruments of ownership will be accepted by             it in lieu of any rights with respect to any such liability under this Agreement or             any other Transaction Document; or                          (iii) the  variation  of  the  terms  of  such  liability  in  connection             with  the  exercise  of  the  write-down  and  conversion  powers  of  any  EEA             Resolution Authority.        SECTION 13.18     PATRIOT Act Notice. Each of the Administrative Agent and the Collateral Agent (for itself and not on behalf of any Purchaser or Purchaser Agent) and each Purchaser  Agent  and  Purchaser  hereby  notifies  ADT  and  the  Seller  that  pursuant  to  the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies ADT and the Seller.  Such information includes the name and address of ADT and the Seller and other information that will allow the Administrative Agent, the Collateral Agent, such Purchaser Agent or such Purchaser to identify ADT and the Seller in accordance with the USA PATRIOT Act.                           [SIGNATURE PAGES FOLLOW]                                         96

 

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.                                      ADT LLC,                                     individually and as the Servicer                                      By:________________________                                     Name:                                     Title:                                      ADT FINANCE LLC, as Seller                                      By:_________________________                                     Name:                                     Title:                                      MIZUHO BANK, LTD.,                                     as Administrative Agent, Arranger, and Structuring                                     Agent                                      By:_________________________                                     Name:                                     Title:                                      MIZUHO BANK, LTD.,                                     as Collateral Agent                                      By:_________________________                                     Name:                                     Title:                                         80 SK 28677 0004 8494650 v1217

 

MIZUHO BANK, LTD., as a Purchaser Agent for Mizuho Bank, Ltd., as Purchaser  By:________________________ Name: Title:  MIZUHO BANK, LTD., as a Purchaser  By:_________________________ Name: Title:     98

 

                                 APPENDIX A                                   DEFINITIONS        This is Appendix A to the Receivables Purchase Agreement, dated as of March 5, 2020 among ADT LLC, individually and as Servicer, ADT FINANCE LLC, as Seller (the “Seller”), the various Purchasers and Purchaser Agents from time to time party thereto and Mizuho Bank, Ltd. (“Mizuho”), as Administrative Agent, Arranger, Structuring Agent and Collateral Agent (as such terms are defined below).  A.    Defined Terms.        As used in this Agreement, unless the context requires a different meaning, the following terms have the meanings indicated herein below:        “1934 Act” means the Securities Exchange Act of 1934.        “Acceleration Date” means the date specified in Section 10.2 following the occurrence of an Event of Termination.        “Accounts  Amendment  Effective Date”  means  the  date  that  is  the  earlier  to  occur  of (x) the  twelve  (12)  month  anniversary  of  the  Closing  Date,  and  (y) the  date  upon  which  the conditions set forth in Section 3.5(b) are satisfied.        “Administrative  Agent”  means  Mizuho,  in  its  capacity  as  administrative  agent  for  the Purchaser Agents and the Purchasers as set forth herein and in the other Transaction Documents.        “Administrative  Agent’s  Account”  means  the  special  account  of  the  Administrative Agent (Account No. H79-740-005344, ABA No. 026 004 307) maintained at Mizuho Bank, Ltd. or such other account as the Administrative Agent shall designate to the Seller and ADT.        “ADT” is defined in the preamble.        “ADT  Certification”  is  defined  in  the  Payment  Direction  in  respect  of  the  Omnibus Account.        “ADT  Credit  Agreement”  means  the  Ninth  Amended  and  Restated  First  Lien  Credit Agreement  dated  as  of  September  23,  2019  among  Prime  Security  Services  Holdings,  LLC, Prime Security Services Borrower, LLC, Barclays Bank PLC, as administrative agent and the other parties thereto.        “ADT Collateral Agreements” means, each of (i) the Collateral Agreement (First Lien), dated as of July 1, 2015, among Prime Security Services Borrower, LLC, each Subsidiary Loan Party  party  thereto,  and  Barclays  Bank  PLC  (as  successor  in  interest  to  Credit  Suisse  AG, Cayman Islands Branch, as collateral agent), and (ii) the Collateral Agreement (Second Lien), dated as of January 28, 2020, among Prime Security Services Borrower, LLC, Prime Finance                                         A-1 SK 28677 0004 8494650 v1217

 

Inc., each Subsidiary Guarantor party thereto, and Wells Fargo Bank, National Association, as collateral agent.        “ADT Credit Score” means the designated credit score of an Obligor assigned by ADT in accordance with ADT’s internal scoring system and the Credit and Collection Policy.        “ADT Entity” means ADT, the Servicer (if the Servicer is an Affiliate of the Parent), the Seller and the Parent.        “ADT Indentures” means, each of (i) the indentures dated as of April 4, 2019, among Prime  Security  Services  Borrower,  LLC,  as  issuer,  Prime  Finance  Inc.,  as  Co-Issuer,  the guarantors  party  thereto  from  time  to  time,  and  Wells  Fargo  Bank,  National  Association,  as trustee, (ii) indenture dated as of July 5, 2012, between the ADT Corporation, as issuer, and Wells  Fargo  Bank, National  Association,  as  trustee,  (iii) indenture dated  as of May  2, 2016, between Prime Security One MS, Inc., as issuer, and Wells Fargo Bank, National Association, as trustee,  and  (iv) indenture  dated  as  of  January  28,  2020,  among  Prime  Security  Services Borrower, LLC, as issuer, Prime Finance Inc., as issuer, the subsidiary guarantors party thereto from time to time, and Wells Fargo Bank, National Association, as trustee and collateral agent.        “ADT Intercreditor” means the First Lien/First Lien Intercreditor Agreement, dated as of May 2, 2016, among Barclays Bank PLC and Wells Fargo Bank, National Association.        “ADT Managed Pool Delinquency Ratio” means, with respect to any Settlement Period, a ratio (expressed as a percentage) calculated by dividing (i) the number of residential customers originated  through  the  direct  sales  channel  (excluding, for  the  avoidance  of doubt,  dealers  or contracts acquired from dealers or any third parties) with any payment, or part thereof, of any Service Charge Receivable that remains unpaid for 91 to 120 days from the original due date of such  payment  as  of  the  Cut-off  Date  for  such  Settlement  Period,  by  (ii) the  total  number  of residential customers originated through the direct sales channel, with an “active status” in the Records of ADT as of the Cut-off Date for such Settlement Period.        “ADT  Obligations”  means  any  obligation  owed  by  any  ADT  Entity  (other  than  the Seller) to the Collateral Agent, the Administrative Agent, any Purchaser Agent, any Purchaser, any  Indemnified  Party,  any  other  Affected  Party,  or  any  account  institution  that  maintains  a Lock-box  Account,  a  Collection  Account  or  the  Omnibus  Account  arising  out  of  or  in connection with this Agreement and each other Transaction Document, whether now or hereafter existing,  due  or  to  become  due,  direct  or  indirect  or  absolute  or  contingent,  including,  all Indemnified Amounts payable pursuant to Section 12.2.        “Advance Rate” means, in respect of any Receivable, the applicable “Advance Rate” set forth in the Advance Rate Matrix corresponding to such Receivable based upon its Product Type and Remaining Term as determined on the Purchase Date in respect of such Receivable. For the avoidance of doubt, any Receivable with a Product Type other than “Tier 1”, “Tier 2”, Tier 3” or “Burglar Alarm” or with an Original Term exceeding 60 months, will be zero.        “Advance Rate Matrix” means the Advance Rate Matrix attached as Schedule III to this Agreement, as may be amended from time to time with the consent of all Purchasers.                                        A-2

 

      “Adverse Claim” means any claim of ownership or any Lien other than any Permitted Adverse Claims.        “Affected Party” means the Collateral Agent, the Administrative Agent, each Purchaser, each Purchaser Agent, each Liquidity Provider, each Enhancement Provider and each Program Administrator.        “Affiliate”  when  used  with  respect  to  a  Person  means  any  other  Person  Controlling, Controlled  by,  or  under  common  Control  with,  such  Person. “Affiliated”  has  the  meaning correlative to “Affiliate”.        “Agreement” is defined in the preamble.        “Allocated Share” is defined in Section 1.2(a).        “Anti-Corruption Laws” is defined in Section 6.1(y)(iii).        “Applicable Cooling Off Period” means, in respect of a Receivable, the period of time after  origination  thereof  during  which  the  related  Obligor  shall  have  the  right  to  cancel  or terminate such Contract without fee, premium or penalty whether by Law or under the terms of the related Contract or otherwise.         “Approval Date” is defined in Section 3.5.        “Arranger” means Mizuho, in its capacity as Arranger for the transactions contemplated by this Agreement and the other Transaction Documents.        “Average Life” means, as of any date of determination, with respect to any Receivable in the Receivable Pool which is an Eligible Receivable, the quotient obtained by dividing (i) the sum  of  the  products  of  (a) the  number  of  months  (rounded  to  the  nearest  one  hundredth thereof) from  such  date  of  determination  to  the  respective  dates  of  each  successive  unpaid monthly  installment  owed  in  respect  of  such  Receivable  for  the  Remaining  Term  by  the applicable  Obligor  under  the  Contract  giving  rise  to  such  Receivable,  and  (b) the  respective monthly  installment  amounts  on  such  monthly  installment  dates,  by  (ii) the  Financed  Unpaid Balance in respect of such Receivable.        “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.        “Bail-In Legislation” means, with respect to any EEA Member Country implementing Article  55  of  Directive  2014/59/EU  of  the  European  Parliament  and  of  the  Council  of  the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.        “Bank Rate” for any day falling  in a particular Yield Period with  respect  to any Rate Tranche  and  any  Purchaser  Group  means  an  interest  rate  per  annum  equal  to  the  applicable LIBO Rate for such Yield Period.                                        A-3 SK 28677 0004 8494650 v1217

 

      “Bankruptcy Code” means Title 11 of the United States Code.        “Base Rate”  means,  with  respect  to  any  Purchaser,  as  of  any  date of  determination,  a fluctuating rate of interest per annum equal to the highest of:        (a)   the applicable Prime Rate for such date; and        (b)   the Federal Funds Rate for such date, plus 0.50%.        “Benchmark Replacement” means the sum of: (a) the alternate benchmark rate (which may  include  Term  SOFR)  that  has  been  selected  by  the  Administrative  Agent  and  the  Seller giving  due  consideration  to  (i) any  selection  or  recommendation  of  a  replacement  rate  or  the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBO Rate for U.S. dollar-denominated syndicated or bilateral credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.        “Benchmark Replacement  Adjustment” means, with respect  to any replacement of the LIBO Rate with an Unadjusted Benchmark Replacement for each applicable Yield Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the  Seller  giving  due  consideration  to  (i) any  selection  or  recommendation  of  a  spread adjustment,  or  method  for  calculating  or  determining  such  spread  adjustment,  for  the replacement of the LIBO Rate with the applicable Unadjusted Benchmark Replacement by the Relevant  Governmental  Body  or  (ii) any  evolving  or  then-prevailing  market  convention  for determining  a  spread  adjustment,  or  method  for  calculating  or  determining  such  spread adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities at such time.        “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement,  any  technical,  administrative  or  operational  changes  (including  changes  to  the definition of “Base Rate,” the definition of “Yield Period,” the definition of “Bank Rate” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Purchaser Agents in a manner substantially consistent with market practice (provided that, if the Administrative  Agent  decides  that  adoption  of  any  portion  of  such  market  practice  is  not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as  the  Administrative  Agent  decides  is  reasonably  necessary  in  connection  with  the administration of this Agreement).        “Benchmark Replacement Date” means the earlier to occur of the following events with respect to the LIBO Rate:                                         A-4

 

            (i)   in the case of clause (i) or (ii) of the definition of “Benchmark Transition                   Event,” the later of (x) the date of the public statement or publication of                   information referenced therein and (y) the date on which the administrator                   of the LIBO Rate permanently or indefinitely ceases to provide the LIBO                   Rate; or              (ii)  in the case of clause (i) of the definition of “Benchmark Transition                   Event,” the date of the public statement or publication of information                   referenced therein.        “Benchmark Transition Event” means the occurrence  of one or  more of  the  following events with respect to the LIBO Rate:              (i)   a public statement or publication of information by or on behalf of the                   administrator of the LIBO Rate announcing that such administrator has                   ceased or will cease to provide the LIBO Rate, permanently or                   indefinitely, provided that, at the time of such statement or publication,                   there is no successor administrator that will continue to provide the LIBO                   Rate;              (ii)  a public statement or publication of information by the regulatory                   supervisor for the administrator of the LIBO Rate, the U.S. Federal                   Reserve System, an insolvency official with jurisdiction over the                   administrator for  the LIBO Rate, a resolution authority with jurisdiction                   over the administrator for the LIBO Rate or a court or an entity with                   similar insolvency or resolution authority over the administrator for  the                   LIBO Rate, which states that the administrator of the LIBO Rate has                   ceased or will cease to provide the LIBO Rate permanently or indefinitely,                   provided that, at the time of such statement or publication, there is no                   successor administrator that will continue to provide the LIBO Rate; or              (iii) a public statement or publication of information by the regulatory                   supervisor for the administrator of the LIBO Rate announcing that the                   LIBO Rate is no longer representative.        “Benchmark  Transition  Start  Date”  means  (a) in  the  case  of  a  Benchmark  Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement  or  publication,  the  date  of  such  statement  or  publication)  and  (b) in  the  case  of  an Early  Opt-in  Election,  the  date  specified  by  the  Administrative  Agent  by  notice  to  each Purchaser Agent, the Servicer and the Seller.        “Benchmark  Unavailability  Period”  means,  if  a  Benchmark  Transition  Event  and  its related Benchmark Replacement Date have occurred with respect to the LIBO Rate and solely to the extent that the LIBO Rate has not been replaced with a Benchmark Replacement, the period                                        A-5 SK 28677 0004 8494650 v1217

 

(x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no  Benchmark  Replacement  has  replaced  the  LIBO  Rate  for  all  purposes  hereunder  in accordance  with Section  2.5  and  (y) ending  at  the  time  that  a  Benchmark  Replacement  has replaced the LIBO Rate for all purposes hereunder pursuant to Section 2.5.        “Billing  Address”  means,  the billing  address  of each  Obligor  relating  to  a  Receivable specified in the Records of the Servicer.        “Borrower Information” means any personally identifiable information or records in any form (oral, written, graphic, electronic, machine-readable, or otherwise) relating to an Obligor, including but not limited to: an Obligor’s name, address, telephone number, account number, or transactional  account history,  account status;  the fact  that  the Obligor  has a relationship with ADT  or  any of its  Affiliates; and  any other personally  identifiable information, in each case, other  than  any  such  information  provided  in  a  manner  that  does  not  personally  identify  such Obligor and in compliance with applicable Privacy Requirements.        “Business  Day”  means  a day  other  than  Saturday  or  Sunday  or  on  which  commercial banks in New York City, New York are authorized or required by applicable law to be closed for business; provided,  that,  when  used  with  respect  to  a  Yield  Rate  or  associated  Rate  Tranche based on the applicable LIBO Rate, “Business Day” shall also exclude any day on which banks are not open for domestic and international business (including dealings in U.S. Dollar deposits) in London, England.        “Cash Equivalents” means (a) cash, (b) direct general obligations of the United States of America  or  obligations  the  prompt  payment  of  the  principal  of  and  interest  on  which  is unconditionally  guaranteed  by  the  United  States  of  America,  (c) U.S.  dollar-denominated commercial paper notes which are rated at least “A-1+” by S&P and at least “P-1” by Moody’s, or (d) time deposits at, or certificates of deposit and bankers acceptances issued by, commercial banks located in the United States (including domestic branches or agencies of foreign banks) having short-term deposit ratings of “A-1” by S&P and “P-1” by Moody’s, provided that each such investment specified in clauses (b), (c) and (d) is payable in Dollars, has a maturity of the lesser of (i) ninety-one (91) days, and (ii) the days remaining until the next Payment Date, and is payable in the United States of America, or (e) U.S. Dollar-denominated money market funds of United  States  issuers  that  have  ratings  of  at  least  “AAAm”  by  S&P  and  at  least  “Aaa”  by Moody’s (or equivalent long-term ratings) and permit daily liquidation of investments. Ratings by  S&P  which  include  an  “r”  designation  are  not  eligible  to  be  Cash  Equivalents  unless approved by S&P or otherwise meet the rating conditions of S&P.        “Cash Purchase Price” is defined in Section 1.1.        “Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption  or  implementation  of  any  Law,  or  (b) any change  in any Law; provided that notwithstanding  anything  herein  to  the  contrary,  (x) the  Dodd-Frank  Wall  Street  Reform  and Consumer Protection Act and all requests, rules, guidelines, or directives thereunder or issued in connection  therewith,  and  (y) all  requests,  rules,  guidelines,  or  directives  promulgated  by  the Bank  for  International  Settlements,  the  Basel  Committee  on  Banking  Supervision  (or  any successor or  similar authority),  or the United  States  or  foreign  regulatory authorities,  in each                                        A-6

 

case  pursuant  to  the agreements  reached  by  the  Basel  Committee  on  Banking  Supervision  in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems”, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, or issued.        “Change of Control” means the occurrence of any of the following:              (a)   all  of  the  outstanding  Voting  Securities  of  the  Seller  shall  cease  to  be       owned by ADT; or              (b)   all of the outstanding Voting Securities of ADT shall cease to be directly       or indirectly owned by the Parent.        “Chattel Paper” has the meaning of “chattel paper” set forth in Section 9-102 of the UCC.        “Closing Date” means March 5, 2020.        “Code” means the Internal Revenue Code of 1986, as amended.        “Collateral” is defined in Section 9.1.        “Collateral Agent” means Mizuho, in its capacity as Collateral Agent, together with its successors and assigns.        “Collateral  Agent’s  Account”  means  the  special  account  of  the  Collateral  Agent (Account No. H10-740-032774, ABA No. 026 004 307) maintained at Mizuho Bank Ltd., New York Branch or such other account as the Collateral Agent shall designate in writing to the other parties hereto.        “Collateral Trustee” means, with respect to any Conduit Purchaser, a collateral trustee for the benefit of the holders of the Commercial Paper Notes of such Conduit Purchaser appointed pursuant to such entity’s program documents.        “Collection Account” means each collection account of the Servicer maintained with an Eligible Bank into which Collections are to be remitted.        “Collection Agent” means any collection agent sub-servicer, special servicer or similar agent which is not an Affiliate of ADT appointed by the Servicer to assist it with its collection duties hereunder.        “Collection Agent Fees” all fees and expenses of any Collection Agent retained by the Servicer to collect any Receivable which are netted against the amount of, or otherwise reduce the amount of the Collections paid by, the Obligor of such Receivable.        “Collections” means with respect to any Receivable and the Related Assets, (a) all cash collections and other cash proceeds of such Receivable or Related Assets, from or on behalf of the related Obligors in payment of any amounts owed in respect of such Receivable or Related Assets,  or  applied  to  such  other  charges  in  respect  of  such  Receivable  or  Related  Assets,  or                                        A-7 SK 28677 0004 8494650 v1217

 

applied to such amounts owed by such Obligors,  (b) Deemed Collections, (c) amounts treated as Collections in accordance with Section 8.3(d), and (d) all other amounts required to be remitted to the Collateral Agent’s Account pursuant to any Transaction Document. For the avoidance of doubt the term “Collections” in respect of a Receivable and the Related Assets shall include all amounts allocated to such Receivable in accordance with the related Contract and Section 7.4(n).        “Commercial Paper Notes” means short-term promissory notes issued or to be issued by a Conduit Purchaser to fund its investments in accounts receivable or other financial assets.        “Conditional  Service  Guaranty”  means  the  conditional  service  guaranty  advertised  by ADT to customers as in effect on the Closing Date, which generally provides that refunds for any system-related issues will only be issued after ADT has attempted to resolve the issue, has not been able to resolve such issue within the first six months of the Contract, and any related Equipment  has  been  removed,  as  the  same  may  be  amended  with  the  consent  of  the Administrative Agent, the Collateral Agent and the Purchasers.        “Conditional Service Guaranty Receivable” means, any Receivable which was originated when  the  Conditional  Service  Guaranty  was  in  effect  or  to  which  the  Conditional  Service Guaranty applies, to the extent that the relevant Obligor still has the right to claim a refund for any system or service related concerns, including, without limitation, any Receivable in respect of which the related Obligor has notified any ADT Entity of a system or service concern within the  first  six  (6)  months  of  the  effective  date  of  the  related  Contract  and  such  issue  was  not conclusively resolved within the first six (6) months of the effected date of the related contract.        “Conditional Service Guaranty Reserve” means, as of any date:  (i) if the Level 1 Ratings Trigger  is  in  effect,  the  Financed  Unpaid  Balance  of  all  Conditional  Service  Guaranty Receivables that are Pool Receivables; and (ii) otherwise, zero        “Conduit  Purchaser”  means  each  multi-seller  asset-backed  commercial  paper  conduit listed as such as set forth on the signature pages of this Agreement or in any Joinder, other than any such Person that ceases to be a party hereto pursuant to such Joinder.        “Constituent Documents” means, with respect to any Person, the organization documents of  such  Person,  including  (a) with  respect  to  any  corporation,  the  certificate  or  articles  of incorporation  and  the  bylaws  (or  equivalent  or  comparable  constitutive  documents);  (b) with respect to any limited liability company, the certificate or articles of formation or organization and  operating  agreement  or  limited  liability  company  agreement;  and  (c) with  respect  to  any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice  with  respect  thereto  filed  in  connection  with  its  formation  or  organization  with  the applicable Governmental  Authority  in  the jurisdiction  of  its  formation  or  organization and,  if applicable, any certificate or articles of formation or organization of such entity.        “Contract”  means,  with  respect  to  any  Receivable,  any  retail  installment  agreement, contract,  or  other  document  (including  any  purchase  order  or invoice),  between  ADT  and  an Obligor, pursuant to which such Receivable arises or governing or evidencing such Receivable.                                         A-8

 

      “Control” means the possession, directly or indirectly, of the power to direct or cause the direction  of  the  management  or  policies  of  a  Person,  whether  through  the  ability  to  exercise voting  power,  by  contract  or  otherwise,  and  “Controlling”  and  “Controlled”  have  meanings correlative thereto.        “Control  Agreement”  means  an  agreement  with  respect  to  any  Lock-Box  Account, Collection  Account,  the  Omnibus  Account,  or  any  other  account  of  the  Seller  (including  the Reserve Account), in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent, pursuant to which the Collateral Agent has “control” over such account within the meaning of Article 8 (in the case of a securities account) and/or 9 (in the case of a deposit  account)  of  the  UCC,  and  the  related  account  bank  has  agreed  to  comply  with  the instructions  of  the  Collateral  Agent  without  further  consent  of  the  Seller,  ADT  or  any  other Person.        “CP  Rate”  means,  for  any  period  and  with  respect  to  any  Rate  Tranche  funded  by Commercial  Paper  Notes  of  any  Conduit  Purchaser,  the per annum  rate  equivalent  to  the weighted  average  cost  (as  determined  by  the  applicable  Purchaser  Agent  for  such  Conduit Purchaser  and  which  shall  include  commissions  and  fees  of  placement  agents  and  dealers, incremental carrying costs incurred with respect to Commercial Paper Notes maturing on dates other than those on which corresponding funds are received by such Conduit Purchaser, other borrowings  by  such  Conduit  Purchaser  (other  than  under  any  Liquidity  Agreement)  and  any other costs and expenses associated with the issuance of Commercial Paper Notes) of or related to  the  issuance  of  Commercial  Paper  Notes  that  are  allocated,  in  whole  or  in  part,  by  such Conduit Purchaser or the applicable Purchaser Agent to fund or maintain such Rate Tranche and which may be also allocated in part to the funding of other assets of such Conduit Purchaser (determined  in  the  case  of  Commercial  Paper  Notes  issued  on  a  discount  by  converting  the discount to an interest equivalent rate per annum); provided, that notwithstanding anything in this Agreement or the other Transaction Documents to the contrary, the Seller agrees that any amounts  payable  to  the  applicable  Conduit  Purchaser  in  respect  of  Yield  for  any  Settlement Period with respect to any Rate Tranche funded by such Conduit Purchaser at the CP Rate shall include an amount equal to the portion of the face amount of the outstanding Commercial Paper Notes issued by such Conduit Purchaser to fund or maintain such Rate Tranche that corresponds to the portion of the proceeds of such Commercial Paper Notes that was used to pay the interest component of maturing Commercial Paper Notes issued by such Conduit Purchaser to fund or maintain  such  Rate  Tranche,  to  the  extent  that  such  Conduit  Purchaser  had  not  received payments  of  interest  in  respect  of  such  interest  component  prior  to the  maturity  date  of  such maturing Commercial Paper Notes (for purposes of the foregoing, the “interest component” of Commercial  Paper  Notes  equals  the  excess  of the face amount  thereof  over  the  net  proceeds received by such Conduit Purchaser from the issuance of Commercial Paper Notes, except that if such Commercial Paper Notes are issued on an interest-bearing basis its “interest component” will equal the amount of interest accruing on such Notes through maturity).        “Credit  and  Collection  Policy”  means  the  Servicer’s  credit  and  collection  policies, practices  and  procedures,  relating  to  the  Contracts  and  the  Receivables,  a  copy  of  which  is attached as Exhibit F hereto, as they may modified from time to time after the Closing Date in compliance with this Agreement.                                        A-9 SK 28677 0004 8494650 v1217

 

      “CRR”  means  Articles  404-410  of  the  Capital  Requirements  Regulation  (EU) No. 575/2013, as amended, together with the rules and regulations thereunder.        “Cut-off Date” means the last day of each Settlement Period.        “Daily  Remittance  Amount”  is  defined  in  the  Payment  Direction  in  respect  of  the Omnibus Account.        “Debt”  means,  with  respect  to  any  Person,  (i) all  obligations  (whether  secured  or unsecured)  of  such  Person  for  money  borrowed  and  all  other  obligations  (contingent  or otherwise)  of  such  Person  with  respect  to  surety  bonds,  letters  of  credit  and  bankers’ acceptances,  whether  or  not  matured,  (ii) all  obligations  of  such  Person  evidenced  by  notes, bonds,  debentures,  loan  agreements,  reimbursement  agreements,  or  similar  instruments (including senior, mezzanine and junior borrowings, (iii) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (iv) all capital lease obligations of such Person, (v) all obligations in respect of derivative instruments to the extent required to be reflected as a liability on a balance sheet of such Person under GAAP, (vi) liabilities in respect of unfunded vested benefits under plans covered by Title VI of ERISA, (vii) all indebtedness referred to in clause (i), (ii), (iii) or (iv) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such  Person  has  not  assumed  or  become  liable  for  the  payment  of  such  indebtedness,  and (viii) all  indebtedness  of  others  referred  to  in  clause  (i),  (ii),  (iii),  (iv),  (v)  or  (vi)  above Guaranteed by such Person or for which such Person has otherwise assumed responsibility on, before or after the date such indebtedness is incurred.        “Deemed Collections” is defined in Section 3.2(a).        “Defaulted Receivable” means a Receivable (a) as to which any payment, or part thereof or any payment or part of the related Service Charge Receivable, if any, remains unpaid for 90 days or more from the original due date for such payment (b) any ADT Entity or the Servicer has knowledge or notice that the Obligor thereof is subject to an Event of Bankruptcy and the related bankruptcy case, action, or proceeding has not been dismissed by the applicable court, and such Obligor’s obligations with respect to such Receivable have not been reaffirmed by such Obligor with the approval of the applicable court, or (c) which, consistent with the Credit and Collection Policy, is or should have been written off as uncollectible or defaulted.        “Defaulting Purchaser” means all of the Purchasers of a Purchaser Group, (a) that have failed, within two (2) Business Days of the date required to be funded or paid hereunder, to fund any portion of a Purchase hereunder that they have, in accordance with Section 1.2 agreed to fund, unless the Purchaser Agent for such Purchaser Group notifies the Administrative Agent in writing that such failure is the result of the good faith determination by such Purchaser Group that a condition precedent to funding (specifically identified and with supporting facts) has not                                        A-10

 

been  satisfied, (b) (i) if any Purchaser in such Purchaser Group has become the subject of an Event of Bankruptcy, or (ii) become the subject of a Bail-in Action.        “Delinquency Ratio” means, with respect to any Settlement Period, a ratio (expressed as a  percentage)  calculated  as  (i) the  sum  of  the  Financed  Unpaid  Balances  of  all  Delinquent Receivables that constitute Pool Receivables as of the Cut-off Date for such Settlement Period, divided  by  (ii) the  aggregate  Financed  Unpaid  Balance  of  Pool  Receivables  that  constitute Eligible Receivables as of the Cut-off Date for such Settlement Period.        “Delinquent Receivable”  means  a  Receivable that  is  not a Defaulted Receivable  as to which any payment or part thereof, or any payment or part thereof of the related Service Charge Receivable, if any (other than any Service Charge Receivable related to a Defaulted Receivable), remains unpaid for more than 60 days from the original due date for such payment; provided, that once a Receivable has been written off as uncollectible it shall no longer be a Delinquent Receivable.        “Dilution” means, as of any date of determination, with respect to any Pool Receivable, the  amount  by  which  the  Unpaid  Balance  of  such  Pool  Receivable  is  either  (a) reduced  or canceled as a result of (i) any defective, rejected, or returned merchandise or services, any cash discount, or any failure by any ADT Entity to deliver any merchandise or services or otherwise perform under the underlying contract or invoice, (ii) any change in or cancellation of any of the terms of such contract or invoice or any other adjustment by ADT which reduces the amount payable by the Obligor on the related Receivable, or (iii) any setoff in respect of any claim by the  Obligor  thereof (whether such  claim  arises  out  of  the  same or  a  related transaction  or an unrelated  transaction),  or  (b) subject  to  any  specific  dispute,  offset,  counterclaim,  or  defense whatsoever between the Obligor and the Seller, ADT, the Servicer, or any Affiliate thereof, in each  case,  other  than  to  the  extent  arising  from  the  bankruptcy  or  insolvency  of  the  related Obligor, or the financial or credit condition or financial default, of such related Obligor.        “Direct Deposit Obligor” means, as of any date of determination and with respect to any Receivable,  an  Obligor  which  has  pursuant  to  the  Contract  authorized  ADT  to,  from  time  to time, withdraw from the bank account of such Obligor and/or charge from the credit or debit card of such Obligor all amounts necessary to pay the Unpaid Balance of such Receivable when due  and payable,  to  the extent such authorization has not  been revoked or rescinded by such Obligor as of such date of determination.        “Early Opt-in Election” means the occurrence of:              (i)   a determination by the Administrative Agent that U.S. dollar-denominated                   syndicated or bilateral credit facilities at such time contain (as a result of                   amendment or as originally executed) as a benchmark interest rate, in lieu                   of the LIBO Rate, a new benchmark interest rate to replace the LIBO                   Rate, and              (ii)  the election by the Administrative Agent to declare that an Early Opt-in                   Election has occurred and the provision by the Administrative Agent of                                        A-11 SK 28677 0004 8494650 v1217

 

                  written notice of such election to each Purchaser Agent, the Servicer and                   the Seller.        “EEA  Financial  Institution”  means  (a) any  credit  institution  or  investment  firm established  in  any  EEA  Member  Country  which  is  subject  to  the  supervision  of  an  EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.        “EEA  Member  Country”  means  any  of  the  member  states  of  the  European  Union, Iceland, Liechtenstein, and Norway.        “EEA  Resolution  Authority”  means  any  public  administrative  authority  or  any  person entrusted  with  public  administrative  authority  of  any  EEA  Member  Country  (including  any delegee) having responsibility for the resolution of any EEA Financial Institution.        “Eligible  Assignee”  means  (i) the  Administrative  Agent,  any  Purchaser  Agent,  any Purchaser, or any of their respective Affiliates that are financial institutions or banks, (ii) any Liquidity  Provider,  any  Program  Administrator,  or  any  Enhancement  Provider,  (iii) any commercial paper conduit or similar entity that is managed by the Administrative Agent, any Purchaser or any Purchaser Agent or any of their respective Affiliates, (iv) any other financial or other institution that is acceptable to the Administrative Agent, and solely with respect to this clause (iv) so long as no Unmatured Event of Termination or Event of Termination has occurred and is continuing, with the consent of the Seller (such consent not to be unreasonably withheld, conditioned,  or  delayed),  and  (v) a  collateral  agent,  trustee,  or  similar  party  which  holds  the assets of a Conduit Purchaser on behalf of the holders of the Commercial Paper Notes issued by such Conduit Purchaser.        “Eligible Bank” means a financial institution which has a senior short-term unsecured debt rating (or where such financial institution does not have such a rating, the senior short-term unsecured debt rating of the parent of such financial institution) from both Moody’s and S&P of at  least  P-1  and  A-1  respectively  or  the  long-term  unsecured  debt  rating  equivalent  thereof which, for the avoidance of doubt, is a long-term unsecured debt rating of at least A3, in the case of Moody’s, and at least A-, in the case of S&P.        “Eligible Collateral Agent” means a bank or financial institution which has a long-term unsecured  debt  credit  rating  from  Moody’s  of  at  least  “Baa1”  or  if  such  bank  or  financial institution  is  not  rated  by  Moody’s,  the  equivalent  rating  from  another  nationally  recognized statistical rating organization.        “Eligible  Contract”  means  a  Contract  governed  by  the  law  of  the  United  States  of America or of any State thereof that contains an obligation to pay a specified sum of money and that  has  been  duly  authorized  by  each  party  thereto  and  that  (i) does  not  require  the  Obligor thereunder to consent to any transfer, sale, or assignment thereof or of the related Receivable or any proceeds thereof, (ii) is not subject to a confidentiality provision or similar covenant of non- disclosure that would restrict the ability of the Administrative Agent, the Collateral Agent or any                                       A-12

 

Purchaser to fully exercise or enforce its rights under the Transaction Documents (including any rights thereunder assigned or originated to them hereunder), (iii) remains in full force and effect, (iv) provides for a total Original Term of up to 60 months, (v) the first installment in respect of which is required to be paid by the related Obligor upon completion of the installation of the Equipment  which  is  the  subject  matter  of  such  Contract,  (vi) is  substantially  in  the  form  of Exhibit E-1, Exhibit E-2, or Exhibit E-3 hereto, as applicable based on the date of origination of such Contract, or which is in such other form approved in writing by the Administrative Agent and, except to the extent resulting from the Conditional Service Guaranty, is not subject to any amendment, supplement or other modification as a result of any promotional activity, advertising or  other  statement  or  warranty  (including  on  any  ADT  Entity's  website,  except  for  such amendment,  supplement  or  modification  permitted  under Section  7.3(b)),  and  (vii) is  not assignable by the related Obligor without the consent of ADT.        “Eligible Receivable” means, as of any date of determination, a Receivable:            (a)   (i) which represents all or part of the sales price of the Equipment and the       installation cost of such Equipment (or in respect of an Eligible Contract in the form of       Exhibit E-3, the installation cost of such Equipment), sold and provided by ADT in the       ordinary course of its business and which Receivable has been sold or contributed to the       Seller pursuant to the Sale Agreement, and (ii) which is not owed to ADT or the Seller as       a bailee or consignee for another Person;            (b)   which constitutes Chattel Paper, an “account” (as defined in Section 9-102(a)       of the UCC) or a “payment intangible” (as defined in Section 9-102(a) of the UCC);            (c)   which is not a Service Charge Receivable;            (d)   which is not a Defaulted Receivable;            (e)   with  regard  to  which  the  representations  of  the  Seller  in  respect  of  such       Receivable are true and correct;            (f)   the sale  or  contribution  of which  pursuant  to  the  Sale  Agreement  and  this       Agreement does not violate or contravene any Law or the related Contract;            (g)   which is denominated and payable only in U.S. Dollars in the United States;            (h)   the Obligor of which, as of the date of Purchase is a Direct Deposit Obligor       with respect to such Receivable and has been instructed by ADT that to the extent that its       payments  will  not  be  made  through  the  withdrawal  from  its  bank  account  and/or  the       charge of its credit or debit card, such payments shall be made to a Lock-box relating to a       Lock-box  Account  that  is  subject  to  a  Payment  Direction  in  the  form  of  Exhibit  G-1       hereto or a Control Agreement;            (i)   the  Obligor  of  which  is  domiciled  or  organized  in  the  United  States  of       America (but excluding a Receivable the Obligor of which is domiciled or organized in                                        A-13 SK 28677 0004 8494650 v1217

 

the Commonwealth of Puerto Rico or the Virgin Islands of the United States) and with respect to which ADT has a Billing Address for such Obligor in the United States;      (j)   which arises under an Eligible Contract that, together with such Receivable, (i) is in full force and effect and constitutes the legal, valid, and binding obligation of the related Obligor to pay the full Unpaid Balance of such Receivable, enforceable against such Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to and limiting creditors’  rights  generally  and  by  general  principles  of  equity  (regardless  of  whether enforcement  is  sought  in  a  proceeding  in  equity  or  in  Law),  (ii) as  of  the  date  of  its Purchase, is not subject to any dispute, offset, netting, litigation, counterclaim, or defense whatsoever  (including  defenses  arising  out  of  violations  of  usury  Laws)  (other  than potential discharge in a bankruptcy of the related Obligor) or other event or circumstance that  would  give  rise  to  a  Deemed  Collection,  and  (iii) is  not  subject  to  any  Adverse Claim;      (k)   that together with the Contract related thereto, does not contravene any Law applicable  thereto  (including  Laws  relating  to  usury,  consumer  protection,  truth  in lending,  fair  credit  billing,  fair  credit  reporting,  equal  credit  opportunity,  fair  debt collection practices, and privacy) in any respect, with respect to which the origination thereof did not violate any such Law in any such respect and with respect to which no party to the Contract related thereto is in violation of any Law;      (l)   which  (i) was  originated  by  ADT  in  the  ordinary  course  of  its  business, (ii) satisfies  the  requirements  of  the  Credit  and  Collection  Policy,  and  (iii) has  been acquired by the Seller from ADT pursuant to and in accordance with the terms of the Sale Agreement;      (m)   the  Obligor  of  which  is  not,  any  ADT  Entity  or  an  Affiliate  of  any  ADT Entity;      (n)   the Obligor of which is not a Sanctioned Person;      (o)   the Obligor of which is required to make payments no less frequently than monthly under the related Contract;      (p)   which represents the sales price of goods or services within the meaning of Section 3(c)(5) of the Investment Company Act;      (q)   the Obligor of which (i) is a residential customer of ADT in good standing and listed in the Records of ADT as having an “active status”, (ii) either (x) has not been the Obligor under a Delinquent Receivable during the twelve (12) months immediately preceding the date of Purchase, or (y) has a minimum Telco98 score of 625 and an ADT Credit Score of “A”, “B” or “C”, “N”, “X”, or “Y”, (iii) is not an Obligor in respect of any  Defaulted  Receivable,  and  (iv) is  not  subject  to  cancellation  or  disconnection  in respect  of  ADT’s  Monitoring  Services  in  accordance  with  the  Credit  and  Collection Policy, the terms of the Contract or otherwise;                                 A-14

 

          (r)   which does not constitute a Delinquent Receivable;            (s)   which relates to Equipment which is designated on the Records of ADT and       in accordance with the Credit and Collection Policy as a product type “Tier 1”, “Tier 2”,       “Tier  3”  or  “Burglar  Alarm”  for  the  purpose  of  installing  home  security  monitoring       equipment systems for a single site;            (t)   which is non-executory and has been fully earned by performance on the part       of ADT;            (u)   in respect of which no further action is required to be performed by ADT or       any  other  Person  with  respect  thereto  pursuant  to  the  terms  of  the  Contract,  any       promotional  activity,  advertising  or  any  other  statement  or  warranty  or  otherwise       (subject, to the extent applicable with respect to any Receivable, only to the Conditional       Service Guaranty), other than payment thereon by the applicable Obligor;            (v)   in respect of which the payment of the Unpaid Balance thereof by the related       Obligor  is  not  contingent  upon  such  Obligor  receiving  Monitoring  Services  and  the       termination of the Monitoring Services provided by ADT to the related Obligor will not       affect the obligation of such Obligor to pay the full Unpaid Balance of such Receivable       or otherwise affect the rights of ADT, the Seller or the Collateral Agent under the related       Contract in respect of such Receivable;            (w)   the Obligor  of  which  is  not a Governmental  Authority  and is  a  residential       customer;            (x)   the related Contract in respect  of  which cannot  be cancelled or terminated       unless the related Obligor pays the full Unpaid Balance of such Receivable;            (y)   which has been  outstanding beyond the Applicable Cooling  Off  Period or,       except to the extent provided by the Conditional Service Guaranty, any other period prior       to which such Receivable can be cancelled or terminated in any manner, which would       excuse  the  related  Obligor  of  its  obligation  to  pay  all  or  any  portion  of  the  Unpaid       Balance thereof, and with respect to which the first installment payment thereof has been       paid by the related Obligor and collected and applied by the Servicer;            (z)   the Unpaid Balance of which is not, as of the date of Purchase, subject to       reduction, cancellation, setoff, offset, special refunds, or credits for any reason, including       without limitation as a result of defective or rejected Equipment or other goods;            (aa)  in respect of which all sales taxes to be paid in connection with the related       Equipment  and  installation  thereof  have  been  fully  paid  by  ADT,  or  if  not  due  and       payable as of the Purchase Date in respect of such Receivable, has been fully paid by the       due date thereof (except for any such sales taxes that are being appropriately contested in       good  faith  by appropriate proceedings  and  with respect to  which  adequate reserves  in       conformity with GAAP have been provided);                                        A-15 SK 28677 0004 8494650 v1217

 

          (bb)  the Financed Unpaid Balance of which does not exceed $5,00020,000;            (cc)  without limiting any of the foregoing, no portion of which (i) is subject to       any Lien in favor of any Governmental Authority, or (ii) results in (or, in the case of non-       payment of any such governmental fee, surcharge, or tax by any Person, would result in)       any  Adverse  Claim  on  such  Receivable  or  any  proceeds  thereof  in  favor  of  any       Governmental  Authority  (other  than,  for  the avoidance  of  doubt,  Adverse  Claims  that       may be imposed by any Governmental Authority from time to time on the assets of ADT       generally (or any Person treated as the same Person as ADT for tax purposes) in respect       of  any  governmental  fees,  surcharges  or  taxes  that  will  be  paid  or  contested  in       compliance with Section 7.1(p) and Section 7.4(l));            (dd)  which  as  of  the  date  of  Purchase,  has  not  been  compromised,  adjusted  or       modified  (including  by  the  extension  of  time  for  payment  or  the  granting  of  any       discounts,  allowances,  or  credit),  including  as  a  result  of  any  promotional  activity,       advertising  or  other  statement  or  warranty  (including  on  any  ADT  Entity’s  website),       other than the Conditional Service Guaranty;            (ee)  if any Deemed Collection arises in respect of such Receivable, the Seller is       not  in  default  of  its  obligation  to  pay  the  full  amount  of  such  Deemed  Collection  in       accordance with Section 3.2;            (ff)  the  Obligor  of  which  is  receiving  Monitoring  Services  provided  by  ADT       commensurate with the related Contract, except pursuant to a voluntary termination of       such Monitoring Services by such Obligor after the Purchase Date of such Receivable;            (gg)  the Unpaid Balance of which is payable by the related Obligor in up to 60       equal monthly installments under the related Contract; and            (hh)  which is not a Warranty Receivable.        “Enhancement Agreement” means any agreement between a Conduit Purchaser and any other  Person(s),  entered  into  to  provide  (directly  or  indirectly)  credit  enhancement  to  such Conduit Purchaser’s commercial paper facility.        “Enhancement  Provider”  means  any  Person  providing  credit  support  to  a  Conduit Purchaser under an Enhancement Agreement, including pursuant to an unfunded commitment, or any similar entity with respect to any permitted assignee of such Conduit Purchaser.        “Equipment” means in respect of a Contract, all alarm system and monitoring equipment installed by ADT pursuant to such Contract.        “ERISA” means the U.S. Employee Retirement Income Security Act of 1974.        “ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) that, together with such Person, is treated as a single employer under Section                                        A-16

 

414(b), or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) or (o) of the Code.        “ERISA Event” means (a) any “reportable event”, as defined in Section 4043(c)(1), (6) or (10) of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period referred to in Section 4043(a) is waived), (b) any failure by any Plan to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver  of  the  minimum  funding  standard  with  respect  to  any  Plan,  (d) the incurrence  by  any ADT  Entity,  or  any  ERISA  Affiliate  thereof  of  any  liability  under  Title  IV  of  ERISA  with respect to the termination of any Plan, (e) the receipt by any ADT Entity, or any ERISA Affiliate thereof from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA, (f) the  incurrence  by  any  ADT  Entity,  or  any  ERISA  Affiliate  thereof  of  any  liability  with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or (g) the receipt by any ADT Entity, or any ERISA Affiliate thereof of any notice, or the receipt by any Multiemployer  Plan  from  ADT,  the  Servicer,  the  Parent,  the  Seller,  or  any  ERISA  Affiliate thereof of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Section 4245 of ERISA, or is in reorganization within the meaning of Section 4241 of ERISA, or in endangered or critical status (within the meaning of Section 432 of the Code or Section 305 or Title IV of ERISA).        “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.        “EU Retention Effective Date” means the first date upon which a Purchaser notifies ADT and the Seller that the transaction contemplated by this Agreement must comply with the EU Securitization Rules.        “EU  Securitization  Rules”  means  the  Securitization  Regulation,  together  with  any relevant  regulatory  and/or  implementing  technical  standards  adopted  by  the  European Commission in relation thereto, any relevant regulatory and/or implementing technical standards applicable  in  relation  thereto  pursuant  to  any  transitional  arrangements  made  pursuant  to  the Securitization Regulation, and, in each case, any relevant guidance (having a binding effect or with which European Union institutions or competent authorities of European Union member states are accustomed to comply) published by the European Banking Authority, the European Securities and Markets Authority (or, in either case, any predecessor or successor authority) or by the European Commission.        “Event  of  Bankruptcy”  shall  be  deemed  to  have  occurred  with  respect  to  a  Person  if either: (a) (i) a case or other proceeding shall be commenced, without the application or consent of  such  Person,  in  any  court,  seeking  the  liquidation,  reorganization,  debt  arrangement, dissolution,  winding  up,  or  composition  or  readjustment  of  debts  of  such  Person,  the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator (or other similar official) for such Person or all or substantially all of its assets, or any similar action with respect                                       A-17 SK 28677 0004 8494650 v1217

 

to such Person under any Law relating to bankruptcy, insolvency, reorganization, winding up, or composition  or  adjustment  of  debts,  and  such  case  or  proceeding  shall  continue  unstayed  or undismissed for a period of sixty (60) consecutive days (or, for purposes of Section 10.1(c), if such case or proceeding is in respect of the Seller, zero (0) days); or (ii) an order for relief in respect of such Person shall be entered in an involuntary case under federal bankruptcy laws or other similar Laws now or hereafter in effect; or        (b)   such Person (i) shall commence a voluntary case or other proceeding under any applicable  bankruptcy,  insolvency,  reorganization,  debt  arrangement,  dissolution,  or  other similar  Law  now  or  hereafter  in  effect,  (ii) shall  consent  to  the  appointment  of  or  taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for, such Person or for any substantial part of its property, or (iii) shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors (or any board or Person holding similar rights to control the activities of such Person) shall vote to implement any of the foregoing.        “Event of Termination” is defined in Section 10.1.        “Excess  ADT  Credit  Score  B  Concentration  Amount”  means,  as  of  any  date  of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool related to Obligors with an ADT Credit Score of “B”, as of such  date of determination, exceeds  (b) 30.00%  of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess ADT Credit Score B, C, N, Q, W, X, Y, Z and Null Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool related to Obligors with an ADT Credit Score of “B”, “C”, “N”, “Q”, “W”, “X”, “Y”, “Z” and “Null” as of such date of determination, exceeds (b) 50.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess  ADT  Credit  Score  C  Concentration  Amount”  means,  as  of  any  date  of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool related to Obligors with an ADT Credit Score of “C”, as of such  date of determination, exceeds  (b) 15.00%  of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess ADT Credit Score C, N, Q, W, X, Y, Z and Null Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of  all  Eligible Receivables in the Receivable Pool  related to Obligors with an ADT Credit Score of “C”, “N”, “Q”, “W”, “X”, “Y”, “Z” and “Null” as of such date of determination, exceeds (b) 35.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess  Concentration  Amount”  means,  as  of  any  date  of  determination,  the  sum,  as calculated without duplication for any Eligible Receivable that falls into more than one of the                                       A-18

 

following, of (a) the Excess Single State Unpaid Balance Concentration Amount, as determined as  of  the  last  day  of  the  most  recently  ended  Settlement  Period,  (b) the  Excess  Third  State Obligor  Concentration  Amount,  as  determined  as  of  the  last  day  of  the  most  recently  ended Settlement  Period,  (c) the  Excess  Second  Largest  State  Obligor  Concentration  Amount,  as determined  as  of  the  last  day  of  the  most  recently  ended  Settlement  Period,  (d) the  Excess Largest  State  Obligor  Concentration  Amount,  as  determined  as  of  the  last  day  of  the  most recently ended Settlement Period, (e) the Excess ADT B Credit Score B Concentration Amount, as determined  as of  the  last  day  of  the most  recently ended Settlement  Period, (f) the Excess ADT  C Credit  Score C  Concentration  Amount,  as  determined  as  of  the  last  day  of  the  most recently ended Settlement Period, (g) the Excess N, Q, W, X, Y, Z and Null ADT Credit Score Concentration Amount, as determined as of the last day of the most recently ended Settlement Period,  (h) the  Excess  ADT Credit  Score  B,  C,  N,  Q,  W,  X,  Y, Z  and  Null  Concentration Amount, as determined as of the last day of the most recently ended Settlement Period, (i) the Excess ADT Credit Score C, N, Q, W, X, Y, Z and Null Credit Score Concentration Amount, as determined as of the last day of the most recently ended Settlement Period, and (ij) the Excess ADT C, Q, W, Z and Null Credit ScoreFinanced Unpaid Balance Over $5,000 Concentration Amount, as determined as of the last day of the most recently ended Settlement Period; provided, that  if  such  date  of  determination  occurs  in  any  month  upon  and  after  the  completion  of application of Collections in accordance with Section 3.1(d) with respect to any Settlement Date occurring in such month, each of the amounts calculated above shall also include the Eligible Receivables  (if  any)  purchased  on  such  Settlement  Date.  In  order  to  avoid  duplication  in calculating  the  Excess  Concentration  Amount,  each  component  of  the  Excess  Concentration Amount shall be determined in the order set forth above, and the aggregate Financed Unpaid Balances of any Eligible Receivables that are included in the Excess Concentration Amount in any prior step shall be deemed not to constitute Eligible Receivables in the numerator of any otherwise applicable subsequent step.        “Excess Financed Unpaid Balance Over $5,000 Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all  Eligible  Receivables  in  the  Receivable  Pool  which  relate  to  Obligors  with a  Financed Unpaid  Balance  over  $5,000,  as  of  such  date  of  determination,  exceeds  (b)  5.00%  of  the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess  Largest  State  Obligor  Concentration  Amount”  means  as  of  any  date  of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to Obligors with Billing Addresses in the  Largest  State,  as  of  such  date  of  determination,  exceeds  (b) 20.00%  of  the  aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess Second Largest State Obligor Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to Obligors with Billing Addresses in the Second Largest State, as of such date of determination, exceeds (b) 20.00% of the aggregate                                        A-19 SK 28677 0004 8494650 v1217

 

Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess Single State Unpaid Balance Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to an Obligor with a Billing Address in any single State (or commonwealth) in the United States, as of such date of determination, other than  the  Obligors  in  the  Largest  State,  the  Second  Largest  State  or  the  Third  Largest  State, exceeds (b) 10.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess Third Largest State Obligor Concentration Amount” means, as of any date of determination, the amount, if any by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to Obligors with Billing Addresses in the Third Largest State, as of such date of determination, exceeds (b) 20.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excess N, Q, W, X, Y, Z and Null ADT Credit Score Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of  all  Eligible Receivables in the Receivable Pool  related to Obligors with an ADT Credit  Score  of  “N”,“Q”,  “W”,  “X”,  “Y”, “Z”  and  “Null”,  as  of  such  date  of  determination, exceeds (b) 20.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination.        “Excluded Taxes” means (i) any Taxes based upon, or measured by, any Affected Party’s net income, net receipts, net profits, net worth or capital (including franchise or similar Taxes imposed  in  lieu  of  such  Taxes),  but  only  to  the  extent  such  Taxes  are  imposed  by  a  taxing authority (a) in a jurisdiction (or political subdivision thereof) in which such Affected Party has its principal office or under the laws of which such Affected Party is organized or incorporated, (b) in a jurisdiction (or political subdivision thereof) in which such Affected Party does business, or (c) in a jurisdiction (or political subdivision thereof) in which such Affected Party maintains a lending  office  (or  branch),  (ii) any  franchise  Taxes,  branch  Taxes  or  branch  profits  Taxes imposed  by  the  United  States,  or  any  similar  Taxes  imposed  by  any  jurisdiction  (or  political subdivision thereof) described in clause (i) or in which any of the Seller, ADT or the Servicer is located,  (iii) with  regard  to  any  Affected  Party,  any  withholding  Tax  to  the  extent  it  is (a) imposed on amounts payable to such Affected Party because such Affected Party designates a new  lending office,  except  to  the extent  that  such Affected  Party  was  entitled,  at  the time  of designation of a new lending office, to receive amounts in respect of such Taxes from any of the Seller,  ADT  or  the  Servicer,  as  applicable,  pursuant  to Section  3.3,  (b) attributable  to  such Affected Party’s failure to comply with Section 3.3(e)(v), or (c) imposed on amounts payable to such Affected Party with respect to an applicable interest in Pool Receivables or Related Assets pursuant  to  a  law  in  effect  on  the  date  on  which  such  Affected  Party  acquires  such  interest, except  to  the  extent  that,  in  the case  of an  assignment to  such  Affected  Party,  such Affected Party’s  assignor  was  entitled,  immediately  before  the  time  of  such  assignment,  to  receive amounts in respect of such Taxes from the Seller, ADT or the Servicer, as applicable, pursuant to Section  3.3,  (iv) any  Tax  that  is  found  in  a  final,  non-appealable  judgment  by  a  court  of                                       A-20

 

competent  jurisdiction  to  have  been  imposed  solely  as  a  result  of  any  Affected  Party’s  gross negligence or willful misconduct, and (v) any FATCA Withholding Tax. For the avoidance of doubt,  Excluded  Taxes  shall  include  any  backup  withholding  in  respect  of  income  or  branch profits under Section 3406 of the Code or any similar provision of state, local or foreign law.        “Exiting Purchaser” is defined in Section 3.5.        “Extension Request” is defined in Section 3.5.        “FATCA” means Sections 1471 through 1474 of the Code and the current or future U.S. Treasury  Regulations  issued  thereunder,  as  the  same  may  be  amended,  modified,  or supplemented from time to time (so long as any future, amended, modified, supplemented, or successor version is substantively comparable and not materially more onerous to comply with), corresponding provisions of successor Law, official interpretations thereof, and any agreements entered  into  pursuant  to  Section  1471(b)  of  the  Code  and  any  published  intergovernmental agreements entered into in connection with the implementation of such Sections of the Code and any  fiscal  or  regulatory  legislation,  rules,  or  practices  adopted  pursuant  to  any  such intergovernmental agreement.        “FATCA Withholding Tax” means any withholding Tax imposed under FATCA.        “Federal  Funds  Rate”  means,  for  any  period,  a  fluctuating  interest  rate per annum, determined by the Administrative Agent, equal (for each day during such period) to:              (a)   the weighted average of the rates on overnight federal funds transactions       with  members  of  the  Federal  Reserve  System  arranged  by  federal  funds  brokers,  as       published  for  such  day  (or,  if  such  day  is  not  a  Business  Day,  for  the next  preceding       Business Day) by the Federal Reserve Bank of New York; or              (b)   if such rate is not so published for any day which is a Business Day, the       average of the quotations for such day on such transactions received by the applicable       Liquidity Provider or  Purchaser  Agent  from  three federal funds brokers of recognized       standing selected by it.        “Federal Reserve Bank” means the Board of Governors of the Federal Reserve System, or any successor thereto or to the functions thereof.        “Federal  Reserve  Bank  of  New  York’s  Website”  means  the  website  of  the  Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.        “Fee Letters” means any fee letter among any of the Seller or ADT, on the one hand, and the  Administrative  Agent,  the  Collateral  Agent,  or  the  Purchaser  Agents,  on  the  other  hand, setting out the fees and expenses payable in connection with this Agreement or other Transaction Documents.        “Fees”  means  all  fees  payable  by  the  Seller  pursuant  to  any  Fee Letter,  including  the Funded Fee.                                       A-21 SK 28677 0004 8494650 v1217

 

      “Final Payout Date” means the date following the Purchase Termination Date on which Purchasers’ Pool Investment shall have been reduced to zero and all other amounts then accrued or payable to any of the Affected Parties under the Transaction Documents shall have been paid in full in cash.        “Financed  Unpaid  Balance”  means,  as  of  any  time  of  determination  with  respect  to  a Pool  Receivable,  the  sum  of  all  remaining  unpaid  monthly  installment  payments  (up  to  a maximum of the next 36 such monthly installment payments in the case of a Pool Receivable with a Product Type “Burglar Alarm” or in respect of which no credit check was performed in connection with its origination), owed by the related Obligor in respect of such Pool Receivable as of such time of determination.        “Funded Fee” is defined in the Fee Letter.        “Funded Fee Percentage” is defined in the Fee Letter.        “GAAP” means generally accepted accounting principles in the United States of America as consistently applied.        “Governmental Authority” means the government of the United States of America or any other  nation,  or  of any political subdivision thereof, whether state, regional or local, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive,  legislative,  judicial,  taxing, regulatory  or administrative  powers,  or  functions  of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).        “Guarantee”  by  any  Person  means  any  obligation,  contingent  or  otherwise,  of  such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment  of)  such  Debt  or  other  obligation  (whether  arising  by  virtue  of  partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business or customary and reasonable indemnity obligations incurred in the  ordinary  course  of  business.  The  term  “Guarantee”  used  as  a  verb  has  a  corresponding meaning.        “Hedge Rate” means, for any date of determination, the sum of (i) the Weighted Average Swap Rate,  (ii) 2.0%, (iii) the Funded Fee Percentage, and (iv) the Servicing Fee Rate.         “Indemnified Amounts” is defined in Section 12.1(a).        “Indemnified Party” is defined in Section 12.1(a).                                        A-22

 

      “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made or deemed made by or on account of any obligation of the Seller (or the Servicer on behalf of the Seller) under any Transaction Document, and (b) Other Taxes.        “Independent  Manager”  means  a  natural  person  who  (I) is  not  at  the  time  of  initial appointment, or at  any time while serving as Independent Manager of the Seller, and has not been  at  any  time  during  the  preceding  five  (5)  years:  (a) a  member,  partner,  equityholder, manager, director, officer or employee of ADT or the Parent, or any of their respective Affiliates (other than as special member, independent director, independent manager, or similar capacity, of the Seller or any Affiliate of the Seller that is a securitization vehicle or is similarly structured to  be  a  special  purpose  bankruptcy  remote  entity);  (b) a  creditor,  supplier,  service  provider (including  a  provider  of  professional  services)  or  any  other  Person  who  derives  any  material portion  of  its  revenues  from  its  activities  with  the  Seller,  the  Parent,  or  ADT or any  of  their respective  Affiliates  (other  than  as  a provider  of  corporate  services  in  the  ordinary  course of business or as special member, independent director, independent manager, or similar capacity, of the Seller or any Affiliate of the Seller that is a securitization vehicle or is similarly structured to be a special purpose bankruptcy remote entity); or (c) a member of the immediate family of any  such  disqualified  Person  described  in clauses  (a)  or (b)  above  and  (II) (1) has  prior experience as a special member, independent director, independent manager or similar capacity for  an  entity  that  is  a  securitization  vehicle  or  is  similarly  structured  to  be  a  special  purpose bankruptcy remote entity whose Constituent Documents required the unanimous consent of all independent  managers  before  such  entity  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) has  at  least  three  years  of  employment experience  with  one  or  more  entities  that  provide,  in  the  ordinary  course  of  their  respective businesses,  advisory,  management,  or  placement  services  to  issuers  of  securitization  or structured finance instruments, agreements, or securities, including, without limitation, Citadel SPV (USA) LLC, Corporation Service Company, CT Corporation, Lord Securities Corporation, Wilmington Trust, National Association or Wilmington Trust SP Services, Inc.        “Information” is defined in Section 13.8(e).        “Information Package” is defined in Section 3.1(a).        “Initial Syndication” means the first assignment by Mizuho, as the initial Purchaser, of all or any portion of its interest under this Agreement to any (i) any Conduit Purchaser or (ii) any Person other than its own Affiliates.        “Investment” means as of any date of determination, with respect to any Purchaser, the aggregate of all Cash Purchase Price paid to, or for the account of, the Seller in connection with all Purchases allocated to such Purchaser pursuant to Section 1.2, as reduced from time to time by  Collections  distributed  to  such  Purchaser  (or  to  its  Purchaser  Agent  for  such  Purchaser’s account)  and  applied  on  account  of  such  Purchaser’s  Investment  pursuant  to Sections  3.1(d); provided, that if such Purchaser’s Investment shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any                                        A-23 SK 28677 0004 8494650 v1217

 

reason, such Purchaser’s Investment in respect of such Receivable Pool shall be increased by the amount of such rescinded or returned distribution as though it had not been made.        “Investment Company Act” means the Investment Company Act of 1940.        “Joinder” is defined in Section 13.3(d).        “Largest State” means, as of any date of determination, the state (or commonwealth) in the United States, in respect of which the largest amount of aggregate Financed Unpaid Balances of Eligible Receivables in the Receivable Pool in respect of Obligors with Billing Addresses in such state (or commonwealth) relate.        “Law” means any law (including common law), constitution, statute, treaty, regulation, rule,  ordinance,  order,  injunction,  writ,  decree,  judgment,  award,  or  similar  item  of  or  by  a Governmental Authority or any interpretation, implementation or application thereof.        “Legal Final” means the earliest of (a) the Acceleration Date, and (b) the date which is 60 months after the Purchase Termination Date.        “Level 1 Ratings Trigger” means a condition that is in effect at any time when ADT Inc.: (i) has a long-term “corporate family rating” of “B3” or less by Moody’s and a long-term “issuer rating”  of  “B-”  or  less  by  S&P,  (ii)  has  a  long-term  “corporate  family  rating”  of  “B1”  with negative outlook or “B2” or less by Moody’s and a long-term “issuer rating” of less than “B-” or “B-” with negative outlook by S&P, (iii) has a long-term “corporate family rating” of less than “B3” or “B3” with negative outlook by Moody’s and a long-term “issuer rating” of “B+” with negative outlook or “B” or less by S&P, (iv) has a long-term “corporate family rating” of “Caa1” or less by Moody’s, (v) has a long-term “issuer rating” of “CCC+” or less by S&P, or (vi) is not rated by either S&P or Moody’s.        “LIBO Rate”  means  for  any  Yield  Period,  the  rate per annum  equal  to  the  greater  of (i) 0.00% and (ii) (a) the interest rate per annum designated as the LIBO Rate by the applicable Purchaser  Agent  for  a  period  of  time  comparable  to  such  Yield  Period  that  appears  on  the Reuters Screen LIBO Page (or on any successor or substitute page of such service providing rate quotations comparable to those currently provided on such page of such service, as determined by such Purchaser Agent from time to time) for purposes of providing quotations of the London interbank offered rate or, if for any reason such rate is not available, the rate determined by the applicable Purchaser Agent from another recognized source or interbank quotation for deposits in U.S. dollars as of 11:00 a.m. (London, England time) with respect to such Purchaser Agent or related Purchaser on the second Business Day preceding the first day of such Yield Period or (b) if a rate cannot be determined under the foregoing clause, an annual rate equal to the average (rounded upwards if necessary to the nearest 1/100th of 1%) of the rates per annum at which deposits in U.S. Dollars with a duration comparable to such Yield Period in a principal amount substantially  equal  to  the  principal  amount  of  the  applicable  Rate  Tranche  are  offered  to  the principal  London  office of the applicable  Purchaser  Agent  (or  its  related  Purchaser)  by  three London banks, selected by the Administrative Agent in good faith, at about 11:00 a.m. London time on the second Business Day preceding the first day of such Yield Period.                                        A-24

 

      “Lien”  means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement,  encumbrance,  lien  (statutory  or  other),  preference,  priority,  or  other  security agreement  or  preferential  arrangement  of  any  kind  or  nature  whatsoever,  including  any conditional sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing.        “Liquidation Fee”  means,  as  of  any  date  of  determination,  for  each  Rate  Tranche  (or portion  thereof),  the amount,  if  any  (without  duplication  of any  amounts  payable  pursuant  to Section 4.3), by which:        (a)   the  additional  Yield  which  would  have  accrued  on  the  reductions  of  such Purchaser’s  Tranche  Investment  on  any  day  which  is  not  a  Settlement  Date  determined  in accordance with clause (a) of the definition of Settlement Date with respect to such Rate Tranche during  such  if  such  reductions  had  not  been  made  until  the  Settlement  Date  determined  in accordance with clause (a) of the definition of Settlement Date exceeds,        (b)   the income, if any, received for such day during such Settlement Period by the affected Purchaser from investing the proceeds of such reductions of such Purchaser’s Tranche Investment.        “Liquidity Advance” means a loan, advance, purchase, or other similar action made by a Liquidity Provider pursuant to a Liquidity Agreement.        “Liquidity  Agreement”  means  any  agreement  entered  into,  directly  or  indirectly,  in connection with or related to, this Agreement pursuant to which a Liquidity Provider agrees to make loans or advances to, or purchase assets from, a Conduit Purchaser (directly or indirectly) in  order  to  provide  liquidity  or  other  enhancement  for such  Conduit  Purchaser’s  Commercial Paper Notes or other senior indebtedness.        “Liquidity Provider” means any lender, credit enhancer, or liquidity provider that is at any  time  party  to  a  Liquidity  Agreement  or  any  successor  or  assign  of  such  lender,  credit enhancer, or liquidity provider or any similar entity with respect to any permitted assignee of a Conduit Purchaser.        “Lock-box” means a post office box maintained by a Lock-box Bank relating to a Lock- box Account.        “Lock-box Accounts” means each of the accounts (and any related Lock-box) specified in Schedule V (or such as have been notified to and approved by the Collateral Agent and the Administrative Agent in accordance with Section 7.3(d)) maintained at a Lock-box Bank in the name of the Seller.        “Lock-box Bank” means any of the banks party to a Lock-box agreement.        “Loss  Ratio”  means,  with  respect  to  any  Settlement  Period,  a  ratio  (expressed  as  a percentage)  calculated  as  (i) the  sum  of  the  Financed  Unpaid  Balances  of  all  Defaulted Receivables (other than  any Defaulted  Receivables that have been  written off) that constitute Pool Receivables as of the Cut-off Date for such Settlement Period, plus, without duplication,                                       A-25 SK 28677 0004 8494650 v1217

 

the  sum  of  all  Losses  during  such  Settlement  Period,  divided  by  (ii) the  aggregate  Financed Unpaid Balance of all Pool Receivables that constitute Eligible Receivables as of the Cut-off Date for such Settlement Period.        “Loss Reserve” means as of any time of determination, the product of (i) the result of (A) one (1) minus (B) the Weighted Average Advance Rate for the Receivables Pool as of such time of determination, multiplied by (ii) the Net Portfolio Balance on such time of determination.        “Losses”  means  the  Financed  Unpaid  Balance  (net  of  recoveries)  of  any  Pool Receivables that have been, or should have been, written-off as uncollectible by the Servicer in accordance with the Credit and Collection Policies.        “Material Subsidiary” means, in respect of any  Person, any Subsidiary of such Person that satisfies (or would have satisfied) the definition of “Material Subsidiary” in the ADT Credit Agreement as such definition is in effect on the Closing Date.        “Material Adverse Effect” means with respect to any event or circumstance, a material adverse effect on:              (a)   (i) if a particular Person is specified, the ability of such Person to perform       its  obligations  under  this  Agreement  or  any  other  Transaction  Document,  or  (ii) if  a       particular  Person  is  not  specified,  the  ability  of  any  ADT  Entity  or  the  Servicer  to       perform  its  respective  obligations  under  this  Agreement  or  any  other  Transaction       Document;              (b)   (i) the validity or enforceability of any Transaction Document, or (ii) the       value, validity, enforceability, or collectability of all or any portion of Pool Receivables,       or the Related Assets with respect thereto;              (c)   the assets, operations, business or financial condition of any ADT Entity;       or              (d)   the  status,  existence,  perfection,  priority,  enforceability,  or  other  rights       and  remedies  of  any  Purchaser,  the  Collateral  Agent  or  the  Administrative  Agent       associated with its respective interest in the Pool Receivables, or the Related Assets;  provided,  that  no  Material  Adverse  Effect  shall  be  deemed  to  have  occurred  if  any  event  or circumstance, individually or in the aggregate, has a material adverse effect as set forth above on only  an  insignificant  portion  of  the  Pool  Receivables  and  the  Related  Assets,  and  after  the occurrence of such event or circumstance, the sum of the aggregate Purchasers’ Pool Investment and the Required Reserves does not exceed the Net Portfolio Balance.        “Missing Collections” is defined in Section 3.6(b).        “Mizuho” is defined in the preamble.                                        A-26

 

      “Monitoring Services”  means the monitoring and notification services provided by ADT under any contract which give rise to the Service Charge Receivables.        “Monthly  Collections”  means,  with  respect  to  each  Settlement  Date,  the  aggregate amount  of  Collections  deposited  to  the  Collateral  Agent’s  Account  during  the  immediately preceding  Settlement  Period,  plus  any  Deemed  Collections  with  respect  to  such  Settlement Period  deposited  to  the  Collateral  Agent’s  Account  three  (3)  Business  Days  prior  to  such Settlement Date as required pursuant to Section 3.2.        “Moody’s” means Moody’s Investors Service, Inc.        “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.        “Net Portfolio Balance” means, at any time in any calendar month, (A) if such time is prior to the completion of the application of Collections in accordance with Section 3.1(d) with respect  to  the  Settlement  Date  occurring  in  such  calendar  month,  an  amount  equal  to  (x) the aggregate Financed Unpaid Balance of Pool Receivables that constitute Eligible Receivables as of the end of the last day of the most recently ended Settlement Period, minus (y) the sum of (a) the Excess Concentration Amount as of the end of the last day of the most recently ended Settlement Period, plus (b) without duplication of any amounts already removed from the Net Portfolio Balance (including as a result of the related Pool Receivable no longer constituting an Eligible Receivable), all cash Collections and security deposits which have been allocated to the reduction of the Financed Unpaid Balance of such Eligible Receivables but have not yet been applied to reduce such Financed Unpaid Balance, as of the last day of the end of the last day of the  most  recently  ended  Settlement  Period,  plus  (c) without  duplication  of  any  such  amounts already  removed  from  the  Net  Portfolio  Balance  (including  as  result  of  the  related  Pool Receivable no longer constituting an Eligible Receivable), the aggregate amount, as of the end of the  last  day  of  the  most  recently  ended  Settlement  Period,  for  all  Pool  Receivables  that  are Eligible  Receivables  of  all  Dilutions  and  discounts,  rebates  or  other  credits  that  reduce  the Financed Unpaid Balance in respect of such Pool Receivables; and (B) if such time is upon and after the completion of application of Collections in accordance with Section 3.1(d) with respect to any Settlement Date occurring in such calendar month, the amount determined pursuant to clause (A)(x) hereof plus, upon the completion of any Purchase occurring upon and after such time,  pursuant  to  the  terms  of  this  Agreement,  an  amount  equal  to  the  aggregate  Financed Unpaid Balance of the Pool Receivables of such Purchase that constitute Eligible Receivables as of the end of the last day of the most recently ended Settlement Period, minus the sum of (a) the Excess Concentration Amount as of the end of the last day of the most recently ended Settlement Period  with  respect  to  the  combined  Receivables  Pool  including  any  such  Purchase,  plus (b) without  duplication  of  any  amounts  already  removed  from  the  Net  Portfolio  Balance (including  as  a  result  of  the  related  Pool  Receivable  no  longer  constituting  an  Eligible Receivable),  all  cash  Collections  and  security  deposits  which  have  been  allocated  to  the reduction of the Financed Unpaid Balance of such Eligible Receivables but have not yet been applied to reduce such Financed Unpaid Balance, as of the last day of the end of the last day of the  most  recently  ended  Settlement  Period  with  respect  to  the  combined  Receivables  Pool including any such Purchase, plus (c) without duplication of any such amounts already removed from  the  Net  Portfolio  Balance  (including  as  result  of  the  related  Pool  Receivable  no  longer                                       A-27 SK 28677 0004 8494650 v1217

 

constituting an Eligible Receivable), the aggregate amount, as of the end of the last day of the most recently ended Settlement Period with respect to the combined Receivables Pool including any such Purchase, for all Pool Receivables that are Eligible Receivables of all Dilutions and discounts, rebates or other credits that reduce the Financed Unpaid Balance in respect of such Pool Receivables.        “Non-Cash Purchase” means a Purchase or proposed Purchase of Eligible Receivables, pursuant  to  a  Purchase  Request,  where  the  Cash  Purchase  Price  set  forth  in  such  Purchase Request is zero.        “Non-Public  Borrower  Data”  means  all  Borrower  Information  that  may  constitute nonpublic and/or personal information protected under the Privacy Requirements.        “Obligations” means Seller Obligations and ADT Obligations.        “Obligor” means a Person obligated to make payments under a Contract with respect to a Receivable, including any guarantor thereof.        “OFAC”  is defined in Section 6.1(y)(ii).        “Omnibus  Account”  means  the  Omnibus  Account  of  the  Servicer  maintained  with  an Eligible Bank into which Collections shall be deposited.        “Original Term” means, with respect to any Receivable, the total number of months over which monthly installment payments are due under the related Contract.        “Other Connection Taxes” means, with respect to an Affected Party, Taxes imposed as a result  of  a  present  or  former  connection  between  the  Affected  Party  and  the  jurisdiction imposing  such  Tax  (other  than  connections  arising  from  the  Affected  Party  having  executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Pool Receivables (or Related Assets) or Transaction Document).        “Other Permitted Amounts” means (i) as of any date of determination on or prior to the Accounts Amendment Effective Date, any cash of any ADT Entity or their respective Affiliates (other  than  Collections  in  respect  of  Pool  Receivables  remitted  to  any  Lock-box  Account, Collection Account or the Omnibus Account), and (ii) as of any date of determination after the Accounts Amendment Effective Date, none.        “Other  Taxes”  means  all  present  or  future  stamp  and  other  similar  Taxes  payable  or determined to be payable in connection with the execution, delivery, filing, and recording of this Agreement  or  the  other  Transaction  Documents,  except  any  such  Taxes  that  are  (i) Other Connection Taxes imposed with respect to an assignment, or (ii) Excluded Taxes.        “Parent” means ADT Inc. a Delaware Corporation.                                        A-28

 

      “Participant Register” is defined in Section 13.3(b).        “Participant” is defined in Section 13.3(b).        “Payment  Direction”  means  (i) in  respect  of  any  Lock-box  Account,  the  Irrevocable Payment  Direction  in  the  form  of Exhibit  G-1  hereto,  from  ADT  to  the  applicable  Lock-box Bank, as consented and agreed to by the applicable Lock-box Bank and acknowledged by the Collateral Agent, (ii) in respect of any Collection Account, the Irrevocable Payment Direction in substantially  the  form  of Exhibit  G-2  hereto  from  ADT  to  the  applicable  account  bank,  as consented and agreed to by such account bank and acknowledged by the Collateral Agent, and (iii) in  respect  of  the  Omnibus  Account,  the  Irrevocable  Payment  Direction  in  the  form  of Exhibit G-3 hereto, from ADT to the account bank of maintaining such account, as consented and agreed to by such account bank and acknowledged by the Collateral Agent.        “PBGC”  means  the  Pension  Benefit  Guaranty  Corporation  referred  to  and  defined  in ERISA and any successor entity performing similar functions.        “Performance Support Agreement” means the Performance Support Agreement, dated on or about the  Closing Date  or  the  initial Purchase  Date,  among the Parent,  the Administrative Agent and the Collateral Agent, in form and substance acceptable to the Collateral Agent, the Administrative Agent and the Required Purchasers.        “Permitted  Adverse  Claims”  means  any  Lien  (a) created  under  the  Transaction Documents  to  the  Purchasers,  the  “Collateral  Agent,  the  Administrative  Agent,  the  Affected Parties, and the Purchaser Agents, (b) granted pursuant to the ADT Credit Agreement, the ADT Indentures or the ADT Collateral Agreements with respect to any assets or property other than the Seller, the Pool Receivables and the Collections and Related Assets in respect thereof and the other Collateral, (c) created under the Sale Agreement in favor of the Seller, or (d) as to which no  enforcement  collection,  execution,  levy,  or  foreclosure  proceeding  shall  have  been commenced  or  threatened  and  that  solely  secure  the  payment  of  taxes,  assessments  and/or governmental  charges  or  levies,  if  and  to  the  extent  the  same  are  either  (x) not  yet  due  and payable,  or  (y) being  contested  in  good  faith  and  as  to  which  adequate  reserves  have  been provided in accordance with GAAP, but, in any case, only to the extent that such Lien securing payment of such taxes or assessments or other governmental charges constitutes an inchoate tax lien.        “Person”  means  a  natural  individual,  partnership,  sole  proprietorship,  corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company, any Governmental Authority, or any other entity of whatever nature.        “Plan”  means  any  employee  pension  benefit  plan  (other  than  a  Multiemployer  Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any ADT Entity or any ERISA Affiliate thereof is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.                                        A-29 SK 28677 0004 8494650 v1217

 

      “Pool Limit” means in respect of each Purchaser, the maximum amount corresponding to such Purchaser specified as its “Pool Limit” on Schedule IV to this Agreement.        “Pool Deficiency Amount” means as of any time of determination, an amount equal to the  sum,  without  duplication,  of  (i) the  amount,  if  any,  necessary  to  reduce,  the  sum  of  the Purchasers’ Pool Investment and the Required Reserves at such time to an amount equal to the Net Portfolio Balance at such time, plus (ii) the amount, if any which is necessary to reduce the aggregate Investment of all Exiting Purchasers to zero, plus (iii) the amount, if any, necessary to reduce  the  Pool  Investment  to  an  amount  equal  to  the  Purchasers’  Pool  Limit, plus  (iv) the amount, if any, necessary to reduce each Purchaser Group Investment to an amount equal to the related Purchaser Group Limit.        “Pool Receivable” means a Receivable in the Receivable Pool.        “Prime Rate”  means a rate per  annum equal  to the rate of interest  quoted in the print edition of The Wall Street Journal, Money Rates Section as the USA “Prime Rate”, as published for such day (or, if such day is not a Business Day, for the preceding Business Day), or, if such rate  is  not  so  published  for  any  day  which  is  a  Business  Day,  the  rate  announced  by  the Administrative Agent from time to time as its prime rate of interest at its principal office in New York, New York, such rate to change as and when such designated rate changes.        “Privacy Requirements” means (i) Title V of the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801 et seq.; (ii) federal regulations implementing such act and codified at 12 C.F.R. Part 1016 and 16 C.F.R. Part 313; (iii) Interagency Guidelines Establishing Standards For Safeguarding Obligor Information and codified at 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568, and 570,  and  16  C.F.R.  Part  314;  (iv)  the Health  Insurance  Portability  and  Accountability  Act of 1996, 29 U.S.C. § 1181 et seq.; (v) the California Consumer Privacy Act of 2018, CAL. CIV. CODE § 1798.100 et seq. and implementing regulations, and (vi) other applicable federal, state and local laws, rules, regulations, and orders relating to the privacy and security of Borrower Information including, but not limited to, information security requirements promulgated by the Massachusetts Office of Consumer Affairs and Business Regulation and codified at 201 C.M.R. Part 17.00.        “Product  Type”  means  the  type  of  product  sold  to  the  Obligor  under  the  Contract, including “Tier 1”, “Tier 2”, “Tier 3” or “Burglar Alarm”, each as defined in ADT’s Credit & Collection Policy.        “Program  Administration  Agreement”  means  that  certain  administration  agreement between  a  Conduit  Purchaser  and  Program  Administrator  governing  certain  aspects  of  the administration of such  Conduit Purchaser’s commercial paper facility or any other agreement having similar purposes, as in effect from time to time.        “Program  Administrator”  means,  with  respect  to  any  Conduit  Purchaser,  the administrator  designated  for  such  Conduit  Purchaser  under  its  Program  Administration Agreement.        “Program Information” is defined in Section 13.8(a)(i).                                       A-30

 

      “Proportionate Share” means at any time, for any Purchaser Group, a percentage equal to the  quotient  of  (a) the  Purchaser  Group  Investment  of  such  Purchaser  Group  at  such  time, divided by (b) the Purchasers’ Pool Investment at such time.        “Purchase” is defined in Section 1.1.        “Purchase Date” is defined in Section 1.2(a).        “Purchase Facility” means the receivables purchase facility evidenced by this Agreement.        “Purchase Limit” means in respect of a Purchaser Group, the unused portion of the Pool Limit of such Purchaser Group.        “Purchase Request” is defined in Section 1.2(a).        “Purchase  Termination  Date”  means  the  earliest  of  (a) March  5,  2021,  and  (b) the occurrence of an Event of Termination.        “Purchaser” means each Conduit Purchaser (if any) and each other Person listed as such as set forth on the signature pages of this Agreement or in any Joinder as a “Purchaser”, other than any such Person that ceases to be a party hereto pursuant to such Joinder.        “Purchaser Agent” means each Person acting as agent on behalf of a Purchaser Group and listed as such as set forth on the signature pages of this Agreement or any other Person who becomes a party to this Agreement as a Purchaser Agent in accordance with this Agreement.        “Purchaser  Group”  means  each  group  consisting  of  a  Purchaser  Agent,  its  related Purchasers, including any related Conduit Purchaser, if any, administered or represented by such Purchaser  Agent  and  each  Liquidity  Provider  and  Enhancement  Provider  related  to  any  such Conduit Purchaser.        “Purchaser Group Limit” means, at any time, with respect to any Purchaser Group, the aggregate Pool Limits of all Purchasers at such time in such Purchaser Group.        “Purchaser Group Investment” means at any time with respect to any Purchaser Group, the aggregate Investments of all Purchasers at such time in such Purchaser Group.        “Purchasers’  Pool  Investment”  means,  at  any  time,  the  aggregate  Investments  of  all Purchasers.        “Purchasers’ Pool Limit” means, the aggregate Pool Limits of all Purchaser Groups at such time.        “Purchasers’ Tranche Investment” means in relation to any Rate Tranche the amount of Purchasers’  Pool  Investment  allocated  by  the  Administrative  Agent  to  such  Rate  Tranche; provided,  that  at  all  times  the  aggregate  amounts  allocated  to  all  Rate  Tranches  shall  equal Purchasers’ Pool Investment.                                        A-31 SK 28677 0004 8494650 v1217

 

      “Ratable Share” means, for any Purchaser Group, (x) at any time prior to the Purchase Termination Date, a percentage equal to (a) the Purchase Limit of such Purchaser Group divided by  (b) the  Purchase  Limit  of  all  Purchaser  Groups  and  (y) at  any  time  from  and  after  the Purchaser Termination Date, zero.        “Rate Tranche” means, at any time, a portion of a Purchaser’s Investment relating to a Receivable  Pool  selected  by  the  applicable  Purchaser  Agent  pursuant  to Section  2.1  and designated as a Rate Tranche solely for purposes of computing Yield.        “Ratio Effective Date” means the first date, upon which the Purchasers’ Pool Investment exceeds $50,000,000.        “Receivable”  means  any  right  to  payment  from  a  Person,  whether  constituting  an account, chattel paper, instrument, or a general intangible (as such terms are defined under the UCC),  arising  from  the  financing  of  the  sale  and  installation  costs  of  Equipment  by  ADT pursuant  to  a  Contract  and  including  any  payment  obligations  of  such  Person  with  respect thereto; provided, however that no right to payment or other indebtedness owing by a Sanctioned Person shall (i) constitute a Receivable, (ii) be deemed to have been sold or contributed to the Seller by ADT pursuant to the Sale Agreement, or (iii) sold or pledged hereunder by the Seller.        “Receivable  Pool”  means  at  any  time  all  of  the  outstanding  Receivables  sold  or, purported  to  be  sold  to  the  Collateral  Agent  (on  behalf  of  the  Purchasers)  pursuant  to  this Agreement.        “Records”  means  all  Contracts  and  other  documents,  instruments,  books,  records, purchase  orders,  agreements,  reports,  and  other  information  (including  computer  programs, tapes, disks, other information storage media, data processing software, and related property and rights) prepared or maintained by ADT, the Servicer, or the Seller, respectively, with respect to the  Pool  Receivables,  the  Related  Assets,  the  related  Service  Charge  Receivables  and  the Obligors of such Pool Receivables. For the avoidance of doubt, “Records” shall include any Chattel Paper (tangible or electronic) evidencing any Pool Receivables.        “Register” is defined in Section 13.3(e).        “Related Assets” means (a) with respect to any Pool Receivable, (x) all security interests, hypothecations, reservations of ownership, liens, or other Adverse Claims, and property subject thereto  from  time  to  time  purporting  to  secure  payment  of  such  Pool  Receivable,  including pursuant to the Contract pursuant to which such Pool Receivable was originated, together with all  financing  statements,  registrations,  hypothecations,  charges,  or  other  similar  filings  or instruments  against  an  Obligor  and  all  security  agreements  describing  any  collateral securing such Pool Receivable, if any, (y) all interest in any Equipment relating to any Contract giving rise to such Pool Receivable in respect of which such Equipment is sold or purported to be sold by  ADT,  including  without  limitation,  the  right  to  repossess  such  Equipment,  and  (z) all guarantees, insurance policies, and other agreements or arrangements of whatsoever character from time to time supporting of such Pool Receivable whether pursuant to the Contract pursuant to which such Pool Receivable was originated, including any obligation of any party under the Transaction  Documents  to  promptly  deposit amounts  received  in respect  of Collections  to  an                                       A-32

 

account, (b) all Collections in respect of, and other proceeds of, such Pool Receivable in respect of the period from and after the Cut-off Date immediately preceding the Purchase Date relating to such Pool Receivables, (c) all rights and remedies (but none of the obligations) of the Seller under the Sale Agreement and the other Transaction Documents and any other rights or assets pledged,  sold,  or  otherwise  transferred  to  the  Seller  thereunder,  and  (d) all  the  products  and proceeds of any of the foregoing; provided, that the term “Related Assets” when used to refer to the  Related  Assets  sold,  assigned,  contributed  or  transferred  to  the  Seller  under  the  Sale Agreement shall refer to such term as defined in the Sale Agreement.        “Relevant  Governmental  Body”  means  the Federal  Reserve  Board  and/or the Federal Reserve  Bank  of  New  York,  or  a  committee  officially  endorsed  or  convened  by  the  Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.        “Remaining  Term”  means,  as  of  any  date  of  determination,  with  respect  to  any Receivable, the number of remaining unpaid monthly installment payments due under the related Contract for the payment of the Financed Unpaid Balance following such date of determination.        “Remittance  Notice”  is  defined  in  the  Payment  Direction  in  respect  of  the  Omnibus Account.        “Reporting Date” is defined in Section 3.1(a).        “Required Purchasers” means, at any time, Purchasers whose aggregate Investments at such  time  aggregate  to  more  than  50.00%  of  the  Purchasers’  Pool  Investment  at  such  time; provided, however, that if at such time any Purchaser is a Defaulting Purchaser, the Investments of  such  Defaulting  Purchaser  shall  be  disregarded  for  purposes  of  determining  the  Required Purchasers unless such Defaulting Purchaser is the sole Purchaser.        “Required  Reserves”  means  the  sum  of  (i) the  Loss  Reserve,  (ii) the  Yield  and  Fee Reserve, and (iii) the Conditional Service Guaranty Reserve.        “Reserve Account” means the segregated account of the Seller (Account No. 910-0956, ABA No. 043000261) maintained at The Bank of New York Mellon.        “Response Date” is defined in Section 3.5.        “Responsible  Officer”  shall  mean  in  respect  of  an  ADT  Entity  or  the  Servicer  any executive officer, assistant treasurer, treasurer, or controller of such ADT Entity, and any other officer of such ADT Entity or the Servicer, as the case may be, responsible for the administration of this Agreement.        “Retained Interest” means a material net economic interest of not less than five percent (5%) of the then current aggregate Purchasers’ Pool Investment, which takes the form of the first loss tranche in accordance with Article 6(3)(d) of the Securitization Regulation represented by ADT’s direct or indirect equity interest in the Seller.        “RPA Deferred Purchase Price” is defined in Section 1.1.                                       A-33 SK 28677 0004 8494650 v1217

 

      “Sale Agreement” means the Receivables Sale and Contribution Agreement, dated on or about the Closing Date or the initial Purchase Date, between ADT and the Seller.        “Sanctioned Country” means, at any time, a country or territory which is the subject or target  of  any  Sanctions,  including,  without  limitation,  as  of  the  date  hereof,  Cuba,  Crimea (Ukraine), Iran, Sudan, Syria, and North Korea.        “Sanctioned Person” means, at any time, (a) any Person currently the subject or the target of any Sanctions, including any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (or any successor thereto) or the U.S. Department of State, available at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time; (b) that is fifty-percent or more owned, directly or indirectly, in the aggregate by one or more Persons described in clause (a) above; (c) that is operating, organized or  resident  in  a  Sanctioned  Country;  (d) with  whom  engaging  in  trade,  business,  or  other activities  is  otherwise  prohibited  or  restricted  by  Sanctions;  or  (e) (i) an  agency  of  the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a  person  resident  in  a  Sanctioned  Country,  to  the  extent  subject  to  a  sanctions  program administered by OFAC.        “Sanctions” is defined in Section 6.1(y)(ii).        “Sanctions Laws” is defined in Section 6.1(y)(ii).        “SEC” means the Securities and Exchange Commission or any successor governmental authority.        “Second  Largest  State”  means  as  of  any  date  of  determination,  the  state  (or commonwealth) in the United States, in respect of which the second largest amount of aggregate Financed Unpaid Balances of Eligible Receivables in the Receivable Pool in respect of Obligors with Billing Addresses in such state (or commonwealth) relate.        “Securities Act” means the Securities Act of 1933.        “Securitization Regulation” means Regulation (EU) 2017/2402.        “Security” is defined in Section 2(a)(1) of the Securities Act.        “Seller” is defined in the preamble.        “Seller Creditor” is defined in Section 13.7(b).        “Seller Obligations” means any obligation owed by the Seller to the Collateral Agent, the Administrative Agent, any Purchaser Agent, any Purchaser, any Indemnified Party, any other Affected  Party,  or  any  account  institution  that  maintains  a  Lock-box  Account,  a  Collection Account  or  the  Omnibus  Account  arising  in  connection  with  this  Agreement,  and  each  other Transaction  Document,  whether  now  or  hereafter  existing,  due  or  to  become  due,  direct  or                                        A-34

 

indirect,  or  absolute  or  contingent,  including,  all  Indemnified  Amounts  payable  pursuant  to Section 12.1.        “Service  Charge  Receivable”  means  any  right  to  payment  from  a  Person,  whether constituting an account, chattel paper, instrument, a payment intangible or a general intangible (as  such  terms  are  defined  under  the  UCC),  arising  from  ADT’s  providing  the  Monitoring Services  pursuant  to  a  contract  and  including  any  payment  obligations  of  such  Person  with respect thereto.        “Servicer” is defined in Section 8.1(a).        “Servicing Fee” means in respect of the Receivable Pool, for any day, an amount equal to the  product  of  (i) the  Servicing  Fee  Rate,  times  the  Financed  Unpaid  Balance  of  all  Pool Receivables at the end of such day, and (ii) 1/360.        “Servicing Fee Rate” means 0.50%.        “Set-off Party” is defined in Section 13.4.        “Settlement Date” means (a) the twentieth (20th) day of each calendar month (or, if such day is not a Business Day, the immediately succeeding Business Day), and (b) on and after the Acceleration Date, each additional day selected from time to time by the Administrative Agent (it  being  understood  that the  Administrative Agent  may  select  such Settlement  Date to  occur daily); provided, that the first Settlement Date shall be April 22, 2020; provided, further, that the last Settlement Date shall be the Final Payout Date.        “Settlement Period” means:              (a)   the  period  from the  Closing  Date,  to  the  end  of  the  calendar  month       immediately succeeding the calendar month in which such date occurs; and              (b)   thereafter, each subsequent calendar month;  provided, that the last Settlement Period shall end on the Final Payout Date.        “S&P” means Standard & Poor’s Ratings Services.”        “SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.        “Structuring  Agent”  means  Mizuho,  in  its  capacity  as  structuring  agent  for  the transactions contemplated by this Agreement and the other Transaction Documents.        “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are                                       A-35 SK 28677 0004 8494650 v1217

 

at the time beneficially owned, or the management of which is otherwise Controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.        “Successor Notice” is defined in Section 8.1(b).        “Taxes”  means  all  income,  gross  receipts,  rental,  escheat,  franchise,  excise,  stamp, occupational, capital, value added, sales, use, ad valorem (real and personal), property (real and personal),  and  taxes, fees, levies, imposts, charges, or withholdings of any nature whatsoever (including backup withholding), together with any assessments, penalties, fines, additions to tax and  interest  thereon,  howsoever  imposed,  by  any  Governmental  Authority  or  other  taxing authority in the United States or by any foreign government, foreign governmental subdivision or other foreign or international taxing authority.        “Telco98” means the numeric credit modeling score developed by Equifax.        “Term  SOFR”  means  the  forward-looking  term  rate  based  on  SOFR  that  has  been selected or recommended by the Relevant Governmental Body.        “Third  Largest  State”  means,  as  of  any  date  of  determination,  the  state  (or commonwealth) in the United States, in respect of which the third largest amount of aggregate Financed Unpaid Balances of Eligible Receivables in the Receivable Pool in respect of Obligors with Billing Addresses in such state (or commonwealth) relate.        “Tranche  Investment”  means  in  relation  to  any  Rate  Tranche  and  any  Purchaser,  the amount of such Purchaser’s Investment allocated by the related Purchaser Agent to such Rate Tranche pursuant to Section 2.1; provided, that at all times the aggregate amounts allocated to all Rate Tranches of all  Purchasers in respect of the Receivable Pool shall equal the Purchasers’ Pool Investment; provided, further, that at all times the aggregate amounts allocated to all Rate Tranches in respect of a Receivable Pool of any Purchaser shall equal the aggregate Investment of such Purchaser.        “Transaction Documents” means (i) this Agreement, the Sale Agreement, the Fee Letters, the  Lock-box  agreements,  each  applicable  Payment  Direction,  each  applicable  Control Agreement entered into in connection with the Omnibus Account, each Lock-box Account, each Collection Account and  any  other  account of  the Seller  (including  the Reserve Account),  the limited  liability  company  agreement  of  the  Seller,  the  Performance  Support  Agreement,  all amendments,  waivers  and  other  modification  to  any  of  the  above-referenced  agreements  or documents, executed and delivered by any ADT Entity, and (ii) each other agreement entered into in connection with any Transaction Document which either (x) is expressly designated as a “Transaction Document” by the Administrative Agent, the Seller and ADT or (y) in respect of which counsel to any ADT Entity has provided an opinion of counsel as to enforceability.        “True Sale” shall mean, with respect to any Receivable, the sale, contribution or transfer of  an  ownership  interest  in  such  Receivable  (not  the  granting  of  a  security  interest  therein), within the meaning of all applicable Law, including the United States Bankruptcy Code, which sale or transfer was not made with the intent to hinder, delay or defraud any present or future creditors and is not voidable or subject to avoidance under the United States Bankruptcy Code.                                       A-36

 

      “UCC”  means,  in  respect  of  each  state  in  the  United  States  of  America,  the  Uniform Commercial Code as from time to time in effect in such state.        “Unadjusted  Benchmark  Replacement”  means  the  Benchmark  Replacement  excluding the Benchmark Replacement Adjustment.        “Unmatured Event of Termination” means any event which, with the giving of notice or lapse of time, or both, would become an Event of Termination.        “Unpaid Balance” means, as of any time with respect to a Receivable, an amount equal to the sum of all remaining unpaid monthly installment payments owed by the related Obligor in respect of such Receivable under the related Contract as of such time of determination.        “USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107 56 (signed into law October 26, 2001)).        “U.S. Dollars” means dollars in lawful money of the United States of America.        “Voting Securities” of any Person means the stock or other ownership or equity interests, of  whatever  class  or  classes,  the  holders  of  which  ordinarily  have  the  power  to  vote  for  the election of the members of the board of directors, managers, trustees, or other voting members of the  governing  body  of  such  Person  (other  than  stock  or  other  ownership  or  equity  interests having such power only by reason of the happening of a contingency).        “Weighted Average Advance Rate” means, as of any date of determination, the lesser of (A) 85.00%, and (B) the percentage obtained by (i) multiplying the Advance Rate applicable to each Eligible Receivable in the Receivable Pool with a fraction, (x) the numerator of which is the Financed Unpaid Balance of such Eligible Receivable, and (y) the denominator of which is the aggregate Financed Unpaid Balance of all Eligible Receivables in the Receivable Pool, and (ii) summing all of the products calculated pursuant to clause (i).        “Weighted Average Swap Rate” means, as of any date of determination, the result of (I) the sum of (x) the product of (i) the 5-year USD Libor Swap Rate (USSW) as of such date of determination, and (ii) the Financed Unpaid Balance of all Eligible Receivables with an Original Term  greater  than  36  months, plus  (y)  the  product  of  (i)  the  3-year  USD  Libor  Swap  Rate (USSW) as of such date of determination, and (ii) the Financed Unpaid Balance of all Eligible Receivables with an Original Term of 36 months or less, divided by (II)  the aggregate Financed Unpaid Balance of all Eligible Receivables in the Receivable Pool.          “Weighted  Average  Life” means, as of any date  of determination, with  respect  to all Receivables  in  the  Receivable  Pool  which  are  Eligible  Receivables,  the  number  of  months obtained by:              (a)   summing the products obtained by multiplying (i) the Average Life as of       such date of determination of each such Receivable, by (ii) the Financed Unpaid Balance       of such Pool Receivable;                                       A-37 SK 28677 0004 8494650 v1217

 

and dividing such sum by:              (b)   the  aggregate  Financed  Unpaid  Balances  at  such  time  of  all  Pool       Receivables which are Eligible Receivables.        “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or  partial  withdrawal  from  such  Multiemployer  Plan,  as  such  terms  are  defined  in  Part  I  of Subtitle E of Title IV of ERISA.        “Write-Down  and  Conversion  Powers”  means,  with  respect  to  any  EEA  Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to  time  under  the  Bail-In  Legislation  for  the  applicable  EEA  Member  Country,  which  write- down and conversion powers are described in the EU Bail-In Legislation Schedule.        “Yield” means, for any day with respect to any Rate Tranche for the Receivable Pool:                                {(PTI x YR)/360} + LF        where:        YR         =   the Yield Rate for such Rate Tranche on such day;        PTI        =   Purchasers’ Tranche Investment in such Rate Tranche on                       such day; and        LF         =   the Liquidation Fee, if any, for such day.        “Yield and Fee Reserve” means as of any date of determination, the product of:              (a)   the Weighted Average Life divided by 12; times              (b)   the Hedge Rate; times              (c)   the Financed Unpaid Balance of all Pool Receivables; times              (d)   the Weighted Average Advance Rate; times              (e)   one (1) minus the Hedge Rate.        “Yield Period” means for any Rate Tranche, the period from and including the Closing Date to and excluding the first Settlement Date occurring hereunder, and thereafter, each period from  and  including  each  Settlement  Date  and  to  but  excluding  the  immediately  following Settlement Date.        “Yield Rate” means for any Rate Tranche on any day:              (a)   in the case of a Rate Tranche funded by a Conduit Purchaser through the       issuance of Commercial Paper Notes, the applicable CP Rate; and                                        A-38

 

            (b)   in the case of a Rate Tranche not funded by Commercial Paper Notes, the       applicable Bank Rate for such Rate Tranche;              provided, that:                    (i)   on any day as to any Rate Tranche which is funded by Commercial             Paper  Notes,  the  Yield  Rate  shall  equal  the  applicable  Base  Rate  if  (A) the             Administrative Agent does not receive notice or determines, by 12:00 noon (New             York  City  time) on the third  Business  Day  prior  to  the  first  day  of the related             Yield Period or Settlement Period, as applicable, that such Rate Tranche shall not             be  funded  by  Commercial  Paper  Notes,  or  (B) the  Administrative  Agent             determines that (I) funding that Rate Tranche on a basis consistent with pricing             based on the applicable Bank Rate would violate any applicable Law, or (II) that             deposits  of  a  type  and  maturity  appropriate  to  match  fund  such  Rate  Tranche             based on the applicable Bank Rate are not available; and                    (ii)  on any day when any Event of Termination, shall have occurred             that remains continuing the applicable Yield Rate for each Rate Tranche means a             rate per annum equal to the higher of (A) the applicable Base Rate, plus 2.00%             per annum and (B) the rate per annum otherwise applicable to such Rate Tranche             during the current Yield Period or Settlement Period, as applicable plus 2.00%             per annum.  B.  Other Interpretive Matters.        (a)   All accounting terms defined directly or by incorporation in this Agreement or the Sale Agreement shall have the defined meanings when used in any certificate or other document delivered pursuant thereto unless otherwise defined therein.  For purposes of this Agreement, the Sale  Agreement  and  all  such  certificates  and  other  documents,  unless  the  context  otherwise requires:  (a) except  as  otherwise  expressly  provided  herein,  all  terms  of  an  accounting  or financial nature shall be construed in accordance with GAAP, as in effect from time to time; (b) terms defined in Article 9 of the UCC and not otherwise defined in such agreement are used as  defined  in  such  Article;  (c) references  to  any  amount  as  on  deposit  or  outstanding  on  any particular date means such amount at the close of business on such day; (d) the words “hereof,” “herein” and “hereunder” and words of similar import refer to such agreement (or the certificate or other document in which they are used) as a whole and not to any particular provision of such agreement (or such certificate or document); (e) the term “including” means “including without limitation”;  (f) references  to  any  Law  refer  to  that  Law  as  amended  from  time  to  time  and include any successor Law; (g) references to any agreement refer to that agreement as from time to  time  amended,  restated,  extended,  or  supplemented  or  as  the  terms  of  such  agreement  are waived  or  modified  in  accordance  with  its  terms;  (h) references  to  any  Person  include  that Person’s permitted successors and assigns; (i) headings are for purposes of reference only and shall  not  otherwise  affect  the  meaning  or  interpretation  of  any  provision  hereof;  (j) unless otherwise provided, in the calculation of time from a specified date to a later specified date, the term “from”  means “from and including”,  and the terms “to” and “until” each means “to but excluding”;  (k) if any  calculation  to be  made hereunder refers to a Settlement Period  (or any portion  thereof)  that  would  have  occurred  prior  to  the  Closing  Date,  such  reference  shall  be                                       A-39 SK 28677 0004 8494650 v1217

 

deemed to be a reference to a calendar month; (l) terms in one gender include the parallel terms in the neuter and opposite gender; and (m) the term “or” is not exclusive.        (b)   Each  of  the  ADT  Entities,  the  Collateral  Agent,  each  Purchaser,  and  the       Administrative Agent agree that no party hereto shall be deemed to be the drafter of this       Agreement.                                        A-40

 

                                                                    EXHIBIT A                           FORM OF PURCHASE REQUEST                             ____________________, 20___  Mizuho Bank, Ltd. 1251 Avenue of the Americas New York, NY  10020 Attention:  Ladies and Gentlemen:  Reference is hereby made to the Receivables Purchase Agreement, dated as of March 5, 2020 (as amended,  restated,  supplemented  or  otherwise  modified,  the  “Receivables  Purchase Agreement”), among ADT FINANCE LLC (the “Seller”), ADT LLC, as Servicer, the various Purchasers  and  Purchaser  Agents  from  time  to  time  party  thereto,  Mizuho  Bank,  Ltd.,  as collateral agent,  administrative agent, arranger, and structuring agent.  Capitalized terms used in this Purchase Request and not otherwise defined herein shall have the meanings assigned thereto in the Receivables Purchase Agreement. This letter constitutes a Purchase Request pursuant to Section 1.2(a) of the Receivables Purchase Agreement. The Servicer (on behalf of the Seller) hereby requests that the Purchasers make a Purchase of the Receivables set forth on Annex A hereto on the Settlement Date to occur on [], [20_____]1,  effective  on  the  Cut-off  Date  that  occurred  on  [],  [20_____]2  with  a  proposed aggregate  Cash  Purchase  Price  of  $___________ 3.  The  Seller  and  the  Servicer  hereby represents and warrants that each Receivable set forth on Annex A is an Eligible Receivable. Attached hereto as Annex B is the Information Package in respect of the Settlement Period and Yield Period, as applicable immediately preceding the proposed date of Purchase.  The Servicer hereby directs the Purchasers to pay the Cash Purchase Price to the account of the Seller [specified on Schedule II of the Receivables Purchase Agreement][designated below:  Holder  Name: Bank Name: Branch: SWIFT:   1Must be at least five (5) Business Days from the date of this Purchase Request. 2 Must be last day of immediately preceding calendar month. 3Unless such purchase constitutes a Non-Cash Purchase, such amount shall not be less than $5,000,000 and shall be       in integral multiples of $100,000 in excess thereof.                                    Exhibit A-1 SK 28677 0004 8494650 v1217

 

Address: Account Number: ABA Number:]                                     Exhibit A-2

 

IN WITNESS WHEREOF, the undersigned has caused this Purchase Request to be executed by its duly authorized officer as of the date first above written.                                      ADT LLC, as Servicer and on behalf of the Seller                                      By:                                     Name:                                     Title:                                     Exhibit A-3 SK 28677 0004 8494650 v1217

 

                                                                           Annex A                                         Receivables                                                                      Remaining                                                                     Term For                     ADT                                  Remaining   Payment   Product  Obligor           Credit                                Term5 For      of      Type; Name &             Score     Date of   Unpaid  Financed   Payment    Financed   Credit  Billing  Account    of    Originatio  Balanc   Unpaid   of Unpaid   Unpaid     Check Address4  Number  Obligor      n          e     Balance   Balance    Balance    (Y/N)   1.  2.  3.  4.  5.       4 Or identification number or code of Obligor.     5 The number of remaining installments at the time such Eligible Receivable is acquired by the Seller.                                          Annex A     SK 28677 0004 8494650 v1217

 

                                                                    EXHIBIT B                            FORM OF PAYDOWN NOTICE                           ____________________, 20_____  [SPECIFY NAME AND ADDRESS OF THE ADMINISTRATIVE AGENT]   Ladies and Gentlemen:  Reference is hereby made to the Receivables Purchase Agreement, dated as of March 5, 2020 (as amended,  restated,  supplemented  or  otherwise  modified  from  time  to  time,  the  “Receivables Purchase  Agreement”),  among  ADT  FINANCE  LLC,  as  Seller  (“Seller”),  ADT  LLC.,  as Servicer, the  various  Purchasers  and  Purchaser  Agents  from  time  to  time  party  thereto  and Mizuho  Bank,  Ltd.,  as  collateral  agent,  administrative  agent,  arranger  and  structuring  agent. Capitalized terms used in this notice and not otherwise defined herein shall have the meanings assigned thereto in the Receivables Purchase Agreement. This letter constitutes a notice of the Seller’s optional reduction of Purchasers’ Pool Investment in the Receivable Pool pursuant to Section 3.2(b)(i) of the Receivables Purchase Agreement. The  Seller  desires  to  reduce  the  Purchasers’  Pool  Investment  in  the  Receivable  Pool  on [SPECIFY SETTLEMENT DATE], _____6 by $____________________7. Subsequent to such reduction, the Purchasers’ Pool Investment in the Receivable Pool will be $________________.   6Notice must be given at least five (5) Business Days prior to the requested date of such reduction.  Each Seller shall use reasonable efforts to choose a reduction amount, and the date of commencement thereof, so that such reduction shall commence and conclude in the same Settlement Period. 7Such reduction shall not be less than $10,000,000 and shall be in integral multiples of $100,000 in excess thereof.                                     Exhibit B-1 SK 28677 0004 8494650 v1217

 

IN WITNESS WHEREOF, the undersigned has caused this paydown notice to be executed by its duly authorized officer as of the date first above written.                                      ADT LLC, on behalf of the Seller                                      By:                                     Name:                                     Title:                                      Exhibit B-2

 

                                                                    EXHIBIT C                        FORM OF COMPLIANCE CERTIFICATE        This Compliance Certificate is furnished pursuant to that certain Receivables Purchase Agreement, dated as of March 5, 2020 among ADT LLC (“Servicer”), ADT FINANCE LLC as Seller  (the  “Seller”),  the  various  Purchasers  and  Purchaser  Agents  from  time  to  time  party thereto,  and  Mizuho  Bank,  Ltd.,  as  collateral  agent,  administrative  agent,  Arranger  and structuring agent (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”). Capitalized terms used and not otherwise defined herein are used with the meanings  attributed  thereto  in  the  Agreement  (including  those  incorporated  by  reference therein).        THE UNDERSIGNED HEREBY CERTIFIES THAT:    1.  I am the duly elected ________________ of Servicer.    2.  I  have  reviewed  the  terms  of  the  Agreement  and  each  of  the  other  Transaction Documents and I have made, or have caused to be made under my supervision, a review of the transactions  and  conditions  of  Servicer,  ADT,  and  each  Seller  during  the  accounting  period covered by the attached financial statements.    3.  [Except  as  set  forth  in paragraph  4,  the][T]he  examinations  described  in paragraph  2 above did not disclose, and I have no actual knowledge of, the existence of any condition or event which constitutes an Event of Termination or an Unmatured Event of Termination, as each such  terms  are  defined  under  the  Agreement,  during  or  at  the  end  of  the  accounting  period covered by the attached financial statements or as of the date of this Compliance Certificate.    4.  Described below are the exceptions, if any, to paragraph 3 above by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Seller or the Servicer on its behalf has taken, is taking, or proposes to take with respect to each such condition or event:        The foregoing certifications and the financial statements delivered with this Compliance Certificate in support thereof, are made and delivered as of the _____ day of _____________, 20__.                                            By:  ____________________________                                           Name:                                           Title:                                 Exhibit C  SK 28677 0004 8494650 v1217

 

                                                                    EXHIBIT D                        FORM OF INFORMATION PACKAGE                                    (attached)                                 Exhibit D  SK 28677 0004 8494650 v1217

 

                                                                  EXHIBIT E-1   FORM OF CUSTOMER-OWNED EQUIPMENT CONTRACT ORIGINATED ON OR PRIOR                              TO DECEMBER 15, 2019                                    (attached)                                 Exhibit E-1  SK 28677 0004 8494650 v1217

 

                                                                  EXHIBIT E-2      FORM OF CUSTOMER-OWNED EQUIPMENT CONTRACT ORIGINATED AFTER                               DECEMBER 15, 2019                                 Exhibit E-2  SK 28677 0004 8494650 v1217

 

                                                                  EXHIBIT E-3     FORM OF ADT-OWNED EQUIPMENT CONTRACT ORIGINATED AFTER APRIL 17,                                      2020                                 Exhibit E-3  SK 28677 0004 8494650 v1217

 

                                                                    EXHIBIT F                          CREDIT AND COLLECTION POLICY                                    (attached)                                 Exhibit F  SK 28677 0004 8494650 v1217

 

                                                                  EXHIBIT G-1                 FORM OF LOCK-BOX ACCOUNT PAYMENT DIRECTION                                 Exhibit G-1  SK 28677 0004 8494650 v1217

 

                                                                  EXHIBIT G-2                FORM OF COLLECTION ACCOUNT PAYMENT DIRECTION                                 Exhibit G-2  SK 28677 0004 8494650 v1217

 

                                                                  EXHIBIT G-3                 FORM OF OMNIBUS ACCOUNT PAYMENT DIRECTION                                 Exhibit G-3  SK 28677 0004 8494650 v1217

 

                                                                   EXHIBIT H                                 FORM OF JOINDER                                   [see attached]                                 Exhibit H  SK 28677 0004 8494650 v1217

 

                                                                  SCHEDULE I                             ADDRESSES FOR NOTICES  If to any ADT Entity:              c/o ADT LLC             1501 Yamato Road             Boca Raton, FL 33431             Attention:  Chief Legal Officer             Facsimile:  (561) 226-2856  with copies to: Apollo Management VIII, L.P. 9 West 57th Street, 43rd Floor New York, NY 10019 Attention:  Chief Legal Officer Telephone:  (212) 515-3484 Facsimile:  (646) 607-0539  Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 Attention:  Gregory A. Ezring, T. Robert Zochowski Telephone:  (212) 373-3762 Facsimile:  (212) 492-0762  If to Mizuho:              Mizuho Bank, Ltd.             1251 Avenue of the Americas             New York, NY 10020             Attention:  Johan Andreasson             Tel:   (212) 282-3544             Fax:   (212) 282-4105             Email: Johan.Andreasson@mizuhogroup.com                                 Schedule I  SK 28677 0004 8494650 v1217

 

                                                                 SCHEDULE II                             PAYMENT INSTRUCTIONS  With respect to Mizuho:        Destination Bank: Mizuho Bank Ltd., New York Branch       ABA Number: 026 004 307       Account Name: ISA Loan Agency       Account No.: H79-740-005344       Reference: ADT Finance LLC  With respect to the Seller:        BNY Mellon Bank       500 Ross Street       Pittsburgh, PA 15262       Contact:    Brina Hilliard                   412.234.3359                   brina.hilliard@bnymellon.com        Routing/ABA #:    043000261       Swift:            MELNUS3P       Account #:        132-3080                                 Schedule II  SK 28677 0004 8494650 v1217

 

                                                                       SCHEDULE III                                ADVANCE RATE MATRIX   Advance Rate1)                                Tier 1-3                       Burglar Alarm Remaining      Tier 1-3        wo/ Credit     Burglar Alarm   wo/ Credit Term2)         w/ Credit Check Check          w/ Credit Check Check            60          71.55%            59          72.14%            58          72.73%            57          73.32%            56          73.90%            55          74.49%            54          75.08%            53          75.67%            52          76.25%            51          76.84%            50          77.43%            49          78.02%            48          78.60%            47          79.19%            46          79.78%            45          80.37%            44          80.95%            43          81.54%            42          82.13%            41          82.72%            40          83.30%            39          83.89%            38          84.48%            37          85.07%            36          85.67%         69.59%          84.29%         64.64%            35          85.70%         69.65%          84.39%         64.77%            34          85.74%         69.72%          84.48%         64.90%            33          85.79%         69.78%          84.56%         65.06%            32          85.83%         69.86%          84.67%         65.20%            31          85.88%         70.01%          85.22%         65.44%            30          86.24%         71.01%          85.61%         66.63%            29          86.61%         72.01%          86.00%         67.81%            28          86.97%         73.01%          86.39%         68.99%                                   Schedule III  SK 28677 0004 8494650 v1217

 

           27          87.34%         74.01%          86.78%         70.17%            26          87.70%         75.01%          87.17%         71.36%            25          88.07%         76.00%          87.56%         72.54%            24          88.43%         77.00%          87.96%         73.72%            23          88.80%         78.00%          88.35%         74.90%            22          89.16%         79.00%          88.74%         76.08%            21          89.53%         80.00%          89.13%         77.27%            20          89.89%         81.00%          89.52%         78.45%            19          90.26%         82.00%          89.91%         79.63%            18          90.62%         83.00%          90.30%         80.81%            17          90.99%         84.00%          90.70%         82.00%            16          91.35%         85.00%          91.09%         83.18%            15          91.72%         86.00%          91.48%         84.36%            14          92.08%         87.00%          91.87%         85.54%            13          92.45%         88.00%          92.26%         86.72%            12          92.81%         89.00%          92.65%         87.91%            11          93.18%         90.00%          93.04%         89.09%            10          93.54%         91.00%          93.43%         90.27%             9          93.91%         92.00%          93.83%         91.45%             8          94.27%         93.00%          94.22%         92.64%             7          94.64%         94.00%          94.61%         93.82%             6          95.00%         95.00%          95.00%         95.00%             5          95.00%         95.00%          95.00%         95.00%             4          95.00%         95.00%          95.00%         95.00%             3          95.00%         95.00%          95.00%         95.00%             2          95.00%         95.00%          95.00%         95.00%             1          95.00%         95.00%          95.00%         95.00%  1) Subject to 85% maximum advance rate in aggregate  2) The number of remaining installments at the time such Eligible Receivable is acquired by the Seller                                    Schedule III

 

                                                                SCHEDULE IV                                   POOL LIMITS                              Pool Limit   Mizuho Bank, Ltd.        $200,000,000                                 Schedule IV  SK 28677 0004 8494650 v1217

 

                                                                 SCHEDULE V                     LOCK-BOX AND ACCOUNT INFORMATION   Bank               Address             Lock-box #         Account #(s)  BNY Mellon         ADT LLC, PO Box     371878             192-5363                     371878, Pittsburgh,                     PA 15250  BNY Mellon         BNY Mellon          Virtual LB #66     022-2615                     240 Greenwich Street                     New York, NY 10007  BNY Mellon         BNY Mellon          Virtual LB #20 and 008-8452                     240 Greenwich Street #55                     New York, NY 10007                        COLLECTION ACCOUNT INFORMATION             Bank               Address            Account #(s)            BNY Mellon         BNY Mellon         192-5865                               240 Greenwich Street                               New York, NY 10007            BNY Mellon         BNY Mellon         192-6243                               240 Greenwich Street                               New York, NY 10007                                 OMNIBUS ACCOUNT             Bank               Address            Account #(s)            BNY Mellon         BNY Mellon         132-3080                               240 Greenwich Street                               New York, NY 10007                                 Schedule V  SK 28677 0004 8494650 v1217

 

                                                                                SCHEDULE VI                                           UCC DETAILS                                    Location of    Jurisdiction of                                    Physical     Organization /                   Organizational  Legal Name        Other Names     Records      Entity Type       FEIN           ID                     None          1501 Yamato    DE               45-4517261     7705696  ADT FINANCE                      Road, Boca      LLC                          Raton, FL                                   33431                                         Schedule VI  SK 28677 0004 8494650 v1217

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00316-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00316-of-00352.parquet"}]]