-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O7ZXTCW2lgy5IaQCdBq7Wv+a7Ol66xlaswr9aea0bm62hrWrDsN3pRAA/MbwNif9 RrC3ezDLk+jZqFSncjC7ew== 0001021408-03-002756.txt : 20030213 0001021408-03-002756.hdr.sgml : 20030213 20030213170537 ACCESSION NUMBER: 0001021408-03-002756 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERISOURCEBERGEN CORP CENTRAL INDEX KEY: 0001140859 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 233079390 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-16671 FILM NUMBER: 03560758 BUSINESS ADDRESS: STREET 1: 1300 MORRIS DRIVE, SUITE 100 CITY: CHESTERBROOK STATE: PA ZIP: 19087-5594 BUSINESS PHONE: 6107277000 MAIL ADDRESS: STREET 1: 1300 MORRIS DRIVE, SUITE 100 CITY: CHESTERBROOK STATE: PA ZIP: 19087-5594 10-Q 1 d10q.txt FORM 10-Q - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL QUARTER ENDED DECEMBER 31, 2002 ------------------- OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________ TO ________________ Commission file number 1-16671 ------- AMERISOURCEBERGEN CORPORATION ----------------------------- (Exact name of registrant as specified in its charter) Delaware 23-3079390 - -------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1300 Morris Drive, Suite 100, Chesterbrook, PA 19087-5594 - ---------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (610) 727-7000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] The number of shares of common stock of AmerisourceBergen Corporation outstanding as of January 31, 2003 was 110,219,039. - -------------------------------------------------------------------------------- AMERISOURCEBERGEN CORPORATION INDEX
Page No. -------- Part I. Financial Information Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets, December 31, 2002 3 and September 30, 2002 Consolidated Statements of Operations for the three 5 months ended December 31, 2002 and 2001 Consolidated Statements of Cash Flows for the three 6 months ended December 31, 2002 and 2001 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial 19 Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures 29 About Market Risk Item 4. Controls and Procedures 29 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 30 Signatures 31
2 PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements (Unaudited) AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data) - ----------------------------------------------------------------------------------------------------------------------- December 31, September 30, ASSETS 2002 2002 - ----------------------------------------------------------------------------------------------------------------------- (Unaudited) Current assets: Cash and cash equivalents .................................................. $ 366,776 $ 663,340 Accounts receivable, less allowance for doubtful accounts: $179,438 at December 31, 2002 and $181,432 at September 30, 2002 ................... 2,328,398 2,222,156 Merchandise inventories .................................................... 6,381,477 5,437,878 Prepaid expenses and other ................................................. 19,120 26,263 ------------- ------------- Total current assets ............................................... 9,095,771 8,349,637 ------------- ------------- Property and equipment, at cost: Land ....................................................................... 24,952 24,952 Buildings and improvements ................................................. 134,623 134,394 Machinery, equipment and other ............................................. 273,070 263,154 ------------- ------------- Total property and equipment ....................................... 432,645 422,500 Less accumulated depreciation .............................................. 150,839 139,922 ------------- ------------- Property and equipment, net ........................................ 281,806 282,578 ------------- ------------- Other assets: Goodwill ................................................................... 2,206,346 2,205,159 Deferred income taxes ...................................................... 9,351 12,400 Intangibles, deferred charges and other .................................... 365,898 363,238 ------------- ------------- Total other assets ................................................. 2,581,595 2,580,797 ------------- ------------- TOTAL ASSETS ....................................................... $ 11,959,172 $ 11,213,012 ============= ============= - ----------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. 3 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - (Continued)
(in thousands, except share and per share data) - ----------------------------------------------------------------------------------------------------------------------------- December 31, September 30, LIABILITIES AND STOCKHOLDERS' EQUITY 2002 2002 - ----------------------------------------------------------------------------------------------------------------------------- (Unaudited) Current liabilities: Accounts payable ............................................................. $ 5,542,195 $ 5,367,837 Accrued expenses and other ................................................... 449,368 433,835 Current portion of long-term debt ............................................ 210,998 60,819 Accrued income taxes ......................................................... 82,408 31,955 Deferred income taxes ........................................................ 220,439 205,071 ---------------- ------------ Total current liabilities ............................................ 6,505,408 6,099,517 ---------------- ------------ Long-term debt, net of current portion ............................................... 1,991,706 1,756,494 Other liabilities .................................................................... 42,034 40,663 Stockholders' equity: Common stock, $.01 par value - authorized: 300,000,000 shares; issued and outstanding: 106,998,419 at December 31, 2002 and 106,581,837 shares at September 30, 2002 ............................. 1,070 1,066 Additional paid-in capital ................................................... 2,872,214 2,858,596 Retained earnings ............................................................ 552,684 462,619 Accumulated other comprehensive loss ......................................... (5,944) (5,943) ---------------- ------------ Total stockholders' equity ........................................... 3,420,024 3,316,338 ---------------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........................... $ 11,959,172 $ 11,213,012 ================ ============ - --------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. 4 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data) - -------------------------------------------------------------------------------------------------------------------------- Three months ended December 31, ----------------------------------- 2002 2001 - -------------------------------------------------------------------------------------------------------------------------- Operating revenue ................................................................ $ 11,106,905 $ 9,686,276 Bulk deliveries to customer warehouses ........................................... 1,327,628 1,382,504 ----------------------------------- Total revenue .................................................................... 12,434,533 11,068,780 Cost of goods sold ............................................................... 11,913,108 10,597,347 ----------------------------------- Gross profit ..................................................................... 521,425 471,433 Operating expenses: Distribution, selling and administrative ..................................... 317,682 297,592 Depreciation ................................................................. 15,803 14,247 Amortization ................................................................. 1,466 800 Facility consolidations and employee severance ............................... (1,381) - Merger costs ................................................................. - 7,497 ----------------------------------- Operating income ................................................................. 187,855 151,297 Equity in losses of affiliates and other ......................................... 183 1,731 Interest expense ................................................................. 34,385 36,993 ----------------------------------- Income before taxes............................................................... 153,287 112,573 Income taxes ..................................................................... 60,548 44,690 ----------------------------------- Net income ............................................................... $ 92,739 $ 67,883 =================================== Earnings per share: Basic ........................................................................ $ 0.87 $ 0.65 =================================== Diluted ...................................................................... $ 0.84 $ 0.63 =================================== Weighted average common shares outstanding: Basic ........................................................................ 106,790 103,736 Diluted ...................................................................... 113,402 111,182 Cash dividends declared per share of common stock ................................ $ 0.025 $ 0.025 - --------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. 5 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands) - ---------------------------------------------------------------------------------------------------------------------------- Three months ended December 31, ------------------------------------- 2002 2001 - ---------------------------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income .................................................................... $ 92,739 $ 67,883 Adjustments to reconcile net income to net cash used in operating activities: Depreciation ............................................................. 15,803 14,247 Amortization, including amounts charged to interest expense .............. 3,242 1,999 Provision for loss on accounts receivable ................................ 7,276 15,758 Loss on disposal of property and equipment ............................... 1,391 183 Equity in losses of affiliates and other ................................. 183 1,731 Provision for deferred income taxes ...................................... 18,417 17,795 Employee stock compensation .............................................. 206 205 Changes in operating assets and liabilities, excluding the effects of acquisitions: Accounts and notes receivable .................................... (113,715) 20,662 Merchandise inventories .......................................... (943,599) (722,648) Prepaid expenses and other ....................................... 6,400 (1,721) Accounts payable, accrued expenses and income taxes .............. 243,874 163,460 Other ............................................................ 1,434 1,897 ------------------------------------- NET CASH USED IN OPERATING ACTIVITIES .......................................... (666,349) (418,549) ------------------------------------- INVESTING ACTIVITIES Capital expenditures ........................................................... (16,487) (10,069) Cost of acquired companies, net of cash acquired ............................... (1,427) - Purchase of additional equity interests in businesses .......................... - (8,240) Proceeds from sales of property and equipment .................................. 75 53 ------------------------------------- NET CASH USED IN INVESTING ACTIVITIES ........................................ (17,839) (18,256) ------------------------------------- FINANCING ACTIVITIES Net borrowings under revolving credit and receivables securitization facilities .................................................. 100,000 413,000 Long-term debt borrowings ...................................................... 300,000 - Long-term debt repayments ...................................................... (15,000) (23,075) Deferred financing costs and other ............................................. (4,525) (971) Exercise of stock options ...................................................... 9,823 9,509 Cash dividends on common stock ................................................. (2,674) (2,595) ------------------------------------- NET CASH PROVIDED BY FINANCING ACTIVITIES ...................................... 387,624 395,868 ------------------------------------- DECREASE IN CASH AND CASH EQUIVALENTS ............................................ (296,564) (40,937) Cash and cash equivalents at beginning of period ................................. 663,340 297,626 ------------------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ....................................... $ 366,776 $ 256,689 =====================================
- -------------------------------------------------------------------------------- See notes to consolidated financial statements. 6 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Basis of Presentation The accompanying financial statements present the consolidated financial position, results of operations and cash flows of AmerisourceBergen Corporation and its wholly-owned subsidiaries (the "Company") as of the dates and for the periods indicated. All material intercompany accounts and transactions have been eliminated in consolidation. The Company was formed in connection with the merger of AmeriSource Health Corporation ("AmeriSource") and Bergen Brunswig Corporation ("Bergen"), which was consummated on August 29, 2001. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position as of December 31, 2002 and the results of operations and cash flows for the interim periods ended December 31, 2002 and 2001 have been included. Certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States, but which are not required for interim reporting purposes, have been omitted. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2002. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual amounts could differ from these estimated amounts. Certain reclassifications have been made to prior-year amounts in order to conform to the current-year presentation. Note 2. Recently Issued Financial Accounting Standards In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This statement supersedes Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs Incurred in a Restructuring." This standard addresses the financial accounting and reporting for costs associated with exit or disposal activities. These costs relate to termination benefits provided to current employees that are involuntarily terminated, costs to terminate a contract, and costs to consolidate facilities or relocate employees. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under SFAS No. 146, an entity's commitment to a plan does not by itself create an obligation that meets the definition of a liability. SFAS No. 146 also establishes fair value as the basis for measuring the initial liability. The standard was effective for exit costs or disposal activities initiated after December 31, 2002, although early adoption was encouraged. The Company elected to adopt this standard in September 2002. The Company had previously recognized certain costs associated with restructuring plans as of the date of commitment to the plan. The adoption of SFAS No. 146 resulted in the deferral of recognition of such restructuring costs from the date the Company committed to a plan to the date the Company actually incurred the costs associated with a plan. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition to SFAS No. 123's fair value method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure provisions of SFAS No. 123 and APB Opinion No. 28, "Interim Financial Reporting," to require disclosure in the summary of significant accounting policies of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. The adoption of the standard is effective for fiscal years and interim periods beginning after December 15, 2002. The Company does not expect to adopt the fair value method of accounting for stock-based compensation. As required, the Company will adopt the disclosure provisions of this standard beginning with the quarter ending March 31, 2003. 7 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (UNAUDITED) Note 3. Acquisitions and Other Investments In May 2002, the Company's Pharmaceutical Distribution segment acquired a 20% equity interest in a physician management consulting company for $5 million in cash, subject to a possible adjustment contingent on the entity achieving defined earnings targets in calendar 2002. The Company currently expects that there will be a $4 million increase in the purchase price related to the acquisition of the first 20% equity interest. Additionally, the Company has agreed to acquire, within the next two years, the remaining 80% equity interest for a minimum of $10 million, subject to adjustment contingent on the achievement of defined earnings targets. The Company currently expects to pay between $20 million and $30 million for the next 40% equity interest to be acquired in the second or third quarter of fiscal 2003. Under the terms of the acquisition agreement, the total purchase price for 100% equity ownership of the entity shall not exceed $100 million and is based on the entity's earnings during calendar years 2002 through 2004. The Company currently expects to pay between $70 million and $80 million, in the aggregate, for its 100% equity ownership in the entity. The initial 20% investment has been accounted for using the equity method of accounting. Note 4. Earnings Per Share Basic earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the periods presented. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the periods plus the dilutive effect of stock options. Additionally, the diluted calculations consider the 5% convertible subordinated notes as if converted and, therefore, the after-tax effect of interest expense related to these notes is added back to net income in determining income available to common stockholders.
Three months ended December 31, ------------------------------- (in thousands) 2002 2001 - ------------------------------------------------------------------------------------------------ Net income ..................................................... $ 92,739 $ 67,883 Interest expense - convertible subordinated notes, net of income taxes ........................................ 2,489 2,481 ------------------------------- Income available to common stockholders ................ $ 95,228 $ 70,364 =============================== Weighted average common shares outstanding - basic ............. 106,790 103,736 Effect of dilutive securities: Options to purchase common stock ........................... 948 1,782 Convertible subordinated notes ............................. 5,664 5,664 ------------------------------- Weighted average common shares outstanding - diluted ... 113,402 111,182 ===============================
Note 5. Goodwill and Other Intangible Assets Following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the three months ended December 31, 2002 (in thousands):
Pharmaceutical Distribution PharMerica Total - --------------------------------------------------------------------------------------------------------- Goodwill at September 30, 2002 ..................... $ 1,936,203 $ 268,956 $ 2,205,159 Goodwill recognized in connection with the acquisition of businesses ...................... 1,187 - 1,187 ------------------------------------------------- Goodwill at December 31, 2002 ...................... $ 1,937,390 $ 268,956 $ 2,206,346 =================================================
8 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (UNAUDITED) Following is a summary of other intangible assets (in thousands):
December 31, 2002 September 30, 2002 --------------------------------------- ------------------------------------------- Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount --------------------------------------- ------------------------------------------- Unamortized intangibles: Tradenames .................... $ 226,781 $ - $ 226,781 $ 226,781 $ - $ 226,781 Amortized intangibles: ........... Customer lists and other ...... 32,838 (8,462) 24,376 32,838 (6,996) 25,842 --------------------------------------- ------------------------------------------- Total other intangible assets .... $ 259,619 $ (8,462) $ 251,157 $ 259,619 $ (6,996) $ 252,623 ======================================= ===========================================
Amortization expense for other intangible assets was $1.5 million and $0.8 million in the three months ended December 31, 2002 and 2001, respectively. Amortization expense for other intangible assets is estimated to be $4.5 million in fiscal 2003, $3.7 million in each of fiscal 2004, fiscal 2005, and fiscal 2006 and $3.1 million in fiscal 2007. Note 6. Debt Debt consisted of the following (in thousands):
December 31, September 30, 2002 2002 ---------------------------------------------------------------------------------------------------------- Term loan facility at 3.03% and 3.41%, respectively, due 2003 to 2006 ... $ 285,000 $ 300,000 Blanco revolving credit facility at 3.38% and 3.71%, respectively, due 2003 ............................................. 55,000 55,000 AmeriSource receivables securitization financing due 2004, at 1.87% ..... 100,000 - Bergen receivables securitization financing due 2005 .................... - - Bergen 7 3/8% senior notes due 2003 ..................................... 150,066 150,419 Bergen 7 1/4% senior notes due 2005 ..................................... 99,781 99,758 8 1/8% senior notes due 2008 ............................................ 500,000 500,000 7 1/4% senior notes due 2012 ............................................ 300,000 - PharMerica 8 3/8% senior subordinated notes due 2008 .................... 124,485 124,532 AmeriSource 5% convertible subordinated notes due 2007 .................. 300,000 300,000 Bergen 6 7/8% exchangeable subordinated debentures due 2011 ............. 8,425 8,425 Bergen 7.80% trust preferred securities due 2039 ........................ 275,456 275,288 Other ................................................................... 4,491 3,891 ------------------------------- Total debt ...................................................... 2,202,704 1,817,313 Less current portion .................................................... 210,998 60,819 ------------------------------- Total, net of current portion ................................... $ 1,991,706 $ 1,756,494 ===============================
A description of the principal terms of the aforementioned debt is set forth in Note 5 of the Company's consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2002. 9 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) In November 2002, the Company issued $300 million of 7 1/4% senior notes due November 15, 2012 (the "7 1/4% Notes"). The 7 1/4% Notes are redeemable at the Company's option at any time before maturity at a redemption price equal to 101% of the principal amount thereof plus accrued and unpaid interest and liquidated damages, if any, to the date of redemption and, under some circumstances, a redemption premium. Interest on the 7 1/4% Notes is payable semiannually in arrears, commencing May 15, 2003. The Company used the net proceeds of the 7 1/4% Notes to repay $15 million of the term loan in December 2002 and $150 million in aggregate principal of the Bergen 7 3/8% senior notes in January 2003. Additionally, the Company intends to redeem the PharMerica 8 3/8% senior subordinated notes due 2008, at a redemption price equal to 104.19% of the principal amount thereof, when they become callable in April 2003. In connection with the issuance of the 7 1/4% Notes, the Company incurred approximately $5.1 million of costs which were deferred and are being amortized over the ten-year term of the notes. The Blanco Facility, which expires in May 2003, is not classified in the current portion of long-term debt on the accompanying consolidated balance sheet at December 31, 2002 because the Company has the ability and intent to refinance it on a long-term basis. Additionally, since borrowings under the Blanco Facility are secured by a standby letter of credit under the Senior Credit Agreement, the Company is effectively financing this debt on a long-term basis through that arrangement. Note 7. Facility Consolidations and Employee Severance and Merger Costs Facility Consolidations and Employee Severance In connection with the Merger, the Company has developed integration plans to consolidate its distribution network and eliminate duplicate administrative functions, which are expected to result in synergies of approximately $150 million annually by the end of fiscal 2004. The Company's plan is to have a distribution facility network consisting of 30 facilities in the next four to five years. This will be accomplished by building six new facilities, expanding seven facilities, and closing 27 facilities. During fiscal 2002, the Company closed seven distribution facilities and plans to close additional facilities in fiscal 2003. In September 2001, the Company announced plans to close seven distribution facilities in fiscal 2002, consisting of six former AmeriSource facilities and one former Bergen facility. A charge of $10.9 million was recognized in the fourth quarter of fiscal 2001 related to the AmeriSource facilities, and included $6.2 million of severance for approximately 260 warehouse and administrative personnel to be terminated, $2.3 million in lease and contract cancellations, and $2.4 million for the write-down of assets related to the facilities to be closed. Approximately $0.2 million of costs related to the Bergen facility were included in the purchase price allocation. During the fiscal year ended September 30, 2002, the Company announced further integration initiatives relating to the closure of Bergen's repackaging facility and the elimination of certain Bergen administrative functions, including the closure of a related office facility. The cost of these initiatives of approximately $19.2 million, which included $15.8 million of severance for approximately 310 employees to be terminated, $1.6 million for lease cancellation costs, and $1.8 million for the write-down of assets related to the facilities to be closed, resulted in additional goodwill being recorded during fiscal 2002. In September 2002, the Company announced the first of its facility closures planned for fiscal 2003. The second and third facility closures planned for fiscal 2003 were announced in December 2002. Employee severance and lease cancellation costs related to the fiscal 2003 facility closures will be recognized in accordance with the new provisions of SFAS No. 146. Employee severance costs will generally be expensed during the employee service period and lease cancellation and other costs will generally be expensed when the Company enters into a contractual obligation. A charge of $1.1 million was recognized in the three months ended December 31, 2002 for employee severance related to the three announced fiscal 2003 facility closures. Additional amounts for integration initiatives will be recognized in subsequent periods as facilities to be consolidated are identified and specific plans are approved and announced. The Company paid a total of $4.5 million for employee severance and lease and contract cancellation costs and terminated 103 employees in the first quarter of fiscal 2003 related to the aforementioned integration plans. 10 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) During the three months ended December 31, 2002, severance accruals of $1.8 million recorded in September 2001 were reversed into income because certain employees who were expected to be severed either voluntarily left the Company or were retained in other positions within the Company. Additionally, $0.7 million of the September 2001 write-down of assets related to facilities to be closed was reversed into income because the Company was able to use certain equipment that was previously expected to be abandoned or sold. The following table displays the activity in accrued expenses and other from September 30, 2002 to December 31, 2002 related to the integration plans discussed above (in thousands):
Employee Lease Cancellation Severance Costs and Other Total - ------------------------------------------------------------------------------------------------------------- Balance as of September 30, 2002 ............. $ 8,156 $ 955 $ 9,111 Employee severance expensed .................. 1,119 - 1,119 Payments made during period .................. (3,993) (540) (4,533) Employee severance reduction ................. (1,754) - (1,754) ------------------- ---------------------- ----------------- Balance as of December 31, 2002 .............. $ 3,528 $ 415 $ 3,943 =================== ====================== =================
Merger Costs During the three months ended December 31, 2001, the Company expensed approximately $7.5 million of merger costs, primarily related to integrating the operations of AmeriSource and Bergen. Such costs were comprised of $6.0 million of consulting fees and $1.5 million of other items. Effective October 1, 2002, the Company converted its merger integration office to an operations management office. Accordingly, the costs of the operations management office are included within distribution, selling and administrative expenses in the consolidated statements of operations. Note 8. Legal Matters and Contingencies In the ordinary course of its business, the Company becomes involved in lawsuits, administrative proceedings and governmental investigations, including antitrust, environmental, product liability, regulatory and other matters. Large and sometimes unspecified damages or penalties may be sought from the Company in some matters, and some matters may require years for the Company to resolve. The Company establishes reserves from time to time based on its periodic assessment of the potential outcomes of pending matters. There can be no assurance that an adverse resolution of one or more matters during any subsequent reporting period will not have a material adverse effect on the Company's results of operations for that period. However, on the basis of information furnished by counsel and others and taking into consideration the reserves established for pending matters, the Company does not believe that the resolution of currently pending matters (including those matters specifically described below), individually or in the aggregate, will have a material adverse effect on the Company's financial condition. Environmental Remediation The Company is subject to contingencies pursuant to environmental laws and regulations at a former distribution center. The Company has an accrued liability of $0.9 million as reflected in other liabilities in the accompanying consolidated balance sheet at December 31, 2002. Such liability represents the current estimate of the cost to remediate the site. However, changes in regulations or technology or new information concerning the site could affect the actual liability. Proposition 65 In October 2001, the Center for Environmental Health filed a lawsuit against the Company's then Bergen Brunswig Drug Company subsidiary ("BBDC"), a predecessor to the Company's current AmerisourceBergen Drug Corporation subsidiary, and several other defendants. The complaint alleged violations of California's Proposition 65 and Unfair Trade Practices Act for 11 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) failure to provide clear and reasonable warnings regarding the carcinogenicity and reproductive toxicity of lead and the reproductive toxicity of cadmium to the users of FDA-approved anti-diarrheal medicines. The Company tendered its defense to the manufacturer of its private label medicines. In January 2002, the California Attorney General served an amended complaint against BBDC and several of the defendants covering the same products and asserting similar allegations and damages. On January 29, 2002, the State filed a motion to consolidate the two actions in San Francisco County Superior Court. The Company has answered the amended complaints. Settlement discussions are ongoing. Contract Dispute In January 2002, BBDC was served with a complaint filed in the United States District Court for the District of New Jersey by one of its manufacturer vendors, Bracco Diagnostics Inc. The complaint, which includes claims for fraud, breach of New Jersey's Consumer Fraud Act, breach of contract and unjust enrichment, involves disputes relating to chargebacks and credits. The Court granted the Company's motion to dismiss the fraud and New Jersey Consumer Fraud Act counts. The Company has answered the remaining counts of the complaint and the parties have served each other with discovery requests and discovery is ongoing. PharMerica Matter Prior to the acquisition of PharMerica by Bergen, the United States Department of Health and Human Services ("HHS"), during the course of a Medicare audit of various nursing homes, requested PharMerica to produce records related to intravenous pharmaceuticals provided to certain nursing homes in 1997 and 1998. PharMerica has learned that HHS auditors alleged that during the 1997-1998 time frame, certain nursing homes, primarily operating in Texas, improperly billed Medicare for intravenous pharmaceuticals and related services. In June 2000, the government sued Sensitive Care, a former chain of thirteen Texas nursing homes, alleging that Sensitive Care filed false claims for Medicare reimbursement. Because Sensitive Care has filed for bankruptcy, the government's case has been filed in bankruptcy court as a creditor's claim. In its answer to the government's lawsuit, Sensitive Care has denied liability and has brought a third-party complaint alleging that PharMerica is liable for any false claims liabilities that may be imposed against Sensitive Care under an indemnification clause contained in the pharmacy services contracts between PharMerica and the nursing homes Sensitive Care formerly operated. PharMerica denies that it has any liability for fraudulent billings that Sensitive Care, an independent third-party organization, may have submitted to the government. Nevertheless, PharMerica has entered into settlement discussions with the government in the interest of expeditiously resolving this matter. Note 9. Business Segment Information The Company is organized based upon the products and services it provides to its customers. The Company's operations have been aggregated into two reportable segments: Pharmaceutical Distribution and PharMerica. The Pharmaceutical Distribution segment includes AmerisourceBergen Drug Company ("ABDC") and AmerisourceBergen Specialty Group ("ABSG"). ABDC includes the full-service pharmaceutical distribution facilities, American Health Packaging, and other healthcare related businesses. ABDC sells pharmaceuticals, over-the-counter medicines, health and beauty aids, and other health-related products to hospitals, alternate care and mail order facilities, and independent and chain retail pharmacies. American Health Packaging packages oral solid medications for nearly any need in virtually all settings of patient care. ABDC also provides promotional, inventory management, pharmacy automation and information services to its customers. ABSG sells specialty pharmaceutical products and services to physicians, clinics and other providers in the oncology, nephrology, plasma and vaccines sectors. ABSG also provides third party logistics and reimbursement consulting services to healthcare product manufacturers. The PharMerica segment consists solely of the Company's PharMerica operations. PharMerica provides institutional pharmacy products and services to patients in long-term care and alternate site settings, including skilled nursing facilities, assisted living facilities, and residential living communities. PharMerica also provides mail order pharmacy services to chronically and catastrophically ill patients under workers' compensation programs, and provides pharmaceutical claims administration services for payors. 12 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) All of the Company's operations are located in the United States, except for one ABDC subsidiary, which operates in Puerto Rico. The following tables present segment information for the three months ended December 31 (in thousands):
Revenue ---------------------------------------- Three months ended December 31, 2002 2001 - ---------------------------------------------------------------------------------------------- Pharmaceutical Distribution ....................... $ 10,899,570 $ 9,522,076 PharMerica ........................................ 402,842 355,415 Intersegment eliminations ......................... (195,507) (191,215) ---------------------------------------- Operating revenue ............................ 11,106,905 9,686,276 Bulk deliveries to customer warehouses ............ 1,327,628 1,382,504 ---------------------------------------- Total revenue ..................................... $ 12,434,533 $ 11,068,780 ========================================
Management evaluates segment performance based on revenues excluding bulk deliveries to customer warehouses. Intersegment eliminations represent the elimination of the Pharmaceutical Distribution segment's sales to PharMerica. ABDC is the principal supplier of pharmaceuticals to PharMerica.
Operating Income ---------------------------------------- Three months ended December 31, 2002 2001 - ---------------------------------------------------------------------------------------------- Pharmaceutical Distribution ......................... $ 162,935 $ 139,484 PharMerica .......................................... 23,539 19,310 Facility consolidations and employee severance and Merger costs ("special items") ................. 1,381 (7,497) ---------------------------------------- Total operating income ......................... 187,855 151,297 Equity in losses of affiliates and other ............ (183) (1,731) Interest expense .................................... (34,385) (36,993) ---------------------------------------- Income before taxes ........................ $ 153,287 $ 112,573 ========================================
Segment operating income is evaluated before equity in losses of affiliates, interest expense and special items. All corporate office expenses are allocated to the two reportable segments. 13 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) Note 10. Subsequent Events Acquisition of Bridge Medical, Inc. In January 2003, the Company acquired Bridge Medical, Inc. ("Bridge"), a leading provider of barcode-enabled point-of-care software designed to reduce medication errors, for a base purchase price of approximately $28 million. The acquisition also provides for contingent payments of up to a maximum of $55 million based on Bridge achieving defined earnings targets through the end of calendar 2004. The Company paid 83% of the base purchase price by issuing 401,780 shares of Common Stock. The remaining 17% of the base purchase price was paid in cash. The Company also intends to pay any contingent amounts that may become due primarily in shares of Common Stock. At the closing of the acquisition, the Company issued an additional 401,780 shares of Common Stock into an escrow account that may be used for the payment of contingent amounts, if any, that may become due in the future. The Company will retire any unused shares remaining in the escrow account after the end of calendar 2004 upon the completion of the contingent payment determinations. Acquisition of US Bioservices Corporation In January 2003, the Company acquired US Bioservices Corporation ("US Bio"), a national pharmaceutical services provider focused on the management of high-cost complex therapies and reimbursement support with revenues of approximately $120 million in calendar 2002, for a base purchase price of approximately $159 million, which included the repayment of US Bio debt of approximately $15 million. The Company issued 2,399,091 shares of Common Stock with an aggregate market value of approximately $131 million and paid the remaining $28 million of the base purchase price in cash. The agreement also provides for contingent payments of up to $27.6 million in cash based on US Bio achieving defined earnings targets through the end of the first quarter of calendar 2004. 14 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) Note 11. Selected Consolidating Financial Statements of Parent, Guarantors and Non-Guarantors The Company's 8 1/8% Notes, 7 1/4% Notes and 5% Notes each are fully and unconditionally guaranteed on a joint and several basis by a majority of the Company's subsidiaries (the subsidiaries of the Company which are guarantors of either the 8 1/8% Notes, 7 1/4% Notes and/or the 5% Notes being referred to collectively as the "Guarantor Subsidiaries"). The only subsidiaries of the Company which are not guarantors of either the 8 1/8% Notes, the 7 1/4% Notes and/or the 5% Notes (the "Non-Guarantor Subsidiaries") are: (a) ARFC Securitization Facility and Blue Hill Securitization Program, the receivables securitization special purpose entities; (b) Capital I Trust, the issuer of the Trust Preferred Securities; and (c) certain operating subsidiaries which are collectively minor. The following tables present condensed consolidating financial statements including AmerisourceBergen Corporation (the "Parent"), the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. Such financial statements include balance sheets as of December 31, 2002 and September 30, 2002 and statements of operations and cash flows for the three months ended December 31, 2002 and 2001. SUMMARY CONSOLIDATING BALANCE SHEETS:
December 31, 2002 -------------------------------------------------------------------------------------- AmerisourceBergen Eliminations Corporation Guarantor Non-Guarantor and Consolidated (in thousands) (Parent) Subsidiaries Subsidiaries Reclassifications Total - --------------------------------------------------------------------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 40,302 $ 202,143 $ 124,331 $ - $ 366,776 Accounts receivable, net 3 277,348 2,051,047 - 2,328,398 Merchandise inventories - 6,336,762 44,715 - 6,381,477 Prepaid expenses and other 158 18,329 633 - 19,120 --------------------------------------------------------------------------------------- Total current assets 40,463 6,834,582 2,220,726 - 9,095,771 Property and equipment, net - 280,903 903 - 281,806 Goodwill - 2,203,209 3,137 - 2,206,346 Intangibles, deferred charges and other 29,695 344,061 310,772 (309,279) 375,249 Intercompany investments and advances 4,357,313 1,009,761 (1,382,423) (3,984,651) - -------------------------------------------------------------------------------------- Total assets $ 4,427,471 $ 10,672,516 $ 1,153,115 $ (4,293,930) $ 11,959,172 ====================================================================================== Current liabilities: Accounts payable $ - $ 5,533,019 $ 9,176 $ - $ 5,542,195 Accrued expenses and other 18,279 648,473 3,055 - 669,807 Accrued income taxes (55,595) 138,003 - - 82,408 Current portion of long-term debt 60,000 932 - - 60,932 -------------------------------------------------------------------------------------- Total current liabilities 22,684 6,320,427 12,231 - 6,355,342 Long-term debt, net of current portion 1,325,000 661,772 455,000 (300,000) 2,141,772 Other liabilities - 41,401 633 - 42,034 Stockholders' equity 3,079,787 3,648,916 685,251 (3,993,930) 3,420,024 -------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 4,427,471 $ 10,672,516 $ 1,153,115 $ (4,293,930) $ 11,959,172 ======================================================================================
15 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED)
September 30, 2002 ---------------------------------------------------------------------------------- AmerisourceBergen Eliminations Corporation Guarantor Non-Guarantor and Consolidated (in thousands) (Parent) Subsidiaries Subsidiaries Reclassifications Total - ------------------------------------------------------------------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 416,002 $ 172,058 $ 75,280 $ - $ 663,340 Accounts receivable, net 3,315 243,587 1,975,254 - 2,222,156 Merchandise inventories - 5,387,288 50,590 - 5,437,878 Prepaid expenses and other 218 25,082 963 - 26,263 ---------------------------------------------------------------------------------- Total current assets 419,535 5,828,015 2,102,087 - 8,349,637 Property and equipment, net - 281,682 896 - 282,578 Goodwill - 2,202,023 3,136 - 2,205,159 Intangibles, deferred charges and other 26,082 348,657 310,791 (309,892) 375,638 Intercompany investments and advances 3,568,716 1,684,081 (1,439,566) (3,813,231) - ---------------------------------------------------------------------------------- Total assets $ 4,014,333 $10,344,458 $ 977,344 $ (4,123,123) $11,213,012 ================================================================================== Current liabilities: Accounts payable $ - $ 5,350,189 $ 18,771 $ (1,123) $ 5,367,837 Accrued expenses and other 10,819 626,373 1,714 - 638,906 Accrued income taxes (62,360) 94,315 - - 31,955 Current portion of long-term debt 60,000 819 - - 60,819 ---------------------------------------------------------------------------------- Total current liabilities 8,459 6,071,696 20,485 (1,123) 6,099,517 Long-term debt, net of current portion 1,040,000 661,494 355,000 (300,000) 1,756,494 Other liabilities - 40,038 625 - 40,663 Stockholders' equity 2,965,874 3,571,230 601,234 (3,822,000) 3,316,338 ---------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 4,014,333 $10,344,458 $ 977,344 $ (4,123,123) $11,213,012 ==================================================================================
SUMMARY CONSOLIDATING STATEMENTS OF OPERATIONS:
Three months ended December 31, 2002 ---------------------------------------------------------------------------------- AmerisourceBergen Eliminations Corporation Guarantor Non-Guarantor and Consolidated (in thousands) (Parent) Subsidiaries Subsidiaries Reclassifications Total - ------------------------------------------------------------------------------------------------------------------------------- Operating revenue $ - $11,046,540 $ 60,365 $ - $11,106,905 Bulk deliveries to customer warehouses - 1,327,617 11 - 1,327,628 ---------------------------------------------------------------------------------- Total revenue - 12,374,157 60,376 - 12,434,533 Cost of goods sold - 11,854,710 58,398 - 11,913,108 ---------------------------------------------------------------------------------- Gross profit - 519,447 1,978 - 521,425 Operating expenses: Distribution, selling and administrative - 331,508 (13,826) - 317,682 Depreciation - 15,720 83 - 15,803 Amortization - 1,448 18 - 1,466 Facility consolidations and employee severance - (1,381) - - (1,381) ---------------------------------------------------------------------------------- Operating income - 172,152 15,703 - 187,855 Equity in losses of affiliates and other - 183 - - 183 Interest expense (17,126) 44,170 7,341 - 34,385 ---------------------------------------------------------------------------------- Income before taxes and equity in earnings of subsidiaries 17,126 127,799 8,362 - 153,287 Income taxes 6,765 50,482 3,301 - 60,548 Equity in earnings of subsidiaries 92,739 - - (92,739) - ---------------------------------------------------------------------------------- Net income $ 103,100 $ 77,317 $ 5,061 $ (92,739) $ 92,739 ==================================================================================
16 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) (UNAUDITED)
Three months ended December 31, 2001 --------------------------------------------------------------------------------------- AmerisourceBergen Eliminations Corporation Guarantor Non-Guarantor and Consolidated (in thousands) (Parent) Subsidiaries Subsidiaries Reclassifications Total ================================================================================================================================== Operating revenue $ - $ 9,627,128 $ 59,148 $ - $ 9,686,276 Bulk deliveries to customer warehouses - 1,382,493 11 - 1,382,504 --------------------------------------------------------------------------------------- Total revenue - 11,009,621 59,159 - 11,068,780 Cost of goods sold - 10,543,275 54,072 - 10,597,347 --------------------------------------------------------------------------------------- Gross profit - 466,346 5,087 - 471,433 Operating expenses: Distribution, selling and administrative - 310,815 (13,223) - 297,592 Depreciation - 14,177 70 - 14,247 Amortization - 800 - - 800 Merger costs - 7,497 - - 7,497 --------------------------------------------------------------------------------------- Operating income - 133,057 18,240 - 151,297 Equity in losses of affiliates and other - 1,731 - - 1,731 Interest expense - 22,015 14,978 - 36,993 --------------------------------------------------------------------------------------- Income before taxes and equity in earnings of subsidiaries - 109,311 3,262 - 112,573 Income taxes - 43,307 1,383 - 44,690 Equity in earnings of subsidiaries 67,883 - - (67,883) - --------------------------------------------------------------------------------------- Net income $ 67,883 $ 66,004 $ 1,879 $ (67,883) $ 67,883 =======================================================================================
SUMMARY CONSOLIDATING STATEMENTS OF CASH FLOWS:
Three months ended December 31, 2002 ---------------------------------------------------------------------------------- AmerisourceBergen Corporation Guarantor Non-Guarantor Consolidated (in thousands) (Parent) Subsidiaries Subsidiaries Eliminations Total ================================================================================================================================= Net income $ 103,100 $ 87,678 $ 5,061 $ (103,100) $ 92,739 Adjustments to reconcile net income to net cash provided by (used in) operating activities (81,543) (702,912) (77,733) 103,100 (759,088) ---------------------------------------------------------------------------------- Net cash provided by (used in)operating activities 21,557 (615,234) (72,672) - (666,349) ---------------------------------------------------------------------------------- Capital expenditures - (16,397) (90) - (16,487) Cost of acquired companies, net of cash acquired - (1,427) - - (1,427) Other - 75 - - 75 ---------------------------------------------------------------------------------- Net cash used in investing activities - (17,749) (90) - (17,839) ---------------------------------------------------------------------------------- Net repayments under revolving credit and securitization facilities - - 100,000 - 100,000 Long-term debt borrowings 300,000 - - - 300,000 Long-term debt repayments (15,000) - - - (15,000) Deferred financing costs and other (3,977) (548) - - (4,525) Exercise of stock options 9,823 - - - 9,823 Cash dividends on Common Stock (2,674) - - - (2,674) Intercompany investments and advances (685,429) 663,616 21,813 - - ---------------------------------------------------------------------------------- Net cash (used in) provided by financing activities (397,257) 663,068 121,813 - 387,624 ---------------------------------------------------------------------------------- (Decrease) increase in cash and cash equivalents (375,700) 30,085 49,051 - (296,564) Cash and cash equivalents at beginning of period 416,002 172,058 75,280 - 663,340 ---------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 40,302 $ 202,143 $ 124,331 $ - $ 366,776 ==================================================================================
17 AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) (UNAUDITED)
Three months ended December 31, 2001 ----------------------------------------------------------------------------------------- AmerisourceBergen Corporation Guarantor Non-Guarantor Consolidated (in thousands) (Parent) Subsidiaries Subsidiaries Eliminations Total ================================================================================================================================== Net income $ 67,883 $ 66,004 $ 1,879 $ (67,883) $ 67,883 Adjustments to reconcile net income to net cash provided by (used in) operating activities (149) (630,796) 76,630 67,883 (486,432) -------------------------------------------------------------------------------------- Net cash provided by (used in) operating activities 67,734 (564,792) 78,509 - (418,549) -------------------------------------------------------------------------------------- Capital expenditures - (10,041) (28) - (10,069) Purchase of equity interests in business - (8,240) - - (8,240) Other - 53 - - 53 -------------------------------------------------------------------------------------- Net cash used in investing activities - (18,228) (28) - (18,256) -------------------------------------------------------------------------------------- Net borrowings under revolving credit and securitization facilities - - 413,000 - 413,000 Long-term debt borrowings - - - - - Long-term debt repayments - (23,075) - - (23,075) Deferred financing costs and other (1,024) 64 (11) - (971) Exercise of stock options 9,509 - - - 9,509 Cash dividends on Common Stock (2,595) - - - (2,595) Intercompany investments and advances (436,302) 931,243 (494,941) - - -------------------------------------------------------------------------------------- Net cash (used in) provided by financing activities (430,412) 908,232 (81,952) - 395,868 -------------------------------------------------------------------------------------- (Decrease) increase in cash and cash equivalents (362,678) 325,212 (3,471) - (40,937) Cash and cash equivalents at beginning of period 416,002 (218,844) 100,468 - 297,626 -------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 53,324 $ 106,368 $ 96,997 $ - $ 256,689 ======================================================================================
18 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Consolidated Financial Statements and notes thereto contained herein: The Company AmerisourceBergen Corporation (the "Company") is a leading national wholesale distributor of pharmaceutical products and related healthcare services and solutions with over $40 billion in annualized operating revenue. The Company was formed in connection with the merger of AmeriSource Health Corporation ("AmeriSource") and Bergen Brunswig Corporation ("Bergen"), which was consummated on August 29, 2001 (the "Merger"). The Company is organized based upon the products and services it provides to its customers. The Company's operating segments have been aggregated into two reportable segments: Pharmaceutical Distribution and PharMerica. The Pharmaceutical Distribution segment includes AmerisourceBergen Drug Company ("ABDC") and AmerisourceBergen Specialty Group ("ABSG"). ABDC includes the full-service pharmaceutical distribution facilities, American Health Packaging, and other healthcare related businesses. ABDC sells pharmaceuticals, over-the-counter medicines, health and beauty aids, and other health-related products to hospitals, managed care facilities and independent and chain retail pharmacies. American Health Packaging packages oral solid medications for nearly any need in virtually all settings of patient care. ABDC also provides promotional, inventory management, pharmacy automation and information services to its customers. ABSG sells specialty pharmaceutical products and services to physicians, clinics and other providers in the oncology, nephrology, plasma and vaccines sectors. ABSG also provides third party logistics and reimbursement consulting services to healthcare product manufacturers. The PharMerica segment consists solely of the Company's PharMerica operations. PharMerica provides institutional pharmacy products and services to patients in long-term care and alternate site settings, including skilled nursing facilities, assisted living facilities, and residential living communities. It also provides mail order and on-line pharmacy services to chronically and catastrophically ill patients under workers' compensation programs, and provides pharmaceutical claims administration services for payors. 19 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Results of Operations AmerisourceBergen Corporation Summary Segment Information
Operating Revenue Three Months Ended December 31, ----------------------------------------------- (dollars in thousands) 2002 2001 Change --------------------------------------------------------------------------------------------------------- Pharmaceutical Distribution $ 10,899,570 $ 9,522,076 14% PharMerica 402,842 355,415 13 Intersegment eliminations (195,507) (191,215) 2 -------------------------------- Total $ 11,106,905 $ 9,686,276 15% =============================================== Operating Income Three Months Ended December 31, ----------------------------------------------- (dollars in thousands) 2002 2001 Change --------------------------------------------------------------------------------------------------------- Pharmaceutical Distribution $ 162,935 $ 139,484 17% PharMerica 23,539 19,310 22 Facility consolidations and employee severance and Merger costs ("special items") 1,381 (7,497) -------------------------------- Total $ 187,855 $ 151,297 24% =============================================== Percentages of operating revenue: Pharmaceutical Distribution Gross profit 3.59% 3.70% Operating expenses 2.10% 2.23% Operating income 1.49% 1.46% PharMerica Gross profit 32.18% 33.62% Operating expenses 26.33% 28.18% Operating income 5.84% 5.43% AmerisourceBergen Corporation Gross profit 4.69% 4.87% Operating expenses 3.00% 3.31% Operating income 1.69% 1.56% -----------------------------------------------------------------------------
20 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Consolidated Results Operating revenue, which excludes bulk deliveries, for the quarter ended December 31, 2002 increased 15% to $11.1 billion from $9.7 billion in the prior-year quarter. This increase is primarily due to increased operating revenue in the Pharmaceutical Distribution segment. The Company reports as revenue bulk deliveries to customer warehouses, whereby the Company acts as an intermediary in the ordering and delivery of pharmaceutical products. Bulk deliveries decreased by $54.9 million or 4.0% in the quarter ended December 31, 2002 compared to the prior-year quarter. Due to the insignificant service fees generated from these bulk deliveries, fluctuations in volume have no significant impact on operating margins. However, revenue from bulk deliveries has a positive impact to the Company's cash flows due to favorable timing between the customer payments to us and the payments by us to our suppliers. Gross profit of $521.4 million in the quarter ended December 31, 2002 reflects an increase of 11% from $471.4 million in the prior-year quarter. As a percentage of operating revenue, gross profit in the quarter ended December 31, 2002 was 4.69%, as compared to the prior-year percentage of 4.87%. The decrease in gross profit percentage in comparison with the prior-year percentage reflects declines in both the Pharmaceutical Distribution and PharMerica segments due to changes in customer mix and competitive selling price pressures. Distribution, selling and administrative expenses, depreciation and amortization ("DSAD&A") of $335.0 million in the quarter ended December 31, 2002 reflects an increase of 7% compared to $312.6 million in the prior-year quarter. As a percentage of operating revenue, DSAD&A in the quarter ended December 31, 2002 was 3.02%, as compared to the prior-year percentage of 3.23%. The decrease in the DSAD&A percentage from the prior-year ratio reflects improvements in both the Pharmaceutical Distribution and PharMerica segments due to customer mix changes, operational efficiencies and continued benefits from the merger integration effort. In connection with the Merger, the Company has developed integration plans to consolidate its distribution network and eliminate duplicate administrative functions, which are expected to result in synergies of approximately $150 million annually by the end of fiscal 2004. The Company's plan is to have a distribution facility network consisting of 30 facilities in the next four to five years. This will be accomplished by building six new facilities, expanding seven facilities, and closing 27 facilities. During fiscal 2002, the Company closed seven distribution facilities and is planning to close additional facilities in fiscal 2003. In September 2001, the Company announced plans to close seven distribution facilities in fiscal 2002, consisting of six former AmeriSource facilities and one former Bergen facility. A charge of $10.9 million was recognized in the fourth quarter of fiscal 2001 related to the AmeriSource facilities, and included $6.2 million of severance for approximately 260 warehouse and administrative personnel to be terminated, $2.3 million in lease and contract cancellations, and $2.4 million for the write-down of assets related to the facilities to be closed. Approximately $0.2 million of costs related to the Bergen facility were included in the Merger purchase price allocation. During the fiscal year ended September 30, 2002, the Company announced further integration initiatives relating to the closure of Bergen's repackaging facility and the elimination of certain Bergen administrative functions, including the closure of a related office facility. The cost of these initiatives of approximately $19.2 million, which included $15.8 million of severance for approximately 310 employees to be terminated, $1.6 million for lease cancellation costs, and $1.8 million for the write-down of assets related to the facilities to be closed, resulted in additional goodwill being recorded during fiscal 2002. In September 2002, the Company announced the first of its facility closures planned for fiscal 2003. The second and third facility closures planned for fiscal 2003 were announced in December 2002. Employee severance and lease cancellation costs related to the fiscal 2003 facility closures will be recognized in accordance with the new provisions of Statement of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," which the Company elected to adopt early in September 2002. Employee severance costs will generally be expensed during the employee service period and lease cancellation and other costs will generally be expensed when the Company enters into a contractual obligation. The Company expects to incur charges of approximately $10 million to $12 million relating to these 21 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) efforts in fiscal 2003. A charge of $1.1 million was recognized in the three months ended December 31, 2002 for employee severance related to the three announced fiscal 2003 facility closures. Additional amounts for integration initiatives will be recognized in subsequent periods as facilities to be consolidated are identified and specific plans are approved and announced. The Company paid a total of $4.5 million for employee severance and lease and contract cancellation costs and terminated 103 employees in the first quarter of fiscal 2003 related to the aforementioned integration plans. During the three months ended December 31, 2002, severance accruals of $1.8 million recorded in September 2001 were reversed into income because certain employees who were expected to be severed either voluntarily left the Company or were retained in other positions within the Company. Additionally, $0.7 million of the September 2001 write-down of assets related to facilities to be closed was reversed into income because the Company was able to use certain equipment that was previously expected to be abandoned or sold. During the three months ended December 31, 2001, the Company expensed approximately $7.5 million of merger costs, primarily related to integrating the operations of AmeriSource and Bergen. Such costs were comprised of $6.0 million of consulting fees and $1.5 million of other items. Effective October 1, 2002, the Company converted its merger integration office to an operations management office. Accordingly, the costs of the operations management office are included within distribution, selling and administrative expenses in the consolidated statements of operations. Operating income of $187.9 million for the quarter ended December 31, 2002 reflects an increase of 24% from $151.3 million in the prior-year quarter. Special items increased the Company's operating income in the quarter ended December 31, 2002 by $1.4 million and reduced the Company's operating income in the prior-year quarter by $7.5 million. The Company's operating income as a percentage of operating revenue was 1.69% in the quarter ended December 31, 2002 in comparison to 1.56% in the prior-year quarter. The improvement is due to the reduction of the special items and the aforementioned DSAD&A expense percentage reduction more than offsetting the reduction in gross margin. Interest expense decreased 7% in the quarter ended December 31, 2002 to $34.4 million compared to $37.0 million in the prior-year quarter. Average borrowings, net of cash, under the Company's debt facilities during the quarter ended December 31, 2002 were $1.8 billion as compared to average borrowings, net of cash, of $2.2 billion in the prior-year quarter. The reduction in average borrowings, net of cash, was achieved due to improvements in the management of the Company's working capital. Average borrowing rates under the Company's variable-rate debt facilities decreased to 3.26% in the current year quarter from 3.61% in the prior-year quarter, due to lower market interest rates. Income tax expense of $60.5 million in the quarter ended December 31, 2002, reflects an effective tax rate of 39.5% versus 39.7% in the prior-year quarter. The tax provision for the quarter ended December 31, 2002 was computed based on an estimate of the annual effective rate. Net income of $92.7 million for the quarter ended December 31, 2002 reflects an increase of 37% from $67.9 million in the prior-year quarter. Diluted earnings per share of $0.84 in the quarter ended December 31, 2002 reflects a 33% increase as compared to $0.63 per share in the prior-year quarter. Special items had the effect of increasing net income and diluted earnings per share for the quarter ended December 31, 2002 by $0.8 million and $0.01, respectively. Special items had the effect of reducing net income and diluted earnings per share for the quarter ended December 31, 2001 by $4.5 million and $0.04, respectively. Segment Information Pharmaceutical Distribution Segment Pharmaceutical Distribution operating revenue of $10.9 billion for the quarter ended December 31, 2002 reflects an increase of 14% from $9.5 billion in the prior-year quarter. During the quarter ended December 31, 2002, 55% of operating revenue was from sales to institutional customers and 45% was from retail customers; this compares to a customer mix in the prior-year quarter of 52% institutional and 48% retail. In comparison with the prior-year results, sales to institutional customers increased 19% for the quarter primarily due to higher revenues from mail order customers and the ABSG specialty pharmaceutical business. Sales to retail customers increased 10% over the prior-year quarter, principally due to higher revenues 22 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) from drug store chains, including the pharmacy departments of supermarkets. This segment's growth largely reflects national industry economic conditions, including increases in prescription drug usage and higher pharmaceutical prices. Future operating revenue growth may be impacted by customer consolidation and competition within the industry, as well as by industry growth rates. Industry growth rates, as estimated by IMS Healthcare, Inc., are expected to be between 11% and 14% over the next four years, reflecting the impact of brand name drug patent expirations expected between 2003 and 2005 and a slowdown in the introduction of significant new drugs in 2003. Pharmaceutical Distribution gross profit of $391.8 million in the quarter ended December 31, 2002 reflects an increase of 11% from $352.0 million in the prior-year quarter. As a percentage of operating revenue, gross profit in the first quarter of fiscal 2003 was 3.59%, as compared to the prior-year percentage of 3.70%. The gross profit decline reflects the net impact of a number of factors, including the change in customer mix to a higher percentage of large institutional, mail order and chain accounts, and the continuing competitive pricing environment, offset, in part, by higher buy-side margins than in the prior year. Downward pressures on sell-side gross profit margin are expected to continue and there can be no assurance that increases in the buy-side component of the gross margin, including manufacturer price increases and negotiated deals, will be available in the future to fully or partially offset the anticipated decline. The Company's cost of goods sold for interim periods includes a last-in, first-out ("LIFO") provision that is based on the Company's estimated annual LIFO provision. The annual LIFO provision is affected by changes in inventory quantities, product mix, and manufacturer pricing practices, which may be impacted by market and other external influences. Pharmaceutical Distribution operating expenses of $228.9 million in the quarter ended December 31, 2002 reflect an increase of 8% from $212.5 million in the prior-year quarter. As a percentage of operating revenue, operating expenses in the first quarter of fiscal 2003 were 2.10%, as compared to the prior-year percentage of 2.23%. This decrease in expense percentage reflects the changing customer mix described above, efficiencies of scale, the elimination of redundant costs through the merger integration process, the continued emphasis on productivity throughout the Company's distribution network and a reduction of bad debt expense. Pharmaceutical Distribution operating income of $162.9 million in the quarter ended December 31, 2002 reflects an increase of 17% from $139.5 million in the prior-year quarter. As a percentage of operating revenue, operating income in the first quarter of fiscal 2003 was 1.49%, as compared to the prior-year percentage of 1.46%. The improvement over the prior-year percentage was due to a reduction in the operating expense ratio, which was greater than the reduction in gross profit margin. The reduction of the operating expense ratio was partially due to the Company's ability to capture synergy cost savings from the Merger. While management historically has been able to lower expense ratios and expects to continue to do so, there can be no assurance that reductions will occur in the future, or that expense ratio reductions will exceed possible declines in gross margins. Additionally, there can be no assurance that merger integration efforts will proceed as planned and result in the desired synergies. PharMerica Segment PharMerica's operating revenue increased 13% for the quarter December 31, 2002 to $402.8 million compared to $355.4 million in the prior-year quarter. This increase is principally attributable to growth in PharMerica's workers' compensation business, which has grown at a faster rate than its long-term care business. PharMerica's gross profit of $129.6 million for the quarter ended December 31, 2002 increased 8% from gross profit of $119.5 million in the prior-year quarter. As a percentage of operating revenue, gross profit in the first quarter of fiscal 2003 was 32.18%, as compared to prior-year percentage of 33.62%. This decrease is primarily the result of a change in the sales mix, with a greater proportion of PharMerica's current year revenues coming from its workers' compensation business, which has lower gross profit margins and lower operating expenses than its long-term care business. In addition, industry competitive pressures continue to adversely affect gross profit margins. PharMerica's operating expenses of $106.1 million for the quarter ended December 31, 2002 increased 6% increase from operating expenses of $100.2 million in the prior-year quarter. As a percentage of operating revenue, operating expenses in the first quarter of fiscal 2003 were 26.33%, as compared to the prior-year percentage of 28.18%. The percentage reduction is due to several factors, including the aforementioned shift in customer mix towards the workers' compensation business, continued improvements in operating practices, and a reduction in bad debt expense. 23 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) PharMerica's operating income of $23.5 million for the quarter ended December 31, 2002 increased 22% compared to operating income of $19.3 million in the prior-year quarter. As a percentage of operating revenue, operating income in the first quarter of fiscal 2003 was 5.84%, as compared to the prior-year percentage of 5.43%. The improvement was due to the aforementioned reduction in the operating expense ratio, which was greater than the reduction in gross profit margin. Intersegment Eliminations These amounts represent the elimination of the Pharmaceutical Distribution segment's sales to PharMerica. AmerisourceBergen Drug Company is the principal supplier of pharmaceuticals to PharMerica. Liquidity and Capital Resources The following table illustrates the Company's debt structure at December 31, 2002, including availability under revolving credit facilities and receivables securitization facilities (in thousands):
Outstanding Additional Balance Availability - ---------------------------------------------------------------------------------------------------------------------- Fixed-Rate Debt: Bergen 7 3/8% senior notes due 2003 .......................................... $ 150,066 $ - Bergen 7 1/4% senior notes due 2005 .......................................... 99,781 - 8 1/8% senior notes due 2008 ................................................. 500,000 - 7 1/4% senior notes due 2012 ................................................. 300,000 - PharMerica 8 3/8% senior subordinated notes due 2008 ......................... 124,485 - AmeriSource 5% convertible subordinated notes due 2007 ....................... 300,000 - Bergen 6 7/8% exchangeable subordinated debentures due 2011 .................. 8,425 - Bergen 7.80% trust preferred securities due 2039 ............................. 275,456 - Other ........................................................................ 4,491 - ------------- ----------- Total fixed-rate debt ................................................... 1,762,704 - ------------- ----------- Variable-Rate Debt: Term loan facility due 2003 to 2006 .......................................... 285,000 - Blanco revolving credit facility due 2003 .................................... 55,000 - Revolving credit facility due 2006 ........................................... - 937,615 AmeriSource receivables securitization financing due 2004 .................... 100,000 300,000 Bergen receivables securitization financing due 2005 ......................... - 700,000 ------------- ----------- Total variable-rate debt ................................................ 440,000 1,937,615 ------------- ----------- Total debt, including current portion ................................ $ 2,202,704 $ 1,937,615 ============= ===========
The Company's working capital usage fluctuates widely during the year, generally peaking in the second fiscal quarter due to seasonal inventory buying requirements and buy-side purchasing opportunities. During the second quarter of fiscal 2003, the Company expects to utilize up to 70% of the $2.1 billion of aggregate availability under its revolving credit facility and receivables securitization facilities, which are described below. In November 2002, the Company issued $300 million of 7 1/4% senior notes due November 15, 2012 (the "7 1/4% Notes"). The 7 1/4% Notes are redeemable at the Company's option at any time before maturity at a redemption price equal to 101% of the principal amount thereof plus accrued and unpaid interest and liquidated damages, if any, to the date of redemption and, under some circumstances, a redemption premium. Interest on the 7 1/4% Notes is payable semiannually in arrears, commencing May 15, 2003. The 7 1/4% Notes rank junior to the Senior Credit Agreement (defined below) and equal to the Company's other senior unsecured notes. The Company used the net proceeds of the 7 1/4% Notes to repay $15 million of the 24 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Term Facility (defined below) in December 2002 and $150 million in aggregate principal of the Bergen 7 3/8% senior notes in January 2003. Additionally, the Company intends to redeem the PharMerica 8 3/8% senior subordinated notes due 2008, at a redemption price equal to 104.19% of the principal amount thereof, when they become callable in April 2003. In connection with the issuance of the 7 1/4% Notes, the Company incurred approximately $5.1 million of costs which were deferred and are being amortized over the ten-year term of the notes. The Senior Credit Agreement consists of a $1.0 billion revolving credit facility (the "Revolving Facility") and a $300 million term loan facility (the "Term Facility"), both maturing in August 2006. The Term Facility has scheduled maturities on a quarterly basis beginning December 31, 2002, totaling $60 million in each of fiscal 2003 and 2004, and $80 million and $100 million in fiscal 2005 and 2006, respectively. The first scheduled term loan payment of $15 million was made on December 31, 2002. There were no borrowings outstanding under the Revolving Facility at December 31, 2002. Interest on borrowings under the Senior Credit Agreement accrues at specified rates based on the Company's debt ratings. Such rates range from 1.0% to 2.5% over LIBOR or 0% to 1.5% over prime. Currently, the rate is 1.5% over LIBOR or .50% over prime. Availability under the Revolving Facility is reduced by the amount of outstanding letters of credit ($62.4 million at December 31, 2002). The Company pays quarterly commitment fees to maintain the availability under the Revolving Facility at specified rates based on the Company's debt ratings ranging from .25% to .50% of the unused availability. Currently, the rate is .375%. The Senior Credit Agreement contains restrictions on, among other things, additional indebtedness, distributions and dividends to stockholders, investments and capital expenditures. Additional covenants require compliance with financial tests, including leverage and fixed charge coverage ratios, and maintenance of minimum tangible net worth. The Company can choose to repay or reduce its commitments under the Senior Credit Agreement at any time. Substantially all of the Company's assets, except for trade receivables sold into the AmeriSource and Bergen receivables securitization facilities (as described below), collateralize the Senior Credit Agreement. At December 31, 2002, there was $100 million outstanding under the AmeriSource $400 million receivables securitization facility. The facility has an expiration date of May 2004 and interest rates are based on prevailing market rates for short-term commercial paper plus a program fee of 38.5 basis points (1.87% as of December 31, 2002). In order to borrow available amounts under this securitization facility, a back-up 364-day liquidity facility is required to be in place. The current liquidity facility expires in May 2003, but the Company currently expects that it will be renewed through May 2004. The $450 million Bergen receivables securitization facility expires in December 2005, and interest rates are based on prevailing market rates for short-term commercial paper plus a program fee of 75 basis points. In December 2002, the Company obtained an increase to its availability under the Bergen receivables securitization facility up to $700 million through December 2003 to fund discretionary inventory buying opportunities. In order to borrow available amounts in excess of $450 million under the Bergen receivables securitization facility, a back-up 364-day liquidity facility is required to be in place. The current liquidity facility expires in December 2003. The Bergen receivables securitization facility may be subject to termination in the event of a material adverse effect, among other things, on the financial condition, business, operations or prospects of AmerisourceBergen. If a termination were to occur, a cross-default might be triggered under the Senior Credit Agreement. Management believes that the likelihood of such a termination being triggered is remote. At December 31, 2002, there were no borrowings outstanding under the Bergen receivables securitization facility. The receivables securitization facilities represent financing vehicles utilized by the Company because of the availability of attractive interest rates relative to other financing sources. The Company securitizes its trade accounts and notes receivable, which are generally non-interest bearing, in transactions that are accounted for as borrowings under SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." The Company's most significant market risk is the effect of changing interest rates. The Company manages this risk by using a combination of fixed- and variable-rate debt. At December 31, 2002, the Company had approximately $1.8 billion of fixed-rate debt with a weighted average interest rate of 7.3% and $440 million of variable-rate debt with a weighted average interest rate of 2.8%. The amount of variable-rate debt fluctuates during the year based on the Company's working capital requirements. The Company periodically evaluates various financial instruments that could mitigate a portion of its exposure to variable interest rates. However, there are no assurances that such instruments will be available on terms acceptable to the Company. There were no such financial instruments in effect at December 31, 2002. For every $100 million of unhedged variable-rate debt outstanding, a 28 basis-point increase in interest rates (one-tenth of the average variable rate at December 31, 2002) would increase the Company's annual interest expense by $0.28 million. The Company's operating results have generated sufficient cash flow which, together with borrowings under its debt agreements and credit terms from suppliers, have provided sufficient capital resources to finance working capital and cash 25 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) operating requirements, fund capital expenditures, and fund the payment of interest on outstanding debt. The Company's primary ongoing cash requirements will be to finance working capital, fund the payment of interest on indebtedness, finance Merger integration initiatives and fund capital expenditures and routine growth and expansion through new business opportunities. Future cash flows from operations and borrowings are expected to be sufficient to fund the Company's ongoing cash requirements. Following is a summary of the Company's contractual obligations for future principal payments on its debt, minimum rental payments on its noncancelable operating leases and minimum payments on its other commitments at December 31, 2002 (in thousands):
Payments Due by Period ----------------------------------------------------------------------- Within 1 1-3 4-5 After 5 Total year years years years ------------------------------------------------------------------------------------------------------- Debt ...................... $ 2,226,400 $ 265,932 $ 351,424 $ 376,424 $ 1,232,620 Operating leases .......... 169,695 52,451 64,356 28,840 24,048 Other commitments ......... 30,145 24,145 6,000 - - ----------------------------------------------------------------------- Total ................... $ 2,426,240 $ 342,528 $ 421,780 $ 405,264 $ 1,256,668 =======================================================================
The debt amounts in the above table differ from the related carrying amounts on the consolidated balance sheet due to the purchase accounting adjustments recorded in order to reflect Bergen's obligations at fair value on the effective date of the Merger. These differences are being amortized over the terms of the respective obligations. In addition, the $55 million Blanco revolving credit facility, which expires in May 2003, is included in the "Within 1 year" column in the above repayment table. However, this borrowing is not classified in the current portion of long-term debt on the consolidated balance sheet at December 31, 2002 because the Company has the ability and intent to refinance it on a long-term basis. Additionally, borrowings under the Blanco facility are secured by a standby letter of credit under the Senior Credit Agreement, and therefore the Company is effectively financing this debt on a long-term basis through that arrangement. Other commitments include a future minimum payment of $10 million, as described in Note 3 to the Company's consolidated financial statements, relating to the Company's acquisition of a physician management consulting company. The Company has paid $5 million for a 20% equity interest and currently expects to pay between $70 million and $80 million during fiscal years 2003 through 2005, of which $60 million to $70 million is contingent upon the entity's ability to achieve defined earnings targets, for its 100% equity ownership in the entity. Contingent payments relating to this acquisition, in addition to any other contingent payments outstanding, are not reflected in the above table. In connection with its merger integration plans, the Company intends to build six new distribution facilities and expand seven others over the next 3 to 4 years. The Company has begun to enter into various commitments with third parties relating to site selection, purchase of land, design and construction of the new facilities. As of December 31, 2002, the Company has entered into $20.1 million of commitments relating to the construction of the new facilities. The facility commitments are included in Other Commitments in the above table. In December 2002, the Company entered into a 15-year lease obligation totaling $17.4 million for one of the facilities; this obligation is reflected in the above table. 26 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) During the quarter ended December 31, 2002, the Company's operating activities used $666.3 million of cash as compared to $418.5 million of cash used in the prior-year quarter. Cash used in operations during the quarter ended December 31, 2002 was principally the result of a $943.6 million increase in merchandise inventories and a $113.7 million increase in accounts and notes receivable partially offset by a $243.9 million increase in accounts payable, accrued expenses and income taxes, net income of $92.7 million and non-cash items of $46.5 million. The increase in merchandise inventories reflects inventory required to support the revenue increase, additional safety stock purchased to protect against manufacturer shipping delays during the holiday season, as well as inventory purchased to take advantage of buy-side gross profit opportunities including opportunities associated with manufacturer price increases and negotiated deals. Accounts and notes receivable, before changes in the allowance for doubtful accounts, increased only 4%, despite the 15% increase in operating revenues. During the quarter ended December 31, 2002, the Company's days sales outstanding improved as a result of customer mix and continued emphasis on receivables management at the local level. Days sales outstanding for the Pharmaceutical Distribution segment improved to 16.1 days in the first quarter of fiscal 2003 from 16.9 days in the prior-year quarter. Days sales outstanding for the PharMerica segment improved to 40.0 days in the first quarter of fiscal 2003 from 44.4 days in the prior-year quarter. The $174.4 million increase in accounts payable was primarily due to the merchandise inventory increase. Operating cash uses during the quarter ended December 31, 2002 included $26.8 million in interest payments less $11.3 million in income tax refunds, net of payments. The Company has historically used cash in operations during its first fiscal quarter ending December 31. It is anticipated that cash to be provided by operations for the remaining nine months of fiscal 2003 will more than offset the cash used in operations during the first quarter of fiscal 2003. During the quarter ended December 31, 2001, the Company's operating activities used $418.6 million in cash. Such cash usage primarily resulted from increases of $722.6 million in merchandise inventories, partially offset by a decrease in accounts receivable of $20.7 million, an increase in accounts payable, accrued expenses and income taxes of $163.5 million, and net income of $67.9 million. The increase in merchandise inventories reflects inventory required to support the revenue increase, as well as inventory purchased to take advantage of buy-side gross profit opportunities including manufacturer price increases and negotiated deals. Operating cash uses during the three months ended December 31, 2001 included $30.5 million in interest payments and $7.8 million in income tax payments, net of refunds. Capital expenditures for the quarter ended December 31, 2002 were $16.5 million and relate principally to investments in warehouse improvements, information technology and warehouse automation. The Company estimates that it will spend approximately $100 million to $130 million for capital expenditures during fiscal 2003. Capital expenditures for the quarter ended December 31, 2001 were $10.1 million and relate principally to investments in warehouse improvements, information technology and warehouse automation. During the quarter ended December 31, 2001, the Company used cash of $8.2 million to purchase additional equity interests in four businesses related to the Pharmaceutical Distribution segment. During the quarter ended December 31, 2002, the Company had net borrowings of $100.0 million on its receivables securitization facilities, principally to meet seasonal working capital requirements, as described above. In November 2002, the Company issued the aforementioned $300 million of 7 1/4% Notes. In December 2002, a portion of the proceeds received from the issuance was used to repay $15.0 million of the Term Facility, as described above. During the quarter ended December 31, 2001, the Company had net borrowings of $413.0 million on its receivables securitization facilities, principally to meet seasonal working capital requirements. The Company repaid debt of $23.1 million during the quarter, principally consisting of $20.6 million for the retirement of Bergen's 7% debentures pursuant to a tender offer which was required as a result of the Merger. The Company paid a quarterly cash dividend of $0.025 per share on common stock on December 2, 2002 to stockholders of record at the close of business on November 18, 2002. The Company has paid quarterly cash dividends of $0.025 per share on common stock, since the first quarter of fiscal 2002. The Company anticipates that it will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Company's board of directors and will depend upon the Company's future earnings, financial condition, capital requirements and other factors. 27 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Recently Issued Financial Accounting Standards In June 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This statement supersedes Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs Incurred in a Restructuring." This standard addresses the financial accounting and reporting for costs associated with exit or disposal activities. These costs relate to termination benefits provided to current employees that are involuntarily terminated, costs to terminate a contract, and costs to consolidate facilities or relocate employees. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under SFAS No. 146, an entity's commitment to a plan does not by itself create an obligation that meets the definition of a liability. SFAS No. 146 also establishes fair value as the basis for measuring the initial liability. The standard was effective for exit costs or disposal activities initiated after December 31, 2002, although early adoption was encouraged. The Company elected to adopt this standard in September 2002. The Company had previously recognized certain costs associated with restructuring plans as of the date of commitment to the plan. The adoption of SFAS No. 146 resulted in the deferral of recognition of such costs for restructuring plans from the date the Company committed to a plan to the date the Company actually incurred the costs associated with a plan. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition to SFAS No. 123's fair value method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure provisions of SFAS No. 123 and APB Opinion No. 28, "Interim Financial Reporting," to require disclosure in the summary of significant accounting policies of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. The adoption of the standard is effective for fiscal years and interim periods beginning after December 15, 2002. The Company does not expect to adopt the fair value method of accounting for stock-based compensation. As required, the Company will adopt the disclosure provisions of this standard beginning with the quarter ending March 31, 2003. Forward-Looking Statements Certain of the statements contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report are "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. The forward-looking statements herein include statements addressing management's views with respect to future financial and operating results and the benefits and other aspects of the merger between AmeriSource Health Corporation and Bergen Brunswig Corporation. Various factors, including competitive pressures, success of integration, restructuring or systems initiatives, market interest rates, regulatory changes, changes in customer mix, changes in pharmaceutical manufacturers' pricing and distribution policies, changes in U.S. Government policies, customer insolvencies, or the loss of one or more key customer or supplier relationships, could cause actual outcomes and results to differ materially from those described in forward-looking statements. Certain additional factors that management believes could cause actual outcomes and results to differ materially from those described in forward-looking statements are set forth in Item 1 (Business) under the heading "Certain Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2002 and elsewhere in this report. 28 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. The Company's most significant market risk is the effect of changing interest rates. See discussion under "Liquidity and Capital Resources" in Item 2 above. ITEM 4. Controls and Procedures. The Company maintains disclosure controls and procedures that are intended to ensure that information required to be disclosed in the Company's reports submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. These controls and procedures also are intended to ensure that information required to be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding required disclosures. Based on their evaluation as of a date within 90 days prior to the filing date of this quarterly report, the Company's Chief Executive Officer and Chief Financial Officer, with the participation of other members of the Company's management, have evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a - 14(c) and 15d - 14(c) under the Exchange Act) and have concluded that the Company's disclosure controls and procedures are effective for their intended purposes. There have been no significant changes in the Company's internal controls or in those factors that could significantly affect those controls since the date of their most recent evaluation. 29 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits: 4.1 Third Amendment dated December 2, 2002 to Purchase Agreement under AmeriSource receivables securitization facility. 4.2 Tenth Amendment dated December 2, 2002 to Receivables Purchase Agreement under AmeriSource receivables securitization facility. 4.3 Second Amendment dated December 2, 2002 to Sale and Contribution Agreement under Bergen receivables securitization facility. 4.4 Fourth Amendment dated December 2, 2002 to Receivables Purchase and Servicing Agreement and Annex X under Bergen receivables securitization facility. 4.5 Third Amendment dated December 20, 2002 to Sale and Contribution Agreement under Bergen receivables securitization facility. 4.6 Amended and Restated Receivables Purchase and Servicing Agreement dated December 20, 2002 under Bergen receivables securitization facility. 4.7 Amended and Restated Annex X dated December 20, 2002 under Bergen receivables securitization facility. 4.8 RPSA Supplement Agreement dated December 20, 2002 (relating to Bergen receivables securitization facility) among Blue Hill II, Inc., Liberty Street Funding Corp. and The Bank of Nova Scotia (with the consent of General Electric Capital Corporation.) 99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer.) 99.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer.) (b) Reports on Form 8-K: On November 5, 2002, a Current Report on Form 8-K was filed, reporting under items 5 and 7 that the Company announced its earnings for the fiscal quarter and fiscal year ended September 30, 2002 and the Company announced the signing of a definitive agreement to purchase Bridge Medical, Inc. On November 12, 2002, a Current Report on Form 8-K was filed, reporting under items 5 and 7 certain material information. On November 13, 2002, a Current Report on Form 8-K was filed, reporting under items 5 and 7 that the Company agreed to issue $300 million 7 1/4% senior notes due 2012 in a private placement. On December 6, 2002, a Current Report on Form 8-K was filed, reporting under items 5 and 7 that the Company issued a press release providing information about an investor meeting held December 5, 2002 by the Company, providing disclosure of the Company's financial expectations for the fiscal quarter ending December 31, 2002 and affirming the Company's financial expectations for the fiscal year ending September 30, 2003. On December 16, 2002, a Current Report on Form 8-K was filed, reporting under items 5 and 7 that the Company had announced the signing of a definitive agreement to purchase US Bioservices Corporation on December 13, 2002. On January 6, 2003, a Current Report on Form 8-K was filed, reporting under items 5 and 7 that the Company had closed the acquisition of Bridge Medical, Inc. on January 3, 2003. On January 17, 2003, a Current Report on Form 8-K was filed, reporting under items 5 and 7 that the Company closed the acquisition of US Bioservices Corporation. On January 24, 2003, a Current Report on Form 8-K was filed, reporting under items 5 and 7 that the Company announced its earnings for the fiscal quarter ended December 31, 2002. 30 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERISOURCEBERGEN CORPORATION By /s/ R. David Yost --------------------------------------------------- R. David Yost Chief Executive Officer By /s/ Michael D. DiCandilo --------------------------------------------------- Michael D. DiCandilo Senior Vice President and Chief Financial Officer February 13, 2003 31 CERTIFICATIONS PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Certification of Chief Executive Officer of AmerisourceBergen Corporation I, R. David Yost, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q (the "quarterly report") of AmerisourceBergen Corporation (the "Registrant"); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 14 and 15 d - 14) for the Registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors: (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 13, 2003 /s/ R. David Yost ------------------------------- R. David Yost Chief Executive Officer 32 Certification of Chief Financial Officer of AmerisourceBergen Corporation I, Michael D. DiCandilo, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q (the "quarterly report") of AmerisourceBergen Corporation (the "Registrant"); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 14 and 15 d - 14) for the Registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors: (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 13, 2003 /s/ Michael D. DiCandilo ---------------------------------- Michael D. DiCandilo Senior Vice President and Chief Financial Officer 33 EX-4.1 3 dex41.txt THIRD AMENDMENT TO PURCHASE AGREEMENT EXHIBIT 4.1 EXECUTION COPY THIRD AMENDMENT TO PURCHASE AGREEMENT THIS THIRD AMENDMENT, dated as of December 2, 2002 (this "Amendment"), to the Purchase Agreement dated as of May 14, 1999 (as in effect on the date hereof, the "Purchase Agreement"), between AMERISOURCEBERGEN DRUG CORPORATION (formerly known as AmeriSource Corporation), a Delaware corporation (the "Seller") and AMERISOURCE RECEIVABLES FINANCIAL CORPORATION, a Delaware corporation ("ARFC" or the "Buyer"), is by and between the parties listed above. Unless otherwise defined in this Amendment, capitalized terms shall have the meanings assigned to such terms in the Purchase Agreement (as amended hereby). R E C I T A L S WHEREAS, the Buyer and Seller have entered in the Purchase Agreement pursuant to which the Buyer has purchased ARFC Designated Receivables and related rights and interests from the Seller, which are Receivables generated at ARFC Designated Distribution Centers; WHEREAS, ARFC, the Servicer, the Guarantor, the Administrative Agent and the "Buyer" thereunder have entered into the Receivables Purchase Agreement pursuant to which ARFC has sold to the Administrative Agent (on behalf of the Owners) undivided percentage ownership interests in the ARFC Designated Receivables and related rights and interests purchased from the Seller pursuant to the Purchase Agreement; WHEREAS, AmerisourceBergen Drug Corporation ("ABDC"), as seller and BH2, as buyer have entered into the AmeriSource/BH2 Purchase Agreement pursuant to which BH2 has purchased BH2 Designated Receivables and related rights and interests from ABDC, which are Receivables generated by ABDC at BH2 Designated Distribution Centers; WHEREAS, BH2, as seller, Redwood Receivables Corporation, as conduit purchaser, ABDC, as servicer and General Electric Capital Corporation, as committed purchaser and as administrative agent have entered into the BH2/GE Receivables Purchase Agreement, pursuant to which BH2 has sold undivided percentage ownership interests in the BH2 Designated Receivables and related rights and interests to the Purchasers (as defined therein); WHEREAS, the Seller has advised that from time to time it wishes to consolidate certain of the ARFC Designated Distribution Centers into BH2 Designated Distribution Centers and certain of the BH2 Designated Distribution Centers into ARFC Designated Distribution Centers; and WHEREAS, subject to the terms hereof, the Buyer and the Seller wish to amend the Purchase Agreement to permit the consolidation of Distribution Centers as contemplated in the immediately preceding WHEREAS clause; NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows: SECTION 1. Amendments to Section 1.1 of the Purchase Agreement. (i) The defined terms "ARFC Designated Distribution Center," "ARFC Designated Receivables," "BH2 Designated Distribution Center," "Facility Documents," "Lockbox Account," "Permitted Lockbox" and "Transferred Receivable(s)" are hereby deleted from Section 1.1 of the Purchase Agreement and replaced, respectively, with the following: "ARFC Designated Distribution Center" shall mean any Distribution Center of the Seller identified on Exhibit H hereto as an "ARFC Designated Distribution Center" and shall include, without limitation, each distribution center of each "Seller" party to the Affiliate Purchase Agreement on and as of September 30, 2002 (including, without limitation, James Brudnick Company, Inc. and C.D. Smith Healthcare, Inc.), as such Exhibit H may be amended from time to time pursuant to and in connection with a Distribution Center Consolidation. "ARFC Designated Receivables" shall mean, collectively (but without duplication) (i) all Receivables acquired by the Seller, as buyer, under the Affiliate Purchase Agreement and (ii) all Receivables generated by the Seller at any ARFC Designated Distribution Center; provided that any such Receivables that become BH2 Designated Receivables in connection with a Distribution Center Consolidation shall no longer constitute ARFC Designated Receivables. "BH2 Designated Distribution Center" shall mean any Distribution Center of the Seller identified on Exhibit H hereto as a "BH2 Designated Distribution Center," as such Exhibit H may be amended from time to time pursuant to and in connection with a Distribution Center Consolidation. "Facility Documents" shall mean, collectively, this Agreement, the Affiliate Purchase Agreement, the Receivables Purchase Agreement, each Reconveyance Agreement, and all other agreements, documents and instruments delivered pursuant thereto or in connection therewith. "Lockbox Account" shall mean a demand deposit account identified on Exhibit B hereto maintained with a Permitted Lockbox Bank pursuant to the Lockbox 2 Servicing Instructions for the purpose of depositing payments made by the Obligors, as such Exhibit B may be amended, supplemented and otherwise modified from time to time to reflect a Distribution Center Consolidation, and such other accounts as the Buyer may establish from time to time in accordance with the Receivables Purchase Agreement. "Permitted Lockbox" shall mean a post office box or other mailing location identified on Exhibit B hereto maintained by a Permitted Lockbox Bank pursuant to the Lockbox Servicing Instructions for the purpose of receiving payments made by the Obligors for subsequent deposit into a related Lockbox Account, as such Exhibit B may be amended, supplemented and otherwise modified from time to time to reflect a Distribution Center Consolidation, and such other post office box or other mailing location as the Buyer may establish from time to time in accordance with the Receivables Purchase Agreement. "Transferred Receivable(s)" shall have the meaning specified in Section 2.1 hereof; provided that once a Transferred Receivable has been (i) deemed collected pursuant to Section 2.6 and payment therefor made or (ii) repurchased in connection with a Distribution Center Consolidation, it will no longer constitute a Transferred Receivable hereunder. (ii) The following new defined terms are hereby inserted in Section 1.1 of the Purchase Agreement in appropriate alphabetical order: "BH2 Designated Receivables" shall mean all Receivables generated by the Seller at any BH2 Designated Distribution Center; provided that any such Receivables that become ARFC Designated Receivables in connection with a Distribution Center Consolidation shall no longer constitute BH2 Designated Receivables. "Distribution Center Consolidation" shall mean any consolidation of a BH2 Designated Distribution Center into an ARFC Designated Distribution Center and any consolidation of an ARFC Designated Distribution Center into a BH2 Designated Distribution Center, in each case, pursuant to, and in accordance with, Section 2.5A hereof. "Reconveyance Agreement" shall mean a reconveyance agreement in substantially the form of Exhibit I attached hereto. SECTION 2. Addition of New Section 2.5A to the Purchase Agreement. The following new Section 2.5A is hereby inserted immediately after Section 2.5 of the Purchase Agreement: SECTION 2.5A Distribution Center Consolidations. From time to time, the Seller may (but shall have no obligation to) consummate Distribution Center Consolidations; provided, however, that if the Seller proposes to consummate any 3 Distribution Center Consolidation, the Seller shall provide the Buyer and the Administrative Agent with at least 60 days (or, in the case of the first such Distribution Center Consolidation only, at least one day) prior written notice detailing the proposed consolidation (including, without limitation, identifying the specific Distribution Centers involved in such Distribution Center Consolidation, identifying the Permitted Lockboxes and Lockbox Accounts involved in (or otherwise affected by or related to) such Distribution Center Consolidation (including any such Permitted Lockboxes and/or Lockbox Accounts to be opened, closed or transferred in connection therewith), identifying the Obligors involved in (or otherwise affected by or related to) such Distribution Center Consolidation, and setting forth the actions proposed to be taken with respect thereto) and specifying the proposed date of such consolidation, and such consolidation shall be subject to satisfaction of the following conditions precedent: (a) No Termination Event, Servicing Default, Potential Termination Event or unmatured Servicing Default shall have occurred and be continuing or will result after giving effect to such Distribution Center Consolidation and no "Termination Event" or "Incipient Termination Event" under and as defined in the BH2/GE Receivables Purchase Agreement shall have occurred and be continuing or will result after giving effect to such Distribution Center Consolidation; (b) (i) All of the representations and warranties of the Buyer, the Seller, the Servicer and the Guarantor, as applicable, contained in this Agreement, the Receivables Purchase Agreement and the other Purchase Documents shall be true and correct in all material respects on and as of date of such Distribution Center Consolidation, both before and after giving effect to such Distribution Center Consolidation (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); and (ii) The Guarantor shall have ratified and confirmed that all of its obligations under or in connection with Article IV-A and Section 6.05 of the Receivables Purchase Agreement remain in full force and effect, both before and after giving effect to such Distribution Center Consolidation; (c) An amended and restated Exhibit H to reflect such Distribution Center Consolidation shall have been prepared by the Seller and delivered to the Buyer and the Administrative Agent; (d) To the extent the Distribution Center Consolidation provides for the consolidation of an ARFC Designated Distribution Center into a BH2 Designated Distribution Center: 4 (i) the Administrative Agent and the "Buyer" under the Receivables Purchase Agreement shall have reconveyed the Purchased Interest in all outstanding ARFC Designated Receivables generated at such ARFC Designated Distribution Center in accordance with Section 2.17(a) of the Receivables Purchase Agreement, the Administrative Agent, the "Buyer" under the Receivables Purchase Agreement and the Buyer hereunder shall have executed and delivered a Purchaser Interest Reconveyance Agreement, and the Buyer hereunder shall have paid any amounts due with respect thereto pursuant to Section 2.17(a) of the Receivables Purchase Agreement; (ii) the Buyer and the Administrative Agent shall have completed the actions and made the deliveries required by Section 4.09A(i) of the Receivables Purchase Agreement; (iii) the Buyer and the Seller (with the consent of the Administrative Agent) shall have executed and delivered a Reconveyance Agreement in substance satisfactory to the Buyer and the Administrative Agent and the Buyer shall have received the "Purchase Price" set forth therein; and (iv) the Administrative Agent shall have received an officer's certificate signed by a Responsible Officer of the Buyer to the effect that the Purchase Price equals the fair market value of the "Reassigned Receivables" (as defined in the applicable Reconveyance Agreement); (e) To the extent such Distribution Center Consolidation provides for the consolidation of a BH2 Designated Distribution Center into an ARFC Designated Distribution Center: (i) to the extent the Outstanding Balance of the Receivables originated at such BH2 Designated Distribution Center are in excess of the lesser of (A) $25,000,000 and (B) 10.0% of the Outstanding Balance of Transferred Receivables, the "Buyer" under the Receivables Purchase Agreement shall have received such written notice or confirmation as it deems necessary or appropriate from each of Moody's and S&P to the effect that such consolidation (or events related thereto) will not result in a reduction or withdrawal of the rating of its Commercial Paper and the Buyer hereunder and the Administrative Agent shall have completed satisfactory due diligence with respect to the Receivables originated at such BH2 Designated Distribution Center; (ii) the Buyer and the Administrative Agent shall have received evidence satisfactory to them of completion of the actions and deliveries required by Section 4.09A(ii) of the Receivables Purchase Agreement; 5 (iii) the Buyer and the Administrative Agent shall have received satisfactory documentation evidencing (A) the reconveyance to BH2 of the Purchaser Interest (as defined in the BH2/GE Receivables Purchase Agreement) in the Receivables generated at such BH2 Designated Distribution Center and the release of liens associated therewith, (B) the reconveyance of the Receivables generated at such BH2 Designated Distribution Center to the Seller and the release of liens associated therewith, and (C) that the conditions precedent to such Distribution Center Consolidation have been satisfied in accordance with the BH2/GE Receivables Purchase Agreement and the AmeriSource/BH2 Purchase Agreement; (f) The Administrative Agent shall have received an officer's certificate from each of the Buyer, the Seller, the Servicer and the Guarantor, as applicable, in each case, dated the date of such Distribution Center Consolidation, signed by a Responsible Officer of such Person, certifying (i) as to the applicable matters set forth in Section 2.5A(a), together with a pro forma compliance certificate setting forth the calculations (as applicable) substantiating such certifications, (ii) among other things, as to the matters set forth in Section 2.5A(b), (iii) as to the truth, accuracy and completion of the matters set forth in Section 2.5A(d) or (e), as applicable and, in the case of the Seller's officer certificate, attaching an amended and restated Exhibit H to reflect the Distribution Center Consolidation; (g) On the date of such Distribution Center Consolidation, the Buyer and the Administrative Agent shall have received a current receivables aging report with respect to the Receivables generated at the Distribution Center being consolidated into a surviving Distribution Center, which receivables aging report shall be in form and substance satisfactory to the Buyer and the Administrative Agent (which report the Administrative Agent shall provide to each of S&P and Moody's, together with a copy of the notice delivered pursuant to the first paragraph of this Section 2.5A); (h) Without limiting Section 2.5A(d)(ii) or (e)(ii), not less than 5 days prior to the date of such Distribution Center Consolidation, the Buyer and the Administrative Agent shall have received evidence (in form and substance satisfactory to each of them) demonstrating that appropriate actions have been taken and procedures established (all of which actions and procedures must be satisfactory to the Buyer and the Administrative Agent) to prevent (after giving effect to such Distribution Center Consolidation) the commingling of Collections in respect of Transferred Receivables with those of any other Receivables in any Permitted Lockbox or Lockbox Account; and 6 (i) The Buyer and the Administrative Agent shall have received such additional documentation as the Buyer or Administrative Agent may reasonably request. SECTION 3. Amendment to Section 3.2(g) of the Purchase Agreement. Section 3.2(g) of the Purchase Agreement is hereby deleted and replaced with the following: Distribution Centers; Etc. Exhibit H attached hereto identifies all ARFC Designated Distribution Centers and all BH2 Designated Distribution Centers. Exhibit B attached hereto also identifies each bank and other financial institution at which each Distribution Center maintains post office boxes and deposit accounts for the receipt of collections for the Receivables generated at such Distribution Center and identifies the related post office box address and the related account numbers. The Seller represents that the Seller does not generate or otherwise create or maintain any Receivables that are neither ARFC Designated Receivables nor BH2 Designated Receivable. The Seller further represents and warrants that Exhibit H hereto includes as ARFC Designated Distribution Centers all distribution centers of each "Seller" party to the Affiliate Purchase Agreement on and as of September 30, 2002 (including, without, limitation, James Brudnick Company, Inc. and C.D. Smith Healthcare, Inc.). SECTION 4. Representations and Warranties; Etc. In order to induce the Buyer to execute and deliver this Amendment, the Seller hereby represents and warrants on the date hereof (after giving effect to this Amendment and the Tenth Amendment to the Receivables Purchase Agreement), that each of the representations and warranties set forth in Section 3.1 of the Purchase Agreement is true and correct; provided that, references in Section 3.1 of the Purchase Agreement to "this Agreement" or the "Facility Documents" shall mean and be a reference to, or shall include, the Purchase Agreement (after giving effect to this Amendment and the Tenth Amendment to the Receivables Purchase Agreement). SECTION 5. Amendments to Exhibits. Exhibit I attached hereto is hereby inserted immediately after Exhibit H attached to the Purchase Agreement. SECTION 6. Purchase Agreement in Full Force and Effect, as Amended. Except as specifically stated herein, all of the terms and conditions of the Purchase Agreement shall remain in full force and effect. All references to the Purchase Agreement in any Facility Document or any other document or instrument shall be deemed to mean the Purchase Agreement, as amended by this Amendment. This Amendment shall not constitute a novation of the Purchase Agreement, but shall constitute an amendment thereto. The parties hereto agree to be bound by the terms and obligations of the Purchase Agreement, as amended by this Amendment, as though the terms and obligations of the Purchase Agreement were set forth herein. 7 SECTION 7. Effectiveness. This Amendment shall become effective in accordance with its terms upon receipt by the Buyer and the Administrative Agent of each of the following: (a) an executed counterpart of this Amendment from each party hereto (including the consent of the Administrative Agent and General Electric Capital Corporation, as the administrative agent under the BH2/GE Receivables Purchase Agreement); and (b) a fully executed Tenth Amendment to the Receivables Purchase Agreement, dated as of the date hereof, which amendment shall have become effective in accordance with its terms. [Signature Page Follows] 8 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first above set forth. AMERISOURCE RECEIVABLES FINANCIAL CORPORATION, as Buyer By ______________________________ Name: Title: AMERISOURCEBERGEN DRUG CORPORATION, as Seller By ______________________________ Name: Title: CONSENTED TO AS OF THE DATE FIRST ABOVE SET FORTH: JPMORGAN CHASE BANK, as Administrative Agent By ______________________________ Name: Title: WITH THE CONSENT OF: GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent under the BH2/GE Receivables Purchase Agreement By ______________________________ Name: Title: [Signature Page to the Third Amendment to the AmeriSource Purchase Agreement] EXHIBIT I to Purchase Agreement FORM OF RECONVEYANCE AGREEMENT THIS RECONVEYANCE AGREEMENT (this "Agreement") is made and entered into as of [INSERT DATE], between AMERISOURCE RECEIVABLES FINANCIAL CORPORATION, a Delaware corporation (the "Buyer") and AMERISOURCEBERGEN DRUG CORPORATION (f/k/a AmeriSource Corporation), a Delaware corporation (the "Seller"). All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement (as defined below). Statement of Facts Pursuant to that certain Purchase Agreement, dated as of May 14, 1999, between the Buyer and the Seller (as amended, restated supplemented or otherwise modified from time to time, the "Purchase Agreement"), the Buyer has purchased from time to time from the Seller certain trade receivables (and related rights thereto) generated at ARFC Designated Distribution Centers. The Seller has given notice to the Buyer of the Seller's intent to consolidate the Consolidating Location (defined below) into a BH2 Designated Distribution Center in accordance with Section 2.5A of the Purchase Agreement and, in connection therewith, to repurchase from the Buyer all outstanding ARFC Designated Receivables with respect to the Consolidating Location (as set forth in Schedule II hereto or in such other format as is acceptable to the Buyer, the "Reassigned Receivables") and have the Buyer release its security interests therein. Statement of Terms NOW, THEREFORE, in consideration of the mutual covenants herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Distribution Center Consolidation. On the date hereof, the Seller will consolidate the ARFC Designated Distribution Center located at [insert location details here] (the "Consolidating Location") into the BH2 Designated Distribution Center located at [insert location details here]. On the date hereof, Exhibit H to the Purchase Agreement is hereby amended to provide that the Consolidating Location is not an "ARFC Designated Distribution Center" but is a "BH2 Designated Distribution Center." [As of the date hereof, the Outstanding Balance of the Reassigned Receivables is $[_________].] 2. Reconveyance by Buyer. a. In connection with the Distribution Center Consolidation detailed in Paragraph 1 above, and subject to the terms and conditions of this Agreement, the Buyer hereby sells, assigns, transfers, and conveys to the Seller without recourse, and the Seller hereby accepts, purchases and receives, all of the Buyer's rights, titles and interests in and to the Reassigned Receivables. In consideration of the Buyer's transfer and conveyance hereunder to the Seller of the Reassigned Receivables, the Seller shall pay a purchase price $[________] (the "Purchase Price"), to be paid as set forth on Schedule I hereto either in cash and/or in the form of a reduction of the Subordinated Note owing by the Buyer to the Seller, if any, which Purchase Price represents the fair market value of the Reassigned Receivables as of the date hereof. b. Subject to the terms and conditions of this Agreement, the Buyer hereby releases and terminates all security interests or other rights or interests that the Buyer may have in (i) the Reassigned Receivables, (ii) the Seller's rights in the merchandise (including returned goods) relating to the Reassigned Receivables, (iii) all Reassigned Accounts, (iv) any other Related Security to the extent relating to the foregoing, and (v) all proceeds, substitutions and replacements for each of the foregoing (the "Released Security Interest"). 3. Effectiveness of this Agreement. This Agreement shall become effective as of the date hereof when signed by the Buyer and the Seller and consented to by the Administrative Agent. 4. Further Assurances. The Buyer hereby agrees to execute and deliver such UCC financing statements and such other documents as the Seller may reasonably request from time to time in order to more fully effectuate the transactions contemplated by this Agreement (including, without limitation, those necessary to terminate or assign Account Transfer Letters); provided, however, that any and all such financing statements and other documents shall be prepared and/or recorded at the Seller's expense. 5. Representations and Warranties. Each of the parties hereto represents and warrants that it has the full corporate or other power and authority to execute and deliver this Agreement and to perform its obligations hereunder and that this Agreement has been duly and validly executed and delivered by it (and assuming the due and valid execution and delivery hereof by all other parties hereto) constitutes a legal, valid and binding obligation of such party enforceable against it in accordance with its terms. 6. Miscellaneous. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement may be executed in any number of several counterparts, and each such counterpart shall constitute an original and all such counterparts together shall constitute one and the same instrument. The delivery of an executed counterpart hereof by facsimile shall constitute delivery of an executed counterpart hereof. [Signature Page Follows] IN WITNESS, each of the parties hereto, by their respective duly authorized signatories, has executed and delivered this Agreement as of the date first above written. AMERISOURCEBERGEN DRUG CORPORATION, as Seller ------------------------------------ Name: Title: AMERISOURCE RECEIVABLES FINANCIAL CORPORATION as Buyer ------------------------------------ Name: Title: CONSENTED TO AS OF THE DATE FIRST ABOVE SET FORTH: JPMORGAN CHASE BANK, as Administrative Agent By: ---------------------------- Name: Title: SCHEDULE I Purchase Price - -------------------------------------------------------------------------------- Outstanding Fair Market Fair Market Reduction to Cash - ----------- ----------- ----------- ------------ ----- Balance of Value/Purchase Value Subordinated - ---------- -------------- ----- ------------ Reassigned Price in $ (as a Note - ---------- ---------- ----- ---- Receivables percentage) - ----------- ----------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SCHEDULE II Reassigned Receivables EX-4.2 4 dex42.txt TENTH AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT EXHIBIT 4.2 EXECUTION COPY TENTH AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT THIS TENTH AMENDMENT, dated as of December 2, 2002 (this "Amendment"), to the Receivables Purchase Agreement dated as of May 14, 1999 (as in effect on the date hereof, the "Receivables Purchase Agreement"), among AMERISOURCE RECEIVABLES FINANCIAL CORPORATION, a Delaware corporation (the "Seller"), AMERISOURCEBERGEN DRUG CORPORATION (formerly known as AmeriSource Corporation), a Delaware corporation (the "Servicer" or "AmeriSource"), AMERISOURCEBERGEN SERVICES CORPORATION (formerly known as AmeriSource Health Corporation), a Delaware corporation (the "Guarantor"), DELAWARE FUNDING CORPORATION, a Delaware corporation (together with its successors and assigns, the "Buyer"), and JPMORGAN CHASE BANK, a banking corporation organized under the laws of the State of New York, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Owners (as defined in the Receivables Purchase Agreement), is by and among the parties listed above. Unless otherwise defined in this Amendment, capitalized terms shall have the meanings assigned to such terms in the Receivables Purchase Agreement. R E C I T A L S WHEREAS, the parties to the Receivables Purchase Agreement wish to make certain amendments to the Receivables Purchase Agreement as set forth herein. NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and for good and sufficient consideration, the parties hereto, intending to be legally bound, do hereby agree as follows: SECTION 1. Amendments to Section 1.01 of the Receivables Purchase Agreement. (i) The defined terms "ARFC Designated Distribution Center," "BH2 Designated Distribution Center," "BH2 Designated Receivables," "Lockbox Account," "Permitted Lockbox," "Net Investment" and "Purchase Documents" appearing in Section 1.01 of the Receivables Purchase Agreement are hereby deleted and replaced, respectively, with the following: "ARFC Designated Distribution Center" shall mean any Distribution Center of AmeriSource identified on Exhibit K hereto as an "ARFC Designated Distribution Center," and shall include, without limitation, each distribution center of each "Seller" party to the Affiliate Purchase Agreement on and as of September 30, 2002 (including, without limitation, James Brudnick Company, Inc. and C.D. Smith Healthcare, Inc.), as such Exhibit K may be amended from time to time pursuant to and in connection with a Distribution Center Consolidation. "BH2 Designated Distribution Center" shall mean any Distribution Center of AmeriSource identified on Exhibit K hereto as a "BH2 Designated Distribution Center," as such Exhibit K may be amended from time to time pursuant to and in connection with a Distribution Center Consolidation. "BH2 Designated Receivables" shall mean all Receivables (as defined in the AmeriSource Purchase Agreement) that are generated by AmeriSource at any BH2 Designated Distribution Center; provided that any such Receivables that become ARFC Designated Receivables in connection with a Distribution Center Consolidation shall no longer constitute BH2 Designated Receivables. "Lockbox Account" shall mean a demand deposit account identified on Exhibit J hereto maintained with a Permitted Lockbox Bank pursuant to the Lockbox Servicing Instructions for the purpose of depositing payments made by the Obligors, as such Exhibit J may be amended, supplemented and otherwise modified from time to time to reflect a Distribution Center Consolidation, and such other accounts as the Buyer may establish from time to time in accordance with this Agreement. "Net Investment" shall mean, at any time, the sum of the amounts of Purchase Price paid to the Seller for each Incremental Purchase less the aggregate amount of Collections and other amounts received and applied by the Servicer or the Administrative Agent to reduce such Net Investment pursuant to Sections 2.08(b), 2.08(e), 2.08(f), 2.09, 2.11(b) and 2.17(a) hereof; provided that the Net Investment shall be increased by the amount of any Collections or other amounts so received if at any time the distribution of such Collections or other amounts is rescinded or must otherwise be returned or restored for any reason. "Permitted Lockbox" shall mean a post office box or other mailing location identified on Exhibit J hereto maintained by a Permitted Lockbox Bank pursuant to the Lockbox Servicing Instructions for the purpose of receiving payments made by the Obligors for subsequent deposit into a related Lockbox Account, as such Exhibit J may be amended, supplemented and otherwise modified from time to time to reflect a Distribution Center Consolidation, and such other post office box or other mailing location as the Buyer may establish from time to time in accordance with this Agreement. "Purchase Documents" shall mean, collectively, this Agreement, the Purchase Agreements, each Reconveyance Agreement, each Purchaser Interest Reconveyance Agreement, the Lockbox Servicing Instructions, the Concentration Account Servicing Instructions, the B/A Concentration Account Agreement, the Account Transfer Letters and all other agreements, documents and instruments entered into and delivered by the Seller, any Originator or the Servicer in connection with the transactions contemplated by this Agreement. (ii) The following new defined terms are hereby inserted in Section 1.01 of the Receivables Purchase Agreement in appropriate alphabetical order: "ARFC Designated Receivables" shall mean, collectively (but without duplication) (i) all Receivables (as defined in the AmeriSource Purchase Agreement) acquired by AmeriSource, as buyer, under the Affiliate Purchase Agreement and (ii) all Receivables (as defined in the AmeriSource Purchase Agreement) generated at any ARFC Designated Distribution Center; provided that any such Receivables that become BH2 Designated Receivables in connection with a Distribution Center Consolidation shall no longer constitute ARFC Designated Receivables. 2 "Distribution Center Consolidation" shall mean any consolidation of a BH2 Designated Distribution Center into an ARFC Designated Distribution Center and any consolidation of an ARFC Designated Distribution Center into a BH2 Designated Distribution Center, in each case, pursuant to, and in accordance with, Section 2.5A of the AmeriSource Purchase Agreement. "Purchaser Interest Reconveyance Agreement" shall mean a purchaser interest reconveyance agreement in substantially the form of Exhibit L attached hereto. "Reassigned Accounts" shall have the meaning specified in Section 4.09A(i) hereof. "Reconveyance Agreement" shall mean a reconveyance agreement substantially in the form of Exhibit I to the AmeriSource Purchase Agreement. SECTION 2. Amendments to Section 2.17 of the Receivable Purchase Agreement. Section 2.17 of the Receivables Purchase Agreement is hereby re-titled "Distribution Center Consolidations" and subsection (a) thereof is hereby deleted and replaced with the following: (a) If, in connection with a Distribution Center Consolidation of an ARFC Designated Distribution Center into a BH2 Designated Distribution Center, AmeriSource repurchases the Receivables originated at such ARFC Designated Distribution Center, the Administrative Agent and the Buyer shall sell and reconvey to the Seller the Purchased Interest in such Receivables, subject to the satisfaction of the following conditions precedent: (i) the Administrative Agent shall have received, at least 60 days (or, in the case of the first such Distribution Center Consolidation only, at least one day) prior to such Distribution Center Consolidation, written notice detailing the proposed consolidation (including, without limitation, identifying the specific Distribution Centers involved in such Distribution Center Consolidation, identifying the Permitted Lockboxes and Lockbox Accounts involved in (or otherwise affected by or related to) such Distribution Center Consolidation (including any such Permitted Lockboxes and/or Lockbox Accounts to be opened, closed or transferred in connection therewith), identifying the Obligors involved in (or otherwise affected by or related to) such Distribution Center Consolidation and setting forth the actions proposed to be taken with respect thereto) and specifying the proposed date of such consolidation; (ii) each of the conditions precedent set forth in Section 2.5A(a), (b), (c), (d), (f), (g), (h) and (i) shall have been satisfied; (iii) the Seller, the Buyer and the Administrative Agent shall have executed and delivered a Purchaser Interest Reconveyance Agreement relating to the Receivables to be repurchased in connection with such Distribution Center Consolidation and the Seller shall have paid to the Administrative Agent (for application in accordance with this Agreement as if such payment were a Collection) any amounts due with respect thereto as specified in such Purchaser Interest Reconveyance Agreement (it being understood and agreed that the Seller shall cooperate with the Administrative Agent or the Buyer, as applicable, in making appropriate arrangements in the event the Buyer is unable to use all of the amount so paid by the Seller to repay Commercial Paper on the date so paid); 3 (iv) the Administrative Agent shall have received either an updated Monthly Report or another report (in form and substance satisfactory to the Administrative Agent) signed by a Responsible Officer of the Servicer, dated the date of such Distribution Center Consolidation, demonstrating (in either case) by calculations in detail satisfactory to the Administrative Agent that the Buyer's Percentage Interest does not exceed 100%, both before and after giving effect to such Distribution Center Consolidation (including, without limitation, after giving effect to the repurchase of Receivables in connection therewith and any payment made pursuant to the related Purchaser Interest Reconveyance Agreement); and (v) an amended and restated Exhibit K to reflect such Distribution Center Consolidation shall have been prepared by the Seller (or the Servicer) and delivered to the Administrative Agent. SECTION 3. Addition of New Section 4.09A to the Receivables Purchase Agreement. The following new Section 4.09A is hereby inserted immediately after Section 4.09 of the Receivables Purchase Agreement: 4.09A. Distribution Center Consolidations. (i) Notwithstanding anything to the contrary contained in Section 4.09, upon the occurrence of a Distribution Center Consolidation in which an ARFC Designated Distribution Center is consolidated into a BH2 Designated Distribution Center, and upon satisfaction of the related conditions precedent in Section 2.5A of the AmeriSource Purchase Agreement (other than subsection (e) thereof) and Section 2.17(a) hereof, (A) the Seller shall deliver an amended and restated Exhibit J hereto to delete reference to each Lockbox Account and Permitted Lockbox related to such ARFC Designated Distribution Center (collectively, the "Reassigned Accounts") and (B)(1) the Seller shall transfer such Reassigned Accounts to AmeriSource or any other Person designated by AmeriSource and the Seller shall request the Administrative Agent terminate or assign, and the Administrative Agent agrees to terminate or assign (as requested by the Seller), any Account Transfer Letter with respect to such Reassigned Accounts or (2) the Seller and the Administrative Agent shall take such other actions with respect to such Reassigned Accounts as the Seller and the Administrative Agent may agree. (ii) Upon the occurrence of a Distribution Center Consolidation in which a BH2 Designated Distribution Center is consolidated into an ARFC Designated Distribution Center, and upon satisfaction of the related conditions precedent in Section 2.5A of the AmeriSource Purchase Agreement (other than subsection (d) thereof), (A) the Seller shall deliver an amended and restated Exhibit J hereto to add each lockbox account and lockbox related to such BH2 Designated Distribution Center and (B) the Seller shall (1) provide the Administrative Agent with satisfactory evidence that such lockbox accounts and lockboxes have been transferred to the Seller and either (x) deliver a fully executed Account Transfer Letter with respect to each such lockbox account and lockbox or (y) deliver an assignment (in form and substance satisfactory to the Administrative Agent) of the account control agreement in effect with respect to the security interest of the Purchasers (as defined in the BH2/GE Receivables Purchase Agreement) in such lockbox accounts and lockboxes or (2) take such other actions with respect to such lockbox accounts and lockboxes as the Seller and the Administrative Agent may agree. 4 (iii) Without limiting the generality of any other provision of this Agreement, the Seller shall furnish, or cause to be furnished to the Administrative Agent as promptly as practicable from time to time, such information with respect to any Permitted Lockbox and/or Lockbox Account involved in (or otherwise affected by or related to) a Distribution Center including, without limitation, any such Permitted Lockbox and/or Lockbox Account opened, closed or transferred in connection therewith, in such form and detail, as the Administrative Agent may request. SECTION 4. Amendment to Section 4.10 of the Receivables Purchase Agreement. The period appearing at the end of Section 4.10(g) of the Receivables Purchase Agreement is hereby replaced with "; or" and the following new subsection (h) is inserted immediately thereafter: (h) there shall have occurred any event which materially and adversely impairs in the reasonable judgment of the Administrative Agent the ability of the Servicer to distinguish between ARFC Designated Receivables and BH2 Designated Receivables or to segregate Collections relating to ARFC Designated Receivables from collections relating to BH2 Designated Receivables. SECTION 5. Amendment to Section 5.03(p) of the Receivables Purchase Agreement. Section 5.03(p) of the Receivables Purchase Agreement is hereby deleted and replaced with the following: (p) Distribution Centers; Etc. Exhibit K attached hereto identifies all ARFC Designated Distribution Centers and all BH2 Designated Distribution Centers. Exhibit J attached hereto identifies each bank and other financial institution at which each Distribution Center maintains post office boxes and deposit accounts for the receipt of collections for the portion of the Aggregate Receivables generated at such Distribution Center and identifies the related post office box address and the related account numbers. The Servicer represents and warrants that AmeriSource does not generate or otherwise create or maintain any Receivables (as defined in the AmeriSource Purchase Agreement) that are neither ARFC Designated Receivables nor BH2 Designated Receivables. The Servicer further represents and warrants that Exhibit K attached hereto includes as ARFC Designated Distribution Centers all distribution centers of each "Seller" party to the Affiliate Purchase Agreement. SECTION 6. Addition of New Section 6.01(q) to the Receivables Purchase Agreement. The following new Section 6.01(q) is hereby inserted immediately after Section 6.01(p) of the Receivables Purchase Agreement: (q) Permitted Lockboxes and Lockbox Accounts. Without limiting the generality of Section 2.17(a)(v) hereof, the Seller shall deliver a revised Exhibit J and a revised Exhibit K each time that it establishes a new Permitted Lockbox or Lockbox Account and each time it closes a Permitted Lockbox or Lockbox Account. SECTION 7. Amendment to Section 6.02(c) of the Receivables Purchase Agreement. Section 6.02(c) of the Receivables Purchase Agreement is hereby deleted and replaced with the following: (c) Consolidations, Mergers and Sales of Assets. (i) Consolidate or merge with or into any other Person or (ii) sell, lease or otherwise transfer all or substantially all of its assets to any other Person; provided that (x) the Seller may merge with another Person if (A) the 5 Seller is the corporation surviving such merger and (B) immediately after giving effect to such merger, no Termination Event shall have occurred and be continuing and (y) subject to satisfaction of the conditions set forth in Section 2.17(a) hereof, the Seller may sell or transfer Receivables to AmeriSource pursuant to Section 2.5A of the AmeriSource Purchase Agreement. SECTION 8. Amendments to Section 7.01 of the Receivables Purchase Agreement. The period appearing at the end of Section 7.01(v) of the Receivables Purchase Agreement is hereby replaced with "; or" and the following new subsections (w), (x) and (y) are hereby inserted immediately thereafter: (w) any "Termination Event" or "Event of Servicer Termination" shall occur under the BH2/GE Receivables Purchase Agreement; or (x) an Event of Bankruptcy shall occur with respect to BH2; or (y) any breach by General Electric Capital Corporation shall occur and be continuing under the Intercreditor Agreement. SECTION 9. Amendment to Section 7.02 of the Receivables Purchase Agreement. The proviso to the first sentence of Section 7.02(a) of the Receivables Purchase Agreement is hereby deleted and replaced with the following: ; provided that, in the case of a Termination Event under Section 7.01(k) or (x) hereof, such obligations of the Owners hereunder shall be automatically terminated without any action on the part of the Administrative Agent and all outstanding Tranche Periods may, in the sole discretion of the Administrative Agent or APA Purchasers, be ended. SECTION 10. Representations and Warranties; Etc. In order to induce the Buyer and the Administrative Agent to execute and deliver this Amendment, (i) the Seller hereby represents and warrants on the date hereof (after giving effect to this Amendment and the Third Amendment, dated as of the date hereof, to the AmeriSource Purchase Agreement (the "Third Amendment")), that each of the representations and warranties set forth in Section 5.01 of the Receivables Purchase Agreement is true and correct, (ii) the Guarantor hereby represents and warrants on the date hereof (after giving effect to this Amendment and the Third Amendment) that each of the representations and warranties set forth in Sections 5.01(a), (b), (c) (the first sentence thereof), (d), (e), (g), (h), (i), (k), (m), (p) and (q) of the Receivables Purchase Agreement is true and correct; provided that all references therein to "Seller" shall mean and be a reference to "Guarantor," (iii) the Servicer hereby represents and warrants on the date hereof (after giving effect to this Amendment and the Third Amendment) that each of the representations and warranties in Section 5.03 of the Receivables Purchase Agreement is true and correct; provided that, in the case of preceding clauses (i), (ii) and (iii), as applicable, all references in Section 5.01 or 5.03 of the Receivables Purchase Agreement to "this Agreement" or the "Purchase Documents" shall mean and be a reference to, or shall include, the Receivables Purchase Agreement (after giving effect to this Amendment and the Third Amendment) and (iv) each of the Seller and the Servicer hereby represents and warrants, on the date hereof (both before and after giving effect to this Amendment and the Third Amendment), that no event has occurred and is continuing and no condition exists which constitutes a Termination Event or Potential Termination Event. 6 SECTION 11. Amendments to Exhibits. Exhibit L attached hereto is hereby inserted immediately after Exhibit K attached to the Receivables Purchase Agreement. SECTION 12. Receivables Purchase Agreement in Full Force and Effect, as Amended. Except as specifically stated herein, all of the terms and conditions of the Receivables Purchase Agreement shall remain in full force and effect. All references to the Receivables Purchase Agreement in any Purchase Document or any other document or instrument shall be deemed to mean the Receivables Purchase Agreement, as amended by this Amendment. This Amendment shall not constitute a novation of the Receivables Purchase Agreement, but shall constitute an amendment thereto. The parties hereto agree to be bound by the terms and obligations of the Receivables Purchase Agreement, as amended by this Amendment, as though the terms and obligations of the Receivables Purchase Agreement were set forth herein. SECTION 13. Effectiveness. This Amendment shall become effective in accordance with its terms upon receipt by the Administrative Agent of each of the following: (a) an executed counterpart of this Amendment from each party hereto; (b) Long form good standing and tax certificates for each of the Seller, AmeriSource and the Guarantor, in each case, issued by the Secretary of State of Delaware and the Secretary of the Commonwealth of Pennsylvania, each such certificate to be dated a date reasonably near the date hereof; (c) A certificate of the secretary or assistant secretary of AmeriSource, dated the effective date hereof, certifying that no changes have been made to the certificate of incorporation or bylaws of AmeriSource since a date acceptable to the Administrative Agent and certifying and attaching resolutions authorizing this Amendment and the Third Amendment and an incumbency certificate; (d) A certificate of the secretary or an assistant secretary of the Seller, dated the effective date hereof, certifying that no changes have been made to the certificate of incorporation or bylaws of the Seller and certifying and attaching resolutions authorizing this Amendment and the Third Amendment and an incumbency certificate; (e) An officer's certificate of AmeriSource dated the effective date hereof, executed by a Responsible Officer of AmeriSource, certifying that (i) the representations and warranties contained in Sections 3.1 and 3.2 of the AmeriSource Purchase Agreement are true and correct as if such representations and warranties were made as of the date hereof, both before and after giving effect to this Amendment and the Third Amendment, (ii) no Servicing Default exists as of the date hereof, both before and after giving effect to this Amendment and the Third Amendment, and (iii) no financing statement naming AmeriSource (or any entity merged with or into AmeriSource), as debtor, and covering the Transferred Receivables (as defined in the AmeriSource Purchase Agreement has been filed against AmeriSource (or any such entity merged with or into AmeriSource), except certain financing statements have been filed by (A) the Seller, in its capacity as the buyer, under the AmeriSource Purchase Agreement, (B) JPMorgan Chase Bank, as Collateral Agent under the Security Agreement, all of which Transferred Receivables have been (and will continue to be) released from such financing statements pursuant to the terms of the Credit Agreement and the Security Agreement and (C) BH2 under and in accordance with the AmeriSource/BH2 Purchase Agreement and by General Electric Capital Corporation under and in accordance with the BH2/GE Receivables Purchase Agreement against Bergen Brunswig Drug 7 Company, a predecessor in interest to AmeriSource, all of which Transferred Receivables have been (and will continue to be), by amendment to such financing statements, released or excluded from such financing statements; (f) A favorable opinion or opinions of counsel for AmeriSource, dated the effective date hereof, relating to corporate matters, legality, validity and enforceability of the Purchase Documents (as amended), no conflicts with the Credit Agreement (or related security documents), perfection and priority of the Seller's security interest in the Receivables and such other matters as the Administrative Agent may reasonably request; (g) A favorable opinion or opinions of counsel for the Seller, dated the effective date hereof, relating to perfection and priority, of the Administrative Agent's undivided ownership interest in the Receivables (for the benefit of the Owners), true sale and nonconsolidation (between AmeriSource and the Seller) and such other matters as the Administrative Agent may reasonably request; (h) A favorable opinion or opinions of counsel for the Guarantor, dated the effective date hereof, relating to corporate matters, legality, validity and enforceability of the Purchase Documents (as amended), no conflicts with the Credit Agreement (or related security documents) and such other matters as the Administrative Agent may reasonably request; (i) An executed copy of the Third Amendment to the AmeriSource Purchase Agreement, which amendment shall have become effective in accordance with the terms thereof; (j) An executed copy of an amendment to the Fee Letter, which amendment shall have become effective in accordance with the terms thereof; (k) Executed copies of the Second Amendment, dated as of the date hereof, to the AmeriSource/BH2 Purchase Agreement and the Fourth Amendment, dated as of the date hereof, to the BH2/GE Receivables Purchase Agreement, each of which amendments shall be in form and substance satisfactory to the Administrative Agent and shall have become effective in accordance with its respective terms; (l) Payment in full of all legal fees and expenses incurred by the Administrative Agent in connection with the negotiation and preparation of this Amendment and the Seventh Amendment, Eighth Amendment and Ninth Amendment to the Receivables Purchase Agreement and otherwise in connection with the Purchase Documents, but only to the extent that an invoice therefor has been rendered; (m) A duly executed consent with respect to the Credit Agreement, which consent shall be in form and substance satisfactory to the Administrative Agent and shall have become effective in accordance with its terms; and (n) Such other documents as the Buyer or the Administrative Agent shall reasonably request. SECTION 14. Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts (including by way of facsimile transmission), each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. 8 SECTION 15. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. [Signature Page Follows] 9 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first above set forth. DELAWARE FUNDING CORPORATION By: JPMorgan Chase Bank, as attorney-in-fact for Delaware Funding Corporation By _______________________________________ Name: Title: JPMORGAN CHASE BANK, as Administrative Agent By _______________________________________ Name: Title: AMERISOURCE RECEIVABLES FINANCIAL CORPORATION By _______________________________________ Name: Title: AMERISOURCEBERGEN DRUG CORPORATION By _______________________________________ Name: Title: AMERISOURCEBERGEN SERVICES CORPORATION By _______________________________________ Name: Title: WITH THE CONSENT OF: GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent under the BH2/GE Receivables Purchase Agreement By__________________________________________ Name: Brian P. Schwinn Title: Duly Authorized Signatory [Signature Page to the Tenth Amendment to the AmeriSource Receivables Purchase Agreement] EXHIBIT L to Receivables Purchase Agreement FORM OF PURCHASER INTEREST RECONVEYANCE AGREEMENT THIS PURCHASER INTEREST RECONVEYANCE AGREEMENT (this "Agreement") is made and entered into as of [INSERT DATE], among AMERISOURCE RECEIVABLES FINANCIAL CORPORATION, a Delaware corporation ("Seller"), DELAWARE FUNDING CORPORATION, a Delaware corporation ("Buyer") and JPMORGAN CHASE BANK, as administration agent (in such capacity, the "Administrative Agent"). All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Receivables Purchase Agreement (as defined below). Statement of Facts Pursuant to that certain Receivables Purchase Agreement, dated as of May 14, 1999, among the Seller, the Servicer, the Guarantor, the Buyer and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the "Receivable Purchase Agreement"), the Administrative Agent (on behalf of the Owners) has purchased from the Seller undivided percentage interests in certain trade receivables (and related rights thereto) owned by the Seller and generated at ARFC Designated Distribution Centers. AmeriSource has given notice to the Seller of Amerisource's intent to consolidate the Consolidating Location (defined below) into a BH2 Designated Distribution Center in accordance with Section 2.5A of the AmeriSource Purchase Agreement and, in connection therewith, to repurchase from the Seller all outstanding ARFC Designated Receivables with respect to the Consolidating Location (as set forth in Schedule I hereto or in such other format as is acceptable to the Administrative Agent, the "Reassigned Receivables"), and to have the Seller release its security interests therein. Pursuant to Section 2.17(a) of the Receivables Purchase Agreement, upon the request of the Seller, the Buyer and the Administrative Agent shall reconvey the Purchased Interest in such Reassigned Receivables as provided in this Agreement. Statement of Terms NOW, THEREFORE, in consideration of the mutual covenants herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Distribution Center Consolidation. On the date hereof, AmeriSource will consolidate the ARFC Designated Distribution Center located at [insert location details here] (the "Consolidating Location") into the BH2 Designated Distribution Center located at [insert location details here]. On the date hereof, Exhibit K to the Receivables Purchase Agreement is hereby amended to provide that the Consolidating Location is not an "ARFC Designated Distribution Center" but is a "BH2 Designated Distribution Center." 2. Reconveyance by Purchasers. a. In connection with the Distribution Center Consolidation detailed in Paragraph 1 above, and subject to the terms and conditions of this Agreement, the Buyer and the Administrative Agent hereby sell, assign, transfer, and convey to the Seller without recourse, and the Seller hereby accepts, purchases and receives, all of the Buyer's and the Administrative Agent's right, title and interest in and to the Reassigned Receivables. In consideration of the transfer and conveyance hereunder to the Seller of the Reassigned Receivables, the Seller shall pay to the Administrative Agent (for the benefit of the Owners) [the amount (if any) necessary to cause the Buyer's Percentage Interest not to exceed 100%, after giving effect to the transfer of the Reassigned Receivables to the Seller]. b. Subject to the terms and conditions of this Agreement, the Administrative Agent and the Buyer hereby release and terminate all security interests or other rights or interests that the Administrative Agent and the Buyer may have in (i) the Reassigned Receivables, (ii) AmeriSource's rights in the merchandise (including returned goods) relating to the Reassigned Receivables, (iii) all Reassigned Accounts, (iv) any other Related Security to the extent relating to the foregoing and (v) all proceeds, substitutions and replacements for each of the foregoing (the "Released Security Interest"). 3. Effectiveness of this Agreement. This Agreement shall be effective as of the date hereof when signed by each of the parties hereto. 4. Further Assurances. The Administrative Agent hereby agrees to execute and deliver such UCC financing statements (other than UCC-1 financing statements) and such other documents as the Seller may reasonably request from time to time in order to more fully effectuate the transactions contemplated by this Agreement (including, without limitation, those necessary to terminate or assign Account Transfer Letters); provided, however, that any and all such financing statements and other documents shall be prepared and/or recorded at the Seller's expense. 5. Representations and Warranties. Each of the parties hereto represents and warrants that it has the full corporate or other power and authority to execute and deliver this Agreement and to perform its obligations hereunder and that this Agreement has been duly and validly executed and delivered by it (and assuming the due and valid execution and delivery hereof by all other parties hereto) constitutes a legal, valid and binding obligation of such party enforceable against it in accordance with its terms. 6. Miscellaneous. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement may be executed in any number of several counterparts, and each such counterpart shall constitute an original and all such counterparts together shall constitute one and the same instrument. The delivery of an executed counterpart hereof by facsimile shall constitute delivery of an executed counterpart hereof. [Signature Page Follows] IN WITNESS, each of the parties hereto, by their respective duly authorized signatories, has executed and delivered this Agreement as of the date first above written. AMERISOURCE RECEIVABLES FINANCIAL CORPORATION ____________________________________________ Name: Title: DELAWARE FUNDING CORPORATION By: JPMORGAN CHASE BANK, as attorney-in-fact for Delaware Funding Corporation By:________________________________________ Name: Title: JPMORGAN CHASE BANK, as Administrative Agent By:________________________________________ Name: Title: SCHEDULE I Reassigned Receivables EX-4.3 5 dex43.txt SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMEN EXHIBIT 4.3 SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT THIS SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT, dated as of December 2, 2002 (this "Second Amendment") relates to that certain Sale and Contribution Agreement dated as of December 20, 2000, between Blue Hill and the Originator (each as defined below), as amended by the First Amendment to Sale and Contribution Agreement dated as of October 1, 2002 (the "Sale and Contribution Agreement"), and is entered into by and between BLUE HILL II, INC., a Delaware corporation ("Blue Hill") and AMERISOURCEBERGEN DRUG CORPORATION (f/k/a Amerisource Corporation), a Delaware corporation, as successor by merger to Bergen Brunswig Drug Company, a California corporation, the originator (in such capacity, the "Originator"). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in Annex X to the Sale and Contribution Agreement and the Receivables Purchase and Servicing Agreement dated as of December 20, 2000, as amended by that certain First Amendment dated as of August 29, 2001, as amended by that certain Second Amendment dated as of December 21, 2001, and as amended by that certain Third Amendment dated as of October 1, 2002, and as amended by that certain Fourth Amendment dated as of the date hereof ("Annex X"). W I T N E S S E T H WHEREAS, Blue Hill and Bergen Brunswig have entered into the Sale and Contribution Agreement pursuant to which Blue Hill has purchased BH2 Designated Receivables originated by the Originator, which are Receivables generated by the Originator at BH2 Designated Distribution Centers; WHEREAS, Blue Hill, the Servicer, the Administrative Agent and the Purchasers have entered into the Purchase Agreement pursuant to which Blue Hill has sold undivided percentage ownership interests in the BH2 Designated Receivables and related collateral to the Purchasers; WHEREAS, AmerisourceBergen Drug (f/k/a Amerisource Corporation, a Delaware corporation) as seller and ARFC as buyer have entered into the ASC/ARFC Purchase Agreement pursuant to which ARFC has purchased ARFC Designated Receivables, which are Receivables generated by AmerisourceBergen Drug at ARFC Designated Distribution Centers; WHEREAS, ARFC as seller, AmerisourceBergen Drug as servicer, Amerisource Bergen Services Corporation as guarantor, DFC as buyer and JPMorgan Chase as administrative agent, have entered into the ARFC/JPMorgan Purchase Agreement, pursuant to which ARFC has sold undivided percentage ownership interests in the ARFC Designated Receivables and related collateral to DFC; WHEREAS, the Originator has advised that from time to time, it intends to consolidate certain of the ARFC Designated Distribution Centers into BH2 Designated SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT Distribution Centers and certain of the BH2 Designated Distribution Centers into ARFC Designated Distribution Centers; WHEREAS, Blue Hill and the Originator (collectively, the "Parties") have mutually requested that the Sale and Contribution Agreement be amended (the "Amendments") to permit consolidation of certain of the Distribution Centers of Originator; and WHEREAS, the Parties are willing to so effect the Amendments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the above premises, the Parties agree as follows: 1. Definitions and Usage. Any reference herein to Section, Exhibit or Schedule shall, unless otherwise specified, refer to such Section, Exhibit or Schedule hereof, in its entirety. 2. Amendments to the Sale and Contribution Agreement. Upon the Second Amendment Effective Date, the Sale and Contribution Agreement is hereby amended as follows: a. By amending Section 5.2(p) by deleting the words "as of the Third Amendment Effective Date". b. By deleting the penultimate and ultimate sentences of Section 6.1(h) in their entirety and substituting the following in their stead: The Originator shall only add a Lockbox Account Bank, Deposit Bank, Lockbox, Deposit Account or Lockbox Account to those listed on Exhibit D of the Purchase Agreement (i) as permitted under Section 8.13 hereof in connection with a Distribution Center Consolidation or (ii) if the Buyer has consented thereto and received notice of such addition, a copy of any new Lockbox Agreement or Deposit Account Agreement substantially in the form of Exhibit B-1 or B-2, respectively, of the Purchase Agreement (with such changes as are acceptable to the Buyer) from any new Lockbox Account Bank or Deposit Bank. The Originator shall only terminate a Lockbox Account Bank, Deposit Bank or Lockbox, or close a Lockbox Account, or Deposit Account, (x) as permitted under Section 8.13 hereof in connection with a Distribution Center Consolidation or (y) with Buyer's consent and upon 30 days advance notice to the Buyer and the Administrative Agent. c. By adding the following Section 8.13 in proper alphanumerical order: 8.13 Distribution Center Consolidation. From time to time, the Originator may (but shall have no obligation to) consummate Distribution Center Consolidations; provided, however, that if the Originator proposes to consummate any Distribution Center Consolidation, the Originator shall provide the Buyer and the Administrative Agent with at least 60 days prior written notice detailing the proposed consolidation (including, without SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 2 limitation, identifying the specific Distribution Centers involved in such Distribution Center Consolidation, identifying the Lockbox Accounts, Lockboxes and Deposit Accounts involved in (or otherwise affected by or related to) such Distribution Center Consolidation (including any such Lockbox Accounts, Lockboxes and Deposit Accounts to be opened, closed or transferred in connection therewith), identifying the Obligors involved in (or otherwise affected by or related to) such Distribution Center Consolidation, and setting forth the actions proposed to be taken with respect thereto) and specifying the proposed date of such consolidation, and such consolidation shall be subject to satisfaction of the following conditions precedent: (a) No Termination Event or Incipient Termination Event shall have occurred and be continuing or will result after giving effect to such consolidation, and no "Termination Event", "Servicing Default", "Potential Termination Event" or unmatured "Servicing Default" under and as defined in the ARFC/JPMorgan Chase Purchase Agreement shall have occurred and be continuing or will result after giving effect to such consolidation; (b) All of the representations and warranties of Blue Hill, the Originator and the Servicer contained in the Sale and Contribution Agreement and the other Related Documents shall be true and correct in all material respects on and as of date of such consolidation, as if then made (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); (c) An amended and restated Designated Receivables Schedule to reflect the Distribution Center Consolidation shall have been prepared by the Originator and delivered to the Administrative Agent; (d) To the extent the Distribution Center Consolidation provides for the consolidation of a BH2 Designated Distribution Center into an ARFC Designated Distribution Center: (i) the Purchasers shall have reconveyed their Purchaser Interest in all outstanding BH2 Designated Receivables generated at such BH2 Designated Distribution Center in accordance with Section 2.04(d) of the Purchase Agreement, the Purchasers and the Buyer shall have executed and delivered a Purchaser Interest Reconveyance Agreement, and the Buyer shall have paid any amounts due with respect thereto pursuant to Section 2.04(d) of the Purchase Agreement; (ii) the Administrative Agent and the Purchasers shall have terminated or assigned each Lockbox Account Agreement SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 3 and Deposit Account Agreement with respect to Accounts identified on the Designated Receivables Schedule with respect to such BH2 Designated Distribution Center (the "Reassigned Accounts") and the other actions and deliveries specified in Section 6.01(e) of the Purchase Agreement shall have been completed; (iii) the Buyer and Originator (with the consent of the Administrative Agent) shall have executed and delivered a Reconveyance Agreement in substance satisfactory to the Administrative Agent, and the Buyer shall have received the "Purchase Price" set forth therein; and (iv) the Administrative Agent shall have received an Officer's Certificate of the Buyer that the Purchase Price equals the fair market value of the "Reassigned Receivables" (as defined in the applicable Reconveyance Agreement); (e) To the extent such Distribution Center Consolidation provides for the consolidation of an ARFC Designated Distribution Center into a BH2 Designated Distribution Center: (i) to the extent (A) the Outstanding Balance of the Receivables originated at such ARFC Designated Distribution Center are in excess of the lesser of (x) $25,000,000 and (y) 10.0% of the Outstanding Balance of Transferred Receivables or (B) the ratio of (x) the Outstanding Balance of all Receivables originated at ARFC Designated Distribution Centers that have been consolidated into BH2 Designated Distribution Centers, including the ARFC Designated Distribution Center currently proposed to be consolidated into a BH2 Designated Distribution Center, to (y) the current Outstanding Balance of Transferred Receivables, exceeds 15.0%, the Rating Agency Condition shall have been satisfied with respect to such consolidation and the Buyer and Administrative Agent shall have completed satisfactory due diligence with respect to the Receivables originated at such ARFC Designated Distribution Center; (ii) the Buyer and the Administrative Agent shall have received evidence satisfactory to them of completion of the actions and deliveries required by Section 6.01(e)(ii) of the Purchase Agreement; and (iii) the Buyer and the Administrative Agent shall have received satisfactory documentation evidencing (A) the reconveyance to ARFC of DFC's purchaser interest in the Receivables generated at the ARFC Designated Distribution SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 4 Center and the release of liens associated therewith, (B) the reconveyance of the Receivables generated at the ARFC Designated Distribution Center to the Originator and the release of liens associated therewith, and (C) that the conditions precedent to such Distribution Center Consolidation have been satisfied in accordance with the ARFC/JP Morgan Chase Purchase Agreement and the ASC/ARFC Purchase Agreement; (f) The Buyer and the Administrative Agent shall have received an Officer's Certificate certifying (i) as to the matters set forth in Section 8.13(a) together with a pro forma compliance certificate setting forth the calculations (as applicable) substantiating such certification and attaching an Investment Base Certificate giving effect to such Distribution Center Consolidation, (ii) among other things, as to the matters set forth in Section 8.13(b), (iii) and attaching the Designated Receivables Schedule delivered pursuant to Section 8.13(c), and (iv) as to the truth and accuracy of the matters set forth in Section 8.13(d) or (e), as applicable; (g) The Buyer and the Administrative Agent shall have received a receivables aging report with respect to the Receivables generated at the Distribution Center being consolidated into a surviving Distribution Center, in form and substance satisfactory to the Buyer and the Administrative Agent (which report the Administrative Agent shall provide to the Rating Agencies, together with a copy of the notice delivered pursuant to the first paragraph of this Section 8.13); (h) Without limiting Section 8.13(d)(ii) or (e)(ii), not less than 5 days prior to the date of such Distribution Center Consolidation, the Buyer and the Administrative Agent shall have received evidence (in form and substance satisfactory to each of them) demonstrating that appropriate actions have been taken and procedures established (all of which actions and procedures must be satisfactory to the Buyer and the Administrative Agent) to prevent (after giving effect to such Distribution Center Consolidation) the commingling of Collections in respect of Transferred Receivables with those of any other Receivables in any Lockbox Account, Lockbox or Deposit Account; and (i) The Buyer and the Administrative Agent shall have received such additional documentation as the Buyer or Administrative Agent may reasonably request. d. By adding Exhibit 8.13(b) in the form and substance of Annex I, attached hereto and made a part hereof. 3. Representations and Warranties of the Originator and the Servicer. Each of the Originator and the Servicer represents and warrants to Blue Hill that, as of the Second Amendment Effective Date and after giving effect to this Second Amendment: SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 5 a. All of the representations and warranties of the Originator and the Servicer contained in this Second Amendment, the Sale and Contribution Agreement and the other Related Documents are true and correct in all material respects on and as of the Second Amendment Effective Date, as if then made (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); and b. No Termination Event or Incipient Termination Event has occurred and is continuing or will result after giving effect to this Second Amendment. 4. Effective Date. This Second Amendment shall become effective as of the date first written above (the "Second Amendment Effective Date") upon the satisfaction of each of the following conditions: a. Blue Hill shall have received each of the following documents, in each case in form and substance satisfactory to Blue Hill and the Administrative Agent: i. counterparts hereof executed by each of the Parties; ii. satisfactory evidence of the effectiveness of the Fourth Amendment to the Receivables Purchase Agreement and Annex X, dated as of the date hereof, among, Blue Hill, the Servicer, the Administrative Agent and the Purchasers, together with delivery of an execution copy thereof and of the other documents delivered in connection therewith; iii. a certificate of an officer of the Originator attesting to the solvency of Originator; iv. a certificate of an officer of the Originator certifying, among other things, that the representations and warranties contained in the Related Documents are correct as of the date hereof; v. a certificate of the Secretary or Assistant Secretary of the Originator certifying no change in the certificate of incorporation of the Originator and bylaws of the Originator, and certifying and attaching resolutions authorizing the Second Amendment and an incumbency certificate; vi. tax and good standing certificates of the Seller in the states of California, Pennsylvania and Delaware; vii. tax and good standing certificates of the Originator in the state of California, Pennsylvania and Delaware; viii. a legal opinion as to true sale and substantive consolidation matters delivered by Dechert after giving effect to the Second Amendment; ix. a legal opinion as to security interests, enforceability, corporate matters and non-contravention delivered by Dechert, and in addition, a legal SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 6 opinion delivered by the in-house counsel of the Originator and Buyer, both, after giving effect to the Second Amendment; x. such additional documentation as the Buyer may reasonably request; b. No law, regulation, order, judgment or decree of any Governmental Authority shall, and no Party shall have received any notice that litigation is pending or threatened which is likely to, enjoin, prohibit or restrain the consummation of the transactions contemplated by this Second Amendment, except for such laws, regulations, orders or decrees, or pending or threatened litigation, that in the aggregate could not reasonably be expected to have a Material Adverse Effect; c. All of the representations and warranties of Blue Hill and the Servicer contained in this Second Amendment and the other Related Documents shall be true and correct in all material respects on and as of the Second Amendment Effective Date, as if then made (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); d. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Second Amendment shall be satisfactory in all respects in form and substance to the Buyer; and e. No Termination Event or Incipient Termination Event shall have occurred and be continuing on the Second Amendment Effective Date or will result after giving effect to this Second Amendment. 5. Reference to and Effect on the Related Documents a. Upon the Second Amendment Effective Date, (i) each reference in the Sale and Contribution Agreement to "this Agreement", "hereunder", "hereof" or words of like import, and each reference in the Related Documents to the Sale and Contribution Agreement shall mean and be a reference to the Sale and Contribution Agreement as amended and supplemented hereby. b. Except to the extent specifically set forth herein, the respective provisions of the Sale and Contribution Agreement and the other Related Documents shall not be amended, modified, waived, impaired or otherwise affected hereby, and such documents and the Obligations under each of them are hereby confirmed as being in full force and effect. c. This Second Amendment shall be limited solely to the matters expressly set forth herein and shall not (i) constitute an amendment or waiver of any other term or condition of the Sale and Contribution Agreement or any other Related Document, (ii) prejudice any right or rights which any of the Parties, the Administrative Agent or the Purchasers may now have or may have in the future under or in connection with the Sale and Contribution Agreement or any other Related Document, (iii) require any of SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 7 the Parties, the Administrative Agent or the Purchasers to agree to a similar transaction on a future occasion or (iv) create any right herein to another Person or other beneficiary or otherwise, except to the extent specifically provided herein. 6. Miscellaneous. This Second Amendment is a Related Document. The headings herein are for convenience of reference only and shall not alter or otherwise affect the meaning hereof. 7. Section Titles. The Section titles in this Second Amendment are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. 8. Counterparts. This Second Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. 9. GOVERNING LAW. THIS SECOND AMENDMENT, AND ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE HEREOF, SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 10. No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Second Amendment. In the event an ambiguity or question of intent or interpretation arises, this Second Amendment shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Second Amendment. * * * * SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 8 IN WITNESS WHEREOF, Blue Hill and the Originator have caused this Second Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written. BLUE HILL II, INC., as Buyer By: _________________________ Name: Title: AMERISOURCEBERGEN DRUG CORPORATION, a Delaware corporation, as successor by merger to Bergen Brunswig Drug Company, a California corporation as Originator and as Servicer By: _________________________ Name: Title: ACKNOWLEDGED AND AGREED: GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent By: _________________________ Name: Brian P. Schwinn Title: Duly Authorized Signatory WITH THE CONSENT OF: JP MORGAN CHASE BANK, as Administrative Agent under the ARFC/JPMorgan Chase Purchase Agreement By: _________________________ Name: Title: SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT ANNEX I Exhibit 8.13(b) (see attached) SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT EXHIBIT 8.13(b) FORM OF RECONVEYANCE AGREEMENT THIS RECONVEYANCE AGREEMENT (this "Agreement") is made and entered into as of [INSERT DATE], between BLUE HILL II, INC., a Delaware corporation (the "Buyer") and AMERISOURCEBERGEN DRUG CORPORATION (f/k/a Amerisource Corporation), a Delaware corporation, as successor by merger to Bergen Brunswig Drug Company, a California corporation (the "Originator"). All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in Annex X to the Sale Agreement (as defined below). Statement of Facts Pursuant to that certain Sale and Contribution Agreement, dated as of December 20, 2000, between the Buyer and the Originator, as amended by that certain First Amendment to Sale and Contribution Agreement, dated as of October 1, 2002, and as amended by that certain Second Amendment to Sale and Contribution Agreement, dated as of December 2, 2002 (as amended, restated supplemented or otherwise modified from time to time, the "Sale Agreement"), the Buyer has purchased from time to time from the Originator certain trade receivables (and related rights thereto) generated by the Originator at BH2 Designated Distribution Centers. The Originator has given notice to the Buyer of the Originator's intent to consolidate the Consolidating Location (defined below) into an ARFC Designated Distribution Center in accordance with Section 8.13 of the Sale Agreement and, in connection therewith, to repurchase from the Buyer all outstanding BH2 Designated Receivables with respect to the Consolidating Location (as set forth in Schedule II hereto, or in satisfactory form as is acceptable to the Buyer, the "Reassigned Receivables") and have the Buyer release its security interests therein. Statement of Terms NOW, THEREFORE, in consideration of the mutual covenants herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Distribution Center Consolidation. On the date hereof, the Originator will consolidate the BH2 Designated Distribution Center located at [insert location details here] (the "Consolidating Location") into the ARFC Designated Distribution Center located at [insert location details here]. On the date hereof, the Designated Receivables Schedule is hereby amended to provide that the Consolidating Location is not a "BH2 Designated Distribution Center" but is an "ARFC Designated Distribution Center". As of the date hereof, the Outstanding Balance of the Reassigned Receivables is $[___________] (the "Reassigned Receivables Outstanding Balance"). SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 2. Reconveyance by Buyer. a. In connection with the Distribution Center Consolidation detailed in Paragraph 1 above, and subject to the terms and conditions of this Agreement, the Buyer hereby sells, assigns, transfers, and conveys to the Originator without recourse, and the Originator hereby accepts, purchases and receives, all of the Buyer's rights, titles and interests in and to the Reassigned Receivables. In consideration of the Buyer's transfer and conveyance hereunder to the Originator of the Reassigned Receivables, the Originator shall pay a purchase price in an amount equal to the "Purchase Price" that would be applicable under the Sale Agreement if such Reassigned Receivables were "Sold Receivables" (each as defined in Annex X) (the "Purchase Price"), to be paid as set forth on Schedule I hereto either in cash and/or in the form of a reduction of the subordinated debt owing by the Buyer to the Originator, if any, which Purchase Price represents the fair market value of the Reassigned Receivables as of the date hereof. b. Subject to the terms and conditions of this Agreement, the Buyer hereby releases and terminates all security interests or other rights or interests that the Buyer may have in (i) the Reassigned Receivables, (ii) the Originator's rights in the merchandise (including returned goods) relating to the Reassigned Receivables, (iii) all Reassigned Accounts, (iv) any other Originator Collateral to the extent relating to the foregoing, and (v) all proceeds, substitutions and replacements for each of the foregoing (the "Released Security Interest"). 3. Effectiveness of this Agreement. This Agreement shall be effective as of the date hereof upon receipt by the Administrative Agent of counterparts of this Agreement executed by each of the other parties hereto. 4. Further Assurances. The Buyer hereby agrees to execute and deliver such UCC amendment financing statements and such other documents as the Originator may reasonably request from time to time in order to more fully effectuate the transactions contemplated by this Agreement (including, without limitation, those necessary to terminate or assign Lockbox Account Agreements and Deposit Account Agreements); provided, however, that any and all such financing statements and other documents shall be prepared and/or recorded at the Originator's expense. 5. Representations and Warranties. Each of the parties hereto represents and warrants that it has the full corporate or other power and authority to execute and deliver this Agreement and to perform its obligations hereunder and that this Agreement has been duly and validly executed and delivered by it (and assuming the due and valid execution and delivery hereof by all other parties hereto) constitutes a legal, valid and binding obligation of such party enforceable against it in accordance with its terms. 6. Miscellaneous. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement may be executed in any number of SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT several counterparts, and each such counterpart shall constitute an original and all such counterparts together shall constitute one and the same instrument. The delivery of an executed counterpart hereof by facsimile shall constitute delivery of an executed counterpart hereof. * * * SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT IN WITNESS, each of the parties hereto, by their respective duly authorized signatories, has executed and delivered this Agreement as of the date first above written. AMERISOURCEBERGEN DRUG CORPORATION, a Delaware corporation, as successor by merger to Bergen Brunswig Drug Company, a California corporation, as Originator ____________________________________ Name: Title: BLUE HILL II, INC., as Buyer ____________________________________ Name: Title: ACKNOWLEDGED AND AGREED: GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent _____________________________________________ Name: Brian P. Schwinn Title: Duly Authorized Signatory SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT SCHEDULE I Purchase Price
- --------------------------------------------------------------------------------------------------- Outstanding Balance of Fair Market Value Reduction to Subordinated Cash - ---------------------- ----------------- ------------------------- ---- Reassigned Receivables (as a percentage) Note - ---------------------- ----------------- ---- - --------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------
SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT SCHEDULE II Reassigned Receivables SECOND AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT EX-4.4 6 dex44.txt FOURTH AGREEMENT TO RECEIVABLES EXHIBIT 4.4 FOURTH AMENDMENT TO RECEIVABLES PURCHASE AND SERVICING AGREEMENT AND ANNEX X THIS FOURTH AMENDMENT TO RECEIVABLES PURCHASE AND SERVICING AGREEMENT AND ANNEX X, dated as of December 2, 2002 (this "Fourth Amendment") relates to (i) that certain Receivables Purchase and Servicing Agreement dated as of December 20, 2000, as amended by that certain First Amendment dated as of August 29, 2001, and as amended by that certain Second Amendment dated as of December 21, 2001, and as amended by that certain Third Amendment dated as of October 1, 2002, among Blue Hill, the Servicer, the Purchasers and the Administrative Agent (each as defined below) (the "Purchase Agreement"), (ii) that certain Sale and Contribution Agreement dated as of December 20, 2000, between Blue Hill (as defined below) and the Originator (as defined below), as amended by that certain First Amendment dated as of October 1, 2002, and as amended by that certain Second Amendment dated as of the date hereof (the "Sale and Contribution Agreement"), and (iii) Annex X to the Sale and Contribution Agreement and the Receivables Purchase and Servicing Agreement dated as of December 20, 2000, as amended by that certain First Amendment dated as of August 29, 2001, and as amended by that certain Second Amendment dated as of December 21, 2001, and as amended by that certain Third Amendment dated as of October 1, 2002 ("Annex X"), and is entered into by and among BLUE HILL II, INC., a Delaware corporation ("Blue Hill"), AMERISOURCEBERGEN DRUG CORPORATION (f/k/a Amerisource Corporation), a Delaware corporation ("AmerisourceBergen Drug"), as successor by merger to Bergen Brunswig Drug Company, a California corporation, as the originator (in such capacity, the "Originator") and as the servicer (in such capacity, the "Servicer"), REDWOOD RECEIVABLES CORPORATION ("Redwood"), as the conduit purchaser (the "Conduit Purchaser"), and GENERAL ELECTRIC CAPITAL CORPORATION ("GECC"), as the committed purchaser (the "Committed Purchaser", together with the Conduit Purchaser, the "Purchasers") and as administrative agent for the Purchasers ("Administrative Agent"). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in Annex X. W I T N E S S E T H WHEREAS, Blue Hill, the Servicer, the Purchasers and Administrative Agent have entered into the Purchase Agreement; WHEREAS, Blue Hill and the Originator have entered into the Sale and Contribution Agreement; FOURTH AMENDMENT TO RPSA AND ANNEX X WHEREAS, AmerisourceBergen Drug (f/k/a Amerisource Corporation, a Delaware corporation) as seller and ARFC as buyer have entered into the ASC/ARFC Purchase Agreement pursuant to which ARFC has purchased ARFC Designated Receivables, which are Receivables generated by AmerisourceBergen Drug at ARFC Designated Distribution Centers; WHEREAS, ARFC, as seller, AmerisourceBergen Drug, as servicer, AmerisourceBergen Services Corporation, as guarantor, DFC, as buyer and JPMorgan Chase, as administrative agent, have entered into the ARFC/JPMorgan Chase Purchase Agreement, pursuant to which ARFC has sold undivided percentage ownership interests in the ARFC Designated Receivables and related collateral to DFC; WHEREAS, Blue Hill has been advised that from time to time the Originator intends to consolidate certain of the ARFC Designated Distribution Centers into BH2 Designated Distribution Centers and certain of the BH2 Designated Distribution Centers into ARFC Designated Distribution Centers; WHEREAS, Blue Hill and the Servicer have requested that the Purchase Agreement be amended to permit consolidation of certain of the Distribution Centers of Originator, and Blue Hill, the Originator, the Servicer, the Purchasers and the Administrative Agent (collectively, the "Parties") have mutually requested that Annex X be amended to reflect the foregoing (the "Amendments"); WHEREAS, the Parties are willing to so effect the Amendments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the above premises, the Parties agree as follows: 1. Definitions and Usage. Any reference herein to Section, Exhibit or Schedule shall, unless otherwise specified, refer to such Section, Exhibit or Schedule hereof, in its entirety. 2. Amendments to the Purchase Agreement. Upon the Fourth Amendment Effective Date, the Purchase Agreement is hereby amended as follows: a. By deleting the text of Section 2.04(d) in its entirety and substituting the following in its stead: (d) Repurchases of Transferred Receivables. If (i) the Originator is required to repurchase Transferred Receivables from the Seller pursuant to Section 3.2 of the Sale and Contribution Agreement, or (ii) in connection with a Distribution Center Consolidation of a BH2 Designated Distribution Center into an ARFC Designated Distribution Center, the Originator repurchases Transferred Receivables originated at such BH2 Designated Distribution Center, then in each case, the Applicable Purchaser FOURTH AMENDMENT TO RPSA AND ANNEX X 2 shall sell and reconvey its Purchaser Interests in such Transferred Receivables to the Seller either (x) through the transfer of such Purchaser Interests in exchange for Purchaser Interests in other Transferred Receivables with an Outstanding Balance equal to the Outstanding Balance of the Transferred Receivables being repurchased or (y) for cash in an amount equal to the Outstanding Balance of the Transferred Receivables being repurchased. In connection with any reconveyance of Purchaser Interests by the Purchasers pursuant to a Distribution Center Consolidation described in clause (ii) above, the Seller, the Purchasers and Administrative Agent shall execute and deliver a Purchaser Interest Reconveyance Agreement with respect to the Purchaser Interests to be reconveyed. b. By deleting Section 5.03(a) in its entirety and substituting the following in its stead: (a) Sales and Adverse Claims Relating to Receivables. Except as otherwise provided herein and except in connection with the transfer of Receivables pursuant to a Distribution Center Consolidation, the Seller will not, and will not permit the Originator or the Servicer to, (by operation of law or otherwise) dispose of or otherwise transfer, or create or suffer to exist any Adverse Claim upon, any material portion of the Transferred Receivables or any proceeds thereof or any other property or assets of the Seller. c. By adding the following Section 6.01(e) in the proper alphanumerical order: (e) Distribution Center Consolidation. (i) Notwithstanding anything in the foregoing Section 6.01 to the contrary, upon the occurrence of a Distribution Center Consolidation in which a BH2 Designated Distribution Center is being consolidated into an ARFC Designated Distribution Center and upon satisfaction of the related conditions precedent set forth in Section 8.13 of the Sale and Contribution Agreement (other than subsection (e) thereof), (A) the Seller shall deliver an amended and restated Schedule 4.01(q) to delete reference to the Reassigned Accounts, and (B) (1) the Seller shall transfer such Reassigned Accounts to the Originator or any other Person designated by the Originator, and the Seller shall request, and the Administrative Agent agrees, to terminate or assign (as requested by the Seller) any Lockbox Account Agreement or Deposit Account Agreement with respect to such Reassigned Accounts, or (2) the Seller and Administrative Agent shall take such other action with respect to FOURTH AMENDMENT TO RPSA AND ANNEX X 3 the Reassigned Accounts as the Seller and Administrative Agent shall agree. (ii) Upon the occurrence of a Distribution Center Consolidation in which an ARFC Designated Distribution Center is being consolidated into a BH2 Designated Distribution Center and upon satisfaction of the related conditions precedent set forth in Section 8.13 of the Sale and Contribution Agreement (other than subsection (d) thereof), (A) the Seller shall deliver an amended and restated Schedule 4.01(q) to reflect the Accounts of such ARFC Designated Distribution Center, and (B) the Seller shall (1) provide the Administrative Agent with satisfactory evidence that such Accounts have been transferred to the Seller, and deliver an executed Lockbox Account Agreement or Deposit Account Agreement, as applicable, with respect to each such Account or deliver an assignment of the account control agreement in effect with respect to the security interest of JPMorgan Chase and DFC in such Account, in form and substance satisfactory to the Administrative Agent, or (2) take such other action with respect to such Accounts as the Seller and the Administrative Agent shall agree. d. By deleting the last word in Section 6.02(iii), deleting the period at the end of Section 6.02(iv) and replacing it with a semicolon, and adding Section 6.02(v) in the proper alphanumerical order: (v) if on any Business Day the Originator repurchases Transferred Receivables in connection with a Distribution Center Consolidation, then the Seller shall deposit in the Collection Account cash in the amount so received from the Originator for such payment. e. By deleting the last word in Section 9.01(u), and adding the following Sections 9.01(w), (x), (y), (z) and (aa) in proper alphanumerical order: (w) any "Termination Event" or "Servicing Default" shall occur under the ARFC/JPMorgan Chase Purchase Agreement; (x) AmeriSourceBergen Drug or any of its Consolidated Subsidiaries shall fail to pay any Debt in excess of $10,000,000 of AmerisourceBergen Drug or any of its Consolidated Subsidiaries, as the case may be, or any interest or premium on such Debt, in either case, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument FOURTH AMENDMENT TO RPSA AND ANNEX X 4 relating to such Debt; or any other default under any agreement or instrument relating to any such Debt or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or a final court decision of $10,000,000 or more shall be rendered against AmerisourceBergen Drug or any of its Consolidated Subsidiaries and (i) such amount remains unpaid and (ii) AmerisourceBergen Drug or the relevant Consolidated Subsidiary does not, in good faith, contest such decision within the relevant statutory period; (y) a case or proceeding shall have been commenced against ARFC seeking a decree or order in respect of ARFC (i) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for ARFC or for any substantial part of ARFC's assets, or (iii) ordering the winding-up or liquidation of the affairs of ARFC; (z) ARFC shall (i) file a petition seeking relief under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) consent or fail to object in a timely and appropriate manner to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for ARFC or for any substantial part of ARFC's assets, (iii) make an assignment for the benefit of creditors, or (iv) take any corporate action in furtherance of any of the foregoing; or (aa) any breach by JPMorgan Chase shall have occurred and be continuing under the Third Amendment Intercreditor Agreement; f. By deleting clause (i) of the proviso in the last paragraph of Section 9.01 in its entirety and substituting the following in its stead: (i) upon the occurrence of any of the Termination Events described in Sections 9.01(c), (d), (e), (t), (y) or (z) or g. By deleting the last word of Section 9.02(d), by adding the word "or" after the semicolon in Section 9.02(e) and adding the following Section 9.02(f) in proper alphanumerical order: (f) there shall have occurred any event which materially and adversely impairs in the reasonable judgment of the Administrative Agent the ability of the Servicer to distinguish between BH2 FOURTH AMENDMENT TO RPSA AND ANNEX X 5 Designated Receivables and ARFC Designated Receivables or to segregate collections relating to ARFC Designated Receivables from Collections relating to BH2 Designated Receivables; h. By adding Exhibit 2.04(d) in the form and substance of Annex I, attached hereto and made a part hereof. 3. Amendments to Annex X. Upon the Fourth Amendment Effective Date, Annex X is hereby amended as follows: a. By amending the defined term "ARFC Designated Distribution Center" by inserting the words "from time to time" after the words "any distribution center of the Originator identified". b. By deleting the defined term "ARFC Designated Receivables" in its entirety and substituting the following in its stead: "ARFC Designated Receivables" shall mean, collectively (but without duplication), (i) all Receivables that are generated by the Originator at any of the ARFC Designated Distribution Centers and (ii) all Receivables that are acquired by the Originator pursuant to the ASC Affiliate Purchase Agreement. From and after a Distribution Center Consolidation, "ARFC Designated Receivables" shall exclude all Receivables that become BH2 Designated Receivables pursuant to such Distribution Center Consolidation. c. By amending the defined term "BH2 Designated Distribution Center" by inserting the words "from time to time" after the words "any distribution center of the Originator identified". d. By deleting the defined term "BH2 Designated Receivables" in its entirety and substituting the following in its stead: "BH2 Designated Receivables" shall mean all Receivables owned by the Originator that are generated by the Originator at any of the BH2 Designated Distribution Centers. From and after a Distribution Center Consolidation, "BH2 Designated Receivables" shall exclude all Receivables that become ARFC Designated Receivables pursuant to such Distribution Center Consolidation. e. By amending the defined term "Designated Receivables Schedule" by adding the following after the last word of the definition thereof: , as such Schedule 5.2(p) may be amended from time to time pursuant to and in connection with a Distribution Center Consolidation permitted under Section 8.13 of the Sale and Contribution Agreement. FOURTH AMENDMENT TO RPSA AND ANNEX X 6 f. By adding the following defined term "Distribution Center Consolidation" in the proper alphabetical order: "Distribution Center Consolidation" shall mean any consolidation of a BH2 Designated Distribution Center into an ARFC Designated Distribution Center and any consolidation of an ARFC Designated Distribution Center into a BH2 Designated Distribution Center, in each case, pursuant to, and in accordance with, Section 8.13 of the Sale and Contribution Agreement. g. By deleting the defined term "Lockbox Account" in its entirety and substituting the following in its stead: "Lockbox Account" shall mean each lockbox account listed on Schedule 4.01(q) to the Purchase Agreement established in the name of the Seller held at a Lockbox Bank, as such Schedule 4.01(q) may be amended, supplemented and otherwise modified from time to time to reflect a Distribution Center Consolidation; and any other segregated deposit account established by the Seller for the deposit of Collections with respect to the Transferred Receivables pursuant to and in accordance with Section 6.01(a) of the Purchase Agreement. h. By adding the defined term "Purchaser Interest Reconveyance Agreement" in the proper alphabetical order: "Purchaser Interest Reconveyance Agreement" shall mean a purchaser interest reconveyance agreement in the form and substance attached as Exhibit 2.04(d) to the Purchase Agreement. i. By adding the defined term "Reassigned Accounts" in the proper alphanumerical order: "Reassigned Accounts" shall have the meaning set forth in Section 8.13(d)(ii) of the Sale and Contribution Agreement. j. By amending the defined term "Receivable" by deleting subparagraph (f) thereof in its entirety and substituting the following in its stead: (f) all invoices, all billing statements and all rights in all other Contracts with respect to any of the foregoing; and k. By deleting the defined term "Redwood Termination Date" in its entirety and substituting the following in its stead: "Redwood Termination Date" shall mean the date elected by Redwood or the Collateral Agent (which election shall be mandatory and immediate upon the occurrence of an event set FOURTH AMENDMENT TO RPSA AND ANNEX X 7 forth in clause (c) below), by notice to the Seller and the Administrative Agent as the Redwood Termination Date; provided, that on such date, one or more of the following events shall have occurred and be continuing: (a) a Seller LOC Draw; (b) the obligations of the Liquidity Lenders to make Liquidity Loans shall have terminated and such Liquidity Lenders shall not have otherwise been replaced or the "Liquidity Termination Date" (as defined in the LAPA) shall have occurred; (c) an event of default under the Collateral Agent Agreement or any other Program Document shall have occurred; (d) the short-term debt rating of a Liquidity Lender shall have been downgraded by a Rating Agency and such Liquidity Lender shall not have been replaced in accordance with the terms of the LAPA within 30 days thereafter; (e) Redwood or the Collateral Agent shall have determined that the funding of Transferred Receivables under the Purchase Agreement is impracticable for any reason whatsoever, including as a result of (i) a drop in or withdrawal of any of the ratings assigned to the Commercial Paper by any Rating Agency, (ii) the imposition of Additional Amounts, (iii) restrictions on the amount of Transferred Receivables Redwood may finance or (iv) the inability of Redwood to issue Commercial Paper; (f) any change in accounting standards shall occur or any pronouncement or release of any accounting or regulatory body (including FASB, AICPA or the Securities and Exchange Commission) shall be issued, or any other change in the interpretation of accounting standards shall occur, such that all or any portion of the Conduit Purchaser's assets and liabilities are deemed to be consolidated with the assets and liabilities of GE Capital or any of its affiliates; (g) a Termination Event shall have occurred and be continuing; or (h) the outstanding loans to the Conduit Purchaser under the LAPA equal or exceed the Conduit Purchaser's Capital Investment at such time and no interest or other amounts are owed to the Conduit Purchaser under the Purchase Agreement or the other Related Documents. l. By amending the defined term "Related Documents" by inserting the phrase "each Reconveyance Agreement, each Purchaser Interest Reconveyance Agreement," after "each Deposit Account Agreement" and prior to "the Purchase Agreement". m. By amending the defined term "Transferred Receivable" by inserting immediately prior to the final period of the definition thereof, the phrase "; provided further, that any BH2 Designated Receivable that is repurchased pursuant to a Distribution Center Consolidation shall not be deemed to be a Transferred Receivable from and after the date of such repurchase". n. By deleting the defined term "Unapproved Receivable" in its entirety and substituting the following in its stead: FOURTH AMENDMENT TO RPSA AND ANNEX X 8 "Unapproved Receivable" shall mean any BH2 Designated Receivable (a) with respect to which the obligor thereunder is not an Obligor on any BH2 Designated Receivable and whose customer relationship with the Originator arises as a result of the acquisition by such Originator of another Person or (b) that was originated in accordance with standards established by another Person acquired by the Originator, in each case, solely with respect to any such acquisitions that have not been approved in writing by the Administrative Agent and then only for the period prior to any such approval; provided, however, that any ARFC Designated Receivable that becomes a BH2 Designated Receivable in connection with a Distribution Center Consolidation shall not be deemed an Unapproved Receivable. 4. Representations and Warranties of the Originator. The Originator represents and warrants to Blue Hill that, as of the Fourth Amendment Effective Date and after giving effect to this Fourth Amendment: a. All of the representations and warranties of the Originator contained in this Fourth Amendment, the Sale and Contribution Agreement, the First Amendment to the Sale and Contribution Agreement (as defined below) and the other Related Documents are true and correct in all material respects on and as of the Fourth Amendment Effective Date, as if then made (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); and b. No Termination Event or Incipient Termination Event has occurred and is continuing or will result after giving effect to this Fourth Amendment. 5. Representations and Warranties of Blue Hill and the Servicer. Each of Blue Hill and the Servicer represents and warrants to the Purchasers and the Administrative Agent that, as of the Fourth Amendment Effective Date and after giving effect to this Fourth Amendment: a. All of the representations and warranties of Blue Hill and the Servicer contained in this Fourth Amendment, the Purchase Agreement and the other Related Documents are true and correct in all material respects on and as of the Fourth Amendment Effective Date, as if then made (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); b. Blue Hill is in compliance with Sections 5.01(d) and (e) of the Purchase Agreement; and FOURTH AMENDMENT TO RPSA AND ANNEX X 9 c. No Termination Event or Incipient Termination Event has occurred and is continuing or will result after giving effect to this Fourth Amendment. 6. Effective Date. This Fourth Amendment shall become effective as of the date first written above (the "Fourth Amendment Effective Date") upon the satisfaction of each of the following conditions: a. The Administrative Agent and Blue Hill shall have received each of the following documents, in each case in form and substance satisfactory to the Administrative Agent and Blue Hill: i. counterparts hereof executed by each of the Parties; ii. an executed Second Amendment to the Sale and Contribution Agreement, dated as of the date hereof, between Blue Hill and the Originator, acknowledged and agreed to by the Administrative Agent (the "Second Amendment to the Sale and Contribution Agreement") together with evidence of the effectiveness of the Second Amendment to the Sale and Contribution Agreement; iii. copies of each of the documents required to be delivered under Section 4 of the Second Amendment to the Sale and Contribution Agreement and evidence satisfactory to the Administrative Agent that the conditions precedent thereto have been satisfied; iv. execution copies of that certain Third Amendment to Purchase Agreement dated as of the date hereof between AmerisourceBergen Drug and ARFC and that certain Tenth Amendment to Receivables Purchase Agreement dated as of the date hereof among ARFC, AmerisourceBergen Drug, AmerisourceBergen Services Corporation, DFC and JPMorgan Chase and evidence satisfactory to the Administrative Agent that the conditions precedent thereto have been satisfied or waived; v. a certificate of an officer of the Seller attesting to the solvency of Seller; vi. a certificate of an officer of the Servicer attesting to the solvency of Servicer; vii. a certificate of an officer of the Seller certifying, among other things, that the representations and warranties contained in the Related Documents are correct as of the date hereof; viii. a certificate of an officer of the Servicer certifying, among other things, that the representations and warranties contained in the Related Documents are correct as of the date hereof; FOURTH AMENDMENT TO RPSA AND ANNEX X 10 ix. a certificate of the Secretary or Assistant Secretary of the Seller certifying that no changes have been made to the certificate of incorporation of the Seller and bylaws of the Seller, and certifying and attaching resolutions authorizing the Fourth Amendment, and an incumbency certificate; x. a certificate of the Secretary or Assistant Secretary of the Servicer certifying that no changes have been made to the certificate of incorporation of the Servicer and the bylaws of the Servicer, and certifying and attaching resolutions authorizing the Fourth Amendment and an incumbency certificate; xi. tax and good standing certificates of the Seller in the states of California and Delaware (to the extent not provided pursuant to clause (iii) above); xii. tax and good standing certificates of the Servicer in the state of California, Pennsylvania and Delaware (to the extent not provided pursuant to clause (iii) above); xiii. a legal opinion as to true sale and substantive consolidation matters delivered by Dechert after giving effect to the Fourth Amendment; xiv. a legal opinion as to security interests, enforceability, non-contravention and corporate matters delivered by Dechert, and in addition, a legal opinion delivered by the in-house counsel of the Servicer and the Seller, both, after giving effect to the Fourth Amendment; xv. letters from Standard and Poor's Corporation confirming the A-1+ rating of the commercial paper of Redwood, and from Moody's Investors' Service, Inc. confirming the P-1 rating of the commercial paper of Redwood; and xvi. such additional documentation as the Administrative Agent may reasonably request; b. No law, regulation, order, judgment or decree of any Governmental Authority shall, and no Party shall have received any notice that litigation is pending or threatened which is likely to, enjoin, prohibit or restrain the consummation of the transactions contemplated by this Fourth Amendment, except for such laws, regulations, orders or decrees, or pending or threatened litigation, that in the aggregate could not reasonably be expected to have a Material Adverse Effect; c. All of the representations and warranties of Blue Hill, the Originator and the Servicer contained in this Fourth Amendment, the Second Amendment to Sale and Contribution Agreement and the other Related FOURTH AMENDMENT TO RPSA AND ANNEX X 11 Documents shall be true and correct in all material respects on and as of the Fourth Amendment Effective Date, as if then made (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); d. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Fourth Amendment and the Second Amendment to Sale and Contribution Agreement shall be satisfactory in all respects in form and substance to the Administrative Agent; e. No Termination Event or Incipient Termination Event shall have occurred and be continuing on the Fourth Amendment Effective Date or will result after giving effect to this Fourth Amendment. 7. Reference to and Effect on the Related Documents. a. Upon the Fourth Amendment Effective Date, (i) each reference in the Purchase Agreement, or the Sale and Contribution Agreement (as amended by the Second Amendment to the Sale and Contribution Agreement) or any Related Documents to "Annex X" shall mean and be a reference to Annex X as amended and supplemented hereby, and (ii) each reference in the Purchase Agreement to "this Agreement", "hereunder", "hereof" or words of like import, and each reference in the Related Documents to the Purchase Agreement shall mean and be a reference to the Purchase Agreement as amended and supplemented hereby. b. Except to the extent specifically set forth herein, the respective provisions of the Purchase Agreement, Annex X and the other Related Documents shall not be amended, modified, waived, impaired or otherwise affected hereby, and such documents and the Obligations under each of them are hereby confirmed as being in full force and effect. c. This Fourth Amendment shall be limited solely to the matters expressly set forth herein and shall not (i) constitute an amendment or waiver of any other term or condition of the Purchase Agreement, Annex X or any other Related Document, (ii) prejudice any right or rights which any of the Parties may now have or may have in the future under or in connection with the Purchase Agreement, Annex X or any other Related Document, (iii) require any of the Parties to agree to a similar transaction on a future occasion or (iv) create any right herein to another Person or other beneficiary or otherwise, except to the extent specifically provided herein. 8. Miscellaneous. This Fourth Amendment is a Related Document. The headings herein are for convenience of reference only and shall not alter or otherwise affect the meaning hereof. FOURTH AMENDMENT TO RPSA AND ANNEX X 12 9. Section Titles. The Section titles in this Fourth Amendment are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. 10. Counterparts. This Fourth Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. 11. GOVERNING LAW. THIS FOURTH AMENDMENT, AND ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE HEREOF, SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 12. No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Fourth Amendment. In the event an ambiguity or question of intent or interpretation arises, this Fourth Amendment shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Fourth Amendment. 13. Waiver by Originator, the Servicer and Blue Hill. Each of the Originator,the Servicer and Blue Hill hereby waives any claim, defense, demand, action or suit of any kind or nature whatsoever against the Purchasers or the Administrative Agent arising on or prior to the date of this Fourth Amendment in connection with any of the Related Documents or the transactions contemplated thereunder. * * * * FOURTH AMENDMENT TO RPSA AND ANNEX X 13 IN WITNESS WHEREOF, Blue Hill, the Originator, the Servicer, the Purchasers, and the Administrative Agent have caused this Fourth Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written. BLUE HILL II, INC. By: _________________________ Name: Title: AMERISOURCEBERGEN DRUG CORPORATION, a Delaware corporation, as successor by merger to Bergen Brunswig Drug Company, a California corporation, as Originator and as Servicer By: _________________________ Name: Title: SIGNATURE PAGE TO FOURTH AMENDMENT TO RPSA AND ANNEX X REDWOOD RECEIVABLES CORPORATION, as Conduit Purchaser By: ________________________________ Name: Craig Winslow Title: Assistant Secretary GENERAL ELECTRIC CAPITAL CORPORATION, as Committed Purchaser By: ________________________________ Name: Brian P. Schwinn Title: Duly Authorized Signatory GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent By: ________________________________ Name: Brian P. Schwinn Title: Duly Authorized Signatory WITH THE CONSENT OF: JP MORGAN CHASE BANK, as Administrative Agent under the ARFC/JPMorgan Chase Purchase Agreement ________________________________________________ Name: Title: SIGNATURE PAGE TO FOURTH AMENDMENT TO RPSA AND ANNEX X ANNEX I Exhibit 2.04(d) (see attached) EXHIBIT 2.04(d) FORM OF PURCHASER INTEREST RECONVEYANCE AGREEMENT THIS PURCHASER INTEREST RECONVEYANCE AGREEMENT (this "Agreement") is made and entered into as of [INSERT DATE], among BLUE HILL II, INC., a Delaware corporation ("Blue Hill"), REDWOOD RECEIVABLES CORPORATION ("Conduit Purchaser"), and GENERAL ELECTRIC CAPITAL CORPORATION as committed purchaser ("Committed Purchaser") and as administrative agent for the Conduit Purchaser and the Committed Purchaser (the "Agent"). All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in Annex X to the Purchase Agreement (as defined below). Statement of Facts Pursuant to that certain Receivables Purchase and Servicing Agreement, dated as of December 20, 2000, as amended on August 29, 2001, and as amended on December 21, 2001, and as amended on October 1, 2002, among Blue Hill, the Servicer, the Purchasers and the Administrative Agent (as further amended, restated, supplemented or otherwise modified from time to time, the "Purchase Agreement"), the Purchasers have purchased from Blue Hill undivided percentage interests in certain trade receivables (and related rights thereto) owned by Blue Hill and generated by the Originator at BH2 Designated Distribution Centers. The Originator has given notice to Blue Hill of the Originator's intent to consolidate the Consolidating Location (defined below) into an ARFC Designated Distribution Center in accordance with Section 8.13 of the Sale Agreement, and, in connection therewith, to repurchase from Blue Hill all outstanding BH2 Designated Receivables with respect to the Consolidating Location (as set forth in Schedule I hereto, or in satisfactory form as is acceptable to the Buyer and consented to by the Administrative Agent, the "Reassigned Receivables"), and to have Blue Hill release its security interests therein. Pursuant to Section 2.04(d) of the Purchase Agreement, upon the request of Blue Hill, each Purchaser shall reconvey its Purchaser Interests in such Reassigned Receivables either (a) through the transfer of such Purchaser Interests in exchange for Purchaser Interests in other Transferred Receivables with an Outstanding Balance equal to the Outstanding Balance of the Reassigned Receivables or (b) for cash in an amount equal to the Outstanding Balance of the Reassigned Receivables. Statement of Terms NOW, THEREFORE, in consideration of the mutual covenants herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Distribution Center Consolidation. On the date hereof, the Originator will consolidate the BH2 Designated Distribution Center located at [insert location details here] (the "Consolidating Location") into the ARFC Designated Distribution Center located at [insert location details here]. On the date hereof, the Designated Receivables Schedule is hereby amended to provide that the Consolidating Location is not a "BH2 Designated Distribution Center" but is an "ARFC Designated Distribution Center". As of the date hereof, the Outstanding Balance of the Reassigned Receivables is $[___________] ("Reassigned Receivables Outstanding Balance"). 2. Reconveyance by Purchasers. a. In connection with the Distribution Center Consolidation detailed in Paragraph 1 above, and subject to the terms and conditions of this Agreement, each Purchaser hereby sells, assigns, transfers, and conveys to Blue Hill without recourse, and Blue Hill hereby accepts, purchases and receives, all of each Purchaser's rights, titles and interests in and to the Reassigned Receivables. In consideration of each Purchaser's transfer and conveyance hereunder to Blue Hill of the Reassigned Receivables, Blue Hill shall either (i) pay to the Administrative Agent on behalf of the Purchasers a purchase price in cash in the amount equal to the Purchase Excess, if any, after giving effect to such reconveyance or (ii) transfer to the Purchasers Purchaser Interests in other Transferred Receivables having an Outstanding Balance equal to the Reassigned Receivables Outstanding Balance. b. Subject to the terms and conditions of this Agreement, the Administrative Agent and the Purchasers hereby release and terminate all security interests or other rights or interests that the Administrative Agent and the Purchasers may have in (i) the Reassigned Receivables, (ii) the Originator's rights in the merchandise (including returned goods) relating to the Reassigned Receivables, (iii) all Reassigned Accounts, (iv) any other Seller Collateral to the extent relating to the foregoing, and (v) all proceeds, substitutions and replacements for each of the foregoing (the "Released Security Interest"). 3. Effectiveness of this Agreement. This Agreement shall be effective as of the date hereof upon receipt by the Administrative Agent of counterparts of this Agreement executed by each of the other parties hereto. 4. Further Assurances. The Administrative Agent and the Purchasers each hereby agrees to execute and deliver such UCC amendment financing statements and such other documents as Blue Hill may reasonably request from time to time in order to more fully effectuate the transactions contemplated by this Agreement (including, without limitation, those necessary to terminate or assign Lockbox Account Agreements and Deposit Account Agreements); provided, however, that any and all such financing statements and other documents shall be prepared and/or recorded at Blue Hill's expense. 5. Representations and Warranties. Each of the parties hereto represents and warrants that it has the full corporate or other power and authority to execute and deliver this Agreement and to perform its obligations hereunder and that this Agreement has been duly and validly executed and delivered by it (and assuming the due and valid execution and delivery hereof by all other parties hereto) constitutes a legal, valid and binding obligation of such party enforceable against it in accordance with its terms. 6. Miscellaneous. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement may be executed in any number of several counterparts, and each such counterpart shall constitute an original and all such counterparts together shall constitute one and the same instrument. The delivery of an executed counterpart hereof by facsimile shall constitute delivery of an executed counterpart hereof. * * * IN WITNESS, each of the parties hereto, by their respective duly authorized signatories, has executed and delivered this Agreement as of the date first above written. BLUE HILL II, INC. __________________________________________________ Name: Title: GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent and as Committed Purchaser __________________________________________________ Name: Title: REDWOOD RECEIVABLES CORPORATION, as Conduit Purchaser __________________________________________________ Name: Title: FOURTH AMENDMENT TO RPSA AND ANNEX X Schedule I Reassigned Receivables FOURTH AMENDMENT TO RPSA AND ANNEX X EX-4.5 7 dex45.txt THIRD AMENDMENT TO SALES AND CONTRIBUTION AGREEMEN EXHIBIT 4.5 THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT THIS THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT, dated as of December 20, 2002 (this "Third Amendment") relates to that certain Sale and Contribution Agreement dated as of December 20, 2000, between Blue Hill and the Originator (each as defined below), as amended by the First Amendment to Sale and Contribution Agreement dated as of October 1, 2002 and as amended by the Second Amendment to Sale and Contribution Agreement dated as of December 2, 2002 (the "Sale and Contribution Agreement"), and is entered into by and between BLUE HILL II, INC., a Delaware corporation ("Blue Hill") and AMERISOURCEBERGEN DRUG CORPORATION (f/k/a AmeriSource Corporation), a Delaware corporation, as successor by merger to Bergen Brunswig Drug Company, a California corporation, as the originator (in such capacity, the "Originator"). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in Amended and Restated Annex X to the Sale and Contribution Agreement dated as of December 20, 2000, and the Amended and Restated Receivables Purchase and Servicing Agreement dated as of December 20, 2002 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, "Annex X"). W I T N E S S E T H WHEREAS, Blue Hill and the Originator have entered into the Sale and Contribution Agreement; WHEREAS, Blue Hill, the Servicer, the Purchasers and the Administrative Agent have entered into the Purchase Agreement; WHEREAS, Blue Hill desires to (a) add additional parties as "Purchasers" to the Purchase Agreement so that such parties may make Purchases of Purchaser Interests pursuant to the Purchase Agreement, (b) increase the Maximum Purchase Limit available to Blue Hill thereunder, (c) add other additional parties as "Purchaser Agents" to the Purchase Agreement to act as agents to the "Purchasers" in order to facilitate the Purchases under the Purchase Agreement and (d) provide for the ability of the Purchasers to assign their interests thereunder from time to time; WHEREAS, Blue Hill and Originator (collectively, the "Parties") have mutually requested that the Sale and Contribution Agreement be amended (the "Amendments") to reflect the addition of parties as "Purchasers" and "Purchaser Agents" to the Purchase Agreement; and WHEREAS, the Parties are willing to so effect the Amendments on the terms and conditions set forth herein. THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT NOW, THEREFORE, in consideration of the above premises, the Parties agree as follows: 1. Definitions and Usage. Any reference herein to Section, Exhibit or Schedule shall, unless otherwise specified, refer to such Section, Exhibit or Schedule hereof, in its entirety. 2. Amendments to the Sale and Contribution Agreement. Upon the Third Amendment Effective Date, the Sale and Contribution Agreement is hereby amended as follows: a. By amending Section 3.4 by (i) adding the phrase ", any Purchaser Agent's" after the phrase "Administrative Agent's" and (ii) deleting the phrase "Neither the Seller, the Administrative Agent nor any Purchaser" in its entirety and substituting in its stead the phrase "None of the Seller, the Administrative Agent, the Purchaser Agents and the Purchasers". b. By amending Section 5.2(e) by adding the phrase "and the Purchaser Agents" after the phrase "the Administrative Agent". c. By amending Section 5.2(o) by adding the phrase ", the Purchaser Agents" after the phrase "the Purchasers". d. By amending Section 6.1(e) by (i) adding the phrase "or any Purchaser Agent" after the first reference to the phrase "the Administrative Agent", and (ii) adding the phrase ", the Purchaser Agents" after each reference therein to "the Servicer". e. By amending Section 6.1(l) by adding the phrase ", the Purchaser Agents" after the phrase "the Buyer". f. By amending Section 6.1(m) by adding the phrase ", the Purchaser Agents" after each reference therein to "the Servicer". g. By deleting Section 6.1(o) in its entirety and substituting the following in its stead: (o) No Proceedings. From and after the Closing Date and until the date one year plus one day following the date on which the Commercial Paper allocable to Buyer with the latest maturity has been indefeasibly paid in full in cash, the Originator shall not, directly or indirectly, institute or cause to be instituted against Buyer or any Purchaser any proceeding of the type referred to in Sections 9.01(c) and 9.01(d) of the Purchase Agreement. The Originator acknowledges and agrees that no Conduit Purchaser shall, nor shall be obligated to, pay any amount pursuant to the Related Documents unless (i) such Conduit Purchaser has received funds which may be used to make such payment pursuant to the Program Documents, and (ii) after giving effect to such payment, either (A) such Conduit Purchaser could issue Commercial Paper to refinance all outstanding Commercial Paper (assuming such outstanding Commercial THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 2 Paper matured at such time) issued by such Conduit Purchaser without violating the Program Documents, or (B) all Commercial Paper issued by such Conduit Purchaser is paid in full. Any amount which a Conduit Purchaser does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in Section 101 of the Bankruptcy Code) against or an obligation of such Conduit Purchaser for any insufficiency unless and until such Conduit Purchaser satisfies the provisions of such preceding sentence. This Section 6.1(o) shall survive the termination of this Agreement. h. By amending Section 8.2 by (i) adding the phrase "and the Purchaser Agents" after the first and second references to "Purchasers", (ii) adding the phrase "nor any Purchaser Agent" after the phrase "nor any Purchaser" and (iii) deleting the last sentence of Section 8.2 in its entirety and substituting the following in its stead: Originator hereby further acknowledges that the execution and performance of this Agreement are conditions precedent for the Administrative Agent, the Purchaser Agents and the Purchasers to enter into the Purchase Agreement and that the agreement of the Administrative Agent, the Purchaser Agents and Purchasers to enter into the Purchase Agreement will directly or indirectly benefit Originator and constitutes good and valuable consideration for the rights and remedies of the Administrative Agent, the Purchaser Agents and each Purchaser with respect hereto. i. By amending Section 8.3 by adding the phrase "or Purchaser Agent" after the phrase "or any Purchaser". j. By amending Section 8.9 (a) by (i) adding the phrase ", the Purchaser Agents" after the first reference therein to "the Administrative Agent", (ii) adding the phrase "any Purchaser Agent" after the third reference therein to "the Administrative Agent", and (iii) adding the phrase ", any Purchaser Agent" after the fourth and fifth references therein to "the Administrative Agent". 3. Representations and Warranties of the Originator and the Servicer. Each of the Originator and the Servicer represents and warrants to Blue Hill that, as of the Third Amendment Effective Date and after giving effect to this Third Amendment: a. All of the representations and warranties of the Originator and the Servicer contained in this Third Amendment, the Sale and Contribution Agreement and the other Related Documents are true and correct in all material respects on and as of the Third Amendment Effective Date, as if then made (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); and b. No Termination Event or Incipient Termination Event has occurred and is continuing or will result after giving effect to this Third Amendment. THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 3 4. Effective Date. This Third Amendment shall become effective as of the date first written above (the "Third Amendment Effective Date") upon the satisfaction of each of the following conditions: a. Blue Hill shall have received each of the following documents, in each case in form and substance satisfactory to Blue Hill and the Administrative Agent: i. counterparts hereof executed by each of the Parties; ii. satisfactory evidence of the effectiveness of the Amended and Restated Agreement and Annex X, dated as of the date hereof, among Blue Hill, the Servicer, the Administrative Agent, the Purchaser Agents and the Purchasers, together with delivery of an execution copy thereof and of the other documents delivered in connection therewith; iii. an executed Amended and Restated Fee Letter, dated as of the date hereof, between Blue Hill, GE Capital as Administrative Agent, a Purchaser Agent and a Committed Purchaser, and Redwood. iv. an executed RPSA Supplement Agreement, dated as of the date hereof, between Blue Hill, Liberty Street Funding Corp. as a Conduit Purchaser, The Bank of Nova Scotia as a Committed Purchaser, and The Bank of Nova Scotia as Purchaser Agent for the aforementioned Conduit Purchaser and Committed Purchaser. v. a certificate of an officer of the Originator attesting to the solvency of Originator; vi. a certificate of an officer of the Originator certifying, among other things, that the representations and warranties contained in the Related Documents are correct as of the date hereof; vii. a certificate of the Secretary or Assistant Secretary of the Originator certifying no change in the certificate of incorporation of the Originator and bylaws of the Originator, and certifying and attaching resolutions authorizing the Third Amendment and an incumbency certificate; viii. tax and good standing certificates of the Seller in the states of California, and Delaware; ix. tax and good standing certificates of the Originator in the state of California, Pennsylvania and Delaware; x. a legal opinion as to security interests, enforceability, corporate matters and non-contravention delivered by Dechert, and in addition, a legal opinion delivered by the in-house counsel of the Originator and Buyer, both, after giving effect to the Third Amendment; THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 4 xi. such additional documentation as the Buyer may reasonably request; b. No law, regulation, order, judgment or decree of any Governmental Authority shall, and no Party shall have received any notice that litigation is pending or threatened which is likely to, enjoin, prohibit or restrain the consummation of the transactions contemplated by this Third Amendment, except for such laws, regulations, orders or decrees, or pending or threatened litigation, that in the aggregate could not reasonably be expected to have a Material Adverse Effect; c. All of the representations and warranties of Blue Hill and the Servicer contained in this Third Amendment and the other Related Documents shall be true and correct in all material respects on and as of the Third Amendment Effective Date, as if then made (other than representations and warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); d. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Third Amendment shall be satisfactory in all respects in form and substance to the Buyer; and e. No Termination Event or Incipient Termination Event shall have occurred and be continuing on the Third Amendment Effective Date or will result after giving effect to this Third Amendment. 5. Reference to and Effect on the Related Documents. a. Upon the Third Amendment Effective Date, (i) each reference in the Sale and Contribution Agreement to "this Agreement", "hereunder", "hereof" or phrase of like import, and each reference in the Related Documents to the Sale and Contribution Agreement shall mean and be a reference to the Sale and Contribution Agreement as amended and supplemented hereby. b. Except to the extent specifically set forth herein, the respective provisions of the Sale and Contribution Agreement and the other Related Documents shall not be amended, modified, waived, impaired or otherwise affected hereby, and such documents and the Obligations under each of them are hereby confirmed as being in full force and effect. c. This Third Amendment shall be limited solely to the matters expressly set forth herein and shall not (i) constitute an amendment or waiver of any other term or condition of the Sale and Contribution Agreement or any other Related Document, (ii) prejudice any right or rights which any of the Parties, the Administrative Agent or the Purchasers may now have or may have in the future under or in connection with the Sale and Contribution Agreement or any other Related Document, (iii) require any of the Parties, the Administrative Agent, the Purchaser Agents or the Purchasers to agree to a similar transaction on a future occasion or (iv) create any right herein to another THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 5 Person or other beneficiary or otherwise, except to the extent specifically provided herein. 6. Acknowledgement of Amendment and Restatement. The Originator and Blue Hill acknowledge and consent to the amendment and restatement of Annex X in the form attached hereto as Annex I. 7. Miscellaneous. This Third Amendment is a Related Document. The headings herein are for convenience of reference only and shall not alter or otherwise affect the meaning hereof. 8. Section Titles. The Section titles in this Third Amendment are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. 9. Counterparts. This Third Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. 10. GOVERNING LAW. THIS THIRD AMENDMENT, AND ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE HEREOF, SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 11. No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Third Amendment. In the event an ambiguity or question of intent or interpretation arises, this Third Amendment shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Third Amendment. * * * * THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT 6 IN WITNESS WHEREOF, Blue Hill and the Originator have caused this Third Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written. BLUE HILL II, INC., as Buyer By: ______________________________ Name: Title: AMERISOURCEBERGEN DRUG CORPORATION, a Delaware corporation, as successor by merger to Bergen Brunswig Drug Company, a California corporation, as Originator and as Servicer By: ______________________________ Name: Title: ACKNOWLEDGED AND AGREED: GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent By: _______________________________ Name: Brian P. Schwinn Title: Duly Authorized Signatory THIRD AMENDMENT TO SALE AND CONTRIBUTION AGREEMENT EX-4.6 8 dex46.txt AMENDED AND RESTATED RECEIVABLES EXHIBIT 4.6 AMENDED AND RESTATED RECEIVABLES PURCHASE AND SERVICING AGREEMENT Dated as of December 20, 2002, by and among BLUE HILL II, INC., as Seller, AMERISOURCEBERGEN DRUG CORPORATION (as successor by merger to Bergen Brunswig Drug Company), as Servicer, REDWOOD RECEIVABLES CORPORATION, as a Conduit Purchaser, THE OTHER FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO, as Conduit Purchasers, GENERAL ELECTRIC CAPITAL CORPORATION, as a Committed Purchaser and a Purchaser Agent THE OTHER FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO as Committed Purchasers and Purchaser Agents, and GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement Table of Contents -----------------
Page ---- ARTICLE I. DEFINITIONS AND INTERPRETATION .................................................................... 2 Section 1.01. Definitions ............................................................................... 2 Section 1.02. Rules of Construction ..................................................................... 2 ARTICLE II. AMOUNTS AND TERMS OF PURCHASES ................................................................... 2 Section 2.01. Purchases ................................................................................. 2 Section 2.02. Optional Changes in Maximum Purchase Limit ................................................ 3 Section 2.03. Notices Relating to Purchases and Reductions in Aggregate Capital Investment .............. 4 Section 2.04. Conveyance of Transferred Receivables ..................................................... 5 Section 2.05. Facility Termination Date ................................................................. 7 Section 2.06. Daily Yield ............................................................................... 7 Section 2.07. Fees ...................................................................................... 7 Section 2.08. Time and Method of Payments ............................................................... 7 Section 2.09. Withholding Taxes ......................................................................... 8 Section 2.10. Capital Requirements; Additional Costs .................................................... 8 Section 2.11. Breakage Costs ............................................................................ 10 Section 2.12. Purchase Excess ........................................................................... 10 ARTICLE III. CONDITIONS PRECEDENT ............................................................................ 12 Section 3.01. Conditions Precedent to the Restatement Effective Date .................................... 12 Section 3.02. Conditions Precedent to All Purchases ..................................................... 14 ARTICLE IV. REPRESENTATIONS AND WARRANTIES ................................................................... 15 Section 4.01. Representations and Warranties of the Seller .............................................. 15 Section 4.02. Representations and Warranties of the Servicer ............................................ 19 ARTICLE V. GENERAL COVENANTS OF THE SELLER ................................................................... 20 Section 5.01. Affirmative Covenants of the Seller ....................................................... 20 Section 5.02. Reporting Requirements of the Seller ...................................................... 22 Section 5.03. Negative Covenants of the Seller .......................................................... 22 ARTICLE VI. COLLECTIONS AND DISBURSEMENTS .................................................................... 24 Section 6.01. Establishment of Accounts ................................................................. 24 Section 6.02. Funding of Agent's Account ................................................................ 28 Section 6.03. Daily Disbursements From the Agent's Account; Revolving Period ............................ 30 Section 6.04. Disbursements From the Reserve Account; Settlement Date Procedures; Revolving Period ...... 31 Section 6.05. Liquidation Settlement Procedures ......................................................... 32 Section 6.06. Investment of Funds in Accounts ........................................................... 33 Section 6.07. Termination Procedures .................................................................... 33 ARTICLE VII. SERVICER PROVISIONS ............................................................................. 34 Section 7.01. Appointment of the Servicer ............................................................... 34 Section 7.02. Duties and Responsibilities of the Servicer ............................................... 34
GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement i Table of Contents -----------------
Page ---- Section 7.03. Collections on Receivables ........................................................... 34 Section 7.04. Authorization of the Servicer ........................................................ 35 Section 7.05. Servicing Fees ....................................................................... 36 Section 7.06. Representations and Warranties of the Servicer ....................................... 36 Section 7.07. Covenants of the Servicer ............................................................ 37 Section 7.08. Reporting Requirements of the Servicer ............................................... 38 ARTICLE VIII. GRANT OF SECURITY INTERESTS ............................................................... 38 Section 8.01. Seller's Grant of Security Interest .................................................. 38 Section 8.02. Seller's Certification ............................................................... 39 Section 8.03. Consent to Assignment ................................................................ 40 Section 8.04. Delivery of Collateral ............................................................... 40 Section 8.05. Seller Remains Liable ................................................................ 40 Section 8.06. Covenants of the Seller and the Servicer Regarding the Seller Collateral ............. 41 Section 8.07. License for Use of Software and Other Intellectual Property .......................... 43 ARTICLE IX. TERMINATION EVENTS .......................................................................... 43 Section 9.01. Termination Events ................................................................... 43 Section 9.02. Events of Servicer Termination ....................................................... 48 ARTICLE X. REMEDIES ..................................................................................... 49 Section 10.01. Actions Upon Termination Event ...................................................... 49 Section 10.02. Exercise of Remedies ................................................................ 50 Section 10.03. Power of Attorney ................................................................... 50 Section 10.04. Continuing Security Interest 51 ARTICLE XI. SUCCESSOR SERVICER PROVISIONS 51 Section 11.01. Servicer Not to Resign 51 Section 11.02. Appointment of the Successor Servicer ............................................... 51 Section 11.03. Duties of the Servicer .............................................................. 51 Section 11.04. Effect of Termination or Resignation ................................................ 52 ARTICLE XII. INDEMNIFICATION ............................................................................ 52 Section 12.01. Indemnities by the Seller ........................................................... 52 Section 12.02. Indemnities by the Servicer ......................................................... 54 Section 12.03. Limitation of Damages; Indemnified Persons .......................................... 55 ARTICLE XIII. AGENTS .................................................................................... 55 Section 13.01. Authorization and Action ............................................................ 55 Section 13.02. Reliance ............................................................................ 55 Section 13.03. Notice of Termination Events ........................................................ 57 Section 13.04. Nonreliance on Administrative Agent, Purchaser Agents, Other Purchasers ............. 57 Section 13.05. Indemnification ..................................................................... 57
GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement ii Table of Contents -----------------
Page ---- Section 13.06. Successor Agents ........................................................................ 58 Section 13.07. GE Capital and Affiliates ............................................................... 58 ARTICLE XIV. MISCELLANEOUS .................................................................................. 58 Section 14.01. Notices ................................................................................. 58 Section 14.02. Binding Effect; Assignability ........................................................... 59 Section 14.03. Termination; Survival of Seller Secured Obligations Upon Facility Termination Date ...... 62 Section 14.04. Costs, Expenses and Taxes ............................................................... 62 Section 14.05. Confidentiality ......................................................................... 64 Section 14.06. No Proceedings .......................................................................... 65 Section 14.07. Complete Agreement; Modification of Agreement ........................................... 65 Section 14.08. Amendments and Waivers .................................................................. 65 Section 14.09. No Waiver; Remedies ..................................................................... 66 Section 14.10. Governing Law; Consent To Jurisdiction; Waiver Of Jury Trial ............................ 67 Section 14.11. Counterparts ............................................................................ 68 Section 14.12. Severability ............................................................................ 68 Section 14.13. Section Titles .......................................................................... 68 Section 14.14. Limited Recourse ........................................................................ 68 Section 14.15. Further Assurances ...................................................................... 69 Section 14.16. Consent to Merger and Acknowledgement of Assignment ..................................... 70 Section 14.17. Effect on Predecessor Agreement; No Novation ............................................ 70
GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement iii EXHIBITS 2.02(a): Form of Commitment Reduction Notice 2.02(c): Form of Commitment Termination Notice 2.03(a): Form of Investment Base Certificate 2.03(b): Form of Capital Purchase Request 2.03(c): Form of Repayment Notice 2.04(a): Form of Purchase Assignment 2.04(d): Form of Purchaser Interest Reconveyance Agreement 3.01(a)(i): Form of Officer's Certificate as to Solvency (Seller/Servicer) 3.01(a)(ii)(A): Form of Officer's Closing Certificate (Seller) 3.01(a)(ii)(B): Form of Officer's Post-Closing Certificate (Seller) 3.01(a)(iii)(A): Form of Officer's Closing Certificate (Servicer) 3.01(a)(iii)(B): Form of Officer's Post-Closing Certificate (Servicer) 3.01(a)(iv): Form of Monthly Reporting 10.03: Form of Power of Attorney 14.02(b): Form of Assignment Agreement 14.08(b): Form of RPSA Supplement Agreement A: Credit and Collection Policy B-1: Form of Lockbox Account Agreement B-2: Form of Deposit Account Agreement B-3: Letter Amendment to Lockbox and Deposit Account Agreements C: Intercreditor Agreement D: Chattel Paper Agreement ANNEXES 5.02(a): Reporting Requirements 5.02(b): Investment Reports SCHEDULES 4.01(a): Significant Subsidiaries 4.01(i): Locations 4.01(q): Accounts GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement i AMENDED AND RESTATED RECEIVABLES PURCHASE AND SERVICING AGREEMENT THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AND SERVICING AGREEMENT (the "Amended and Restated Agreement") dated as of December 20, 2002, is entered into by and among BLUE HILL II, INC., a Delaware corporation (the "Seller"), AMERISOURCEBERGEN DRUG CORPORATION (f/k/a AmeriSource Corporation), a Delaware corporation, as successor by merger to Bergen Brunswig Drug Company, a California Corporation, as servicer hereunder (in such capacity, the "Servicer"), REDWOOD RECEIVABLES CORPORATION, a Delaware corporation, as a "Conduit Purchaser", the other financial institutions from time to time party hereto as "Conduit Purchasers", "Committed Purchasers" and/or "Purchaser Agents" (each as defined herein), GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as a "Committed Purchaser", as a "Purchaser Agent" for itself and Redwood, and as administrative agent for itself, Redwood and the other Conduit Purchasers, Committed Purchasers and Purchaser Agents hereunder (in such capacity, the "Administrative Agent"). RECITALS A. The Seller, the Servicer, Redwood as conduit purchaser, GE Capital as committed purchaser and the Administrative Agent have entered into that certain Receivables Purchase and Servicing Agreement dated as of December 20, 2000, as amended by that certain First Amendment dated as of August 29, 2001, as amended by that certain Second Amendment dated as of December 21, 2001, as amended by that certain Third Amendment dated as of October 1, 2002, and as amended by that certain Fourth Amendment dated as of December 2, 2002 (collectively, the "Predecessor Agreement"). B. The Seller desires to amend and restate the Predecessor Agreement in its entirety to (i) add additional parties as "Purchasers" so that such parties may make Purchases of Purchaser Interests, (ii) increase the Maximum Purchase Limit available to the Seller, (iii) add other additional parties as "Purchaser Agents" to act as agents to the "Purchasers" in order to facilitate the Purchases and (iv) provide for the ability of the Purchasers to assign their interests from time to time (the Predecessor Agreement, as so amended and restated, and this Amended and Restated Agreement, as further amended, restated, supplemented or otherwise modified from time to time, collectively, this "Agreement"). C. The Seller and the Servicer have requested that the Predecessor Agreement be amended and restated to permit the addition of certain parties as "Purchasers" and the Seller, the Servicer, the Conduit Purchaser who is Redwood, the Committed Purchaser who is GECC and the Administrative Agent have mutually requested that Annex X be amended and restated to reflect the foregoing. D. The Seller is a special purpose corporation owned by the Originator. E. The Seller has been formed for the purpose of purchasing, or otherwise acquiring by capital contribution, certain designated trade receivables of the Originator. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 1 F. The Seller intends to sell, and subject to the terms and conditions hereof, each Conduit Purchaser and Committed Purchaser intends to purchase, undivided percentage interests in such trade receivables, from time to time, as described herein. G. The Administrative Agent has been requested and is willing to act as administrative agent on behalf of each Conduit Purchaser, Committed Purchaser and Purchaser Agent, in connection with the making and financing of such purchases. H. In order to effectuate the purposes of this Agreement, each Conduit Purchaser, Committed Purchaser and Purchaser Agent desires to appoint the Originator to service, administer and collect the receivables acquired by the Purchasers pursuant to this Agreement and the Originator is willing to act in such capacity as the Servicer hereunder on the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I. DEFINITIONS AND INTERPRETATION Section 1.01. Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Annex X. Section 1.02. Rules of Construction. For purposes of this Agreement, the rules of construction set forth in Annex X shall govern. All Appendices hereto, or expressly identified to this Agreement, are incorporated herein by reference and, taken together with this Agreement, shall constitute but a single agreement. ARTICLE II. AMOUNTS AND TERMS OF PURCHASES Section 2.01. Purchases. (a) From and after the Closing Date and until the Facility Termination Date and subject to the terms and conditions hereof, the Seller from time to time may request that the Conduit Purchasers, or, only if a Conduit Purchaser denies such request or is unable to fund such request (and provides notice of such denial or inability to fund to the Seller, the Administrative Agent, and such Conduit Purchaser's Purchaser Agent), ratably request that such Conduit Purchaser's related Committed Purchasers, purchase Purchaser Interests (each such purchase hereunder, a "Purchase") and the Seller agrees to sell such Purchaser Interests to the Purchasers. Subject to those funds that will be deemed to be Reinvestment Purchases as described in this Section 2.01, the Conduit Purchasers who are not also Committed Purchasers are not obligated to make any Purchase, except that Redwood, in its capacity as a Conduit Purchaser, shall not GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 2 exercise its discretion to deny a request by the Seller to make a Purchase unless a Redwood Termination Date has occurred. Each Conduit Purchaser severally agrees, on the terms and conditions hereof, that if it determines, in its discretion, to make a Purchase requested of it, such Conduit Purchaser shall make available, in accordance with Section 2.04(b) hereof, an amount equal to such Conduit Purchaser's Purchaser Group's Pro Rata Share of such Purchase. Each of the Committed Purchasers severally agrees, on the terms and conditions hereof, that if a Purchase is requested of it and the Committed Purchaser Expiry Date for such Committed Purchaser has not occurred, such Committed Purchaser shall make available in accordance with Section 2.04(b) hereof, an amount equal to such Committed Purchaser's Purchaser Group's Pro Rata Share of such Purchase (and in the case of each Committed Purchaser within a particular Purchaser Group, its Commitment Percentage of its Purchaser Group's Pro Rata Share of such Purchase). Notwithstanding the foregoing, under no circumstances shall a Purchaser make any Purchase if, after giving effect thereto, a Purchase Excess would exist. (b) Each Committed Purchaser's obligation hereunder shall be several, such that the failure of any Committed Purchaser to make a payment in connection with any Purchase hereunder shall not relieve any other Committed Purchaser of its obligation hereunder to make payment for such Purchase. (c) Each purchase of undivided percentage ownership interests in the Transferred Receivables by the Purchasers hereunder shall consist of either (i) a purchase made by the Applicable Purchasers with new funds provided by such Purchasers (each, a "Capital Purchase") or (ii) a purchase made by the Applicable Purchasers with funds consisting of Collections allocated to the Purchaser Interests pursuant to the terms of this Agreement which does not increase the Aggregate Capital Investment or any Capital Investment (each, a "Reinvestment Purchase"). On each Business Day following the Closing Date until the Facility Termination Date, but subject to the conditions set forth in Section 3.02 hereof, each Purchaser holding a Purchaser Interest at such time shall be automatically deemed to have made a Reinvestment Purchase with the excess of (x) the proceeds of Collections in which it has a Purchaser Interest over (y) the amount to be paid pursuant to Sections 6.02(b)(i), 6.03(f), 6.03(g) and 8.06(d), except that if the Administrative Agent has taken dominion and control over the Lockbox Accounts pursuant to Section 6.01(a)(i), such Reinvestment Purchase shall be made in the amount of funds to be distributed to the Seller pursuant to Section 6.04(d). Section 2.02. Optional Changes in Maximum Purchase Limit. (a) So long as no Incipient Termination Event or Termination Event shall have occurred and be continuing, the Seller may, not more than four times during each fiscal year, reduce the Maximum Purchase Limit permanently; provided, that (i) the Seller shall give ten Business Days' prior written notice of a reduction, each to the Administrative Agent and to each Purchaser Agent and substantially in the form of Exhibit 2.02(a) (each such notice, a "Commitment Reduction Notice"); (ii) any partial reduction of the Maximum Purchase Limit shall be in a minimum amount of $25,000,000 or an integral multiple thereof, and (iii) no such reduction shall reduce the Maximum Purchase Limit below the Aggregate Capital Investment at the time of such reduction. Every reduction as provided for in this Section must be accompanied by payment to the Purchasers, ratably, in accordance with their respective Capital Investments, in the amount equal to the excess of the Aggregate Capital Investment over the Maximum Purchase GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 3 Limit. Any reduction provided for in this Section 2.02(a) shall be applied ratably to reduce the Group Commitment of each Purchaser Group. If, after giving effect to the foregoing reduction and payment, any Group Investment is in excess of such Purchaser Group's Group Commitment, the Seller shall pay the Purchasers in such Purchaser Group, ratably, in accordance with their respective Capital Investments, the amount of such excess. (b) [Intentionally Omitted] (c) The Seller may at any time on at least 30 days' prior written notice by the Seller to the Administrative Agent and to each Purchaser Agent irrevocably terminate the Maximum Purchase Limit; provided, that (i) such notice of termination shall be substantially in the form of Exhibit 2.02(c) (the "Commitment Termination Notice"), and (ii) the Seller shall reduce the Aggregate Capital Investment to zero and make all payments required by Section 2.03(c) at the time and in the manner specified therein. Upon such termination, the Seller's right to request that any Purchaser make Purchases hereunder shall simultaneously terminate and the Facility Termination Date shall automatically occur. (d) Each written notice required to be delivered pursuant to this Section 2.02 shall be irrevocable and shall be effective (i) on the day of receipt if received by the Administrative Agent and the Purchasers not later than 5:00 p.m. (New York time) on any Business Day, and (ii) on the immediately succeeding Business Day if received by the Administrative Agent and the Purchasers after such time on such Business Day or if any such notice is received on a day other than a Business Day (regardless of the time of day such notice is received). Each such notice of termination or reduction shall specify, respectively, the amount of, or the amount of the proposed reduction in, the Maximum Purchase Limit. Section 2.03. Notices Relating to Purchases and Reductions in Aggregate Capital Investment. (a) Except as otherwise provided in Annex 5.02(b), not later than 1:00 p.m. (New York time) on the third Business Day of each week, the Seller shall deliver to the Purchasers and the Administrative Agent an Officer's Certificate substantially in the form of Exhibit 2.03(a) (each, an "Investment Base Certificate"). (b) Each Purchase resulting in an increase in Aggregate Capital Investment shall be made upon the provision of notice by the Seller to the Administrative Agent and to each Purchaser Agent in the manner provided herein. Any such notice must be given in writing so that it is received no later than 12:00 Noon (New York time) on the Business Day immediately preceding the proposed Purchase Date set forth therein. Each such notice (a "Capital Purchase Request") shall (i) be substantially in the form of Exhibit 2.03(b), (ii) be irrevocable and (iii) specify the amount of the requested increase in Aggregate Capital Investment and the proposed Purchase Date (which shall be a Business Day). (c) The Seller may at any time reduce the Aggregate Capital Investment; provided, that (i) the Seller shall give prior written notice of any such reduction to the Administrative Agent (with copies to each Purchaser Agent) substantially in the form of Exhibit 2.03(c) (each such notice, a "Repayment Notice"), (ii) each such notice shall be irrevocable, (iii) GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 4 each such notice shall specify the amount of the requested reduction in the Aggregate Capital Investment and the proposed date of such reduction (which shall be a Business Day) and (iv) any such reduction must be accompanied by payment of (A) all Daily Yield accrued and unpaid on each respective Capital Investment being reduced through but excluding the date of such reduction and (B) the costs, if any, required by Section 2.11. Any such notice of reduction must be received by the Administrative Agent and each Purchaser Agent no later than 12:00 Noon (New York time) on the Business Day immediately preceding the date of the proposed reduction in Aggregate Capital Investment; provided, that if such proposed reduction would result in the reduction of $100,000,000 or more of the Capital Investment of the Related Purchasers in any Purchaser Group for which The Bank of Nova Scotia is the Purchaser Agent, notice of such reduction must be received by the Administrative Agent and each Purchaser Agent no later than 12:00 Noon (New York time) on the second Business Day immediately preceding the date of the proposed reduction in Aggregate Capital Investment. Section 2.04. Conveyance of Transferred Receivables. (a) Purchase Assignment. On or prior to the Closing Date, the Seller shall complete, execute and deliver to the Administrative Agent for the benefit of the Purchasers (ratably, in accordance with their respective Capital Investments) an assignment substantially in the form of Exhibit 2.04(a) (the "Purchase Assignment") in order to evidence the Purchases. (b) Funding of Capital Purchases; Increases in Aggregate Capital Investment. (i) Payment of Purchase Price: No Cash Management Event. Following receipt of any Capital Purchase Request, and subject to satisfaction of the conditions set forth in Section 3.02, each Applicable Purchaser (or the related Purchaser Agent on its behalf) shall make available, ratably, in accordance with such Purchaser's Purchaser Group's Pro Rata Share (and, in the case of each Committed Purchaser within a particular Purchaser Group, in accordance with its Commitment Percentage of its Purchaser Group's Pro Rata Share of such Purchase) to or on behalf of the Seller on the Purchase Date specified therein, the lesser of the requested increase in Aggregate Capital Investment specified in such Capital Purchase Request and Aggregate Capital Investment Available by depositing such amount in the Seller Account; provided that if the Administrative Agent has taken exclusive dominion and control over the Lockbox Accounts pursuant to Section 6.01(a)(i), each Applicable Purchaser (or the related Purchaser Agent on its behalf) shall deposit such amount in the Agent's Account in accordance with Section 6.03(b). (ii) Payment of Purchase Price: Cash Management Event. After the Cash Management Date and as long as no Termination Event has occurred and is continuing, the Applicable Purchasers shall, or shall cause the Administrative Agent to, make available, ratably, in accordance with each such Purchaser's Purchaser Group's Pro Rata Share (and, in the case of each Committed Purchaser within a particular Purchaser Group, in accordance with its Commitment Percentage of its Purchaser Group's Pro Rata Share of such Purchase), to or on behalf of the Seller on each Business Day during the Revolving Period, in same day funds, all amounts on deposit in the Agent's Account that GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 5 are to be disbursed to or on behalf of the Seller as payment for the Purchaser Interests pursuant to Section 6.04(d). (c) Vesting of Ownership. (i) Effective on and as of each Purchase Date, the Applicable Purchasers shall own (ratably, in accordance with their respective Capital Investments) the Purchaser Interests sold by the Seller hereunder on such Purchase Date. The Seller shall not take any action inconsistent with such ownership and shall not claim any ownership interests in such Purchaser Interests. (ii) The Seller shall indicate in its Records that interests in the Transferred Receivables have been sold hereunder and that ownership of such interests is vested in the Administrative Agent on behalf of the Purchasers to the extent of the Purchaser Interests. In addition, the Seller shall respond to any inquiries with respect to the ownership of any Transferred Receivable by stating that interests therein have been sold hereunder and that ownership of such interests is vested in the Purchasers to the extent of the Purchaser Interests. (d) Repurchases of Transferred Receivables. If (i) the Originator is required to repurchase Transferred Receivables from the Seller pursuant to Section 3.2 of the Sale and Contribution Agreement, or (ii) in connection with a Distribution Center Consolidation of a BH2 Designated Distribution Center into an ARFC Designated Distribution Center, the Originator repurchases Transferred Receivables originated at such BH2 Designated Distribution Center, then in each case, the Applicable Purchaser shall sell and reconvey its Purchaser Interests in such Transferred Receivables to the Seller either (x) through the transfer of such Purchaser Interests in exchange for Purchaser Interests in other Transferred Receivables with an Outstanding Balance equal to the Outstanding Balance of the Transferred Receivables being repurchased or (y) for cash in an amount equal to the Outstanding Balance of the Transferred Receivables being repurchased. In connection with any reconveyance of Purchaser Interests by the Purchasers pursuant to a Distribution Center Consolidation described in clause (ii) above, the Seller, the Purchasers and Administrative Agent shall execute and deliver a Purchaser Interest Reconveyance Agreement with respect to the Purchaser Interests to be reconveyed. (e) Optional Retransfers. (i) At its option and at any time, the Seller shall have the right to repurchase all, but not less than all, of the then outstanding Purchaser Interests in the Transferred Receivables. The Seller shall be entitled to effectuate such reconveyance upon 30 days' prior written notice by the Seller to the Administrative Agent and to each Purchaser Agent; provided, that on the effective date of such repurchase (as specified in the notice to the Administrative Agent and to each Purchaser Agent), the Seller shall reduce the Aggregate Capital Investment to zero and make all payments required to by Section 2.03(c) on such date. Upon such repurchase, the Seller's right to request that any Purchaser make Purchases hereunder shall simultaneously terminate and the Facility Termination Date shall automatically occur. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 6 (ii) On any day, with respect to any Purchaser Interest which has been repurchased pursuant to Section 2.04(e)(i), the Administrative Agent and each Purchaser holding Purchaser Interests immediately prior to such repurchase shall, on such day and at the expense of the Seller, take all actions required under Section 6.08(b) to release their interests in the Transferred Receivables, the Related Security, all Collections with respect thereto and all Proceeds of the foregoing and otherwise to effect such repurchase. Section 2.05. Facility Termination Date; Committed Purchaser Expiry Date. Notwithstanding anything to the contrary set forth herein, (a) no Purchaser shall have any obligation to purchase any additional Purchaser Interests from and after the Facility Termination Date and (b) from and after the Committed Purchaser Expiry Date for any Committed Purchaser, neither such Committed Purchaser nor any Related Purchasers shall have any obligation to purchase any Purchaser Interests. Section 2.06. Daily Yield. (a) The Seller shall pay Daily Yield for each day on which any Capital Investment is outstanding, in the manner and at the times specified in Sections 6.04, 6.05 and 6.06. (b) Notwithstanding the foregoing, the Seller shall pay interest at the applicable Daily Yield Rate on unpaid Daily Yield and on any other amount payable by the Seller hereunder (to the extent permitted by law) that shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise) for the period commencing on the due date thereof to (but excluding) the date the same is indefeasibly paid in full. Section 2.07. Fees. (a) On each Settlement Date, the Seller shall pay to the Servicer or to the Successor Servicer, as applicable, the Servicing Fee or the Successor Servicing Fees and Expenses, respectively, in each case to the extent of available funds therefor as provided in Section 6.05. (b) On or prior to the Restatement Effective Date, the Seller shall pay to the Administrative Agent, for the account of itself, the Purchaser Agents and the Purchasers, the fees, including the Purchaser Group Commitment Fees, set forth in each respective Purchaser Group Fee Letter that are payable on the Restatement Effective Date. Section 2.08. Time and Method of Payments. (a) Except as otherwise provided in Sections 6.02, 6.03, 6.04, 6.05 and 6.06, all payments in reduction of Aggregate Capital Investment and all payments of yield, fees and other amounts payable by the Seller hereunder shall be made in Dollars, in immediately available funds, to the Administrative Agent (for its account or the account of the Applicable Purchasers (ratably, in accordance with their respective Capital Investments), Affected Parties or Indemnified Persons) not later than 12:00 Noon (New York time) on the due date therefor. Any such payment made on such date but after such time shall be deemed to have been made on, and Daily Yield on each respective Capital Investment shall continue to accrue and be payable GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 7 thereon until, the next succeeding Business Day. If any such payment becomes due on a day other than a Business Day, the maturity thereof will be extended to the next succeeding Business Day and Daily Yield thereon shall be payable during such extension. (b) Any and all payments by the Seller hereunder shall be made in accordance with this Section 2.08 without setoff or counterclaim and free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, excluding those taxes specified in clauses (a), (b) and (d) of the definition of "Excluded Taxes" (such non-excluded taxes, levies, imposts, deductions, charges and withholdings being "Indemnified Taxes"). If the Seller shall be required by law to deduct any Indemnified Taxes from or in respect of any sum payable hereunder, (i) the sum payable shall be increased as much as shall be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.08) the Affected Party entitled to receive any such payment receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Seller shall make such deductions, and (iii) the Seller shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law. Within 30 days after the date of any payment of Indemnified Taxes, the Seller shall furnish to the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof. The Seller shall indemnify any Affected Party from and against, and, within ten days of demand therefor, pay any Affected Party for, the full amount of Indemnified Taxes (together with any taxes imposed by any jurisdiction on amounts payable under this Section 2.08) paid by such Affected Party and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted. Section 2.09. Withholding Taxes. Before the first date on which any amount is payable hereunder for the account of any Purchaser not incorporated under the laws of the United States of America, such Purchaser shall deliver to each of the Seller and the Administrative Agent two (2) duly completed copies of United States Internal Revenue Service Form W-8BEN or 8-WECI (or successor applicable form) certifying that such Purchaser is entitled to receive payments hereunder without deduction or withholding of any United States federal income taxes. Each such Purchaser shall replace or update such forms when necessary to maintain any applicable exemption and as requested by the Administrative Agent or Seller. Section 2.10. Capital Requirements; Additional Costs. (a) If the adoption after the date hereof of any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve requirements or similar requirements or compliance by any Affected Party with any request or directive regarding capital adequacy, reserve requirements or similar requirements (whether or not having the force of law) from any central bank or other Governmental Authority increases or would have the effect of increasing the amount of capital, reserves or other funds required to be maintained by such Affected Party against commitments made by it under this Agreement, any other Related Document or any Program Document and thereby reducing the rate of return on such Affected Party's capital as a consequence of its commitments hereunder or thereunder, then the Seller shall from time to time upon demand (and submission of the computation certificate discussed below) by the Administrative Agent pay to the Administrative Agent on behalf of such GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 8 Affected Party, or if so required pursuant to Section 6.02, to such Affected Party directly, documented additional amounts sufficient to compensate such Affected Party for the Seller's Share of such reduction together with interest thereon from the date of any such demand until payment in full at the applicable Daily Yield Rate; provided, however, that the Seller shall be obligated to pay only such compensation which is incurred after the date sixty (60) days prior to the date of such demand; provided, further, however, that such 60-day limitation shall not apply to any such compensation that is applicable retroactively to periods prior to the effective date of the applicable event so long as the Administrative Agent notifies the Seller of such event within 60 days of a responsible officer of the Administrative Agent receiving actual knowledge thereof. A certificate as to the amount of that reduction and showing the basis of the computation thereof and which is calculated the same as for comparable claims with respect to similarly situated sellers or borrowers of the Applicable Purchaser submitted by the Administrative Agent to the Seller shall be final, binding and conclusive on the parties hereto (absent manifest error) for all purposes. (b) If, due to any Regulatory Change, there shall be any increase in the cost to any Affected Party of agreeing to make or making, funding or maintaining any commitment hereunder, under any other Related Document or under any Program Document, including with respect to any Purchases, Capital Investment, LOC Draws or Liquidity Loans, or any reduction in any amount receivable by such Affected Party hereunder or thereunder, including with respect to any Purchases, Capital Investment, LOC Draws or Liquidity Loans (any such increase in cost or reduction in amounts receivable are hereinafter referred to as "Additional Costs"), then the Seller shall, from time to time upon demand (and submission of the computation certificate described below) by the Administrative Agent or any Purchaser Agent, pay to the Administrative Agent on behalf of such Affected Party, or if so required pursuant to Section 6.02 to the Affected Party directly, additional amounts sufficient to compensate such Affected Party for the Seller's Share of such Additional Costs together with interest thereon from the date demanded until payment in full thereof at the applicable Daily Yield Rate; provided, however, that the Seller shall be obligated to pay only such compensation which is incurred after the date sixty (60) days prior to the date of such demand; provided, further, however, that such 60-day limitation shall not apply to any such compensation that is applicable retroactively to periods prior to the effective date of the applicable event so long as the Administrative Agent or any Purchaser Agent notifies the Seller of such event within 60 days of a responsible officer of the Administrative Agent or any Purchaser Agent receiving actual knowledge thereof. Such Affected Party agrees that, as promptly as practicable after it becomes aware of any circumstance referred to above that would result in any such Additional Costs, it shall, to the extent not inconsistent with its internal policies of general application, use reasonable commercial efforts to minimize costs and expenses incurred by it and payable to it by the Seller pursuant to this Section 2.10(b). (c) With respect to any compensation payable under Section 2.10(a) or any Additional Costs payable under Section 2.10(b), the Purchaser shall not allocate to Seller a proportionately greater amount of such compensation than it allocates to each of its other commitments to make purchases or to lend with respect to which it is entitled to demand comparable compensation, and will not include amounts already factored into the rates of interest or fees already provided for herein. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 9 (d) Determinations by any Affected Party for purposes of this Section 2.10 of the effect of any Regulatory Change on its costs of making, funding or maintaining any commitments hereunder, under any other Related Document or under any Program Document or on amounts receivable by it hereunder or thereunder or of the additional amounts required to compensate such Affected Party in respect of any Additional Costs shall be set forth in a written notice to the Seller in reasonable detail and which is calculated the same as for comparable claims with respect to similarly situated sellers or borrowers of the Affected Party and shall be final, binding and conclusive on the Seller (absent manifest error) for all purposes. Section 2.11. Breakage Costs. The Seller shall pay to the Administrative Agent for the account of the Applicable Purchaser, or if so required pursuant to Section 6.02 to the Applicable Purchaser, upon request of such Purchaser, such amount or amounts as shall compensate such Purchaser for any loss, cost or expense incurred by such Purchaser (as determined by such Purchaser) as a result of any reduction by the Seller in Aggregate Capital Investment (and accompanying loss of Daily Yield thereon) other than on the maturity date of the Commercial Paper (or other financing source) funding such Aggregate Capital Investment, which compensation shall include an amount equal to any loss or expense incurred by such Purchaser during the period from the date of such reduction to (but excluding) the maturity date of such Commercial Paper (or other financing source) if the rate of interest obtainable by such Purchaser upon the redeployment of funds in an amount equal to such reduction is less than the interest rate applicable to such Commercial Paper (or other financing source), (any such loss, cost or expense, "Breakage Costs"). The determination by such Purchaser of the amount of any such loss or expense shall be set forth in a written notice to the Seller at the time of demand or charge in reasonable detail and shall be calculated in a manner which is consistent with the manner in which it makes calculations for comparable claims with respect to similarly situated sellers or borrowers and shall be final, binding and conclusive on the Seller (absent manifest error) for all purposes; provided, that the Purchaser shall not allocate to Seller a proportionately greater amount of such compensation than it allocates to each of its other commitments to make purchases or to lend with respect to which it is entitled to demand comparable compensation, and will not include amounts already factored into the rates of interest or fees already provided for herein. Section 2.12. Purchase Excess. On each Business Day during the Revolving Period and after completion of the disbursements specified in Section 6.04, the Administrative Agent shall notify the Seller and the Servicer of any Purchase Excess on such day, and the Seller shall (a) prior to the Cash Management Date, pay such Purchase Excess in accordance with Section 6.02(a)(i) and (b) on and after the Cash Management Date, deposit the amount of such Purchase Excess in the Agent's Account by 12:00 Noon (New York time) on the immediately succeeding Business Day. Section 2.13. Extension of the Committed Purchaser Expiry Date. (a) Extension Request. The Seller, not more than forty-five (45) days before the date set forth in clause (b) of the definition of Committed Purchaser Expiry Date, may request that the relevant Committed Purchaser (the "Renewable Committed Purchaser") extend the Renewable Committed Purchaser's Committed Purchaser Expiry Date by giving the Renewable Committed Purchaser's Purchaser Agent and the Administrative Agent notice of such GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 10 request. The related Purchaser Agent shall promptly notify the Renewable Committed Purchaser of the receipt of such request, and the Renewable Committed Purchaser shall, not later than fifteen (15) days before the Renewable Committed Purchaser's Committed Purchaser Expiry Date, notify its Purchaser Agent and the Administrative Agent whether or not it consents to such extension; provided, that if the Renewable Committed Purchaser fails to give such notice it shall be deemed not to have consented to such extension. Consent to any extension requested by the Seller may be given or withheld in the sole and absolute discretion of the Renewable Committed Purchaser. Upon receipt of consent by the Renewable Committed Purchaser to an extension, the relevant Purchaser Agent promptly will notify the Seller thereof, and effective as of the Renewable Committed Purchaser's Committed Purchaser Expiry Date, the Renewable Committed Purchaser's Committed Purchaser Expiry Date then in effect shall be extended to the date that is 364 days (or such other period as agreed by the Renewable Committed Purchaser) after the Renewable Committed Purchaser's Committed Purchaser Expiry Date then in effect, or if such day is not a Business Day, the immediately preceding Business Day. The Administrative Agent will promptly give the Seller notice of any failure of any Renewable Committed Purchaser to consent to any requested extension of such Renewable Committed Purchaser's Committed Purchaser Expiry Date (each Renewable Committed Purchaser which has declined or has been deemed to have declined to renew its Commitment hereunder, a "Non-Renewing Committed Purchaser"). (b) Reduction of Maximum Purchase Limit; Payment Mechanics. To the extent that the Availability at the time of such declaration equals or exceeds the outstanding Capital Investment of the Non-Renewing Committed Purchaser, on the Committed Purchaser Expiry Date of such Non-Renewing Committed Purchaser, the Maximum Purchase Limit, to the extent the Non-Renewing Committed Purchaser's Commitment is not assigned as provided in Section 2.13(c), shall be reduced in an amount equal to the Commitment of such Non-Renewing Committed Purchaser immediately prior to the termination of such Commitment. On the Business Day immediately preceding such Non-Renewing Committed Purchaser's Committed Purchaser Expiry Date, the Seller shall deliver to the Administrative Agent and to each Purchaser Agent who represents a remaining Committed Purchaser, a Capital Purchase Request pursuant to Section 2.03(b) requesting a Purchase in an amount equal to the Non-Renewing Committed Purchaser's outstanding Capital Investment and shall remit the proceeds of such Purchase to the Non-Renewing Committed Purchaser (or to such Non-Renewing Committed Purchaser's Purchaser Agent for the account of such Non-Renewing Committed Purchaser) as payment in full for such Non-Renewing Committed Purchaser's outstanding Capital Investment; provided, that in no circumstances shall the Commitment of the remaining Committed Purchaser be increased. (c) Assignment by Non-Renewing Committed Purchaser. Notwithstanding the preceding Section 2.13(b), so long as no Termination Event has occurred and is continuing, the Seller (with the written consent of the Administrative Agent and each Purchaser other than the Non-Renewing Committed Purchaser), the Administrative Agent or the Non-Renewing Committed Purchaser may arrange for one or more financial institutions that meet the requirements set forth in Section 14.02(b) to assume all or part of the Commitment of a Non-Renewing Committed Purchaser, so long as each such assignment satisfies the requirements of Section 14.02(b) hereof; provided, that the assumption of such Commitments for all Non-Renewing Committed Purchasers shall be on a pro rata basis or on such other allocations as the GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 11 Committed Purchasers shall agree. If a financial institution is willing to assume all or a part of the Non-Renewing Committed Purchaser's Commitment, then such financial institution, the Non-Renewing Committed Purchaser, the Seller and the Administrative Agent will promptly evidence such assumption and assignment pursuant to Section 14.02(b). ARTICLE III. CONDITIONS PRECEDENT Section 3.01. Conditions Precedent to the Restatement Effective Date. Neither the Conduit Purchasers nor the Committed Purchasers shall be obligated to purchase Purchaser Interests hereunder on the occasion of the initial Purchase following the Restatement Effective Date, nor shall any Purchaser, any Purchaser Agent or the Administrative Agent be obligated to take, fulfill or perform any other action hereunder, until the following conditions have been satisfied, in the sole discretion of, or waived in writing by, the Purchasers and the Administrative Agent: (a) Agreement; Other Related Documents. The Administrative Agent and the Purchasers shall have received each of the following documents, instruments, agreements and legal opinions, in each case in form and substance satisfactory to the Administrative Agent and the Purchasers: (i) counterparts hereof executed by each of the parties to this Agreement; (ii) an executed Third Amendment to the Sale and Contribution Agreement, dated as of the date hereof, between the Seller and the Originator, acknowledged and agreed to by the Administrative Agent (the "Third Amendment to the Sale and Contribution Agreement") together with evidence of the effectiveness of the Third Amendment to the Sale and Contribution Agreement; (iii) copies of each of the documents required to be delivered under Section 4(a) of the Third Amendment to the Sale and Contribution Agreement and evidence satisfactory to the Administrative Agent that the conditions precedent thereto have been satisfied; (iv) an executed Amended and Restated Redwood Fee Letter, dated as of the date hereof, between the Seller and GE Capital in its capacities as Administrative Agent, a Purchaser Agent and a Committed Purchaser. (v) an executed RPSA Supplement Agreement, dated as of the date hereof, between the Seller, Liberty Street Funding Corp. as a Conduit Purchaser, The Bank of Nova Scotia as a Committed Purchaser, and The Bank of Nova Scotia as Purchaser Agent for the aforementioned Conduit Purchaser and Committed Purchaser; (vi) an executed Purchaser Group Fee Letter in respect of The Bank of Nova Scotia's Purchaser Group, among the Seller, The Bank of Nova Scotia and Liberty Street Funding Corp.; GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 12 (vii) a certificate of an officer of the Seller certifying, among other things, that the representations and warranties contained in the Related Documents are correct as of the Restatement Effective Date; (viii) a certificate of an officer of the Servicer certifying, among other things, that the representations and warranties contained in the Related Documents are correct as of the Restatement Effective Date; (ix) a certificate of the Secretary or Assistant Secretary of the Seller certifying that no changes have been made to the certificate of incorporation of the Seller and bylaws of the Seller, and certifying and attaching resolutions authorizing this Agreement, and an incumbency certificate; (x) a certificate of the Secretary or Assistant Secretary of the Servicer certifying that no changes have been made to the certificate of incorporation of the Servicer and the bylaws of the Servicer, and certifying and attaching resolutions authorizing this Agreement and an incumbency certificate;/1/ (xi) tax and good standing certificates of the Seller in the states of California, and Delaware (to the extent not provided pursuant to clause (iii) above); (xii) tax and good standing certificates of the Servicer in the state of California, Pennsylvania and Delaware (to the extent not provided pursuant to clause (iii) above); (xiii) a legal opinion as to true sale and substantive consolidation matters delivered by Dechert after giving effect to this Agreement; (xiv) a legal opinion as to security interests, enforceability, non-contravention and corporate matters delivered by Dechert, and in addition, a legal opinion delivered by the in-house counsel of the Servicer and the Seller, both, after giving effect to this Agreement; and (xv) such additional documentation as the Administrative Agent may reasonably request. (b) Governmental Approvals. The Purchasers and the Administrative Agent shall have received (i) satisfactory evidence that the Seller and the Servicer have obtained all required consents and approvals of all Persons, including all requisite Governmental Authorities, to the execution, delivery and performance of this Agreement and the other Related Documents and the consummation of the transactions contemplated hereby or thereby or (ii) an Officer's Certificate from each of the Seller and the Servicer in form of Exhibits 3.01(a)(ii)(A) and 3.01(a)(iii)(A) respectively. (c) Compliance with Laws. The Seller and the Servicer shall be in compliance in all respects with all applicable foreign, federal, state and local laws and regulations, including those specifically referenced in Section 5.01(a), except where such failure to comply does not have a Material Adverse Effect. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 13 (d) Payment of Fees. The Seller shall have paid all fees required to be paid by it on the Restatement Effective Date, including all fees required hereunder and under the Purchaser Group Fee Letters, and shall have reimbursed each Purchaser for all fees, costs and expenses of closing the transactions contemplated hereunder and under the other Related Documents, including each Purchaser's legal, rating agency and audit expenses, and other document preparation costs to the extent required under Section 14.04 hereof. (e) Representations and Warranties. Each representation and warranty by the Seller, Servicer and Originator contained herein and in each other Related Document shall be true and correct as of the Restatement Effective Date, except to the extent that such representation or warranty expressly relates solely to an earlier date. (f) No Termination Event. No Incipient Termination Event or Termination Event hereunder shall have occurred and be continuing or would result after giving effect to any of the transactions contemplated on the Restatement Effective Date. (g) Confirmation of Commercial Paper Ratings. Each Purchaser Agent shall have received written confirmation from each Rating Agency that the then current rating of the Commercial Paper issued by their related Conduit Purchaser shall not be withdrawn or downgraded after giving effect to this Agreement and the transactions contemplated thereby. (h) Corporate Proceedings; Etc. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the Third Amendment to Sale and Contribution Agreement shall be satisfactory in all respects in form and substance to the Purchasers. The date on which each of the foregoing conditions has been satisfied shall be referred to as the "Restatement Effective Date". Section 3.02. Conditions Precedent to All Purchases. No Purchaser shall be obligated to purchase Purchaser Interests hereunder on any Purchase Date if, as of the date thereof: (a) any representation or warranty of the Seller or the Servicer contained herein or in any of the other Related Documents shall be untrue or incorrect in any material respect, as of such date, either before or after giving effect to the Purchase of Purchaser Interests on such date and to the application of the proceeds therefrom, except to the extent that such representation or warranty expressly relates to an earlier date and except for changes therein expressly permitted by this Agreement; (b) any event shall have occurred, or would result from the Purchase of Purchaser Interests on such Purchase Date or from the application of the proceeds therefrom, that constitutes (i) a Termination Event or an Event of Servicer Termination, or (ii) except in the case of Reinvestment Purchases, an Incipient Termination Event or an Incipient Servicer Termination Event; (c) the Seller shall not be in compliance with any of its covenants or other agreements set forth herein; GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 14 (d) the Facility Termination Date shall have occurred; (e) either before or after giving effect to such Purchase and to the application of the proceeds therefrom, a Purchase Excess would exist; (f) the Purchaser Interests sold hereunder would after giving effect to such purchase, exceed 100%; (g) the Originator, the Seller or the Servicer shall fail to have taken such other action, including delivery of approvals, consents, opinions, documents and instruments to the Purchasers and the Administrative Agent, (i) as any Purchaser, any Purchaser Agent or the Administrative Agent may reasonably request, or (ii) as either Rating Agency may request; or (h) the Administrative Agent shall have determined that any event or condition has occurred that has had, or could reasonably be expected to have or result in, a Material Adverse Effect. The delivery by the Seller of a Capital Purchase Request and the acceptance by the Seller of the funds from such Capital Purchase on any Purchase Date shall be deemed to constitute, as of any such Purchase Date, a representation and warranty by the Seller that the conditions in this Section 3.02 have been satisfied. ARTICLE IV. REPRESENTATIONS AND WARRANTIES Section 4.01. Representations and Warranties of the Seller. To induce each Purchaser to purchase the Purchaser Interests and the Administrative Agent and the Purchaser Agents to take any action hereunder, the Seller makes the following representations and warranties to each Purchaser, each Purchaser Agent and the Administrative Agent, each and all of which shall survive the execution and delivery of this Agreement. (a) Corporate Existence and Power. Each of the Seller and each Bergen Entity is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all corporate power and authority and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is now conducted, except where failure to obtain such license, authorization, consent or approval would not have (i) an adverse effect on its ability to perform its obligations under, or the enforceability of, any Related Document, (ii) a material adverse effect on its business or financial condition, (iii) an adverse effect on the interests of the Administrative Agent or any Purchaser under any Related Document or (iv) an adverse effect on the enforceability or collectibility of any Transferred Receivable. Each Significant Subsidiary as defined in the Credit Facility as of the Restatement Effective Date is set forth on Schedule 4.01(a) hereto. (b) Corporate Authorization and No Contravention. The execution, delivery and performance by each of the Seller and each other Bergen Entity of each Related Document to which it is a party, and the creation of all security interests provided for herein and therein GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 15 (i) are within its corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene or constitute a default under (A) any applicable law, rule or regulation, (B) its charter or bylaws or (C) any material agreement, order or other instrument to which it is a party or its property is subject and (iv) will not result in any Adverse Claim on any Transferred Receivable or any Seller Collateral or give cause for the acceleration of any indebtedness of the Seller or any other Bergen Entity. (c) No Consent Required. No approval, authorization or other action by, or filings with, any Governmental Authority or other Person is required in connection with the execution, delivery and performance by the Seller or any other Bergen Entity of any Related Document to which it is a party or any transaction contemplated thereby except with respect to UCC filings contemplated by the Related Documents and as indicated on the Chattel Paper Report delivered by the Seller on the Closing Date, and such exceptions indicated on the Chattel Paper Report will not result in a Material Adverse Effect. (d) Binding Effect. Each Related Document to which the Seller or any other Bergen Entity is a party constitutes the legal, valid and binding obligation of such Person enforceable against that Person in accordance with its terms, except as limited by bankruptcy, insolvency, or other similar laws of general application relating to or affecting the enforcement of creditors' rights generally and subject to general principles of equity. (e) Perfection of Ownership Interest. Immediately preceding its sale of Transferred Receivables to the Seller, the Originator was the owner of, and effectively sold, such Transferred Receivables to the Seller, free and clear of any Adverse Claim. The Seller owns the Transferred Receivables, and all of its other properties and assets free of any Adverse Claim other than the interests of the Conduit Purchasers and the Committed Purchasers, and their respective successors and assigns (through the Administrative Agent) therein that are created hereby, and each Purchaser shall at all times have a valid undivided percentage ownership interest, which shall be a first priority perfected security interest for purposes of Article 9 of the applicable Uniform Commercial Code, in the Purchaser Interests, the Transferred Receivables and Seller Collateral. (f) Accuracy of Information. All information furnished by the Seller, any other Bergen Entity or any Affiliate of any such Person to the Administrative Agent, any Purchaser Agent or any Purchaser in connection with any Related Document, or any transaction contemplated thereby, is true and accurate in all material respects (and is not incomplete by omitting any information necessary to prevent such information from being materially misleading). (g) No Defaults or Violations. None of the Seller or any other Bergen Entity is in default of any contractual obligation or in violation of any order, rule or regulation of any Governmental Authority, which default or violation may result in a Material Adverse Effect. (h) No Actions, Suits or Material Adverse Change. Except for (i) matters disclosed in writing to the Administrative Agent prior to the Restatement Effective Date, (ii) matters disclosed in reports filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended, (iii) if the Closing Date occurs before, or less than 10 days GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 16 after, the release of the Parent's audited financial statements for the fiscal year ending September 30, 2000 (the "2000 Audited Financials"), (A) matters disclosed in the Parent's audited financial statements as at and for the fiscal year ending September 30, 1999 (the "1999 Audited Financials"), (B) no greater than a $66,700,000 provision for accounts receivables, (C) no greater than $505,000,000 in charges against goodwill related to PharMerica in the fourth quarter of the fiscal year-ended September 30, 2000, and (D) no greater than $26,000,000 in other special charges, and (iv) if the Closing Date occurs 10 or more days after the release of the 2000 Audited Financials, matters disclosed in the 2000 Audited Financials, there has been no material adverse change in the financial condition, business, operations or prospects of the Parent. Since the last day of the fiscal year covered by the Applicable Financials, (x) there has been no material adverse change in the quality or collectibility of the Receivables, taken as a whole, or in the Seller's, Servicer's or Originator's financial condition, business, operations or prospects and (y) no material litigation, investigation or tax audits have commenced against any Bergen Entity. Since its formation, there has been no material adverse change in the Seller's financial condition, business, operations or prospects. Since the Closing Date, there has been no material adverse change in the ability of the Seller or any other Bergen Entity to perform its obligations under any Related Document. (i) Accuracy of Exhibits. All information on the Schedules hereto is true and complete in all material respects, subject to any changes permitted by, and notified to the Administrative Agent and the Purchaser Agents in accordance with, Article V. With respect to each of the Seller and the Originator (i) their respective chief executive offices are located at the respective address for notices set forth in this Agreement; (ii) the respective offices where all of the Records with respect to any Receivables are kept are listed on Schedule 4.01(i) hereto; (iii) each, within the last five years, has operated only under the trade names identified in Schedule 4.01(i) hereto, and, within the last five years, has not changed its name, merged or consolidated with any other corporation or been the subject of any proceeding under Title 11, United States Code (Bankruptcy), except as disclosed in Schedule 4.01(i) hereto, (iv) each is a "registered organization" (as defined in Section 9-102(a)(70) of the UCC) and is organized or incorporated in the jurisdiction set forth on Schedule 4.01(i) hereto, for purposes of Article 9 of the UCC, and each is (and at all times) located in such jurisdiction, and (v) the organizational identification number for each is set forth Schedule 4.01(i) hereto. (j) Sales by the Originator. Each sale by the Originator to the Seller of the Transferred Receivables has been made in accordance with the terms of the Purchase Agreement, including the payment by the Seller to the Originator of the purchase price described in the Sale and Contribution Agreement. Each such sale has been made for "reasonably equivalent value" (as such term is used in Section 548 of the Bankruptcy Code) and not for or on account of "antecedent debt" (as such term is used in Section 547 of the Bankruptcy Code) owed by the Originator to the Seller. (k) Solvency. Both before and after giving effect to (i) the transactions contemplated by this Agreement and the other Related Documents and (ii) the payment and accrual of all transaction costs in connection with the foregoing, the Seller is and will be Solvent. (l) Taxes. The Seller has filed all material tax returns and reports required by law to have been filed by it and has paid all material taxes and governmental charges thereby GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 17 shown to be owing, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. (m) ERISA. During the twelve-consecutive-month period prior to the date of the execution and delivery of this Purchase Agreement and prior to the date of any Purchase hereunder, no steps have been taken by the PBGC to terminate any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by the Originator or any ERISA Affiliate of any material liability, fine or penalty. Neither the Originator nor any ERISA Affiliate has any contingent liability with respect to any post-retirement benefit under a Welfare Plan that has or could reasonably be expected to have a Material Adverse Effect, other than liability for continuation coverage described in Part 6 of Title I of ERISA. The Seller has not incurred and does not expect to incur any liabilities (except for premium payments arising in the ordinary course of business) payable to the PBGC under ERISA. (n) Investment Company Act. The Seller is not an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act of 1940, 15 U.S.C. Sections 80a et seq., and any regulations promulgated thereunder. (o) Securities Regulation. The Purchase by the Seller of the Receivables under the Sale and Contribution Agreement and the Purchase of the Purchaser Interests by the Purchasers hereunder and the application of the proceeds thereof, in each case in accordance with the provisions of the applicable Related Document, will not violate any applicable provisions of the Securities Act or other applicable securities laws. (p) Nonconsolidation. The Seller is operated in such a manner that the separate corporate existence of the Seller, on the one hand, and any member of the Parent Group, on the other hand, would not be disregarded in the event of the bankruptcy or insolvency of any member of the Parent Group thereof and, without limiting the generality of the foregoing: (i) the Seller has not engaged, and does not presently engage, in any activity other than those activities expressly permitted under the Seller's organizational documents and the Related Documents, nor has the Seller entered into any agreement other than this Agreement, the other Related Documents to which it is a party and, with the prior written consent of the Administrative Agent, any other agreement necessary to carry out more effectively the provisions and purposes hereof or thereof; (ii) the Seller maintains a business office separate from that of each member of the Parent Group; (iii) the financial statements and books and records of the Seller and the Originator reflect the separate corporate existence of the Seller; (iv) except as otherwise expressly permitted hereunder, under the other Related Documents and under the Seller's organizational documents, no Parent Group GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 18 member (A) pays the Seller's expenses, (B) guarantees the Seller's obligations, or (C) advances funds to the Seller for the payment of expenses or otherwise; and (v) the Seller does not act as agent for any Parent Group member, but instead presents itself to the public as a corporation separate from each such Person and independently engaged in the business of purchasing and financing Transferred Receivables. (q) Deposit and Lockbox Accounts. Schedule 4.01(q) lists all banks and other financial institutions at which the Seller maintains deposit, lockbox or other bank accounts (including the Lockbox Accounts and Deposit Accounts) as of the Restatement Effective Date, and such schedule correctly identifies the name, address and telephone number of each depository and whether such depository is a Lockbox Account Bank, Deposit Bank, or otherwise, the name in which the account is held, a description of the purpose of the account and whether such account is a Deposit Account, Lockbox Account or otherwise, and the complete account number therefor (and, with respect to each Lockbox Account, the lockbox number and address thereof). (r) Transferred Receivables. (i) Eligibility. Each Transferred Receivable designated as an Eligible Receivable in each Investment Base Certificate constitutes an Eligible Receivable as of the date of such Investment Base Certificate. (ii) Nonavoidability of Transfers. The Seller shall (A) have received each Contributed Receivable as a contribution to the capital of the Seller by the Originator and (B) have purchased each Sold Receivable from the Originator for cash consideration, in each case in an amount that constitutes fair consideration and reasonably equivalent value therefor. Each Sale of a Sold Receivable effected pursuant to the terms of the Sale and Contribution Agreement shall not have been made for or on account of an antecedent debt owed by the Originator thereof to the Seller and no such Sale is or may be avoidable or subject to avoidance under any bankruptcy laws, rules or regulations. (s) Representations and Warranties in Other Related Documents. Each of the representations and warranties of the Seller contained in the Related Documents (other than this Agreement) is true and correct in all material respects and the Seller hereby makes each such representation and warranty to, and for the benefit of, the Purchasers, the Purchaser Agents and the Administrative Agent as if the same were set forth in full herein. (t) No Termination Event or Incipient Termination Event. No Termination Event or Incipient Termination Event has occurred and is continuing or will result after giving effect to this Agreement. Section 4.02. Representations and Warranties of the Servicer. To induce the Purchasers to purchase the Purchaser Interests and the Administrative Agent and the Purchaser Agents to take any action required to be performed by it hereunder, the Servicer represents and warrants to the Purchasers, the Purchaser Agents and the Administrative Agent, which GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 19 representation and warranty shall survive the execution and delivery of this Agreement, that each of the representations and warranties of the Servicer (whether made by the Servicer in its capacity as an Originator or as Servicer) contained in any Related Document is true and correct in all material respects and, if made by the Servicer in its capacity as an Originator, applies with equal force to the Servicer in its capacity as Servicer, and the Servicer hereby makes each such representation and warranty to, and for the benefit of, the Purchasers, the Purchaser Agents and the Administrative Agent as if the same were set forth in full herein. The Servicer further represents and warrants that no Termination Event or Incipient Termination Event has occurred and is continuing or will result after giving effect to this Agreement. ARTICLE V. GENERAL COVENANTS OF THE SELLER Section 5.01. Affirmative Covenants of the Seller. The Seller covenants and agrees that from and after the Closing Date and until the Termination Date: (a) Conduct of Business. The Seller will perform, and will cause each other Bergen Entity and Significant Subsidiary to perform, all actions necessary to remain duly incorporated, validly existing and in good standing in its jurisdiction of incorporation and to maintain all requisite authority to conduct its business in each jurisdiction in which it conducts business except to the extent that such failure would not have a Material Adverse Effect. (b) Compliance with Laws. The Seller will comply, and will cause each other Bergen Entity to comply, with all laws, regulations, judgments and other directions or orders imposed by any Governmental Authority to which such Person or any Transferred Receivable or Seller Collateral may be subject, except to the extent non-compliance would not have a Material Adverse Effect. (c) Furnishing Information and Inspection of Records. The Seller will furnish to the Administrative Agent, the Purchaser Agents and the Purchasers such information (including non-financial information) concerning the Originator's Receivables, the Transferred Receivables and the Seller Collateral as the Administrative Agent, the Purchaser Agents or a Purchaser may reasonably request. Twice a year (and at any time during the continuance of an Incipient Termination Event or Termination Event), the Administrative Agent and the Purchaser Agents may (at the expense of the Seller subject to the limitations set forth in the Purchaser Group Fee Letters) have its auditors, which may include an independent public accounting firm, conduct an audit of the Records or make test verifications of the Originator's Receivables, the Transferred Receivables and the Collections with respect to the Originator's Receivables and the Transferred Receivables. (d) Keeping Records. (i) The Seller will, and will cause the Originator to, have and maintain (A) administrative and operating procedures (including an ability to recreate Records if originals are destroyed), (B) adequate facilities, personnel and equipment and (C) all Records and other information necessary or advisable for collecting the Transferred GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 20 Receivables (including Records adequate to permit the immediate identification of each new Transferred Receivable and all Collections of, and adjustments to, each existing Receivable). The Seller will give the Administrative Agent and the Purchaser Agents prior notice of any material change in such administrative and operating procedures. (ii) The Seller will, (A) at all times from and after the date hereof, clearly and conspicuously mark its computer and master data processing books and records with a legend describing the Administrative Agent's interest (on behalf of the Purchasers) in the Transferred Receivables and (B) so mark the original copy (or the replacement copy with respect to which a Chattel Paper Agreement has been executed by the Originator) of each contract relating to a Transferred Receivable that consists of chattel paper and deliver to the Administrative Agent all such contracts (including all multiple originals of such contracts), with any appropriate endorsement or assignment, or segregate (from all other receivables then owned or being serviced by the Seller) the Transferred Receivables and all contracts relating to each Transferred Receivable and hold in trust and safely keep such contracts so legended in separate filing cabinets or other suitable containers at such locations as the Administrative Agent may specify. (e) Perfection. (i) The Seller will, and will cause the Originator to, at its expense, promptly execute and deliver all instruments and documents and take all action necessary or reasonably requested by the Administrative Agent (including the execution and filing of financing or continuation statements, amendments thereto or assignments thereof) to enable the Administrative Agent, on behalf of the Purchasers and Purchaser Agents, to exercise and enforce all its rights hereunder and to vest and maintain vested in the Administrative Agent, on behalf of the Purchasers and Purchaser Agents, a valid, first priority perfected security interest in the Seller Collateral and proceeds thereof free and clear of any Adverse Claim (and a perfected ownership interest in the Transferred Receivables). The Administrative Agent will be permitted to sign and file any continuation statements, amendments thereto and assignments thereof that are consistent with the Related Documents without the Seller's signature. (ii) Each of the Seller and the Originator will at all times maintain its chief executive offices within a jurisdiction in the USA (other than in the states of Florida, Maryland and Tennessee) in which Article 9 of the UCC is in effect. If the Seller or the Originator moves its chief executive office to a location that imposes Taxes, fees or other charges to perfect the Administrative Agent's, and the Purchasers' interests hereunder or the Seller's interests under the Purchase Agreement, the Seller will pay all such reasonable amounts and any other reasonable costs and expenses incurred in order to maintain the enforceability of the Related Documents, the Purchases and the interests of the Administrative Agent and the Purchasers in the Seller Collateral. (f) Performance of Duties. The Seller will perform, and will cause each other Bergen Entity and the Servicer (if an Affiliate) to perform, its respective duties or obligations in accordance with the provisions of each of the Related Documents. The Seller (at its expense) will, and will cause each other Bergen Entity to, (i) fully and timely perform in all material GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 21 respects all agreements required to be observed by it in connection with each Receivable but in all respects necessary to comply with the following subparagraphs (ii) and (iii), (ii) comply in all respects with the Credit and Collection Policy, and (iii) refrain from any action that may impair the rights of the Administrative Agent or the Purchasers in the Seller Collateral. (g) Deposit of Collections. The Seller shall deposit or cause to be deposited promptly into an Account, and in any event no later than the second Business Day after receipt thereof, all Collections it may receive with respect to any Transferred Receivable. (h) Taxes. Each of the Seller and each Bergen Entity has filed all material tax returns and reports required by law to have been filed by it and has paid all material taxes and governmental charges thereby shown to be owing, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. Section 5.02. Reporting Requirements of the Seller. (a) The Seller hereby agrees that, from and after the Closing Date and until the Termination Date, it (i) shall, and shall cause each other Bergen Entity to, maintain a system of accounting established and administered in accordance with GAAP, and (ii) shall deliver or cause to be delivered to the Purchasers, the Administrative Agent, the Purchaser Agents and, in the case of paragraph (j) of Annex 5.02(a) only, to the Rating Agencies, the financial statements, notices and other information at the times, to the Persons and in the manner set forth in Annex 5.02(a). (b) The Seller hereby agrees that, from and after the Closing Date and until the Termination Date, it shall deliver or cause to be delivered to the Purchasers, the Purchaser Agents and the Administrative Agent, the Investment Reports (including Investment Base Certificates) at the times, to the Persons and in the manner set forth in Annex 5.02(b). Section 5.03. Negative Covenants of the Seller. The Seller covenants and agrees that, without the prior written consent of the Purchasers and the Administrative Agent, from and after the Closing Date until the Termination Date: (a) Sales and Adverse Claims Relating to Receivables. Except as otherwise provided herein and except in connection with the transfer of Receivables pursuant to a Distribution Center Consolidation, the Seller will not, and will not permit the Originator or the Servicer to, (by operation of law or otherwise) dispose of or otherwise transfer, or create or suffer to exist any Adverse Claim upon, any material portion of the Transferred Receivables or any proceeds thereof or any other property or assets of the Seller. (b) Extension or Amendment of Transferred Receivables. Except as otherwise permitted in Section 7.07(b), the Seller will not, and will not permit the Originator or the Servicer to, extend, amend, rescind, modify, forgive, discharge or cancel any Transferred Receivable. (c) Change in Business or Credit and Collection Policy. The Seller will not make any material change in the character of its business and will not, and will not permit the GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 22 Originator or the Servicer to, make any material change to the Credit and Collection Policy without the prior written consent of the Administrative Agent and the Purchaser Agents and provision of written notice to the Rating Agencies by the Seller. (d) Sale of Stock and Assets. The Seller shall not sell, transfer, convey, assign or otherwise dispose of, or assign any right to receive income in respect of, any of its properties or other assets any Transferred Receivable or contract therefor or any of its rights with respect to any Account or any other deposit account in which any Collections of any Transferred Receivable are deposited except as otherwise expressly permitted by this Agreement or any of the other Related Documents. (e) Capital Structure and Business. The Seller shall not (i) transact business, other than in compliance with (A) its certificate of incorporation and bylaws and (B) the Related Documents, and in such corporate and trade names as are set forth on Schedule 4.01(i), or (ii) amend its certificate or articles of incorporation or bylaws. (f) Mergers, Subsidiaries, Etc. The Seller shall not directly or indirectly, by operation of law or otherwise, (i) form or acquire any Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially all of the assets or capital Stock of, or otherwise combine with or acquire, any Person. (g) Sale Characterization; Sale and Contribution Agreement. The Seller shall not make statements or disclosures, prepare any financial statements or in any other respect account for or treat the transactions contemplated by the Sale and Contribution Agreement (including for accounting, tax and reporting purposes) in any manner other than (i) with respect to each Sale of each Sold Receivable effected pursuant to the Sale and Contribution Agreement, as a true sale and absolute assignment of the title to and sole record and beneficial ownership interest of the Transferred Receivables by the Originator to the Seller and (ii) with respect to each contribution of Contributed Receivables thereunder, as an increase in the stated capital of the Seller. (h) Indebtedness. The Seller shall not create, incur, assume or permit to exist any Debt, except (i) Debt of the Seller to any Affected Party, Indemnified Person or any other Person expressly permitted by this Agreement or any other Related Document, (ii) deferred taxes, (iii) unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law, (iv) indorser liability in connection with the indorsement of negotiable instruments for deposit or collection in the ordinary course of business, and (v) Debt of the Seller to the Originator under the Subordinated Note. (i) Commingling. The Seller shall not deposit or permit the deposit of any funds that do not constitute Collections of Transferred Receivables into any Lockbox Account or Deposit Account, except inadvertent deposits of checks from time to time in immaterial amounts that are readily traceable. (j) Restricted Payments by the Seller. Except for the Subordinated Note, the Seller shall not enter into any lending or borrowing transaction with any other Person. The GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 23 Seller shall not at any time make payments with respect to the Subordinated Note if after giving effect to such payments a Purchase Excess would exist or an Incipient Termination Event or Termination Event would otherwise result therefrom or be continuing. The Seller will not purchase or redeem any shares of the capital stock of the Seller, declare or pay dividends thereon (other than stock dividends), or make any distribution to stockholders or set aside any funds for any such purpose; provided, however, the foregoing shall not prevent the Seller from paying cash dividends on any day if (i) after giving effect to such payment, the Seller's Net Worth Percentage would not be less than 10%, (ii) after giving effect to any such advance or distribution, a Purchase Excess would not exist nor would a Termination Event otherwise result therefrom, and (iii) on such day or the immediately preceding day the Seller delivers to the Administrative Agent and the Purchaser Agents a certificate in which the Seller attests to and specifies (x) the calculation of the Seller's Net Worth Percentage after giving effect to such payment, (y) that a Purchase Excess does not exist and a Termination Event will not result as a result of such payment, and (z) the principal outstanding on the Subordinated Note as of such date. (k) Changes in Instructions to Obligors. The Seller shall not make any change in its instructions to Obligors regarding the deposit of Collections with respect to the Transferred Receivables. (l) Investments. Except as otherwise expressly permitted hereunder or under the other Related Documents, the Seller shall not make any investment in, or make or accrue loans or advances of money to, any Person, including any Stockholder, director, officer or employee of the Seller, the Parent or any of the Parent's other Subsidiaries, through the direct or indirect lending of money, holding of securities or otherwise, except with respect to Transferred Receivables, and Permitted Investments. (m) Related Documents. The Seller shall not modify the terms of any policy or resolutions of its board of directors if such modification could have or result in a Material Adverse Effect. ARTICLE VI. COLLECTIONS AND DISBURSEMENTS Section 6.01. Establishment of Accounts. (a) The Lockbox Accounts. (i) The Seller has established with each Lockbox Account Bank one or more Lockbox Accounts. If a Cash Management Event shall have occurred and be continuing, the Administrative Agent may or, at the direction of the Requisite Purchasers, shall, without prior notice to the Seller, take exclusive dominion and control of each Lockbox Account and all monies, instruments and other property then or thereafter on deposit therein, and the Seller thereafter shall not make or cause to be made, nor shall the Seller thereafter have any ability to make or cause to be made, any withdrawals from any Lockbox Account except as provided in Section 6.01(c)(ii); provided, that the GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 24 Administrative Agent shall promptly notify the Seller and each Rating Agency in writing of such action. (ii) The Seller or the Servicer have instructed all existing Obligors of Transferred Receivables, and shall instruct all future Obligors of such Transferred Receivables, to make payments in respect thereof (A) by check or money order mailed to one or more lockboxes or post office boxes for which there is an effective and binding Lockbox Agreement (each a "Lockbox" and collectively the "Lockboxes") or (B) by wire transfer or moneygram directly to a Lockbox Account. The Seller and the Servicer shall endorse, to the extent necessary, all checks or other instruments received in any Lockbox so that the same can be deposited in a Lockbox Account, in the form so received (with all necessary endorsements), on the first Business Day after the date of receipt thereof. In addition, each of the Seller and the Servicer shall deposit or cause to be deposited into a Lockbox Account all cash, checks, money orders or other proceeds of Transferred Receivables or Seller Collateral received by it other than in a Lockbox or Lockbox Account, in the form so received (with all necessary endorsements), not later than the close of business on the second Business Day following the date of receipt thereof, and until so deposited all such items or other proceeds shall be held in trust for the benefit of the Administrative Agent (for the benefit of the Purchasers, ratably, in accordance with their respective Capital Investments). Neither the Seller nor the Servicer shall make any deposits into a Lockbox or Lockbox Account except in accordance with the terms of this Agreement or any other Related Document. (iii) If, for any reason, a Lockbox Account Agreement terminates or any Lockbox Account Bank fails to comply with its obligations under the Lockbox Account Agreement to which it is a party, then the Seller shall promptly notify all Obligors of Transferred Receivables who had previously been instructed to make wire payments to a Lockbox Account maintained at any such Lockbox Account Bank to make all future payments to a new Lockbox Account in accordance with this Section 6.01(a)(iii). The Seller shall not close any such Lockbox Account unless it shall have (A) received the prior written consent of the Administrative Agent, (B) established a new account with the same Lockbox Account Bank or with a new depositary institution satisfactory to the Administrative Agent, (C) entered into an agreement covering such new account with such Lockbox Account Bank or with such new depositary institution substantially in the form of such Lockbox Account Agreement or that is satisfactory in all material respects to the Administrative Agent (whereupon, for all purposes of this Agreement and the other Related Documents, such new account shall become a Lockbox Account, such new agreement shall become a Lockbox Account Agreement and any new depositary institution shall become a Lockbox Account Bank), and (D) taken all such action as the Administrative Agent shall require to grant and perfect a first priority Lien in such new Lockbox Account to the Purchasers under Section 8.01 of this Agreement. Except as permitted by this Section 6.01(a), neither the Seller nor the Servicer shall open any new Lockbox or Lockbox Account without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld. (b) Deposit Account. The Seller has established with each Deposit Bank one or more Deposit Accounts, and each such Deposit Bank has executed a Deposit Account GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 25 Agreement. If a Cash Management Event shall have occurred and be continuing, the Administrative Agent may or, at the direction of the Requisite Purchasers, shall, without prior notice to the Seller, take exclusive dominion and control of each Deposit Account and all monies, instruments and other property then or thereafter on deposit therein, and the Seller thereafter shall not make or cause to be made, nor shall the Seller thereafter have any ability to make or cause to be made, any withdrawals from any Deposit Account except as provided in Section 6.01(c)(ii); provided, that the Administrative Agent shall promptly notify the Seller and each Rating Agency in writing of such action. (i) Neither the Seller nor the Servicer shall make any deposits into a Deposit Account except in accordance with the terms of this Agreement or any other Related Document. (ii) If, for any reason, a Deposit Account Agreement terminates or any Deposit Bank fails to comply with its obligations under the Deposit Account Agreement to which it is a party, then the Seller and Servicer shall immediately stop depositing Collections into such Deposit Account. The Seller shall not close any such Deposit Account unless it shall have (A) received the prior written consent of the Administrative Agent, (B) established a new account with the same Deposit Bank or with a new depositary institution reasonably satisfactory to the Administrative Agent, (C) entered into an agreement covering such new account with such Deposit Bank or with such new depositary institution substantially in the form of such Deposit Account Agreement or that is satisfactory in all material respects to the Administrative Agent (whereupon, for all purposes of this Agreement and the other Related Documents, such new account shall become a Deposit Account, such new agreement shall become a Deposit Account Agreement and any new depositary institution shall become a Deposit Bank), and (D) taken all such action as the Administrative Agent shall reasonably require to grant and perfect a first priority Lien in such new Deposit Account to the Purchaser under Section 8.01 of this Agreement. Except as permitted by this Section 6.01(b), neither the Seller nor the Servicer shall open any new Deposit Account without the prior written consent of the Administrative Agent, which shall not be unreasonably withheld. (c) Agent's Account. (i) Following the Cash Management Date, the Purchasers shall establish and maintain the Agent's Account with the Depositary. The Agent's Account shall be registered in the name of the Administrative Agent and the Administrative Agent shall, subject to the terms of this Agreement, have exclusive dominion and control thereof and of all monies, instruments and other property from time to time on deposit therein. (ii) If the Administrative Agent has taken dominion and control over the Lockbox Accounts pursuant to Section 6.01(a)(i), the Seller shall instruct each Lockbox Account Bank and Deposit Bank to transfer, and the Seller hereby grants the Administrative Agent the authority to instruct each such Lockbox Account Bank and Deposit Bank to transfer, on each Business Day in same day funds, all available funds in each Lockbox Account and Deposit Account to the Agent's Account, and the Seller shall GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 26 cause each Lockbox Account Bank and Deposit Bank to make such transfer. The Purchasers, the Purchaser Agents and the Administrative Agent shall deposit into the Agent's Account from time to time all monies, instruments and other property received by any of them as proceeds of the Transferred Receivables. On each Business Day prior to the Facility Termination Date the Administrative Agent shall instruct and cause the Depositary (which instruction may be in writing or by telephone confirmed promptly thereafter in writing) to release funds on deposit in the Agent's Account in the order of priority set forth in Section 6.04. On each Business Day from and after the Facility Termination Date, the Administrative Agent shall apply all amounts when received in the Agent's Account in the order of priority set forth in Section 6.06. (iii) If, for any reason, the Depositary wishes to resign as depositary of the Agent's Account or fails to carry out the instructions of the Administrative Agent, then the Administrative Agent shall promptly notify the Purchasers. Neither the Purchasers nor the Administrative Agent shall close the Agent's Account unless (A) a new deposit account has been established with the Depositary, (B) the Purchasers and the Administrative Agent have entered into an agreement covering such new account with such new depositary institution satisfactory in all respects to the Administrative Agent (whereupon such new account shall become the Agent's Account for all purposes of this Agreement and the other Related Documents), and (C) the Purchasers and the Administrative Agent have taken all such action as the Administrative Agent shall require to grant and perfect a first priority Lien in such new Agent's Account to the Administrative Agent on behalf of the Purchasers. (d) Reserve Account. Following the Cash Management Date, the Administrative Agent shall establish and maintain the Reserve Account with the Depositary. The Reserve Account shall be registered in the name of the Administrative Agent and the Administrative Agent shall, subject to the terms of this Agreement, have exclusive dominion and control thereof and of all monies, instruments and other property from time to time on deposit therein. (e) Distribution Center Consolidation. (i) Notwithstanding anything in the foregoing Section 6.01 to the contrary, upon the occurrence of a Distribution Center Consolidation in which a BH2 Designated Distribution Center is being consolidated into an ARFC Designated Distribution Center and upon satisfaction of the related conditions precedent set forth in Section 8.13 of the Sale and Contribution Agreement (other than subsection (e) thereof), (A) the Seller shall deliver an amended and restated Schedule 4.01(q) to delete reference to the Reassigned Accounts, and (B) (1) the Seller shall transfer such Reassigned Accounts to the Originator or any other Person designated by the Originator, and the Seller shall request, and the Administrative Agent agrees, to terminate or assign (as requested by the Seller) any Lockbox Account Agreement or Deposit Account Agreement with respect to such Reassigned Accounts, or (2) the Seller and Administrative Agent shall take such other action with respect to the Reassigned Accounts as the Seller and Administrative Agent shall agree. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 27 (ii) Upon the occurrence of a Distribution Center Consolidation in which an ARFC Designated Distribution Center is being consolidated into a BH2 Designated Distribution Center and upon satisfaction of the related conditions precedent set forth in Section 8.13 of the Sale and Contribution Agreement (other than subsection (d) thereof), (A) the Seller shall deliver an amended and restated Schedule 4.01(q) to reflect the Accounts of such ARFC Designated Distribution Center, and (B) the Seller shall (1) provide the Administrative Agent with satisfactory evidence that such Accounts have been transferred to the Seller, and deliver an executed Lockbox Account Agreement or Deposit Account Agreement, as applicable, with respect to each such Account or deliver an assignment of the account control agreement in effect with respect to the security interest of JPMorgan Chase and DFC in such Account, in form and substance satisfactory to the Administrative Agent, or (2) take such other action with respect to such Accounts as the Seller and the Administrative Agent shall agree. Section 6.02. Collections and Disbursement Procedures Prior to the Cash Management Date and During the Revolving Period. (a) On each Business Day prior to the Cash Management Date and during the Revolving Period, no later than 12:00 Noon (New York time): (i) if, on the immediately preceding Business Day, the Administrative Agent shall have notified the Seller of any Purchase Excess, then the Seller shall pay an amount equal to any Purchase Excess to be applied in reduction of Aggregate Capital Investment, to the Purchasers ratably based on the amount of their respective Capital Investments; and (ii) if, pursuant to a Repayment Notice, the Seller has requested a reduction of the Aggregate Capital Investment of the Purchasers, then the Seller shall pay to the Purchasers, ratably based on the amount of their respective Capital Investments, an amount equal to the lesser of (A) the amount of such requested reduction of Aggregate Capital Investment and (B) such balance. (b) On each Settlement Date prior to the Cash Management Date and during the Revolving Period, as soon as practicable but in any event no later than 12:00 Noon (New York time), the Seller shall pay in the following priority: (i) to the applicable Purchasers (or, if applicable, any Indemnified Person or Affected Party), ratably, in accordance with the Purchasers' respective Capital Investments, or with respect to clauses (C) and (D) below, in accordance with the amount owed, an amount equal to: (A) the accrued and unpaid Daily Yield as of the end of the immediately preceding Settlement Period; (B) the unpaid Accrued Purchaser Group Commitment Fee as of the end of the immediately preceding Settlement Period; GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 28 (C) all Additional Amounts incurred and payable to any Affected Party as of the end of the immediately preceding Settlement Period; (D) all other amounts accrued and payable under this Agreement (including Indemnified Amounts incurred and payable to any Indemnified Person) as of the end of the immediately preceding Settlement Period to the extent not already paid; and (E) if a Purchase Excess exists on such date, an amount equal to such excess to the extent not already paid, to be applied in reduction of Aggregate Capital Investment; and (ii) to the Servicer on behalf of the Seller, an amount equal to its accrued and unpaid Servicing Fee as of the end of the immediately preceding Settlement Period. Section 6.03. Collections and Disbursement Procedures After the Cash Management Date and During the Revolving Period: Funding of Agent's Account. On and after the Cash Management Date, as soon as practicable, and in any event, no later than 12:00 Noon (New York time) on each Business Day: (a) the Administrative Agent, the Seller and the Servicer shall cause the Lockbox Account Banks and Deposit Banks to make the transfer to the Agent's Account required to be made on such Business Day pursuant to Section 6.01(c)(ii); (b) the Applicable Purchasers (or the related Purchaser Agent on its behalf) or the Administrative Agent shall deposit in the Agent's Account the amount, if any, required pursuant to Section 2.04(b)(i); (c) if on any Business Day the Seller is required to make other payments under this Agreement not previously retained out of Collections on Transferred Receivables (including Additional Amounts and Indemnified Amounts not previously paid), then the Seller shall deposit an amount equal to such payments in the Agent's Account; (d) if on the immediately preceding Business Day, a Collection on Transferred Receivables is to be adjusted pursuant to Section 3.2 of the Sale and Contribution Agreement, then the Seller shall deposit in the Agent's Account cash in the amount so received from the Originator for such payment; (e) if on any Business Day the Originator repurchases Transferred Receivables in connection with a Distribution Center Consolidation, then the Seller shall deposit in the Agent's Account cash in the amount so received from the Originator for such payment; (f) the Seller shall deposit cash in the Agent's Account in the amount equal to the Outstanding Balance of any Transferred Receivable the Seller elects to pay pursuant to the first proviso of Section 8.06(d); GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 29 (g) if, on the immediately preceding Business Day, the Administrative Agent shall have notified the Seller of any Purchase Excess, then the Seller shall deposit cash in the amount of such Purchase Excess in the Agent's Account; (h) if, pursuant to a Repayment Notice, the Seller has requested a reduction of the Aggregate Capital Investment of the Purchasers, then the Seller shall deposit cash in the amount equal to the amount of such requested reduction of Aggregate Capital Investment; (i) the Servicer shall deposit in the Agent's Account the Outstanding Balance of any Transferred Receivable the Servicer elects to pay pursuant to Section 7.04; (j) if, on or before the second Business Day immediately preceding any Settlement Date, the Administrative Agent shall have notified the Seller of any Reserve Account Deficiency pursuant to Section 6.05(b), then the Seller shall deposit cash in the amount of such deficiency in the Agent's Account on such Settlement Date; and (k) from and after the Facility Termination Date, the Administrative Agent shall transfer all amounts on deposit in the Reserve Account to the Agent's Account. Section 6.04. Daily Disbursements From the Agent's Account After the Cash Management Date and During the Revolving Period. On each Business Day no later than 12:00 Noon (New York time) after the Cash Management Date and during the Revolving Period, and following the transfers made pursuant to Section 6.03, the Administrative Agent shall disburse the amounts then on deposit in the Agent's Account and its related subaccounts in the following priority: (a) to the Reserve Account the amount of any Reserve Account Deficiency deposited pursuant to Section 6.03(j); (b) to the Reserve Account an amount equal to the sum of: (i) Daily Yield; (ii) the Yield Shortfall as of the immediately preceding Business Day; (iii) the Accrued Servicing Fee; (iv) the Servicing Fee Shortfall as of the immediately preceding Business Day; (v) the Accrued Purchaser Group Commitment Fee; and (vi) the Purchaser Group Commitment Fee Shortfall as of the immediately preceding Business Day; (vii) to the Purchasers an amount equal to the deposits made in the Agent's Account pursuant to Section 6.03(c) and not otherwise disbursed pursuant to GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 30 Section 6.04(a), to be disbursed based on the amounts owed, ratably to the applicable Purchasers; (c) an amount equal to any Purchase Excess to be applied in reduction of Aggregate Capital Investment, to the Purchasers ratably based on the amount of their respective Capital Investments; (d) if, pursuant to a Repayment Notice, the Seller has requested a reduction of the Aggregate Capital Investment of the Purchasers, then to the Purchasers, ratably based on the amount of their respective Capital Investments, the lesser of (i) the amount of such requested reduction of Aggregate Capital Investment and (ii) such balance; and (e) after the payment of each of the amounts listed in Sections 6.04(a), (b), (c) and (d), the Administrative Agent shall deposit in the Seller Account the balance of any amounts remaining after making the foregoing disbursements. Section 6.05. Disbursements From the Reserve Account; Settlement Date Procedures; After the Cash Management Date and During the Revolving Period. (a) On each Settlement Date after the Cash Management Date and during the Revolving Period, the amounts on deposit in the Reserve Account shall be disbursed or retained by the Administrative Agent in the following priority: (i) to the applicable Purchasers (or, if applicable, any Indemnified Person or Affected Party), ratably, in accordance with the Purchasers' respective Capital Investments, or with respect to clauses (C) and (D) below, in accordance with the amount owed, an amount equal to: (A) the accrued and unpaid Daily Yield as of the end of the immediately preceding Settlement Period; (B) the unpaid Accrued Purchaser Group Commitment Fee as of the end of the immediately preceding Settlement Period; (C) all Additional Amounts incurred and payable to any Affected Party as of the end of the immediately preceding Settlement Period; (D) all other amounts accrued and payable under this Agreement (including Indemnified Amounts incurred and payable to any Indemnified Person) as of the end of the immediately preceding Settlement Period to the extent not already transferred pursuant to Section 6.04(b)(i); and (E) if a Purchase Excess exists on such date, an amount equal to such excess to the extent not already transferred pursuant to Section 6.04(c), to be applied in reduction of Aggregate Capital Investment; GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 31 (ii) to the Servicer on behalf of the Seller, an amount equal to its accrued and unpaid Servicing Fee as of the end of the immediately preceding Settlement Period; (iii) to be retained in the Reserve Account, an amount equal to the Accrued Monthly Yield, Accrued Purchaser Group Commitment Fee and Accrued Servicing Fee as of such date; and (iv) to the Seller Account, the balance of any funds remaining after retaining or disbursing the foregoing amounts. (b) No later than the second Business Day immediately preceding each Settlement Date, the Administrative Agent shall determine and notify the Seller of any Reserve Account Deficiency for the preceding Settlement Period, and the Seller shall on and after the Cash Management Date, deposit cash in the amount of such Reserve Account Deficiency to the Agent's Account pursuant to Section 6.03(j). Section 6.06. Liquidation Settlement Procedures. On each Business Day from and after the Facility Termination Date until the Termination Date, the Administrative Agent shall, as soon as practicable, transfer all amounts then on deposit in the Reserve Account to the Agent's Account and shall transfer all amounts in the Agent's Account (including amounts transferred pursuant to Section 6.03(j) and amounts which are not allocable to the Purchaser Interests) in the following priority: (a) if an Event of Servicer Termination has occurred and a Successor Servicer has assumed the responsibilities and obligations of the Servicer in accordance with Section 11.02, then to the Successor Servicer an amount equal to its accrued and unpaid Successor Servicing Fees and Expenses; (b) to the Purchasers, ratably, in accordance with their respective Capital Investments, an amount equal to accrued and unpaid Daily Yield through and including the date of maturity (if any) of the Commercial Paper (or other funding source) maintaining each Purchaser's respective Capital Investment; (c) to the Purchasers, ratably, in accordance with their respective Capital Investments, an amount equal to the unpaid Aggregate Capital Investment; (d) to the Administrative Agent and to the Purchaser Agents, in each case, ratably, in accordance with the amount owed, an amount equal to accrued and unpaid Purchaser Group Commitment Fees; (e) all Indemnified Amounts incurred and payable to any Indemnified Person; and (f) to the extent not paid pursuant to Section 6.06(a), to the Servicer in an amount equal to the accrued and unpaid Servicing Fee; and GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 32 (g) to the Seller Account, the balance of any funds remaining after payment in full of all amounts set forth in this Section 6.06. Section 6.07. Investment of Funds in Accounts. To the extent uninvested amounts are on deposit in the Reserve Account on any given day during the Revolving Period, the Administrative Agent shall invest all such amounts in Permitted Investments selected by the Administrative Agent that mature no later than the immediately succeeding Settlement Date. From and after the Facility Termination Date, any investment of such amounts shall be solely at the discretion of the Administrative Agent, subject to the restrictions described above. All proceeds of any such investment shall be deposited upon receipt into the Reserve Account. Section 6.08. Termination Procedures. (a) On the earlier of (i) the first Business Day after the Facility Termination Date on which the Aggregate Capital Investment has been reduced to zero or (ii) the Final Purchase Date, if the obligations to be paid pursuant to Section 6.06 have not been paid in full, the Seller shall immediately deposit in the Agent's Account an amount sufficient to make such payments in full. (b) On the Termination Date, all amounts on deposit in the Agent's Account and the Reserve Account shall be disbursed to the Seller and all ownership interests or Liens of the Purchasers (and their assignees and successors) in and to all Transferred Receivables and all Liens of the Purchasers and the Administrative Agent in and to the Seller Collateral shall be released by each Purchaser and the Administrative Agent. Such disbursement shall constitute the final payment to which the Seller is entitled pursuant to the terms of this Agreement, except to the extent that additional Collections are received by the Administrative Agent, any Purchaser or any Purchaser Agent, which Collections shall be promptly reported and remitted to the Seller or its designee. Upon such termination, the Administrative Agent shall promptly (a) execute and deliver UCC-3 termination statements to the Seller with respect to each UCC-1 financing statement filed in favor of the Administrative Agent or any Purchaser (or their assignees and successors) in connection with this Agreement, (b) deliver written notice to all Lockbox Banks and Deposit Banks to remit to the Servicer (unless otherwise directed by the Seller all payments, remittances and other items that have been received by, or are maintained in, any Lockbox Bank, Lockbox, Lockbox Account or Deposit Bank and to follow thereafter all directions of the Servicer (unless otherwise directed by the Seller) with respect to the continuance of termination of such Lockboxes and Deposit Accounts and (c) promptly deliver to the Servicer (unless otherwise directed by the Seller) all Collections and all other funds, records or other property of Seller or the Servicer that may come, or have come, into the Administrative Agent's, any Purchaser Agent's or any Purchaser's (or their assignees and successors) custody or control. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 33 ARTICLE VII. SERVICER PROVISIONS Section 7.01. Appointment of the Servicer. Each of the Conduit Purchasers and the Committed Purchasers hereby appoints the Servicer as its agent, and the Seller hereby acknowledges such appointment, to service the Transferred Receivables and enforce its rights and interests in and under each Transferred Receivable and the rights and interests under the Contract therefor as such rights and interests relate to such Transferred Receivable and to serve in such capacity until the termination of its responsibilities pursuant to Sections 9.02 or 11.01. In connection therewith, the Servicer hereby accepts such appointment and agrees to perform the duties and obligations set forth herein. The Servicer may, with the prior written consent of the Requisite Purchasers and the Administrative Agent, subcontract with a Sub-Servicer for the collection, servicing or administration of the Transferred Receivables; provided, that (a) the Servicer shall remain liable for the performance of the duties and obligations of such Sub-Servicer pursuant to the terms hereof and (b) any Sub-Servicing Agreement that may be entered into and any other transactions or services relating to the Transferred Receivables involving a Sub-Servicer shall be deemed to be between the Sub-Servicer and the Servicer alone, and the Purchasers, the Purchaser Agents and the Administrative Agent shall not be deemed parties thereto and shall have no obligations, duties or liabilities with respect to the Sub-Servicer. Section 7.02. Duties and Responsibilities of the Servicer. Subject to the provisions of this Agreement, the Servicer shall conduct the servicing, administration and collection of the Transferred Receivables and shall take, or cause to be taken, all actions that (a) may be necessary or advisable to service, administer and collect each Transferred Receivable from time to time, (b) the Servicer would take if the Transferred Receivables were owned by the Servicer, and (c) are consistent with industry practice for the servicing of such Transferred Receivables. Section 7.03. Collections on Receivables. (a) (i) In the event that the Servicer is unable to determine the specific Transferred Receivables on which Collections have been received from the Obligor thereunder but is able to determine that such Collections have been received with respect to Transferred Receivables, the parties agree for purposes of this Agreement only that such Collections shall be deemed to have been received on such Transferred Receivables in the order in which they were originated with respect to such Obligor. In the event that the Servicer is unable to determine the specific Transferred Receivables on which discounts, offsets or other non-cash reductions have been granted or made with respect to the Obligor thereunder, the parties agree for purposes of this Agreement only that such reductions shall be deemed to have been granted or made (A) prior to a Termination Event, on such Transferred Receivables as determined by the Servicer, and (B) from and after the occurrence of a Termination Event, on Eligible Receivables in the reverse order in which they were originated with respect to such Obligor. (ii) In the event that the Servicer is unable to determine the specific Receivables on which Collections have been received from the Obligor thereunder and is unable to determine whether such Collections have been received with respect to Transferred Receivables or with respect to ARFC Designated Receivables, the parties agree for purposes of this Agreement, the Sale and Contribution GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 34 Agreement, the ASC/ARFC Purchase Agreement and the ARFC/JPMorgan Chase Purchase Agreement only that such Collections shall be allocated among such Receivables on a pro rata basis, based upon the outstanding balance of all Receivables in respect of such Obligor net of all Collections and discounts, and any other modifications, that reduce the Billed Amount of such Receivables. (b) If the Servicer determines that amounts unrelated to the Transferred Receivables (the "Unrelated Amounts") have been deposited in the Agent's Account pursuant to Section 6.03, then the Servicer shall provide written evidence thereof to the Purchasers, the Purchaser Agents and the Administrative Agent no later than the first Business Day following the day on which the Servicer had actual knowledge thereof, which evidence shall be provided in writing and shall be otherwise satisfactory to each such Affected Party. Upon receipt of any such notice, the Administrative Agent shall segregate the Unrelated Amounts, remit such amounts to the Seller, and the same shall not be deemed to constitute Collections on Transferred Receivables and shall not be subject to the provisions of this Agreement. Section 7.04. Authorization of the Servicer. Each of the Conduit Purchasers and the Committed Purchasers hereby authorizes the Servicer, and the Seller acknowledges such authorization, to take any and all reasonable steps in its name and on its behalf necessary or desirable and not inconsistent with the ownership of the Purchaser Interests purchased by such Purchaser hereunder and the pledge of any Conduit Purchaser's Purchaser Interest by such Conduit Purchaser to a Program Support Provider pursuant to a Program Document, in the determination of the Servicer, to (a) collect all amounts due under any Transferred Receivable, including endorsing its name on checks and other instruments representing Collections on such Transferred Receivable, and execute and deliver any and all instruments of satisfaction or cancellation or of partial or full release or discharge and all other comparable instruments with respect to any such Transferred Receivable and (b) after any Transferred Receivable becomes a Defaulted Receivable and to the extent permitted under and in compliance with applicable law and regulations, commence proceedings with respect to the enforcement of payment of any such Transferred Receivable and the related rights under the Contract therefor as such rights relate to such Transferred Receivable and adjust, settle or compromise any payments due thereunder, in each case to the same extent as the Originator could have done if it had continued to own such Transferred Receivable. The Originator, the Seller, the Administrative Agent, each Purchaser Agent and each Purchaser shall furnish the Servicer with any powers of attorney and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. Notwithstanding anything to the contrary contained herein, if a Cash Management Event (other than an event specified in clause (g) of the definition thereof) has occurred and is continuing, the Administrative Agent shall have the absolute and unlimited right to direct the Servicer (whether the Servicer is the Originator, the Parent or otherwise) (i) to commence or settle any legal action to enforce collection of any Transferred Receivable or (ii) to foreclose upon, repossess or take any other action that the Administrative Agent deems necessary or advisable with respect thereto; provided, that in lieu of commencing any such action or taking other enforcement action, the Seller may direct the Servicer to pay on behalf of the Seller to the Applicable Purchaser, the Capital Investment with respect to its Purchaser Interest in such Transferred Receivable. In no event shall the Servicer be entitled to make any Affected Party a party to any Litigation without such Affected Party's express prior written consent, or to make the Seller a party to any Litigation without the Administrative Agent's consent. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 35 Section 7.05. Servicing Fees. As compensation for its servicing activities and as reimbursement for its reasonable expenses in connection therewith, the Servicer shall be entitled to receive the Servicing Fees in accordance with Sections 6.05 and 6.06. The Servicer shall be required to pay for all expenses incurred by it in connection with its activities hereunder (including any payments to accountants, counsel or any other Person) and shall not be entitled to any payment therefor other than the Servicing Fees. Section 7.06. Representations and Warranties of the Servicer. To induce the Purchasers to purchase the Purchaser Interests and to take any action required to be performed by it hereunder, the Servicer represents and warrants to the Purchasers, the Purchaser Agents and the Administrative Agent, which representation and warranty shall survive the execution and delivery of this Agreement: (a) Each of the representations and warranties of the Servicer (whether made by the Servicer in its capacity as the Originator or as the Servicer) contained in any Related Document is true and correct and, if made by the Servicer in its capacity as the Originator, applies with equal force to the Servicer in its capacity as the Servicer (b) The Servicer is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified to do business, and is in good standing, in every jurisdiction where the nature of its business requires it to be so qualified, except to the extent the failure to so qualify would not have a Material Adverse Effect. (c) The execution, delivery and performance by the Servicer of this Agreement and the other documents to be delivered by it hereunder (i) are within the Servicer's corporate powers, (ii) have been duly authorized by all necessary corporate action and (iii) do not contravene (1) the Servicer's charter or bylaws, (2) any material law, rule or regulation applicable to the Servicer, (3) any material contractual restriction binding on or affecting the Servicer or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting the Servicer or its property. This Agreement has been duly executed and delivered by the Servicer. (d) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Servicer of this Agreement or any other document to be delivered by it hereunder. (e) This Agreement constitutes the legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (f) If the Servicer is the Originator or one of its Affiliates, each Monthly Report, Investment Report, information, exhibit, financial statement, document, book, record or report furnished or to be furnished at any time by the Servicer on behalf of the Seller or by or on GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 36 behalf of the Originator to the Administrative Agent, the Purchaser Agents or the Purchasers in connection with this Agreement is correct in all material respects as of its date or (except as otherwise disclosed to such Person at such time) as of the date so furnished, and no such document contains any untrue statement of a material fact or omits to state a fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not materially misleading. (g) No proceeds of any purchase or reinvestment hereunder will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, or for any other purpose that might cause any portion of such proceeds to be considered a "purpose credit" within the meaning of Regulations T, U or X of the Federal Reserve Board. The Seller does not own any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. Section 7.07. Covenants of the Servicer. The Servicer covenants and agrees that from and after the Closing Date and until the Termination Date: (a) Ownership of Transferred Receivables. The Servicer shall identify the Transferred Receivables clearly and unambiguously in its Servicing Records to reflect that such Transferred Receivables have been sold or contributed to the Seller and, following the Purchase of Purchaser Interests in such Transferred Receivables under this Agreement, are subject to the interest of the Conduit Purchasers or Committed Purchasers, as applicable. (b) Compliance with Credit and Collection Policies. The Servicer shall comply in all respects with the Credit and Collection Policies with respect to each Transferred Receivable and the Contract therefor. The Servicer shall not materially amend, waive or modify any term or provision of the Credit and Collection Policies without the prior written consent of the Administrative Agent. (c) Covenants in Other Related Documents. The Servicer shall perform, keep and observe all covenants applicable to it in its capacity as an Originator under the Sale and Contribution Agreement and the other Related Documents (including those covenants set forth in Sections 5.1 and 5.2 of the Sale and Contribution Agreement) and the Servicer hereby agrees to be bound by such covenants in its capacity as the Servicer hereunder for the benefit of the Purchasers, the Purchaser Agents and the Administrative Agent as if the same were set forth in full herein. (d) Servicer Information. The Servicer shall furnish to the Administrative Agent and the Purchaser Agents such information with respect to the Receivables (including, but not limited to, its procedures for selecting Transferred Receivables for sale, its procedures for segregating Transferred Receivables from Receivables other than Transferred Receivables, and its standards and procedures for selling goods or services on credit) as the Administrative Agent or the Purchaser Agents may reasonably request. Section 7.08. Reporting Requirements of the Servicer. If the Servicer is the Originator or one of its Affiliates, the Servicer hereby agrees that, from and after the Closing Date and until the Termination Date, it shall deliver or cause to be delivered to the Purchasers, GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 37 the Purchaser Agents and the Administrative Agent the financial statements, notices, and other information at the times, to the Persons and in the manner set forth in Annex 5.02(a). ARTICLE VIII. GRANT OF SECURITY INTERESTS Section 8.01. Seller's Grant of Security Interest. The parties hereto intend that each Purchase of Purchaser Interests to be made hereunder shall constitute a purchase and sale of undivided percentage ownership interests in the Transferred Receivables and not a loan. Notwithstanding the foregoing, in addition to and not in derogation of any rights now or hereafter acquired by any Purchaser or the Administrative Agent hereunder, the parties hereto intend that this Agreement shall constitute a security agreement under applicable law. In such regard and, in any event, to secure the prompt and complete payment, performance and observance of all Seller Secured Obligations, and to induce the Conduit Purchasers and the Committed Purchasers to enter into this Agreement and perform the obligations required to be performed by it hereunder in accordance with the terms and conditions thereof, the Seller hereby grants, assigns, conveys, pledges, hypothecates and transfers to the Administrative Agent, for the benefit of itself, the Conduit Purchasers and the Committed Purchasers, a Lien upon and security interest in all of its right, title and interest in, to and under, but none of its obligations arising from, the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of, the Seller (including under any trade names, styles or derivations of the Seller), and regardless of where located (all of which being hereinafter collectively referred to as the "Seller Collateral"): (a) all Transferred Receivables; (b) the Sale and Contribution Agreement, all Lockbox Account Agreements, Deposit Account Agreements and all other Related Documents now or hereafter in effect relating to the purchase, servicing or processing of Transferred Receivables (collectively, the "Seller Assigned Agreements"), including (i) all rights of the Seller to receive moneys due and to become due thereunder or pursuant thereto, (ii) all rights of the Seller to receive proceeds of any insurance, indemnity, warranty or guaranty with respect thereto, (iii) all claims of the Seller for damages or breach with respect thereto or for default thereunder, (iv) the right of the Seller to amend, waive or terminate the same and to perform and to compel performance and otherwise exercise all remedies thereunder, and (v) all rights of the Seller in the Originator Collateral; (c) all of the following (collectively, the "Seller Account Collateral"): (i) the Lockbox Accounts, the Lockboxes, and all funds on deposit therein and all certificates and instruments, if any, from time to time representing or evidencing the Lockbox Accounts, the Lockboxes or such funds, (ii) the Deposit Accounts and all funds on deposit therein and all certificates and instruments, if any, from time to time representing or evidencing the Deposit Accounts or such funds; GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 38 (iii) the Agent's Account, the Reserve Account and all funds on deposit therein and all certificates and instruments, if any, from time to time representing or evidencing the Agent's Account, the Reserve Account or such funds, (iv) all Investments from time to time of amounts in the Agent's Account and the Reserve Account, and all certificates, instruments and investment property, if any, from time to time representing or evidencing such Investments, (v) all notes, certificates of deposit and other instruments from time to time delivered to or otherwise possessed by any Purchaser or any assignee or agent on behalf of any Purchaser in substitution for or in addition to any of the then existing Seller Account Collateral, and (vi) all interest, dividends, cash, instruments, investment property and other property from time to time received, receivable or otherwise distributed with respect to or in exchange for any and all of the then existing Seller Account Collateral; (d) all other property that may from time to time hereafter be granted and pledged by the Seller or by any Person on its behalf under this Agreement, including any deposit with any Purchaser or the Administrative Agent of additional funds by the Seller; and (e) to the extent not otherwise included, all proceeds of the foregoing and all accessions to, substitutions and replacements for, and profits of, each of the foregoing Seller Collateral (including proceeds that constitute property of the types described in Sections 8.01(a) through (d). Section 8.02. Seller's Certification. The Seller hereby certifies that (a) the benefits of the representations, warranties and covenants of the Originator made to the Seller under the Sale and Contribution Agreement have been assigned as part of the Seller Collateral by the Seller to the Administrative Agent on behalf of the Purchasers hereunder; (b) the rights of the Seller under the Sale and Contribution Agreement to require payment of a Rejected Amount from the Originator may be enforced by the Purchasers and the Administrative Agent; and (c) the Sale and Contribution Agreement provides that the representations, warranties and covenants described in Sections 4.1, 4.2, 5.1, and 5.3 thereof, the indemnification and payment provisions of Article VII thereof and the provisions of Sections 6.1(o), 8.3 and 8.5 thereof shall survive the sale of the Purchaser Interests and the termination of the Sale and Contribution Agreement and this Agreement. The Seller hereby acknowledges that one or more Conduit Purchasers may have assigned to one or more Program Support Providers under one or more Program Documents the benefits of the representations, warranties and covenants certified in Section 8.02(a) to have been assigned to such Conduit Purchaser. Notwithstanding any provision in this Agreement to the contrary, the assignments and rights referred to in this Section 8.02 that have been granted to the Purchasers, the Administrative Agent and their respective successors and assigns shall automatically and irrevocably be deemed to be released and reassigned to Seller upon the Termination Date. Section 8.03. Consent to Assignment. Each of the Seller and the Servicer acknowledges and consents to the grant by Redwood to the Collateral Agent of a Lien upon all GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 39 of Redwood's rights, title and interest in, to and under the Seller Collateral and acknowledges the rights of the Collateral Agent with respect to such Lien, and further acknowledges and consents that, upon the occurrence and during the continuance of an Incipient Termination Event or a Termination Event prior to a GE Capital Funding Event, the Collateral Agent shall be entitled to enforce the provisions of the Seller Assigned Agreements and shall be entitled to all the rights and remedies of Redwood thereunder. In addition, each of the Seller and the Servicer hereby authorizes the Collateral Agent to rely on the representations and warranties made by it in the Seller Assigned Agreements to which it is a party and in any other certificates or documents furnished by it to any party in connection therewith. Section 8.04. Delivery of Collateral. Other than as provided in Section 5.01(d)(ii), all certificates or instruments representing or evidencing the Seller Collateral shall be delivered to and held by or on behalf of the Administrative Agent and shall be in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Administrative Agent. The Administrative Agent shall have the right (a) at any time to exchange certificates or instruments representing or evidencing Seller Collateral for certificates or instruments of smaller or larger denominations and (b) at any time in its discretion following the occurrence and during the continuation of a Termination Event and without notice to the Seller, to transfer to or to register in the name of the Administrative Agent or its nominee any or all of the Seller Collateral. Section 8.05. Seller Remains Liable. It is expressly agreed by the Seller that, anything herein to the contrary notwithstanding, the Seller shall remain liable under any and all of the Transferred Receivables, the Contracts therefor, the Seller Assigned Agreements and any other agreements constituting the Seller Collateral to which it is a party to observe and perform all the conditions and obligations to be observed and performed by it thereunder. The Purchasers, the Administrative Agent, the Redwood Secured Parties and the other Program Support Providers shall not have any obligation or liability under any such Transferred Receivables, Contracts or agreements by reason of or arising out of this Agreement or any Program Document or the granting herein or therein of a Lien thereon or the receipt by the Administrative Agent, Purchasers, any Redwood Secured Party or any other Program Support Provider of any payment relating thereto pursuant hereto or thereto. The exercise by any Purchaser or the Administrative Agent of any of its respective rights under this Agreement shall not release the Originator, the Seller or the Servicer from any of their respective duties or obligations under any such Transferred Receivables, Contracts or agreements. None of the Purchasers, the Administrative Agent, any Redwood Secured Party or any other Program Support Provider shall be required or obligated in any manner to perform or fulfill any of the obligations of the Originator, the Seller or the Servicer under or pursuant to any such Transferred Receivable, Contract or agreement, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment received by it or the sufficiency of any performance by any party under any such Transferred Receivable, Contract or agreement, or to present or file any claims, or to take any action to collect or enforce any performance or the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 40 Section 8.06. Covenants of the Seller and the Servicer Regarding the Seller Collateral. (a) Offices and Records. The Seller shall maintain its principal place of business and chief executive office and the office at which it stores its Records at the respective locations specified in Schedule 4.01(i) or, upon 30 days' prior written notice to the Administrative Agent, at such other location in a jurisdiction where all action requested by the Administrative Agent pursuant to Section 14.15 shall have been taken with respect to the Seller Collateral. Each of the Seller and the Servicer shall, at its own cost and expense, maintain adequate and complete records of the Transferred Receivables and the Seller Collateral and, with respect to the Servicer only, all of the Originator's Receivables, including records of any and all payments received, credits granted and merchandise returned with respect thereto and all other dealings therewith. Each of the Seller and the Servicer shall mark conspicuously with a legend, in form and substance satisfactory to the Administrative Agent, its books and records, computer tapes, computer disks and credit files pertaining to the Seller Collateral, and its file cabinets or other storage facilities where it maintains information pertaining thereto, to evidence this Agreement and the assignment and Liens granted pursuant to this Article VIII and in accordance with Section 5.01(d)(ii). If a Termination Event has occurred and is continuing, at any time on the demand of the Administrative Agent or any Purchaser Agent, the Seller and the Servicer shall deliver and turn over such books and records to the Administrative Agent, such Purchaser Agent or its representatives, as applicable. Prior to the occurrence of a Termination Event and upon notice from the Administrative Agent or any Purchaser Agent, the Seller and the Servicer shall permit any representative of the Administrative Agent or such Purchaser Agent to inspect such books and records and shall provide photocopies thereof to the Administrative Agent or such Purchaser Agent as more specifically set forth in Section 8.06(b). (b) Access. Each of the Seller and the Servicer shall, at its own expense, during normal business hours, from time to time upon reasonable prior notice (except that no notice shall be required if an Incipient Termination Event or Termination Event has occurred and is continuing) as frequently as the Administrative Agent or any Purchaser Agent determines to be appropriate: (i) provide the Purchasers, the Purchaser Agents, the Administrative Agent and any of their respective officers, employees and agents access to its properties (including properties utilized in connection with the collection, processing or servicing of the Transferred Receivables), facilities, advisors and employees (including officers) and to the Seller Collateral, (ii) permit the Purchasers, the Purchaser Agents, the Administrative Agent and any of their respective officers, employees and agents to inspect, audit and make extracts from its books and records, including all Records, (iii) permit the Purchasers, the Purchaser Agents and the Administrative Agent and their respective officers, employees and agents to inspect, review and evaluate the Transferred Receivables and the Seller Collateral (including Transferred Receivables that consist of chattel paper), (iv) permit the Purchasers, the Purchaser Agents and the Administrative Agent and their respective officers, employees and agents to discuss matters relating to the Transferred Receivables or its performance under this Agreement or the other Related Documents or the business, operations, properties, financial and other conditions of the Seller, the Originator or the Servicer with any of its officers, employees, representatives or agents (in each case, with those persons having knowledge of such matters) and with its independent certified public accountants, (v) if an Incipient Termination Event or a Termination Event shall have occurred and be continuing then each of the Seller and the Servicer shall, at its GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 41 own expense, provide such access at all times and without advance notice, and (vi) if a Cash Management Event (other than the events specified in clauses (e)(i) and (g) in the definition thereof) shall have occurred and be continuing, the Originator shall provide the Purchasers, the Purchaser Agents and the Administrative Agent with access to its suppliers and customers; provided, that the Administrative Agent shall notify the Seller or Servicer, as the case may be, prior to any contact with its independent certified public accountants and shall give such Person the opportunity to participate in such discussions. Each of the Seller and the Servicer shall make available to the Administrative Agent, the Purchaser Agents and their respective counsel, as quickly as is possible under the circumstances, originals or copies of all books and records, including Records, that the Administrative Agent or any Purchaser Agent may request. Each of the Seller and the Servicer shall deliver any document or instrument necessary for the Administrative Agent, as the Administrative Agent may from time to time request, to obtain records from any service bureau or other Person that maintains records for the Seller or the Servicer, and shall maintain duplicate records or supporting documentation on media, including computer tapes and discs owned by the Seller or the Servicer. (c) Communication with Accountants. Each of the Seller and the Servicer authorizes the Purchasers, the Purchaser Agents and the Administrative Agent to communicate directly with its independent certified public accountants in the circumstances permitted in Section 8.06(b) and authorizes and shall instruct those accountants and advisors to disclose and make available to the Purchasers, the Purchaser Agents and the Administrative Agent any and all financial statements, management letters, and other supporting financial documents, schedules and information relating to the Seller or the Servicer (including copies of any reports and documents required for submission in accordance with Section 5.02) with respect to its business, financial condition and other affairs; provided, that, the Administrative Agent, the Purchaser Agents and the Purchasers agree not to make photocopies of any management letter made available to them hereunder. (d) Collection of Transferred Receivables. Except as otherwise provided in this Section 8.06(d), the Servicer shall continue to collect or cause to be collected, at its sole cost and expense, all amounts due or to become due to the Seller under the Transferred Receivables, the Seller Assigned Agreements and any other Seller Collateral. In connection therewith, the Seller and the Servicer shall take such action as it, and from and after the occurrence and during the continuance of a Termination Event, the Administrative Agent, may deem necessary or desirable to enforce collection of the Transferred Receivables, the Seller Assigned Agreements and the other Seller Collateral; provided, that the Seller may, rather than having the Servicer commence any such action or taking any other enforcement action, at its option, elect to pay to the Applicable Purchaser (in accordance with its Purchaser Interests), the Outstanding Balance of any such Transferred Receivable; provided further, that if (i) the Administrative Agent has taken dominion and control over the Lockbox Accounts pursuant to Section 6.01(a)(i), then the Administrative Agent may without prior notice to the Seller or the Servicer, exercise its rights and remedies with respect to the Lockbox Accounts and Deposit Accounts under Sections 6.01 and 6.03, and (ii) if the Administrative Agent has taken dominion and control over the Lockbox Accounts pursuant to Section 6.01(a)(i), (caused by the occurrence and continuation of a Cash Management Event other than the events specified in clauses (e)(i) and (g) in the definition thereof), then the Administrative Agent may, without prior notice to the Seller or the Servicer, notify any Obligor under any Transferred Receivable or obligors under the Seller Assigned GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 42 Agreements of the assignment of such Transferred Receivables or Seller Assigned Agreements, as the case may be, to the Administrative Agent on behalf of the Purchasers hereunder and direct that payments of all amounts due or to become due to the Seller thereunder be made directly to the Administrative Agent or any servicer, collection agent or lockbox or other account designated by the Administrative Agent and, upon such notification and if a Termination Event has occurred and is continuing, at the sole cost and expense of the Seller and the Servicer, the Administrative Agent may enforce collection of any such Transferred Receivable or the Seller Assigned Agreements and adjust, settle or compromise the amount or payment thereof. (e) Performance of Seller Assigned Agreements. Each of the Seller and the Servicer shall (i) perform and observe in all material respects all the terms and provisions of the Seller Assigned Agreements to be performed or observed by it, maintain the Seller Assigned Agreements in full force and effect, enforce the Seller Assigned Agreements in accordance with their terms and take all action as may from time to time be requested by the Administrative Agent in order to accomplish the foregoing, and (ii) upon the request of and as directed by the Administrative Agent, make such demands and requests to any other party to the Seller Assigned Agreements as are permitted to be made by the Seller or the Servicer thereunder. Section 8.07. License for Use of Software and Other Intellectual Property. Unless expressly prohibited by the licensor thereof or any provision of applicable law, if any, the Seller hereby grants to the Administrative Agent on behalf of the Purchasers a license to use, without charge, the Seller's computer programs, software, printouts and other computer materials, technical knowledge or processes, data bases, materials, trademarks, registered trademarks, trademark applications, service marks, registered service marks, service mark applications, patents, patent applications, trade names, rights of use of any name, labels fictitious names, inventions, designs, trade secrets, goodwill, registrations, copyrights, copyright applications, permits, licenses, franchises, customer lists, credit files, correspondence, and advertising materials or any property of a similar nature, as it pertains to the Seller Collateral, or any rights to any of the foregoing, in the advertising for sale, and selling any of the Seller Collateral, or exercising of any other remedies hereto, and the Seller agrees that the Seller's rights under all licenses and franchise agreements shall inure to the Administrative Agent's benefit (on behalf of the Purchasers). Except upon the occurrence and continuation of a Termination Event, the Administrative Agent and the Purchasers agree not to use any such license without giving the Seller notice. ARTICLE IX. TERMINATION EVENTS Section 9.01. Termination Events. If any of the following events (each, a "Termination Event") shall occur (regardless of the reason therefor): (a) the Seller shall (i) fail to make any payment of any Seller Secured Obligation when due and payable and the same shall remain unremedied for two Business Days or more, (ii) fail to observe or perform any covenant or agreement contained in Sections 5.01(e), 5.01(g), 5.03(a) and 6.01 of this Agreement, or (iii) fail or neglect to perform, keep or observe any other provision of this Agreement or the other Related Documents (other than any provision GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 43 embodied in or covered by any other clause of this Section 9.01) and the same shall remain unremedied for two Business Days or more after written notice thereof shall have been given by the Administrative Agent to the Seller; (b) a default or breach shall occur under any agreement, document or instrument to which any Bergen Entity, the Seller or the Servicer is a party or by which any such Person or its property is bound that is not cured within any applicable grace period therefor, and such default or breach (i) involves the failure to make any payment when due in respect of any Debt (other than the Seller Secured Obligations) of any such Person which, except with respect to the Seller, is in excess of a principal amount of $25,000,000 in the aggregate, or (ii) causes or permits any holder of such Debt or a trustee or agent to cause, such Debt, or a portion thereof which, except with respect to the Seller, is in excess of a principal amount of $25,000,000 in the aggregate to become due prior to its stated maturity or prior to its regularly scheduled dates of payment; (c) a case or proceeding shall have been commenced against any Bergen Entity, any Significant Subsidiary, the Seller or the Servicer seeking a decree or order in respect of any such Person (i) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any such Person or for any substantial part of such Person's assets, or (iii) ordering the winding-up or liquidation of the affairs of any such Person; (d) any Bergen Entity, Significant Subsidiary, the Seller or the Servicer shall (i) file a petition seeking relief under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) consent or fail to object in a timely and appropriate manner to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any such Person or for any substantial part of such Person's assets, (iii) make an assignment for the benefit of creditors, or (iv) take any corporate action in furtherance of any of the foregoing; (e) (i) any Bergen Entity, the Seller or the Servicer generally does not pay its debts as such debts become due or admits in writing its inability to, or is generally unable to, pay its Debts as such Debts become due or (ii) the fair market value of the Originator's, the Servicer's or the Seller's liabilities exceeds the fair market value of its assets; (f) a final judgment or judgments for the payment of money in excess of $25,000,000 in the aggregate at any time outstanding shall be rendered against any Bergen Entity, any Affiliate of the Originator, or the Servicer and the same shall not, within 30 days after the entry thereof, have been discharged or execution thereof stayed or bonded pending appeal, or shall not have been discharged prior to the expiration of any such stay; (g) a judgment or order for the payment of money shall be rendered against the Seller and either (i) enforcement proceedings shall have been commenced upon any such judgment, or (ii) such judgment or order shall not have been vacated or dismissed within 30 days after such judgment or order is entered; GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 44 (h) (i) any information contained in any Investment Base Certificate is untrue or incorrect in any respect, or, any information given with respect to Reserves in the Investment Base Certificate is not made in good faith and is not based on reasonable estimates (which reasonability is determined as of the date of such Investment Base Certificate), or (ii) any representation or warranty of the Originator or the Seller herein or in any other Related Document or in any written statement, report, financial statement or certificate (other than an Investment Base Certificate) made or delivered by the Originator or the Seller to any Affected Party hereto or thereto is untrue or incorrect in any material respect as of the date when made or deemed made; provided that a breach of any representation, warranty or covenant related to the Receivables shall not be deemed a breach to the extent such Receivable has been adjusted in accordance with Section 3.2 of the Sale and Contribution Agreement; (i) any Governmental Authority (including the IRS or the PBGC) shall file notice of a Lien on any Receivables of the Originator or which otherwise materially adversely affects the financial condition of the Originator or the Parent's ability to perform as Servicer hereunder and (i) the amount secured by such Lien, as stated in such notice, is $5,000,000 or more or (ii) the amount secured by such Lien, as stated in such notice, is less than $5,000,000 and (A) such Lien has not been terminated, released or bonded within two (2) Business Days after the receipt of such notice by any Bergen Entity, provided, that any such bond shall effectively suspend such Governmental Authority's ability to enforce or execute on such Lien within ten (10) Business Days of receipt of such notice or (B) such Governmental Authority commences any enforcement action with respect to, or attempts to execute on, such Lien; (j) any Governmental Authority (including the IRS or the PBGC) shall file notice of a Lien with regard to any of the assets of the Seller; (k) there shall have occurred any event which materially adversely impairs in the reasonable judgment of the Administrative Agent the ability of the Servicer to originate Transferred Receivables of a credit quality, taken as a whole, which are at least of the credit quality of the Transferred Receivables, taken as a whole, in the initial Purchase; (l) a Material Adverse Effect has occurred since the Closing Date; (m) (i) the Originator shall fail to observe or perform any covenant or agreement contained in Sections 6.1(g), (h) or (i) of the Sale and Contribution Agreement, (ii) a default or breach shall occur under any provision of Sections 7.1 or 8.6 of the Sale and Contribution Agreement and the same shall remain unremedied for two Business Days or more after the occurrence thereof, (iii) a default or breach shall occur under any other provision of the Sale and Contribution Agreement and the same shall remain unremedied for five Business Days or more after written notice thereof shall have been given by the Administrative Agent to the Seller or (iv) the Sale and Contribution Agreement shall for any reason cease to evidence the transfer to the Seller of the legal and equitable title to, and ownership of, the Transferred Receivables; (n) except as otherwise expressly provided herein, any Lockbox Account Agreement, Deposit Account Agreement or the Sale and Contribution Agreement shall have GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 45 been modified, amended or terminated without the prior written consent of the Purchasers and the Administrative Agent; (o) an Event of Servicer Termination shall have occurred; (p) with respect to the Transferred Receivables, (i) prior to the Purchase of Purchaser Interests therein hereunder, the Seller shall cease to hold valid and properly perfected title to and sole record and beneficial ownership in such Transferred Receivables or (ii) after the Purchase of Purchaser Interests hereunder, the Administrative Agent (on behalf of the Purchasers) shall cease to hold either (A) valid and properly perfected title to and sole record and beneficial ownership in such Transferred Receivables or (B) a first priority, perfected Lien in such Transferred Receivables and the Seller Collateral; (q) the Parent shall fail to own and control, directly or indirectly, 100% of the outstanding voting stock of the Seller and the Originator; (r) any of the following events shall occur with respect to any Pension Plan: (i) the institution of any steps by the Originator, any of its ERISA Affiliates or any other Person to terminate a Pension Plan if, as a result of such termination, the Originator or any ERISA Affiliate could be required to make a contribution to such Pension Plan, or could reasonably be expected to incur a liability or obligation to such Pension Plan, in excess of $5,000,000 in the aggregate for all such contributions, liabilities and obligations; or (ii) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; (s) the Seller shall amend its bylaws or its certificate or articles of incorporation without the express prior written consent of the Purchasers and the Administrative Agent; (t) BHI shall have received an Election Notice pursuant to Section 2.1 of the Sale and Contribution Agreement; (u) (i) the Default Ratio shall exceed 6.75%; (ii) the Delinquency Ratio shall exceed 3.75%; (iii) the Three Month Rolling Dilution Ratio shall exceed 6.0%; (iv) the Receivables Collection Turnover shall exceed 20 days; or (v) the Seller's Net Worth Percentage is less than 5.0%; (v) any material provision of any Related Document shall for any reason cease to be valid, binding and enforceable in accordance with its terms (or any Bergen Entity or any party to such document or the Seller shall challenge the enforceability of any Related Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Related Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 46 (w) any "Termination Event" or "Servicing Default" shall occur under the ARFC/JPMorgan Chase Purchase Agreement; (x) AmeriSourceBergen Drug or any of its Consolidated Subsidiaries shall fail to pay any Debt in excess of $10,000,000 of AmerisourceBergen Drug or any of its Consolidated Subsidiaries, as the case may be, or any interest or premium on such Debt, in either case, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other default under any agreement or instrument relating to any such Debt or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or a final court decision of $10,000,000 or more shall be rendered against AmerisourceBergen Drug or any of its Consolidated Subsidiaries and (i) such amount remains unpaid and (ii) AmerisourceBergen Drug or the relevant Consolidated Subsidiary does not, in good faith, contest such decision within the relevant statutory period; (y) a case or proceeding shall have been commenced against ARFC seeking a decree or order in respect of ARFC (i) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for ARFC or for any substantial part of ARFC's assets, or (iii) ordering the winding-up or liquidation of the affairs of ARFC; (z) ARFC shall (i) file a petition seeking relief under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) consent or fail to object in a timely and appropriate manner to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for ARFC or for any substantial part of ARFC's assets, (iii) make an assignment for the benefit of creditors, or (iv) take any corporate action in furtherance of any of the foregoing; or (aa) any breach by JPMorgan Chase shall have occurred and be continuing under the Third Amendment Intercreditor Agreement; then, and in any such event, the Administrative Agent may, by notice to the Seller, declare the Facility Termination Date to have occurred without demand, protest or further notice of any kind, all of which are hereby expressly waived by the Seller; provided, that the Facility Termination Date shall automatically occur (i) upon the occurrence of any of the Termination Events described in Sections 9.01(c), (d), (e), (t), (y) or (z) or (ii) three days after the occurrence of the Termination Event described in Section 9.01(a)(i) if the same shall not have been remedied by such time, in each case without demand, protest or any notice of any kind, all of which are hereby expressly waived by the Seller. Section 9.02. Events of Servicer Termination. If any of the following events (each, an "Event of Servicer Termination") shall occur (regardless of the reason therefor): GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 47 (a) the Servicer shall fail or neglect to perform, keep or observe any provision of this Agreement or the other Related Documents (whether in its capacity as the Originator or the Servicer) and the same shall remain unremedied for three (3) Business Days or more after written notice thereof shall have been given by the Purchasers, the Purchaser Agents or the Administrative Agent to the Servicer; (b) any representation or warranty of the Servicer herein or in any other Related Document or in any written statement, report, financial statement or certificate made or delivered by the Servicer to the Purchasers, the Purchaser Agents or the Administrative Agent hereto or thereto is untrue or incorrect in any material respect as of the date when made or deemed made; provided that a breach of any representation, warranty or covenant related to the Receivables shall not be deemed a breach to the extent such Receivable has been adjusted in accordance with Section 3.2 of the Sale and Contribution Agreement; (c) a Termination Event shall have occurred and is continuing or this Agreement shall have been terminated; (d) the Seller's board of directors shall have determined that it is in the best interests of the Seller to terminate the duties of the Servicer hereunder and shall have given the Servicer, the Purchasers, the Purchaser Agents and the Administrative Agent at least 30 days' written notice thereof; (e) (i) the Servicer shall assign or purport to assign any of its obligations hereunder or under the Sale and Contribution Agreement without the prior written consent of the Administrative Agent and the Purchaser Agents or (ii) the Administrative Agent shall have determined (A) that any event or condition that materially adversely affects the ability of the Servicer to collect the Transferred Receivables, taken as a whole, or to otherwise perform hereunder has occurred or (B) in its reasonable judgment that a material deterioration has taken place in the quality of servicing of Transferred Receivables or other Receivables serviced by the Servicer that is material; or (f) there shall have occurred any event which materially and adversely impairs in the reasonable judgment of the Administrative Agent the ability of the Servicer to distinguish between BH2 Designated Receivables and ARFC Designated Receivables or to segregate collections relating to ARFC Designated Receivables from Collections relating to BH2 Designated Receivables; then, and in any such event, any Purchaser may, by delivery of a Servicer Termination Notice to the Seller and the Servicer, terminate the servicing responsibilities of the Servicer hereunder, without demand, protest or further notice of any kind, all of which are hereby waived by the Servicer. Upon the delivery of any such notice, all authority and power of the Servicer under this Agreement and the Sale and Contribution Agreement shall pass to and be vested in the Successor Servicer acting pursuant to Section 11.02; provided, that notwithstanding anything to the contrary herein, the Servicer agrees to continue to follow the procedures set forth in Section 7.02 with respect to Collections on the Transferred Receivables until a Successor Servicer has assumed the responsibilities and obligations of the Servicer in accordance with Section 11.02. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 48 ARTICLE X. REMEDIES Section 10.01. Actions Upon Termination Event. If any Termination Event shall have occurred and be continuing and the Administrative Agent shall have declared the Facility Termination Date to have occurred or the Facility Termination Date shall be deemed to have occurred pursuant to Section 9.01, then the Administrative Agent may or, at the direction of the Requisite Purchasers, shall exercise in respect of the Seller Collateral, in addition to any and all other rights and remedies granted to it hereunder, under any other Related Document or under any other instrument or agreement securing, evidencing or relating to the Seller Secured Obligations or otherwise available to it, all of the rights and remedies of a secured party upon default under the UCC (such rights and remedies to be cumulative and nonexclusive), and, in addition, may, or at the direction of the Requisite Purchasers shall, take the following actions: (a) The Administrative Agent may, without notice to the Seller except as required by law and at any time or from time to time, charge, offset or otherwise apply amounts payable to the Seller from the Agent's Account, any Lockbox Account, Deposit Account, the Reserve Account or any part of such accounts in accordance with the priorities set forth in Sections 6.06 and 6.08 against all or any part of the Seller Secured Obligations. (b) The Administrative Agent may, without notice except as specified below, solicit and, with the consent of the Purchasers, accept bids for and sell the Seller Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or any of the Purchasers', or Administrative Agent's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Administrative Agent may deem commercially reasonable. The Administrative Agent shall have the right to conduct such sales on the Seller's premises or elsewhere and shall have the right to use any of the Seller's premises without charge for such sales at such time or times as the Administrative Agent deems necessary or advisable. The Seller agrees that, to the extent notice of sale shall be required by law, at least ten Business Days' notice to the Seller of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Administrative Agent shall not be obligated to make any sale of Seller Collateral regardless of notice of sale having been given. The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed for such sale, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Every such sale shall operate to divest all right, title, interest, claim and demand whatsoever of the Seller in and to the Seller Collateral so sold, and shall be a perpetual bar, both at law and in equity, against the Originator, the Seller, any Person claiming the Seller Collateral sold through the Originator or the Seller, and their respective successors or assigns. The Administrative Agent shall deposit the net proceeds of any such sale in the Agent's Account and such proceeds shall be disbursed in accordance with Section 6.06. (c) Upon the completion of any sale under Section 10.01(b), the Seller or the Servicer shall deliver or cause to be delivered to the purchaser or purchasers at such sale on the date thereof, or within a reasonable time thereafter if it shall be impracticable to make immediate delivery, all of the Seller Collateral sold on such date, but in any event full title and right of GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 49 possession to such property shall vest in such purchaser or purchasers upon the completion of such sale. Nevertheless, if so requested by the Administrative Agent or by any such purchaser, the Seller shall confirm any such sale or transfer by executing and delivering to such purchaser all proper instruments of conveyance and transfer and releases as may be designated in any such request. (d) At any sale under Section 10.01(b), the Purchasers, the Purchaser Agents, the Administrative Agent, the Redwood Secured Parties or any other Program Support Provider may bid for and purchase the property offered for sale, and upon compliance with the terms of sale, may hold, retain and dispose of such property without further accountability therefor. (e) The Administrative Agent may exercise, at the sole cost and expense of the Seller, any and all rights and remedies of the Seller under or in connection with the Seller Assigned Agreements or the other Seller Collateral, including any and all rights of the Seller to demand or otherwise require payment of any amount under, or performance of any provisions of, the Seller Assigned Agreements. Section 10.02. Exercise of Remedies. No failure or delay on the part of the Administrative Agent in exercising any right, power or privilege under this Agreement and no course of dealing between the Originator, the Seller, or the Servicer, on the one hand, and the Administrative Agent, on the other hand, shall operate as a waiver of such right, power or privilege, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. The rights and remedies under this Agreement are cumulative, may be exercised singly or concurrently, and are not exclusive of any rights or remedies that the Administrative Agent would otherwise have at law or in equity. No notice to or demand on any party hereto shall entitle such party to any other or further notice or demand in similar or other circumstances, or constitute a waiver of the right of the party providing such notice or making such demand to any other or further action in any circumstances without notice or demand. Section 10.03. Power of Attorney. On the Closing Date, each of the Seller and the Servicer shall execute and deliver a power of attorney substantially in the form attached hereto as Exhibit 10.03 (each, a "Power of Attorney"). The power of attorney granted pursuant to each Power of Attorney is a power coupled with an interest and shall be irrevocable until all of the Seller Secured Obligations are indefeasibly paid or otherwise satisfied in full. The powers conferred on the Administrative Agent under each Power of Attorney are solely to protect the Purchaser's Liens upon and interests in the Seller Collateral and shall not impose any duty upon the Administrative Agent to exercise any such powers. The Administrative Agent shall not be accountable for any amount other than amounts that it actually receives as a result of the exercise of such powers and none of the Administrative Agent's officers, directors, employees, agents or representatives shall be responsible to the Seller or the Servicer for any act or failure to act, except in respect of damages attributable solely to their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 50 Section 10.04. Continuing Security Interest. This Agreement shall create a continuing Lien in the Seller Collateral until the conditions to the release of the Liens of the Purchasers and the Administrative Agent thereon set forth in Section 6.08(b) have been satisfied. ARTICLE XI. SUCCESSOR SERVICER PROVISIONS Section 11.01. Servicer Not to Resign. The Servicer shall not resign from the obligations and duties hereby imposed on it except upon a determination that (a) (i) the performance of its duties hereunder has become impermissible under applicable law or regulation and (ii) there is no reasonable action that the Servicer could take to make the performance of its duties hereunder become permissible under applicable law or (b) the Servicing Fee has not been paid within 90 days of the date due. Any such determination shall (i) with respect to clause (a) above, be evidenced by an opinion of counsel to such effect and (ii) with respect to clause (b) above, be evidenced by an Officer's Certificate to such effect, in each case delivered to the Purchasers, the Purchaser Agents and the Administrative Agent. No such resignation shall become effective until a Successor Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 11.02. Section 11.02. Appointment of the Successor Servicer. In connection with the termination of the Servicer's responsibilities or the resignation by the Servicer under this Agreement pursuant to Sections 9.02 or 11.01, the Administrative Agent shall (a) succeed to and assume all of the Servicer's responsibilities, rights, duties and obligations as Servicer (but not in any other capacity, including specifically not the obligations of the Servicer set forth in Section 12.02) under this Agreement (and except that the Administrative Agent makes no representations and warranties pursuant to Section 4.02) and (b) may at any time appoint a successor servicer to the Servicer that shall be acceptable to the Administrative Agent and the Purchaser Agents and shall have satisfied the Rating Agency Condition in respect thereof (and, if such resignation is pursuant to Section 11.01(a) and no Incipient Termination Event or Termination Event has occurred and is continuing, subject to the consent of the Seller, not to be unreasonably withheld) and shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement (the Administrative Agent, in such capacity, or such successor servicer being referred to as the "Successor Servicer"); provided, that the Successor Servicer shall have no responsibility for any actions of the Servicer prior to the date of its appointment or assumption of duties as Successor Servicer. In selecting a Successor Servicer, the Administrative Agent may obtain bids from any potential Successor Servicer and may agree to any bid it deems appropriate. The Successor Servicer shall accept its appointment by executing, acknowledging and delivering to the Administrative Agent and the Purchaser Agents an instrument in form and substance acceptable to the Administrative Agent. Section 11.03. Duties of the Servicer. The Servicer covenants and agrees that, following the appointment of, or assumption of duties by, a Successor Servicer: (a) The Servicer shall terminate its activities as Servicer hereunder in a manner that facilitates the transfer of servicing duties to the Successor Servicer and is otherwise acceptable to each Purchaser and the Administrative Agent and, without limiting the generality GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 51 of the foregoing, shall timely deliver (i) any funds to the Administrative Agent that were required to be remitted to the Administrative Agent for deposit in the Agent's Account and (ii) all Servicing Records and other information with respect to the Transferred Receivables to the Successor Servicer at a place selected by the Successor Servicer. The Servicer shall account for all funds and shall execute and deliver such instruments and do such other things as may be required to vest and confirm in the Successor Servicer all rights, powers, duties, responsibilities, obligations and liabilities of the Servicer. (b) The Servicer shall terminate each existing Sub-Servicing Agreement and the Successor Servicer shall not be deemed to have assumed any of the Servicer's interests therein or to have replaced the Servicer as a party thereto. Section 11.04. Effect of Termination or Resignation. Any termination of or resignation by the Servicer hereunder shall not affect any claims that the Seller, the Purchasers, the Purchaser Agents, or the Administrative Agent may have against the Servicer for events or actions taken or not taken by the Servicer arising prior to any such termination or resignation. ARTICLE XII. INDEMNIFICATION Section 12.01. Indemnities by the Seller. (a) Without limiting any other rights that the Purchasers, the Administrative Agent, the Liquidity Agents, the Liquidity Lenders, any other Program Support Providers, or any of their respective officers, directors, employees, attorneys, agents or representatives (each, an "Indemnified Person") may have hereunder or under applicable law, the Seller hereby agrees to indemnify and hold harmless each Indemnified Person from and against any and all Indemnified Amounts that may be claimed or asserted against or incurred by any such Indemnified Person in connection with or arising out of the transactions contemplated under this Agreement or under any other Related Document or any actions or failures to act in connection therewith, including any and all reasonable legal costs and expenses arising out of or incurred in connection with disputes between or among any parties to any of the Related Documents; provided, that the Seller shall not be liable for any indemnification to an Indemnified Person to the extent that any such Indemnified Amount (x) results solely from (i) with respect to any Indemnified Person other than the Conduit Purchasers, such Indemnified Person's gross negligence or (ii) with respect to any Indemnified Person, such Indemnified Person's willful misconduct, in each case as finally determined by a court of competent jurisdiction or (y) constitutes recourse for uncollectible or uncollected Transferred Receivables. Without limiting the generality of the foregoing, the Seller shall pay on demand to each Indemnified Person any and all Indemnified Amounts relating to or resulting from: (i) reliance on any representation or warranty made or deemed made by the Seller (or any of its officers) under or in connection with this Agreement or any other Related Document or on any other information delivered by the Seller pursuant hereto or thereto that shall have been incorrect in any material respect when made or deemed made or delivered; GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 52 (ii) the failure by the Seller to comply with any term, provision or covenant contained in this Agreement, any other Related Document or any agreement executed in connection herewith or therewith, any applicable law, rule or regulation with respect to any Transferred Receivable or the Contract therefor, or the nonconformity of any Transferred Receivable or the Contract therefor with any such applicable law, rule or regulation; or (iii) (A) the failure to vest and maintain vested in the Seller valid and properly perfected title to and sole record and beneficial ownership of the Receivables that constitute Transferred Receivables, together with all Collections in respect thereof, free and clear of any Adverse Claim, (B) the failure to vest and maintain vested in the Purchasers valid and properly perfected title and sole record and beneficial ownership of the Purchaser Interests, (C) the failure to maintain or transfer to the Purchasers a first, priority, perfected Lien in the Seller Collateral and (D) the failure to maintain or transfer to the Administrative Agent a first priority, perfected Lien therein; (iv) any dispute, claim, offset or defense of any Obligor (other than its discharge in bankruptcy to the payment of any Transferred Receivable that is the subject of a Purchase hereunder (including a defense based on such Transferred Receivable or the Contract therefor not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services giving rise to such Transferred Receivable or the furnishing of or failure to furnish such merchandise or services or relating to collection activities with respect to such Transferred Receivable (if such collection activities were performed by any Bergen Entity or any of its Affiliates acting as the Servicer), except to the extent that such dispute, claim, offset or defense results solely from any action or inaction on the part of any Indemnified Person; (v) any products liability claim or other claim arising out of or in connection with merchandise, insurance or services that is the subject of any Contract with respect to any Transferred Receivable; (vi) the commingling of Collections with respect to Transferred Receivables by the Seller at any time with its other funds or the funds of any other Person; (vii) any failure by the Seller to cause the filing of, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or any other applicable laws with respect to any Transferred Receivable that is the subject of a Purchase hereunder, whether at the time of any such Purchase or at any subsequent time except to the extent such delay or failure is caused solely by the Administrative Agent; or (viii) any failure of a Bank to comply with the terms of the applicable Lockbox Account Agreement or Deposit Account Agreement. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 53 (b) Any Indemnified Amounts subject to the indemnification provisions of this Section 12.01 not paid in accordance with Article VI shall be paid by the Seller to the Indemnified Person entitled thereto within five Business Days following demand therefor. Section 12.02. Indemnities by the Servicer. (a) Without limiting any other rights that an Indemnified Person may have hereunder or under applicable law, the Servicer hereby agrees to indemnify and hold harmless each Indemnified Person from and against any and all Indemnified Amounts that may be claimed or asserted against or incurred by any such Indemnified Person in connection with or arising out of any breach by the Servicer (solely in its capacity as Servicer) of its obligations hereunder or under any other Related Document; provided, that the Servicer shall not be liable for any indemnification to an Indemnified Person to the extent that any such Indemnified Amount (x) results solely from (i) with respect to any Indemnified Person other than the Conduit Purchaser, such Indemnified Person's gross negligence or (ii) with respect to any Indemnified Person, such Indemnified Person's willful misconduct, in each case as finally determined by a court of competent jurisdiction, or (y) constitutes recourse for uncollectible or uncollected Transferred Receivables. Without limiting the generality of the foregoing, the Servicer shall pay on demand to each Indemnified Person any and all Indemnified Amounts relating to or resulting from: (i) reliance on any representation or warranty made or deemed made by the Servicer (or any of its officers) (solely in its capacity as Servicer) under or in connection with this Agreement or any other Related Document or on any other information delivered by the Servicer (solely in its capacity as Servicer) pursuant hereto or thereto that shall have been incorrect in any material respect when made or deemed made or delivered; (ii) the failure by the Servicer (solely in its capacity as Servicer) to comply with any term, provision or covenant contained in this Agreement, any other Related Document or any agreement executed in connection herewith or therewith, any applicable law, rule or regulation with respect to the servicing of any Transferred Receivable; (iii) the imposition of any Adverse Claim with respect to any Transferred Receivable or the Seller Collateral as a result of any action taken by the Servicer hereunder; or (iv) the commingling of Collections with respect to Transferred Receivables by the Servicer at any time with its other funds or the funds of any other Person. (b) Any Indemnified Amounts subject to the indemnification provisions of this Section 12.02 not paid in accordance with Article VI shall be paid by the Servicer to the Indemnified Person entitled thereto within five Business Days following demand therefor. Section 12.03. Limitation of Damages; Indemnified Persons. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 54 SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER. ARTICLE XIII. AGENTS Section 13.01. Authorization and Action. (a) Each Purchaser and Purchaser Agent hereby irrevocably appoints GE Capital as the Administrative Agent, to take such action and carry out such functions under this Agreement as are authorized to be performed by the Administrative Agent pursuant to the terms of this Agreement or any other Related Document or otherwise contemplated hereby or thereby or are reasonably incidental thereto; provided, that the duties of the Administrative Agent hereunder shall be determined solely by the express provisions of this Agreement, and, other than the duties set forth in Section 13.02, any permissive right of the Administrative Agent hereunder shall not be construed as a duty. (b) Each Purchaser hereby irrevocably appoints the respective Person identified as the Purchaser Agent for such Purchaser's Purchaser Group on the signature pages to this Agreement, or on the signature pages to such Purchaser's Assignment Agreement or RPSA Supplement Agreement, as the case may be, to take such action and carry out such functions under this Agreement as are authorized to be performed by a Purchaser Agent pursuant to the terms of this Agreement or any other Related Document or otherwise contemplated hereby or thereby or are reasonably incidental thereto; provided, that the duties of a Purchaser Agent hereunder shall be determined solely by the express provisions of this Agreement, and any permissive rights of the Purchaser Agents hereunder shall not be construed as a duty. Section 13.02. Reliance. (a) None of the Administrative Agent, any of its Affiliates or any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or the other Related Documents, except for damages solely caused by its or their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Without limiting the generality of the foregoing, and notwithstanding any term or provision hereof to the contrary, the Seller, the Servicer, the Purchaser Agents, the Conduit Purchasers and the Committed Purchasers hereby acknowledge and agree that the Administrative Agent (i) acts as agent hereunder for the Conduit Purchasers, the Committed Purchasers and the Purchaser Agents and has no duties or obligations to, shall incur no liabilities or obligations to, and does not act as an agent in any capacity for, the Seller (other than, with respect to the Administrative Agent, under the Power of Attorney with respect to remedial actions), the Servicer or the Originator, (ii) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 55 advice of such counsel, accountants or experts, (iii) makes no representation or warranty hereunder to any Affected Party and shall not be responsible to any such Person for any statements, representations or warranties made in or in connection with this Agreement or the other Related Documents, (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement, or the other Related Documents on the part of the Seller, the Servicer, the Purchaser Agents, the Conduit Purchasers or the Committed Purchasers or to inspect the property (including the books and records) of the Seller, the Servicer, the Purchaser Agents, the Conduit Purchasers or the Committed Purchasers, (v) shall not be responsible to the Seller, the Servicer, any Purchaser Agent or any Purchaser for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Related Documents or any other instrument or document furnished pursuant hereto or thereto, (vi) shall incur no liability under or in respect of this Agreement or the other Related Documents by acting upon any notice, consent, certificate or other instrument or writing believed by it to be genuine and signed, sent or communicated by the proper party or parties and (vii) shall not be bound to make any investigation into the facts or matters stated in any notice or other communication hereunder and may rely on the accuracy of such facts or matters. Notwithstanding the foregoing, the Administrative Agent acknowledges that it has a duty to transfer funds between and among the Accounts and the Agent's Account, and make investments of funds on deposit in the Reserve Account, in accordance with Article VI and the instructions of the Servicer. (b) None of the Purchaser Agents, any of their respective Affiliates or any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or the other Related Documents, except for damages solely caused by its or their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Without limiting the generality of the foregoing, and notwithstanding any term or provision hereof to the contrary, the Seller, the Servicer, the Administrative Agent, the Purchaser Agents, the Conduit Purchasers and the Committed Purchasers hereby acknowledge and agree that each Purchaser Agent acts as agent hereunder for its related Conduit Purchasers and Committed Purchasers and has no duties or obligations to, shall incur no liabilities or obligations to, and does not act as an agent in any capacity for, the Seller, the Servicer, the Originator, any Purchaser other than its Related Purchasers, any other Purchaser Agent or the Administrative Agent. (c) Unless otherwise specified in particular provisions of this Agreement, each Purchaser Agent and the Administrative Agent shall in all cases be fully justified in failing or refusing to take any action under any Related Document unless it shall first receive such advise or concurrence of all or any of the Purchasers (or in the case of any Purchaser Agent, the Related Purchasers having a majority of their Group Commitment), and assurance of its indemnification, as it deems appropriate. Unless otherwise specified in particular provisions of this Agreement, the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under and as permitted by this Agreement in accordance with the request of the Requisite Purchasers, and such request and any action taken or failure to act pursuant thereto shall be binding upon all Purchasers, the Administrative Agent and the Purchaser Agents. The Purchasers within each Purchaser Group with a majority of the Group Commitment of such Purchaser Group shall be entitled to request or direct the related Purchaser Agent to take action, or refrain from taking action, under and as permitted by this Agreement on behalf of such GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 56 Purchasers. Such Purchaser Agent shall in all cases be fully protected in acting, or refraining from acting, under this Agreement in accordance with a request of such majority Purchasers, and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Purchaser Agent's Related Purchasers. Section 13.03. Notice of Termination Events. None of the Purchaser Agents nor the Administrative Agent shall be deemed to have knowledge or notice of the occurrence of any Termination Event or Incipient Termination Event unless such Person has received notice from any Purchaser, Purchaser Agent, the Servicer or the Seller stating that a Termination Event or Incipient Termination Event has occurred hereunder and describing such Termination Event or Incipient Termination Event. In the event that the Administrative Agent receives a notice, it shall promptly give notice thereof to each Purchaser Agent whereupon each such Purchaser Agent shall promptly give notice thereof to its Related Purchasers. In the event that a Purchaser Agent receives such a notice (other than from the Administrative Agent), it shall promptly given notice thereof to the Administrative Agent and to its Related Purchasers. The Administrative Agent shall (a) to the extent so directed in writing by any Purchaser upon the occurrence and during the continuation of a Termination Event, declare the Facility Termination Date to have occurred, and (b) take such other action concerning a Termination Event or Incipient Termination Event as may be directed by the Requisite Purchasers, but until the Administrative Agent receives such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, as the Administrative Agent deems advisable and in the best interests of the Purchasers and Purchaser Agents. Section 13.04. Nonreliance on Administrative Agent, Purchaser Agents, Other Purchasers. Each Purchaser expressly acknowledges that none of the Administrative Agent, the Purchaser Agents nor any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent or any Purchaser Agent hereafter taken, including any review of the affairs of the Seller, the Servicer or the Originator shall be deemed to constitute any representation or warranty by the Administrative Agent or such Purchaser Agent. Each Purchaser represents and warrants to the Administrative Agent and the Purchaser Agents that, independently and without reliance upon the Administrative Agent, the Purchaser Agents, 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 the Seller, the Servicer, the Originator, and the Receivables and its own decision to enter into this Agreement and to take, or omit, action under any Related Document. Except for items specifically required to be delivered hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Purchaser Agent with any information concerning the Seller, the Servicer, the Originator or any of their respective Affiliates that comes into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. Section 13.05. Indemnification. Each Purchaser Group hereby agrees to indemnify and hold harmless the Administrative Agent (solely in its capacity as Administrative Agent) and its officers, directors, employees, attorneys, agents or representatives (to the extent such amounts are not reimbursed by the Seller, the Servicer or the Originator, and without limiting the obligations of the Seller, the Servicer or the Originator to do so), ratably, in GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 57 accordance with its Pro Rata Share, from and against any and all Indemnified Amounts (including amounts payable under Section 14.04) that may be claimed or asserted against or incurred by any such Person in connection with or arising out of transactions contemplated under this Agreement or under any other Related Document or any actions or failures to act in connection therewith, including any and all reasonable legal costs and expenses arising out of or incurred in connection with disputes between or among any parties to any of the Related Documents; provided that the Purchaser Groups shall not be liable for any indemnification to any such Person to the extent that any such Indemnified Amount results solely from such Person's gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Section 13.06. Successor Agents. The Administrative Agent may, upon thirty days notice to the Seller, each Purchaser and each Purchaser Agent, resign as Administrative Agent. Such resignation shall not become effective until a successor agent is appointed by the Majority Purchasers and has accepted such appointment. Upon such acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Related Documents. After any retiring Administrative Agent's resignation hereunder, the provisions of Article XII and Article XIII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent. Each Purchaser Agent and its Related Purchasers shall agree among themselves as to the circumstances and procedures for removal, resignation and replacement of the Purchaser Agents. Section 13.07. GE Capital and Affiliates; Purchaser Agent and Affiliates. GE Capital and its Affiliates and each Purchaser Agent and its Affiliates may generally engage in any kind of business with any Obligor, the Originator, the Seller, the Servicer, the Administrative Agent, the Conduit Purchasers or the Committed Purchasers, the Purchaser Agents, any of their respective Affiliates and any Person who may do business with or own securities of such Persons or any of their respective Affiliates, all as if GE Capital were not the Administrative Agent and each Person who is a Purchaser Agent hereunder were not a Purchaser Agent and without the duty to account therefor to any Obligor, the Originator, the Seller, the Servicer, the Administrative Agent, any Purchaser Agent, any Purchaser or any other Person. ARTICLE XIV. MISCELLANEOUS Section 14.01. Notices. Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other parties, or whenever any of the parties desires to give or serve upon any other parties any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and three Business Days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon transmission, when sent by facsimile (with such facsimile promptly confirmed GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 58 by delivery of a copy by personal delivery or United States Mail as otherwise provided in this Section 14.01), (c) one Business Day after deposit with a reputable overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or facsimile number set forth under its name on the signature page hereof or to such other address (or facsimile number) as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to any Person (other than any Conduit Purchaser, Committed Purchaser, Purchaser Agent or the Administrative Agent) designated in any written notice provided hereunder to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration or other communication. Notwithstanding the foregoing, whenever it is provided herein that a notice is to be given to any other party hereto by a specific time, such notice shall only be effective if actually received by such party prior to such time, and if such notice is received after such time or on a day other than a Business Day, such notice shall only be effective on the immediately succeeding Business Day. Section 14.02. Binding Effect; Assignability. (a) General. This Agreement shall be binding upon and inure to the benefit of the Seller, the Servicer, the Conduit Purchasers, the Committed Purchasers, the Purchaser Agents and the Administrative Agent and their respective successors and permitted assigns. Neither the Seller nor the Servicer may assign, transfer, hypothecate or otherwise convey any of their respective rights or obligations hereunder or interests herein without the express prior written consent of the Conduit Purchasers, the Committed Purchasers, the Purchaser Agents and the Administrative Agent and unless the Rating Agency Condition shall have been satisfied with respect to any such assignment. Any such purported assignment, transfer, hypothecation or other conveyance by the Seller or the Servicer without the prior express written consent of the Conduit Purchasers, the Committed Purchasers, the Purchaser Agents and the Administrative Agent shall be void. (b) Assignments by the Committed Purchasers. (i) Any Committed Purchaser may, at any time, assign any of its rights and obligations hereunder or interests herein to any Person pursuant to an Assignment Agreement substantially in the form of Exhibit 14.02(b) hereto with any changes as have been approved by the parties thereto, and, as applicable, a supplement to the relevant Program Documents in form satisfactory to the applicable Purchasers and the related Purchaser Agent; provided, that (A) any assignment shall be an assignment of an identical percentage of the assignor Committed Purchaser's Capital Investment and its Commitment hereunder and, as applicable, under the relevant Program Documents; (B) any assignment shall not be less than $25,000,000; (C) prior to the occurrence of a Termination Event, such assignment is subject to the prior written consent of the Seller as to the assignee Committed Purchaser (which consent will not be unreasonably withheld); and (D) the assignee Committed Purchaser has (1) in the case of the assignor Committed Purchaser who is GECC, a short-term debt rating of at least A-1+ by S&P and P-1 by Moody's and (2) in the case of all other assignor Committed Purchasers, a short-term GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 59 debt rating of at least A-1 by S&P and P-1 by Moody's. In connection with any Assignment Agreement entered into by a Committed Purchaser in accordance with this Section, the Conduit Purchaser related to such assignor Committed Purchaser shall be permitted to assign all or a portion of its rights and obligations under this Agreement to the commercial paper conduit related to such assignee Committed Purchaser pursuant to Section 14.02(c)(i). Any such assignee Committed Purchaser may further assign at any time its rights and obligations hereunder or interests herein (including any rights it may have in and to the Purchaser Interests and the Seller Collateral and any rights it may have to exercise remedies hereunder), in each case without the consent of the Originator or the Servicer but subject to the requirements of this Agreement. Notwithstanding the foregoing, the Committed Purchaser who is GE Capital may not assign its rights and obligations hereunder or interests herein to the extent that such assignment would reduce such Committed Purchaser's Commitment hereunder below $200,000,000. Upon execution and delivery to the Administrative Agent and to the related Conduit Purchaser of the Assignment Agreement and, as applicable, to the relevant Purchaser Agent of the supplement to the relevant Program Documents, and payment by the assignee Committed Purchaser to the assignor Committed Purchaser of the agreed purchase price, if any, to the extent of such assignment such assignor Committed Purchaser shall be released from its future obligations hereunder and, as applicable, under the relevant Program Documents, and such assignee Committed Purchaser shall for all purposes be a Committed Purchaser, as applicable, and shall have all the rights and obligations of such a Purchaser hereunder to the same extent as if it were an original party hereto and, as applicable, to the relevant Program Documents. The Seller acknowledges and agrees that, upon any such assignment, the assignee Committed Purchaser thereof may enforce directly, without joinder of any Purchaser, all of the obligations of the Seller hereunder. Any Assignment Agreement shall be an amendment hereof only to the extent necessary to reflect the addition of the assignee Committed Purchaser as a Committed Purchaser, any resulting adjustment of the assignor Committed Purchaser's Commitment and Capital Investment, as applicable, and any terms specific to such assignee Committed Purchaser or its Purchaser Group as set forth on Schedule I to the Assignment Agreement. (ii) If any Committed Purchaser shall (A) petition the Seller for any amounts under Section 2.10 or (B) cease to have a short-term debt rating of the level required by such Committed Purchaser's securitization program (as used in this Section, a "replaced Committed Purchaser"), the related Purchaser Agent or the Administrative Agent may designate a replacement financial institution (as used in this Section, a "replacement Committed Purchaser"), to which such replaced Committed Purchaser shall, subject to its receipt of an amount equal to the aggregate outstanding principal balance of its Capital Investment and accrued and unpaid Daily Yield thereon (and, if applicable, its receipt of all amounts claimed under Section 2.10) promptly assign all of its rights, obligations and Commitment hereunder, together with all of its right, title and interest in, to, and under the Purchaser Interest allocable to it, to the replacement Committed Purchaser in accordance with Section 14.02(b) above. (c) Assignments by the Conduit Purchasers. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 60 (i) Any Conduit Purchaser may, at any time, assign any of its rights and obligations hereunder or interests herein to any Person pursuant to an Assignment Agreement substantially in the form of Exhibit 14.02(b) hereto with any changes as have been approved by the parties thereto, and, as applicable, a supplement to the relevant Program Documents in form satisfactory to the applicable Purchasers and their related Purchaser Agent; provided, that (A) any assignment shall not be less than $25,000,000; (B) prior to the occurrence of a Termination Event, such assignment is subject to the prior written consent of the Seller as to the assignee Conduit Purchaser (which consent will not be unreasonably withheld); and (C) the assignee Conduit Purchaser has a short-term debt rating of at least A-1 by S&P and P-1 by Moody's. Any such assignee Conduit Purchaser may further assign at any time its rights and obligations hereunder or interests herein (including any rights it may have in and to the Purchaser Interests and the Seller Collateral and any rights it may have to exercise remedies hereunder), in each case without the consent of the Originator or the Servicer but subject to the requirements of this Agreement. Upon execution and delivery to the Administrative Agent and to the related Committed Purchaser of the Assignment Agreement and, as applicable, to the relevant Purchaser Agent of the supplement to the relevant Program Documents, and payment by the assignee Conduit Purchaser to the assignor Conduit Purchaser of the agreed purchase price, to the extent of such assignment such assignor Conduit Purchaser shall be released from its future obligations hereunder and, as applicable, under the relevant Program Documents, and (1) the related administrative or managing agent for such assignee Conduit Purchaser will act as the Purchaser Agent for such Conduit Purchaser hereunder; (2) such assignee Conduit Purchaser shall for all purposes be a Committed Purchaser, as applicable, and shall have all the rights and obligations of such a Purchaser hereunder to the same extent as if it were an original party hereto and, as applicable, to the relevant Program Documents, and such assignee Conduit Purchaser's related Program Support Providers shall have the benefit of all of the rights and protections provided to such Program Support Providers herein and in the other Transaction Documents; and (3) all distributions to the assignor Conduit Purchaser hereunder with respect to the assigned portion of the Conduit Purchaser's Purchaser Interest shall be made to the assignee Conduit Purchaser. The Seller acknowledges and agrees that, upon any such assignment, the assignee Conduit Purchaser thereof may enforce directly, without joinder of any Purchaser, all of the obligations of the Seller hereunder. Any Assignment Agreement shall be an amendment hereof only to the extent necessary to reflect the addition of the assignee Conduit Purchaser as a Conduit Purchaser, any resulting adjustment of the assignor Conduit Purchaser's Capital Investment, and any terms specific to such assignee Conduit Purchaser or its Purchaser Group as set forth on Schedule I to the Assignment Agreement. (ii) The Seller hereby acknowledges and consents to any assignment, grant of security interest, or other transfers of any portion of, or any of its beneficial interest in, the Purchaser Interest (or any portion thereof) by a Conduit Purchaser, including, without limitation, to its related Committed Purchaser, any Program Support Provider, any Liquidity Lender or any collateral agent in connection with the Program Documents. The Seller hereby specifically acknowledges that in accordance with the provisions of the LAPA, on the day of the GE Capital Funding Event, (A) the Committed Purchaser who is GE Capital may purchase from the Conduit Purchaser who is Redwood GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 61 all or any part of the Purchaser Interests sold by the Seller hereunder on each Purchase Date prior to the GE Capital Funding Event, and (B) such Conduit Purchaser may assign all or any part of its rights and interest in the Seller Collateral to such Committed Purchaser. The Seller hereby specifically consents to the assignment by the Conduit Purchaser who is Redwood of its rights hereunder to the Collateral Agent. Section 14.03. Termination; Survival of Seller Secured Obligations Upon Facility Termination Date. (a) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Termination Date. (b) Except as otherwise expressly provided herein or in any other Related Document, no termination or cancellation (regardless of cause or procedure) of any commitment made by any Affected Party under this Agreement shall in any way affect or impair the obligations, duties and liabilities of the Seller or the rights of any Affected Party relating to any unpaid portion of the Seller Secured Obligations, due or not due, liquidated, contingent or unliquidated or any transaction or event occurring prior to such termination, or any transaction or event, the performance of which is required after the Facility Termination Date. Except as otherwise expressly provided herein or in any other Related Document, all undertakings, agreements, covenants, warranties and representations of or binding upon the Seller or the Servicer, and all rights of any Affected Party hereunder, all as contained in the Related Documents, shall not terminate or expire, but rather shall survive any such termination or cancellation and shall continue in full force and effect until the Termination Date; provided, that the rights and remedies provided for herein with respect to any breach of any representation or warranty made by the Seller or the Servicer pursuant to Article IV, the indemnification and payment provisions of Article XII and Sections 14.04, 14.05 and 14.06 shall be continuing and shall survive the Termination Date. Section 14.04. Costs, Expenses and Taxes. (a) The Seller shall reimburse each Purchaser, each Purchaser Agent and the Administrative Agent for all reasonable out-of-pocket expenses incurred in connection with the negotiation and preparation of this Agreement and the other Related Documents including the Purchasers', the Purchaser Agents' and Administrative Agent's reasonable fees and expenses of all of special counsel, advisors, consultants and auditors retained in connection with the transactions contemplated thereby and advice in connection therewith; provided that the Seller's obligations to pay certain of such costs and expenses shall be subject to the limitations set forth in the Purchaser Group Fee Letters. The Seller shall reimburse the Conduit Purchasers, the Committed Purchasers, the Purchaser Agents and the Administrative Agent for all reasonable fees, costs and expenses, including the fees, costs and expenses of counsel or other advisors (including environmental and management consultants and appraisers) for advice, assistance, or other representation in connection with: (i) the forwarding to the Seller or any other Person on behalf of the Seller by any Purchaser of any payments for Purchases made by it hereunder; GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 62 (ii) any amendment, modification or waiver of, consent with respect to, or termination of this Agreement or any of the other Related Documents or advice in connection with the administration thereof or their respective rights hereunder or thereunder; (iii) any Litigation, contest or dispute (whether instituted by the Seller, the Conduit Purchasers, the Committed Purchasers, the Purchaser Agents the Administrative Agent or any other Person as a party, witness, or otherwise) in any way relating to the Seller Collateral, any of the Related Documents or any other agreement to be executed or delivered in connection herewith or therewith, including any Litigation, contest, dispute, suit, case, proceeding or action, and any appeal or review thereof, in connection with a case commenced by or against the Seller or any other Person that may be obligated to the Purchasers, the Purchaser Agents or the Administrative Agent by virtue of the Related Documents, including any such Litigation, contest, dispute, suit, proceeding or action arising in connection with any work-out or restructuring of the transactions contemplated hereby during the pendency of one or more Termination Events, except to the extent that such Litigation, contest or dispute results solely from (i) with respect to any Indemnified Person other than the Conduit Purchasers, gross negligence of such Indemnified Person, or (ii) willful misconduct of such Indemnified Person, in each case as finally determined by a court of competent jurisdiction; (iv) any attempt to enforce any remedies of the Conduit Purchasers, the Committed Purchasers, the Purchaser Agents or the Administrative Agent against the Seller or any other Person that may be obligated to them by virtue of any of the Related Documents, including any such attempt to enforce any such remedies in the course of any work-out or restructuring of the transactions contemplated hereby during the pendency of one or more Termination Events; (v) any work-out or restructuring of the transactions contemplated hereby during the pendency of one or more Termination Events; and (vi) following a Cash Management Event, efforts to (A) monitor the Purchases or any of the Seller Secured Obligations and (B) evaluate, observe or assess the Originator, the Seller or the Servicer or their respective affairs; (vii) efforts to verify, protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of any of the Seller Collateral provided, that any efforts conducted as part of the audits permitted pursuant to Section 5.01(c) shall be subject to the limitations set forth in the Purchaser Group Fee Letters; including all reasonable attorneys' and other professional and service providers' fees arising from such services, including those in connection with any appellate proceedings, and all expenses, costs, charges and other fees reasonably incurred by such counsel and others in connection with or relating to any of the events or actions described in this Section 14.04, all of which shall be payable, on demand, by the Seller to the Conduit Purchasers, the Committed Purchasers or the Administrative Agent, as applicable. Without limiting the generality of the foregoing, such expenses, costs, charges and fees may include: reasonable fees, costs and GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 63 expenses of accountants, environmental advisors, appraisers, investment bankers, management and other consultants and paralegals; court costs and expenses; photocopying and duplication expenses; court reporter fees, costs and expenses; long distance telephone charges; air express charges; telegram or facsimile charges; secretarial overtime charges; and reasonable expenses for travel, lodging and food paid or incurred in connection with the performance of such legal or other advisory services. (b) In addition, the Seller shall pay on demand any and all stamp, sales, excise and other Indemnified Taxes and fees payable or determined to be payable in connection with the execution, delivery, filing or recording of this Agreement or any other Related Document, and the Seller agrees to indemnify and save each Indemnified Person harmless from and against any and all liabilities with respect to or resulting from any delay or failure to pay such taxes and fees. Section 14.05. Confidentiality. (a) Except to the extent otherwise required by applicable law, as required to be filed publicly with the Securities and Exchange Commission, or unless the Administrative Agent and the Purchaser Agents shall otherwise consent in writing, the Seller and the Servicer each agrees to maintain the confidentiality of this Agreement (and all drafts hereof and documents ancillary hereto) in its communications with third parties other than any Affected Party or any Indemnified Person and otherwise and not to disclose, deliver or otherwise make available to any third party (other than its directors, officers, employees, accountants or counsel) the original or any copy of all or any part of this Agreement (or any draft hereof and documents ancillary hereto) except to an Affected Party or an Indemnified Person. (b) The Seller and the Servicer each agrees that it shall not (and shall not permit any of its Subsidiaries to) issue any news release or make any public announcement pertaining to the transactions contemplated by this Agreement and the other Related Documents without the prior written consent of the Conduit Purchasers, the Committed Purchasers, the Purchaser Agents and the Administrative Agent (which consent shall not be unreasonably withheld) unless such news release or public announcement is required by law, in which case the Seller or the Servicer, as applicable, shall consult with the Conduit Purchasers, the Committed Purchasers, the Purchaser Agents and the Administrative Agent prior to the issuance of such news release or public announcement. The Seller may, however, disclose the general terms of the transactions contemplated by this Agreement and the other Related Documents to trade creditors, suppliers and other similarly-situated Persons so long as such disclosure is not in the form of a news release or public announcement. (c) Each of the Administrative Agent, the Purchaser Agents and the Purchasers agrees to maintain the confidentiality of the Information (as defined below), and will not use such confidential Information for any purpose or in any matter except in connection with this Agreement, except that Information may be disclosed (a) to (i) each Affected Party and (ii) its and each Affected Party's and their respective Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 64 any Rating Agency, any regulatory authority (it being understood that it will to the extent reasonably practicable provide the Company with an opportunity to request confidential treatment from such regulatory authority), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) to the extent required in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Related Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to any assignee of, or any prospective assignee of, any of its rights or obligations under this Agreement, (g) with the consent of the Seller or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or any other confidentiality agreement to which it is party with the Seller or any Bergen Entity or (ii) becomes available to the Administrative Agent, any Purchaser Agent or any Purchaser on a nonconfidential basis from a source other than the Seller or a Bergen Entity. For the purposes of this Section, "Information" means all information received from the Seller and Servicer relating to the Seller, Servicer any Bergen Entity or their businesses (including the Contracts relating to the Transferred Receivables), other than any such information that is available to Administrative Agent, any Purchaser Agent or any Purchaser on a nonconfidential basis prior to disclosure by Seller or Servicer; provided that, in the case of information received from Seller or Servicer after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Section 14.06. No Proceedings. Each of the Seller and the Servicer hereby agrees that, from and after the Closing Date and until the date one year plus one day following the date on which the Commercial Paper with the latest maturity has been indefeasibly paid in full in cash, it will not, directly or indirectly, institute or cause to be instituted against the Conduit Purchasers or the Committed Purchasers any proceeding of the type referred to in Sections 9.01(c) and 9.01(d). This Section 14.06 shall survive the termination of this Agreement. Section 14.07. Reaffirmation; Complete Agreement; Modification of Agreement. The Seller hereby reaffirms its assignment, conveyance, pledge, hypothecation and transfer of a Lien upon and security interest in the Seller Collateral pursuant to Section 8.01 of the Predecessor Agreement. This Agreement and the other Related Documents constitute the complete agreement among the parties hereto with respect to the subject matter here of and thereof, supersede all prior agreements and understandings relating to the subject matter hereof and thereof, and may not be modified, altered or amended except as set forth in Section 14.08. Section 14.08. Amendments and Waivers. (a) No amendment, modification, termination or waiver of any provision of this Agreement or any of the other Related Documents, or any consent to any departure by the Seller or the Servicer therefrom, shall in any event be effective unless the same shall be in writing and signed by the Requisite Purchasers, the Administrative Agent, the Seller and the Servicer; provided, that (i) the Administrative Agent shall notify each of the Rating Agencies GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 65 concurrently with the execution of any amendment to any provision of this Agreement or any of the other Related Documents, and (ii) it shall be a condition precedent to the effectiveness of any material amendment to any provision of this Agreement or any of the other Related Documents that the Rating Agency Condition shall have been satisfied in respect thereof; provided, further, that no such amendment, modification, termination or waiver shall, without the consent of each affected Purchaser, (A) extend the date of payment on or deposit into the Agent's Account of Collections by the Seller or the Servicer, (B) reduce the rate or extend the payment of Daily Yield, (C) reduce any fees, including Purchaser Group Commitment Fees, payable pursuant to the applicable Purchaser Group Fee Letters, (D) change the amount of Capital Investment of any Purchaser (except as contemplated by Section 2.03(c)), any Purchaser's Pro Rata Share of the Purchaser Interests or any Committed Purchaser's Commitment, (E) amend, modify or waive any provision of the definition of "Requisite Purchasers" or this Section 14.08, (F) change the definition of "Concentration Discount Amount", "Discount Reserve", "Eligible Receivable", "Investment Base", "Purchase Discount Rate", "Reserve", "Special Limit" or "Termination Event", (G) amend or modify any defined term (or any defined term used directly or indirectly in any such defined term) used in clauses (A) through (F) above in any manner that would circumvent the intention of the restrictions set forth in such clauses, or (H) otherwise materially affect the rights of any Purchaser or Purchaser Agent hereunder. (b) The Seller may, with the written consent of the Administrative Agent and each Purchaser, add additional Persons as Purchasers (either to an existing Purchaser Group or by creating new Purchaser Groups) and, if such new Purchaser is a Committed Purchaser, increase the Maximum Purchase Limit by the amount of the Commitment of such new Committed Purchaser. Each new Purchaser (or Purchaser Group) shall become a party hereto by executing and delivering to the Administrative Agent and to the Seller an RPSA Supplement Agreement substantially in the form of Exhibit 14.08(b) hereto with any changes as have been approved by the parties thereto and the Administrative Agent. At such time, the new Purchaser shall for all purposes be a Conduit Purchaser, Committed Purchaser, and/or Purchaser Agent, as applicable, and shall have all the rights and obligations of such a Purchaser and/or Purchaser Agent, as applicable, hereunder to the same extent as if it were an original party hereto and, as applicable, to the relevant Program Documents. Any RPSA Supplement Agreement shall be an amendment hereof only to the extent necessary to reflect the addition of the new Person as a Conduit Purchaser, Committed Purchaser and/or Purchaser Agent, as applicable, any terms specific to such new Purchaser and/or Purchaser Agent as set forth on Schedule I to the RPSA Supplement Agreement, and any increase to the Maximum Purchase Limit associated with such RPSA Supplement Agreement. Section 14.09. No Waiver; Remedies. The failure by any Conduit Purchaser, the any Committed Purchaser, any Purchaser Agent or the Administrative Agent, at any time or times, to require strict performance by the Seller or the Servicer of any provision of this Agreement or any Purchase Assignment shall not waive, affect or diminish any right of any Purchaser or the Administrative Agent thereafter to demand strict compliance and performance herewith or therewith. Any suspension or waiver of any breach or default hereunder shall not suspend, waive or affect any other breach or default whether the same is prior or subsequent thereto and whether the same or of a different type. None of the undertakings, agreements, warranties, covenants and representations of the Seller or the Servicer contained in this Agreement or any Purchase Assignment, and no breach or default by the Seller or the Servicer GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 66 hereunder or thereunder, shall be deemed to have been suspended or waived by any Purchaser, any Purchaser Agent or the Administrative Agent unless such waiver or suspension is by an instrument that is executed and delivered in accordance with Section 14.08(a) hereof and is directed to the Seller or the Servicer, as applicable, specifying such suspension or waiver. The rights and remedies of each Purchaser, each Purchaser Agent and the Administrative Agent under this Agreement shall be cumulative and nonexclusive of any other rights and remedies that any Purchaser, Purchaser Agent and the Administrative Agent may have under any other agreement, including the other Related Documents, by operation of law or otherwise. Recourse to the Seller Collateral shall not be required. Section 14.10. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE ADMINISTRATIVE AGENT IN THE RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. (b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ANY PURCHASER OR THE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE SELLER COLLATERAL OR ANY OTHER SECURITY FOR THE SELLER SECURED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE CONDUIT PURCHASERS, THE COMMITTED PURCHASERS, THE PURCHASER AGENTS OR THE ADMINISTRATIVE AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 67 WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. (c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. Section 14.11. Counterparts. This Agreement may be executed in any number of separate counterparts, each of which shall collectively and separately constitute one agreement. Section 14.12. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. Section 14.13. Section Titles. The section titles and table of contents contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. Section 14.14. Limited Recourse. The obligations of the Conduit Purchasers and the Committed Purchasers under this Agreement and ---------------- all Related Documents are solely the GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 68 corporate obligations of each such Purchaser. No recourse shall be had for the payment of any amount owing in respect of Purchases or for the payment of any fee hereunder or any other obligation or claim arising out of or based upon this Agreement or any other Related Document against any Stockholder, employee, officer, director, agent or incorporator of such Purchaser. Any accrued obligations owing by the Conduit Purchasers or the Committed Purchasers under this Agreement shall be payable by such Purchaser solely to the extent that funds are available therefor from time to time. The Conduit Purchasers shall not, and shall not be obligated to, pay any amount pursuant to the Related Documents unless (a) each such Conduit Purchaser has received funds which may be used to make such payment pursuant to the applicable Program Documents, and (b) after giving effect to such payment, either (A) each such Conduit Purchaser could issue Commercial Paper to refinance all outstanding Commercial Paper (assuming such outstanding Commercial Paper matured at such time) without violating the applicable Program Documents, or (B) all Commercial Paper is paid in full. Any amount which any Conduit Purchaser does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in Section 101 of the Bankruptcy Code) against or an obligation of such Conduit Purchaser for any insufficiency unless and until such Conduit Purchaser satisfies the provisions of such preceding sentence. This Section 14.14 shall survive the termination of this Agreement. Section 14.15. Further Assurances. (a) Each of the Seller and the Servicer shall, at its sole cost and expense, upon request of the Conduit Purchasers, the Committed Purchasers or the Administrative Agent, promptly and duly execute and deliver any and all further instruments and documents and take such further action that may be necessary or desirable or that the Conduit Purchasers, the Committed Purchasers or the Administrative Agent may request to (i) perfect, protect, preserve, continue and maintain fully the Purchases made and the right, title and interests (including Liens) granted to such Purchaser under this Agreement, (ii) enable the Conduit Purchasers, the Committed Purchasers or the Administrative Agent to exercise and enforce its rights under this Agreement or any of the other Related Documents or (iii) otherwise carry out more effectively the provisions and purposes of this Agreement or any other Related Document. Without limiting the generality of the foregoing, the Seller shall, upon request of the Conduit Purchasers and the Committed Purchasers or the Administrative Agent, (A) execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices that may be necessary or desirable or that the Purchasers or the Administrative Agent may request to perfect, protect and preserve the Purchases made and the Liens granted pursuant to this Agreement, free and clear of all Adverse Claims, (B) mark, or cause the Servicer to mark, each Contract evidencing each Transferred Receivable (to the extent related to such Transferred Receivable) with a legend, acceptable to each Purchaser and the Administrative Agent evidencing that the Conduit Purchasers or the Committed Purchasers, as applicable, have purchased an undivided percentage ownership interest in all right and title thereto and interest therein as provided herein, (C) mark, or cause the Servicer to mark, its master data processing records evidencing such Transferred Receivables with such a legend and (D) notify or cause the Servicer to notify Obligors of the sale of undivided percentage ownership interests in the Transferred Receivables effected hereunder. GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 69 (b) Without limiting the generality of the foregoing, the Seller hereby authorizes the Conduit Purchaser, the Committed Purchaser and the Administrative Agent, and each of the Conduit Purchaser and the Committed Purchaser hereby authorizes the Administrative Agent, to file one or more financing or continuation statements, or amendments thereto or assignments thereof, relating to all or any part of the Transferred Receivables, including Collections with respect thereto, or the Seller Collateral without the signature of the Seller or, as applicable, the Conduit Purchaser or the Committed Purchaser, as applicable, to the extent permitted by applicable law. A carbon, photographic or other reproduction of this Agreement or of any notice or financing statement covering the Transferred Receivables, the Seller Collateral or any part thereof shall be sufficient as a notice or financing statement where permitted by law. Section 14.16. Consent to Merger and Acknowledgement of Assignment. The Administrative Agent, the Purchasers and the Seller hereby consent to (a) the merger of Durr Fillauer Medical into Bergen Brunswig, with Bergen Brunswig being the surviving corporation of such merger, (b) the merger of Bergen Brunswig into AmeriSource Corporation, with AmeriSource Corporation being the surviving corporation of such merger and changing its name to AmerisourceBergen Drug in connection therewith, and (c) the merger of C.D. Smith Healthcare, Inc. into AmerisourceBergen Drug, with AmerisourceBergen Drug being the surviving corporation of such merger. AmerisourceBergen Drug hereby assumes all obligations and liabilities of Bergen Brunswig as Servicer hereunder and under the Related Documents. Section 14.17. Effect on Predecessor Agreement; No Novation. Each of the parties hereto agrees that, effective upon satisfaction of each of the conditions set forth in Section 3.01 hereof: (a) the terms and provisions of the Predecessor Agreement shall be amended, superseded and restated in their entirety by the terms and provisions of the Amended and Restated Agreement; provided, however, that with respect to any date or time period occurring and ending prior to the Restatement Effective Date, the rights and obligations of the parties to the Predecessor Agreement shall be governed by the Predecessor Agreement and the "Related Documents" as defined therein; and (b) the execution and delivery of the Amended and Restated Agreement or any of the Related Documents shall not constitute or effect, or be deemed to constitute or effect, (i) a novation, refinancing, discharge, extinguishment or refunding of any of the Seller Secured Obligations, or (ii) a release, waiver or discharge of any of the rights or remedies of the Administrative Agent, the Purchasers or the Purchaser Agents set forth in the Predecessor Agreement. Section 14.18. Reference to Purchase Agreement. Upon the effectiveness of this Agreement, each reference in the Purchase Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import shall mean and be a reference to the Purchase Agreement, as amended and restated hereby, and each reference in the Purchase Agreement, the Related Documents and any other document, instrument or agreement executed and/or delivered in connection with the Purchase Agreement to "the Purchase Agreement", "the Receivables Purchase and Servicing Agreement" or words of like import shall mean and be a reference to the GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 70 Purchase Agreement, as amended and restated hereby. The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of any Purchaser, Purchaser Agent or the Administrative Agent under this Agreement or any other Related Document, nor constitute a waiver of any provision contained therein. [Signature pages follow] GE Capital Corporation/Blue Hill II, Inc. Amended and Restated Receivables Purchase and Servicing Agreement 71 IN WITNESS WHEREOF, the parties have caused this Receivables Purchase and Servicing Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. BLUE HILL II, INC., as the Seller ____________________________________ Name _______________________________ Title ______________________________ Address: ------- 4000 Metropolitan Drive Orange, California 92868 AMERISOURCEBERGEN DRUG CORPORATION, as successor by merger to Bergen Brunswig Drug Company, a California Corporation, as the Servicer ____________________________________ Name _______________________________ Title ______________________________ Address: ------- 1300 Morris Drive Chesterbrook, Pennsylvania 19087 Signature Page for Amended and Restated Receivables Purchase and Servicing Agreement REDWOOD RECEIVABLES CORPORATION, as a Conduit Purchaser ____________________________________ Name: Craig Winslow Assistant Secretary Address: ------- c/o General Electric Capital Corporation 3001 Summer Street, 2nd Floor Stamford, Connecticut 06927 Telephone: (203) 602-9330 Facsimile: (203) 961-2953 GENERAL ELECTRIC CAPITAL CORPORATION, as a Committed Purchaser and a Purchaser Agent on behalf of itself and Redwood ____________________________________ Name: Brian P. Schwinn Duly Authorized Signatory Address: ------- 201 High Ridge Road Stamford, Connecticut 06927 Attention: Vice President - Portfolio/Bergen Telephone: (203) 357-4065 Facsimile: (203) 316-7821 Commitment: $450,000,000.00 ---------- Signature Page for Amended and Restated Receivables Purchase and Servicing Agreement LIBERTY STREET FUNDING CORP., as a Conduit Purchaser ____________________________________ Name: Andrew Stidd President Address: ------- c/o Scotia Capital One Liberty Plaza, 24/th/ Floor New York, New York 10006 Attention: Vilma Pindling Phone: (212) 225-5410 Facsimile: (212) 225-6465 E-Mail: vilma_pindling@scotiacapital.com THE BANK OF NOVA SCOTIA, as a Committed Purchaser and as a Purchaser Agent on behalf of itself and Liberty Street Funding Corp. ____________________________________ Name: Michael Eden Director Commitment: $250,000,000.00 ---------- Address: ------- c/o Scotia Capital One Liberty Plaza, 24/th/ Floor New York, New York 10006 Attention: Vilma Pindling Phone: (212) 225-5410 Facsimile: (212) 225-6465 E-Mail: vilma_pindling@scotiacapital.com Signature Page for Amended and Restated Receivables Purchase and Servicing Agreement GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent ____________________________________ Name: Brian P. Schwinn Duly Authorized Signatory Address: ------- 201 High Ridge Road Stamford, Connecticut 06927 Attention: Vice President - Portfolio/Bergen Telephone: (203) 357-4065 Facsimile: (203) 316-7821 ACKNOWLEDGED AND AGREED: GENERAL ELECTRIC CAPITAL CORPORATION, as Collateral Agent ____________________________________ Name: Brian P. Schwinn Duly Authorized Signatory Address: ------- 201 High Ridge Road Stamford, Connecticut 06927 Attention: Vice President Telephone: (203) 357-4065 Facsimile: (203) 316-7821 Signature Page for Amended and Restated Receivables Purchase and Servicing Agreement WITH RESPECT TO THE INTERCREDITOR AGREEMENT DATED AS OF OCTOBER 1, 2002, ACKNOWLEDGED & CONSENTED TO BY: JPMORGAN CHASE BANK, in its capacity as "Chase Facility Agent" ____________________________________ Name: Title: EX-4.7 9 dex47.txt AMENDED AND RESTATED ANNEX X EXHIBIT 4.7 AMENDED AND RESTATED ANNEX X dated as of December 20, 2002 to SALE AND CONTRIBUTION AGREEMENT dated as of December 20, 2000, and as heretofore amended and AMENDED AND RESTATED RECEIVABLES PURCHASE AND SERVICING AGREEMENT dated as of December 20, 2002 Definitions and Interpretation ABDC/Blue Hill II A&R Annex X Section 1. Definitions and Conventions. Capitalized terms used in the Sale and Contribution Agreement and the Purchase Agreement shall have (unless otherwise provided elsewhere therein) the following respective meanings: "1999 Audited Financials" shall have the meaning set forth in Section 4.01(h) of the Purchase Agreement. "2000 Audited Financials" shall have the meaning set forth in Section 4.01(h) of the Purchase Agreement. "Accession Agreement" shall mean an Accession Agreement substantially in the form of Exhibit A to the Collateral Agent Agreement. "Accounts" shall mean the Agent's Account, the Lockbox Accounts, the Deposit Accounts, and the Reserve Account, collectively. "Accrued Monthly Yield" shall mean, as of any date of determination within a Settlement Period, the sum of the Daily Yields for each day from and including the first day of the Settlement Period through and including such date. "Accrued Purchaser Group Commitment Fee" shall mean, as of any date of determination within a Settlement Period, the sum of the Purchaser Group Commitment Fees calculated for each day from and including the first day of the Settlement Period through and including such date. "Accrued Servicing Fee" shall mean, as of any date of determination within a Settlement Period, the sum of the Servicing Fees calculated for each day from and including the first day of the Settlement Period through and including such date. "Additional Amounts" shall mean any amounts payable to any Affected Party under Sections 2.09 or 2.10 of the Purchase Agreement. "Additional Costs" shall have the meaning assigned to it in Section 2.09(b) of the Purchase Agreement. "Administrative Agent" shall have the meaning set forth in the Preamble of the Purchase Agreement. "Administrative Services Agreement" shall mean that certain Administrative Services Agreement dated as of March 7, 2000, between Redwood and the Operating Agent. "Adverse Claim" shall mean any claim of ownership or any Lien, other than any ownership interest or Lien created under the Sale and Contribution Agreement, or the Purchase Agreement, or any Lien created under the Collateral Agent Agreement or the other Program Documents. ABDC/Blue Hill II A&R Annex X -2- "Affected Party" shall mean each of the following Persons: the Purchasers, the Liquidity Agents, the Liquidity Lenders, the Administrative Agent, the Purchaser Agents, each other Program Support Provider and each Affiliate of the foregoing Persons. "Affiliate" shall mean, with respect to any Person, (a) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, ten percent (10%) or more of the Stock having ordinary voting power in the election of directors of such Person, (b) each Person that controls, is controlled by or is under common control with such Person, or (c) each of such Person's officers, directors, joint venturers and partners. For the purposes of this definition, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise. "Agent's Account" shall mean that certain segregated deposit account established by the Administrative Agent in accordance with the requirements set forth in Section 6.01(c) of the Purchase Agreement. "Agreement" shall mean (a) as used in the Purchase Agreement, the Purchase Agreement, and (b) as used in the Sale and Contribution Agreement, the Sale and Contribution Agreement. "Aggregate Capital Investment" shall mean, as of any date of determination, an amount equal to the sum of all Capital Investments for each Purchaser. "Aggregate Capital Investment Available" shall mean, as of any date of determination, the amount, if any, by which Availability exceeds Aggregate Capital Investment, in each case as of the end of the immediately preceding day. "Amended and Restated Agreement" shall have the meaning assigned to it in the recitals to the Purchase Agreement. "AmerisourceBergen Drug" shall mean AmerisourceBergen Drug Corporation (f/k/a AmeriSource Corporation), a Delaware corporation, as successor by merger to Bergen Brunswig. "Appendices" shall mean, with respect to any Related Document, all exhibits, schedules, annexes and other attachments thereto, or expressly identified thereto. "Applicable Financials" shall mean (a) if the Closing Date is before, or less than 10 days after, the release of the 2000 Audited Financials, the 1999 Audited Financials, or (b) if the Closing Date is 10 days or more after the release of the 2000 Audited Financials, the 2000 Audited Financials. "Applicable Purchaser" shall mean (a) with respect to Redwood's Purchaser Group (i) prior to the occurrence of a GE Capital Funding Event, the Conduit Purchaser, and (ii) on and after the occurrence of a GE Capital Funding Event, the Committed Purchaser, and (b) with respect to each other Purchaser Group, the Purchaser who has made (or will make) the Purchase in question. ABDC/Blue Hill II A&R Annex X -3- "ARFC" shall mean AmeriSource Receivables Financial Corporation, a Delaware corporation. "ARFC Designated Distribution Center" shall mean any distribution center of the Originator identified from time to time on the Designated Receivables Schedule as an "ARFC Designated Distribution Center". "ARFC Designated Receivables" shall mean, collectively (but without duplication), (a) all Receivables that are generated by the Originator at any of the ARFC Designated Distribution Centers and (b) all Receivables that are acquired by the Originator pursuant to the ASC Affiliate Purchase Agreement. From and after a Distribution Center Consolidation, "ARFC Designated Receivables" shall exclude all Receivables that become BH2 Designated Receivables pursuant to such Distribution Center Consolidation. "ARFC/JPMorgan Chase Purchase Agreement" shall mean that certain Receivables Purchase Agreement, dated as of May 14, 1999, among ARFC as seller, AmerisourceBergen Drug (f/k/a AmeriSource Corporation) as servicer, Amerisource Health Corporation as guarantor, DFC as buyer and JPMorgan Chase as administrative agent, as amended by that certain First Amendment dated as of May 12, 2000, that certain Second Amendment dated as of May 26, 2000, that certain Third Amendment dated as of October 17, 2000, that certain Fourth Amendment dated as of August 29, 2001, that certain Fifth Amendment dated as of November 7, 2001, that certain Sixth Amendment dated as of November 30, 2001, that certain Seventh Amendment dated as of February 7, 2002, that certain Eighth Amendment dated as of August 8, 2002, that certain Ninth Amendment dated as of the Third Amendment Effective Date, that certain Tenth Amendment dated as of December 2, 2002, and as may be further amended from time to time in accordance with the Third Amendment Intercreditor Agreement. "ASC Affiliate Purchase Agreement" shall mean the Purchase Agreement, dated as of May 26, 2000, among each of the sellers party thereto from time to time and the Originator, as buyer, as amended by that certain First Amendment, dated as of October 1, 2002 and as may be further amended from time to time in accordance with the Third Amendment Intercreditor Agreement. "ASC/ARFC Purchase Agreement" shall mean that certain Purchase Agreement, dated as of May 14, 1999, between AmerisourceBergen Drug (f/k/a AmeriSource Corporation) as originator and ARFC as seller, as amended by that certain First Amendment to Purchase Agreement dated as of May 26, 2000, that certain Second Amendment to Purchase Agreement dated as of October 1, 2002, that certain Third Amendment to Purchase Agreement, dated as of December 2, 2002, and as may be further amended from time to time in accordance with the Third Amendment Intercreditor Agreement. "Assignment Agreement" shall mean an agreement substantially in the form set forth in Exhibit 14.02(b) to the Purchase Agreement. "Authorized Officer" shall mean, with respect to any corporation, the Chairman or Vice-Chairman of the Board, the President, any Vice President, the Secretary, the Treasurer, ABDC/Blue Hill II A&R Annex X -4- any Assistant Secretary, any Assistant Treasurer and other officers of such corporation, so long as each such officer is specifically authorized in resolutions of the Board of Directors of such corporation to sign agreements, instruments or other documents on behalf of such corporation in connection with the transactions contemplated by the Sale and Contribution Agreement, the Purchase Agreement and the other Related Documents. "Availability" shall mean, as of any date of determination, the amount equal to the lesser of (a) (i) the Investment Base multiplied by the Purchase Discount Rate, minus (ii) the Discount Reserve and (b) the Maximum Purchase Limit. "Available Funds" shall mean monies then held by or on behalf of Buyer, solely to the extent that such monies do not constitute Collections that are required to be identified or are deemed to be held by the Servicer pursuant to the Purchase Agreement for the benefit of, or required to be distributed to, the Administrative Agent or the Purchasers pursuant to the Purchase Agreement or required to be paid to the Servicer as the Servicing Fee, or otherwise necessary to pay current expenses of Buyer (in its reasonable discretion). "Available LOC Percentage" shall mean twenty percent (20.0%); provided, that following the occurrence or during the continuation of a Termination Event, the Available LOC Percentage may be changed at any time (a) by the Administrative Agent in the Administrative Agent's sole discretion, exercised in good faith, and (b) in the case of an increase only, upon consent of the Purchasers and satisfaction of the Rating Agency Condition with respect thereto. "Bankruptcy Code" shall mean the provisions of title 11 of the United States Code, 11 U.S.C. (S)(S) 101 et seq. "Bergen Brunswig" shall mean Bergen Brunswig Drug Company, a California corporation. "Bergen Entity" shall mean the Parent, AmerisourceBergen Services Corporation, a Delaware corporation (successor by merger to Bergen Brunswig Corporation, a New Jersey corporation), and the Originator. "BH2 Designated Distribution Center" shall mean any distribution center of the Originator identified from time to time on the Designated Receivables Schedule as a "BH2 Designated Distribution Center". "BH2 Designated Receivables" shall mean all Receivables owned by the Originator that are generated by the Originator at any of the BH2 Designated Distribution Centers. From and after a Distribution Center Consolidation, "BH2 Designated Receivables" shall exclude all Receivables that become ARFC Designated Receivables pursuant to such Distribution Center Consolidation. "BHI" shall mean Blue Hill II, Inc., a Delaware corporation. "Billed Amount" shall mean, with respect to any Receivable, the amount billed on the Billing Date to the Obligor thereunder. ABDC/Blue Hill II A&R Annex X -5- "Billing Date" shall mean, (a) with respect to any Receivable for which a statement is issued, the original statement date with respect to such Receivable, and (b) with respect to any Receivable for which no statement is issued, the invoice date with respect to such Receivable. "Breakage Costs" shall have the meaning assigned to it in Section 2.10 of the Purchase Agreement. "Bringdown Certificate" shall mean an Officer's Certificate substantially in the form of Exhibit 3.01(a)(ii) to the Purchase Agreement. "Business Day" shall mean any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York. "Buyer" shall mean BHI in its capacity as purchaser under the Sale and Contribution Agreement. "Buyer Indemnified Party" shall have the meaning assigned to it in Section 7.1 of the Sale and Contribution Agreement. "Capital Investment" shall mean, with respect to any Purchaser, as of any date of determination, the amount equal to (a) the aggregate deposits made by such Purchaser to the Seller Account and the Agent's Account pursuant to Section 2.04(b) of the Purchase Agreement on or before such date, minus (b) the aggregate amounts disbursed to such Purchaser in reduction of such Purchaser's Capital Investment pursuant to Sections 6.02, 6.03, 6.04, 6.05 or 6.06 of the Purchase Agreement on or before such date; provided, that the Capital Investment of any Purchaser shall be restored and reinstated in the amount of any reduction if at any time the amounts disbursed in reduction are rescinded or must otherwise be returned for any reason; provided, further, that references to the Capital Investment of any Purchaser who is Redwood or GE Capital shall mean an amount equal to (x) the aggregate deposits made by such Purchaser to the Seller Account and Agent's Account pursuant to Section 2.04(b) of the Purchase Agreement on or before such date, plus (y) in the case of the Committed Purchaser only, any amounts advanced by the Committed Purchaser to the Conduit Purchaser under the LAPA in respect of Capital Investment when purchasing the Conduit Purchaser's Purchaser Interests minus (z) the aggregate amounts disbursed to such Purchaser in reduction of such Purchaser's Capital Investment pursuant to Sections 6.02, 6.03, 6.04, 6.05 or 6.06 of the Purchase Agreement on or before such date. "Capital Lease" shall mean, with respect to any Person, any lease of any property (whether real, personal or mixed) by such Person as lessee that, in accordance with GAAP, would be required to be classified and accounted for as a capital lease on a balance sheet of such Person. "Capital Lease Obligation" shall mean, with respect to any Capital Lease of any Person, the amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear on a balance sheet of such lessee in respect of such Capital Lease. ABDC/Blue Hill II A&R Annex X -6- "Capital Purchase" shall have the meaning assigned to it in Section 2.01(c) of the Purchase Agreement. "Capital Purchase Request" shall have the meaning assigned to it in Section 2.03(b) of the Purchase Agreement. "Cash Management Date" shall mean the date on which the Administrative Agent has taken dominion and control over the Lockbox Accounts pursuant to Section 6.01(a)(i). "Cash Management Event" shall mean any of the following events: (a) the Servicer shall fail or neglect to perform, keep or observe any material provision of this Agreement or the other Related Documents (whether in its capacity as the Originator or the Servicer) and the same shall remain unremedied for two (2) Business Days or more after written notice thereof shall have been given by the Purchasers, the Purchaser Agents or the Administrative Agent to the Servicer; (b) any representation or warranty of the Servicer herein or in any other Related Document or in any written statement, report, financial statement or certificate made or delivered by the Servicer to the Purchasers, the Purchaser Agents or the Administrative Agent hereto or thereto is untrue or incorrect in any material adverse respect as of the date when made or deemed made; provided that a breach of any representation, warranty or covenant related to the Receivables shall not be deemed a breach to the extent such Receivable has been deemed collected or adjusted in accordance with Section 3.2 of the Sale and Contribution Agreement within two Business Days after the delivery of an Investment Report evidencing such breach; (c) a case or proceeding shall have been commenced against the Servicer seeking a decree or order in respect of any such Person (i) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any such Person or for any substantial part of such Person's assets, or (iii) ordering the winding-up or liquidation of the affairs of any such Person; (d) the Servicer shall (i) file a petition seeking relief under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) consent or fail to object in a timely and appropriate manner to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any such Person or for any substantial part of such Person's assets, (iii) make an assignment for the benefit of creditors, or (iv) take any corporate action in furtherance of any of the foregoing; (e) (i) an "Event of Default" shall occur under the Credit Facility or a "Termination Event" or "Servicing Default" shall occur under the ARFC/JPMorgan Chase Purchase Agreement, or (ii) a default or breach shall occur under any other agreement, document or instrument to which any Bergen Entity, the Seller or the Servicer is a party or by which any such Person or its property is bound that is not cured within any applicable grace period therefor, and such default or breach (A) involves the failure to make any payment when due in respect of any Debt (other than the Seller Secured Obligations) of any such Person which, except with ABDC/Blue Hill II A&R Annex X -7- respect to the Seller, is in excess of a principal amount of $25,000,000 in the aggregate, or (B) causes or permits any holder of such Debt or a trustee or agent to cause, Debt or a portion thereof which, except with respect to the Seller, is in excess of a principal amount of $25,000,000 in the aggregate to become due prior to its stated maturity or prior to its regularly scheduled dates of payment; (f) a Termination Event has occurred and is continuing; or (g) the Parent's long-term unsecured unsubordinated indebtedness is rated less than BB- by S&P (or such rating is withdrawn or suspended) or less than Ba3 by Moody's (or such rating is withdrawn or suspended). "Chattel Paper Agreement" shall mean a Chattel Paper Agreement executed by the Originator substantially in the form attached as Exhibit D to the Purchase Agreement. "Chattel Paper Report" shall have the meaning set forth in Annex 5.02(a). "Closing Date" shall mean December 20, 2000. "Collateral Agent" shall mean GE Capital, in its capacity as collateral agent for Redwood and the Redwood Secured Parties pursuant to the Collateral Agent Agreement. "Collateral Agent Agreement" shall mean that certain Third Amended and Restated Collateral Agent and Security Agreement dated as of March 7, 2000, among Redwood, the Depositary and GE Capital, in its capacities as (a) the Collateral Agent, (b) the Operating Agent, (c) the Liquidity Agent and (d) the Letter of Credit Agent. "Collections" shall mean, with respect to any Receivable, all cash collections and other proceeds of such Receivable (including late charges, fees and interest arising thereon, and all recoveries with respect thereto that have been written off as uncollectible). "Commercial Paper" shall mean those certain short-term promissory notes issued by a Purchaser from time to time in the United States of America commercial paper market. "Commitment" shall mean, with respect to each Committed Purchaser, the maximum amount which such Purchaser is obligated to pay under the Purchase Agreement on account of all Purchases, as set forth below its signature to the Purchase Agreement or below its signature to its Assignment Agreement or its RPSA Supplement Agreement, as the case may be, as such amount may be modified in connection with a subsequent assignment pursuant to Section 14.02 of the Purchase Agreement or in connection with a reduction in the Maximum Purchase Limit pursuant to Section 2.02 of the Purchase Agreement. "Commitment Percentage" shall mean, with respect to each Committed Purchaser within a particular Purchaser Group, such Committed Purchaser's Commitment divided by the Group Commitment of such Purchaser Group. "Commitment Reduction Notice" shall have the meaning assigned to it in Section 2.02(a) of the Purchase Agreement. ABDC/Blue Hill II A&R Annex X -8- "Commitment Termination Notice" shall have the meaning assigned to it in Section 2.02(c) of the Purchase Agreement. "Committed Purchaser" shall mean each Person identified as a committed purchaser on the signature pages to the Purchase Agreement or on the signature pages to any Assignment Agreement or any RPSA Supplement Agreement, as the case may be, and each such Person's permitted successors and assigns. "Committed Purchaser Daily Yield" shall mean (a) with respect to the Committed Purchaser who is GE Capital, the GE Capital Daily Yield, and (b) with respect to each other Committed Purchaser, (i) the Committed Purchaser Daily Yield Rate for such day multiplied by (ii) such Committed Purchaser's Capital Investment outstanding on such day. "Committed Purchaser Daily Yield Rate" shall mean, for any day during a Settlement Period, (a) with respect to the Committed Purchaser who is GE Capital, the GE Capital Daily Yield Rate, and (b) with respect to each other Committed Purchaser, the rate set forth as the Committed Purchaser Daily Yield Rate in Schedule I of such Committed Purchaser's Assignment Agreement or RPSA Supplement Agreement, as the case may be. "Committed Purchaser Expiry Date" shall mean (a) with respect to the Committed Purchaser who is GE Capital, the fifth anniversary of the Closing Date and (b) with respect to each other Committed Purchaser, the date set forth as the "Committed Purchaser Expiry Date" on Schedule I to such Committed Purchaser's RPSA Supplement or Assignment Agreement, as the case may be, as such date may be extended in accordance with Section 2.13(a) of the Purchase Agreement from time to time. "Concentration Discount Amount" shall mean, with respect to any Obligor, and as of any date of determination after giving effect to all Eligible Receivables to be transferred on such date, (a) the amount by which the Outstanding Balance of Eligible Receivables owing by such Obligor exceeds the larger of (i) the percentage of the Outstanding Balance of Eligible Receivable set forth in the table below based upon the short-term unsecured debt rating (or, in the absence of such rating, the equivalent long-term unsecured senior debt rating) assigned to them at such time by S&P and Moody's (and, if such Obligor is rated by both agencies and has a split rating (except for an A-1+/P-1 rating), the applicable rating will be the lower of the two) and (ii) the Special Limit, if any, applicable to such Obligor, multiplied by (b) the Outstanding Balance of all Eligible Receivables on such date.
- ------------------------------------------------------------------------------------------------------------ S&P RATING MOODY'S RATING ALLOWABLE % OF ELIGIBLE RECEIVABLES - ------------------------------------------------------------------------------------------------------------ A-1+ P-1 10.0% - ------------------------------------------------------------------------------------------------------------ A-1 P-1 8.0% - ------------------------------------------------------------------------------------------------------------ A-2 P-2 6.0% - ------------------------------------------------------------------------------------------------------------ A-3 P-3 3.0% - ------------------------------------------------------------------------------------------------------------
ABDC/Blue Hill II A&R Annex X -9- - ---------------------------------------------------------------------------------------------------------------------- Below A-3 or Not Rated by either S&P Below P-3 or Not Rated by either S&P 3.0% or Moody's or Moody's - ----------------------------------------------------------------------------------------------------------------------
If the Special Limit for National Rx is revoked as indicated in subsection (i)(A) of the definition of "Special Limit", the Concentration Discount Amount for National Rx will be based on the Merck short-term unsecured senior debt ratings and the associated Concentration Limits in the table appearing above. If the Special Limit for National Rx is revoked as indicated in subsection (i)(B) of the definition of "Special Limit", the Concentration Discount Amount for National Rx will be based on the short-term unsecured senior debt ratings of National Rx and the associated Concentration Limits in the table appearing above. If the Special Limit for any other Obligor is revoked at any time, such Obligor's Concentration Discount Amount will be based on its short-term unsecured senior debt rating per the table above. "Conduit Purchaser" shall mean each Person identified as a conduit purchaser on the signature pages to the Purchase Agreement or on the signature pages to any Assignment Agreement or any RPSA Supplement Agreement, as the case may be, and each such Person's permitted successors and assigns. "Conduit Purchaser Daily Yield" shall mean (a) with respect to the Conduit Purchaser who is Redwood, the Redwood Daily Yield, and (b) with respect to each other Conduit Purchaser, (i) the Conduit Purchaser Yield Rate for such day multiplied by (ii) the Conduit Purchaser's Capital Investment outstanding on such day. "Conduit Purchaser Daily Yield Rate" shall mean, for any day during a Settlement Period, (a) with respect to the Conduit Purchaser who is Redwood, the Redwood Daily Yield Rate, and (b) with respect to each other Conduit Purchaser, the rate set forth as the Conduit Purchaser Daily Yield Rate in Schedule I of such Conduit Purchaser's Assignment Agreement or RPSA Supplement Agreement, as the case may be. "Consolidated Subsidiary" means, at any date, for any Person, any Subsidiary or other entity the accounts of which would be consolidated under GAAP with those of such Person in its consolidated financial statements as of such date. "Contract" shall mean any agreement (including any invoice or billing statement) pursuant to, or under which, an Obligor shall be obligated to make payments with respect to any Receivable. "Contributed Receivables" shall have the meaning assigned to it in Section 2.2 of the Sale and Contribution Agreement. "CP Holder" shall mean any Person that holds record or beneficial ownership of Commercial Paper. "Credit and Collection Policies" shall mean the credit, collection, customer relations and service policies of the Originator, as such policies relate to the Transferred Receivables, in effect on the Closing Date, attached to the Purchase Agreement as Exhibit A, as the same may from time to time be amended, restated, supplemented or otherwise modified in accordance with the terms of the Purchase Agreement. ABDC/Blue Hill II A&R Annex X -10- "Credit Facility" shall mean (a) that certain Credit Agreement dated as of August 29, 2001, among the Parent, as borrower, the lenders party thereto, The Chase Manhattan Bank as administrative agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC as joint lead arrangers and joint bookrunners, Bank of America, N.A. and Credit Suisse First Boston as syndication agents and First Union National Bank and The Bank of Nova Scotia as documentation agents, and the other loan documents executed in connection therewith together with such further amendments, restatements, supplements or modifications thereto as may be effected from time to time and (b) any refinancings, replacements or refundings thereof so long as either (i) the collateral granted as security thereunder similarly excludes Receivables, Originator Collateral, Seller Collateral and the Proceeds thereof and excludes the Stock of, and Indebtedness issued by, the Seller, or (ii) the agent on behalf of such replacement lenders enters into an intercreditor agreement with the Administrative Agent, the Seller and the Originator on terms and provisions no less favorable to the Administrative Agent and the Purchasers than the Intercreditor Agreement and such intercreditor agreement shall be in effect with respect to such replacement Credit Facility. "Daily Default Margin" shall mean, for any day on which a Termination Event has occurred and is continuing, two percent (2.0%) divided by 360. "Daily Margin" shall mean, for any day, the Per Annum Daily Margin on such day divided by 360. "Daily Yield" shall mean, for any day, the sum of (a) Conduit Purchaser Daily Yields for such day and (b) the Committed Purchaser Daily Yields for such day. "Daily Yield Rate" shall mean the Conduit Purchaser Daily Yield Rate or the Committed Purchaser Daily Yield Rate, as the case may be. "Dated Balances Not Due Reserve" shall mean an amount equal to (a) the aggregate Outstanding Balance of each Transferred Receivable other than the NCS Healthcare Receivables for which the stated term is required to be greater than 30 days after the Billing Date of such Receivable pursuant to the terms of an agreement between the Originator and a supplier to the Originator or the terms of a special situation promotion for certain Obligors, less (b) with respect to any day, the aggregate Outstanding Balance of the Transferred Receivables described in clause (a) where such Transferred Receivables are due no more than 30 days after such date. "Dealer" shall mean any dealer party to a Dealer Agreement. "Dealer Agreement" shall mean any dealer agreement entered into by Redwood for the distribution of Commercial Paper. "Debt" of any Person shall mean, without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services payment for which is deferred 90 days or more, but excluding obligations to trade creditors incurred in the ordinary course of business that are not overdue by more than 90 days unless being contested in good faith, (b) all reimbursement and other obligations with respect to letters of credit, bankers' acceptances and surety bonds, whether or not matured, (c) all obligations evidenced by notes, bonds, debentures or similar instruments, (d) all indebtedness created or arising under any ABDC/Blue Hill II A&R Annex X -11- 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), (e) all Capital Lease Obligations, (f) all obligations of such Person under commodity purchase or option agreements or other commodity price hedging arrangements, in each case whether contingent or matured, (g) all obligations of such Person under any foreign exchange contract, currency swap agreement, interest rate swap, cap or collar agreement or other similar agreement or arrangement designed to alter the risks of that Person arising from fluctuations in currency values or interest rates, in each case whether contingent or matured, (h) all liabilities of such Person under Title IV of ERISA, (i) all Guaranteed Indebtedness of such Person, (j) all indebtedness referred to in clauses (a) through (i) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property or other assets (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, (k) the Seller Secured Obligations, and (l) the "Obligations" as such term is defined in the Credit Facility. "Defaulted Receivable" shall mean any Transferred Receivable other than an NCS HealthCare Receivable (a) with respect to which any payment, or part thereof, remains unpaid for more than 60 days after its Maturity Date or 90 days from its Billing Date, (b) with respect to which the Obligor thereunder has taken any action, or suffered any event to occur, of the type described in Sections 9.01(c) or 9.01(d) of the Purchase Agreement, or (c) that otherwise is determined to be uncollectible and is written off in accordance with the Credit and Collection Policies. "Default Ratio" shall mean, as of any date of determination, the ratio (expressed as a percentage) of: (a) (i) the average of the respective Outstanding Balances of all Transferred Receivables with respect to which any payment, or part thereof, remained unpaid for more than 60 days from their respective Maturity Dates as of the last day of the three Settlement Periods immediately preceding such date, plus (ii) without duplication, the aggregate Outstanding Balance of Transferred Receivables that were written off as uncollectible during such three Settlement Periods to (b) the average of the respective Outstanding Balances of all Transferred Receivables as of the last day of the three Settlement Periods immediately preceding such date; provided, that the Outstanding Balance of all Transferred Receivables that are NCS HealthCare Receivables shall be excluded from the above calculation. "Delinquency Ratio" shall mean, as of any date of determination, the ratio (expressed as a percentage) of: (a) the average of the respective Outstanding Balances of all Transferred Receivables with respect to which any payment, or part thereof, remained unpaid for more than ABDC/Blue Hill II A&R Annex X -12- 30 but less than 61 days from their respective Maturity Dates as of the last day of the three Settlement Periods immediately preceding such date to (b) the average of the Outstanding Balances of all Transferred Receivables as of the last day of the three Settlement Periods immediately preceding such date; provided, that the Outstanding Balance of all Transferred Receivables that are NCS HealthCare Receivables shall be excluded from the above calculation. "Deposit Account" shall mean each account maintained by the Servicer at a Deposit Bank for the purpose of receiving or concentrating Collections with respect to the Transferred Receivables, which account shall be maintained in the name of the Seller. "Deposit Account Agreement" shall mean a letter agreement substantially in the form of Exhibit B-2 to the Purchase Agreement (or otherwise acceptable to the Administrative Agent) from the Seller and the Servicer to each Deposit Bank, acknowledged and accepted by such Deposit Bank and the Administrative Agent. "Deposit Bank" shall mean each bank listed as such on Exhibit F to the Purchase Agreement, and any other bank added as a "Deposit Bank" in accordance with Section 6.01(b) of the Purchase Agreement. "Depositary" shall mean Bankers Trust Company, or any other Person designated as the successor Depositary pursuant to and in accordance with the terms of the Depositary Agreement, in its capacity as issuing and paying agent or trustee in connection with the issuance of Commercial Paper. "Depositary Agreement" shall mean that certain Depositary Agreement dated March 15, 1994, by and between Redwood and the Depositary and consented to by the Liquidity Agent. "Designated Financial Officer" means the chief financial officer of BHI or the other relevant Bergen Entity, as applicable. "Designated Receivables Schedule" means Schedule 5.2(p) to the Sale and Contribution Agreement, as such Schedule 5.2(p) may be amended from time to time pursuant to and in connection with a Distribution Center Consolidation permitted under Section 8.13 of the Sale and Contribution Agreement. "DFC" shall mean Delaware Funding Corporation, a Delaware corporation. "Dilution Factors" shall mean, with respect to any Transferred Receivable, any net credits, rebates, freight charges, cash discounts, volume discounts, cooperative advertising expenses, royalty payments, warranties, cost of parts required to be maintained by agreement (whether express or implied), warehouse and other allowances, disputes, setoffs, chargebacks, defective returns, other returned or repossessed goods, inventory transfers, allowances for early ABDC/Blue Hill II A&R Annex X -13- payments and other similar allowances that are reflected on the books of the Originator and made or coordinated with the usual practices of the Originator; provided, that any allowances or adjustments in accordance with the Credit and Collection Policies made on account of the insolvency of the Obligor thereunder or such Obligor's inability to pay shall not constitute a Dilution Factor. "Dilution Ratio" shall mean, as of any date of determination, the ratio (expressed as a percentage) of: (a) the aggregate Dilution Factors during the first Settlement Period immediately preceding such date to (b) the aggregate Billed Amount of all Transferred Receivables originated during the first Settlement Period immediately preceding such date; provided, that Dilution Factors relating to, and the Billed Amount of, all NCS HealthCare Receivables shall be excluded from the above calculation. "Dilution Reserve Ratio" shall mean, as of any date of determination, the ratio (expressed as a percentage) calculated in accordance with the following formula: [(ADR x 2.00) + [(HDR - ADR) x HDR]] x DILHOR --- ------ ADR NRPB where: ADR = the average of the respective Dilution Ratios as of the last day of the 12 Settlement Periods immediately preceding such date. HDR = the highest Dilution Ratio during the 12 Settlement Periods immediately preceding such date. DILHOR = the aggregate Billed Amount of Eligible Receivables originated during the Settlement Period immediately preceding such date: NRPB = the Outstanding Balance of Eligible Receivables as of the last day of the first Settlement Period immediately preceding such date. Notwithstanding the foregoing, the Dilution Reserve Ratio may be changed at any time by the Administrative Agent, (a) in the Administrative Agent's reasonable credit judgment, provided that so long as a Termination Event has not occurred nor is continuing, the Administrative Agent may change the formulas for or methods of calculation of the Dilution Reserve Ratio only to the extent that such change together with any other Discretionary Changes then in effect would not result in making Availability hereunder less than the Minimum Availability Requirement, and (b) in the case of a decrease only, upon consent of the Requisite Purchasers and satisfaction of the Rating Agency Condition with respect thereto. ABDC/Blue Hill II A&R Annex X -14- "Discount Reserve" means, at any time, the product of (a) 1.5, (b) the Prime Rate plus 2.00%, (c) Aggregate Capital Investment and (d) a fraction, the numerator of which is the higher of (i) 30 and (ii) the most recently reported Receivables Collection Turnover multiplied by 2, and the denominator of which is 360. "Discretionary Changes" shall mean, at any time, any and all changes made by the Administrative Agent to the formulas for or methods of calculation of Dilution Reserve Ratio, the Loss Ratio, and any other Reserves, in each case, which are in effect at such time. "Distribution Center" shall mean any BH2 Designated Distribution Center and any ARFC Designated Distribution Center. "Distribution Center Consolidation" shall mean any consolidation of a BH2 Designated Distribution Center into an ARFC Designated Distribution Center and any consolidation of an ARFC Designated Distribution Center into a BH2 Designated Distribution Center, in each case, pursuant to, and in accordance with, Section 8.13 of the Sale and Contribution Agreement. "Dollars" or "$" shall mean lawful currency of the United States of America. "Dynamic Purchase Discount Rate" shall mean, as of any date of determination, the rate equal to (a) 100% minus (b) the sum of (i) the Loss Reserve Ratio plus (ii) the Dilution Reserve Ratio, plus (c) the Available LOC Percentage. "Election Notice" shall have the meaning assigned to it in Section 2.1 of the Sale and Contribution Agreement. "Eligible Receivable" shall mean, as of any date of determination, a Transferred Receivable: (a) that is not a liability of an Excluded Obligor; (b) that is not a liability of an Obligor (i) organized under the laws of any jurisdiction outside of the United States of America or (ii) having its principal place of business outside of the United States of America; (c) that is only denominated and payable in Dollars in the United States of America; (d) that is not and will not be subject to any right of rescission, set-off, recoupment, counterclaim or defense, whether arising out of transactions concerning the Contract therefor or otherwise (except to the extent that (i) the Eligible Receivable exceeds such offset claim, (ii) a No-Offset Agreement has been executed, or (iii) the Administrative Agent in its reasonable credit judgment determines that appropriate reserves have been established therefor); (e) that is not a Defaulted Receivable or an Unapproved Receivable; ABDC/Blue Hill II A&R Annex X -15- (f) that does not represent "billed but not yet shipped" goods or merchandise, unperformed services, consigned goods or "sale or return" goods and does not arise from a transaction for which any additional performance by the Originator, or acceptance by or other act of the Obligor thereunder, remains to be performed as a condition to any payments on such Receivable; (g) as to which the representations and warranties of Sections 5.2(a) and (h)(i)-(iv) of the Sale and Contribution Agreement are true and correct in all respects as of the Transfer Date therefor; (h) that is not the liability of an Obligor that is a supplier or vendor (or affiliate thereof) of any Bergen Entity (except to the extent that (i) the Eligible Receivable exceeds any offset claim of such supplier or vendor or affiliate thereof, (ii) a No-Offset Agreement has been executed, or (iii) the Administrative Agent in its reasonable credit judgment determines that appropriate reserves have been established therefor); (i) that is a true and correct statement of a bona fide indebtedness incurred in the amount of the Billed Amount of such Receivable for merchandise sold to or services rendered and accepted by the Obligor thereunder; (j) that was originated in accordance with and satisfies all applicable requirements of the Credit and Collection Policies; (k) that represents the genuine, legal, valid and binding obligation of the Obligor thereunder enforceable by the holder thereof in accordance with its terms; (l) that is entitled to be paid pursuant to the terms of the Contract therefor, and except as permitted by the Credit and Collection Policy, has not been paid in full or been compromised, adjusted, extended, satisfied, subordinated, rescinded or modified, and is not subject to compromise, adjustment, extension, satisfaction, subordination, rescission, or modification by the Originator (except for adjustments to the Outstanding Balance thereof to reflect Dilution Factors made in accordance with the Credit and Collection Policy); (m) with respect to which the Originator thereof has submitted all necessary documentation for payment to the Obligor thereunder and the Originator has fulfilled all of its other obligations in respect thereof; (n) that does not contravene in any material respect any laws, rules or regulations applicable thereto (including laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no party to the Contract therefor is in violation of any such law, rule or regulation that could have a material adverse effect on the collectibility, value or payment terms of such Receivable; (o) with respect to which no proceedings or investigations are pending or threatened before any Governmental Authority (i) asserting the invalidity of such Receivable or the Contract therefor, (ii) asserting the bankruptcy or insolvency of the Obligor thereunder, (iii) seeking payment of such Receivable or payment and performance of such Contract or (iv) ABDC/Blue Hill II A&R Annex X -16- seeking any determination or ruling that might materially and adversely affect the validity or enforceability of such Receivable or such Contract; (p) with respect to which the Obligor thereunder is not: (i) bankrupt or insolvent, (ii) unable to make payment of its obligations when due, (iii) a debtor in a voluntary or involuntary bankruptcy proceeding, or (iv) the subject of a comparable receivership or insolvency proceeding; (q) (i) that is an "account" or "chattel paper" within the meaning of the UCC of the jurisdictions in which the chief executive office of each of Originator and the Seller is located, and the jurisdictions under which they are organized, and, if such Transferred Receivable is "chattel paper", (A) the Seller has complied with Section 5.01(d) of the Purchase Agreement, (B) the Originator has complied with Section 6.1(f)(ii)(B) of the Sale and Contribution Agreement, (C) the Seller or Servicer has delivered a Chattel Paper Report to the Administrative Agent with respect to such Transferred Receivable, and (D) such chattel paper is not subject to any prohibition on assignment which is effective under applicable law unless such prohibition has been waived in writing by the related Obligor or the related Obligor has delivered a written consent permitting assignment under the Sale and Contribution Agreement and the Purchase Agreement, which waiver or consent is enforceable in accordance with its terms, and (ii) is not represented by a note or an instrument; (r) with respect to which all material consents, licenses, approvals or authorizations of, or registrations with, any Governmental Authority required to be obtained, effected or given in connection with the creation of such Receivable or the Contract therefor have been duly obtained, effected or given and are in full force and effect; (s) that is created through the provision of merchandise, goods or services (i) by the Originator in the ordinary course of its business in a current transaction or (ii) by another Person from whom the Originator acquired such Receivables where those Receivables have been approved in writing by the Administrative Agent; (t) that is not subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of the Purchaser; (u) that is due and payable within 30 days of the Billing Date; (v) the Billing Date for which (i) with respect to Obligors on a bi-monthly billing cycle, is no later than fifteen (15) calendar days after the invoice date, and (ii) with respect to Obligors on a monthly billing cycle, is no later than the last day of the same calendar month in which the invoice date occurs; (w) that is not a NCS HealthCare Receivable; and (x) that is not the liability of a state Governmental Authority where the Administrative Agent has reasonably determined that the laws of such state prohibit, limit or restrict the assignment or collection of such state Governmental Authority's Receivables unless the Originator assigns to the Seller, and the Seller assigns to the Administrative Agent on behalf ABDC/Blue Hill II A&R Annex X -17- of the Purchasers, rights to payment of such Receivable pursuant to and in accordance with applicable state law. "ERISA" shall mean the Employee Retirement Income Security Act of 1974 and any regulations promulgated thereunder. "ERISA Affiliate" shall mean, with respect to the Originator, any trade or business (whether or not incorporated) that, together with the Originator, are treated as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of the IRC. "Event of Servicer Termination" shall have the meaning assigned to it in Section 9.02 of the Purchase Agreement. "Excluded Obligor" shall mean any Obligor (a) that is an Affiliate or employee of the Originator or the Seller, (b) that is a federal or national Governmental Authority, (c) with respect to which 50% or more of the aggregate Outstanding Balance of all Transferred Receivables owing by such Obligor are Defaulted Receivables, or (d) with a Special Limit, of which more than 25% of the aggregate outstanding balance of all Transferred Receivables of such Obligor are Defaulted Receivables. "Excluded Taxes" shall mean and includes any of the following Taxes: (a) any Taxes imposed by any jurisdiction in which a Person is organized, does business or maintains a permanent establishment solely by virtue of such organization, business or maintenance of a permanent establishment, (b) any Taxes on, or measured by, the overall net income of a Person; (c) any Taxes that would not be imposed if a Person were a "United States person" as defined in section 7701(a)(30) of the Internal Revenue Code of 1986, as amended, and (d) any withholding taxes, to the extent that the relevant Person is eligible to claim a reduction in or exclusion from such withholding taxes under applicable statute or tax treaties in effect at the time such withholding taxes are imposed. "Existing Securitization Facility" shall mean that certain Amended and Restated Receivables Sale Agreement, dated as of February 29, 2000, among BHI, Bergen Brunswig, Wachovia Bank, N.A., the Related Bank Purchasers (as defined therein) party thereto and the Conduit Purchasers (as defined therein) party thereto as in existence on the Closing Date. "Extended Term Reserve" shall mean the an amount equal to (a) the aggregate Outstanding Balance of each Transferred Receivable other than the NCS HealthCare Receivables for which the stated term is greater than 30 days after the Billing Date of such Receivable less (b) the Dated Balances Not Due Reserve. "Facility Termination Date" shall mean the earliest of (a) the date so designated pursuant to Section 9.01 of the Purchase Agreement, (b) 60 days prior to the Final Purchase Date (c) two (2) Business Days prior to the date of termination of the Maximum Purchase Limit specified in a notice from the Seller to the Purchaser delivered pursuant to and in accordance with Section 2.02(c) certifying that the Seller intends to effectuate a replacement securitization facility on such date of termination, (d) 30 days prior to the date of termination of the Maximum Purchase Limit specified in a notice from the Seller to the Purchaser delivered pursuant to and in accordance with Section 2.02(c) of the Purchase Agreement (other than a notice specified in ABDC/Blue Hill II A&R Annex X -18- clause (c) hereof), and (e) two (2) Business Days prior to the occurrence of a Committed Purchaser Expiry Date, provided that no Facility Termination Date shall occur if such Committed Purchaser Expiry Date has occurred as a result of a Committed Purchaser's failure to extend such Committed Purchaser's Committed Purchaser Expiry Date pursuant to Section 2.13 of the Purchase Agreement and such Committed Purchaser either has been (i) replaced in accordance with Sections 2.13(c) and 14.02(b) of the Purchase Agreement or (ii) repaid in full in accordance with Section 2.13(b) of the Purchase Agreement. "Federal Reserve Board" shall mean the Board of Governors of the Federal Reserve System. "Final Purchase Date" shall mean the fifth anniversary of the Closing Date. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect on the Closing Date, consistently applied as such term is further defined in Section 2(a) of this Annex X. "GE Capital" shall mean General Electric Capital Corporation, a Delaware corporation, and its permitted successors and assigns. "GE Capital Daily Yield" shall mean, with respect to the Committed Purchaser who is GE Capital, for any day, the product of (a) the sum of (i) GE Capital Daily Yield Rate for such day, plus (ii) the Daily Margin on such day, plus, (iii) if a Termination Event has occurred and is continuing, the Daily Default Margin, multiplied by (b) such Committed Purchaser's Capital Investment outstanding on such day. "GE Capital Daily Yield Rate" shall mean, for any day during a Settlement Period, (a) the weighted average GE Capital Yield Rates applicable to such Committed Purchaser's Capital Investment on such day, weighted by such Committed Purchaser's outstanding Capital Investment, divided by (b) 360. "GE Capital Funding Event" shall mean the occurrence of a Redwood Termination Date, but only if both (i) no Termination Event has occurred and is continuing, and (ii) the Committed Purchaser Expiry Date has not occurred. "GE Capital Yield Rate" shall mean, with respect to any portion of the Capital Investment of the Committed Purchaser who is GE Capital on any day during a Settlement Period, (a) if the LIBOR market is closed, or if such Committed Purchaser's Purchaser Agent determines that it is illegal for the Committed Purchaser to make Purchases accruing interest at as a rate based upon LIBOR, the sum of (i) the highest prime, base or equivalent lending rate of interest announced or published on or most recently before such date by any of the five largest member banks of the New York Clearing House Association, Inc. (with the understanding that such rates may merely serve as a basis upon which effective rates of interest are calculated for loans making reference to such prime, base or equivalent rates and that such rates are not necessarily the lowest or best rates at which such banks calculate interest or extend credit) plus (ii) if a Termination Event has occurred and is continuing, the Daily Default Margin, or (b) the sum of (i) LIBOR plus (ii) 0.50% plus (iii) the applicable "Eurodollar Spread" as defined in the defined term "Applicable Rate" in the Credit Facility from time to time, provided that if such ABDC/Blue Hill II A&R Annex X -19- Credit Facility is terminated, the term shall have the same meaning as such term had in the Credit Facility immediately prior to termination. "General Trial Balance" shall mean with respect to the Originator and as of any date of determination, the Originator's accounts receivable trial balance with respect to BH2 Designated Receivables (whether in the form of a computer printout, magnetic tape or diskette) as of such date, listing Obligors and the BH2 Designated Receivables owing by such Obligors as of such date together with the aged Outstanding Balances of such Receivables, in form and substance reasonably satisfactory to the Seller and the Administrative Agent. "Governmental Authority" shall mean any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Group Commitment" shall mean, with respect to any Purchaser Group, the aggregate of all of the Commitments of the Committed Purchasers within such Purchaser Group. "Group Investment" shall mean, with respect to any Purchaser Group, the aggregate of all of the Capital Investments of the Purchasers within such Purchaser Group. "Guaranteed Indebtedness" shall mean, as to any Person, any obligation of such Person guaranteeing any indebtedness, lease, dividend, or other obligation ("primary obligation") of any other Person (the "primary obligor") in any manner, including any obligation or arrangement of such Person to (a) purchase or repurchase any such primary obligation, (b) advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the primary obligor, (c) purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (d) indemnify the owner of such primary obligation against loss in respect thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed to be the amount equal to the lesser at such time of (x) the stated or determinable amount of the primary obligation in respect of which such Guaranteed Indebtedness is incurred and (y) the maximum amount for which such Person may be liable pursuant to the terms of the instrument embodying such Guaranteed Indebtedness; or, if not stated or determinable, the maximum reasonably anticipated liability (assuming full performance) in respect thereof. "Incipient Servicer Termination Event" shall mean any event that, with the passage of time or notice or both, would, unless cured or waived, become an Event of Servicer Termination. "Incipient Termination Event" shall mean any event that, with the passage of time or notice or both, would, unless cured or waived, become a Termination Event. "Indemnified Amounts" shall mean, with respect to any Person, any and all suits, actions, proceedings, claims, damages, losses, liabilities and reasonable expenses (including ABDC/Blue Hill II A&R Annex X -20- reasonable attorneys' fees and disbursements and other costs of investigation or defense, including those incurred upon any appeal). "Indemnified Person" shall have the meaning assigned to it in Section 12.01 (a) of the Purchase Agreement. "Indemnified Taxes" shall have the meaning assigned to it in Section 2.08 (b) of the Purchase Agreement. "Intercreditor Agreement" shall mean that certain Intercreditor Agreement substantially in form and substance of the form of Intercreditor Agreement attached as Exhibit C. "Investment Base" shall mean, as of any date of determination, the amount equal to the Outstanding Balance of Eligible Receivables minus the Reserves with respect thereto, in each case as disclosed in the most recently submitted Investment Base Certificate or as otherwise determined in good faith by the Purchasers or the Administrative Agent based on reasonable estimates derived from Seller Collateral information available to any of them, including any information obtained from any audit or from any other reports with respect to the Seller Collateral, which determination shall be final, binding and conclusive on all parties to the Purchase Agreement (absent manifest error). "Investment Base Certificate" shall have the meaning assigned to it in Section 2.03(a) of the Purchase Agreement. "Investment Company Act" shall mean the provisions of the Investment Company Act of 1940, 15 U.S.C. (S)(S) 80a et seq., and any regulations promulgated thereunder. "Investment Reports" shall mean the reports with respect to the Transferred Receivables and the Seller Collateral referred to in Annex 5.02(b) to the Purchase Agreement. "Investments" shall mean, with respect to any Seller Account Collateral, the certificates, instruments, investment property or other investments in which amounts constituting such collateral are invested from time to time. "IRS" shall mean the Internal Revenue Service. "JPMorgan Chase" shall mean JPMorgan Chase Bank (f/k/a Morgan Guaranty Trust Company of New York). "LAPA" shall mean that certain Liquidity Loan and Asset Purchase Agreement dated as of December 20, 2000 among Redwood and GE Capital, in its capacities as (a) the administrative agent for the Conduit Purchasers and the Committed Purchasers, (b) the Collateral Agent and Operating Agent for Redwood, (c) the initial Liquidity Lender, (d) the Liquidity Agent, and (e) a Committed Purchaser, as amended, restated, supplemented or otherwise modified from time to time. ABDC/Blue Hill II A&R Annex X -21- "Letter of Credit" shall mean that certain Irrevocable Letter of Credit No. RRC-3 dated March 7, 2000, issued by the Letter of Credit Providers at the request of Redwood in favor of the Collateral Agent pursuant to the Letter of Credit Agreement. "Letter of Credit Agent" shall mean GE Capital, in its capacity as agent for the Letter of Credit Providers under the Letter of Credit Agreement. "Letter of Credit Agreement" shall mean that certain Third Amended and Restated Letter of Credit Reimbursement Agreement dated as of March 7, 2000, among Redwood, the Letter of Credit Agent, the Letter of Credit Providers and the Collateral Agent. "Letter of Credit Providers" shall mean, initially, GE Capital, in its capacity as issuer of the Letter of Credit under the Letter of Credit Agreement, and thereafter its successors and permitted assigns in such capacity. "LIBOR" shall mean, for each Settlement Period, (a) with respect to the Purchaser Group in which Redwood and GE Capital are members, the Redwood LIBOR, and (b) with respect to each other Purchaser Group, the rate set forth as LIBOR in Schedule I of such Purchaser Group's Assignment Agreement or RPSA Supplement Agreement, as the case may be. "Lien" shall mean any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction). "Liquidity Agent" shall mean (a) with respect to the Purchaser Group in which Redwood and GE Capital are members, GE Capital, in its capacity as agent for the Liquidity Lenders pursuant to the LAPA, and (b) with respect to each other Purchaser Group, any Person acting as liquidity agent for the various Liquidity Lenders under each Liquidity Agreement. "Liquidity Agreement" shall mean (a) with respect to the Purchaser Group in which Redwood and GE Capital are members, the LAPA, and (b) with respect to each other Purchaser Group, any agreement entered into in connection with the Purchase Agreement pursuant to which a Liquidity Lender agrees to make advances to, or purchase assets from, any Conduit Purchaser in order to provide liquidity for such Conduit Purchaser's Purchases under the Purchase Agreement. "Liquidity Lenders" shall mean (a) with respect to the Purchaser Group in which Redwood and GE Capital are members, GE Capital and any other provider of Liquidity Loans under the LAPA, and (b) with respect to each other Purchaser Group, any Person providing liquidity support to any Conduit Purchaser in respect of such Conduit Purchaser's Purchases under the Purchase Agreement. "Liquidity Loans" shall mean (a) with respect to the Purchaser Group in which Redwood and GE Capital are members, any and all borrowings of Redwood under the LAPA, ABDC/Blue Hill II A&R Annex X -22- and (b) with respect to each other Purchaser Group, any and all borrowings by any Conduit Purchaser under any Liquidity Agreement. "Litigation" shall mean, with respect to any Person, any action, claim, lawsuit, demand, investigation or proceeding pending or threatened against such Person before any court, board, commission, agency or instrumentality of any federal, state, local or foreign government or of any agency or subdivision thereof or before any arbitrator or panel of arbitrators. "Lockbox" shall have the meaning assigned to it in Section 6.01(a)(ii) of the Purchase Agreement. "Lockbox Account" shall mean each lockbox account listed on Schedule 4.01(q) to the Purchase Agreement established in the name of the Seller held at a Lockbox Bank, as such Schedule 4.01(q) may be amended, supplemented and otherwise modified from time to time to reflect a Distribution Center Consolidation; and any other segregated deposit account established by the Seller for the deposit of Collections with respect to the Transferred Receivables pursuant to and in accordance with Section 6.01(a) of the Purchase Agreement. "Lockbox Account Agreement" shall mean each agreement (a) substantially in the form of Exhibit B-1 to the Purchase Agreement or (b) otherwise satisfactory in form and substance to the Administrative Agent, pursuant to which a Lockbox Account is established and maintained at a Lockbox Bank in accordance with Section 6.01(c) of the Purchase Agreement. "Lockbox Account Bank" means each bank identified as a Lockbox Bank on Schedule 4.01(q) and any other bank or financial institution at which one or more Lockbox Accounts are maintained. "Loss Reserve Ratio" shall mean, as of any date of determination, the ratio (expressed as a percentage) calculated in accordance with the following formula: 2 x ARR x DEFHOR ------ NRPB where: ARR = the highest Three Month Aged Receivables Ratio during the 12 Settlement Periods immediately preceding such date. DEFHOR = the aggregate Billed Amount of Eligible Receivables originated during the three Settlement Periods immediately preceding such date NRPB = the Outstanding Balance of Eligible Receivables as of the last day of the first Settlement Period immediately preceding such date. Notwithstanding the foregoing, the Loss Reserve Ratio may be changed at any time by the Administrative Agent, (a) in the Administrative Agent's reasonable credit judgment, provided that so long as a Termination Event has not occurred nor is continuing, the Administrative Agent ABDC/Blue Hill II A&R Annex X -23- may change the formulas for or methods of calculation of the Loss Reserve Ratio only to the extent that such change together with any other Discretionary Changes then in effect would not result in making Availability hereunder less than the Minimum Availability Requirement, and (b) in the case of a decrease only, upon consent of the Requisite Purchasers and satisfaction of the Rating Agency Condition with respect thereto. "Margin" shall mean, for any day, the product of (i) the Capital Investment of Redwood and GE Capital and (ii) the sum of the Daily Margin plus Daily Default Margin, if any, for such day. "Material Adverse Effect" shall mean a material adverse effect on (i) the collectibility of the Transferred Receivables, taken as a whole, (ii) BHI's financial condition, business, operations or prospects or ability to perform its obligations under any Related Document, (iii) the Servicer's financial condition, business, operations or prospects or ability to perform its obligations under any Related Document, (iv) the Originator's financial condition, business, operations or prospects or ability to perform its obligations under any Related Document, or (v) of the Bergen Entities, taken as a whole, financial condition, business, operations or prospects or ability to perform its obligations under any Related Document. "Maturity Date" shall mean, with respect to any Receivable, the due date for payment therefor specified in the Contract therefor, or, if no date is so specified, 30 days from the Billing Date. "Maximum Purchase Limit" shall mean $700,000,000, as such amount may be reduced in accordance with Sections 2.02 or 2.13(b) of the Purchase Agreement, and as such amount may be increased in connection with an RPSA Supplement delivered after the Restatement Effective Date. "Minimum Availability Requirement" shall mean the amount, as calculated under the Existing Securitization Facility, equal to the lesser of (i) $350,000,000 and (ii) the excess of (A) the "Eligible Receivables Balance" less the amount by which the "Eligible Receivables Balance" exceeds the "Concentration Limits" for all "Obligors" (each defined term as defined in the Existing Securitization Facility) over (B) the "Aggregate Reserves" (as defined in the Existing Securitization Facility), in each case, calculated in a manner consistent with the methodology used immediately prior to the termination of the Existing Securitization Facility as exemplified by the underlying calculations reflected in Schedule 2 to this Annex X. "Monthly Report" shall have the meaning assigned to it in paragraph (a) of Annex 5.02(a) to the Purchase Agreement. "Moody's" shall mean Moody's Investors Service, Inc. or any successor thereto. "NCS HealthCare" shall mean NCS HealthCare, Inc. and its successors and assigns, including, without limitation, a debtor-in-possession, trustee or receiver for NCS HealthCare, Inc. "NCS HealthCare Receivables" shall mean Receivables for which NCS HealthCare is an Obligor. ABDC/Blue Hill II A&R Annex X -24- "Net Worth Percentage" shall mean a fraction (expressed as a percentage) (a) the numerator of which equals the excess of assets over liabilities, in each case determined in accordance with GAAP consistently applied and (b) the denominator of which equals the Outstanding Balance of Transferred Receivables. "No-Offset Agreement" shall mean an agreement between an Obligor and the Administrative Agent pursuant to which such Obligor agrees not to offset any claim it may have against Receivables owed by such Obligor to any Bergen Entity, such agreement to be in form and substance satisfactory to the Administrative Agent in its sole discretion and subject to satisfaction of the Rating Agency Condition. "Non-Renewing Committed Purchaser" shall have the meaning assigned to it in Section 2.13(a) of the Purchase Agreement. "Obligor" shall mean, with respect to any Receivable, the Person primarily obligated to make payments in respect thereof. "Officer's Certificate" shall mean, with respect to any Person, a certificate signed by an Authorized Officer of such Person. "Operating Agent" shall mean GE Capital, in its capacity as operating agent for Redwood under the Administrative Services Agreement. "Originator" shall mean AmerisourceBergen Drug as the seller of BH2 Designated Receivables under the Sale and Contribution Agreement. "Originator Collateral" shall have the meaning assigned to it in Section 2.5 of the Sale and Contribution Agreement. "Other Funding Agreements" shall mean any agreements entered into from time to time by the Applicable Purchaser for the purchase or financing of receivables. "Outstanding Balance" shall mean, with respect to any Transferred Receivable and as of any date of determination, the amount (which amount shall not be less than zero) equal to (a) the Billed Amount thereof, minus (b) all Collections received from the Obligor thereunder with respect to such Transferred Receivable, minus (c) all discounts to or any other modifications that reduce such Billed Amount; provided, that if after the occurrence or during the continuation of a Termination Event the Administrative Agent or the Servicer makes a determination that all payments by such Obligor with respect to such Billed Amount have been made, the Outstanding Balance shall be zero. "Parent" shall mean AmerisourceBergen Corporation, a Delaware corporation "Parent Group" shall mean the Parent and each of its Affiliates other than BHI. "PBGC" shall mean the Pension Benefit Guaranty Corporation. "Pension Plan" shall mean a Plan described in Section 3(2) of ERISA. ABDC/Blue Hill II A&R Annex X -25- "Per Annum Daily Margin" shall have the meaning assigned to it in the Redwood Fee Letter. "Permitted Debt" shall mean the indebtedness permitted under Sections 6.01(a)(i)-(x) of the Credit Facility from time to time, provided that if such Credit Facility is terminated, the reference to Section 6.01 shall refer to the Credit Facility as in effect immediately prior to such termination; provided, that if such Credit Facility has been replaced and (a) the Parent's long-term unsecured unsubordinated indebtedness is rated equal to or higher than BBB- by S&P and Baa3 by Moody's, "Permitted Debt" shall mean the indebtedness permitted under such replacement Credit Facility, or (b) if the Parent's long-term unsecured unsubordinated indebtedness is rated less than BBB- by S&P (or such rating is withdrawn or suspended) or less than Baa3 by Moody's (or such rating is withdrawn or suspended), and the indebtedness permitted under such replacement credit facility is no less restrictive than the permitted indebtedness in the Credit Facility immediately prior to termination, the term shall have the same meaning as the permitted indebtedness under the replacement Credit Facility. "Permitted Investments" shall mean any of the following: (a) obligations of, or guaranteed as to the full and timely payment of principal and interest by, the United States of America or obligations of any agency or instrumentality thereof if such obligations are backed by the full faith and credit of the United States of America, in each case with maturities of not more than 90 days from the date acquired; (b) repurchase agreements on obligations of the type specified in clause (a) of this definition; provided, that the short-term debt obligations of the party agreeing to repurchase are rated at least A-1+ or the equivalent by S&P and P-1 or the equivalent by Moody's; (c) federal funds, certificates of deposit, time deposits and bankers' acceptances of any depository institution or trust company incorporated under the laws of the United States of America or any state, in each case with original maturities of not more than 90 days or, in the case of bankers' acceptances, original maturities of not more than 365 days; provided, that the short-term obligations of such depository institution or trust company are rated at least A-1+ or the equivalent by S&P and P-1 or the equivalent by Moody's; (d) commercial paper of any corporation incorporated under the laws of the United States of America or any state thereof with original maturities of not more than 30 days that on the date of acquisition are rated at least A-1+ or the equivalent by S&P and P-1 or the equivalent by Moody's; (e) securities of money market funds rated at least Aam or the equivalent by S&P and P-1 or the equivalent by Moody's; and (f) such other investments with respect to which each Rating Agency shall have confirmed in writing to the Lender and Collateral Agent that such investments shall not result in a withdrawal or reduction of the then current rating by such Rating Agency of the Commercial Paper. ABDC/Blue Hill II A&R Annex X -26- "Person" shall mean any individual, sole proprietorship, partnership, joint venture, unincorporated organization, trust, association, corporation (including a business trust), limited liability company, institution, public benefit corporation, joint stock company, Governmental Authority or any other entity of whatever nature. "PharMerica" shall mean PharMerica, Inc., a Delaware corporation and an indirect wholly-owned Subsidiary of the Parent. "Plan" shall mean, at any time, an "employee benefit plan," as defined in Section 3(3) of ERISA, that the Originator or ERISA Affiliate maintains, contributes to or has an obligation to contribute to on behalf of participants who are or were employed by the Originator or ERISA Affiliate. "Power of Attorney" shall have the meaning assigned to it in Section 10.03 of the Purchase Agreement. "Predecessor Agreement" shall have the meaning assigned to it in the recitals to the Purchase Agreement. "Program Documents" shall mean (a) with respect to the Purchaser Group in which Redwood and GE Capital are members, the Redwood Program Documents, and (b) with respect to each other Purchaser Group, the Liquidity Agreements and any other agreement entered into by any Program Support Provider providing for the issuance of one or more letters of credit for the account of a Conduit Purchaser, the issuance of one or more surety bonds for which such Conduit Purchaser is obligated to reimburse the applicable Program Support Provider for any drawings thereunder, the sale by such Conduit Purchaser to any Program Support Provider of the Purchaser Interests allocable to it (or portions thereof or participations therein) and/or the making of loans and/or other extensions of credit to such Conduit Purchaser in connection with such Conduit Purchaser's commercial paper program, together with any letter of credit, surety bond, or other instrument issued thereunder. "Program Support Provider" shall mean (a) with respect to the Purchaser Group in which Redwood and GE Capital are members, the Liquidity Agents, the Liquidity Lenders, the Operating Agent, the Letter of Credit Provider, the Letter of Credit Agent, the Collateral Agent, the Depositary, and each other Person with respect to Redwood described under clause (b) to this definition, and (b) any Liquidity Lender or other Person now or hereafter extending credit or having a commitment to extend credit to or for the account of, or to make purchases from, a Conduit Purchaser or issuing a letter of credit, surety bond, or other instrument to support any obligations arising under or in connection with such Conduit Purchaser's commercial paper program. "Pro Rata Share" shall mean, with respect to each Purchaser Group, such Purchaser Group's Group Commitment divided by the aggregate Commitments of all Purchaser Groups. "Purchase" shall have the meaning assigned to it in Section 2.01 of the Purchase Agreement. ABDC/Blue Hill II A&R Annex X -27- "Purchase Agreement" shall mean that certain Receivables Purchase and Servicing Agreement dated as of December 20, 2000, among the Seller, the Conduit Purchaser, the Committed Purchaser, the Servicer, and the Administrative Agent, as amended, and as amended and restated by the Amended and Restated Agreement. "Purchase Assignment" shall mean that certain Purchase Assignment dated as of the Closing Date by and between the Seller and the Applicable Purchaser in the form attached as Exhibit 2.04(a) to the Purchase Agreement. "Purchase Date" shall mean each day on which a Purchase is made. "Purchase Discount Rate" shall mean, as of any date of determination, a rate equal to the lesser of (a) the Dynamic Purchase Discount Rate and (b) the Purchase Discount Rate Cap. "Purchase Discount Rate Cap" shall mean a rate equal to eighty-five percent (85%). "Purchase Excess" shall mean, as of any date of determination, the extent to which the Aggregate Capital Investment exceeds the Availability, in each case as disclosed in the most recently submitted Investment Base Certificate or as otherwise determined in good faith by the Applicable Purchasers or the Administrative Agent based on reasonable estimates derived from Seller Collateral information available to any of them, including any information obtained from any audit or from any other reports with respect to the Seller Collateral, which determination shall be final, binding and conclusive on all parties to the Purchase Agreement (absent manifest error). "Purchase Price" shall have the meaning assigned to it in Section 2.3 of the Sale and Contribution Agreement. "Purchaser Agent" shall mean each Person acting as agent on behalf of a Purchaser Group and designated as a Purchaser Agent for such Purchaser Group on the signature pages to the Purchase Agreement or on the signature pages to any Assignment Agreement or any RPSA Supplement Agreement, as the case may be, and each such Person's permitted successors and assigns. "Purchaser Group" shall mean, for each Conduit Purchaser, such Conduit Purchaser, its related Committed Purchaser and its Related Purchaser Agent. "Purchaser Group Commitment Fees" shall mean, for each Purchaser Group, the fees set forth in such Purchaser Group's Purchaser Group Fee Letter, including commitment fees or other similar fees but not including fees included in the calculation of Daily Yield. "Purchaser Group Commitment Fee Shortfall" shall mean, as of any date of determination within a Settlement Period, the amount, if any, by which the Accrued Purchaser Group Commitment Fees exceed the Retained Purchaser Group Commitment Fees, in each case, as of such date. ABDC/Blue Hill II A&R Annex X -28- "Purchaser Group Fee Letter" shall mean (a) with respect to the Purchaser Group in which Redwood and GE Capital are members, the Redwood Fee Letter, and (b) with respect to each other Purchaser Group, those certain letter agreements in respect of each Purchaser Group among the Seller, the Servicer and the related Purchaser Agent whereby Seller agrees to pay to the Purchaser Agent (on behalf of its Related Purchasers) the fees, including the Purchaser Group Commitment Fees, in the amounts and on the dates set forth in each such letter, in each case, as the same may be amended, restated, supplemented, or otherwise modified from time to time. "Purchaser Interest" shall mean the undivided percentage ownership interest of the Purchasers in the Transferred Receivables which are purchased under the Purchase Agreement. The Purchaser Interest of the Purchasers shall be expressed as a fraction of the total Transferred Receivables computed as follows: PI = __C + DR___ IB x PDR where: PI = the Purchaser Interest at the time of determination; C = the Aggregate Capital Investment at such time; DR = the Discount Reserve; IB = the Investment Base at such time; and PDR = the Purchase Discount Rate at such time. The Purchaser Interest shall be calculated (or deemed to be calculated) on each Business Day from the Closing Date through the Facility Termination Date; from and after the Facility Termination Date, the Purchaser Interest of the Purchasers shall be the Purchaser Interest of such Purchaser as calculated on the Business Day immediately preceding the Facility Termination Date until the Termination Date, at which time the Purchaser Interest shall equal zero. "Purchaser Interest Reconveyance Agreement" shall mean a purchaser interest reconveyance agreement in the form and substance attached as Exhibit 2.04(d) to the Purchase Agreement. "Purchasers" shall mean the Conduit Purchasers and the Committed Purchasers. "Rating Agency" shall mean Moody's or S&P. "Rating Agency Condition" shall mean, with respect to any action, that each Rating Agency has notified the Conduit Purchasers and the Administrative Agent in writing that ABDC/Blue Hill II A&R Annex X -29- such action will not result in a reduction or withdrawal of the rating of any outstanding Commercial Paper. "Ratios" shall mean, collectively, the Default Ratio, the Delinquency Ratio, the Dilution Ratio, the Dilution Reserve Ratio, the Three Month Rolling Dilution Ratio, the Loss Reserve Ratio, the Receivables Collection Turnover and the Three Month Aged Receivables Ratio. "Reassigned Accounts" shall have the meaning set forth in Section 8.13(d)(ii) of the Sale and Contribution Agreement. "Receivable" shall mean, with respect to any Obligor: (a) indebtedness of such Obligor (whether constituting an account, chattel paper, document, instrument or general intangible) arising from the provision of merchandise, goods or services to such Obligor by the Originator, including the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto; (b) all Liens and property subject thereto from time to time securing or purporting to secure any such indebtedness of such Obligor; (c) all guaranties, indemnities and warranties, insurance policies, financing statements and other agreements or arrangements of whatever character from time to time supporting or securing payment of any such indebtedness; (d) all Collections with respect to any of the foregoing; (e) all Records with respect to any of the foregoing; (f) all invoices, all billing statements and all rights in all other Contracts with respect to any of the foregoing; and (g) all proceeds (whether constituting accounts, chattel paper, documents, instruments or general intangibles) with respect to the foregoing. Notwithstanding the foregoing, the Receivables shall not include the obligations of the Originator under the Contracts. "Receivable Collection Turnover" shall mean, as of any date of determination, the amount (expressed in days) equal to: (a) a fraction, (i) the numerator of which is equal to the average of the Outstanding Balances of Transferred Receivables on the first day of the three Settlement Periods immediately preceding such date and (ii) the denominator of which is equal to aggregate Collections received during such three Settlement Periods with respect to all Transferred Receivables, multiplied by ABDC/Blue Hill II A&R Annex X -30- (b) the number of days contained in such three Settlement Periods; provided, that the Outstanding Balances of, and the Collections with respect to, all Transferred Receivables that are NCS HealthCare Receivables shall not be included in the foregoing calculation. "Receivables Assignment" shall have the meaning assigned in Section 2.2 of the Sale and Contribution Agreement. "Records" shall mean all documents (other than Contracts), books, records and other information (including computer programs, tapes, disks, data processing software and related property and rights) prepared and maintained by the Originator, the Servicer, any Sub-Servicer or the Seller with respect to the Transferred Receivables and the Obligors thereunder, the Originator Collateral and the Seller Collateral. "Redwood" shall mean Redwood Receivables Corporation, a Delaware corporation. "Redwood Daily Yield" shall mean, for any day, the product of (a) the Redwood Daily Yield Rate for such day and (b) Redwood's Capital Investment outstanding on such day. "Redwood Daily Yield Rate" means, with respect to the Conduit Purchaser who is Redwood, on any day, a floating per annum rate equal to the sum of (a) the Daily Margin on such day, plus (b) if a Termination Event has occurred and is continuing, the Daily Default Margin, plus (c)(i) to the extent such Conduit Purchaser's Purchases hereunder are being funded by the sale of Commercial Paper, (A) the per annum rate equivalent to the weighted average of the rates paid or payable by such Conduit Purchaser from time to time as interest on or otherwise (by means of interest rate hedges or otherwise) in respect of Commercial Paper that is allocated, in whole or in part, to fund or maintain such Conduit Purchaser's Capital Investment during the relevant Settlement Period, which rates shall reflect and give effect to Dealer fees, commissions of placement agents and other issuance costs in respect of such Commercial Paper, divided by (B) 360 days; provided, however, that (i) if any component of such rate is a discount rate the rate used shall be the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum and (ii) to the extent such Conduit Purchaser's Purchases hereunder are not being financed by the sale of Commercial Paper, the daily rate (in effect from time to time) to such Conduit Purchaser of borrowing such funds under the LAPA as in effect on the date of this Agreement. "Redwood Fee Letter" shall mean that certain amended and restated letter agreement dated as of the Restatement Effective Date, between the Seller and GE Capital in its capacities as Administrative Agent, Purchaser Agent and Committed Purchaser. "Redwood LIBOR" shall mean for any calendar quarter, the per annum rate for deposits in Dollars for a period of 90 days which appears on Telerate Page 3750 as of 11:00 a.m., London time, on the last Business Day of the immediately preceding calendar quarter. If such rate does not appear on Telerate Page 3750 on such day, the rate will be determined on the basis of the rates at which deposits in United States dollars are offered by the reference banks selected by the Operating Agent at approximately 11:00 a.m., London time, on such day to prime banks ABDC/Blue Hill II A&R Annex X -31- in the London interbank market for a period of one month commencing on that day. Redwood's Purchaser Agent will request the principal London office of each of the reference banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for that day will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that day will be the arithmetic mean of the rates quoted by two or more major banks in New York City, selected by Redwood's Purchaser Agent, in its sole discretion at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks for a period of 90 days. "Redwood Program Documents" shall mean the Letter of Credit Agreement, the LAPA, the Collateral Agent Agreement, the Depositary Agreement, the Commercial Paper, the Administrative Services Agreement, each Accession Agreement and the Dealer Agreements. "Redwood Secured Parties" shall mean the Collateral Agent, the Operating Agent, the CP Holders, the Depositary, the Liquidity Agent, the Liquidity Lenders, the Letter of Credit Agent and the Letter of Credit Providers. "Redwood Termination Date" shall mean the date elected by Redwood or the Collateral Agent (which election shall be mandatory and immediate upon the occurrence of an event set forth in clause (c) below), by notice to the Seller and the Administrative Agent as the Redwood Termination Date; provided, that on such date, one or more of the following events shall have occurred and be continuing: (a) a Seller LOC Draw; (b) the obligations of the Liquidity Lenders to make Liquidity Loans shall have terminated and such Liquidity Lenders shall not have otherwise been replaced or the "Liquidity Termination Date" (as defined in the LAPA) shall have occurred; (c) an event of default under the Collateral Agent Agreement or any other Redwood Program Document shall have occurred; (d) the short-term debt rating of a Liquidity Lender shall have been downgraded by a Rating Agency and such Liquidity Lender shall not have been replaced in accordance with the terms of the LAPA within 30 days thereafter; (e) Redwood or the Collateral Agent shall have determined that the funding of Transferred Receivables under the Purchase Agreement is impracticable for any reason whatsoever, including as a result of (i) a drop in or withdrawal of any of the ratings assigned to the Commercial Paper by any Rating Agency, (ii) the imposition of Additional Amounts, (iii) restrictions on the amount of Transferred Receivables Redwood may finance or (iv) the inability of Redwood to issue Commercial Paper; (f) any change in accounting standards shall occur or any pronouncement or release of any accounting or regulatory body (including FASB, AICPA or the Securities and Exchange Commission) shall be issued, or any other change in the interpretation of accounting standards shall occur, such that all or any portion of the Conduit Purchaser's assets and liabilities are deemed to be consolidated with the assets and liabilities of GE Capital or any of its affiliates; (g) a Termination Event shall have occurred and be continuing; (h) the outstanding loans to the Conduit Purchaser under the LAPA equal or exceed the Conduit Purchaser's Capital Investment at such time and no interest or other amounts are owed to the Conduit Purchaser under the Purchase Agreement or the other Related Documents; or (i) the exercise of any other Conduit Purchaser of its discretion not to make a Purchase under Section 2.01(a). "Regulatory Change" shall mean any change after the Closing Date in any federal, state or foreign law or regulation (including Regulation D of the Federal Reserve Board) ABDC/Blue Hill II A&R Annex X -32- or the adoption or making after such date of any interpretation, directive or request under any federal, state or foreign law or regulation (whether or not having the force of law) by any Governmental Authority charged with the interpretation or administration thereof that, in each case, is applicable to any Affected Party. "Reinvestment Purchase" shall have the meaning assigned to it in Section 2.01(c) of the Purchase Agreement. "Rejected Amount" shall have the meaning assigned to it in Section 3.2 of the Sale and Contribution Agreement. "Related Documents" shall mean the Sale and Contribution Agreement, each Lockbox Account Agreement, each Deposit Account Agreement, each Reconveyance Agreement, each Purchaser Interest Reconveyance Agreement, the Purchase Agreement, the Intercreditor Agreement, each Receivables Assignment, the Purchase Assignment, each Power of Attorney, each Chattel Paper Agreement, each Assignment Agreement, each RPSA Supplement Agreement and all other agreements, instruments, documents and certificates identified in the Schedule of Documents and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any of the Seller, the Originator or the Servicer, or any employee of any such Person, and delivered in connection with the Sale and Contribution Agreement, the Purchase Agreement or the transactions contemplated thereby; provided, that the "Related Documents" shall not include the Program Documents. Any reference in the Sale and Contribution Agreement, the Purchase Agreement or any other Related Document to a Related Document shall include all Appendices thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to such Related Document as the same may be in effect at any and all times such reference becomes operative. "Related Purchasers" shall mean (a) with respect to any Purchaser Agent, the Purchasers in such Purchaser Agent's Purchaser Group and (b) with respect to any Purchaser, the Purchasers in such Purchaser's Purchaser Group. "Renewable Committed Purchaser" shall have the meaning assigned to it in Section 2.13(a) of the Purchase Agreement. "Repayment Notice" shall have the meaning assigned to it in Section 2.03(c) of the Purchase Agreement. "Reportable Event" shall mean any of the events set forth in Section 4043(b) of ERISA. "Requisite Purchasers" shall mean, at any time, the Purchasers whose Commitments aggregate two-thirds (2/3) or more of the aggregate Commitments of all Committed Purchasers. "Reserve Account" shall mean that certain segregated deposit account established by the Administrative Agent in accordance with the requirements set forth in Section 6.01(d) of the Purchase Agreement. ABDC/Blue Hill II A&R Annex X -33- "Reserve Account Deficiency" shall mean, as of any Settlement Date after the Cash Management Date, the amount, if any, by which the amounts necessary to make the payments required under Sections 6.05(a)(i), (ii), and (iii) of the Purchase Agreement exceed the amounts on deposit in the Reserve Account. "Reserves" shall mean the aggregate Concentration Discount Amount for all Obligors of Transferred Receivables, the Extended Term Reserve, the Dated Balance Not Due Reserve, and such other reserves as the Administrative Agent may establish from time to time in its reasonable credit judgment; provided, that, so long as no Termination Event has occurred or is continuing, the Administrative Agent may establish new reserves and change the formulas for or methods of calculation of such new reserves only to the extent that such new reserve or change, as applicable, together with any other Discretionary Changes then in effect would not result in making Availability hereunder less than the Minimum Availability Requirement. "Restatement Effective Date" shall have the meaning assigned to it in Section 3.01 of the Purchase Agreement. "Retained Monthly Yield" shall mean, as of any date of determination within a Settlement Period, the sum of all amounts transferred to or retained in the Reserve Account with respect to Daily Yield from and including the first day of such Settlement Period through and including such date pursuant to Section 6.05(a)(ii) of the Purchase Agreement. "Retained Purchaser Group Commitment Fees" shall mean, as of any date of determination within a Settlement Period, the sum of all amounts transferred to or retained in the Reserve Account with respect to the Purchaser Group Commitment Fees from and including the first day of such Settlement Period through and including such date in accordance with Sections 6.04(b)(i)(E) or 6.05(a)(iv) of the Purchase Agreement. "Retained Servicing Fee" shall mean, as of any date of determination within a Settlement Period, the sum of all amounts transferred to or retained in the Reserve Account with respect to the Servicing Fee from and including the first day of such Settlement Period through and including such date pursuant to Sections 6.04(b)(i)(C) or 6.05(a)(iv) of the Purchase Agreement. "Retiree Welfare Plan" shall mean, at any time, a Welfare Plan that provides for continuing coverage or benefits for any participant or any beneficiary of a participant after such participant's termination of employment, other than continuation coverage provided pursuant to Section 4980B of the IRC and at the sole expense of the participant or the beneficiary of the participant. "Revolving Period" shall mean the period from and including the Closing Date through and including the day immediately preceding the Facility Termination Date. "RPSA Supplement Agreement" shall mean (a) with respect to the Purchaser Group in which The Bank of Nova Scotia and Liberty Street Funding Corp. are members, that certain RPSA Supplement Agreement dated as of the Restatement Effective Date, among the Seller, The Bank of Nova Scotia and Liberty Street Funding Corp. and acknowledged by the Administrative Agent, and (b) with respect to each other Purchaser Group that enters into an ABDC/Blue Hill II A&R Annex X -34- RPSA Supplement Agreement, an agreement substantially in the form set forth in Exhibit 14.02(b) to the Purchase Agreement. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto. "Sale" shall mean, with respect to a sale of BH2 Designated Receivables under the Sale and Contribution Agreement, a sale of BH2 Designated Receivables by the Originator to the Buyer in accordance with the terms of the Sale and Contribution Agreement. "Sale and Contribution Agreement" shall mean that certain Sale and Contribution Agreement dated as of December 20, 2000, as amended by the First Amendment to Sale and Contribution Agreement dated as of October 1, 2002, as amended by the Second Amendment to Sale and Contribution Agreement dated as of December 2, 2002, and as amended by the Third Amendment to Sale and Contribution Agreement dated as of the Restated Effective Date, among the Originator, the Servicer and BHI as Buyer. "Schedule of Documents" shall mean the schedule, including all appendices, exhibits or schedules thereto, listing certain documents and information to be delivered in connection with the Sale and Contribution Agreement, the Purchase Agreement and the other Related Documents and the transactions contemplated thereunder, substantially in the form attached as Annex Y to the Purchase Agreement and the Sale and Contribution Agreement. "Securities Act" shall mean the provisions of the Securities Act of 1933, 15 U.S.C. Sections 77a et seq., and any regulations promulgated thereunder. "Securities Exchange Act" shall mean the provisions of the Securities Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any regulations promulgated thereunder. "Seller" shall mean BHI, in its capacity as the seller under the Purchase Agreement. "Seller Account" shall mean a deposit account maintained in the name of the Seller at a commercial bank in the United States of America, as designated by the Seller from time to time. "Seller Account Collateral" shall have the meaning assigned to it in Section 8.01(c) of the Purchase Agreement. "Seller Assigned Agreements" shall have the meaning assigned to it in Section 8.01(b) of the Purchase Agreement. "Seller Collateral" shall have the meaning assigned to it in Section 8.01 of the Purchase Agreement. "Seller LOC Draws" shall mean any payments made to the Purchaser in connection with the Letter of Credit and allocated to the Seller. ABDC/Blue Hill II A&R Annex X -35- "Seller Secured Obligations" shall mean all loans, advances, debts, liabilities, indemnities and obligations for the performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required or contingent, or such amounts are liquidated or determinable) owing by the Seller to any Affected Party under the Purchase Agreement and any Related Document, and all covenants and duties regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, arising thereunder, including Aggregate Capital Investment, Daily Yield, Yield Shortfall, Purchaser Group Commitment Fees, Purchaser Group Commitment Fee Shortfall, Margin, amounts in reduction of Purchase Excess, Successor Servicing Fees and Expenses, Additional Amounts and Indemnified Amounts. This term includes all principal, interest (including all interest that accrues after the commencement of any case or proceeding by or against the Seller in bankruptcy, whether or not allowed in such case or proceeding), fees, charges, expenses, attorneys' fees and any other sum chargeable to the Seller thereunder, whether now existing or hereafter arising, voluntary or involuntary, whether or not jointly owed with others, direct or indirect, absolute or contingent, liquidated or unliquidated, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations that are paid to the extent all or any portion of such payment is avoided or recovered directly or indirectly from any Purchaser or the Administrative Agent or any transferee of the Purchasers, any Purchaser Agent or the Administrative Agent as a preference, fraudulent transfer or otherwise. "Seller's Share" shall mean the ratio of (a) the Maximum Purchase Limit under the Purchase Agreement to (b) the aggregate maximum purchase limits or commitments under the Purchase Agreement and all Other Funding Agreements. "Servicer" shall mean AmerisourceBergen Drug, in its capacity as the Servicer under the Purchase Agreement, or any other Person designated as a Successor Servicer pursuant to the Purchase Agreement. "Servicer's Certificate" shall mean an Officer's Certificate substantially in the form of Exhibit 3.01(a)(iii) to the Purchase Agreement. "Servicer Termination Notice" shall mean any notice by the Administrative Agent to the Servicer that (a) an Event of Servicer Termination has occurred and (b) the Servicer's appointment under the Purchase Agreement has been terminated. "Servicing Fee" shall mean, for any day within a Settlement Period, the amount equal to (a) (i) the Servicing Fee Rate divided by (ii) 360, multiplied by (b) the Aggregate Capital Investment on such day. "Servicing Fee Rate" shall mean 1.00%. "Servicing Fee Shortfall" shall mean, as of any date of determination within a Settlement Period, the amount, if any, by which the Accrued Servicing Fee exceeds the Retained Servicing Fee, in each case as of such date. "Servicing Officer" shall mean any officer of the Servicer involved in, or responsible for, the administration and servicing of the Transferred Receivables and whose name ABDC/Blue Hill II A&R Annex X -36- appears on any Officer's Certificate listing servicing officers furnished to the Administrative Agent by the Servicer, as such certificate may be amended from time to time. "Servicing Records" shall mean all documents, books, Records and other information (including computer programs, tapes, disks, data processing software and related property and rights) prepared and maintained by the Servicer with respect to the Transferred Receivables and the Obligors thereunder. "Settlement Date" shall mean the fifth Business Day following the end of each Settlement Period. "Settlement Period" shall mean: (a) solely for purposes of determining the Ratios, (i) with respect to all Settlement Periods other than the final Settlement Period, each calendar month, whether occurring before or after the Closing Date, and (ii) with respect to the final Settlement Period, the period ending on the Termination Date and beginning with the first day of the calendar month in which the Termination Date occurs, and (b) for all other purposes, (i) with respect to the initial Settlement Period, the period from and including the Closing Date through and including the last day of the calendar month in which the Closing Date occurs, (ii) with respect to the final Settlement Period, the period ending on the Termination Date and beginning with the first day of the calendar month in which the Termination Date occurs, and (iii) with respect to all other Settlement Periods, each calendar month; provided, however, that upon the occurrence of the GE Capital Funding Event, such Settlement Period shall terminate on the day prior to the GE Capital Funding Event, and the next Settlement Period shall be the period from and including the day of the GE Capital Funding Event through and including the last day of the calendar month in which the GE Capital Funding Event occurs. "Significant Subsidiary" means each Subsidiary of the Parent defined as a "Significant Subsidiary" under the Credit Facility on the date hereof and set forth in Schedule 4.01(a) to the Purchase Agreement, as updated quarterly in accordance with Annex 5.02(a) of the Purchase Agreement from time to time thereafter. "Sold Receivable" shall have the meaning assigned to it in Section 2.2 of the Sale and Contribution Agreement. "Solvency Certificate" shall mean an Officer's Certificate substantially in the form of Exhibit 3.01(a)(i) to the Purchase Agreement. "Solvent" shall mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person; (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its Debts as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur Debts or liabilities beyond such Person's ability to pay as such Debts and liabilities mature; and (d) such Person is not engaged in a business or transaction, and ABDC/Blue Hill II A&R Annex X -37- is not about to engage in a business or transaction, for which such Person's property would constitute an unreasonably small capital. The amount of contingent liabilities (such as Litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can reasonably be expected to become an actual or matured liability. "Special Limit" means, (i) for National Rx, Inc. ("National Rx"), a wholly owned subsidiary of Merck-Medco Managed Care, Inc., a wholly owned subsidiary of Merck & Co., Inc. ("Merck"), 15.0% of the Outstanding Balance of Eligible Receivables; provided, however, that such Special Limit shall be automatically deemed revoked (A) at the time, if any, when Merck ceases to have a short-term unsecured senior debt rating of higher than "A-2" from S&P and a short-term unsecured senior debt rating of higher than "P-2" from Moody's or (B) National Rx shall cease at any time to be, directly or indirectly, a wholly owned subsidiary of Merck; (ii) for Longs Drug Stores Corporation ("Longs"), 12.5% of the Outstanding Balance of Eligible Receivables; provided, however, that such Special Limit shall be automatically deemed revoked at the time, if any, when the sum of Defaulted Receivables to Longs exceeds 50% of the total outstanding balance of Receivables to Longs, unless in the case of either (i) or (ii), the Administrative Agent notifies the Seller of a different limit and if such different limit represents an increase, each Rating Agency has approved such increased limit; (iii) for Walgreen Company, 12.0% of the Outstanding Balance of Eligible Receivables; provided, however, that such Special Limit shall be deemed automatically revoked at any time, if any, when Walgreen Company ceases to have a short-term unsecured senior debt rating of higher than "A-2" from S&P and a short-term unsecured senior debt rating of higher than "P-2" from Moody's; and (iv) such other "Special Limits" as shall be agreed to in writing by the Administrative Agent (with the consent of the Requisite Purchasers) for other Obligors from time to time and approved by the required Rating Agencies. "Stock" shall mean all shares, options, warrants, general or limited partnership interests or other equivalents (regardless of how designated) of or in a corporation, partnership or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act). "Stockholder" shall mean, with respect to any Person, each holder of Stock of such Person. "Subordinated Note" shall mean that certain Subordinated Note executed and delivered by Buyer to the order of Originator dated as of December 20, 2000, substantially in the form attached as Exhibit B to the Sale and Contribution Agreement. "Sub-Servicer" shall mean any Person with whom the Servicer enters into a Sub-Servicing Agreement. "Sub-Servicing Agreement" shall mean any written contract entered into between the Servicer and any Sub-Servicer pursuant to and in accordance with Section 7.01 of the ABDC/Blue Hill II A&R Annex X -38- Purchase Agreement relating to the servicing, administration or collection of the Transferred Receivables. "Subsidiary" shall mean, with respect to any Person, any corporation or other entity (a) of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person or (b) that is directly or indirectly controlled by such Person within the meaning of control under Section 15 of the Securities Act. "Successor Servicer" shall have the meaning assigned to it in Section 11.02 of the Purchase Agreement, or, following the Termination Date, Section 3.1(e) of the Sale and Contribution Agreement. "Successor Servicing Fees and Expenses" shall mean the fees and expenses payable to the Successor Servicer as agreed to by the Seller, the Purchasers, and the Administrative Agent. "Taxes" means all taxes, charges, fees, levies or other assessments (including income, gross receipts, profits, withholding, excise, property, sales, use, license, occupation and franchise taxes and including any related interest, penalties or other additions) imposed by any jurisdiction or taxing authority (whether foreign or domestic). "Termination Date" shall mean the date on which (a) Aggregate Capital Investment has been permanently reduced to zero, (b) all other Seller Secured Obligations under the Purchase Agreement and the other Related Documents have been indefeasibly repaid in full and completely discharged and (c) the Maximum Purchase Limit has been irrevocably terminated in accordance with the provisions of Section 2.02(c) of the Purchase Agreement. "Termination Event" shall have the meaning assigned to it in Section 9.01 of the Purchase Agreement. "Third Amendment Effective Date" shall mean the Effective Date under (and as defined in) the Third Amendment to Receivables Purchase and Servicing Agreement and Annex X dated as of October 1, 2002, among Blue Hill, the Servicer, the Purchasers and the Administrative Agent. "Third Amendment Intercreditor Agreement" shall mean that certain Third Amendment Intercreditor Agreement dated as of the Third Amendment Effective Date, between JPMorgan Chase, as "Administrative Agent" under the ARFC/JPMorgan Purchase Agreement, and GE Capital, as Administrative Agent under this Agreement, as amended, supplemented or otherwise modified from time to time. "Three Month Aged Receivables Ratio" shall mean, as of any date of determination, the ratio (expressed as a percentage) of: (a) the sum of the respective Outstanding Balances (without reduction for credit balances) of Transferred Receivables with respect to which any payment, or part thereof, ABDC/Blue Hill II A&R Annex X -39- remained unpaid for more than 60 but less than 91 days past their respective Maturity Dates as of the last day of the three Settlement Periods immediately preceding such date to (b) the aggregate Billed Amount of Transferred Receivables originated during the fourth, fifth, and sixth Settlement Periods immediately preceding such date; provided, that, the Outstanding Balance and Billed Amount of all Transferred Receivables constituting NCS HealthCare Receivables shall be excluded from the foregoing calculation. "Three Month Rolling Dilution Ratio" shall mean, as of any date of determination, the ratio (expressed as a percentage) of: (a) the aggregate Dilution Factors during the three Settlement Periods immediately preceding such date to (b) the aggregate Billed Amount of all Transferred Receivables originated during the three Settlement Periods immediately preceding such date; provided, that, Dilution Factors relating to, and the Billed Amount of, all Transferred Receivables constituting NCS HealthCare Receivables shall be excluded from the foregoing calculation. "Transfer Date" shall mean the date on which Receivables owned by the Originator were sold or contributed to the Buyer in accordance with the Section 2.2 of the Sale and Contribution Agreement. "Transferred Receivable" shall mean any Sold Receivable or Contributed Receivable; provided, that any Receivable repurchased by the Originator pursuant to Section 3.2 of the Sale and Contribution Agreement shall not be deemed to be a Transferred Receivable from and after the date of such repurchase unless such Receivable has subsequently been repurchased by or recontributed to the Buyer; provided further, that any BH2 Designated Receivables that is repurchased pursuant to a Distribution Center Consolidation shall not be deemed to be a Transferred Receivable from and after the date of such repurchase. "UCC" shall mean, with respect to any jurisdiction, the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in such jurisdiction. "Unapproved Receivable" shall mean any BH2 Designated Receivable (a) with respect to which the obligor thereunder is not an Obligor on any BH2 Designated Receivable and whose customer relationship with the Originator arises as a result of the acquisition by such Originator of another Person or (b) that was originated in accordance with standards established by another Person acquired by the Originator, in each case, solely with respect to any such acquisitions that have not been approved in writing by the Administrative Agent and then only for the period prior to any such approval; provided, however, that any ARFC Designated ABDC/Blue Hill II A&R Annex X -40- Receivable that becomes a BH2 Designated Receivable in connection with a Distribution Center Consolidation shall not be deemed an Unapproved Receivable. "Yield Shortfall" shall mean, as of any date of determination within a Settlement Period, the amount, if any, by which the Accrued Monthly Yield exceeds the Retained Monthly Yield, in each case as of such date. Section 2. Other Terms and Rules of Construction. (a) Accounting Terms. Rules of construction with respect to accounting terms used in any Related Document shall be as set forth in Annex G to the Purchase Agreement. Unless otherwise specifically provided therein, any accounting term used in any Related Document shall have the meaning customarily given such term in accordance with GAAP, and all financial computations thereunder shall be computed in accordance with GAAP consistently applied. That certain items or computations are explicitly modified by the phrase "in accordance with GAAP" shall in no way be construed to limit the foregoing. (b) Other Terms. All other undefined terms contained in any of the Related Documents shall, unless the context indicates otherwise, have the meanings provided for by the UCC as in effect in the State of New York to the extent the same are used or defined therein. (c) Rules of Construction. Unless otherwise specified, references in any Related Document or any of the Appendices thereto to a Section, subsection or clause refer to such Section, subsection or clause as contained in such Related Document. The words "herein," "hereof" and "hereunder" and other words of similar import used in any Related Document refer to such Related Document as a whole, including all annexes, exhibits and schedules, as the same may from time to time be amended, restated, modified or supplemented, and not to any particular section, subsection or clause contained in such Related Document or any such annex, exhibit or schedule. Any reference to or definition of any document, instrument or agreement shall unless expressly otherwise noted include the same as amended, restated, supplemented or otherwise modified from time to time. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and neuter genders. The words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation"; the word "or" is not exclusive; references to Persons include their respective successors and assigns (to the extent and only to the extent permitted by the Related Documents) or, in the case of Governmental Authorities, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations shall include any amendments of the same and any successor statutes and regulations. (d) Rules of Construction for Determination of Ratios. The Ratios as of the last day of the Settlement Period immediately preceding the Closing Date shall be established by the Administrative Agent on or prior to the Closing Date and the underlying calculations for periods immediately preceding the Closing Date to be used in future calculations of the Ratios shall be established by the Administrative Agent on or prior to the Closing Date in accordance with Schedule 1 attached to this Annex X. For purposes of calculating the Ratios, (i) averages shall be computed by rounding to the third decimal place and (ii) the Settlement Period in which ABDC/Blue Hill II A&R Annex X -41- the date of determination thereof occurs shall not be included in the computation thereof and the first Settlement Period immediately preceding such date of determination shall be deemed to be the Settlement Period immediately preceding the Settlement Period in which such date of determination occurs. ABDC/Blue Hill II A&R Annex X -42- EX-4.8 10 dex48.txt RPSA SUPPLEMENT AGREEMENT EXHIBIT 4.8 RPSA SUPPLEMENT AGREEMENT THIS RPSA SUPPLEMENT AGREEMENT (this "Supplement") is entered into as of December 20, 2002, among Blue Hill II, Inc. ("Blue Hill"), Liberty Street Funding Corp. (the "New Conduit Purchaser"), The Bank of Nova Scotia (the "New Committed Purchaser", and together with the New Conduit Purchaser, the New Purchasers"), and The Bank of Nova Scotia (the "New Purchaser Agent"), and is consented to by General Electric Capital Corporation ("GECC") as administrative agent (in such capacity, the "Administrative Agent") and each of the existing "Purchasers" set forth on the signature pages hereto ("Existing Purchasers"). Reference is made to the Amended and Restated Receivables Purchase and Servicing Agreement, dated as of December 20, 2002 (as the same may be amended, restated, supplemented and otherwise modified from time to time, the "Purchase Agreement") among Blue Hill as seller, AmerisourceBergen Drug Corporation, as successor by merger to Bergen Brunswig Drug Company, as servicer, Redwood Receivables Corporation ("Redwood") as a conduit purchaser, the financial institutions from time to time party thereto as conduit purchasers ("Conduit Purchasers"), committed purchasers ("Committed Purchasers") and purchaser agents ("Purchaser Agents"), and GECC as a Committed Purchaser, as a Purchaser Agent, and as administrative agent for the Conduit Purchasers, the Committed Purchasers and the Purchaser Agents. Capitalized terms used but not otherwise defined herein have the meanings given to such terms in Amended and Restated Annex X to Sale and Contribution Agreement and Amended and Restated Receivables Purchase and Servicing Agreement dated as of December 20, 2002 (as the same may be amended, restated, supplemented and otherwise modified from time to time, "Annex X"). Preliminary Statements A. Upon the Restatement Effective Date, the Maximum Purchase Limit under the Purchase Agreement shall be increased by $250,000,000 to be $700,000,000. B. Blue Hill desires that the New Purchasers become parties to the Purchase Agreement in order to make Purchases of Transferred Receivables thereunder in connection with the increased Maximum Purchase Limit. C. The New Purchasers desire to become parties to the Purchase Agreement. D. Pursuant to Section 14.08(b) of the Purchase Agreement, Blue Hill may add additional Persons as "Purchasers" to the Purchase Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereto agree as follows: 1. Upon the terms and conditions set forth in the Purchase Agreement, the New Purchasers agree to become Purchasers thereunder, the New Purchaser Agent agrees to become a Purchaser Agent thereunder, and the New Committed Purchaser agrees to undertake a Commitment in the amount set forth under its signature hereto. 2. Blue Hill represents and warrants that (a) all of the representations and warranties of it contained in the Purchase Agreement and the other Related Documents are true and correct in all respects on and as of the Effective Date hereof, as if then made (other than representations and The Bank of Nova Scotia RPSA Supplement Agreement warranties which expressly speak as of a different date, which shall be true and correct in all material respects as of that date); and (b) no Termination Event or Incipient Termination Event has occurred and is continuing or will result after giving effect to this Supplement. 3. Each of the New Purchasers (a) represents and warrants to Blue Hill and to the Administrative Agent that independently and without reliance upon the Administrative Agent, the Purchaser Agents, 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 Blue Hill, the Servicer or the Originator, and the Receivables and its own decision to enter into the Purchase Agreement and to take, or omit, action under any Related Document; (b) confirms that it has received a copy of the Purchase Agreement and the Sale and Contribution Agreement, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) appoints the Purchaser Agent as its agent to take such action on each such New Purchaser's behalf and to carry out such functions under the Purchase Agreement and the other Related Documents as are delegated to the Purchaser Agent by the terms thereof, or are reasonably incidental thereto; (d) appoints the Administrative Agent as its agent to take such action on each such New Purchaser's behalf and to carry out such functions under the Purchase Agreement and the other Related Documents as are delegated to the Administrative Agent by the terms thereof, or are reasonably incidental thereto; (e) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Purchase Agreement are required to be performed by it as a Committed Purchaser or a Conduit Purchaser, as applicable; and (f) specifies as its address for notices the office set forth beneath its name on the signature pages hereof. 4. Schedule I hereto, and made a part hereof, sets forth additional terms and conditions that will apply specifically to the New Purchasers in their capacities as a Purchasers under the Purchase Agreement. 5. The effective date for this Supplement shall be the date on which (a) Blue Hill and each member of the New Purchasers' Purchaser Group receive this Supplement executed by the parties hereto; (b) all conditions set forth in Section 14.08(b) have been satisfied, including, without limitation, obtaining the consent of the Administrative Agent and each of the other Purchasers; (c) the Administrative Agent receives counterparts of this Supplement executed by each of the parties hereto; and (d) the Restatement Effective Date occurs (the "Effective Date"). 6. From and after the Effective Date, (a) each of the New Purchasers shall become a party to the Purchase Agreement as a Committed Purchaser and/or a Conduit Purchaser, as applicable, for all purposes, shall have the rights and obligations of a Committed Purchaser and/or a Conduit Purchaser, as applicable, thereunder as if an original party thereto; (b) the New Purchase Agent shall become a party to the Purchase Agreement as a Purchaser Agent, for all purposes, and shall have the rights and obligations of a Purchaser Agent thereunder as if an original party thereto. 7. Each party hereto covenants and agrees that, from and after the Effective Date and until the date one year plus one day following the date on which the Commercial Paper with the latest maturity has been indefeasibly paid in full in cash, it will not, directly or indirectly, institute or cause to be instituted against any Conduit Purchaser or any Committed Purchaser any proceeding of the type referred to in Sections 9.01(c) and 9.01(d) of the Purchase Agreement. This Section 7 shall survive the termination of this Supplement. The Bank of Nova Scotia RPSA Supplement Agreement 8. THIS SUPPLEMENT, AND ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE HEREOF, SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 9. This Supplement contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings. 10. If any one or more of the covenants, agreements, provisions or terms of this Supplement shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions, or terms shall be deemed severable from the remaining covenants, agreements, provisions, or terms of this Supplement and shall in no way affect the validity or enforceability of the other provisions of this Supplement. 11. This Supplement 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. 12. This Supplement shall be binding on the parties hereto and their respective successors and assigns. * * * The Bank of Nova Scotia RPSA Supplement Agreement IN WITNESS WHEREOF, the parties hereto have caused this RPSA Supplement Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written. BLUE HILL II, INC. LIBERTY STREET FUNDING CORP., as New Conduit Purchaser By: ______________________________ By: ____________________________________ Name: Name: Title: Title: Address for Notices: Name: Address: Attention: Telephone: Facsimile: THE BANK OF NOVA SCOTIA, as New Committed Purchaser and New Purchaser Agent By: ______________________________ Name: Title: Commitment: $250,000,000 Address for Notices: Name: Address: Attention: Telephone: Facsimile: Signature Page to The Bank of Nova Scotia RPSA Supplement Agreement ACKNOWLEDGED AND AGREED: GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent By: ____________________________________ Name: Title: Duly Authorized Signatory GENERAL ELECTRIC CAPITAL CORPORATION, as a Committed Purchaser and a Purchaser Agent By: ____________________________________ Name: Title: Duly Authorized Signatory REDWOOD RECEIVABLES CORPORATION, as a Conduit Purchaser By: ____________________________________ Name: Title: Assistant Secretary Signature Page to The Bank of Nova Scotia RPSA Supplement Agreement Schedule I to Exhibit 14.08(b) to Purchase Agreement New Committed Purchaser's Commitment: $250,000,000 New Purchasers' Purchaser Group Commitment: $250,000,000 Additional Terms and Conditions: - ------------------------------- Notwithstanding anything to the contrary in the Purchase Agreement, when used in the Purchase Agreement in connection with the New Purchasers, the New Purchaser Agent, The New Purchasers' Purchaser Group, the New Committed Purchaser's Commitment, the New Purchasers' Group Commitment or the New Purchasers' Capital Investment, the following terms shall have the meanings set forth below: "Committed Purchaser Daily Yield Rate" shall mean, with respect to the Committed Purchaser who is The Bank of Nova Scotia, for any day during a Settlement Period, (a) the weighted average Scotia Yield Rates applicable to such Committed Purchaser's Capital Investment on such day, weighted by such Committed Purchaser's outstanding Capital Investment, divided by (b) 360. "Committed Purchaser Expiry Date" shall mean, with respect to the Committed Purchaser who is The Bank of Nova Scotia, February 28, 2003, as such date may be extended from time to time in accordance with Section 2.13(a) of the Purchase Agreement. "Scotia Yield Rate" shall mean, with respect to the Capital Investment of the Committed Purchaser who is The Bank of Nova Scotia, for any day during a Settlement Period, (a) if the LIBOR market is closed, or if such Committed Purchaser's Purchaser Agent determines that it is illegal for the Committed Purchaser to make Purchases accruing interest at a rate based upon LIBOR, the sum of (i) the rate of interest most recently announced by The Bank of Nova Scotia at its office in New York, New York as its prime rate, such rate to change as and when such designated rate changes (with the understanding that such rate may merely serve as a basis upon which effective rates of interest are calculated for loans making reference to such prime rate and that such rate is not necessarily the lowest or best rate at which The Bank of Nova Scotia calculates interest or extends credit) plus (ii) the Used Commitment Fee (as such term is defined in such Committed Purchaser's Purchaser Group Fee Letter) plus (iii) if a Termination Event has occurred and is continuing, the Daily Default Margin, or (b) the sum of (i) LIBOR plus (ii) the Used Commitment Fee (as such term is defined in such Committed Purchaser's Purchaser Group Fee Letter) plus (iii) if a Termination Event has occurred and is continuing, the Daily Default Margin. "Conduit Purchaser Daily Yield Rate" shall mean, with respect to the Conduit Purchaser who is Liberty Street Funding Corp., on any day, the floating per annum rate equal to the sum of (a) the Used Commitment Fee (as defined in such Conduit Purchaser's Purchaser Group Fee Letter) plus (b) if a Termination Event has occurred and is continuing, the Daily Default Margin plus (c) the weighted average cost (as determined by such Conduit Purchaser's Purchaser Agent and which shall include commissions of placement agents and dealers, incremental carrying costs incurred with respect to Commercial Paper 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 Program Document) and any other costs associated with the issuance of Commercial Paper) of or related to the issuance of Commercial Paper that are allocated, in whole or in part, by such Conduit Purchaser or such Conduit Purchaser's Purchaser Agent to fund or maintain such Conduit Purchaser's Capital Investment (and which may also be allocated in part to the funding of other assets of such Conduit Purchaser); provided, however, that if any component of such rate is a discount rate, in calculating the "Conduit Purchaser Daily Yield Rate", such Conduit Purchaser's Purchaser Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum; provided, further, that if any Conduit Purchaser other than Liberty Street Funding Corp. elects not to make a Purchase under Section 2.01(a) of the Purchase Agreement for any reason other than solely because another Conduit Purchaser elects not to make a Purchase pursuant to such Section, the rate set forth in item (c) of this definition shall be the Committed Purchaser Daily Yield Rate for the Committed Purchaser who is The Bank of Nova Scotia. "LIBOR" shall mean, with respect to the Committed Purchaser who is The Bank of Nova Scotia, for any Settlement Period, (a) the interest rate per annum shown on the BBAM page of the Bloomberg Financial Markets Services Display Screen or any successor page as the average British Bankers' Association Interest Settlement Rate for deposits in Dollars with a period comparable to such Settlement Period and for delivery on the first day of such Settlement Period, as of 11:00 a.m. (London time) two Business Days prior to the first day of such Settlement Period, or (b) if the screen described in clause (a) above shall cease to be publicly available, the interest rate per annum shown on page 3750 of the Dow Jones & Company Telerate screen or any successor page as the composite offered rate for London interbank deposits with a period comparable to such Settlement Period, as shown under the heading "USED" at 11:00 a.m. (London time) two Business Days prior to the first day of such Settlement Period, or (c) if the rates in clauses (a) and (b) shall cease to be publicly available, the average interest rate per annum offered to such Committed Purchaser's Purchaser Agent in the interbank market for Dollar deposits of amounts in funds comparable to the principal amount of such Committed Purchaser's Capital Investment to which such LIBOR is to be applicable with maturities comparable to the Settlement Period for which LIBOR will apply as of approximately 1:00 p.m. (New York time) two Business Days prior to the commencement of such Settlement Period. The LIBOR shall be set using five decimal places. EX-99.1 11 dex991.txt CERTIFICATION EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of AmerisourceBergen Corporation (the "Company") on Form 10-Q for the quarter ended December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, R. David Yost, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ R. DAVID YOST - ---------------------------------------- R. David Yost Chief Executive Officer February 13, 2003 EX-99.2 12 dex992.txt CERTIFICATION EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of AmerisourceBergen Corporation (the "Company") on Form 10-Q for the quarter ended December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael D. DiCandilo, Senior Vice Presdient and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ MICHAEL D. DICANDILO - ------------------------------------------------------ Michael D. DiCandilo Senior Vice President and Chief Financial Officer February 13, 2003 -----END PRIVACY-ENHANCED MESSAGE-----